Exhibit 10.1


 


FIRST AMENDED AND RESTATED CREDIT
AGREEMENT


 


DATED AS OF AUGUST 7, 2006


 


AMONG


 


 


FTD, INC.,


 


 


THE LENDERS LISTED HEREIN,


as Lenders,


 


WELLS FARGO BANK, N.A.,


as Administrative Agent,


 


MIZUHO
CORPORATE BANK, LTD.,


ING CAPITAL LLC,


as
Co-Syndication Agents,


 


 


BMO
CAPITAL MARKETS,


as Documentation Agent


 


 


and


 


 


WELLS FARGO BANK, N.A.,


as Sole Lead Arranger


and Sole Book Manager


 

















 


EXECUTION COPY


 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Certain Defined Terms

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.2

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

  	
  31

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Other Definitional Provisions and
  Rules of Construction

  	
  32

  
	
   

  	
   

  	
   

  
	
  1.4

  	
  Interrelationship with the Original
  Credit Agreement

  	
  32

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
   

  	
  AMOUNTS AND TERMS OF COMMITMENTS AND
  LOANS

  	
  32

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Commitments; Making of Loans; the
  Register; Optional Notes

  	
  32

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Interest on the Loans

  	
  39

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Fees

  	
  44

  
	
   

  	
   

  	
   

  
	
  2.4

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

  	
  46

  
	
   

  	
   

  	
   

  
	
  2.5

  	
  Use of Proceeds

  	
  54

  
	
   

  	
   

  	
   

  
	
  2.6

  	
  Special Provisions Governing
  Eurodollar Rate Loans

  	
  54

  
	
   

  	
   

  	
   

  
	
  2.7

  	
  Increased Costs; Taxes; Capital
  Adequacy

  	
  56

  
	
   

  	
   

  	
   

  
	
  2.8

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

  	
  61

  
	
   

  	
   

  	
   

  
	
  2.9

  	
  Replacement of a Lender

  	
  61

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
   

  	
  LETTERS OF CREDIT

  	
  62

  
	
   

  	
   

  	
   

  
	
  3.1

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

  	
  62

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Letter of Credit Fees

  	
  65

  
	
   

  	
   

  	
   

  
	
  3.3

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

  	
  66

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Obligations Absolute

  	
  69

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Nature of Issuing Lenders’ Duties

  	
  70

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
   

  	
  CONDITIONS TO LOANS AND LETTERS OF CREDIT

  	
  71

  
	
   

  	
   

  	
   

  
	
  4.1

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

  	
  71

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Conditions to All Loans

  	
  77

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Conditions to Letters of Credit

  	
  78

  
	
   

  	
   

  	
   

  
	
  4.4

  	
  Conditions to Effectiveness of this
  Agreement

  	
  78

  



 


i

















 


	
  SECTION 5.

  	
   

  	
  COMPANY’S REPRESENTATIONS AND
  WARRANTIES

  	
  78

  
	
   

  	
   

  	
   

  
	
  5.1

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

  	
  79

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Authorization of Borrowing, etc

  	
  79

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Financial Condition

  	
  80

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  No Material Adverse Change; No
  Restricted Junior Payments

  	
  81

  
	
   

  	
   

  	
   

  
	
  5.5

  	
  Title to Properties; Liens; Real
  Property; Intellectual Property

  	
  81

  
	
   

  	
   

  	
   

  
	
  5.6

  	
  Litigation; Adverse Facts

  	
  82

  
	
   

  	
   

  	
   

  
	
  5.7

  	
  Payment of Taxes

  	
  82

  
	
   

  	
   

  	
   

  
	
  5.8

  	
  Performance of Agreements; Material
  Contracts

  	
  82

  
	
   

  	
   

  	
   

  
	
  5.9

  	
  Governmental Regulation

  	
  83

  
	
   

  	
   

  	
   

  
	
  5.10

  	
  Securities Activities

  	
  83

  
	
   

  	
   

  	
   

  
	
  5.11

  	
  Employee Benefit Plans

  	
  83

  
	
   

  	
   

  	
   

  
	
  5.12

  	
  Certain Fees

  	
  84

  
	
   

  	
   

  	
   

  
	
  5.13

  	
  Environmental Protection

  	
  84

  
	
   

  	
   

  	
   

  
	
  5.14

  	
  Employee
  Matters

  	
  85

  
	
   

  	
   

  	
   

  
	
  5.15

  	
  Solvency

  	
  85

  
	
   

  	
   

  	
   

  
	
  5.16

  	
  Matters Relating to Collateral

  	
  85

  
	
   

  	
   

  	
   

  
	
  5.17

  	
  Disclosure

  	
  86

  
	
   

  	
   

  	
   

  
	
  5.18

  	
  Subordinated Indebtedness

  	
  86

  
	
   

  	
   

  	
   

  
	
  5.19

  	
  Related Agreements.

  	
  86

  
	
   

  	
   

  	
   

  
	
  5.20

  	
  Reporting
  to IRS

  	
  87

  
	
   

  	
   

  	
   

  
	
  5.21

  	
  Foreign Assets Control Regulations,
  etc.

  	
  87

  
	
   

  	
   

  	
   

  
	
  5.22

  	
  Foreign Subsidiaries

  	
  87

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  	
  COMPANY’S AFFIRMATIVE COVENANTS

  	
  87

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Financial Statements and Other
  Reports

  	
  88

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Existence, etc

  	
  92

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  Payment of Taxes and Claims; Tax

  	
  93

  
	
   

  	
   

  	
   

  
	
  6.4

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

  	
  93

  
	
   

  	
   

  	
   

  
	
  6.5

  	
  Inspection Rights; Lender Meeting

  	
  95

  
	
   

  	
   

  	
   

  
	
  6.6

  	
  Compliance with Laws, etc.

  	
  95

  
	
   

  	
   

  	
   

  
	
  6.7

  	
  Environmental Matters

  	
  96

  



 


ii

















 


	
  6.8

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

  	
  97

  
	
   

  	
   

  	
   

  
	
  6.9

  	
  Matters Relating to Additional Real
  Property Collateral

  	
  98

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
   

  	
  COMPANY’S NEGATIVE COVENANTS

  	
  99

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Indebtedness

  	
  100

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Liens and Related Matters

  	
  101

  
	
   

  	
   

  	
   

  
	
  7.3

  	
  Investments; Acquisitions

  	
  103

  
	
   

  	
   

  	
   

  
	
  7.4

  	
  Contingent Obligations

  	
  105

  
	
   

  	
   

  	
   

  
	
  7.5

  	
  Restricted Junior Payments

  	
  106

  
	
   

  	
   

  	
   

  
	
  7.6

  	
  Financial Covenants

  	
  107

  
	
   

  	
   

  	
   

  
	
  7.7

  	
  Restriction on Fundamental Changes;
  Asset Sales

  	
  108

  
	
   

  	
   

  	
   

  
	
  7.8

  	
  Consolidated Capital Expenditures

  	
  110

  
	
   

  	
   

  	
   

  
	
  7.9

  	
  Transactions with Shareholders and
  Affiliates

  	
  110

  
	
   

  	
   

  	
   

  
	
  7.10

  	
  Sales and Lease-Backs

  	
  111

  
	
   

  	
   

  	
   

  
	
  7.11

  	
  Conduct of Business

  	
  111

  
	
   

  	
   

  	
   

  
	
  7.12

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

  	
  111

  
	
   

  	
   

  	
   

  
	
  7.13

  	
  Fiscal Year

  	
  112

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
   

  	
  EVENTS OF DEFAULT

  	
  112

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Failure to Make Payments When Due

  	
  112

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  Default in Other Agreements

  	
  112

  
	
   

  	
   

  	
   

  
	
  8.3

  	
  Breach of Certain Covenants

  	
  113

  
	
   

  	
   

  	
   

  
	
  8.4

  	
  Breach
  of Warranty

  	
  113

  
	
   

  	
   

  	
   

  
	
  8.5

  	
  Other Defaults Under Loan Documents

  	
  113

  
	
   

  	
   

  	
   

  
	
  8.6

  	
  Involuntary Bankruptcy; Appointment
  of Receiver, etc.

  	
  113

  
	
   

  	
   

  	
   

  
	
  8.7

  	
  Voluntary Bankruptcy; Appointment of
  Receiver, etc.

  	
  114

  
	
   

  	
   

  	
   

  
	
  8.8

  	
  Judgments and Attachments

  	
  114

  
	
   

  	
   

  	
   

  
	
  8.9

  	
  Dissolution

  	
  114

  
	
   

  	
   

  	
   

  
	
  8.10

  	
  Employee Benefit Plans

  	
  114

  
	
   

  	
   

  	
   

  
	
  8.11

  	
  Change
  in Control

  	
  115

  
	
   

  	
   

  	
   

  
	
  8.12

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

  	
  115

  
	
   

  	
   

  	
   

  
	
  8.13

  	
  Conduct of Business By Holdings

  	
  115

  



 


iii

















 


	
  8.14

  	
  Conduct of Business By Dormant
  Subsidiaries

  	
  115

  
	
   

  	
   

  	
   

  
	
  8.15

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

  	
  116

  
	
   

  	
   

  	
   

  
	
  8.16

  	
  Amendment of Certain Documents of
  Holdings

  	
  116

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
   

  	
  ADMINISTRATIVE AGENT

  	
  116

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Appointment

  	
  116

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  Powers and Duties; General Immunity

  	
  118

  
	
   

  	
   

  	
   

  
	
  9.3

  	
  Independent Investigation by
  Lenders; No Responsibility For Appraisal of Creditworthiness

  	
  119

  
	
   

  	
   

  	
   

  
	
  9.4

  	
  Right
  to Indemnity

  	
  119

  
	
   

  	
   

  	
   

  
	
  9.5

  	
  Successor Administrative Agent and
  Swing Line Lender

  	
  120

  
	
   

  	
   

  	
   

  
	
  9.6

  	
  Collateral Documents and Guaranties

  	
  120

  
	
   

  	
   

  	
   

  
	
  9.7

  	
  Duties of Other Agents

  	
  121

  
	
   

  	
   

  	
   

  
	
  9.8

  	
  Administrative Agent May File Proofs
  of Claim

  	
  122

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
   

  	
  MISCELLANEOUS

  	
  122

  
	
   

  	
   

  	
   

  
	
  10.1

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

  	
  122

  
	
   

  	
   

  	
   

  
	
  10.2

  	
  Expenses

  	
  127

  
	
   

  	
   

  	
   

  
	
  10.3

  	
  Indemnity

  	
  128

  
	
   

  	
   

  	
   

  
	
  10.4

  	
  Set-Off

  	
  129

  
	
   

  	
   

  	
   

  
	
  10.5

  	
  Ratable
  Sharing

  	
  129

  
	
   

  	
   

  	
   

  
	
  10.6

  	
  Amendments and Waivers

  	
  130

  
	
   

  	
   

  	
   

  
	
  10.7

  	
  Independence of Covenants

  	
  131

  
	
   

  	
   

  	
   

  
	
  10.8

  	
  Notices; Effectiveness of Signatures

  	
  131

  
	
   

  	
   

  	
   

  
	
  10.9

  	
  Survival of Representations,
  Warranties and Agreements

  	
  132

  
	
   

  	
   

  	
   

  
	
  10.10

  	
  Failure or Indulgence Not Waiver;
  Remedies Cumulative

  	
  132

  
	
   

  	
   

  	
   

  
	
  10.11

  	
  Marshalling; Payments Set Aside

  	
  132

  
	
   

  	
   

  	
   

  
	
  10.12

  	
  Severability

  	
  133

  
	
   

  	
   

  	
   

  
	
  10.13

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

  	
  133

  
	
   

  	
   

  	
   

  
	
  10.14

  	
  Release of Security Interest or
  Guaranty

  	
  133

  
	
   

  	
   

  	
   

  
	
  10.15

  	
  Applicable
  Law

  	
  134

  
	
   

  	
   

  	
   

  
	
  10.16

  	
  Construction of Agreement; Nature of
  Relationship

  	
  134

  
	
   

  	
   

  	
   

  
	
  10.17

  	
  Consent to Jurisdiction and Service
  of Process

  	
  134

  



 


iv

















 


	
  10.18

  	
  Waiver of Jury Trial

  	
  135

  
	
   

  	
   

  	
   

  
	
  10.19

  	
  Confidentiality

  	
  136

  
	
   

  	
   

  	
   

  
	
  10.20

  	
  Counterparts; Effectiveness

  	
  136

  
	
   

  	
   

  	
   

  
	
  10.21

  	
  Original Credit Agreement Superseded

  	
  137

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  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 TERM NOTE

  
	
   

  	
   

  	
   

  
	
  V

  	
   

  	
  Intentionally Deleted

  
	
   

  	
   

  	
   

  
	
  VI

  	
   

  	
  FORM OF REVOLVING NOTE

  
	
   

  	
   

  	
   

  
	
  VII

  	
   

  	
  FORM OF SWING LINE NOTE

  
	
   

  	
   

  	
   

  
	
  VIII

  	
   

  	
  FORM OF COMPLIANCE CERTIFICATE

  
	
   

  	
   

  	
   

  
	
  IX

  	
   

  	
  FORM OF OPINION OF COMPANY COUNSEL

  
	
   

  	
   

  	
   

  
	
  X

  	
   

  	
  Intentionally Deleted

  
	
   

  	
   

  	
   

  
	
  XI

  	
   

  	
  FORM OF ASSIGNMENT AGREEMENT

  
	
   

  	
   

  	
   

  
	
  XII

  	
   

  	
  FORM OF SOLVENCY CERTIFICATE

  
	
   

  	
   

  	
   

  
	
  XIII

  	
   

  	
  FORM OF SUBSIDIARY GUARANTY

  
	
   

  	
   

  	
   

  
	
  XIV

  	
   

  	
  FORM OF SECURITY AGREEMENT

  
	
   

  	
   

  	
   

  
	
  XV

  	
   

  	
  FORM OF HOLDINGS GUARANTY

  
	
   

  	
   

  	
   

  
	
  XVI

  	
   

  	
  FORM OF NOTICE OF PREPAYMENT

  
	
   

  	
   

  	
   

  
	
  XVII

  	
   

  	
  FORM OF MORTGAGE

  



 


vi

















 


SCHEDULES


 


	
  2.1

  	
   

  	
  LENDERS’ COMMITMENTS AND PRO RATA SHARES

  
	
   

  	
   

  	
   

  
	
  4.1C

  	
   

  	
  CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT

  
	
   

  	
   

  	
   

  
	
  4.1M

  	
   

  	
  CLOSING DATE MORTGAGED PROPERTIES

  
	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  SUBSIDIARIES OF COMPANY

  
	
   

  	
   

  	
   

  
	
  5.3

  	
   

  	
  CONTINGENT LIABILITIES

  
	
   

  	
   

  	
   

  
	
  5.5B

  	
   

  	
  REAL PROPERTY

  
	
   

  	
   

  	
   

  
	
  5.5C

  	
   

  	
  INTELLECTUAL PROPERTY

  
	
   

  	
   

  	
   

  
	
  5.6

  	
   

  	
  LITIGATION

  
	
   

  	
   

  	
   

  
	
  5.8

  	
   

  	
  MATERIAL CONTRACTS

  
	
   

  	
   

  	
   

  
	
  5.11

  	
   

  	
  CERTAIN EMPLOYEE BENEFIT PLANS

  
	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  CERTAIN EXISTING INDEBTEDNESS

  
	
   

  	
   

  	
   

  
	
  7.2

  	
   

  	
  CERTAIN EXISTING LIENS

  
	
   

  	
   

  	
   

  
	
  7.3

  	
   

  	
  CERTAIN EXISTING INVESTMENTS

  
	
   

  	
   

  	
   

  
	
  7.4

  	
   

  	
  CERTAIN EXISTING CONTINGENT OBLIGATIONS

  
	
   

  	
   

  	
   

  
	
  7.9

  	
   

  	
  AFFILIATE TRANSACTIONS

  



 


vii

















 


EXECUTION COPY


 


FTD, INC.


 


FIRST AMENDED AND RESTATED CREDIT AGREEMENT


 


This FIRST AMENDED AND RESTATED CREDIT AGREEMENT is dated as of August
7, 2006 and entered into by and among FTD, INC., a
Delaware corporation, as borrower (“Company”), THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF, WELLS FARGO BANK, N.A. (“Wells Fargo”), as administrative
agent for Lenders (in such capacity, “Administrative Agent”),
MIZUHO CORPORATE BANK, LTD. and ING CAPITAL LLC as co-syndication agents for Lenders (in such
capacity, “Co-Syndication Agents”), and BMO CAPITAL MARKETS as documentation agent for Lenders (in
such capacity, “Documentation Agent”).


 


R E C I T A L S


 


WHEREAS,
Company as borrower and Wells Fargo as administrative agent, syndication agent,
documentation agent and lender entered into the Original Credit Agreement (this
and other capitalized terms used in these recitals without definition being
used as defined in subsection 1.1) on the Closing Date;


 


WHEREAS,
the parties to the Original Credit Agreement want to amend and restate the
Original Credit Agreement on the terms and conditions set forth herein and in the
other Loan Documents;


 


WHEREAS,
each of ING Capital LLC and Mizuho Corporate Bank, Ltd. has agreed to act as
Co-Syndication Agent for the Lenders;


 


WHEREAS,
BMO Capital Markets has agreed to act as Documentation Agent for the Lenders;


 


WHEREAS,
UK Bidco was formed by Company for the purpose of acquiring all or
substantially all of the outstanding shares of UK Target;


 


WHEREAS,
Company desired to provide financing to UK Bidco to fund the Acquisition
Financing Requirements;


 


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


 


WHEREAS,
Company desired 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;


 

















 


WHEREAS,
Holdings and all of the Domestic Subsidiaries of Company (other than the
Dormant Subsidiaries and Interflora
Inc.) 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; and


 


NOW,
THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained (the receipt and adequacy
of which is hereby acknowledged), Company, Lenders, Co-Syndication Agents,
Documentation Agent and Administrative Agent agree as follows:


 


2

















 


DEFINITIONS


 


1.1          Certain
Defined Terms.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Agreement”
means this First Amended and Restated Credit Agreement dated as of August 7,
2006 between Company, the Lenders and the Agents as it may be amended, amended
and restated, supplemented or otherwise modified from time to time.


 


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


 


3

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


4

















 


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


 


“Change
in Control” means:


 


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


 


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


 


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


 


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


 


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


 


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


 


“Closing
Date” means July 28, 2006 being the date on which the initial
Loans were made under the Original Credit Agreement.


 


5

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


6

















 


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


 


“Confidential
Information Memorandum” means the Confidential Information
Memorandum dated July, 2006 prepared by the Sole Lead Arranger.


 


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


 


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


 


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


 


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


 


“Consolidated
EBITDA” means, for any period, the sum, without duplication,
of the amounts for such period of (i) Consolidated Net Income,
(ii) Consolidated Interest Expense, (iii) provisions for taxes based
on income, (including payments made pursuant to subsection 7.5(iii)(b)),
(iv) total depreciation expense, (v) total amortization expense,
(vi) Transaction Costs, (vii) management or employee retention or
incentive payments under Company’s cliff bonus plan, (viii) any foreign
currency translation or transaction gains or losses, (ix) all extraordinary,
unusual or non-recurring losses, charges or expenses (minus any extraordinary,
unusual or non-recurring gains) (it being understood and agreed that Item 10(e)
of Regulation S-K under the Securities Act shall not constitute a limitation on
any such determination and unusual or non-recurring


 


7

















 


losses,
charges, expenses or gains shall be determined by Company in good faith), (x)
other non-cash items, including, without limitation, non-cash stock
compensation paid to officers, directors and employees (other than any such
non-cash item to the extent it represents an accrual of or reserve for cash
expenditures in any future period) but only, in the case of clauses (ii)-(x),
to the extent deducted in the calculation of Consolidated Net Income, less
non-cash items added in the calculation of Consolidated Net Income (other than
any such non-cash item to the extent it will result in the receipt of cash payments
in any future period), and all of the foregoing as determined on a consolidated
basis for Company and its Subsidiaries in conformity with GAAP.


 


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


 


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


 


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


 


8

















 


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


 


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


 


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


 


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


 


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


 


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


 


9

















 


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


 


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


 


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


 


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


 


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


 


“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.


 


10

















 


“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.


 


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


 


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


 


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


 


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


 


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


 


“Effective
Date” means August 7, 2006.


 


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


 


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


 


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


 


11

















 


“Environmental
Laws” means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of any Government
Authority relating to (i) environmental matters, including those relating
to any Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational
safety and health, industrial hygiene, land use or the protection of human,
plant or animal health or welfare, in any manner applicable to Company or any
of its Subsidiaries or any Facility.


 


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


 


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


 


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


 


12

















 


Multiemployer
Plan that it is in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA, or that it intends to terminate or has terminated under Section
4041A or 4042 of ERISA; (viii) the assertion of a material claim (other than
routine claims for benefits) against any Company Employee Benefit Plan other
than a Multiemployer Plan or the assets thereof, or against Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in connection with any
Company Employee Benefit Plan; (ix) receipt from the Internal Revenue Service
of notice of the failure of any Company Pension Plan (or any other Company Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of any trust forming part of any Company Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (x) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan; provided
that any event described in the foregoing clauses shall not be an ERISA Event
unless it could reasonably be expected to result in a Direct Liability.


 


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


 


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


 


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


 


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


 


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


 


13

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Foreign
Plan” means any employee benefit plan maintained by Company
or any of its Subsidiaries that is mandated or governed by any law, rule or
regulation of any


 


14

















 


Government
Authority other than the United States of America, any state thereof or any
other political subdivision thereof.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Government
Authority” means the government of the United States or any
other nation, or any state, regional or local political subdivision or
department thereof, and any other governmental or regulatory agency, authority,
body, commission, central bank, board, bureau, organ, court, instrumentality or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, in each


 


15

















 


case
whether federal, state, local or foreign (including supra-national bodies such
as the European Union or the European Central Bank).


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


16

















 


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


 


“Indebtedness”,
as applied to any Person, means (i) all indebtedness for borrowed money,
(ii) that portion of obligations with respect to Capital Leases that is
properly classified as a liability on a balance sheet in conformity with GAAP,
(iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money, (iv) any
obligation owed for all or any part of the deferred purchase price of property
or services (excluding any such obligations incurred under ERISA), which purchase
price is (a) due more than six months from the date of incurrence of the
obligation in respect thereof or (b) evidenced by a note or similar written
instrument, (v) Synthetic Lease Obligations, and (vi) all indebtedness
secured by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person. Obligations
under Interest Rate Agreements and Currency Agreements constitute (1) in the
case of Hedge Agreements, Contingent Obligations, and (2) in all other cases,
Investments, and in neither case constitute Indebtedness.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


17

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Letter
of Credit Usage” means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter
may become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all


 


18

















 


drawings
under Letters of Credit honored by Issuing Lenders and not theretofore
reimbursed out of the proceeds of Revolving Loans pursuant to subsection 3.3B
or otherwise reimbursed by Company. For purposes of this definition, any amount
described in clause (i) or (ii) of the preceding sentence which is denominated
in a currency other than Dollars shall be valued based on the applicable
Exchange Rate for such currency as of the applicable date of determination.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


19

















 


consolidated
revenues of Company and its Subsidiaries or (ii) as at the end of such Fiscal
Year, was the owner of more than 5% of the consolidated assets of Company and
its Subsidiaries.


 


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


 


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


 


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


 


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


 


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


 


“Net
Insurance/Condemnation Proceeds” means any Cash payments or
proceeds received by Company or any of its Domestic Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result


 


20

















 


of the
taking of any assets of Company or any of its Subsidiaries by any Person
pursuant to the power of eminent domain, condemnation or otherwise, or pursuant
to a sale of any such assets to a purchaser with such power under threat of
such a taking, in each case net of any taxes paid or payable and actual and
reasonable documented costs incurred by Company or any of its Subsidiaries in
connection with the adjustment or settlement of any claims of Company or such
Subsidiary in respect thereof, and, in each case, only to the extent such Cash
payments or proceeds, net of the foregoing documented costs, exceed $1,000,000.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


21

















 


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


 


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


 


“Original Credit Agreement” means the Credit Agreement dated
as of July 28, 2006 between Company and Wells Fargo.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(ii)           statutory
Liens of landlords, Liens of collecting banks under the UCC on items in the
course of collection, statutory Liens and rights of set-off of banks, statutory
Liens of carriers, warehousemen, mechanics, repairmen, workmen and


 


22

















 


materialmen, and other
Liens imposed by law, in each case incurred in the ordinary course of business
(a) for amounts not yet overdue or (b) for amounts that are overdue and that
(in the case of any such amounts overdue for a period in excess of 10 days) are
being contested in good faith by appropriate proceedings, so long as (1) such
reserves or other appropriate provisions, if any, as shall be required by GAAP
shall have been made for any such contested amounts, and (2) in the case of a
Lien with respect to any material portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any material portion of
the Collateral on account of such Lien;


 


(iii)          Liens
incurred or pledges or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types
of social security, or to secure the performance of statutory obligations,
bids, leases, government contracts, trade contracts, and other similar
obligations (exclusive of obligations for the payment of borrowed money), so
long as no foreclosure, sale or similar proceedings have been commenced with
respect to any material portion of the Collateral on account thereof;


 


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


 


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


 


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


 


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


 


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


 


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


 


23

















 


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


 


(xi)           Liens
granted pursuant to the Collateral Documents;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Prime
Rate” means the rate that Wells Fargo announces from time to
time as its prime lending rate, as in effect from time to time. The Prime Rate
is a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Wells Fargo or


 


24

















 


any
other Lender may make commercial loans or other loans at rates of interest at,
above or below the Prime Rate.


 


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


 


“Pro Rata
Share” means (i) with respect to all payments,
computations and other matters relating to the Term Loan Commitment or the Term
Loan of any Lender, the percentage obtained by dividing (x) the
Term Loan Exposure of that Lender by (y) the aggregate Term Loan
Exposure of all Lenders, (ii)  with respect to all payments,
computations and other matters relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender or any Letters of Credit issued or participations
therein deemed purchased by any Lender or any assignments of any Swing Line
Loans deemed purchased by any Lender, the percentage obtained by dividing
(x) the Revolving Loan Exposure of that Lender by (y) the
aggregate Revolving Loan Exposure of all Lenders, and (iii) for all other
purposes with respect to each Lender, the percentage obtained by dividing
(x) the sum of the Term Loan Exposure of that Lender plus the
Revolving Loan Exposure of that Lender by (y) the sum of the
aggregate Term Loan Exposure of all Lenders plus the aggregate Revolving
Loan Exposure of all Lenders, in any such case as the applicable percentage may
be adjusted by assignments permitted pursuant to subsection 10.1. The initial
Pro Rata Share of each Lender for purposes of each of clauses (i), (ii) and
(iii) of the preceding sentence is set forth opposite the name of that Lender
in Schedule 2.1 annexed hereto.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


25

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


26

















 


“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(ii).


 


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


 


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


 


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


 


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


 


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


 


“Sole
Lead Arranger” means Wells Fargo Bank, N.A..


 


“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


 


27

















 


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.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Subsidiary”,
with respect to any Person, means any corporation, partnership, trust, limited liability
company, association, Joint Venture or other business entity of which more than
50% of the total voting power of shares of stock or other ownership interests
entitled (without regard to the occurrence of any contingency) to vote in the
election of the members of


 


28

















 


the
Governing Body is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof.


 


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


 


“Subsidiary
Guaranty” means the Subsidiary Guaranty executed and
delivered by existing Domestic Subsidiaries (other than the Dormant
Subsidiaries and Interflora Inc.) of Company on the Closing Date and to be
executed and delivered by additional Subsidiaries of Company from time to time
thereafter in accordance with subsection 6.8, substantially in the form of Exhibit
XIII annexed hereto, as such Subsidiary Guaranty may hereafter be amended,
supplemented or otherwise modified from time to time.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Tax”
or “Taxes” means any present or future tax,
levy, impost, duty, charge, fee, deduction or withholding of any nature and
whatever called, imposed by a Governmental Authority, on whomsoever and
wherever imposed, levied, collected, withheld or assessed, including interest,
penalties, additions to tax and any similar liabilities with respect thereto;
except that, in the case of a Lender, there shall be excluded (i) taxes
that are imposed on the overall net income or net profits (including franchise
taxes imposed in lieu thereof) (a) by the


 


29

















 


United
States, (b) by any other Government Authority under the laws of which such
Lender is organized or has its principal office or maintains its applicable
lending office, or (c) by any jurisdiction solely as a result of a present
or former connection between such Lender and such jurisdiction (other than any
such connection arising solely from such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, any of the
Loan Documents), and (ii) any branch profits taxes imposed by the United States
or any similar tax imposed by any other jurisdiction in which such Lender is
located.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


30

















 


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


 


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


 


“UK
Target’s Fiscal Years” means the fiscal year of UK Target and
its Subsidiaries ending in May of each calendar year. For purposes of this
Agreement, any particular fiscal year shall be designated by reference to the
calendar year in which such fiscal year ends.


 


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


 


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


 


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


 


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


 


31

















 


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.


 


1.4          Interrelationship
with the Original Credit Agreement.


 


A.            This
Agreement is intended to amend and restate the provisions of the Original
Credit Agreement and, except as expressly modified herein, all of the terms and
provisions of the Original Credit Agreement shall continue to apply for the
period prior to the Effective Date, including any determinations of payment dates,
interest rates, compliance with covenants and other obligations, accuracy of
representations and warranties, Events of Default or any amount that may by
payable to the Administrative Agent or the Lenders (or their assignees or
replacements hereunder). All references in the Notes and the other Loan
Documents to (i) the “Credit Agreement” shall be deemed to include references
to this Agreement and (ii) the “Lenders” or a “Lender” or to the “Administrative
Agent” shall mean such terms as defined in this Agreement. As to all periods
occurring on or after the Effective Date, all of the covenants set forth in the
Original Credit Agreement shall be of no further force and effect (with respect
to such periods), it being understood that all obligations of Company under the
Original Credit Agreement shall be governed by this Agreement form and after
the Effective Date.


 


B.            Company,
Agents and Lenders acknowledge and agree that all principal, interest, fees,
costs, reimbursable expenses and indemnification obligations accruing or
arising under or in connection with the Original Credit Agreement which remain
unpaid and outstanding as of the Effective date shall be and remain outstanding
and payable as an obligation under this Agreement and the other Loan Documents.


 


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 and in the other
Loan Documents, each Lender hereby severally agrees to make the Loans as
described in


 


32

















 


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


 


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


 


(ii)           Revolving
Loans. Each Revolving Lender severally agrees, subject to the limitations
set forth below with respect to the maximum amount of Revolving Loans permitted
to be outstanding from time to time, to lend to Company from time to time during
the period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date an aggregate amount not exceeding its Pro Rata Share of the
aggregate amount of the Revolving Loan Commitments to be used for the purposes
identified in subsection 2.5B. The original amount of each Revolving Lender’s
Revolving Loan Commitment will be set forth in an allocation letter delivered
to such Lender by Administrative Agent and the aggregate original amount of the
Revolving Loan Commitments is $75,000,000; provided that the Revolving
Loan Commitments of Revolving Lenders shall be adjusted to give effect to any
assignments of the Revolving Loan Commitments pursuant to subsection 10.1B and
shall be reduced from time to time by the amount of any reductions thereto made
pursuant to subsection 2.4. Each Revolving Lender’s Revolving Loan Commitment
shall expire on the Revolving Loan Commitment Termination Date and all
Revolving Loans and all other amounts owed hereunder with respect to the
Revolving Loans and the Revolving Loan Commitments shall be paid in full no
later than that date; provided that each Revolving Lender’s Revolving
Loan Commitment shall expire immediately and without further action on September
1, 2006 if the Term Loans are not made on or before that date. Amounts borrowed
under this subsection 2.1A(ii) may be repaid and reborrowed to but excluding
the Revolving Loan Commitment Termination Date.


 


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


 


33

















 


(iii)          Swing
Line Loans.


 


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


 


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


 


(b)           Swing
Line Loan Prepayment with Proceeds of Revolving Loans. With respect to any
Swing Line Loans that have not been voluntarily prepaid by Company pursuant to
subsection 2.4B(i), Swing Line Lender may, at any time in its sole and absolute
discretion, deliver to Administrative Agent (with a copy to Company), no later
than 10:00 A.M. (New York City time) on the first Business Day in advance of
the proposed Funding Date, a notice requesting Revolving Lenders to make
Revolving Loans that are Base Rate Loans on such Funding Date in an amount
equal to the amount of such Swing Line Loans (the “Refunded
Swing Line Loans”) outstanding on the date such notice is given. Company
hereby authorizes the giving of any such notice and the making of any such
Revolving Loans. Anything contained in this Agreement to the contrary
notwithstanding, (1) the proceeds of such Revolving Loans made by
Revolving Lenders other than Swing Line Lender shall be immediately delivered
by


 


34

















 


Administrative
Agent to Swing Line Lender (and not to Company) and applied to repay a
corresponding portion of the Refunded Swing Line Loans and (2) on the day
such Revolving Loans are made, Swing Line Lender’s Pro Rata Share of the
Refunded Swing Line Loans shall be deemed to be paid with the proceeds of a
Revolving Loan made by Swing Line Lender, and such portion of the Swing Line
Loans deemed to be so paid shall no longer be outstanding as Swing Line Loans
and shall no longer be due under the Swing Line Note, if any, of Swing Line
Lender but shall instead constitute part of Swing Line Lender’s outstanding
Revolving Loans and shall be due under the Revolving Note, if any, of Swing
Line Lender. Company hereby authorizes Administrative Agent and Swing Line
Lender to charge Company’s accounts with Administrative Agent and Swing Line
Lender (up to the amount available in each such account) in order to
immediately pay Swing Line Lender the amount of the Refunded Swing Line Loans
to the extent the proceeds of such Revolving Loans made by Revolving Lenders,
including the Revolving Loan deemed to be made by Swing Line Lender, are not
sufficient to repay in full the Refunded Swing Line Loans. If any portion of
any such amount paid (or deemed to be paid) to Swing Line Lender should be
recovered by or on behalf of Company from Swing Line Lender in any bankruptcy
proceeding, in any assignment for the benefit of creditors or otherwise, the
loss of the amount so recovered shall be ratably shared among all Lenders in
the manner contemplated by subsection 10.5.


 


(c)           Swing
Line Loan Assignments. On the
Funding Date of each Swing Line Loan, each Revolving Lender shall be deemed to,
and hereby agrees to, purchase an assignment of such Swing Line Loan in an
amount equal to its Pro Rata Share. If for any reason (1) Revolving
Loans are not made upon the request of Swing Line Lender as provided in the
immediately preceding paragraph in an amount sufficient to repay any amounts
owed to Swing Line Lender in respect of any outstanding Swing Line Loans or (2)
the Revolving Loan Commitments are terminated at a time when any Swing Line
Loans are outstanding, upon notice from Swing Line Lender as provided below,
each Revolving Lender shall fund the purchase of such assignment in an amount
equal to its Pro Rata Share (calculated, in the case of the foregoing clause
(2), immediately prior to such termination of the Revolving Loan Commitments)
of the unpaid amount of such Swing Line Loans together with accrued interest
thereon. Upon one Business Day’s notice from Swing Line Lender to
Administrative Agent, who shall promptly notify the Revolving Lenders, each
Revolving Lender shall deliver to Administrative Agent for the benefit of Swing
Line Lender such amount in same day funds at the Funding and Payment Account. Without
limiting the effect of the deemed assignment described in the preceding
sentence, in order to further evidence such assignment (and without prejudice
to the effectiveness of the assignment provisions set forth above), each
Revolving Lender agrees to enter into an Assignment Agreement at the request of
Swing Line Lender in form and substance reasonably satisfactory to Swing Line
Lender. In the event any Revolving Lender fails to make available to Swing Line
Lender any amount as provided in this paragraph, Swing Line Lender shall be
entitled to recover such amount on demand from such Revolving Lender together
with interest thereon at


 


35

















 


the
rate customarily used by Swing Line Lender for the correction of errors among
banks for three Business Days and thereafter at the Base Rate. In the event
Swing Line Lender receives a payment of any amount in which other Revolving
Lenders have purchased assignments as provided in this paragraph, Swing Line
Lender shall promptly remit such payment to Administrative Agent for
distribution to each such other Revolving Lender its Pro Rata Share of such
payment.


 


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


 


B.            Borrowing
Mechanics. Term Loans or Revolving Loans made as Base Rate Loans on any
Funding Date (other than Revolving Loans made pursuant to a request by Swing
Line Lender pursuant to subsection 2.1A(iii) or Revolving Loans made pursuant
to subsection 3.3B) shall be in an aggregate minimum amount of $1,000,000 and
multiples of $100,000 in excess of that amount. Term Loans or Revolving Loans
made on any Funding Date as Eurodollar Rate Loans with a particular Interest
Period shall be in an aggregate minimum amount of $2,000,000 and multiples of
$100,000 in excess of that amount. Swing Line Loans made on any Funding Date
shall be in an aggregate minimum amount of $500,000 and multiples of $100,000
in excess of that amount. Whenever Company desires that Lenders make Term Loans
or Revolving Loans it shall deliver to Administrative Agent a duly executed
Notice of Borrowing no later than 11:00 A.M. (New York City time) at least
three Business Days in advance of the proposed Funding Date (in the case of a
Eurodollar Rate Loan) or at least one Business Day in advance of the proposed
Funding Date (in the case of a Base Rate Loan). Whenever Company desires that
Swing Line Lender make a Swing Line Loan, it shall deliver to Swing Line Lender
at the Swing Line Funding and Payment Office a duly executed Notice of
Borrowing no later than 12:00 Noon (New York City time) on the proposed Funding
Date. Term


 


36

















 


Loans and Revolving Loans may be continued as or
converted into Base Rate Loans and Eurodollar Rate Loans in the manner provided
in subsection 2.2D. In lieu of delivering a Notice of Borrowing, Company may
give Administrative Agent (or in the case of Swing Line Loans, Swing Line
Lender and Administrative Agent), as applicable, telephonic notice by the
required time of any proposed borrowing under this subsection 2.1B; provided
that such notice shall be promptly confirmed in writing by delivery of a duly
executed Notice of Borrowing to Administrative Agent (or Swing Line Lender in
the case of Swing Line Loans) on or before the applicable Funding Date.


 


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


 


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


 


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


 


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


 


Promptly after
receipt by Administrative Agent of a Notice of Borrowing pursuant to subsection
2.1B (or telephonic notice in lieu thereof), Administrative Agent shall notify
each Lender for that type of Loan (other than Swing Line Lender in the case of
a Swing Line Loan borrowing) of the proposed borrowing. Each such Lender (other
than Swing Line Lender) shall make the amount of its Loan available to
Administrative Agent at the Funding and Payment Office not later than 1:00 P.M.
(New York City time) on the applicable Funding Date in same day funds in
Dollars. Swing Line Lender shall make the amount of its Loan available directly
to Company as provided below. Except as provided in subsection 2.1A(iii) or
subsection


 


37

















 


3.3B with respect to Revolving Loans used to repay
Refunded Swing Line Loans or to reimburse any Issuing Lender for the amount of
a drawing under a Letter of Credit issued by it, upon satisfaction or waiver of
the conditions precedent specified in subsections 4.1 (in the case of Loans
made on the Closing Date) and 4.2 (in the case of all Loans), Administrative
Agent or Swing Line Lender, as the case may be, shall make the proceeds of such
Loans available to Company on the applicable Funding Date by causing an amount
of same day funds in Dollars equal to the proceeds of all such Loans received
by Administrative Agent from Lenders or to be disbursed by Swing Line Lender,
as applicable, to be credited to the account designated by Company in the
applicable Notice of Borrowing.


 


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


 


D.            The
Register. Administrative
Agent, acting for these purposes solely as an agent of Company (it being
acknowledged that Administrative Agent, in such capacity, and its officers,
directors, employees, agent and affiliates shall constitute Indemnitees under
subsection 10.3), shall maintain
(and make available for inspection by Company and Lenders upon reasonable prior
notice at reasonable times) at its address referred to in subsection 10.8 a
register for the recordation of, and shall record, the names and addresses of
Lenders and the Term Loan Commitment, Revolving Loan Commitment, Swing Line
Loan Commitment, Term Loans, Revolving Loans and Swing Line Loans of each
Lender from time to time (the “Register”). Company,
Administrative Agent and Lenders shall, absent manifest error, deem and treat
the Persons listed as Lenders in the Register as the holders and owners of the
corresponding Commitments and Loans listed therein for all purposes hereof; all
amounts owed with respect to any Commitment or Loan shall be owed to the Lender
listed in the Register as the owner thereof; and any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be conclusive
and binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans. Each Lender shall record on its internal
records the amount of its Loans and Commitments and each payment in respect
hereof, and any such recordation shall be conclusive


 


38

















 


and binding on Company, absent manifest error,
subject to the entries in the Register, which shall, absent manifest error,
govern in the event of any inconsistency with any Lender’s records. Failure to
make any recordation in the Register or in any Lender’s records, or any error
in such recordation, shall not affect any Loans or Commitments or any
Obligations in respect of any Loans.


 


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


 


2.2          Interest
on the Loans.


 


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


 


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


 


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


 


39

















 


(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

  	
   

  	
  Eurodollar Rate

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Leverage Ratio

  	
   

  	
  Margin

  	
   

  	
  Base Rate Margin

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than

  	
   

  	
  3.50:1.00

  	
   

  	
  2.000

  	
  %

  	
  1.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than or equal
  to

  	
   

  	
  3.50:1.00

  	
   

  	
  1.750

  	
  %

  	
  0.750

  	
  %

  



 


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


 


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


 


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


 


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


 


40

















 


	
   

  	
   

  	
  Consolidated

  	
   

  	
  Eurodollar Rate

  	
   

  	
  Base

  	
   

  
	
   

  	
   

  	
  Leverage Ratio

  	
   

  	
  Margin

  	
   

  	
  Rate Margin

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal to

  	
   

  	
  4.50:1.00

  	
   

  	
  2.500

  	
  %

  	
  1.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal to

  but less than

  	
   

  	
  4.00:1.00

  4.50:1.00

  	
   

  	
  2.250

  	
  %

  	
  1.250

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal to

  but less than

  	
   

  	
  3.50:1.00

  4.00:1.00

  	
   

  	
  2.000

  	
  %

  	
  1.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal to

  but less than

  	
   

  	
  3.00:1.00

  3.50:1.00

  	
   

  	
  1.875

  	
  %

  	
  0.875

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than

  	
   

  	
  3.00:1.00

  	
   

  	
  1.750

  	
  %

  	
  0.750

  	
  %

  



 


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


 


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


 


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


 


B.            Interest
Periods. In connection with each Eurodollar Rate Loan, Company may,
pursuant to the applicable Notice of Borrowing or Notice of


 


41

















 


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


 


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


 


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


 


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


 


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


 


42

















 


at maturity (including final maturity); provided
that in the event any Swing Line Loans or any Revolving Loans that are Base
Rate Loans are prepaid pursuant to subsection 2.4B(i), interest accrued on such
Loans through the date of such prepayment shall be payable on the next
succeeding Interest Payment Date applicable to Base Rate Loans (or, if earlier,
at final maturity).


 


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


 


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


 


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


 


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


 


43

















 


Loans. Payment or acceptance of the increased rates of
interest provided for in this subsection 2.2E is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.


 


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


 


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


 


2.3          Fees.


 


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


 


44

















 


	
   

  	
   

  	
  Consolidated

  	
   

  	
  Commitment

  	
   

  
	
   

  	
   

  	
  Leverage Ratio

  	
   

  	
  Fee Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal to

  	
   

  	
  4.50:1.00

  	
   

  	
  0.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal to

  but less than

  	
   

  	
  4.00:1.00

  4.50:1.00

  	
   

  	
  0.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal to

  but less than

  	
   

  	
  3.50:1.00

  4.00:1.00

  	
   

  	
  0.375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal to

  but less than

  	
   

  	
  3.00:1.00

  3.50:1.00

  	
   

  	
  0.375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than

  	
   

  	
  3.00:1.00

  	
   

  	
  0.250

  	
  %

  



 


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


 


Upon
delivery of the Pricing Certificate by Company to Administrative Agent pursuant
to subsection 6.1 (v), the commitment fee rate shall automatically be adjusted
in accordance with such Pricing Certificate, such adjustment to become
effective on the next succeeding Business Day following the receipt by
Administrative Agent of such Pricing Certificate (subject to the foregoing
provisions of this subsection 2.3A); provided that, if at any time a Pricing
Certificate is not delivered at the time required pursuant to subsection
6.1(v), from the time such Pricing Certificate was required to be delivered
until the Business Day next succeeding delivery of such Pricing Certificate,
the commitment fee rate shall be the maximum percentage amount set forth above.


 


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


 


45

















 


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


 


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


 


	
  Date

  	
   

  	
  Scheduled Repayment

  	
   

  
	
  October 31, 2006

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2007

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2007

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  July 31, 2007

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  October 31, 2007

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2008

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2008

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  July 31, 2008

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  October 31, 2008

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2009

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2009

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  July 31, 2009

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  October 31, 2009

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2010

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2010

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  July 31, 2010

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  October 31, 2010

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2011

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2011

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  July 31, 2011

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  October 31, 2011

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2012

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2012

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  July 31, 2012

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  October 31, 2012

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2013

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2013

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  July 28, 2013

  	
   

  	
  $

  	
  139,875,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  150,000,000

  	
   

  



 


46

















 


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


 


B.            Prepayments
and Reductions in Revolving Loan Commitments.


 


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


 


47

















 


(ii)           Voluntary
Reductions of Revolving Loan Commitments. Company may, upon not less than
three Business Days’ prior written notice by delivery of a Notice of Prepayment
to Administrative Agent or upon telephonic notice promptly confirmed in writing
by the delivery of a Notice of Prepayment to Administrative Agent or upon such
lesser number of days’ prior written or telephonic notice, as determined by
Administrative Agent in its sole discretion, at any time and from time to time,
terminate in whole or permanently reduce in part, without premium or penalty,
the Revolving Loan Commitments in an amount up to the amount by which the
Revolving Loan Commitment Amount exceeds the Total Utilization of Revolving
Loan Commitments at the time of such proposed termination or reduction; provided
that any such partial reduction of the Revolving Loan Commitment Amount shall
be in an aggregate minimum amount of $3,000,000 and multiples of $1,000,000 in
excess of that amount. Company’s notice to Administrative Agent (who will
promptly notify each Revolving Lender of such notice) shall designate the date
(which shall be a Business Day) of such termination or reduction and the amount
of any partial reduction, and such termination or reduction shall be effective
on the date specified in Company’s notice and shall reduce the amount of the
Revolving Loan Commitment of each Revolving Lender proportionately to its Pro
Rata Share. Any such voluntary reduction of the Revolving Loan Commitment
Amount shall be applied as specified in subsection 2.4B(iv). All written or
telephonic notices of termination or reduction of the Revolving Loan
Commitments delivered pursuant to this subsection 2.4B(ii) shall be irrevocable
and Company shall be bound to the termination or reduction of the Revolving
Loan Commitments referenced in such notice; provided that a notice of
termination or reduction of the Revolving Loan Commitments delivered by Company
may state that such notice is conditioned upon the effectiveness of other
credit facilities, in which case such notice may be revoked by Company (by
notice to Administrative Agent on or prior to the specified effective date) if
such condition is not satisfied.


 


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


 


(a)           Prepayments
and Reductions From Net Asset Sale Proceeds. No later than the fifth
Business Day following the date of receipt by Company or any of its Domestic
Subsidiaries of any Net Asset Sale Proceeds in respect of any Asset Sale,
Company shall either (1) prepay the Loans and/or the Revolving Loan Commitment
Amount shall be permanently reduced in an aggregate amount equal to such Net
Asset Sale Proceeds or (2), so long as no Event of Default shall have occurred
and be continuing and to the extent that aggregate Net Asset Sale Proceeds for
the Fiscal Year in which such proceeds are received do not exceed $15,000,000
deliver to Administrative Agent an Officer’s Certificate setting forth (x) that
portion of such Net Asset Sale Proceeds that Company or such Subsidiary intends
to reinvest in equipment or other productive assets of the general type used in
the business of Company and its Subsidiaries within 270 days of such date


 


48

















 


of
receipt and (y) the proposed use of such portion of the Net Asset Sale Proceeds
and such other information with respect to such reinvestment as Administrative
Agent may reasonably request, and Company shall, or shall cause one or more of
its Subsidiaries to, promptly and diligently apply such portion to such
reinvestment purposes; provided, however, that, pending such
reinvestment, such portion of the Net Asset Sale Proceeds shall be applied to
prepay outstanding Revolving Loans (without a reduction in the Revolving Loan
Commitment Amount) to the full extent thereof. In addition, Company shall, no
later than 270 days after receipt of such Net Asset Sale Proceeds that have not
theretofore been applied to the Obligations or that have not been so reinvested
as provided above, make an additional prepayment of the Loans (and/or the
Revolving Loan Commitment Amount shall be permanently reduced) in the full
amount of all such Net Asset Sale Proceeds.


 


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


 


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


 


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


 


49

















 


(e)           Prepayments
and Reductions from Consolidated Excess Cash Flow. In the event that there
shall be Consolidated Excess Cash Flow for any Fiscal Year (commencing with the
Fiscal Year ending June 30, 2007), Company shall, no later than 105 days after
the end of such Fiscal Year, prepay the Loans and/or the Revolving Loan
Commitment Amount shall be permanently reduced in an aggregate amount equal to (i)
50% of such Consolidated Excess Cash Flow minus (ii) voluntary repayments of
the Loans (excluding repayments of Revolving Loans or Swingline Loans, except
to the extent the Revolving Commitments are permanently reduced in connection
with such repayments); provided that for any Fiscal Year in which the
Consolidated Leverage Ratio as of the last day of such Fiscal Year is less than
3.00:1.00 no prepayment shall be required hereunder.


 


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


 


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


 


(h)           Prepayments
Due to Failure to Consummate the Acquisition in accordance with subsection 6.10.
In the event the Acquisition is not consummated in accordance with subsection
6.10 of this Agreement, not later than noon Pacific


 


50

















 


time
Monday August 7, 2006, Company shall prepay the Term Loans in an aggregate amount equal to the amounts
drawn on the Closing Date to fund the Acquisition Financing Requirements.


 


(iv)          Application
of Prepayments.


 


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


 


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


 


51

















 


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


 


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


 


C.            General
Provisions Regarding Payments.


 


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


 


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


 


(iii)          Apportionment
of Payments. Aggregate principal and interest payments in respect of Term
Loans and Revolving Loans shall be apportioned among all outstanding Loans to
which such payments relate, in each case proportionately to Lenders’ respective
Pro Rata Shares; provided, that all payments in respect of Loans shall
first be applied in the following priority to repay any amounts owing to (i) first,
Swing Line Lender due to the failure of any Revolving Lender to (A) fund a
Revolving Loan for the purpose of repaying any Refunded Swing Line Loan
pursuant to subsection 2.1A(iii)(b) or (B) purchase an assignment of an unpaid
Swing Line Loan pursuant to subsection 2.1A(iii)(c), and (ii) second,
Issuing Lenders due to the failure of any Revolving Lender to (A) fund a
Revolving Loan for the purpose of repaying any unreimbursed amounts of a
drawing under a Letter of Credit pursuant to subsection 3.3B or (B) fund a
participation in any such unreimbursed Letter of Credit drawing pursuant to


 


52

















 


subsection 3.3C. Administrative Agent shall promptly distribute to each
Lender, at the account specified in the payment instructions set forth below
its name on the appropriate signature page hereof or at such other account as
such Lender may request in subsequent payment instructions delivered to
Administrative Agent by such Lender, its Pro Rata Share of all such payments
received by Administrative Agent and the commitment fees and letter of credit
fees of such Lender, if any, when received by Administrative Agent pursuant to
subsection 2.3 and subsection 3.2. Notwithstanding the foregoing
provisions of this subsection 2.4C(iii), if, pursuant to the provisions of
subsection 2.6C, any Notice of Conversion/Continuation is withdrawn as to any
Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its
Pro Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give
effect thereto in apportioning interest payments received thereafter.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


2.5          Use
of Proceeds.


 


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


 


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


 


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


 


2.6          Special
Provisions Governing Eurodollar Rate Loans.


 


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


 


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


 


B.            Inability
to Determine Applicable Interest Rate. In the event that Administrative
Agent shall have determined (which determination shall be conclusive and
binding upon all parties hereto), on any Interest Rate Determination Date that
by reason of circumstances affecting the London interbank market adequate and
fair means do not exist for ascertaining the interest rate applicable to such
Loans on the basis provided for in the definition


 


54

















 


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.


 


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


 


D.            Compensation
For Breakage or Non-Commencement of Interest Periods. Company shall
compensate each Lender, upon written request by that Lender pursuant to
subsection 2.8, for all reasonable losses, expenses and liabilities (including
any interest paid


 


55

















 


by that Lender to lenders of funds borrowed by it to
make or carry its Eurodollar Rate Loans and any loss, expense or liability
sustained by that Lender in connection with the liquidation or re-employment of
such funds) which that Lender may sustain: (i) if for any reason (other
than a default by that Lender or because such Lender is an Affected Lender) a
borrowing of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Borrowing or a telephonic request therefor, or a
conversion to or continuation of any Eurodollar Rate Loan does not occur on a
date specified therefor in a Notice of Conversion/Continuation or a telephonic
request therefor, (ii) if any prepayment or other principal payment or any
conversion of any of its Eurodollar Rate Loans (including any prepayment or
conversion occasioned by the circumstances described in subsection 2.6C) occurs
on a date prior to the last day of an Interest Period applicable to that Loan,
(iii) if any prepayment of any of its Eurodollar Rate Loans is not made on
any date specified in a Notice of Prepayment given by Company, or (iv) as
a consequence of any other default by Company in the repayment of its
Eurodollar Rate Loans when required by the terms of this Agreement.


 


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


 


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


 


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


 


2.7          Increased
Costs; Taxes; Capital Adequacy.


 


A.            Compensation
for Increased Costs. Subject to the provisions of subsection 2.7B (which
shall be controlling with respect to the matters covered thereby), in the event
that any Lender (including any Issuing Lender) shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or


 


56

















 


governmental rule, regulation or order), or any
determination of a court or other Government Authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other Government Authority (whether or not having the force of
law):


 


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


 


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


 


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


 


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


 


B.            Taxes.


 


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


 


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


 


57

















 


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


 


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


 


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


 


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


 


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


 


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


 


58

















 


such
Lender certifying that such Lender is not (i) a “bank” for purposes of
Section 881(c) of the Internal Revenue Code, (ii) a ten-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of
Company or Holdings or (iii) a controlled foreign corporation related to
Company (within the meaning of Section 864(d)(4) of the Internal Revenue Code),
in each case together with any other certificate or statement of exemption
required under the Internal Revenue Code or the regulations issued thereunder
to establish that such Lender is not subject to, or is subject to a reduced
rate of, United States withholding tax with respect to any payments to such
Lender of interest payable under any of the Loan Documents.


 


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


 


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


 


59

















 


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


 


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


 


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


 


60

















 


reduction, increased to the extent necessary to take
into account any Tax incurred or payable by such Lender as a result of the
obligation of Company to pay such additional amounts.


 


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


 


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


 


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


 


2.9          Replacement
of a Lender.


 


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


 


61

















 


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


 


Section
3.              LETTERS OF CREDIT


 


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


 


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


 


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(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;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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C.            Mechanics
of Issuance.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


3.2          Letter
of Credit Fees.


 


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


 


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


 


65

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


66

















 


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


 


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


 


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


 


67

















 


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


 


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


 


D.            Interest
on Amounts Paid Under Letters of Credit.


 


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


 


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


 


68

















 


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


 


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


 


3.4          Obligations Absolute.


 


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


 


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


 


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


 


69

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


3.5          Nature
of Issuing Lenders’ Duties.


 


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


 


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


 


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


 


Section
4.              CONDITIONS TO LOANS
AND LETTERS OF CREDIT


 


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


 


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


 


The
obligations of Lenders to make the Term Loans and any Revolving Loans and Swing
Line Loans made on the Closing Date were, in addition to the conditions precedent
specified in subsection 4.2, subject to prior or concurrent satisfaction of the
following conditions. Solely for purposes of the historical conditions set
forth in this Section 4.1, capitalized terms used in this Section 4.1 and
defined in the Original Credit Agreement shall have the meanings specified in
the Original Credit Agreement as applicable as of the Closing Date.


 


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


 


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


 


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


 


71

















 


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


 


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


 


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


 


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


 


C.            Corporate
and Capital Structure; Ownership.


 


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


 


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


 


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


 


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


 


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Subsidiaries for February through May 2005, consisting
of balance sheets and the related consolidated statements of income,
stockholders’ equity and cash flows for such period and (iv) unaudited
financial statements of UK Target and its Subsidiaries as at May 31, 2006, consisting
of balance sheets and the related consolidated statements of income,
stockholders’ equity and cash flows for the 12 month period ending on such date
all in reasonable detail.


 


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


 


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


 


H.            Reserved.


 


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


 


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


 


K.            Environmental
Reports. Administrative Agent shall have received reports and other
information, in form, scope and substance reasonably satisfactory to


 


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Administrative Agent, regarding environmental matters
relating to Company and its Subsidiaries and the Facilities.


 


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


 


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


 


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


 


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


 


(iv)          PTO
Cover Sheets, Etc. Delivery to Administrative Agent of all cover sheets or
other documents or instruments required to be filed with the PTO in order to
create or perfect Liens in respect of any IP Collateral together with releases
of all security interests duly executed (if necessary) by all applicable
Persons for filing in all applicable


 


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jurisdictions as may be necessary to terminate any effective PTO
filings in respect of IP Collateral (other than any such PTO filings in respect
of Liens permitted to remain outstanding pursuant to the terms of this
Agreement); and


 


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


 


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


 


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


 


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


 


(iii)          Reserved:


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


4.2          Conditions
to All Loans.


 


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


 


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


 


B.            As
of that Funding Date:


 


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


 


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


 


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


 


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


 


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4.3          Conditions
to Letters of Credit.


 


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


 


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


 


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


 


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


 


4.4          Conditions
to Effectiveness of this Agreement. This Agreement shall become effective upon
satisfaction of the following
conditions:


 


(i)            Administrative
Agent shall have received sufficient copies of this Agreement originally
executed and delivered by each applicable Loan Party, each Agent and each
Lender;


 


(ii)           on
the Effective Date, the representations and warranties contained herein and in
the other Loan Documents shall be true and correct in all materials respects on
and as of the Effective Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties
specifically related to an earlier date, in which case such representations and
warranties shall have been true and correct in all materials respect on and as
of such earlier date; and


 


(iii)          on
the Effective Date, no event shall have occurred and be continuing that would
constitute and Event of Default or a Default.


 


Section
5.              COMPANY’S
REPRESENTATIONS AND WARRANTIES


 


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


 


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


 


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


 


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


 


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


 


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


 


5.2          Authorization
of Borrowing, etc.


 


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


 


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


 


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


 


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


 


5.3          Financial
Condition.


 


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


 


80

















 


Date,
is not reflected in the most recent financial statements delivered to Lenders
pursuant to subsection 6.1 or the notes thereto and that, in any such case, is
material in relation to the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its Subsidiaries.


 


5.4          No
Material Adverse Change; No Restricted Junior Payments.


 


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


 


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


 


A.            Title
to Properties; Liens. Company and its Subsidiaries have (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real
or personal property), or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under subsection 7.7 and
except for such defects that individually or in the aggregate would not have a
Material Adverse Effect. Except as permitted by this Agreement, all such
properties and assets are free and clear of Liens.


 


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


 


C.            Intellectual
Property. As of the Closing Date, Company and its Subsidiaries own or have
the right to use, all Intellectual Property used in the conduct of their
business, except where the failure to own or have such right to use in the
aggregate could not reasonably be expected to result in a Material Adverse
Effect. No claim has been asserted against Company or any of its Subsidiaries
and is pending by any Person challenging or questioning such use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Officer of Company know of any valid basis for any such


 


81

















 


claim, except for such claims that in the aggregate
could not reasonably be expected to result in a Material Adverse Effect. The
use of such Intellectual Property by Company and its Subsidiaries does not
infringe on the rights of any Person, except for such claims and infringements
that, in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect. All material federal and state and all material
foreign registrations of and applications for Intellectual Property, and all
material unregistered Intellectual Property that is not readily available in
the marketplace, that are owned or licensed by Company or any of its
Subsidiaries on the Closing Date are described on Schedule 5.5C annexed hereto.


 


5.6          Litigation;
Adverse Facts.


 


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


 


5.7          Payment
of Taxes.


 


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


 


5.8          Performance
of Agreements; Material Contracts.


 


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


 


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


 


5.9          Governmental
Regulation.


 


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


 


5.10        Securities
Activities.


 


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


 


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


 


5.11        Employee
Benefit Plans.


 


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


 


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


 


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


 


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


 


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


 


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


 


5.12        Certain
Fees.


 


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


 


5.13        Environmental
Protection.


 


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


 


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


 


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


 


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


 


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


 


5.14        Employee
Matters.


 


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


 


5.15        Solvency.


 


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


 


5.16        Matters
Relating to Collateral.


 


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


 


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


 


C.            Absence
of Third-Party Filings. Except such as may have been filed in favor of
Administrative Agent as contemplated by subsection 5.16A and to evidence
permitted lease obligations and other Liens permitted pursuant to subsection
7.2 and those that are being terminated in connection with the refinancing of
the Existing Credit Agreement, (i) no effective UCC financing statement,
fixture filing or other instrument similar in effect covering all or any


 


85

















 


part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the
IP Collateral is on file in the PTO (to Company’s knowledge) or in the United
States Copyright Office.


 


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


 


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


 


5.17        Disclosure.


 


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


 


5.18        Subordinated
Indebtedness.


 


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


 


5.19        Related
Agreements.


 


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


 


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


 


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


 


5.20        Reporting
to IRS.


 


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


 


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


 


5.21        Foreign
Assets Control Regulations, etc.


 


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


 


5.22        Foreign
Subsidiaries.


 


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


 


Section
6.              COMPANY’S
AFFIRMATIVE COVENANTS


 


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


 


87

















 


6.1          Financial
Statements and Other Reports.


 


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


 


(i)            Events
of Default, etc.:  promptly upon any Officer
of Company obtaining knowledge (a) of any condition or event that constitutes
an Event of Default or Potential Event of Default, or becoming aware that any
Lender has given any written notice (other than to Administrative Agent) or
taken any other action with respect to a claimed Event of Default or Potential
Event of Default, (b) that any Person has given any notice to Company or
any of its Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in subsection 8.2, (c) of
any condition or event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange Commission on Form 8-K
if Company were required to file such reports under the Exchange Act, or (d) of
the occurrence of any event or change that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect, an Officer’s
Certificate specifying the nature and period of existence of such condition,
event or change, or specifying the notice given or action taken by any such
Person and the nature of such claimed Event of Default, Potential Event of
Default, default, event or condition, and what action Company has taken, is
taking and proposes to take with respect thereto;


 


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


 


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


 


88

















 


being understood that the information required by this Section 6.1(iii)
may be furnished in the form of a Form 10-Q);


 


(iv)          Year-End
Financials:  as soon as available and
in any event within 105 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of Holdings and its Subsidiaries as at the end of
such Fiscal Year and the related consolidated statements of income,
stockholders’ equity and cash flows of Holdings and its Subsidiaries for such
Fiscal Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year, all in reasonable detail and certified by
the chief financial officer of Company that they fairly present, in all
material respects, the financial condition of Holdings and its Subsidiaries as
at the dates indicated and the results of their operations and their cash flows
for the periods indicated, (b) a narrative report describing the
operations of Holdings and its Subsidiaries for such Fiscal Year, and
(c) in the case of such consolidated financial statements, a report
thereon of Ernst & Young LLP or other independent certified public
accountants of recognized national standing selected by Company and reasonably satisfactory
to Administrative Agent, which report shall be unqualified, shall express no
doubts, assumptions or qualifications concerning the ability of Holdings and
its Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material respects, the
consolidated financial position of Holdings and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for
the periods indicated in conformity with GAAP applied on a basis consistent
with prior years (except as otherwise disclosed in such financial statements)
and that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally
accepted auditing standards (it being understood that the information required
by this Section 6.1(v) may be furnished in the form of a Form 10-K);


 


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


 


89

















 


(vi)          Reconciliation
Statements:  if, as a result of any
change in accounting principles and policies from those used in the preparation
of the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Holdings and its Subsidiaries delivered
pursuant to subdivisions (iii), (iv) or (xiii) of this subsection 6.1 will
differ in any material respect from the consolidated financial statements that
would have been delivered pursuant to such subdivisions had no such change in
accounting principles and policies been made, then (a) together with the
first delivery of financial statements pursuant to subdivision (iii), (iv) or
(xiii) of this subsection 6.1 following such change, consolidated financial
statements of Holdings and its Subsidiaries for (y) the current Fiscal
Year to the effective date of such change and (z) the two full Fiscal
Years immediately preceding the Fiscal Year in which such change is made, in
each case prepared on a pro forma basis as if such change had been in effect
during such periods, and (b) together with each delivery of financial
statements pursuant to subdivision (iii), (iv) or (xiii) of this subsection 6.1
following such change, if required pursuant to subsection 1.2, a written
statement of the chief accounting officer or chief financial officer of Company
setting forth the differences (including any differences that would affect any calculations
relating to the financial covenants set forth in subsection 7.6) which would
have resulted if such financial statements had been prepared without giving
effect to such change;


 


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


 


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


 


(ix)           SEC
Filings and Press Releases:  promptly
upon their becoming available, copies of (a) all financial statements,
reports, notices and proxy statements sent or made available generally by
Company to its security holders or by any Subsidiary of Company


 


90

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


91

















 


and cash flows of Holdings and its Subsidiaries for each quarter of
such Fiscal Year, and (c) such other information and projections as any
Lender may reasonably request;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


6.2          Existence,
etc.


 


Except
as permitted under subsection 7.7, Company will, and will cause each of its
Subsidiaries to, at all times preserve and keep in full force and effect its existence
in the jurisdiction of organization specified on Schedule 5.1 and all
rights and franchises material to its


 


92

















 


business; provided, however that neither
Company nor any of its Subsidiaries shall be required to preserve any such
right or franchise if the Governing Body of Company or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of Company or such Subsidiary, as the case may be, and that the
loss thereof is not disadvantageous in any material respect to Company, such
Subsidiary or Lenders.


 


6.3          Payment
of Taxes and Claims; Tax.


 


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


 


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


 


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


 


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


 


B.            Insurance.
Company will maintain or cause to be maintained, with financially sound and
reputable insurers, such public liability insurance, third party property
damage insurance, business interruption insurance and casualty insurance with
respect to liabilities, losses or damage in respect of the assets, properties
and businesses of Company and its Subsidiaries as may customarily be carried or
maintained under similar circumstances by corporations of established
reputation engaged in similar businesses, in each case in such amounts (giving
effect to self-insurance), with such deductibles, covering such risks and
otherwise on such terms and conditions as shall be customary for corporations
similarly situated in the industry. Without limiting the generality of the
foregoing, Company will maintain or


 


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cause to be maintained (i) flood insurance with
respect to each Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, in each case in
compliance with any applicable regulations of the Board of Governors of the
Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all
times satisfactory to Administrative Agent in its commercially reasonable
judgment. Each such policy of insurance shall (a) name Administrative Agent for
the benefit of Lenders as an additional insured thereunder as its interests may
appear and (b) in the case of each business interruption and casualty insurance
policy, contain a loss payable clause or endorsement, satisfactory in form and
substance to Administrative Agent, that names Administrative Agent for the
benefit of Lenders as the loss payee thereunder for any covered loss in excess
of $1,000,000 and provides for at least 30 days prior written notice to
Administrative Agent of any modification or cancellation of such policy.


 


C.            Application
of Net Insurance/Condemnation Proceeds.


 


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


 


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


 


(iii)          Net
Insurance/Condemnation Proceeds Received by Administrative Agent. Upon
receipt by Administrative Agent of any Net Insurance/Condemnation Proceeds as
loss payee, (a) if and to the extent Company would have been required to apply
such Net Insurance/Condemnation Proceeds (if it had received them directly) to
prepay the Loans and/or reduce the Revolving Loan Commitment Amount,
Administrative Agent shall, and Company hereby authorizes Administrative Agent
to, apply such Net Insurance/Condemnation Proceeds to prepay the Loans (and/or
the Revolving Loan Commitment Amount shall be reduced) as provided in
subsection 2.4B, and (b) to the extent the foregoing clause (a) does not apply,
Administrative Agent shall


 


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


 


6.5          Inspection
Rights; Lender Meeting.


 


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


 


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


 


6.6          Compliance
with Laws, etc.


 


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


 


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6.7          Environmental
Matters.


 


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


 


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


 


(ii)           Notice
of Certain Releases, Remedial Actions, Etc. Promptly upon the occurrence
thereof, written notice describing in reasonable detail (a) any Release
required to be reported to any federal, state or local governmental or
regulatory agency under any applicable Environmental Laws, (b) any
remedial action taken by Company or any other Person in response to (1) any
Hazardous Materials Activities the existence of which could reasonably be
expected to result in one or more Environmental Claims having, individually or
in the aggregate, a Material Adverse Effect, or (2) any Environmental
Claims that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect, and (c) Company’s discovery of any
occurrence or condition on any real property adjoining or in the vicinity of
any Facility that could cause such Facility or any part thereof to be subject
to any material restrictions on the ownership, occupancy, transferability or
use thereof under any Environmental Laws.


 


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


 


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


 


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expected to subject Company or any of its Subsidiaries to any material
additional obligations or requirements under any Environmental Laws that could
reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect.


 


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


 


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


 


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


 


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


 


C.            Subsidiary
Organizational Documents, Legal Opinions, Etc. Company shall deliver to
Administrative Agent, together with such Loan Documents, (i) certified
copies of such Subsidiary’s Organizational Documents, together with, if such
Subsidiary is a Domestic Subsidiary, a good standing certificate from the
Secretary of State of the jurisdiction of its organization and, to the extent
generally available, a certificate or other evidence of good


 


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


 


6.9          Matters
Relating to Additional Real Property Collateral.


 


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


 


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


 


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required under such laws and regulations as determined
by Administrative Agent in its discretion).


 


6.10        Acquisition.


 


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


 


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


 


C.            Consummation
of Acquisition. On or before noon Pacific time Wednesday August 2, 2006 all
conditions to the Acquisition set forth in the Acquisition Agreement shall have
been satisfied or the fulfillment of any such conditions shall have been waived
with the written consent of Administrative Agent and the Acquisition shall have
become effective in accordance with the terms of the Acquisition Agreement.


 


6.11        Other Post
Closing Matters.


 


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


 


Section
7.              COMPANY’S NEGATIVE
COVENANTS


 


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


 


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7.1          Indebtedness.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(viii)        Company
or a Domestic Subsidiary of Company may become and remain liable with respect
to Indebtedness of any Person assumed in connection with any acquisition of
such Person permitted under subsection 7.3 and a Person that becomes a direct
or indirect wholly-owned Subsidiary of Company as a result of any acquisition


 


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permitted under subsection 7.3 may remain liable with respect to
Indebtedness existing on the date of such acquisition; provided that
such Indebtedness is not created in anticipation of such acquisition;


 


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


 


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


 


7.2          Liens
and Related Matters.


 


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


 


(i)            Permitted
Encumbrances;


 


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


 


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


 


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(iv)          Liens
described in Schedule 7.2 annexed hereto;


 


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


 


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


 


B.            No
Further Negative Pledges. Neither Company nor any of its Domestic
Subsidiaries shall enter into any agreement (other than the Subordinated Note
Indenture or any agreement prohibiting only the creation of Liens securing
Subordinated Indebtedness) prohibiting the creation or assumption of any Lien
upon any of its properties or assets, whether now owned or hereafter acquired,
except (i) with respect to specific property encumbered to secure payment of
particular Indebtedness or to be sold pursuant to an executed agreement with
respect to an Asset Sale; (ii) this Agreement and the other Loan Documents;
(iii) any covenant in documents creating Liens permitted by Section 7.2A
prohibiting further liens on the assets encumbered thereby; and (iv) any other
agreement that does not restrict Liens created pursuant to the Loan Documents
on assets of Company or its Domestic Subsidiaries securing the Obligations or
any Interest Rate Agreement and does not require the granting of any Lien
securing any other Indebtedness or other obligation by virtue of the granting
of Liens on or pledge of assets of Company or its Domestic Subsidiaries to
secure the Obligations or any Interest Rate Agreement.


 


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


 


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Subordinated Note Indenture, (f) Joint Venture
agreements and other similar agreements relating to the disposition or
distribution of assets, (g) in any agreement that amends, refinances or
replaces any agreement containing restrictions permitted under the preceding
clauses (a) through (f); provided that the terms and conditions of such
agreement, as they relate to any such restrictions, are no less favorable to
Company or such Subsidiaries, as applicable, than those under the agreement so
amended, refinanced or replaced, and (h) restrictions contained in Indebtedness
not incurred in violation hereof by a Foreign Subsidiary; provided that such
restrictions relate only to one or more Foreign Subsidiaries.


 


7.3          Investments;
Acquisitions.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(vii)         Company
and its Domestic Subsidiaries may acquire assets (including Capital Stock and
including Capital Stock of Subsidiaries formed in connection with any such
acquisition) having a fair market value not in excess of $30,000,000 in any one
Fiscal Year and $80,000,000 in the aggregate and continue to own such assets
after the acquisition thereof; provided that (a) Company shall, and
shall cause its Domestic Subsidiaries to, comply with the requirements of
subsections 6.8 and 6.9 with respect to each such acquisition that results in a
Person becoming a Subsidiary, (b) Company shall be in pro forma compliance
with all financial covenants after giving effect to such


 


103

















 


acquisition and (c) no Event of Default shall have occurred and be
continuing prior to such acquisition or result from such acquisition;


 


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


 


(ix)           Company
and its wholly-owned Domestic Subsidiaries may make additional Investments in
their respective Foreign Subsidiaries; provided that the amount of all
such Investments does not exceed $10,000,000 (plus the amount of all loans or
advances permitted under subsection 7.1(iv)) in the aggregate for all such
Investments since the Closing Date, including all Contingent Obligations of
Company pursuant to subsections 7.4(viii) and (ix);


 


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


 


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


 


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


 


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


 


(xiv)        Company
and its Subsidiaries may make loans (financing equipment sold by Company and
its Subsidiaries) or equipment leases to customers doing business with Company
and its Subsidiaries in an aggregate principal amount not to exceed


 


104

















 


$40,000,000 (with the principal amount of such leases to be deemed to
be equal to the discounted present value, at a market rate of interest, of the
remaining rental payments plus any residual value of the leased equipment as
shown on Company’s financial statements); provided that, Company or such
Subsidiary has filed appropriate UCC financing statements (or has taken such
other equivalent actions in any other applicable jurisdiction) to protect its
interest in all such financed equipment to the extent such equipment has, at
the time of such transaction, a fair market value in excess of $30,000 on a per
customer basis; and


 


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


 


7.4          Contingent
Obligations.


 


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


 


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


 


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


 


(iii)          Hedge
Agreements;


 


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


 


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


 


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


 


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


 


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


 


105

















 


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


 


7.5          Restricted
Junior Payments.


 


Company
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, declare, order, pay, make or set apart any sum for any Restricted
Junior Payment; provided that (i)  Company may make regularly
scheduled payments of interest in respect of any Subordinated Indebtedness in
accordance with the terms of, and only to the extent required by, and subject
to the subordination provisions contained in, the indenture or other agreement
pursuant to which such Subordinated Indebtedness was issued, as such indenture
or other agreement may be amended from time to time to the extent not
prohibited under subsection 7.12B, (ii) Company may make all payments
necessary in connection with the Acquisition, (iii) in the case of clauses (a),
(c), (d), (e) and (f) below, so long as no Event of Default shall have occurred
and be continuing or shall be caused thereby, Company may make Restricted
Junior Payments to Holdings (a) in an aggregate amount not to exceed $3,000,000
in any Fiscal Year to the extent necessary to permit Holdings to pay general
administrative costs and expenses, (b) to the extent necessary to permit
Holdings (or an Affiliate of Holdings) to discharge the consolidated, combined
or other group tax liabilities of Holdings and its Subsidiaries, in each case
so long as Holdings (or an Affiliate of Holdings) applies the amount of any
such Restricted Junior Payment for such purpose, (c) for repurchases of Capital
Stock from employees of Company or any of its Subsidiaries, FTD-member
florists, distributors or directors (or their heirs or estates) of Holdings,
Company or any Subsidiary of Company upon the death, disability or termination
of employment (or termination of membership or distribution, in the case of a
FTD-member florist or distributor); provided that such repurchases are
made with the proceeds of such Restricted Junior Payments within three Business
Days of the payment of such Restricted Junior Payments, (d) to make payments of
cash, in lieu of the issuance of fractional shares upon the exercise of
warrants or upon the conversion or exchange of, or issuance of Capital Stock in
lieu of cash dividends on any Capital Stock of Holdings, provided that the
aggregate amount of Restricted Junior Payments made after the Closing Date
pursuant to this clause (d) and clause (c) above shall not exceed $7,500,000, (e)
for other repurchases of Capital Stock of Holdings in an aggregate amount not
to exceed $30,000,000 made from and after the Closing Date; provided that after
giving pro forma effect to any such Restricted Junior Payments and repurchases
(A) the Consolidated Leverage Ratio as of the last day of the Fiscal Quarter
immediately preceding the date of any such Restricted Junior Payment is less
than 4.00:1.00 and (B) the excess of the aggregate Revolving Loan Commitments
over the Total Utilization of Revolving Loan Commitments as of the date of any
such Restricted Junior Payment is at least $20,000,000; provided further that,
such repurchases are made with the proceeds of the applicable Restricted Junior
Payments within three Business Days of the payment of such Restricted Junior
Payments, and (f) to allow Holdings to pay principal and interest on the
Holdings Loan Notes, (iv) Company may purchase Capital Stock of Holdings
in a purchase deemed to occur upon the exercise of stock options, warrants or
other convertible securities to the extent such Capital Stock represents a
portion of the exercise price thereof and (v) Company may purchase or redeem
the Subordinated Notes using the proceeds from a Public Offering of Stock to
the extent the gross proceeds from such Public Offering of Stock aggregate no
less than $50,000,000 and are not otherwise required to be applied as a
mandatory prepayment pursuant to subsection 2.4B(iii)(c), provided that (a) the
Consolidated Leverage Ratio (calculated to give pro forma effect to any


 


106

















 


mandatory
prepayment that will be made using the proceeds from such Public Offering of
Stock) as of the last day of the Fiscal Quarter immediately preceding the date
such proceeds are received is less than 3.50:1.00, (b) the excess of the
Revolving Loan Commitment Amount over the Total Utilization of Revolving Loan
Commitments on the date immediately proceeding the closing of such Public
Offering of Stock is at least $15,000,000 and (c) Administrative Agent shall
have received an Officer’s Certificate setting forth the calculation of the
Consolidated Leverage Ratio required by the foregoing clause (a) and setting
forth the availability of Revolving Loans as required by the foregoing clause
(b).


 


7.6          Financial
Covenants.


 


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


 


	
   

  	
   

  	
  Minimum Fixed

  	
   

  
	
  Period Ending

  	
   

  	
  Charge Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2006

  	
   

  	
  1.30:1.00

  	
   

  
	
  December 31, 2006

  	
   

  	
  1.30:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2007

  	
   

  	
  1.30:1.00

  	
   

  
	
  June 30, 2007

  	
   

  	
  1.30:1.00

  	
   

  
	
  September 30, 2007

  	
   

  	
  1.30:1.00

  	
   

  
	
  December 31, 2007

  	
   

  	
  1.30:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2008

  	
   

  	
  1.30:1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  1.30:1.00

  	
   

  
	
  September 30, 2008

  	
   

  	
  1.35:1.00

  	
   

  
	
  December 31, 2008

  	
   

  	
  1.35:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2009

  	
   

  	
  1.35:1.00

  	
   

  
	
  June 30, 2009

  	
   

  	
  1.35:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

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

  	
   

  	
  1.40:1.00

  	
   

  



 


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


 


107

















 


	
  Period Ending

  	
   

  	
  Maximum Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2006

  	
   

  	
  5.75:1.00

  	
   

  
	
  December 31, 2006

  	
   

  	
  5.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2007

  	
   

  	
  5.75:1.00

  	
   

  
	
  June 30, 2007

  	
   

  	
  5.75:1.00

  	
   

  
	
  September 30, 2007

  	
   

  	
  5.50:1.00

  	
   

  
	
  December 31, 2007

  	
   

  	
  5.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2008

  	
   

  	
  5.50:1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  5.50:1.00

  	
   

  
	
  September 30, 2008

  	
   

  	
  5.25:1.00

  	
   

  
	
  December 31, 2008

  	
   

  	
  5.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2009

  	
   

  	
  5.25:1.00

  	
   

  
	
  June 30, 2009

  	
   

  	
  5.25:1.00

  	
   

  
	
  September 30, 2009

  	
   

  	
  5.00:1.00

  	
   

  
	
  December 31, 2009

  	
   

  	
  5.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2010

  	
   

  	
  5.00:1.00

  	
   

  
	
  June 30, 2010

  	
   

  	
  5.00:1.00

  	
   

  
	
  September 30, 2010

  	
   

  	
  4.75:1.00

  	
   

  
	
  December 31, 2010

  	
   

  	
  4.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2011

  	
   

  	
  4.75:1.00

  	
   

  
	
  June 30, 2011

  	
   

  	
  4.75:1.00

  	
   

  
	
  September 30, 2011

  	
   

  	
  4.50:1.00

  	
   

  
	
  December 31, 2011

  	
   

  	
  4.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2012

  	
   

  	
  4.50:1.00

  	
   

  
	
  June 30, 2012

  	
   

  	
  4.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

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

  	
   

  	
  4.25:1.00

  	
   

  



 


7.7          Restriction
on Fundamental Changes; Asset Sales.


 


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


 


108

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


109

















 


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


 


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


 


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


 


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


 


7.8          Consolidated
Capital Expenditures.


 


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


 


7.9          Transactions
with Shareholders and Affiliates.


 


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


 


110

















 


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


 


7.10        Sales
and Lease-Backs.


 


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


 


7.11        Conduct
of Business.


 


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


 


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


 


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


 


111

















 


B.            Amendments
of Documents Relating to Subordinated Indebtedness. Company shall not, and
shall not permit any of its Subsidiaries to, amend or otherwise change the
terms of any Subordinated Indebtedness, or make any payment consistent with an
amendment thereof or change thereto, if the effect of such amendment or change
is to increase the interest rate on such Subordinated Indebtedness, change (to
earlier dates) any dates upon which payments of principal or interest are due
thereon, change any event of default or condition to an event of default with
respect thereto (other than to eliminate or waive any such event of default or
increase any grace period related thereto), change the redemption, prepayment
or defeasance provisions thereof, change the subordination provisions thereof
(or of any guaranty thereof), or change any collateral therefor (other than to
release such collateral), or if the effect of such amendment or change,
together with all other amendments or changes made, is to increase materially the
obligations of the obligor thereunder or to confer any additional rights on the
holders of such Subordinated Indebtedness (or a trustee or other representative
on their behalf) which would be adverse to Company or Lenders.


 


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


 


7.13        Fiscal Year.


 


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


 


Section
8.              EVENTS OF DEFAULT


 


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


 


8.1          Failure
to Make Payments When Due.


 


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


 


8.2          Default
in Other Agreements.


 


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


 


(ii)           breach
or default by Holdings, Company or any of its Subsidiaries with respect to any
other material term of (a) one or more items of Indebtedness or Contingent


 


112

















 


Obligations in the individual or aggregate principal amounts referred
to in clause (i) above or (b) any loan agreement, mortgage, indenture or
other agreement relating to such item(s) of Indebtedness or Contingent
Obligation(s), if the effect of such breach or default is to cause, or to
permit the holder or holders of that Indebtedness or Contingent Obligation(s) (or
a trustee on behalf of such holder or holders) to cause, that Indebtedness or
Contingent Obligation(s) to become or be declared due and payable prior to its
stated maturity or the stated maturity of any underlying obligation, as the
case may be (in each case only after the requisite giving or receiving of
notice, lapse of time, both, or otherwise and provided such breach or default
has not been waived); or


 


8.3          Breach
of Certain Covenants.


 


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


 


8.4          Breach
of Warranty.


 


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


 


8.5          Other
Defaults Under Loan Documents.


 


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


 


8.6          Involuntary Bankruptcy;
Appointment of Receiver, etc.


 


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


 


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


 


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any of its Material Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of Holdings, Company
or any of its Material Subsidiaries, and any such event described in this
clause (ii) shall continue for 60 days unless dismissed, bonded or discharged;
or


 


8.7          Voluntary Bankruptcy;
Appointment of Receiver, etc.


 


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


 


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


 


8.8          Judgments
and Attachments.


 


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


 


8.9          Dissolution.


 


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


 


8.10        Employee
Benefit Plans.


 


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


 


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computation
any Pension Plans with respect to which assets exceed benefit liabilities),
which could reasonably be expected to result in a Direct Liability in excess of
$1,500,000; or


 


8.11        Change
in Control.


 


A
Change in Control shall have occurred; or


 


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


 


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


 


8.13        Conduct
of Business By Holdings.


 


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


 


8.14        Conduct
of Business By Dormant Subsidiaries.


 


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


 


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


 


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


 


8.16        Amendment of Certain Documents of Holdings.


 


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


 


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


 


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


 


Section
9.              ADMINISTRATIVE AGENT


 


9.1          Appointment.


 


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


 


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


 


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


 


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


 


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


 


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


 


9.2          Powers
and Duties; General Immunity.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


9.4          Right
to Indemnity.


 


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


 


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


 


9.5          Successor
Administrative Agent and Swing Line Lender.


 


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


 


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


 


9.6          Collateral
Documents and Guaranties.


 


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


 


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


 


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


 


9.7          Duties
of Other Agents.


 


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


 


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


 


9.8          Administrative Agent May File Proofs of Claim.


 


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


 


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


 


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


 


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


 


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


 


Section
10.            MISCELLANEOUS


 


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


 


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


 


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


 


B.            Assignments.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


10.2        Expenses.


 


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


 


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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,
employees, agents, trustees, advisors and Affiliates of Agents and Lenders
(collectively called the “Indemnitees”),
from and against any and all Indemnified Liabilities (as hereinafter defined); provided
that Company shall not have any obligation to any Indemnitee hereunder with
respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise solely from the gross negligence or willful misconduct of
that Indemnitee as determined by a final judgment of a court of competent jurisdiction.


 


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


 


To the
extent that the undertakings to defend, indemnify, pay and hold harmless set
forth in this subsection 10.3 may be unenforceable in whole or in part because
they are


 


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


 


10.5        Ratable
Sharing.


 


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


 


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


 


10.6        Amendments
and Waivers.


 


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


 


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


 


10.7        Independence
of Covenants.


 


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


 


10.8        Notices;
Effectiveness of Signatures.


 


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


 


131

















 


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.


 


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


 


10.9        Survival of
Representations, Warranties and Agreements.


 


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


 


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


 


10.10      Failure or Indulgence Not
Waiver; Remedies Cumulative.


 


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


 


10.11      Marshalling; Payments Set
Aside.


 


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


 


132

















 


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. Nothing
contained herein or in any other Loan Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders, or Lenders
and Company, as a partnership, an association, a Joint Venture or any other
kind of entity. The amounts payable at any time hereunder to each Lender shall
be a separate and independent debt, and, subject to subsection 9.6, each Lender
shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.


 


To the
extent permitted by law, Company shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with or as a result of this Agreement (including,
without limitation, subsection 2.1C hereof), any other Loan Document, any
transaction contemplated by the Loan Documents, any Loan or the use of proceeds
thereof.


 


10.14      Release
of Security Interest or Guaranty.


 


Upon
the proposed sale or other disposition of any Collateral that is permitted by this
Agreement or to which Requisite Lenders have otherwise consented, or the sale
or other disposition of all of the Capital Stock of a Subsidiary Guarantor to
any Person (other than an Affiliate of Company) permitted by this Agreement or
to which Requisite Lenders have otherwise consented, for which a Loan Party
desires to obtain a security interest release or a release of any Guaranty from
Administrative Agent, such Loan Party shall deliver an Officer’s Certificate
(i) stating that the Collateral or the Capital Stock subject to such
disposition is being sold or otherwise disposed of in compliance with the terms
hereof and (ii) specifying the Collateral or Capital Stock being sold or
otherwise disposed of in the proposed transaction. Upon the receipt of such
Officer’s Certificate, Administrative Agent shall, at such Loan Party’s
expense, so long as Administrative Agent (a) has no reason to believe that the
facts stated in such Officer’s Certificate are not true and correct and (b), if
the sale or other disposition of such item of Collateral or Capital Stock
constitutes an Asset Sale, shall have received evidence satisfactory to it that
arrangements satisfactory to it have been made for delivery of the Net Asset
Sale


 


133

















 


Proceeds
if and as required by subsection 2.4, execute and deliver such releases of its
security interest in such Collateral or such Subsidiary Guaranty, as may be
reasonably requested by such Loan Party.


 


10.15      Applicable
Law.


 


THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THAT WOULD REQUIRE APPLICATION OF ANOTHER LAW.


 


10.16      Construction
of Agreement; Nature of Relationship.


 


Each
of the parties hereto acknowledges that (i) it has been represented by counsel
in the negotiation and documentation of the terms of this Agreement, (ii) it
has had full and fair opportunity to review and revise the terms of this
Agreement, (iii) this Agreement has been drafted jointly by all of the parties
hereto, and (iv) neither Administrative Agent nor any Lender or other Agent has
any fiduciary relationship with or duty to Company arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent, the other Agents and Lenders, on one
hand, and Company, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor. Accordingly, each of the parties hereto
acknowledges and agrees that the terms of this Agreement shall not be construed
against or in favor of another party.


 


10.17      Consent
to Jurisdiction and Service of Process.


 


ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS HEREUNDER OR THEREUNDER,
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT,
COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY


 


(I)            ACCEPTS
GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH
COURTS;


 


(II)           WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS;


 


(III)         AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SUBSECTION 10.8;


 


(IV)         AGREES THAT SERVICE AS PROVIDED IN CLAUSE
(III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER


 


134

















 


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 SECTION
5-1402 OR OTHERWISE.


 


10.18      Waiver
of Jury Trial.


 


EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION
OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT,
AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE
DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS
SUBSECTION 10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.


 


135

















 


10.19      Confidentiality.


 


Each
Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement that has been identified in writing as
confidential by Company in accordance with such Lender’s customary procedures
for handling confidential information of this nature, it being understood and
agreed by Company that in any event a Lender may make disclosures (a) to
its Affiliates and to its own and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such information and instructed to keep
such information confidential), (b) to the extent requested by any Government
Authority, (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to any other party to this
Agreement that is entitled to receive such information, (e) in connection
with the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same
as those of this subsection 10.19, to (i) any Eligible Assignee of or Participant
in, or any prospective Eligible Assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any direct or indirect
contractual counterparty or prospective counterparty (or such contractual
counterparty’s or prospective counterparty’s professional advisor) to any
credit derivative transaction relating to obligations of Company, (g) with
the consent of Company, (h) to the extent such information
(i) becomes publicly available other than as a result of a breach of this
subsection 10.19 or (ii) becomes available to Administrative Agent or any
Lender on a non-confidential basis from a source other than Company or
(i) to the National Association of Insurance Commissioners or any other
similar organization or any nationally recognized rating agency that requires
access to information about a Lender’s or its Affiliates’ investment portfolio
in connection with ratings issued with respect to such Lender or its
Affiliates; provided that, unless specifically prohibited by applicable
law or court order, each Lender shall notify Company of any request by any
Government Authority or representative thereof (other than any such request in
connection with any examination of the financial condition of such Lender by
such Government Authority) for disclosure of any such non-public information
prior to disclosure of such information; and provided, further
that in no event shall any Lender be obligated or required to return any
materials furnished by Company or any of its Subsidiaries. In addition,
Administrative Agent and Lenders may disclose the existence of this Agreement
and information about this Agreement to market data collectors, similar service
providers to the lending industry, and service providers to Administrative
Agent and Lenders, and Administrative Agent or any of its Affiliates may place
customary “tombstone” advertisements relating hereto in publications (including
publications circulated or otherwise made available in electronic form) of its
choice at its own expense.


 


10.20      Counterparts;
Effectiveness.


 


This
Agreement and any amendments, waivers, consents or supplements hereto or in
connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This


 


136

















 


Agreement
shall become effective upon the execution of a counterpart hereof by each of
the parties hereto.


 


10.21      Original
Credit Agreement Superseded. As and to the extent set forth in Section 1.4,
on and after the Effective Date,
the Original Credit Agreement is superseded by this Agreement, which hereby
renews, amends, restates and modifies, but does not novate or extinguish the
obligations under the Original Credit Agreement.


 


[Remainder
of page intentionally left blank]


 


137

















 


EXECUTION
COPY


 


IN
WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.


 


	
   

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ JON R. BURNEY

  	
   

  
	
   

  	
  Name:

  	
  Jon R. Burney

  	
   

  
	
   

  	
  Title:

  	
  Vice President, General Counsel and Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  3113 Woodcreek Drive

  
	
   

  	
  Downers Grove, DuPage County, Illinois 60515

  
	
   

  	
  Attention: Jon R. Burney

  
	
   

  	
  Facsimile: (630) 719 6183

  
						



 


S-1

















 


LENDERS:


 


 


	
   

  	
  WELLS
  FARGO BANK, N.A., individually as a Lender

  
	
   

  	
  and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ KEVIN
  MCKHANN

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin McKhann

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  201 Third
  Street, Eighth Floor, MAC A0187-081

  
	
   

  	
  San Francisco,
  California 94103

  
	
   

  	
  Attention: Vince
  Loomis

  
	
   

  	
  Facsimile:
  415-512-7059

  
	
   

  	
   

  
	
   

  	
  Payment
  Instructions:

  
	
   

  	
   

  
	
   

  	
  Pay to:

  	
  Wells Fargo
  Bank, N.A.

  
	
   

  	
  ABA:

  	
  121000248

  
	
   

  	
  Address:

  	
  San Francisco,
  CA

  
	
   

  	
  Acct. No.:

  	
  4518151378

  
	
   

  	
  Payee Name:

  	
  SYNDIC/WFBCORP/FTD
  Inc.

  
	
   

  	
  Ref:

  	
  FTD Inc.

  
								



 


S-2

















 


	
   

  	
  MIZUHO
  CORPORATE BANK, LTD., as Co-

  
	
   

  	
  Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ JAMES R.
  FAYEN

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James R. Fayen

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Deputy General
  Manager

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  1251 Avenue of
  the Americas

  
	
   

  	
  32nd
  Floor

  
	
   

  	
  New York, NY
  10020

  
	
   

  	
  Attention: John
  W. Bishop

  
	
   

  	
  Email: john.bishop@mizuhocbus.com

  
								



 


S-3

















 


	
   

  	
  ING
  CAPITAL LLC, as Co-Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ KHURSHEED
  SORABJEE

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Khursheed
  Sorabjee

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  1325 Avenue of
  the Americas

  
	
   

  	
  New York, NY
  10019

  
	
   

  	
  Attention: David
  Garlasco

  
	
   

  	
  Facsimile:
  646-424-8256

  
							



 


S-4

















 


	
   

  	
  BMO CAPITAL MARKETS
  FINANCING, INC., as

  
	
   

  	
  Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ THAD D.
  RASCHE

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thad D. Rasche

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  111 W. Monroe
  Street

  
	
   

  	
  10th Floor
  Center

  
	
   

  	
  Chicago, IL
  60603

  
	
   

  	
  Attention: Juan R. Ramirez

  
	
   

  	
  Facsimile: 312- 293-5041

  
	
   

  	
  Email: juan.ramirez@bmo.com

  
							



 


S-5

















 


EXHIBIT I


 


[FORM OF NOTICE OF
BORROWING]


 


NOTICE OF BORROWING


 


Pursuant to that
certain Credit Agreement dated as of July 28, 2006, as amended, supplemented,
amended and restated or otherwise modified to the date hereof (said Credit
Agreement, as so amended, amended and restated, supplemented or otherwise
modified, being the “Credit Agreement”, the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among FTD, Inc., a Delaware corporation, as borrower (“Company”), the lenders listed therein as Lenders (“Lenders”),
Wells Fargo Bank, N.A., as Administrative Agent (“Administrative Agent”),
and the other agents listed therein, this represents Company’s request to
borrow as follows:


 


1.             Date
of borrowing:                                     ,
                  


 


2.             Amount
of borrowing:  $                                      


 


3.             Lender(s):


 


o
a.        Lenders,
in accordance with their applicable Pro Rata Shares


 


o
b.        Swing
Line Lender


 


4.             Type
of Loans:


 


o
a.        Term
Loans


 


o
b.        Revolving
Loans


 


o
c.        Swing
Line Loan


5.             Interest
rate option:


 


o
a.        Base
Rate Loan(s)


 


o
b.        Eurodollar
Rate Loans with an initial Interest Period of                         
month(s)


 


The proceeds of
such Loans are to be deposited [details of the Company’s account].


 


The undersigned
officer, to the best of his or her knowledge and in his or her official (and
not individual) capacity, and Company certify that:


 


(i)            The
representations and warranties contained in the Credit Agreement and the other
Loan Documents are true, correct and complete in all material respects on and
as of the date hereof to the same extent as though made on and as of the date
hereof, except to the extent such representations and warranties specifically
relate to an earlier date, in which case such


 


I-1

















 


representations and warranties were true, correct and complete in all
material respects on and as of such earlier date; provided, that, if a
representation and warranty is qualified as to materiality, with respect to
such representation and warranty the materiality qualifier set forth in this
paragraph shall be disregarded for purposes of this condition;


 


(ii)           No
event has occurred and is continuing or would result from the consummation of
the borrowing contemplated hereby that would constitute an Event of Default or
a Potential Event of Default; and


 


(iii)          Each
Loan Party has performed in all material respects all agreements and satisfied
all conditions which the Credit Agreement provides shall be performed or
satisfied by it on or before the date hereof.


 


I-2

















 


	
  DATED:

  	
   

  	
   

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 


I-3

















 


EXHIBIT II


 


[FORM OF NOTICE OF
CONVERSION/CONTINUATION]


 


NOTICE OF
CONVERSION/CONTINUATION


 


Pursuant to that
certain Credit Agreement dated as of July 28, 2006, as amended, supplemented,
amended and restated or otherwise modified to the date hereof (said Credit
Agreement, as so amended, amended and restated, supplemented or otherwise
modified, being the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among FTD, Inc., a Delaware corporation, as borrower (“Company”), the lenders listed therein as Lenders (“Lenders”),
Wells Fargo Bank, N.A., as Administrative Agent (“Administrative Agent”),
and the other agents listed therein, this represents Company’s request to
convert or continue Loans as follows:


 


1.             Date
of conversion/continuation:                                      ,
              


 


2.             Amount
of Loans being converted/continued:  $                                      


 


3.             Type
of Loans being converted/continued:


 


o a.        Term Loans


 


o  b.       Revolving
Loans


 


4.             Nature
of conversion/continuation:


 


o
a.        Conversion
of Base Rate Loans to Eurodollar Rate Loans


 


o
b.        Conversion
of Eurodollar Rate Loans to Base Rate Loans


 


o
c.        Continuation
of Eurodollar Rate Loans as such


 


5.             If
Loans are being continued as or converted to Eurodollar Rate Loans, the
duration of the new Interest Period that commences on the conversion/
continuation date:                                
month(s)


 


In the case of a
conversion to or continuation of Eurodollar Rate Loans, the undersigned
officer, to the best of his or her knowledge and in his or her official (and
not individual) capacity, and Company certify that no Event of Default or
Potential Event of Default has occurred and is continuing under the Credit
Agreement.


 


	
  DATED:

  	
   

  	
   

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 


II-1

















 


EXHIBIT III


 


[FORM OF REQUEST FOR
ISSUANCE]


 


REQUEST FOR ISSUANCE


 


Pursuant to that
certain Credit Agreement dated as of July 28, 2006, as amended, supplemented,
amended and restated or otherwise modified to the date hereof (said Credit
Agreement, as so amended, amended and restated, supplemented or otherwise
modified, being the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among FTD, Inc., a Delaware corporation, as borrower (“Company”), the lenders listed therein as Lenders (“Lenders”),
Wells Fargo Bank, N.A., as Administrative Agent (“Administrative Agent”),
and the other agents listed therein, this represents Company’s request for the
issuance of a Letter of Credit by [Administrative Agent][name of other Lender]
as follows:


 


1.             Issuing
Lender:    [Administrative Agent]


 


[                                                                           ]


 


2.             Date
of issuance of Letter of Credit:                              ,
               


 


3.             Type
of Letter of Credit:


 


o a.        Commercial Letter of
Credit


 


o b.        Standby Letter of Credit


 


4.             Face
amount of Letter of Credit:  $                                                


 


5.             Expiration
date of Letter of Credit:                                  ,
                


 


6.             Name
and address of beneficiary:


                                                                                      


                                                                                      


                                                                                      


7.             Attached
hereto is:


 


o            the verbatim text of
such proposed Letter of Credit; or


 


o            a description of the
proposed terms and conditions of such Letter of Credit, including a precise
description of any documents to be presented by the beneficiary which, if
presented by the beneficiary prior to the expiration date of such Letter of
Credit, would require the Issuing Lender to make payment under such Letter of
Credit.


 


III-1

















 


The undersigned
officer, to the best of his or her knowledge and in his or her official (and
not individual) capacity, and Company certify that:


 


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


 


(ii)           No
event has occurred and is continuing or would result from the issuance of the
Letter of Credit contemplated hereby that would constitute an Event of Default
or a Potential Event of Default; and


 


(iii)          Each
Loan Party has performed in all material respects all agreements and satisfied
all conditions which the Credit Agreement provides shall be performed or
satisfied by it on or before the date hereof.


 


III-2

















 


	
  DATED:

  	
   

  	
   

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 


III-3

















 


EXHIBIT IV


 


[FORM OF] TERM NOTE


 


FTD, INC.


 


	
  $                             

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
  July 28, 2006

  



 


FOR VALUE
RECEIVED, FTD, INC., a Delaware corporation (“Company”),
promises to pay to                                     
(“Payee”) or its registered
assigns the principal amount of                          
($                                           ).  The principal amount of this Note shall be
payable on the dates and in the amounts specified in the Credit Agreement;
provided that the last such installment shall be in an amount sufficient to
repay the entire unpaid principal balance of this Note, together with all
accrued and unpaid interest thereon.


 


Company also
promises to pay interest on the unpaid principal amount hereof, until paid in full,
at the rates and at the times which shall be determined in accordance with the
provisions of that certain Credit Agreement dated as of July 28, 2006 by and
among FTD, Inc., a Delaware corporation, as borrower (“Company”),
the lenders listed therein as Lenders (“Lenders”), Wells Fargo Bank, N.A.,
as Administrative Agent (“Administrative Agent”), and the
other agents listed therein (said Credit Agreement, as it may be amended,
supplemented, amended and restated or otherwise modified from time to time, being
the “Credit Agreement”, the terms
defined therein and not otherwise defined herein being used herein as therein
defined).


 


This Note is one
of Company’s “Term Notes” and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Term Loan
evidenced hereby was made and is to be repaid.


 


All payments of
principal and interest in respect of this Note shall be made in lawful money of
the United States of America in same day funds at the Funding and Payment
Office or at such other place as shall be designated in writing for such
purpose in accordance with the terms of the Credit Agreement.  Unless and until an Assignment Agreement effecting
the assignment or transfer of this Note shall have been accepted by
Administrative Agent and recorded in the Register as provided in the Credit
Agreement, Company and Administrative Agent shall be entitled to deem and treat
Payee as the owner and holder of this Note and the Loan evidenced hereby.  Payee hereby agrees, by its acceptance
hereof, that before disposing of this Note or any part hereof it will make a
notation hereon of all principal payments previously made hereunder and of the
date to which interest hereon has been paid; provided, however,
that the failure to make, or any error in making, a notation of any payment
made on this Note shall not limit or otherwise affect the obligations of
Company hereunder with respect to payments of principal of or interest on this
Note.


 


Whenever any
payment on this Note shall be stated to be due on a day which is not a Business
Day, such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest on this Note.


 


IV-1

















 


This Note is
subject to mandatory prepayment as provided in the Credit Agreement and to
prepayment at the option of Company as provided in the Credit Agreement.


 


THIS
NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.


 


Upon the
occurrence of an Event of Default, the unpaid balance of the principal amount
of this Note, together with all accrued and unpaid interest thereon, may
become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.


 


The terms of this
Note are subject to amendment only in the manner provided in the Credit
Agreement.


 


This Note is
subject to restrictions on transfer or assignment as provided in the Credit
Agreement.


 


No reference
herein to the Credit Agreement and no provision of this Note or the Credit
Agreement shall alter or impair the obligations of Company, which are absolute
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.


 


Company promises
to pay all costs and expenses, including reasonable attorneys’ fees, all as
provided in the Credit Agreement, incurred in the collection and enforcement of
this Note.  Company and any endorsers of
this Note hereby consent to renewals and extensions of time at or after the
maturity hereof, without notice, and hereby waive diligence, presentment,
protest, demand and notice of every kind and, to the full extent permitted by
law, the right to plead any statute of limitations as a defense to any demand
hereunder.


 


IV-2

















 


IN WITNESS
WHEREOF, Company has caused this Note to be duly executed and delivered by its
officer thereunto duly authorized as of the date and at the place first written
above.


 


	
   

  	
   

  	
   

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 


IV-3

















 


EXHIBIT V


 


INTENTIONALLY DELETED


 


V-1

















 


EXHIBIT VI


 


[FORM OF] REVOLVING NOTE


 


FTD, INC.


 


	
  $                      

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
  July 28, 2006

  



 


FOR VALUE
RECEIVED, FTD, INC., a Delaware corporation (“Company”),
promises to pay to                                  
(“Payee”) or its registered
assigns, the lesser of (x)                                             
($                                        )
and (y) the unpaid principal amount of all advances made by Payee to Company as
Revolving Loans under the Credit Agreement referred to below.  The principal amount of this Note shall be
payable on the dates and in the amounts specified in the Credit Agreement.


 


Company also
promises to pay interest on the unpaid principal amount hereof, until paid in
full, at the rates and at the times which shall be determined in accordance
with the provisions of that certain Credit Agreement dated as of July 28, 2006,
by and among FTD, Inc., a Delaware corporation, as borrower (“Company”), the lenders listed therein as Lenders (“Lenders”),
Wells Fargo Bank, N.A., as Administrative Agent (“Administrative Agent”),
and the other agents listed therein (said Credit Agreement, as it may be
amended, supplemented, amended and restated or otherwise modified from time to
time, being the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as
therein defined).


 


This Note is one
of Company’s “Revolving Notes” and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid.


 


All payments of
principal and interest in respect of this Note shall be made in lawful money of
the United States of America in same day funds at the Funding and Payment
Office or at such other place as shall be designated in writing for such
purpose in accordance with the terms of the Credit Agreement.  Unless and until an Assignment Agreement
effecting the assignment or transfer of this Note shall have been accepted by
Administrative Agent and recorded in the Register as provided in the Credit
Agreement, Company and Administrative Agent shall be entitled to deem and treat
Payee as the owner and holder of this Note and the Loans evidenced hereby.  Payee hereby agrees, by its acceptance
hereof, that before disposing of this Note or any part hereof it will make a
notation hereon of all principal payments previously made hereunder and of the
date to which interest hereon has been paid; provided, however,
that the failure to make, or any error in making, a notation of any payment
made on this Note shall not limit or otherwise affect the obligations of
Company hereunder with respect to payments of principal of or interest on this
Note.


 


Whenever any
payment on this Note shall be stated to be due on a day which is not a Business
Day, such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest on this Note.


 


VI-1

















 


This Note is
subject to mandatory prepayment as provided in the Credit Agreement and to
prepayment at the option of Company as provided in the Credit Agreement.


 


THIS
NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.


 


Upon the
occurrence of an Event of Default, the unpaid balance of the principal amount
of this Note, together with all accrued and unpaid interest thereon, may
become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.


 


The terms of this
Note are subject to amendment only in the manner provided in the Credit
Agreement.


 


This Note is
subject to restrictions on transfer or assignment as provided in the Credit
Agreement.


 


No reference
herein to the Credit Agreement and no provision of this Note or the Credit
Agreement shall alter or impair the obligations of Company, which are absolute
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.


 


Company promises
to pay all costs and expenses, including reasonable attorneys’ fees, all as
provided in the Credit Agreement, incurred in the collection and enforcement of
this Note.  Company and any endorsers of
this Note hereby consent to renewals and extensions of time at or after the
maturity hereof, without notice, and hereby waive diligence, presentment,
protest, demand and notice of every kind and, to the full extent permitted by
law, the right to plead any statute of limitations as a defense to any demand
hereunder.


 


VI-2

















 


IN WITNESS
WHEREOF, Company has caused this Note to be duly executed and delivered by its
officer thereunto duly authorized as of the date and at the place first written
above.


 


	
   

  	
   

  	
   

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 


VI-3

















 


TRANSACTIONS


ON


REVOLVING NOTE


 


	
  Date

  	
   

  	
  Type of

  Loan Made

  This Date

  	
   

  	
  Amount of

  Loan Made

  This Date

  	
   

  	
  Amount of

  Principal Paid

  This Date

  	
   

  	
  Outstanding

  Principal

  Balance

  This Date

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


VI-4

















 


EXHIBIT VII


 


[FORM OF] SWING LINE NOTE


 


FTD, INC.


 


	
  $5,000,000

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
  July 28, 2006

  



 


FOR VALUE
RECEIVED, FTD, INC., a Delaware corporation (“Company”),
promises to pay to Wells Fargo Bank, N.A. (“Payee”)
or its registered assigns, the lesser of (x) FIVE MILLION DOLLARS ($5,000,000)
and (y) the unpaid principal amount of all advances made by Payee to Company as
Swing Line Loans under the Credit Agreement referred to below.  The principal amount of this Note shall be
payable on the dates and in the amounts specified in the Credit Agreement.


 


Company also
promises to pay interest on the unpaid principal amount hereof, until paid in
full, at the rates and at the times which shall be determined in accordance
with the provisions of that certain Credit Agreement dated as of July 28, 2006,
by and among FTD, Inc., a Delaware corporation, as borrower (“Company”), the lenders listed therein as Lenders (“Lenders”),
Wells Fargo Bank, N.A., as Administrative Agent (“Administrative Agent”),
and the other agents listed therein (said Credit Agreement, as it may be
amended, supplemented, amended and restated or otherwise modified from time to
time, being the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as
therein defined).


 


This Note is
Company’s “Swing Line Note” and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Swing Line Loans
evidenced hereby were made and are to be repaid.


 


All payments of
principal and interest in respect of this Note shall be made in lawful money of
the United States of America in same day funds at the Swing Line Funding and
Payment Office or at such other place as shall be designated in writing for
such purpose in accordance with the terms of the Credit Agreement.


 


Whenever any
payment on this Note shall be stated to be due on a day which is not a Business
Day, such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest on this Note.


 


This Note is
subject to mandatory prepayment as provided in the Credit Agreement and to
prepayment at the option of Company as provided in the Credit Agreement.


 


THIS
NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.


 


VII-1

















 


Upon the
occurrence of an Event of Default, the unpaid balance of the principal amount of
this Note, together with all accrued and unpaid interest thereon, may become,
or may be declared to be, due and payable in the manner, upon the conditions
and with the effect provided in the Credit Agreement.


 


The terms of this
Note are subject to amendment only in the manner provided in the Credit
Agreement.


 


This Note is
subject to restrictions on transfer or assignment as provided in the Credit
Agreement.


 


No reference
herein to the Credit Agreement and no provision of this Note or the Credit
Agreement shall alter or impair the obligations of Company, which are absolute
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.


 


Company promises
to pay all costs and expenses, including reasonable attorneys’ fees, all as
provided in the Credit Agreement, incurred in the collection and enforcement of
this Note.  Company and any endorsers of
this Note hereby consent to renewals and extensions of time at or after the
maturity hereof, without notice, and hereby waive diligence, presentment,
protest, demand and notice of every kind and, to the full extent permitted by
law, the right to plead any statute of limitations as a defense to any demand
hereunder.


 


VII-2

















 


IN WITNESS
WHEREOF, Company has caused this Note to be duly executed and delivered by its
officer thereunto duly authorized as of the date and at the place first written
above.


 


	
   

  	
   

  	
   

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 


VII-3

















 


TRANSACTIONS


ON


SWING
LINE NOTE


 


	
  Date

  	
   

  	
  Amount of

  Loan Made

  This Date

  	
   

  	
  Amount of

  Principal Paid

  This Date

  	
   

  	
  Amount of

  Principal Paid

  This Date

  	
   

  	
  Outstanding

  Principal

  Balance

  This Date

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


VII-4

















 


EXHIBIT VIII


 


[FORM OF COMPLIANCE
CERTIFICATE]


 


COMPLIANCE CERTIFICATE


 


THE UNDERSIGNED
HEREBY CERTIFY THAT:


 


(1)           We
are the duly elected [Title] and [Title] of FTD, Inc., a Delaware corporation (“Company”);


 


(2)           We
have reviewed the terms of that certain Credit Agreement dated as of July 28,
2006, as amended, supplemented, amended and restated or otherwise modified to
the date hereof (said Credit Agreement, as so amended, amended and restated,
supplemented or otherwise modified, being the “Credit
Agreement”, the terms defined therein and not otherwise defined in
this Certificate (including Attachment No. 1 annexed hereto and made a part
hereof) being used in this Certificate as therein defined), by and among
Company, the lenders listed therein as Lenders (“Lenders”), Wells
Fargo Bank, N.A., as Administrative Agent (“Administrative Agent”),
and the other agents listed therein, and the terms of the other Loan Documents,
and we have made, or have caused to be made under our supervision, a review in
reasonable detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by the attached financial
statements; and


 


(3)           The
examination described in paragraph (2) above did not disclose, and we have no
knowledge of, the existence of any condition or event which constitutes an
Event of Default or Potential Event of Default during or at the end of the
accounting period covered by the attached financial statements or as of the
date of this Certificate[, except as set forth below].


 


[Set forth [below]
[in a separate attachment to this Certificate] are all exceptions to paragraph
(3) above listing, in detail, the nature of the condition or event, the period
during which it has existed and the action which Company has taken, is taking,
or proposes to take with respect to each such condition or event:                                                                                          ]


 


The foregoing
certifications, together with the computations set forth in Attachment No. 1
annexed hereto and made a part hereof and the financial statements delivered
with this Certificate in support hereof, are made and delivered by the
undersigned in their official (and not individual) capacities this                     
day of                           ,
         pursuant to subsection 6.1(v)
of the Credit Agreement.


 


	
   

  	
   

  	
   

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								



 


VIII-1

















 


ATTACHMENT NO. 1

TO COMPLIANCE CERTIFICATE


 


	
  A.

  	
  Indebtedness

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Purchase money or other Indebtedness secured by
  Liens permitted by subsection 7.2A(ii) plus Indebtedness in respect of
  Capital Leases permitted under subsection 7.1(iii):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Maximum permitted under subsection 7.1(iii):

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Indebtedness of Foreign Subsidiaries to Company or
  any Subsidiary Guarantor permitted under subsection 7.1(iv):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Maximum permitted under subsection 7.1(iv):

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  Indebtedness assumed by Foreign Subsidiaries in
  connection with permitted acquisitions plus Indebtedness of the Person
  acquired in connection with any such acquisition that becomes a Foreign
  Subsidiary, each as permitted under subsection 7.1(ix):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  Maximum permitted under subsection 7.1(ix):

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.

  	
  Other Indebtedness of Company and its Subsidiaries
  permitted under subsection 7.1(x):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.

  	
  Maximum permitted under subsection 7.1(x):

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.

  	
  Portion of Indebtedness permitted under subsection
  7.1(x) incurred by Company’s Domestic Subsidiaries:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.

  	
  Maximum permitted under subsection 7.1(x):

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
  Liens

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Indebtedness secured by Liens on assets of a Person
  that becomes a Subsidiary permitted under subsection 7.2A(iii):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Maximum permitted under subsection 7.2A(iii):

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Indebtedness secured by other Liens permitted under
  subsection 7.2A(v):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Maximum permitted under subsection 7.2A(v):

  	
   

  	
  $

  	
  10,000,000

  	
   

  



 


VIII-2

















 


	
  C.

  	
  Investments

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Fair market value of Investments made by Company and
  its Domestic Subsidiaries consisting of acquired assets (including Capital
  Stock) during the current Fiscal Year permitted under subsection 7.3(vii):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Maximum permitted under subsection 7.3(vii):

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Aggregate fair market value of all Investments made
  by Company and its Domestic Subsidiaries consisting of acquired assets
  (including Capital Stock) permitted under subsection 7.3(vii) (the sum of all
  amounts currently and previously reported in C.1):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Maximum permitted under subsection 7.3(vii):

  	
   

  	
  $

  	
  80,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  Fair market value of Investments made by Foreign
  Subsidiaries consisting of acquired assets (including Capital Stock) during
  the current Fiscal Year permitted under subsection 7.3(viii):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  Maximum permitted under subsection 7.3(viii):

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.

  	
  Aggregate fair market value of all Investments made
  by Foreign Subsidiaries consisting of acquired assets (including Capital
  Stock) permitted under subsection 7.3(viii) (the sum of all amounts currently
  and previously reported in C.5):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.

  	
  Maximum permitted under subsection 7.3(viii):

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.

  	
  Since the Closing Date, Investments in Foreign
  Subsidiaries permitted under subsection 7.3(ix), including the amount of all
  Contingent Obligations of Company permitted under subsections 7.4(viii) and
  (ix):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.

  	
  Maximum Investments and Contingent Obligations
  permitted under subsection 7.3(ix):

  	
   

  	
  $

  	
   

  	
  (1)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.

  	
  Other Investments by Company and its Domestic
  Subsidiaries permitted under subsection 7.3(x):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.

  	
  Maximum permitted under subsection 7.3(x):

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.

  	
  Investments during the current Fiscal Year by
  Company in respect of obligations of employees in connection with the payment
  of income taxes on employee owned stock permitted under subsection 7.3(xi):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.

  	
  Maximum permitted under subsection 7.3(xi):

  	
   

  	
  $

  	
  1,000,000

  	
   

  



 






(1)  The maximum Investments and
Contingent Obligations permitted under subsection 7.3(ix) of the Credit
Agreement is $10,000,000 plus the amount of all loans or advances permitted
under subsection 7.1(iv) of the Credit Agreement.


 


VIII-3

















 


	
   

  	
  15.

  	
  Investments by Company and its Subsidiaries consisting
  of loans (financing equipment sold) or equipment leases to customers
  permitted under subsection 7.3(xiv):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.

  	
  Maximum permitted under subsection 7.3(xiv):

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.

  	
  Investments by Company and its Subsidiaries consisting
  of loans to customers in settlement of accounts receivable permitted under
  subsection 7.3(xv):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.

  	
  Maximum permitted under subsection 7.3(xv):

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
  Contingent Obligations

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Other Contingent Obligations permitted under
  subsection 7.4(ix):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Maximum permitted under subsection 7.4(ix):

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
  Restricted Junior Payments

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Restricted Junior Payments made to Holdings for
  administrative costs and expenses permitted under subsection 7.5(iii)(a):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Maximum permitted under subsection 7.5(iii)(a):

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Since the Closing Date, the sum of Restricted Junior
  Payments made (i) to repurchase Capital Stock of employees and certain other
  persons upon death, disability or termination and (ii) in lieu of issuing
  fractional shares, permitted under subsections 7.5(iii)(c) and (d):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Maximum permitted under subsections 7.5(iii)(c) and
  (d):

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  Restricted Junior Payments for other repurchases of
  Capital Stock of Holdings permitted under subsection 7.5(iii)(e):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  Maximum permitted under subsection 7.5(iii)(e):

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
  Minimum Fixed Charge Coverage Ratio
  (for the four-Fiscal Quarter period
  ending                ,       )

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Consolidated Net Income:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Consolidated Interest Expense:(2)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Provisions for taxes based on income:

  	
   

  	
  $

  	
   

  	
   

  



 






(2)  The amounts referenced in
items F.2 through F.10 should only be included to the extent deducted in
determining Consolidated Net Income.


 


VIII-4

















 


	
   

  	
  4.

  	
  Total depreciation expense:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  Total amortization expense:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  Transaction Costs:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.

  	
  Management or employee retention or incentive
  payments under Company’s cliff bonus plan:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.

  	
  Foreign currency translation or transaction gains or
  losses:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.

  	
  All extraordinary, unusual or non-recurring losses,
  charges or expenses (minus any extraordinary, unusual or non-recurring
  gains):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.

  	
  Other non-cash items (other than any such non-cash
  item to the extent it represents an accrual of or reserve for cash
  expenditures in any future period):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.

  	
  Non-cash items added in the calculation of
  Consolidated Net Income (other than any such non-cash item to the extent it
  will result in the receipt of cash payments in any future period):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.

  	
  Consolidated EBITDA (1+2+3+4+5+6+7+8+9+10+11-12):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.

  	
  Consolidated Interest Expense (F.2 above):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.

  	
  Interest expense not payable in cash:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.

  	
  Consolidated Cash Interest Expense (13-14):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.

  	
  Scheduled principal payments:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.

  	
  Taxes based on income and paid in cash:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.

  	
  Consolidated Fixed Charges (15+16+17):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.

  	
  Fixed Charge Coverage Ratio (12):(18):

  	
   

  	
  :1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.

  	
  Minimum ratio required under subsection 7.6A:

  	
   

  	
  :1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
  Maximum Leverage Ratio
  (as of
                            ,         )

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Consolidated Total Debt:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Consolidated EBITDA:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Leverage Ratio (1):(2):

  	
   

  	
  :1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Maximum ratio permitted under subsection 7.6B:

  	
   

  	
  :1.00

  	
   

  



 


VIII-5

















 


	
  H.

  	
  Fundamental Changes

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Aggregate fair market value of assets sold in any
  one or more Asset Sales in the current Fiscal Year in one or more
  transactions permitted under subsection 7.7(iv):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Maximum permitted under subsection 7.7(iv):

  	
   

  	
  $

  	
  15,000,000

  	
  (3)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
  Consolidated Capital Expenditures

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Consolidated Capital Expenditures for current Fiscal
  Year:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Consolidated Capital Expenditures for prior Fiscal
  Year:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Maximum amount of Consolidated Capital Expenditures
  permitted under subsection 7.8 for prior Fiscal Year without regard to any
  carryover amount:

  	
   

  	
  $

  	
  17,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Excess of permitted amount of Consolidated Capital
  Expenditures for prior Fiscal Year over Consolidated Capital Expenditures in
  prior Fiscal Year (3–2):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  Maximum amount of unused permitted Consolidated
  Capital Expenditures that can be carried forward from prior Fiscal Year (50%
  of 3):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  Permitted carryover amount of Consolidated Capital
  Expenditures from prior Fiscal Year (smaller of (4) or (5)):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.

  	
  Maximum amount of Consolidated Capital Expenditures
  permitted under subsection 7.8 for Fiscal Year without regard to carryover amount:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.

  	
  Maximum permitted under subsection 7.8 (6+7):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  J.

  	
  Consolidated Excess Cash Flow
  (for the Fiscal Year ended
                     )

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Consolidated EBITDA:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Consolidated Current Assets at beginning of Fiscal
  Year:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Consolidated Current Liabilities at beginning of
  Fiscal Year:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Consolidated Working Capital at beginning of Fiscal
  Year 

  (2–3) (may be negative number):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  Consolidated Current Assets at end of Fiscal Year:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  Consolidated Current Liabilities at end of Fiscal
  Year:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.

  	
  Consolidated Working Capital at end of Fiscal Year
  (5–6) (may be a negative number):

  	
   

  	
  $

  	
   

  	
   

  



 






(3)  Other than any permitted
Asset Sale of Florists’ Transworld Delivery, Inc.’s headquarters located at
3113 Woodcreek Drive, Downers Grove, Illinois the value of which must not
exceed $20,000,000.


 


VIII-6

















 


	
   

  	
  8.

  	
  Consolidated Working Capital Adjustment (4–7) (may
  be a negative number):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.

  	
  Voluntary and scheduled repayments of Consolidated
  Total Debt (excluding voluntary repayments of the Loans and scheduled
  repayments of Revolving Loans except to the extent the Revolving Loan
  Commitments are permanently reduced in connection with such repayments):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.

  	
  Consolidated Capital Expenditures (net of any
  proceeds of any related financings, other than the proceeds of Revolving
  Loans or Swing Line Loans, with respect to such expenditures):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.

  	
  Consolidated Cash Interest Expense (F.4 above):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.

  	
  Taxes based on income and paid in cash (F.6 above):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.

  	
  To the extent expensed in a prior Fiscal Year, the
  amount, if any, of cliff bonus payments made during such Fiscal Year:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.

  	
  Restricted Junior Payments permitted by subsection
  7.5:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.

  	
  Other cash expenses incurred during such period to
  the extent added back in determining Consolidated EBITDA:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.

  	
  Cash consideration paid in connection with
  Investments permitted pursuant to subsection 7.3(vii) or subsection
  7.3(viii):

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.

  	
  Consolidated Excess Cash Flow ((1+8) –
  (9+10+11+12+13+14+15+16)):

  	
   

  	
  $

  	
   

  	
   

  



 


VIII-7

















 


EXHIBIT IX


 


[FORMS OF OPINIONS OF
COUNSEL TO LOAN PARTIES]


 


 


[see attached]


 


IX-1

















 


EXHIBIT X


 


INTENTIONALLY DELETED


 


X-1

















 


EXHIBIT XI


 


[FORM OF] ASSIGNMENT AND
ASSUMPTION AGREEMENT


 


This Assignment
and Assumption Agreement (the “Assignment”) is dated as of the Effective
Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”)
and [Insert name of Assignee]
(the “Assignee”).  Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement identified below, receipt of a copy of which is hereby
acknowledged by the Assignee.  The
Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby
agreed to and incorporated herein by reference and made a part of this
Assignment as if set forth herein in full.


 


For an agreed
consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the
Assignor, subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by Administrative
Agent as contemplated below, the interest in and to all of the Assignor’s
rights and obligations under the Credit Agreement and any other documents or
instruments delivered pursuant thereto that represents the amount and
percentage interest identified below of all of the Assignor’s outstanding
rights and obligations under the respective facilities identified below
(including, to the extent included in any such facilities, letters of credit
and swingline loans) (the “Assigned Interest”).  Such sale and assignment is without recourse
to the Assignor and, except as expressly provided in this Assignment, without
representation or warranty by the Assignor.


 


1.             Assignor:                                                                                                          


 


2.             Assignee:                                                                                                          
[and is an Affiliate/Approved Fund(1)


 


3.             Borrower:                                               FTD,
Inc., a Delaware corporation (“Company”)


 


4.             Administrative
Agent:                        Wells Fargo Bank, N.A., as
Administrative Agent under the Credit Agreement


 


5.             Credit
Agreement                                 The $225,000,000
Credit Agreement dated as of July 28, 2006 among Company, the lenders listed
therein as Lenders (“Lenders”),
Administrative Agent, and the other agents parties thereto, as amended,
restated, amended and restated or otherwise modified from time to time (the “Credit
Agreement”)


 






(1)  Select as applicable.


 


XI-1

















 


6.             Assigned Interest:


 


	
  Facility Assigned

  	
   

  	
  Aggregate

  Amount of

  Commitment/Loans

  for all Lenders

  	
   

  	
  Amount of

  Commitment/Loans

  Assigned

  	
   

  	
  Percentage

  Assigned of

  Commitment/Loans(2)

  	
   

  
	
  Revolving Loan Commitment

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
  Term Loan

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  



 


Effective Date:                           
      , 20      
[TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE
OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]


 


The terms set
forth in this Assignment are hereby agreed to:


 


	
   

  	
  ASSIGNOR

  	
   

  
	
   

  	
  [NAME OF ASSIGNOR]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ASSIGNEE

  	
   

  
	
   

  	
  [NAME OF ASSIGNEE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Consented to and Accepted:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  WELLS FARGO BANK, N.A.,

  	
   

  	
   

  	
   

  
	
  as Administrative Agent

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [Consented to:]

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FTD, INC.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  



 






(2)           Set forth, to at least
9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.


 


XI-2

















 


	
  [Consented to:]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [WELLS FARGO BANK, N.A.,
  

  	
   

  	
   

  	
   

  
	
  as Issuing Lender]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  



 


XI-3

















 


ANNEX 1


 


FTD, INC. 

$225,000,000 CREDIT AGREEMENT


 


STANDARD TERMS AND
CONDITIONS FOR ASSIGNMENT


AND ASSUMPTION AGREEMENT


 


1.             Representations
and Warranties.


 


1.1           Assignor.  The Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the Assigned Interest,
(ii) the Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim and (iii) it has full power and authority, and has
taken all action necessary, to execute and deliver this Assignment and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or
representations made in or in connection with any Loan Document, (ii) the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement or any other instrument or document delivered
pursuant thereto, other than this Assignment (herein collectively the “Loan
Documents”), or any collateral thereunder, (iii) the financial
condition of Company, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or
observance by Company, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.


 


1.2           Assignee.  The Assignee (a) represents and warrants
that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it meets all requirements of an Eligible Assignee under
the Credit Agreement, (iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement and, to the extent of the
Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it has received a copy of the Credit Agreement, together with copies
of the most recent financial statements delivered pursuant to subsection 6.1
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and to purchase the Assigned Interest on the basis of which it
has made such analysis and decision, and (v) if it is a Non-US Lender,
attached to the Assignment is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and
without reliance on Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.


 


2.             Payments.  From and after the Effective Date,
Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.


 


1-1

















 


3.             General
Provisions.  This Assignment shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.  This
Assignment may be executed in any number of counterparts, which together shall
constitute one instrument.  Delivery of
an executed counterpart of a signature page of this Assignment by telecopy or
electronic mail shall be effective as delivery of a manually executed
counterpart of this Assignment.  THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.


 


1-2

















 


EXHIBIT XII


 


[FORM OF] SOLVENCY
CERTIFICATE


 


This SOLVENCY CERTIFICATE (this “Certificate”) is delivered in connection
with that certain Credit Agreement dated as of July 28, 2006 (the “Credit Agreement”), by and among FTD, Inc.,
a Delaware corporation, as borrower (“Company”), the
lenders listed therein as Lenders (“Lenders”), Wells Fargo Bank, N.A.,
as Administrative Agent (“Administrative Agent”), and the
other agents listed therein.  Capitalized
terms used herein without definition have the same meanings as in the Credit
Agreement.


 


This Solvency
Certificate is being delivered pursuant to subsection 4.1O of the Credit
Agreement.  The undersigned is the [Vice
President Finance] of Company and hereby further certifies as of the date
hereof, in [his] [her] capacity as an officer of Company, and not individually,
as follows:


 


1.             I
have responsibility for (a) the management of the financial affairs of
Company and the preparation of financial statements of Company, and
(b) reviewing the financial and other aspects of the transactions
contemplated by the Credit Agreement.


 


2.             I
have carefully prepared and/or reviewed the contents of this Solvency
Certificate and have conferred with counsel for Company for the purpose of
discussing the meaning of any provisions hereof that I desired to have
clarified.


 


3.             
Based upon the foregoing and upon the best of my knowledge after due diligence,
I have concluded as follows:


 


a.             The
“fair value” and “present fair saleable value” of the assets of Company
exceeds:  (x) the total liabilities of
Company (including its probable liability in respect of contingent and
unliquidated liabilities and its unmatured liabilities), and (y) the amount
required to pay such liabilities as they become absolute and matured in the
normal course of business.


 


b.             Company
has the ability to pay its debts and liabilities (including its probable
liability in respect of contingent and unliquidated liabilities and its
unmatured liabilities) as they become absolute and matured in the normal course
of business.


 


c.             Company
does not have an unreasonably small amount of capital with which to conduct its
business after giving due consideration to the industry in which it is engaged.


 


d.             Company
has not executed the Loan Documents or made any transfer or incurred any
obligations thereunder, with actual intent to hinder, delay or defraud either
present or future creditors.


 


In computing the
amount of such contingent and unliquidated liabilities as of the date hereof,
such liabilities have been computed at the amount that, in the light of all the
facts


 


XII-1

















 


and circumstances existing as of the date hereof, represents the amount
that can reasonably be expected to become an actual or matured liability.


 


For the purpose of
the above analysis, the values of Company’s assets have been computed by
considering Company as a going concern entity. 
References to “Company” in this paragraph 3 shall mean and refer to
Company and the Subsidiary Guarantors on a consolidated basis.


 


I understand that
Administrative Agent and Lenders are relying on this Solvency Certificate in
extending credit to Company pursuant to the Credit Agreement.


 


XII-2

















 


The undersigned
has executed this Solvency Certificate, in [his] [her] capacity as an officer
of Company and not individually, as of the 28th day of July, 2006.


 


 


	
   

  	
  Name:

  
	
   

  	
  Title: 

  



 


XII-3

















 


EXHIBIT XIII


 


[FORM OF] SUBSIDIARY
GUARANTY


 


This SUBSIDIARY GUARANTY is entered into as of
July 28, 2006, by the undersigned (each a “Guarantor”,
and together with any future Subsidiaries executing this Guaranty, being
collectively referred to herein as the “Guarantors”)
in favor of and for the benefit of WELLS FARGO BANK, N.A., as agent for and representative of (in
such capacity herein called “Guarantied Party”)
the lenders (“Lenders”) party to
the Credit Agreement referred to below and any Swap Counterparties (as
hereinafter defined), and in favor of and for the benefit of the other
Beneficiaries (as hereinafter defined).


 


RECITALS.


 


A.            FTD,
Inc., a Delaware corporation (“Company”),
has entered into that certain Credit Agreement dated as of July 28, 2006, with
Lenders, Guarantied Party, as Administrative Agent for Lenders, and the other
agents listed therein (said Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the “Credit Agreement”; capitalized terms
defined therein and not otherwise defined herein being used herein as therein
defined).


 


B.            Company
may from time to time enter, or may from time to time have entered, into one or
more Interest Rate Agreements, Currency Agreements or other swap agreements
(collectively, the “Lender Swap Agreements”)
with one or more Persons that are Lenders or Affiliates of Lenders at the time
such Lender Swap Agreements are entered into (in such capacity, collectively, “Swap Counterparties”) in accordance with
the terms of the Credit Agreement, and it is desired that the obligations of
Company under the Lender Swap Agreements, including without limitation the
obligation of Company to make payments thereunder in the event of early
termination thereof, together with all obligations of Company under the Credit
Agreement and the other Loan Documents, be guarantied hereunder.


 


C.            Guarantied
Party, Lenders and each Swap Counterparty for which Guarantied Party has
received the notice required by Section 18 hereof are sometimes referred to
herein as “Beneficiaries”.


 


D.            A
portion of the proceeds of the Loans may be advanced to other Guarantors that
are Subsidiaries of Company, and thus the Guarantied Obligations (as
hereinafter defined) are being incurred for and will inure to the benefit of
Guarantors (which benefits are hereby acknowledged).


 


E.             It
is a condition precedent to the making of Loans under the Credit Agreement
(other than the initial Term Loans to be made on the Closing Date) that Company’s
obligations thereunder be guarantied by Guarantors.


 


F.             Guarantors
are willing irrevocably and unconditionally to guaranty such obligations of
Company.


 


XIII-1

















 


NOW,
THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and in order to induce Lenders and Guarantied Party to enter into the Credit
Agreement and to make Loans and other extensions of credit thereunder and to
induce Swap Counterparties to enter into the Lender Swap Agreements, Guarantors
hereby agree as follows:


 


1.             Guaranty.              (a)
Guarantors jointly and severally irrevocably and unconditionally guaranty, as
primary obligors and not merely as sureties, the due and punctual payment in
full of all Guarantied Obligations (as hereinafter defined) when the same shall
become due, whether at stated maturity, by acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
§ 362(a)).  The term “Guarantied Obligations” is used herein in
its most comprehensive sense and includes any and all Obligations of Company
and all obligations of Company under Lender Swap Agreements, now or hereafter
made, incurred or created, whether absolute or contingent, liquidated or
unliquidated, whether due or not due, and however arising under or in
connection with the Credit Agreement, the Lender Swap Agreements, this Guaranty
and the other Loan Documents, including those arising under successive
borrowing transactions under the Credit Agreement which shall either continue
such obligations of Company or from time to time renew them after they have
been satisfied.


 


Each Guarantor
acknowledges that a portion of the Loans may be advanced to it, that Letters of
Credit may be issued for the benefit of its business and that the Guarantied
Obligations are being incurred for and will inure to its benefit.


 


Any interest on
any portion of the Guarantied Obligations that accrues after the commencement
of any proceeding, voluntary or involuntary, involving the bankruptcy,
insolvency, receivership, reorganization, liquidation or arrangement of Company
(or, if interest on any portion of the Guarantied Obligations ceases to accrue
by operation of law by reason of the commencement of said proceeding, such
interest as would have accrued on such portion of the Guarantied Obligations if
said proceeding had not been commenced) shall be included in the Guarantied
Obligations because it is the intention of each Guarantor and Guarantied Party
that the Guarantied Obligations should be determined without regard to any rule
of law or order that may relieve Company of any portion of such Guarantied
Obligations.


 


In the event that
all or any portion of the Guarantied Obligations is paid by Company, the
obligations of each Guarantor hereunder shall continue and remain in full force
and effect or be reinstated, as the case may be, in the event that all or any
part of such payment(s) is rescinded or recovered directly or indirectly from
Guarantied Party or any other Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments that are so rescinded or recovered shall
constitute Guarantied Obligations.


 


Subject to the other
provisions of this Section 1, upon the failure of Company to pay any of the
Guarantied Obligations when and as the same shall become due, each Guarantor
will upon demand pay, or cause to be paid, in cash, to Guarantied Party for the
ratable benefit of Beneficiaries, an amount equal to the aggregate of the
unpaid Guarantied Obligations.


 


XIII-2

















 


(b)           Anything
contained in this Guaranty to the contrary notwithstanding, the obligations of
each Guarantor under this Guaranty and the other Loan Documents shall be
limited to a maximum aggregate amount equal to the largest amount that would
not render its obligations hereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any applicable provisions of comparable state law (collectively, the “Fraudulent Transfer Laws”), in each case
after giving effect to all other liabilities of such Guarantor, contingent or
otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of such Guarantor (x) in respect of
intercompany indebtedness to Company or other affiliates of Company to the
extent that such indebtedness would be discharged in an amount equal to the
amount paid by such Guarantor hereunder and (y) under any guaranty of
Subordinated Indebtedness which guaranty contains a limitation as to maximum
amount similar to that set forth in this Section 1(b), pursuant to which the
liability of such Guarantor hereunder is included in the liabilities taken into
account in determining such maximum amount) and after giving effect as assets
to the value (as determined under the applicable provisions of the Fraudulent
Transfer Laws) of any rights to subrogation, reimbursement, indemnification or
contribution of such Guarantor pursuant to applicable law or pursuant to the
terms of any agreement.


 


(c)           Each
Guarantor under this Guaranty, and each guarantor under other guaranties, if
any, relating to the Credit Agreement (the “Related
Guaranties”) that contain a contribution provision similar to that
set forth in this Section 1(c), together desire to allocate among themselves
(collectively, the “Contributing Guarantors”),
in a fair and equitable manner, their obligations arising under this Guaranty
and the Related Guaranties.  Accordingly,
in the event any payment or distribution is made on any date by a Guarantor
under this Guaranty or a guarantor under a Related Guaranty, each such
Guarantor or such other guarantor shall be entitled to a contribution from each
of the other Contributing Guarantors in the maximum amount permitted by law so
as to maximize the aggregate amount of the Guarantied Obligations paid to
Beneficiaries.


 


2.             Guaranty Absolute; Continuing Guaranty.  The obligations of each Guarantor hereunder
are irrevocable, absolute, independent and unconditional and shall not be
affected by any circumstance which constitutes a legal or equitable discharge
of a guarantor or surety other than payment in full of the Guarantied
Obligations.  In furtherance of the
foregoing and without limiting the generality thereof, each Guarantor agrees
that:  (a) this Guaranty is a
guaranty of payment when due and not of collectibility; (b) Guarantied
Party may enforce this Guaranty upon the occurrence and during the continuance
of an Event of Default under the Credit Agreement or the occurrence of an early
termination date or similar event under any Lender Swap Agreements
notwithstanding the existence of any dispute between Company and any
Beneficiary with respect to the existence of such event; (c) the
obligations of each Guarantor hereunder are independent of the obligations of
Company under the Loan Documents or the Lender Swap Agreements and the
obligations of any other guarantor of obligations of Company and a separate
action or actions may be brought and prosecuted against each Guarantor whether
or not any action is brought against Company or any of such other guarantors
and whether or not Company is joined in any such action or actions; and
(d) a payment of a portion, but not all, of the Guarantied Obligations by
one or more Guarantors shall in no way limit, affect, modify or abridge the
liability of such or any other Guarantor for any portion of the Guarantied
Obligations that has not been paid.  This
Guaranty is a continuing guaranty and shall be binding upon each


 


XIII-3

















 


Guarantor and its successors and assigns, and each Guarantor
irrevocably waives any right to revoke this Guaranty as to future transactions
giving rise to any Guarantied Obligations.


 


3.             Actions by Beneficiaries.  Any Beneficiary may from time to time,
without notice or demand and without affecting the validity or enforceability
of this Guaranty or giving rise to any limitation, impairment or discharge of
any Guarantor’s liability hereunder, (a) renew, extend, accelerate or
otherwise change the time, place, manner or terms of payment of the Guarantied
Obligations, (b) settle, compromise, release or discharge, or accept or
refuse any offer of performance with respect to, or substitutions for, the
Guarantied Obligations or any agreement relating thereto and/or subordinate the
payment of the same to the payment of any other obligations, (c) request
and accept other guaranties of the Guarantied Obligations and take and hold
security for the payment of this Guaranty or the Guarantied Obligations,
(d) release, exchange, compromise, subordinate or modify, with or without
consideration, any security for payment of the Guarantied Obligations, any
other guaranties of the Guarantied Obligations, or any other obligation of any
Person with respect to the Guarantied Obligations, (e) enforce and apply
any security now or hereafter held by or for the benefit of any Beneficiary in
respect of this Guaranty or the Guarantied Obligations and direct the order or
manner of sale thereof, or exercise any other right or remedy that Guarantied
Party or the other Beneficiaries, or any of them, may have against any such
security, as Guarantied Party in its discretion may determine consistent with
the Credit Agreement, the Lender Swap Agreements and any applicable security
agreement, including foreclosure on any such security pursuant to one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and (f) exercise any other rights available to
Guarantied Party or the other Beneficiaries, or any of them, under the Loan
Documents or the Lender Swap Agreements.


 


4.             No Discharge.  This Guaranty and the obligations of
Guarantors hereunder shall be valid and enforceable and shall not be subject to
any limitation, impairment or discharge for any reason (other than payment in
full of the Guarantied Obligations), including without limitation the occurrence
of any of the following, whether or not any Guarantor shall have had notice or
knowledge of any of them:  (a) any
failure to assert or enforce or agreement not to assert or enforce, or the stay
or enjoining, by order of court, by operation of law or otherwise, of the
exercise or enforcement of, any claim or demand or any right, power or remedy
with respect to the Guarantied Obligations or any agreement relating thereto,
or with respect to any other guaranty of or security for the payment of the
Guarantied Obligations, (b) any waiver or modification of, or any consent
to departure from, any of the terms or provisions of the Credit Agreement, any
of the other Loan Documents, the Lender Swap Agreements or any agreement or
instrument executed pursuant thereto, or of any other guaranty or security for
the Guarantied Obligations, (c) the Guarantied Obligations, or any
agreement relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect, (d) the application of payments received
from any source to the payment of indebtedness other than the Guarantied
Obligations, even though Guarantied Party or the other Beneficiaries, or any of
them, might have elected to apply such payment to any part or all of the
Guarantied Obligations, (e) any failure to perfect or continue perfection
of a security interest in any collateral which secures any of the Guarantied
Obligations, (f) any defenses, set-offs or counterclaims which Company may
assert against Guarantied Party or any Beneficiary in respect of the Guarantied
Obligations, including but not limited to failure of consideration, breach of
warranty, payment, statute of frauds, statute of limitations, accord and
satisfaction and usury, and (g) any other act or thing or omission, or delay


 


XIII-4

















 


to do any other act or thing, which may or might in any manner or to
any extent vary the risk of a Guarantor as an obligor in respect of the
Guarantied Obligations.


 


5.             Waivers.  Each Guarantor waives, for the benefit of
Beneficiaries:  (a) any right to
require Guarantied Party or the other Beneficiaries, as a condition of payment
or performance by such Guarantor, to (i) proceed against Company, any
other guarantor of the Guarantied Obligations or any other Person,
(ii) proceed against or exhaust any security held from Company, any other
guarantor of the Guarantied Obligations or any other Person, (iii) proceed
against or have resort to any balance of any deposit account or credit on the
books of any Beneficiary in favor of Company or any other Person, or
(iv) pursue any other remedy in the power of any Beneficiary; (b) any
defense arising by reason of the incapacity, lack of authority or any
disability or other defense of Company including, without limitation, any
defense based on or arising out of the lack of validity or the unenforceability
of the Guarantied Obligations or any agreement or instrument relating thereto
or by reason of the cessation of the liability of Company from any cause other
than payment in full of the Guarantied Obligations; (c) any defense based
upon any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than
that of the principal; (d) any defense based upon Guarantied Party’s or
any other Beneficiary’s errors or omissions in the administration of the
Guarantied Obligations, except behavior that amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or otherwise,
that are or might be in conflict with the terms of this Guaranty and any legal
or equitable discharge of such Guarantor’s obligations hereunder, (ii) the
benefit of any statute of limitations affecting such Guarantor’s liability
hereunder or the enforcement hereof, (iii) any rights to set-offs,
recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that any Beneficiary protect, secure, perfect or insure any Lien or
any property subject thereto; (f) except as expressly provided in the Loan
Documents, notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
of this Guaranty, notices of default under the Credit Agreement, notices of
default or early termination under any Lender Swap Agreement or any agreement
or instrument related thereto, notices of any renewal, extension or
modification of the Guarantied Obligations or any agreement related thereto,
notices of any extension of credit to Company and notices of any of the matters
referred to in Sections 3 and 4 and any right to consent to any thereof; and
(g) to the fullest extent permitted by law, any defenses or benefits that
may be derived from or afforded by law which limit the liability of or
exonerate guarantors or sureties, or which may conflict with the terms of this
Guaranty.


 


6.             Guarantors’ Rights of Subrogation,
Contribution, Etc.; Subordination of Other Obligations.  Until the Guarantied Obligations shall have
been paid in full and the Commitments shall have terminated and all Letters of
Credit shall have expired or been cancelled or collateralized with cash or a
letter of credit, each Guarantor shall withhold exercise of (a) any claim,
right or remedy, direct or indirect, that such Guarantor now has or may
hereafter have against Company or any of its assets in connection with this
Guaranty or the performance by such Guarantor of its obligations hereunder, in
each case whether such claim, right or remedy arises in equity, under contract,
by statute, under common law or otherwise and including without limitation
(i) any right of subrogation, reimbursement or indemnification that such
Guarantor now has or may hereafter have against Company, (ii) any right to
enforce, or to participate in, any claim, right or remedy that any Beneficiary
now has or may hereafter have


 


XIII-5

















 


against Company, and (iii) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any
Beneficiary and (b) any right of contribution such Guarantor now has or
may hereafter have against any other guarantor of any of the Guarantied
Obligations.  Each Guarantor further
agrees that, to the extent the agreement to withhold the exercise of its rights
of subrogation, reimbursement, indemnification and contribution as set forth
herein is found by a court of competent jurisdiction to be void or voidable for
any reason, any rights of subrogation, reimbursement or indemnification such
Guarantor may have against Company or against any collateral or security, and
any rights of contribution such Guarantor may have against any such other
guarantor, shall be junior and subordinate to any rights Guarantied Party or
the other Beneficiaries may have against Company, to all right, title and
interest Guarantied Party or the other Beneficiaries may have in any such
collateral or security, and to any right Guarantied Party or the other
Beneficiaries may have against such other guarantor.


 


Any indebtedness
of Company now or hereafter held by any Guarantor is subordinated in right of
payment to the Guarantied Obligations, and any such indebtedness of Company to
a Guarantor collected or received by such Guarantor after an Event of Default
has occurred and is continuing, and any amount paid to a Guarantor on account
of any subrogation, reimbursement, indemnification or contribution rights
referred to in the preceding paragraph when all Guarantied Obligations have not
been paid in full, any Lender shall have any Commitment or any Swap
Counterparty shall have any obligation under any Lender Swap Agreement, shall
be held for Guarantied Party on behalf of Beneficiaries and shall forthwith be
paid over to Guarantied Party for the benefit of Beneficiaries to be credited
and applied against the Guarantied Obligations.


 


7.             Expenses.  Guarantors jointly and severally agree to
pay, or cause to be paid, on demand, and to save Guarantied Party and the other
Beneficiaries harmless against liability for, (i) any and all costs and
expenses (including reasonable fees, costs of settlement, and disbursements of
counsel and allocated costs of internal counsel) incurred or expended by
Guarantied Party or any other Beneficiary in connection with the enforcement of
or preservation of any rights under this Guaranty and (ii) any and all
costs and expenses (including those arising from rights of indemnification)
required to be paid by Guarantors under the provisions of any other Loan
Document.


 


8.             Financial Condition of Company.  No Beneficiary shall have any obligation, and
each Guarantor waives any duty on the part of any Beneficiary, to disclose or
discuss with such Guarantor its assessment, or such Guarantor’s assessment, of
the financial condition of Company or any matter or fact relating to the
business, operations or condition of Company. 
Each Guarantor has adequate means to obtain information from Company on
a continuing basis concerning the financial condition of Company and its
ability to perform its obligations under the Loan Documents and the Lender Swap
Agreements, and each Guarantor assumes the responsibility for being and keeping
informed of the financial condition of Company and of all circumstances bearing
upon the risk of nonpayment of the Guarantied Obligations.


 


9.             Representations and Warranties.  Each Guarantor makes, for the benefit of
Beneficiaries, each of the representations and warranties made in the Credit
Agreement by Company as to such Guarantor, its assets, financial condition,
operations, organization, legal status, business and the Loan Documents to
which it is a party.


 


XIII-6

















 


10.          Covenants.  Each Guarantor agrees that, so long as any
part of the Guarantied Obligations shall remain unpaid, any Letter of Credit
shall be outstanding and not collateralized by cash or a letter of credit, or
any Lender shall have any Commitment or any Swap Counterparty shall have any
obligation under any Lender Swap Agreement, such Guarantor will, unless
Requisite Obligees (as such term is defined in Section 17(a)) shall
otherwise consent in writing, perform or observe, and cause its Subsidiaries,
if any, to perform or observe, all of the terms, covenants and agreements that
the Loan Documents state that Company is to cause a Guarantor and such Subsidiaries
to perform or observe.


 


11.          Set Off. 
In addition to any other rights any Beneficiary may have under law or in
equity, if any amount shall at any time be due and owing by a Guarantor to any
Beneficiary under this Guaranty, such Beneficiary is authorized at any time or
from time to time, without notice (any such notice being expressly waived), to
set off and to appropriate and to apply any and all deposits (general or
special, including but not limited to indebtedness evidenced by certificates of
deposit, whether matured or unmatured) and any other indebtedness of such
Beneficiary owing to a Guarantor and any other property of such Guarantor held
by a Beneficiary to or for the credit or the account of such Guarantor against
and on account of the Guarantied Obligations and liabilities of such Guarantor
to any Beneficiary under this Guaranty.


 


12.          Discharge of Guaranty Upon Sale of Guarantor.  If all of the stock of a Guarantor or any of
its successors in interest under this Guaranty shall be sold or otherwise
disposed of (including by merger or consolidation) in a sale or other
disposition not prohibited by the Credit Agreement or otherwise consented to by
Requisite Obligees (as such term is defined in Section 17(a)), such
Guarantor or such successor in interest, as the case may be, may request
Guarantied Party to, and Guarantied Party shall, execute and deliver documents
or instruments necessary to evidence the release and discharge of this Guaranty
as provided in subsection 10.14 of the Credit Agreement.


 


13.          Amendments and Waivers.  No amendment, modification, termination or
waiver of any provision of this Guaranty, and no consent to any departure by
any Guarantor therefrom, shall in any event be effective without the written
concurrence of Guarantied Party and, in the case of any such amendment or
modification, Guarantors.  Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.


 


14.          Miscellaneous.  It is not necessary for Beneficiaries to
inquire into the capacity or powers of any Guarantor or Company or the
officers, directors or any agents acting or purporting to act on behalf of any
of them.


 


The rights, powers
and remedies given to Beneficiaries by this Guaranty are cumulative and shall
be in addition to and independent of all rights, powers and remedies given to
Beneficiaries by virtue of any statute or rule of law or in any of the Loan
Documents or the Lender Swap Agreements or any agreement between one or more
Guarantors and one or more Beneficiaries or between Company and one or more
Beneficiaries.  Any forbearance or
failure to exercise, and any delay by any Beneficiary in exercising, any right,
power or remedy hereunder shall not impair any such right, power or remedy or
be construed to be a waiver thereof, nor shall it preclude the further exercise
of any such right, power or remedy.


 


XIII-7

















 


In case any
provision in or obligation under this Guaranty shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.


 


THIS
GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTORS, GUARANTIED PARTY AND THE
OTHER BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.


 


This Guaranty
shall inure to the benefit of Beneficiaries and their respective successors and
assigns.


 


ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY EACH
GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY
AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY.  Each Guarantor agrees that service of all
process in any such proceeding in any such court may be made by registered or
certified mail, return receipt requested, to such Guarantor at its address set
forth below its signature hereto, such service being acknowledged by such
Guarantor to be sufficient for personal jurisdiction in any action against such
Guarantor in any such court and to be otherwise effective and binding service
in every respect.  Nothing herein shall
affect the right to serve process in any other manner permitted by law or shall
limit the right of Guarantied Party or any Beneficiary to bring proceedings
against such Guarantor in the courts of any other jurisdiction.


 


EACH
GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, GUARANTIED PARTY EACH
AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS
HEREOF, GUARANTIED PARTY EACH (I) ACKNOWLEDGES THAT THIS WAIVER IS A
MATERIAL INDUCEMENT FOR SUCH GUARANTOR AND GUARANTIED PARTY TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT SUCH GUARANTOR AND GUARANTIED PARTY HAVE


 


XIII-8

















 


ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
GUARANTY OR ACCEPTING THE BENEFITS THEREOF, AS THE CASE MAY BE, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS, AND
(II) FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF THIS
GUARANTY.  In the event
of litigation, this Guaranty may be filed as a written consent to a trial by
the court.


 


15.          Additional Guarantors.  The initial Guarantor(s) hereunder shall be
such of the Subsidiaries of Company as are signatories hereto on the date
hereof.  From time to time subsequent to
the date hereof, Subsidiaries of Company may become parties hereto, as additional
Guarantors (each an “Additional Guarantor”),
by executing a counterpart of this Guaranty. 
A form of such a counterpart is attached as Exhibit A.  Upon delivery of any such counterpart to
Guarantied Party, notice of which is hereby waived by Guarantors, each such
Additional Guarantor shall be a Guarantor and shall be as fully a party hereto
as if such Additional Guarantor were an original signatory hereof.  Each Guarantor expressly agrees that its
obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Guarantor hereunder, nor by any election of
the Guarantied Party not to cause any Subsidiary of Company to become an
Additional Guarantor hereunder.  This
Guaranty shall be fully effective as to any Guarantor that is or becomes a
party hereto regardless of whether any other Person becomes or fails to become
or ceases to be a Guarantor hereunder.


 


16.          Counterparts; Effectiveness.  This Guaranty may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
for all purposes; but all such counterparts together shall constitute but one
and the same instrument.  This Guaranty
shall become effective as to each Guarantor upon the execution of a counterpart
hereof by such Guarantor (whether or not a counterpart hereof shall have been
executed by any other Guarantor) and receipt by the Guaranteed Party of written
or telephonic notification of such execution and authorization of delivery
thereof.


 


17.          Guarantied
Party as Agent.


 


(a)           Guarantied Party has
been appointed to act as Guarantied Party hereunder by Lenders and, by
acceptance of any of the benefits hereunder, each Swap Counterparty.  Guarantied Party shall be obligated, and
shall have the right hereunder, to make demands, to give notices, to exercise
or refrain from exercising any rights, and to take or refrain from taking any
action, solely in accordance with this Guaranty and the Credit Agreement; provided
that Guarantied Party shall exercise, or refrain from exercising, any remedies
under or with respect to this Guaranty in accordance with the instructions of
(i) Requisite Lenders, or (ii) after payment in full of all
Obligations under the Credit Agreement and the other Loan Documents, the
cancellation, expiration or collateralization with cash or a letter of credit
of all Letters of Credit


 


XIII-9

















 


and the termination of the Commitments, the holders of a majority of
(A) the aggregate notional amount under all Lender Swap Agreements
(including Lender Swap Agreements that have been terminated) or (B) if all
Lender Swap Agreements have been terminated in accordance with their terms, the
aggregate amount then due and payable (exclusive of expenses and similar
payments but including any early termination payments then due) under such
Lender Swap Agreements (Requisite Lenders or, if applicable, such holders being
referred to herein as “Requisite Obligees”).


 


(b)           Guarantied Party shall
at all times be the same Person that is Administrative Agent under the Credit
Agreement.  Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement
shall also constitute notice of resignation as Guarantied Party under this
Guaranty; and appointment of a successor Administrative Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute appointment of a
successor Guarantied Party under this Guaranty. 
Upon the acceptance of any appointment as Administrative Agent under
subsection 9.5 of the Credit Agreement by a successor Administrative Agent,
that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Guarantied Party under this Guaranty, and the retiring Guarantied Party under
this Guaranty shall promptly (i) transfer to such successor Guarantied
Party all sums held hereunder, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of
the successor Guarantied Party under this Guaranty, and (ii) take such
other actions as may be necessary or appropriate in connection with the
assignment to such successor Guarantied Party of the rights created hereunder,
whereupon such retiring Guarantied Party shall be discharged from its duties
and obligations under this Guaranty. 
After any retiring Guarantied Party’s resignation hereunder as
Guarantied Party, the provisions of this Guaranty shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Guaranty while it
was Guarantied Party hereunder.


 


18.          Notice of Lender Swap Agreements.  Guarantied Party shall not be deemed to have
any duty whatsoever with respect to any Swap Counterparty until it shall have
received written notice in form and substance satisfactory to Guarantied Party
from Company, a Guarantor or the Swap Counterparty as to the existence and
terms of the applicable Lender Swap Agreement.


 


 


[Remainder
of page intentionally left blank.]


 


XIII-10

















 


IN
WITNESS WHEREOF, each Guarantor and Guarantied Party, solely
for the purposes of the waiver of the right to jury trial contained in Section
14, have caused this Guaranty to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date first written
above.


 


	
   

  	
  FTD.COM INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FLORISTS’ TRANSWORLD
  DELIVERY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
							



 


XIII-S-1

















 


	
   

  	
  WELLS FARGO BANK, N.A.,
  as Administrative

  Agent, as Guarantied Party

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
							



 


XIII-S-2

















 


EXHIBIT A


 


[FORM OF COUNTERPART FOR
ADDITIONAL GUARANTORS]


 


This COUNTERPART
(this “Counterpart”), dated               ,
20    , is delivered pursuant to Section 15 of the Guaranty
referred to below.  The undersigned
hereby agrees that this Counterpart may be attached to the Guaranty, dated as
of July 28, 2006 (as it may be from time to time amended, modified or
supplemented, the “Guaranty”;
capitalized terms used herein not otherwise defined herein shall have the
meanings ascribed therein), among the Guarantors named therein and Wells Fargo
Bank, N.A., as Guarantied Party.  The
undersigned, by executing and delivering this Counterpart, hereby becomes an
Additional Guarantor under the Guaranty in accordance with Section 15 thereof
and agrees to be bound by all of the terms thereof.


 


IN
WITNESS WHEREOF, the undersigned has caused this Counterpart
to be duly executed and delivered by its officer thereunto duly authorized as
of                             ,
20    .


 


 


	
   

  	
  [NAME
  OF ADDITIONAL GUARANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
								



 


A-1

















 


EXHIBIT XIV


 


[FORM OF] SECURITY
AGREEMENT


 


This SECURITY AGREEMENT (this “Agreement”) is dated as of July 28, 2006,
and entered into by and among FTD, INC., a
Delaware corporation (“Company”), FTD GROUP, INC., a Delaware corporation (“Holdings”), each of THE UNDERSIGNED DIRECT AND INDIRECT SUBSIDIARIES
of Company (each of such undersigned Subsidiaries being a “Subsidiary Grantor” and collectively “Subsidiary Grantors”) and each ADDITIONAL GRANTOR that may become a party
hereto after the date hereof in accordance with Section 21 hereof (each of
Company, Holdings, each Subsidiary Grantor, and each Additional Grantor being a
“Grantor” and collectively the “Grantors”) and WELLS FARGO BANK, N.A.,
as Administrative Agent for and representative of (in such capacity herein
called “Secured Party”) the
Beneficiaries (as hereinafter defined).


 


PRELIMINARY STATEMENTS


 


A.            Pursuant
to the Credit Agreement dated as of July 28, 2006 (said Credit Agreement, as it
may hereafter be amended, restated, supplemented or otherwise modified from
time to time, being the “Credit Agreement”;
the terms defined therein and not otherwise defined in Section 32 or elsewhere
herein being used herein as therein defined), by and among Company, the lenders
listed therein as Lenders, Wells Fargo Bank, N.A., as Administrative Agent (in
such capacity, “Administrative Agent”),
and the other agents listed therein, Lenders have made certain commitments,
subject to the terms and conditions set forth in the Credit Agreement, to
extend certain credit facilities to Company.


 


B.            Company
may from time to time enter, or may from time to time have entered, into one or
more Lender Swap Agreements with one or more Swap Counterparties in accordance
with the terms of the Credit Agreement, and it is desired that the obligations
of Company under the Lender Swap Agreements, including, without limitation, the
obligation of Company to make payments thereunder in the event of early
termination thereof, together with all obligations of Company under the Credit
Agreement and the other Loan Documents, be secured hereunder.


 


C.            Holdings
has executed and delivered the Holdings Guaranty, and Subsidiary Grantors have
executed and delivered the Subsidiary Guaranty, in each case in favor of
Secured Party for the benefit of Lenders and any Swap Counterparties, pursuant
to which Holdings and each Subsidiary Grantor have guarantied the prompt
payment and performance when due of all obligations of Company under the Credit
Agreement and all obligations of Company under the Lender Swap Agreements.


 


D.            It
is a condition precedent to the initial extensions of credit by Lenders under
the Credit Agreement that Grantors listed on the signature pages hereof shall
have granted the security interests and undertaken the obligations contemplated
by this Agreement.


 


NOW,
THEREFORE, in consideration of the agreements set forth
herein and in the Credit Agreement and in order to induce Lenders to make Loans
and other extensions of


 


XIV-1

















 


credit under the Credit Agreement and to induce Swap Counterparties to
enter into the Lender Swap Agreements, each Grantor hereby agrees with Secured
Party as follows:


 


SECTION 1.                Grant
of Security.


 


Each Grantor
hereby assigns to Secured Party, and hereby grants to Secured Party a security
interest in, all of such Grantor’s right, title and interest in and to all of
the personal property of such Grantor, in each case whether now or hereafter
existing, whether tangible or intangible, whether now owned or hereafter
acquired, wherever the same may be located and whether or not subject to the
Uniform Commercial Code as it exists on the date of this Agreement, or as it
may hereafter be amended in the State of New York (the “UCC”), including all Assigned Agreements
and the following (the “Collateral”):


 


(a)           all
Accounts;


 


(b)           all
Chattel Paper;


 


(c)           all
Money and all Deposit Accounts, together with all amounts on deposit from time
to time in such Deposit Accounts;


 


(d)           all
Documents;


 


(e)           all
General Intangibles, including all intellectual property, Payment Intangibles
and Software;


 


(f)            all
Goods, including Inventory, Equipment and Fixtures;


 


(g)           all
Instruments;


 


(h)           all
Investment Property;


 


(i)            all
Letter-of-Credit Rights and other Supporting Obligations;


 


(j)            all
Records;


 


(k)           all
Commercial Tort Claims, including those set forth on Schedule 1 annexed
hereto; and


 


(l)            all
Proceeds and Accessions with respect to any of the foregoing Collateral.


 


Each category of
Collateral set forth above shall have the meaning set forth in the UCC (to the
extent such term is defined in the UCC), it being the intention of Grantors
that the description of the Collateral set forth above be construed to include
the broadest possible range of assets.


 


Notwithstanding
anything herein to the contrary, in no event shall the Collateral include, and
no Grantor shall be deemed to have granted a security interest in, any of such
Grantor’s rights or interests in or under, (a) any license, contract,
permit, Instrument, Security or


 


XIV-2

















 


franchise to which such Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract, permit, Instrument, Security
or franchise, result in a breach of the terms of, or constitute a default
under, such license, contract, permit, Instrument, Security or franchise (other
than to the extent that any such term would be rendered ineffective pursuant to
the UCC or any other applicable law (including the Bankruptcy Code) or
principles of equity); provided, that immediately upon the
ineffectiveness, lapse or termination of any such provision the Collateral
shall include, and such Grantor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect, or (b)  any property or asset hereafter acquired by any Grantor
that is subject to a Lien permitted to be incurred pursuant to the Credit
Agreement solely to the extent that the documents evidencing such Lien prohibit
the grant of a security interest in or Lien on such property or asset; provided
that, upon such property or asset no longer being subject to such Lien or
prohibition, such property or asset shall (without any act or delivery by any
Person) constitute Collateral hereunder.


 


Notwithstanding
anything herein to the contrary, the Collateral shall not include any equity
interests issued by a Person if such Person is a controlled foreign corporation
(used hereinafter as such term is defined in Section 957(a) or any successor
provision of the Internal Revenue Code), in excess of the amount of such equity
interests possessing up to but not exceeding 66% of the voting power of all
classes of such equity interests entitled to vote of such Person.


 


SECTION 2.                Security
for Obligations.


 


This Agreement
secures, and the Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise, of all Secured
Obligations of each Grantor.  “Secured Obligations” means:


 


(a)           with
respect to Company, all obligations and liabilities of every nature of Company
now or hereafter existing under or arising out of or in connection with the
Credit Agreement and the other Loan Documents and any Lender Swap Agreement;


 


(b)           with
respect to each Subsidiary Grantor and Additional Grantor, all obligations and
liabilities of every nature of such Subsidiary Grantor now or hereafter
existing under or arising out of or in connection with the Subsidiary Guaranty;
and


 


(c)           with
respect to Holdings, all obligations and liabilities of every nature of
Holdings now or hereafter existing under or arising out of or in connection
with the Holdings Guaranty;


 


in each case
together with all extensions or renewals thereof, whether for principal,
interest, reimbursement of amounts drawn under Letters of Credit, payments for
early termination of Lender Swap Agreements, fees, expenses, indemnities or
otherwise, whether voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with
others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that


 


XIV-3

















 


are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Secured Party or any Lender or Swap Counterparty as a
preference, fraudulent transfer or otherwise, and all obligations of every
nature of Grantors now or hereafter existing under this Agreement (including,
without limitation, interest and other amounts that, but for the filing of a
petition in bankruptcy with respect to Company or any other Grantor, would
accrue on such obligations, whether or not a claim is allowed against Company
or such Grantor for such amounts in the related bankruptcy proceeding).


 


SECTION 3.                Grantors
Remain Liable.


 


Anything contained
herein to the contrary notwithstanding, (a) each Grantor shall remain liable
under any contracts and agreements included in the Collateral, to the extent
set forth therein, to perform all of its duties and obligations thereunder to
the same extent as if this Agreement had not been executed, (b) the exercise by
Secured Party of any of its rights hereunder shall not release any Grantor from
any of its duties or obligations under the contracts and agreements included in
the Collateral, and (c) Secured Party shall not have any obligation or
liability under any contracts, licenses, and agreements included in the Collateral
by reason of this Agreement, nor shall Secured Party be obligated to perform
any of the obligations or duties of any Grantor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.


 


SECTION 4.                Representations
and Warranties.


 


Each Grantor
represents and warrants as follows:


 


(a)           Ownership of Collateral.  Except as expressly permitted by the Credit
Agreement, such Grantor owns its interests in the Collateral free and clear of
any Lien and no effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office, in the PTO (to such Grantor’s knowledge) or in the Copyright
Office, except for which proper terminations have been delivered to Secured
Party for filing.


 


(b)           Perfection. 
The security interests in the Collateral granted to Secured Party for
the ratable benefit of Lenders and Swap Counterparties hereunder constitute
valid security interests in the Collateral, securing the payment of the Secured
Obligations.  Upon (i) the filing of
UCC financing statements naming each Grantor as “debtor”, naming Secured Party
as “secured party” and describing the Collateral in the filing offices with
respect to such Grantor set forth on Schedule 2 annexed hereto,
(ii) in the case of the Securities Collateral consisting of certificated
Securities or evidenced by Instruments, in addition to filing of such UCC
financing statements, delivery of the certificates representing such
certificated Securities and delivery of such Instruments to Secured Party, in
each case duly endorsed or accompanied by duly executed instruments of
assignment or transfer in blank, (iii) in the case of the Intellectual
Property Collateral, in addition to the filing of such UCC financing
statements, the recordation of a Grant with the PTO or with the Copyright
Office, as applicable, (iv) in the case of Equipment that is covered by a
certificate of title, to the extent requested by Secured Party, the filing with
the registrar of motor vehicles or other appropriate authority in the
applicable jurisdiction of an application requesting the notation of the
security interest created hereunder on


 


XIV-4

















 


such certificate of title, and (v), in the case of any Deposit Account
and any Investment Property constituting a Security Entitlement, Securities
Account, Commodity Contract or Commodity Account, to the extent requested by
Secured Party, the execution and delivery to Secured Party of an agreement
providing for control by Secured Party thereof, the security interests in the
Collateral granted to Secured Party for the ratable benefit of Lenders and Swap
Counterparties will constitute perfected security interests therein prior to
all other Liens (except for Permitted Encumbrances and Liens permitted by
subsection 7.2(A) of the Credit Agreement), and all filings and other actions
necessary or desirable to perfect and protect such security interests have
been, or promptly after the Closing Date will be, duly made or taken.


 


(c)           Office Locations; Type and Jurisdiction of
Organization; Locations of Equipment and Inventory.  As of the Closing Date or, in the case of an
Additional Grantor, the date of the applicable Counterpart, the office where such
Grantor keeps its Records regarding the Accounts and all Intellectual Property
and all originals of all Chattel Paper that evidence Accounts are located at
the locations set forth on Schedule 3 annexed hereto; such Grantor’s
name as it appears in official filings in the jurisdiction of its organization,
type of organization (i.e. corporation, limited partnership, etc.),
jurisdiction of organization and organization number provided by the applicable
Government Authority of the jurisdiction of organization are set forth on Schedule
3 annexed hereto.  All of the
Equipment and Inventory is, as of the date hereof, or in the case of an
Additional Grantor, the date of the applicable Counterpart, located at the
places set forth on Schedule 4 annexed hereto, except for Inventory
which, in the ordinary course of business, is in transit either (i) from a
supplier to a Grantor, (ii) between the locations set forth on Schedule
4 annexed hereto, or (iii) to customers of a Grantor.


 


(d)           Reserved.


 


(e)           Delivery of Certain Collateral.  As of the Closing Date, all certificates or
Instruments (excluding checks) evidencing, comprising or representing the
Collateral have been delivered to Secured Party duly endorsed or accompanied by
duly executed instruments of transfer or assignment in blank.


 


(f)            Securities Collateral.  All of the Pledged Subsidiary Equity set
forth on Schedule 6 annexed hereto has been duly authorized and validly
issued and is fully paid and non-assessable; all of the Pledged Subsidiary Debt
set forth on Schedule 7 annexed hereto has been duly authorized and is
the legally valid and binding obligation of the issuers thereof and is not in
default; there are no outstanding warrants, options or other rights to
purchase, or other agreements outstanding with respect to, or property that is
now or hereafter convertible into, or that requires the issuance or sale of,
any Pledged Subsidiary Equity, other than the Put/Call Agreements; Schedule
6 annexed hereto sets forth all of the Equity Interests and the Pledged Equity
owned by each Grantor, and the percentage ownership in each issuer thereof, on
the date hereof; and Schedule 7 annexed hereto sets forth all of the
Pledged Debt in existence on the date hereof.


 


(g)           Intellectual Property Collateral.  As of the Closing Date, a true and complete
list of all material Trademark Registrations and applications for any material
Trademark owned, held (whether pursuant to a license or otherwise) or used by
such Grantor, in whole or in part, is set forth on Schedule 8 annexed
hereto; as of the Closing Date, a true and


 


XIV-5

















 


complete list of all material Patents owned, held (whether pursuant to
a license or otherwise) or used by such Grantor, in whole or in part, is set
forth on Schedule 9 annexed hereto; as of the Closing Date, a true and
complete list of all material Copyright Registrations and applications for
Copyright Registrations held (whether pursuant to a license or otherwise) by
such Grantor, in whole or in part, is set forth on Schedule 10 annexed
hereto; and after reasonable inquiry, such Grantor is not aware of any pending
or threatened claim by any third party that any of the Intellectual Property
Collateral owned, held or used by such Grantor is invalid or unenforceable
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.


 


(h)           Deposit Accounts, Security Accounts, Commodity
Accounts.  Schedule 11
annexed hereto lists all Deposit Accounts, Security Accounts and Commodity
Accounts owned by each Grantor as of the Closing Date and indicates the
institution or intermediary at which the account is held and the account
number.


 


(i)            Chattel Paper.  As of the date hereof, such Grantor has no
interest in any Chattel Paper, except as set forth in Schedule 12
annexed hereto.


 


(j)            Letter-of-Credit Rights.  As of the date hereof, such Grantor has no
interest in any Letter-of-Credit Rights, except as set forth on Schedule 13
annexed hereto.


 


(k)           Documents. 
As of the date hereof, no negotiable Documents are outstanding with
respect to any of the Inventory, except as set forth on Schedule 14
annexed hereto.


 


(l)            Assigned Agreements.  As of the date hereof, to the applicable
Grantor’s knowledge, each Assigned Agreement is in full force and effect and is
enforceable against the parties thereto in accordance with its terms.


 


(m)          Motor Vehicles. As of the date hereof, such
Grantor owns no motor vehicles.


 


SECTION 5.                Further
Assurances.


 


(a)           Generally. 
Each Grantor agrees that from time to time, at the expense of Grantors,
such Grantor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral.  Without
limiting the generality of the foregoing, each Grantor will:  (i) (A) notify Secured Party in writing
of receipt by such Grantor of any interest in Chattel Paper (other than Chattel
Paper received by such Grantor in connection with the making of loans
(financing equipment sold) or equipment leases to customers permitted by
subsection 7.3(xiv) of the Credit Agreement), (B) at the reasonable request of
Secured Party, notify Secured Party in writing of receipt by such Grantor of
any interest in Chattel Paper received in connection with the making of loans
(financing equipment sold) or equipment leases to customers permitted by
subsection 7.3(xiv) of the Credit Agreement and (C) at the reasonable request
of Secured Party, mark conspicuously each item of Chattel Paper, with a legend,
in form and substance


 


XIV-6

















 


reasonably satisfactory to Secured Party, indicating that such Chattel
Paper is subject to the security interest granted hereby, (ii) deliver to
Secured Party all promissory notes and other Instruments with a principal
amount in excess of $100,000 and, at the reasonable request of Secured Party,
all original counterparts of Chattel Paper, duly endorsed and accompanied by
duly executed instruments of transfer or assignment, all in form and substance
satisfactory to Secured Party, (iii) (A) execute (if necessary) and
file such financing or continuation statements, or amendments thereto,
(B) at the reasonable request of Secured Party, execute and deliver, and
cause to be executed and delivered, agreements establishing that Secured Party
has control of electronic Chattel Paper, Deposit Accounts, Investment Property
and Letter-of-Credit Rights of such Grantor and (C) deliver such other
instruments or notices, in each case, as may be necessary or desirable, or as
Secured Party may reasonably request, in order to perfect and preserve the
security interests granted or purported to be granted hereby, (iv) furnish
to Secured Party from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as Secured Party may reasonably request, all in reasonable detail,
(v) promptly after the acquisition by such Grantor of any item of
Equipment with a value in excess of $100,000 that is covered by a certificate
of title under a statute of any jurisdiction under the law of which indication
of a security interest on such certificate is required as a condition of
perfection thereof, execute and file with the registrar of motor vehicles or
other appropriate authority in such jurisdiction an application or other
document requesting the notation or other indication of the security interest
created hereunder on such certificate of title, (vi) within 30 days after
the end of each calendar quarter, deliver to Secured Party copies of all such
applications or other documents filed during such calendar quarter and copies
of all such certificates of title issued during such calendar quarter
indicating the security interest created hereunder in the items of Equipment
covered thereby, (vii) at any reasonable time, upon request and reasonable
prior notice by Secured Party, exhibit the Collateral to and allow inspection
of the Collateral by Secured Party, or persons designated by Secured Party,
(viii) at Secured Party’s reasonable request, appear in and defend any action
or proceeding that may affect such Grantor’s title to or Secured Party’s
security interest in all or any material part of the Collateral, and (ix) at
Secured Party’s reasonable request, use commercially reasonable efforts to
obtain any necessary consents of third parties to the creation and perfection
of a security interest in favor of Secured Party with respect to any
Collateral.  Each Grantor hereby
authorizes Secured Party to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral (including any financing statement indicating that it covers “all
assets” or “all personal property” of such Grantor) without the signature of
any Grantor.


 


(b)           Securities Collateral.  Without limiting the generality of the
foregoing Section 5(a), each Grantor agrees that (i) all certificates or
Instruments with a principal amount in excess of $100,000 representing or
evidencing the Securities Collateral shall be delivered to and held by or on
behalf of Secured Party pursuant hereto and shall be in suitable form for
transfer by delivery or, as applicable, shall be accompanied by such Grantor’s
endorsement, where necessary, or duly executed instruments of transfer or assignment
in blank, all in form and substance reasonably satisfactory to Secured Party
and (ii) it will, upon obtaining any additional Equity Interests or
Indebtedness, promptly (and in any event within ten Business Days) deliver to
Secured Party a Pledge Supplement, duly executed by such Grantor, in respect of
such additional Pledged Equity or Pledged Debt; provided, that the
failure of any Grantor to execute a Pledge Supplement with respect to any
additional Pledged Equity or Pledged Debt shall not impair the security
interest of Secured Party therein or otherwise adversely affect the rights and
remedies of


 


XIV-7

















 


Secured Party hereunder with respect thereto.  Upon each such acquisition, the
representations and warranties contained in Section 4(f) hereof shall be deemed
to have been made by such Grantor as to such Pledged Equity or Pledged Debt,
whether or not such Pledge Supplement is delivered.


 


(c)           Intellectual Property Collateral.  Without limiting the generality of the
foregoing Section 5(a), if any Grantor shall hereafter obtain rights to any new
Intellectual Property Collateral or become entitled to the benefit of
(i) any Patent or any reissue, division, continuation, renewal, extension
or continuation-in-part of any Patent or any improvement of any Patent or
(ii) any Copyright Registration, application for Copyright Registration or
renewals or extension of any Copyright, then in any such case, the provisions
of this Agreement shall automatically apply thereto.  At least quarterly, within 20 Business Days
after the end of each calendar quarter, each Grantor shall notify Secured Party
in writing of any of the foregoing rights acquired by such Grantor after the
date hereof and of any Trademark Registrations issued or application for a
Trademark Registration made, any Patent issued or application for a Patent
made, and any Copyright Registrations issued or application for Copyright
Registration made, in any such case, after the date hereof.  At least quarterly, within 20 Business Days
after the end of each calendar quarter, each Grantor shall execute and deliver
to Secured Party an IP Supplement, and submit a Grant for recordation with
respect thereto in the PTO or Copyright Office, as applicable; provided,
the failure of any Grantor to execute an IP Supplement or submit a Grant for
recordation with respect to any additional Intellectual Property Collateral
shall not impair the security interest of Secured Party therein or otherwise
adversely affect the rights and remedies of Secured Party hereunder with
respect thereto.  Upon delivery to
Secured Party of an IP Supplement, Schedules 8, 9 and 10 annexed hereto
and Schedule A to each Grant, as applicable, shall be deemed modified to
include reference to any right, title or interest in any existing Intellectual
Property Collateral or any Intellectual Property Collateral set forth on Schedule
A to such IP Supplement.  Upon each
such acquisition, the representations and warranties contained in Section 4(g)
hereof shall be deemed to have been made by such Grantor as to such
Intellectual Property Collateral, whether or not such IP Supplement is
delivered.


 


(d)           Commercial Tort Claims.  Grantors have no Commercial Tort Claims as of
the date hereof, except as set forth on Schedule 1 annexed hereto.  In the event that a Grantor shall at any time
after the date hereof have any Commercial Tort Claims, such Grantor shall
promptly notify Secured Party thereof in writing, which notice shall (i) set
forth in reasonable detail the basis for and nature of such Commercial Tort
Claim and (ii) constitute an amendment to this Agreement by which such
Commercial Tort Claim shall constitute part of the Collateral.


 


SECTION 6.                Certain
Covenants of Grantors.


 


Each Grantor
shall:


 


(a)           not
use or knowingly permit any Collateral to be used unlawfully or in violation of
any provision of this Agreement or any applicable statute, regulation or
ordinance or any policy of insurance covering the Collateral;


 


(b)           give
Secured Party at least 10 days’ prior written notice of (i) any change in
such Grantor’s name, identity or corporate structure and (ii) any
reincorporation,


 


XIV-8

















 


reorganization or other action that results in a change of the
jurisdiction of organization of such Grantor;


 


(c)           if
Secured Party gives value to enable such Grantor to acquire rights in or the
use of any Collateral, use such value for such purposes;


 


(d)           keep
correct and accurate (in all material respects) Records of Collateral at the
locations described in Schedule 3 annexed hereto;


 


(e)           permit
representatives of Secured Party at any time upon reasonable prior notice
during normal business hours to inspect and make abstracts from such Records,
and each Grantor agrees to render to Secured Party, at Grantor’s cost and
expense, such clerical and other assistance as may be reasonably requested with
regard thereto;


 


(f)            not
permit any Person other than Secured Party or such Grantor to have possession
or control of any Chattel Paper; and


 


(g)           not
enter into any Control Agreement covering any Collateral with any Person unless
such Control Agreement is in favor of Secured Party.


 


SECTION 7.                Special
Covenants With Respect to Equipment and Inventory.


 


Each Grantor
shall:


 


(a)           if
any Inventory is in possession or control of any of such Grantor’s agents or
processors, if the aggregate book value of all such Inventory exceeds $250,000,
and in any event upon the occurrence of an Event of Default and at the written
request of Secured Party, instruct such agent or processor to hold all such
Inventory for the account of Secured Party and subject to the instructions of
Secured Party;


 


(b)           if
any Inventory is located on premises leased by such Grantor, at the written
request of Secured Party, use commercially reasonable efforts to deliver to
Secured Party a fully executed Collateral Access Agreement; and


 


(c)           promptly
upon the issuance and delivery to such Grantor of any negotiable Document with
a value in excess of $100,000, deliver such Document to Secured Party.


 


SECTION 8.                Special
Covenants with respect to Accounts and Assigned Agreements.


 


(a)           Each
Grantor shall, for not less than two years from the date on which each Account
of such Grantor arose, maintain (i) complete Records of such Account,
including records of all payments received, credits granted and merchandise
returned, and (ii) all documentation relating thereto.


 


(b)           Except
as otherwise provided in this subsection (b), each Grantor shall continue to
collect, at its own expense, all amounts due or to become due to such Grantor
under the Accounts.  In connection with
such collections, each Grantor may take (and, at Secured Party’s direction,
shall take) such action as such Grantor or Secured Party may deem necessary


 


XIV-9

















 


or advisable to enforce collection of amounts due or to become due
under the Accounts; provided, however, that Secured Party shall have the
right at any time, upon the occurrence and during the continuation of an Event
of Default and upon written notice to such Grantor of its intention to do so,
to (i) notify the account debtors or obligors under any Accounts of the
assignment of such Accounts to Secured Party and to direct such account debtors
or obligors to make payment of all amounts due or to become due to such Grantor
thereunder directly to Secured Party, (ii) notify each Person maintaining
a lockbox or similar arrangement to which account debtors or obligors under any
Accounts have been directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time sent to or
deposited in such lockbox or other arrangement directly to Secured Party,
(iii) enforce collection of any such Accounts at the expense of Grantors,
and (iv) adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as such Grantor might have done.  After receipt by such Grantor of the notice
from Secured Party referred to in the proviso to the preceding sentence, (A)
all amounts and proceeds (including checks and other Instruments) received by
such Grantor in respect of the Accounts shall be received for the benefit of
Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 17 hereof, and (B) such Grantor shall not,
without the written consent of Secured Party, adjust, settle or compromise the
amount or payment of any Account, or release wholly or partly any account
debtor or obligor thereof, or allow any credit or discount thereon except to
the extent not prohibited by the terms of the Credit Agreement.


 


(c)           Each
Grantor shall at its expense:


 


(i)            if
consistent with sound business practices, perform and observe all terms and
provisions of the Assigned Agreements to be performed or observed by it,
maintain the Assigned Agreements in full force and effect, enforce the Assigned
Agreements in accordance with their terms, and take all such action to such end
as may be from time to time requested by Secured Party; and


 


(ii)           upon
request of Secured Party, (A) furnish to Secured Party, promptly upon
receipt thereof, copies of all notices, requests and other documents received
by such Grantor under or pursuant to the Assigned Agreements and from time to
time such information and reports regarding the Assigned Agreements as Secured
Party may reasonably request and (B) make to the parties to such Assigned
Agreements such demands and requests for information and reports or for action
as such Grantor is entitled to make under the Assigned Agreements.


 


(d)           Upon
the occurrence and during the continuance of an Event of Default, no Grantor
shall (i) cancel or terminate any of the Assigned Agreements or consent to
or accept any cancellation or termination thereof; (ii) amend or otherwise
modify the Assigned Agreements or give any consent, waiver or approval
thereunder that could reasonably be expected to materially impair the interest
or rights of Secured Party; (iii) waive any default under or breach of the
Assigned Agreements; (iv) consent to or permit or accept any prepayment of
amounts to become due under or in connection with the Assigned Agreements,
except as expressly provided therein; or (v) take any other action in
connection with the Assigned


 


XIV-10

















 


Agreements that could reasonably be expected to materially impair the
value of the interest or rights of such Grantor thereunder or that could
reasonably be expected to materially impair the interest or rights of Secured
Party.


 


SECTION 9.                Special
Covenants With Respect to the Securities Collateral.


 


(a)           Form of Securities Collateral.  Secured Party shall have the right at any
time to exchange certificates or instruments representing or evidencing
Securities Collateral for certificates or instruments of smaller or larger
denominations.  If any Securities
Collateral is not a security pursuant to Section 8-103 of the UCC, no Grantor
shall take any action that, under such Section, converts such Securities
Collateral into a security without causing the issuer thereof to issue to it
certificates or instruments evidencing such Securities Collateral, which it
shall promptly deliver to Secured Party as provided in this Section 9(a).


 


(b)           Covenants. 
Each Grantor shall (i) not, except as expressly permitted by the
Credit Agreement, permit any issuer of Pledged Subsidiary Equity to merge or
consolidate unless all the outstanding Equity Interests of the surviving or
resulting Person are, upon such merger or consolidation, pledged hereunder and
no cash, securities or other property is distributed in respect of the
outstanding Equity Interests of any other constituent corporation; provided
that, if the surviving or resulting Person upon any such merger or
consolidation is a controlled foreign corporation, then such Grantor shall only
be required to pledge outstanding Equity Interests of such surviving or
resulting Person possessing up to but not exceeding 66% of the voting power of
all classes of Equity Interests of such issuer entitled to vote;
(ii) cause each issuer of Pledged Subsidiary Equity not to issue Equity
Interests in addition to or in substitution for the Pledged Subsidiary Equity
issued by such issuer, except to such Grantor; (iii) immediately upon its
acquisition (directly or indirectly) of any Equity Interests, including
additional Equity Interests in each issuer of Pledged Equity, comply with
Section 5(b); provided that, notwithstanding anything contained in this
clause (iii) to the contrary, such Grantor shall only be required to pledge the
outstanding Equity Interests of a controlled foreign corporation possessing up
to but not exceeding 66% of the voting power of all classes of capital stock of
such controlled foreign corporation entitled to vote; (iv) immediately
upon issuance of any and all Instruments or other evidences of additional
Indebtedness from time to time owed to such Grantor by any obligor on the
Pledged Debt, comply with Sections 5(a) and (b); (v) promptly deliver to
Secured Party all written notices received by it with respect to the Securities
Collateral; (vi) at its expense (A) perform and comply in all material
respects with all terms and provisions of any agreement related to the
Securities Collateral required to be performed or complied with by it, (B)
maintain all such agreements in full force and effect and (C) enforce all such
agreements in accordance with their terms; and (vii), at the request of Secured
Party, promptly execute and deliver to Secured Party an agreement providing for
control by Secured Party of all Securities Entitlements, Securities Accounts,
Commodity Contracts and Commodity Accounts of such Grantor.


 


(c)           Voting and Distributions.  So long as no Event of Default shall have
occurred and be continuing, (i) each Grantor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not prohibited by the terms of
this Agreement or the Credit Agreement; provided, no Grantor shall
exercise or refrain from exercising any such right if Secured Party shall have
notified such


 


XIV-11

















 


Grantor that, in Secured Party’s reasonable judgment, such action would
have a material adverse effect on the value of the Securities Collateral or any
part thereof; and (ii) each Grantor shall be entitled to receive and
retain any and all dividends, other distributions and interest paid in respect
of the Securities Collateral.


 


Upon the
occurrence and during the continuation of an Event of Default, (x) upon written
notice from Secured Party to any Grantor, all rights of such Grantor to
exercise the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant hereto shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the sole
right to exercise such voting and other consensual rights; (y) except as
otherwise specified in the Credit Agreement, all rights of such Grantor to
receive the dividends, other distributions, principal and interest payments
which it would otherwise be authorized to receive and retain pursuant hereto
shall cease, and all such rights shall thereupon become vested in Secured Party
who shall thereupon have the sole right to receive and hold as Collateral such
dividends, other distributions and interest payments; and (z) all dividends,
principal, interest payments and other distributions which are received by such
Grantor contrary to the provisions of clause (y) above shall be received for
the benefit of Secured Party, shall be segregated from other funds of such
Grantor and shall forthwith be paid over to Secured Party as Collateral in the
same form as so received (with any necessary endorsements).


 


In order to permit
Secured Party to exercise the voting and other consensual rights which it may
be entitled to exercise pursuant hereto and to receive all dividends and other
distributions which it may be entitled to receive hereunder, (I) each Grantor
shall promptly execute and deliver (or cause to be executed and delivered) to
Secured Party all such proxies, dividend payment orders and other instruments as
Secured Party may from time to time reasonably request, and (II) without
limiting the effect of clause (I) above, each Grantor hereby grants to Secured
Party an irrevocable proxy to vote the Pledged Equity and to exercise all other
rights, powers, privileges and remedies to which a holder of the Pledged Equity
would be entitled (including giving or withholding written consents of holders
of Equity Interests, calling special meetings of holders of Equity Interests
and voting at such meetings), which proxy shall be effective, automatically and
without the necessity of any action (including any transfer of any Pledged
Equity on the record books of the issuer thereof) by any other Person
(including the issuer of the Pledged Equity or any officer or agent thereof),
upon the occurrence of an Event of Default and which proxy shall only terminate
upon the payment in full of the Secured Obligations, the cure of such Event of
Default or waiver thereof as evidenced by a writing executed by Secured Party.


 


SECTION 10.             Special
Covenants With Respect to the Intellectual Property Collateral.


 


(a)           Each
Grantor shall:


 


(i)            use
commercially reasonable efforts so as not to permit the inclusion in any
contract to which it hereafter becomes a party of any provision that could reasonably
be expected to impair or prevent the creation of a security interest in, or the
assignment of, such Grantor’s rights and interests in any property included
within the definitions of any Intellectual Property Collateral acquired under
such contracts;


 


XIV-12

















 


(ii)           use
commercially reasonable efforts to protect the secrecy of all trade secrets
that constitute Intellectual Property Collateral, including, without
limitation, where appropriate entering into confidentiality agreements with
employees and labeling and restricting access to secret information and
documents;


 


(iii)          use
proper statutory notice in connection with its use of any of the Intellectual
Property Collateral and products and services covered by the Intellectual
Property Collateral; and


 


(iv)          use a
commercially appropriate standard of quality (which may be consistent with such
Grantor’s past practices) in the manufacture, sale and delivery of products and
services sold or delivered under or in connection with the Trademarks.


 


(b)           Except
as otherwise provided in this Section 10, each Grantor shall continue to
collect, at its own expense, all amounts due or to become due to such Grantor
in respect of the Intellectual Property Collateral or any portion thereof.  In connection with such collections, each
Grantor may take such action as such Grantor may reasonably deem necessary or
advisable to enforce collection of such amounts; provided, Secured Party shall
have the right at any time, upon the occurrence and during the continuation of
an Event of Default and upon written notice to such Grantor of its intention to
do so, to notify the obligors with respect to any such amounts of the existence
of the security interest created hereby and to direct such obligors to make
payment of all such amounts directly to Secured Party, and, upon such
notification and at the expense of such Grantor, to enforce collection of any
such amounts and to adjust, settle or compromise the amount or payment thereof,
in the same manner and to the same extent as such Grantor might have done.  After receipt by any Grantor of the notice
from Secured Party referred to in the proviso to the preceding sentence and
upon the occurrence and during the continuance of any Event of Default,
(i) all amounts and proceeds (including checks and Instruments) received
by each Grantor in respect of amounts due to such Grantor in respect of the
Intellectual Property Collateral or any portion thereof shall be received for
the benefit of Secured Party hereunder, shall be segregated from other funds of
such Grantor and shall be forthwith paid over or delivered to Secured Party in
the same form as so received (with any necessary endorsement) to be held as
cash Collateral and applied as provided by Section 17 hereof, and
(ii) such Grantor shall not adjust, settle or compromise the amount or
payment of any such amount or release wholly or partly any obligor with respect
thereto or allow any credit or discount thereon.


 


(c)           Each
Grantor shall have the duty diligently, through counsel reasonably acceptable
to such Grantor and Secured Party, to prosecute, file and/or make, unless and
until such Grantor, in its commercially reasonable judgment, decides otherwise,
(i) any application for registration relating to any of the Intellectual
Property Collateral owned, held or used by such Grantor and set forth on Schedules
8, 9 or 10 annexed hereto, as applicable, that is pending as
of the date of this Agreement, (ii) any Copyright Registration on any
existing or future unregistered but copyrightable works (except for works of
nominal commercial value or with respect to which such Grantor has determined
in the exercise of its commercially reasonable judgment that it shall not seek
registration), (iii) any application on any future patentable but
unpatented innovation or invention comprising Intellectual Property Collateral,
and (iv) any Trademark opposition and cancellation proceedings, renew
Trademark Registrations and Copyright Registrations and do any and all acts which
are necessary or desirable to preserve and maintain all rights in all


 


XIV-13

















 


Intellectual Property Collateral. 
Any expenses incurred in connection therewith shall be borne solely by
Grantors.


 


(d)           Except
as provided herein, each Grantor shall have the right to commence and prosecute
in its own name, as real party in interest, for its own benefit and at its own
expense, such suits, proceedings or other actions for infringement, unfair
competition, dilution, misappropriation or other damage, or reexamination or
reissue proceedings as are necessary to protect the Intellectual Property
Collateral.  Each Grantor shall promptly,
following its becoming aware thereof, notify Secured Party of the institution
of, or of any adverse determination in, any proceeding (whether in the PTO, the
Copyright Office or any federal, state, local or foreign court) or regarding
such Grantor’s ownership, right to use, or interest in any Intellectual
Property Collateral material to such Grantor’s business.  Each Grantor shall provide to Secured Party
any information with respect thereto reasonably requested by Secured Party and
of which such Grantor has knowledge.


 


(e)           In
addition to, and not by way of limitation of, the granting of a security
interest in the Collateral pursuant hereto, each Grantor, effective upon the
occurrence and during the continuance of an Event of Default, hereby grants to
Secured Party the nonexclusive right and license to use all Trademarks,
tradenames, Copyrights, Patents or technical processes included within the
Intellectual Property Collateral owned or used by such Grantor that relate to
the Collateral, together with any goodwill associated therewith, all to the
extent necessary to enable Secured Party to realize on the Collateral in
accordance with this Agreement and to enable any transferee or assignee of the
Collateral to enjoy the benefits of the Collateral.  This right shall inure to the benefit of all
successors, assigns and transferees of Secured Party and its successors,
assigns and transferees, whether by voluntary conveyance, operation of law,
assignment, transfer, foreclosure, deed in lieu of foreclosure or
otherwise.  Such right and license shall
be granted free of charge, without requirement that any monetary payment
whatsoever be made to such Grantor.  If
and to the extent that any Grantor is permitted to license the Intellectual
Property Collateral, Secured Party shall promptly enter into a non-disturbance
agreement or other similar arrangement, at such Grantor’s request and expense,
with such Grantor and any licensee of any Intellectual Property Collateral
permitted hereunder in form and substance reasonably satisfactory to such
licensee, such Grantor and Secured Party pursuant to which (i) Secured
Party shall agree not to disturb or interfere with such licensee’s rights under
its license agreement with such Grantor so long as such licensee is not in
default thereunder, and (ii) such licensee shall acknowledge and agree
that the Intellectual Property Collateral licensed to it is subject to the
security interest created in favor of Secured Party and the other terms of this
Agreement.


 


(f)            The
parties hereto acknowledge and agree that, subject to the other terms and
provisions of this Agreement and of the Credit Agreement, including Secured
Party’s rights upon the occurrence and during the continuance of an Event of
Default, the grant of a security interest in each Grantor’s Intellectual
Property contained herein shall not diminish such Grantor’s exclusive right and
license to use, or grant to other Persons licenses or sublicenses in, such
Intellectual Property, except to the extent such actions by any Grantor would
inhibit or prevent Secured Party from enforcing its rights hereunder or under
the Credit Agreement.


 


XIV-14

















 


SECTION 11.             Collateral
Account.


 


Secured Party is
hereby authorized to establish and maintain as a blocked account under the sole
dominion and control of Secured Party, a restricted Deposit Account designated
as “FTD, Inc. Collateral Account” (the “Collateral Account”).  All amounts at any time held in the
Collateral Account shall be beneficially owned by Grantors but shall be held in
the name of Secured Party hereunder, for the benefit of Beneficiaries, as
collateral security for the Secured Obligations upon the terms and conditions
set forth herein.  Grantors shall have no
right to withdraw, transfer or, except as expressly set forth herein, otherwise
receive any funds deposited into the Collateral Account.  Notwithstanding the foregoing, amounts
deposited by Company into the Collateral Account pursuant to subsection 3.3E of
the Credit Agreement shall be released to Company upon satisfaction of the
conditions specified in such subsection. 
Anything contained herein to the contrary notwithstanding, the
Collateral Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate banking or Government Authority, as may now or
hereafter be in effect.  All deposits of
funds in the Collateral Account shall be made by wire transfer (or, if
applicable, by intra-bank transfer from another account of a Grantor) of
immediately available funds, in each case addressed in accordance with
instructions of Secured Party.  Each
Grantor shall, promptly after initiating a transfer of funds to the Collateral
Account, give notice to Secured Party by telefacsimile of the date, amount and
method of delivery of such deposit.  Cash
held by Secured Party in the Collateral Account shall not be invested by
Secured Party but instead shall be maintained as a cash deposit in the
Collateral Account pending application thereof as elsewhere provided in this
Agreement.  To the extent permitted under
Regulation Q of the Board of Governors of the Federal Reserve System, any cash
held in the Collateral Account shall bear interest at the standard rate paid by
Secured Party to its customers for deposits of like amounts and terms.  Subject to Secured Party’s rights hereunder,
any interest earned on deposits of cash in the Collateral Account shall be
deposited directly in, and held in the Collateral Account.


 


SECTION 12.             Secured
Party Appointed Attorney-in-Fact.


 


Each Grantor
hereby irrevocably appoints Secured Party as such Grantor’s attorney-in-fact,
with full authority in the place and stead of such Grantor and in the name of
such Grantor, Secured Party or otherwise, from time to time in Secured Party’s
discretion to take any action and to execute any instrument that Secured Party
may deem necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation:


 


(a)           upon
the occurrence and during the continuance of an Event of Default, to obtain and
adjust insurance required to be maintained by such Grantor or paid to Secured
Party pursuant to the Credit Agreement;


 


(b)           upon
the occurrence and during the continuance of an Event of Default, to ask for,
demand, collect, sue for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in respect of any of the
Collateral;


 


XIV-15

















 


(c)           upon
the occurrence and during the continuance of an Event of Default, to receive, endorse
and collect any drafts or other Instruments, Documents, Chattel Paper and other
documents in connection with clauses (a) and (b) above;


 


(d)           upon
the occurrence and during the continuance of an Event of Default, to file any
claims or take any action or institute any proceedings that Secured Party may
deem necessary or desirable for the collection of any of the Collateral or
otherwise to enforce or protect the rights of Secured Party with respect to any
of the Collateral;


 


(e)           to
pay or discharge taxes or Liens (other than taxes not required to be discharged
pursuant to the Credit Agreement and Liens permitted under this Agreement or
the Credit Agreement) levied or placed upon or threatened against the
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by Secured Party in its sole discretion,
any such payments made by Secured Party to become obligations of such Grantor
to Secured Party, due and payable immediately without demand;


 


(f)            upon
the occurrence and during the continuance of an Event of Default, to sign and
endorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications and
notices in connection with Accounts and other documents relating to the
Collateral; and


 


(g)           upon
the occurrence and during the continuance of an Event of Default, generally to
sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though Secured Party were
the absolute owner thereof for all purposes, and to do, at Secured Party’s
option and Grantors’ expense, at any time or from time to time, all acts and
things that Secured Party deems necessary to protect, preserve or realize upon
the Collateral and Secured Party’s security interest therein in order to effect
the intent of this Agreement, all as fully and effectively as such Grantor
might do.


 


SECTION 13.             Secured
Party May Perform.


 


If any Grantor
fails to perform any agreement contained herein, Secured Party may itself
perform, or cause performance of, such agreement, and the expenses of Secured
Party incurred in connection therewith shall be payable by Grantors under
Section 18(b) hereof.


 


SECTION 14.             Standard
of Care.


 


The powers
conferred on Secured Party hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such
powers.  Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.  Secured Party shall be
deemed to have exercised reasonable care in the custody and preservation of
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which Secured Party accords its own property.


 


XIV-16

















 


SECTION 15.             Remedies.


 


(a)           Generally. 
If any Event of Default shall have occurred and be continuing, Secured
Party may, subject to Section 20 hereof, 
exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the UCC (whether or not the
UCC applies to the affected Collateral), and also may (i) require each
Grantor to, and each Grantor hereby agrees that it will at its expense and upon
request of Secured Party forthwith, assemble all or part of the Collateral as
directed by Secured Party and make it available to Secured Party at a place to
be designated by Secured Party that is reasonably convenient to both parties, (ii) enter
onto the property where any Collateral is located and take possession thereof
with or without judicial process, (iii) prior to the disposition of the
Collateral, store, process, repair or recondition the Collateral or otherwise
prepare the Collateral for disposition in any manner to the extent Secured
Party deems appropriate, (iv) take possession of any Grantor’s premises or
place custodians in exclusive control thereof, remain on such premises and use
the same and any of such Grantor’s equipment for the purpose of completing any
work in process, taking any actions described in the preceding clause (iii) and
collecting any Secured Obligation, (v) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of Secured Party’s offices or elsewhere, for cash, on
credit or for future delivery, at such time or times and at such price or
prices and upon such other terms as Secured Party may deem commercially
reasonable, (vi) exercise dominion and control over and refuse to permit
further withdrawals from any Deposit Account maintained with Secured Party or
any Lender and provide instructions directing the disposition of funds in
Deposit Accounts not maintained with Secured Party or any Lender and
(vii) provide entitlement orders with respect to Security Entitlements and
other Investment Property constituting a part of the Collateral and, without
notice to any Grantor, transfer to or register in the name of Secured Party or
any of its nominees any or all of the Securities Collateral.  To the extent permitted by law, Secured Party
or any Lender or Swap Counterparty may be the purchaser of any or all of the
Collateral at any such sale and Secured Party, as agent for and representative
of Lenders and Swap Counterparties (but not any Lender or Swap Counterparty in
its individual capacity unless Requisite Obligees shall otherwise agree in
writing), shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Collateral payable by Secured
Party at such sale.  Each purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. 
Each Grantor agrees that, to the extent notice of sale shall be required
by law, at least ten days’ notice to such Grantor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. 
Secured Party shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. 
Secured Party may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.  Each Grantor hereby waives
any claims against Secured Party arising by reason of the fact that the price
at which any Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale, even if Secured
Party accepts the first offer received and does not


 


XIV-17

















 


offer such Collateral to more than one offeree.  If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantors shall be jointly and severally liable for the deficiency
and the fees of any attorneys employed by Secured Party to collect such
deficiency.  Each Grantor further agrees
that a breach of any of the covenants contained in this Section 15 will cause
irreparable injury to Secured Party, that Secured Party has no adequate remedy
at law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section shall be specifically enforceable against
such Grantor, and each Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except
for a defense that no default has occurred giving rise to the Secured
Obligations becoming due and payable prior to their stated maturities.


 


(b)           Securities Collateral.  Each Grantor recognizes that, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws, Secured Party may be compelled, with respect to any sale of
all or any part of the Securities Collateral conducted without prior
registration or qualification of such Securities Collateral under the
Securities Act and/or such state securities laws, to limit purchasers to those
who will agree, among other things, to acquire the Securities Collateral for
their own account, for investment and not with a view to the distribution or
resale thereof.  Each Grantor
acknowledges that any such private placement may be at prices and on terms less
favorable than those obtainable through a sale without such restrictions
(including an offering made pursuant to a registration statement under the
Securities Act) and, notwithstanding such circumstances, each Grantor agrees
that any such private placement shall not be deemed, in and of itself, to be
commercially unreasonable and that Secured Party shall have no obligation to
delay the sale of any Securities Collateral for the period of time necessary to
permit the issuer thereof to register it for a form of sale requiring
registration under the Securities Act or under applicable state securities
laws, even if such issuer would, or should, agree to so register it.  If Secured Party determines to exercise its
right to sell any or all of the Securities Collateral, upon written request,
each Grantor shall and shall cause each issuer of any Securities Collateral to
be sold hereunder from time to time to furnish to Secured Party all such
information as Secured Party may request in order to determine the amount of
Securities Collateral which may be sold by Secured Party in exempt transactions
under the Securities Act and the rules and regulations of the Securities and
Exchange Commission thereunder, as the same are from time to time in effect.


 


(c)           Collateral Account.  If an Event of Default has occurred and is
continuing and, in accordance with Section 8 of the Credit Agreement, Company
is required to pay to Secured Party an amount (the “Aggregate Available Amount”) equal to the maximum amount that
may at any time be drawn under all Letters of Credit then outstanding under the
Credit Agreement, Company shall deliver funds in such an amount for deposit in
the Collateral Account.  In the event a
Letter of Credit is denominated in a currency other than Dollars, the portion
of the Aggregate Available Amount related to such Letter of Credit shall be
calculated based upon the applicable Exchange Rate for such currency as of the
applicable date of determination.  If for
any reason the aggregate amount delivered by Company for deposit in the
Collateral Account as aforesaid is less than the Aggregate Available Amount,
the aggregate amount so delivered by Company shall be apportioned among all
outstanding Letters of Credit for purposes of this Section in accordance with
the ratio of the maximum amount available for drawing under each such Letter of
Credit (as to such Letter of Credit, the “Maximum
Available Amount”) to the Aggregate Available Amount.  Upon any drawing under any outstanding Letter


 


XIV-18

















 


of Credit in respect of which Company has deposited in the Collateral
Account an amount described above, Secured Party shall apply the amount
apportioned to such Letter of Credit to reimburse the Issuing Lender for the
amount of such drawing.  In the event of
cancellation or expiration of any Letter of Credit in respect of which Company
has deposited in the Collateral Account any amounts described above, or in the
event of any reduction in the Maximum Available Amount under such Letter of
Credit, Secured Party shall apply the amount then on deposit in the Collateral Account
in respect of such Letter of Credit (less, in the case of such a reduction, the
Maximum Available Amount under such Letter of Credit immediately after such
reduction) first, to the payment of any amounts payable to Secured Party
pursuant to Section 17 hereof, second, to the extent of any excess, to the cash
collateralization pursuant to the terms of this Agreement of any outstanding
Letters of Credit in respect of which Company has failed to pay all or a
portion of the amounts described above (such cash collateralization to be
apportioned among all such Letters of Credit in the manner described above),
third, to the extent of any further excess, to the payment of any other
outstanding Secured Obligations in such order as Secured Party shall elect, and
fourth, to the extent of any further excess, to the payment to whomsoever shall
be lawfully entitled to receive such funds.


 


SECTION 16.             Additional
Remedies for Intellectual Property Collateral.


 


(a)           Anything
contained herein to the contrary notwithstanding, upon the occurrence and
during the continuation of an Event of Default, (i) Secured Party shall
have the right (but not the obligation) to bring suit, in the name of any
Grantor, Secured Party or otherwise, to enforce any Intellectual Property Collateral,
in which event each Grantor shall, at the reasonable request of Secured Party,
do any and all lawful acts and execute any and all documents required by
Secured Party in aid of such enforcement and each Grantor shall promptly, upon
demand, reimburse and indemnify Secured Party as provided in subsections 10.2
and 10.3 of the Credit Agreement and Section 18 hereof, as applicable, in
connection with the exercise of its rights under this Section 16, and, to the
extent that Secured Party shall elect not to bring suit to enforce any such
Intellectual Property Collateral as provided in this Section, each Grantor
agrees to use all reasonable measures, whether by action, suit, proceeding or
otherwise, which, in such Grantor’s reasonable judgment are necessary to prevent
the infringement of any of the Intellectual Property Collateral material to
such Grantor’s business by others and for that purpose agrees to use its
commercially reasonable judgment in maintaining any action, suit or proceeding
against any Person so infringing reasonably necessary to prevent such
infringement; (ii) upon written demand from Secured Party, each Grantor
shall execute and deliver to Secured Party an assignment or assignments of the
Intellectual Property Collateral and such other documents as are necessary or
appropriate to carry out the intent and purposes of this Agreement;
(iii) each Grantor agrees that such an assignment and/or recording shall
be applied to reduce the Secured Obligations outstanding only to the extent
that Secured Party (or any Lender) receives cash proceeds in respect of the
sale of, or other realization upon, the Intellectual Property Collateral; and
(iv) within five Business Days after written notice from Secured Party,
each Grantor shall make available to Secured Party, to the extent within such
Grantor’s power and authority, such personnel in such Grantor’s employ as
Secured Party may reasonably designate, by name, title or job responsibility,
to permit such Grantor to continue, directly or indirectly, to produce, advertise
and sell the products and services sold or delivered by such Grantor under or
in connection with the Trademarks, Trademark Registrations and Trademark
Rights, such persons to be available to perform their prior functions on
Secured Party’s behalf


 


XIV-19

















 


and to be compensated by Secured Party at such Grantor’s expense on a
per diem, pro-rata basis consistent with the salary and benefit structure
applicable to each as of the date of such Event of Default.


 


(b)           If
(i) an Event of Default shall have occurred and, by reason of cure,
waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing,
(iii) an assignment to Secured Party of any rights, title and interests in
and to the Intellectual Property Collateral shall have been previously made,
and (iv) the Secured Obligations shall not have become immediately due and
payable, upon the written request of any Grantor, Secured Party shall promptly
execute and deliver to such Grantor such assignments as may be necessary to
reassign to such Grantor any such rights, title and interests as may have been
assigned to Secured Party as aforesaid, subject to any disposition thereof that
may have been made by Secured Party; provided, after giving effect to such
reassignment, Secured Party’s security interest granted pursuant hereto, as
well as all other rights and remedies of Secured Party granted hereunder, shall
continue to be in full force and effect; and provided further, the rights,
title and interests so reassigned shall be free and clear of all Liens other
than Liens (if any) encumbering such rights, title and interest at the time of
their assignment to Secured Party and Permitted Encumbrances.


 


SECTION 17.             Application
of Proceeds.


 


Except as
expressly provided elsewhere in this Agreement, all proceeds received by
Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral shall be applied as provided in the
Credit Agreement.


 


SECTION 18.             Indemnity
and Expenses.


 


(a)           Grantors
jointly and severally agree to indemnify Secured Party, each Lender and each
Swap Counterparty from and against any and all claims, losses and liabilities
in any way relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party’s or such Lender’s or Swap Counterparty’s gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction.


 


(b)           Grantors
jointly and severally agree to pay to Secured Party upon demand the amount of
any and all costs and expenses in accordance with subsection 10.2 of the Credit
Agreement.


 


(c)           The
obligations of Grantors in this Section 18 shall (i) survive the termination of
this Agreement and the discharge of Grantors’ other obligations under this
Agreement, the Lender Swap Agreements, the Credit Agreement and the other Loan
Documents and (ii), as to any Grantor that is a party to a Guaranty, be subject
to the provisions of Section 1(b) thereof.


 


XIV-20

















 


SECTION 19.             Continuing
Security Interest; Transfer of Loans; Termination and Release.


 


(a)           This
Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until the payment in full of the
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit (or the
collateralization thereof with cash or a letter of credit), (ii) be
binding upon Grantors and their respective successors and assigns, and
(iii) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party, each of the Lenders and the Swap
Counterparties and its successors, transferees and assigns.  Without limiting the generality of the foregoing
clause (iii), (A) but subject to the provisions of subsection 10.1 of the
Credit Agreement, any Lender may assign or otherwise transfer any Loans held by
it to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to Lenders herein or otherwise
and (B) any Swap Counterparty may assign or otherwise transfer any Lender Swap
Agreement to which it is a party to any other Person in accordance with the
terms of such Lender Swap Agreement, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to Swap
Counterparties herein or otherwise.


 


(b)           Upon
the payment in full of all Secured Obligations (other than contingent
obligations as to which no claim has been made), the cancellation or
termination of the Commitments and the cancellation or expiration of all
outstanding Letters of Credit (or the collateralization thereof with cash or a
letter of credit), the security interest granted hereby (other than with
respect to any cash collateral in respect of Letters of Credit) shall terminate
and all rights to the Collateral shall revert to the applicable Grantors.  Upon any such termination Secured Party will,
at Grantors’ expense, execute and deliver to Grantors such documents as
Grantors shall reasonably request to evidence such termination.  In addition, upon the proposed sale or other
disposition of any Collateral by a Grantor in accordance with, or not
prohibited by, the Credit Agreement for which such Grantor desires a security
interest release from Secured Party, such a release may be obtained pursuant to
the provisions of subsection 10.14 of the Credit Agreement.


 


SECTION 20.             Secured
Party as Agent.


 


(a)           Secured
Party has been appointed to act as Secured Party hereunder by Lenders and, by
their acceptance of the benefits hereof, Swap Counterparties.  Secured Party shall be obligated, and shall
have the right hereunder, to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking any
action (including, without limitation, the release or substitution of
Collateral), solely in accordance with this Agreement and the Credit Agreement;
provided that Secured Party shall exercise, or refrain from exercising, any
remedies provided for in Section 15 hereof in accordance with the instructions
of Requisite Obligees.  In furtherance of
the foregoing provisions of this Section 20(a), each Swap Counterparty, by its
acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral hereunder, it being
understood and agreed by such Swap Counterparty that all rights and remedies
hereunder may be exercised solely by Secured Party for the benefit of Lenders
and Swap Counterparties in accordance with the terms of this Section 20(a).


 


XIV-21

















 


(b)           Secured
Party shall at all times be the same Person that is Administrative Agent under
the Credit Agreement.  Written notice of
resignation by Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute notice of resignation as Secured Party under
this Agreement; and appointment of a successor Administrative Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute appointment of a
successor Secured Party under this Agreement. 
Upon the acceptance of any appointment as Administrative Agent under
subsection 9.5 of the Credit Agreement by a successor Administrative Agent,
that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Secured Party under this Agreement, and the retiring Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all
sums, securities and other items of Collateral held hereunder, together with
all records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute (if necessary) and deliver to such successor Secured
Party such amendments to financing statements, and take such other actions, as
may be necessary or appropriate in connection with the assignment to such
successor Secured Party of the security interests created hereunder, whereupon
such retiring Secured Party shall be discharged from its duties and obligations
under this Agreement.  After any retiring
Administrative Agent’s resignation hereunder as Secured Party, the provisions
of this Agreement shall inure to its benefit as to any actions taken or omitted
to be taken by it under this Agreement while it was Secured Party hereunder.


 


(c)           Secured
Party shall not be deemed to have any duty whatsoever with respect to any Swap
Counterparty until it shall have received written notice in form and substance
satisfactory to Secured Party from a Grantor or the Swap Counterparty as to the
existence and terms of the applicable Lender Swap Agreement.


 


SECTION 21.             Additional
Grantors.


 


The initial
Grantors hereunder shall be Company, Holdings and such of the Subsidiaries of
Company as are signatories hereto on the date hereof.  From time to time subsequent to the date
hereof, additional Subsidiaries of Company may become Additional Grantors, by
executing a Counterpart.  Upon delivery
of any such Counterpart to Secured Party, notice of which is hereby waived by
Grantors, each such Additional Grantor shall be a Grantor and shall be as fully
a party hereto as if such Additional Grantor were an original signatory
hereto.  Each Grantor expressly agrees
that its obligations arising hereunder shall not be affected or diminished by
the addition or release of any other Grantor hereunder, nor by any election of
Secured Party not to cause any Subsidiary of Company to become an Additional
Grantor hereunder.  This Agreement shall
be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder.


 


SECTION 22.             Amendments;
Etc.


 


No amendment,
modification, termination or waiver of any provision of this Agreement, and no
consent to any departure by any Grantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by Secured Party and,
in the case of any


 


XIV-22

















 


such amendment or modification, by Grantors; provided this
Agreement may be modified by the execution of a Counterpart by an Additional
Grantor in accordance with Section 21 hereof and Grantors hereby waive any
requirement of notice of or consent to any such amendment.  Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.


 


SECTION 23.             Notices.


 


Any notice or
other communication herein required or permitted to be given shall be in
writing and may be personally served or sent by telefacsimile or United States
mail or courier service and shall be deemed to have been given when delivered
in person or by courier service, upon receipt of telefacsimile, or three
Business Days after depositing it in the United States mail with postage
prepaid and properly addressed; provided that notices to Secured Party
shall not be effective until received. 
For the purposes hereof, the address of each party hereto shall be as
provided in subsection 10.8 of the Credit Agreement or as set forth under such
party’s name on the signature pages hereof or such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.


 


SECTION 24.             Failure
or Indulgence Not Waiver; Remedies Cumulative.


 


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


 


SECTION 25.             Severability.


 


In case any
provision in or obligation under this Agreement shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.


 


SECTION 26.             Headings.


 


Section and
subsection headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.


 


SECTION 27.             Governing
Law; Rules of Construction.


 


THIS AGREEMENT AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC


 


XIV-23

















 


PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK, IN WHICH CASE THE LAWS
OF SUCH JURISDICTION SHALL GOVERN WITH RESPECT TO THE PERFECTION OF THE
SECURITY INTEREST IN, OR THE REMEDIES WITH RESPECT TO, SUCH PARTICULAR
COLLATERAL.  The rules of construction
set forth in subsection 1.3 of the Credit Agreement shall be applicable to this
Agreement mutatis mutandis.


 


SECTION 28.             Consent
to Jurisdiction and Service of Process.


 


ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS AGREEMENT,
EACH GRANTOR, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION
AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES
THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GRANTOR
AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 23 HEREOF; (IV) AGREES
THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER SUCH GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH GRANTOR IN
THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS
OF THIS SECTION 28 RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.


 


SECTION 29.             Waiver
of Jury Trial.


 


GRANTORS AND
SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS.  EACH
GRANTOR AND SECURED PARTY ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT
FOR GRANTORS AND SECURED PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
GRANTORS AND SECURED PARTY HAVE ALREADY RELIED ON THIS


 


XIV-24

















 


WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.  EACH GRANTOR AND SECURED PARTY FURTHER
WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. 
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 29 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.  In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.


 


SECTION 30.             Counterparts.


 


This Agreement may
be executed in one or more counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.


 


SECTION 31.             Security
Agreement To Govern Grants.


 


Each Grantor and
Secured Party hereby acknowledge and agree that the rights, obligations and
remedies of each Grantor and Secured Party set forth in this Agreement with
respect any Intellectual Property Collateral shall be applicable to each Grant
(and any supplement thereof) executed by any Grantor as if the terms and
provisions of this Agreement were incorporated into each such Grant (and any
supplement thereof).


 


SECTION 32.             Definitions.


 


(a)           Each
capitalized term utilized in this Agreement that is not defined in the Credit
Agreement or in this Agreement, but that is defined in the UCC, including the
categories of Collateral listed in Section 1 hereof, shall have the meaning set
forth in Articles 1, 8 or 9 of the UCC.


 


(b)           In
addition, the following terms used in this Agreement shall have the following
meanings:


 


“Additional
Grantor” means a Subsidiary of Company that becomes a party
hereto after the date hereof as an additional Grantor by executing a
Counterpart.


 


“Assigned
Agreements” means, with respect to any Grantor, the
agreements set forth on Schedule 15 annexed hereto, as each such
agreement may be amended, restated, supplemented or otherwise modified from
time to time, including, without limitation, (a) all rights of such Grantor to
receive moneys due or to become due under or pursuant to the Assigned
Agreements, (b) all rights of such Grantor to receive proceeds of any
Supporting Obligations with respect to the Assigned Agreements, (c) all claims
of such Grantor for damages arising out of any breach of or


 


XIV-25

















 


default under the Assigned Agreements, and (d) all rights of such
Grantor to terminate, amend, supplement, modify or exercise rights or options
under the Assigned Agreements, to perform thereunder and to compel performance
and otherwise exercise all remedies thereunder.


 


“Beneficiary”
means Administrative Agent, each Lender and each Swap Counterparty.


 


“Collateral”
has the meaning set forth in Section 1 hereof.


 


“Copyright
Office” means the United States Copyright Office or any
successor or substitute office in which it is necessary or, in the reasonable
opinion of Secured Party, advisable to record a Grant in order to create or
perfect Liens on Copyrights, Copyright Registrations and Copyright Rights.


 


“Copyrights”
means all items under copyright in various published and unpublished works of
authorship including, without limitation, computer programs, computer data
bases, other computer software layouts, trade dress, drawings, designs,
writings, and formulas (including, without limitation, the works set forth on Schedule
10 annexed hereto, as the same may be amended pursuant hereto from time to
time).


 


“Copyright
Registrations” means all copyright registrations issued to
any Grantor and applications for copyright registration that have been or may
hereafter be issued or assigned to a Grantor or applied for by a Grantor
thereon in the United States and any state thereof and in foreign countries
(including, without limitation, the registrations set forth on Schedule 10
annexed hereto, as the same may be amended pursuant hereto from time to time).


 


“Copyright
Rights” means all common law and other rights in and to the
Copyrights in the United States and any state thereof and in foreign countries
including all copyright licenses (but with respect to such copyright licenses,
only to the extent permitted by such licensing arrangements), the right (but
not the obligation) to renew and extend Copyright Registrations and any such
rights and to register works protectable by copyright and the right (but not
the obligation) to sue in the name of any Grantor or in the name of Secured
Party or Lenders for past, present and future infringements of such Copyrights
and any such rights.


 


“Counterpart”
means a counterpart to this Agreement entered into by a Subsidiary of Company
pursuant to Section 21 hereof.


 


“Credit
Agreement” has the meaning set forth in the Preliminary
Statements of this Agreement.


 


“Equity
Interests” means all shares of stock, partnership interests,
interests in Joint Ventures, limited liability company interests and all other
equity interests in a Person, whether such stock or interests are classified as
Investment Property or General Intangibles under the UCC.


 


“Event
of Default” means any Event of Default as defined in the
Credit Agreement or, after payment in full of all Obligations under the Credit
Agreement and the other Loan Documents, the cancellation, expiration or
collateralization with cash or a letter of credit of all Letters of Credit and
the termination of the Commitments, the occurrence of an Early


 


XIV-26

















 


Termination Date (as defined in a Master Agreement in the form prepared
by the International Swap and Derivatives Association, Inc. or a similar event
under any similar swap agreement) under any Lender Swap Agreement.


 


“Grant”
means a Grant of Trademark Security Interest, substantially in the form of
Exhibit I annexed hereto, and a Grant of Patent Security Interest,
substantially in the form of Exhibit II annexed hereto, and a Grant of
Copyright Security Interest, substantially in the form of Exhibit III annexed
hereto.


 


“Intellectual
Property Collateral” means, with respect to any Grantor all
right, title and interest (including rights acquired pursuant to a license or
otherwise but only to the extent permitted by agreements governing such license
or other use) of such Grantor in and to all:


 


(a)           Copyrights,
Copyright Registrations and Copyright Rights, including, without limitation,
each of the Copyrights, rights, titles and interests in and to the Copyrights,
all derivative works and other works protectable by copyright, which are
presently, or in the future may be, owned, created (as a work for hire for the
benefit of such Grantor), authored (as a work for hire for the benefit of such
Grantor), or acquired by such Grantor, in whole or in part, and all Copyright
Rights with respect thereto and all Copyright Registrations therefor,
heretofore or hereafter granted or applied for, and all renewals and extensions
thereof, throughout the world, including all proceeds thereof (such as, by way
of example and not by limitation, license royalties and proceeds of
infringement suits),


 


(b)           Patents;


 


(c)           Trademarks,
Trademark Registrations, the Trademark Rights and goodwill of such Grantor’s
business symbolized by the Trademarks and associated therewith; and


 


(d)           all
trade secrets, trade secret rights, know-how, customer lists, processes of
production, ideas, confidential business information, techniques, processes,
formulas, and all other proprietary information.


 


“IP
Supplement” means an IP Supplement, substantially in the form
of Exhibit V annexed hereto.


 


“Lender
Swap Agreement” means an Interest Rate Agreement, Currency
Agreement or other swap agreement between Company or a Subsidiary of Company
and a Swap Counterparty.


 


“Patents”
means all patents and patent applications and rights and interests in patents
and patent applications under any domestic or foreign law that are presently,
or in the future may be, owned or held by a Grantor and all patents and patent
applications and rights, title and interests in patents and patent applications
under any domestic or foreign law that are presently, or in the future may be,
owned by such Grantor in whole or in part (including, without limitation, the
patents and patent applications set forth on Schedule 9 annexed hereto),
all rights (but not obligations) corresponding thereto to sue for past, present
and future infringements and all re-issues, divisions, continuations, renewals,
extensions and continuations-in-part thereof.


 


XIV-27

















 


“Pledged
Debt” means the Indebtedness from time to time owed to a
Grantor, including the Indebtedness set forth on Schedule 7 annexed
hereto and issued by the obligors named therein, the Instruments and certificates
evidencing such Indebtedness and all interest, cash or other property received,
receivable or otherwise distributed in respect of or exchanged therefor.


 


“Pledged
Equity” means all Equity Interests now or hereafter owned by
a Grantor, including all securities convertible into, and rights, warrants,
options and other rights to purchase or otherwise acquire, any of the
foregoing, including those owned on the date hereof and set forth on Schedule
6 annexed hereto, the certificates or other instruments representing any of
the foregoing and any interest of such Grantor in the entries on the books of
any securities intermediary pertaining thereto and all distributions, dividends
and other property received, receivable or otherwise distributed in respect of
or exchanged therefor.


 


“Pledged
Subsidiary Debt” means Pledged Debt owed to a Grantor by any
obligor that is, or becomes, a direct or indirect Subsidiary of such Grantor,
of which such Grantor is a direct or indirect Subsidiary or that controls, is
controlled by or under common control with such Grantor.


 


“Pledged
Subsidiary Equity” means Pledged Equity in a Person that is,
or becomes a direct Subsidiary of a Grantor.


 


“Pledge
Supplement” means a Pledge Supplement, in substantially the
form of Exhibit IV annexed hereto, in respect of the additional
Pledged Equity or Pledged Debt pledged pursuant to this Agreement.


 


“Requisite
Obligees” means either (i) Requisite Lenders or (ii),
after payment in full of all Obligations under the Credit Agreement and the other
Loan Documents, the cancellation, expiration or collateralization with cash or
a letter of credit of all Letters of Credit and the termination of the
Commitments, the holders of a majority of (A) the aggregate notional amount
under all Lender Swap Agreements (including Lender Swap Agreements that have
been terminated) or (B) if all Lender Swap Agreements have been terminated in
accordance with their terms, the aggregate amount then due and payable
(exclusive of expenses and similar payments but including any early termination
payments then due) under such Lender Swap Agreements.


 


“Secured
Obligations” has the meaning set forth in Section 2 hereof.


 


“Securities Collateral” means, with respect
to any Grantor, the Pledged Equity, the Pledged Debt and any other Investment
Property in which such Grantor has an interest.


 


“Swap
Counterparty” means a Person that enters into a swap
agreement with Company or a Subsidiary and is a Lender or an Affiliate of a
Lender at the time such agreement is entered into.


 


“Trademarks”
means all trademarks, service marks, designs, logos, indicia, tradenames, trade
dress, corporate names, company names, business names, fictitious business
names, trade styles and/or other source and/or business identifiers and
applications pertaining thereto, owned by such Grantor, or hereafter adopted
and used by a Grantor, in its business (including, without limitation, the
trademarks specifically set forth on Schedule 10 annexed hereto).


 


XIV-28

















 


“Trademark
Registrations” means all registrations that have been or may
hereafter be issued or assigned to a Grantor or applied for by a Grantor
thereon in the United States and any state thereof and in foreign countries
(including, without limitation, the registrations and applications set forth on
Schedule 10 annexed hereto).


 


“Trademark
Rights” means all common law and other rights (but in no
event any of the obligations) in and to the Trademarks in the United States and
any state thereof and in foreign countries.


 


“UCC”
means the Uniform Commercial Code, as it exists on the date of this Agreement
or as it may hereafter be amended, in the State of New York.


 


 [Remainder of page intentionally left blank]


 


XIV-29

















 


IN
WITNESS WHEREOF, Grantors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.


 


	
  HOLDINGS:

  	
   

  
	
   

  	
   

  
	
   

  	
  FTD GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notice Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  11111 Santa
  Monica Blvd., Suite 2000

  	
   

  
	
   

  	
  Los Angeles,
  California 90025

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
   

  	
   

  
							



 


XIV-S-1

















 


	
   

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notice Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3113 Woodcreek
  Drive

  	
   

  
	
   

  	
  Downers Grover, DuPage
  County,

  Illinois  60515

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
   

  	
   

  
							



 


XIV-S-2

















 


	
   

  	
  SUBSIDIARY GRANTORS:

  
	
   

  	
   

  
	
   

  	
   

  	
  FTD.COM INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notice Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3113 Woodcreek
  Drive

  
	
   

  	
   

  	
  Downers Grove,
  DuPage County, Illinois 60515

  
	
   

  	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FLORISTS’ TRANSWORLD DELIVERY,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notice Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3113 Woodcreek
  Drive

  
	
   

  	
   

  	
  Downers Grove,
  DuPage County, Illinois 60515

  
	
   

  	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
   

  
											



 


XIV-S-3

















 


	
   

  	
  WELLS FARGO BANK, N.A.,
  as Administrative

  Agent, as Secured Party

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  201 Third
  Street, Eighth Floor, MAC A0187-081

  
	
   

  	
  San Francisco,
  California 94103

  
	
   

  	
  Attention:

  
	
   

  	
  Facsimile:

  



 


XIV-S-4

















 


SCHEDULE A

TO

SECURITY AGREEMENT


 


	
  Name

  	
   

  	
  Notice Address for each Grantor

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


A-1

















 


SCHEDULE 1

TO

SECURITY AGREEMENT


 


Commercial Tort
Claims


 


1-1

















 


SCHEDULE 2

TO

SECURITY AGREEMENT


 


Filing Offices


 


 


	
  Grantor

  	
   

  	
  Filing Offices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


2-1

















 


SCHEDULE 3

TO

SECURITY AGREEMENT


 


Office Locations,
Type and Jurisdiction of Organization


 


	
  Name of

  Grantor

  	
   

  	
  Type of

  Organization

  	
   

  	
  Office Locations

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Organization

  Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


3-1

















 


SCHEDULE 4

TO

SECURITY AGREEMENT


 


Locations of
Equipment and Inventory


 


	
  Name of Grantor

  	
   

  	
  Locations of Equipment and Inventory

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


4-1

















 


SCHEDULE 5

TO

SECURITY AGREEMENT


 


[Reserved]


 


5-1

















 


SCHEDULE 6

TO

SECURITY AGREEMENT


 


	
  Equity Issuer

  	
   

  	
  Class

  of

  Equity

  	
   

  	
  Equity

  Certificate Nos.

  	
   

  	
  Par

  Value

  	
   

  	
  Amount of

  Equity Interests

  	
   

  	
  Percentage of

  Outstanding

  Equity Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


6-1

















 


SCHEDULE 7

TO

SECURITY AGREEMENT


 


	
  Debt Issuer

  	
   

  	
  Amount of

  Indebtedness

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


7-1

















 


SCHEDULE 8

TO

SECURITY AGREEMENT


 


U.S. Trademarks:


 


	
  Registered Owner

  	
   

  	
  Trademark

  Description

  	
   

  	
  Registration

  Number

  	
   

  	
  Registration

  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Foreign Trademarks:


 


	
  Registered Owner

  	
   

  	
  Trademark

  Description

  	
   

  	
  Registration

  Number

  	
   

  	
  Registration

  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


8-1

















 


SCHEDULE 9

TO

SECURITY AGREEMENT


 


U.S. Patents Issued:


 


	
  Patent No.

  	
   

  	
  Issue Date

  	
   

  	
  Title

  	
   

  	
  Inventor(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


U.S. Patents Pending:


 


	
  Date

  Filed

  	
   

  	
  Application

  Number

  	
   

  	
  Title

  	
   

  	
  Inventor(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Foreign Patents Issued:


 


	
  Country

  	
   

  	
  Patent No.

  	
   

  	
  Issue Date

  	
   

  	
  Title

  	
   

  	
  Inventor(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Foreign Patents Pending:


 


	
  Country

  	
   

  	
  Applicant’s

  Name

  	
   

  	
  Date

  Filed

  	
   

  	
  Application

  Number

  	
   

  	
  Title

  	
   

  	
  Inventor(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


9-1

















 


SCHEDULE 10

TO

SECURITY AGREEMENT


 


U.S. Copyright Registrations:


 


	
  Title

  	
   

  	
  Registration No.

  	
   

  	
  Date of Issue

  	
   

  	
  Registered Owner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Foreign Copyright Registrations:


 


	
  Country

  	
   

  	
  Title

  	
   

  	
  Registration No.

  	
   

  	
  Date of Issue

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Pending U.S. Copyright Registration Applications:


 


	
  Title

  	
   

  	
  Appl. No.

  	
   

  	
  Date of Application

  	
   

  	
  Copyright Claimant

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Pending Foreign Copyright Registration
Applications:


 


	
  Country

  	
   

  	
  Title

  	
   

  	
  Appl. No.

  	
   

  	
  Date of Application

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


10-1

















 


SCHEDULE 11

TO

SECURITY AGREEMENT


 


Deposit Accounts,
Security Accounts, Commodity Accounts


 


	
  Type of Account

  	
   

  	
  Depository Bank or

  Securities Intermediary

  	
   

  	
  Address of Depository Bank

  or Securities Intermediary

  	
   

  	
  Account Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


11-1

















 


SCHEDULE 12 

TO

SECURITY AGREEMENT


 


Chattel Paper


 


12-1

















 


SCHEDULE 13 

TO

SECURITY AGREEMENT


 


Letter-of-Credit
Rights


 


13-1

















 


SCHEDULE 14 

TO

SECURITY AGREEMENT


 


Documents


 


14-1

















 


SCHEDULE 15

TO

SECURITY AGREEMENT


 


Assigned
Agreements


 


15-1

















 


EXHIBIT I TO

SECURITY AGREEMENT


 


[FORM OF GRANT OF
TRADEMARK SECURITY INTEREST]



GRANT OF TRADEMARK SECURITY INTEREST


 


WHEREAS,
[NAME OF GRANTOR], a                       
corporation (“Grantor”), owns and
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Trademark Collateral (as defined below); and


 


WHEREAS,
FTD, Inc., a Delaware corporation (“Company”),
has entered into a Credit Agreement dated as of July 28, 2006 (said Credit
Agreement, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Credit Agreement”), with the
lenders named therein (collectively, together with their respective successors
and assigns party to the Credit Agreement from time to time, the “Lenders”), Wells Fargo Bank, N.A., as
Administrative Agent for the Lenders (in such capacity, “Secured Party”), and the other agents
listed therein pursuant to which Lenders have made certain commitments, subject
to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Company; and


 


WHEREAS,
Company may from time to time enter, or may from time to time have entered,
into one or more swap agreements (collectively, the “Lender Swap Agreements”) with one or more Persons that are
Lenders or Affiliates of Lenders at the time such Lender Swap Agreements are
entered into (in such capacity, collectively, “Swap
Counterparties”); and


 


[Insert if Grantor
is a Subsidiary:] [WHEREAS,
Grantor has executed and delivered that certain Subsidiary Guaranty dated as of
July 28, 2006 (said Subsidiary Guaranty, as it may heretofore have been and as
it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time, being the “Guaranty”),
in favor of Secured Party for the benefit of Lenders and any Swap
Counterparties, pursuant to which Grantor has guarantied the prompt payment and
performance when due of all obligations of Company under the Credit Agreement
and the other Loan Documents and all obligations of Company under the Lender
Swap Agreements, including, without limitation, the obligation of Company to
make payments thereunder in the event of early termination thereof; and]


 


WHEREAS,
pursuant to the terms of a Security Agreement dated as of July 28, 2006 (said
Security Agreement, as it may heretofore have been and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to
time, being the “Security Agreement”),
among Grantor, Secured Party and the other grantors named therein, Grantor has
created in favor of Secured Party a security interest in, and Secured Party has
become a secured creditor with respect to, the Trademark Collateral;


 


NOW,
THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Security Agreement, to evidence further the security interest
granted by Grantor to Secured Party pursuant to the Security Agreement, Grantor
hereby grants to Secured Party a security interest in all of


 


XIV-I-1

















 


Grantor’s right, title and interest in and to the following, in each
case whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located (the “Trademark Collateral”):


 


(i)            all
rights, title and interest (including rights acquired pursuant to a license or
otherwise) in and to all trademarks, service marks, designs, logos, indicia,
tradenames, trade dress, corporate names, company names, business names,
fictitious business names, trade styles and/or other source and/or business
identifiers and applications pertaining thereto, owned by such Grantor, or hereafter
adopted and used, in its business (including, without limitation, the
trademarks set forth on Schedule A annexed hereto) (collectively, the “Trademarks”), all registrations that have
been or may hereafter be issued or applied for thereon in the United States and
any state thereof and in foreign countries (including, without limitation, the
registrations and applications set forth on Schedule A annexed hereto),
all common law and other rights (but in no event any of the obligations) in and
to the Trademarks in the United States and any state thereof and in foreign
countries, and all goodwill of such Grantor’s business symbolized by the
Trademarks and associated therewith; and


 


(ii)           all
proceeds, products, rents and profits of or from any and all of the foregoing
Trademark Collateral and, to the extent not otherwise included, all payments
under insurance (whether or not Secured Party is the loss payee thereof), or
any indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Trademark Collateral.  For purposes of this Grant of Trademark
Security Interest, the term “proceeds”
includes whatever is receivable or received when Trademark Collateral or
proceeds are sold, licensed, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.


 


Notwithstanding
anything herein to the contrary, in no event shall the Trademark Collateral
include, and Grantor shall not be deemed to have granted a security interest
in, any of such Grantor’s rights or interests in the Trademark Collateral to
the extent that such a grant would, under the terms of any agreement related to
the Trademark Collateral to which Grantor is a party (including any license )
result in a breach of the terms of, or constitute a default under, such
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to the UCC or any other applicable law (including the
Bankruptcy Code) or principles of equity); provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the
Trademark Collateral shall include, and Grantor shall be deemed to have granted
a security interest in, all such rights and interests as if such provision had
never been in effect.


 


In the event that
any asset of a Grantor is excluded from the Trademark Collateral by virtue of
the foregoing paragraph, Grantor agrees to use all commercially reasonable
efforts to obtain all requisite consents to enable such Grantor to provide a
security interest in such asset pursuant hereto as promptly as practicable.


 


Grantor does
hereby further acknowledge and affirm that the rights, obligations and remedies
of Secured Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.


 


XIV-I-2

















 


[The remainder of this
page is intentionally left blank.]


 


XIV-I-3

















 


IN
WITNESS WHEREOF, Grantor has caused this Grant of Trademark
Security Interest to be duly executed and delivered by its officer thereunto
duly authorized as of the      day of               ,
          .


 


	
   

  	
  [NAME
  OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						



 


XIV-I-4

















 


SCHEDULE A

TO

GRANT OF TRADEMARK SECURITY INTEREST


 


	
  Owner

  	
   

  	
  Trademark

  Description

  	
   

  	
  Registration/

  Appl. Number

  	
   

  	
  Registration/

  Appl. Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


XIV-I-A-1

















 


EXHIBIT II TO

SECURITY AGREEMENT


 


[FORM OF GRANT OF PATENT
SECURITY INTEREST]



GRANT OF PATENT SECURITY INTEREST


 


WHEREAS,
[NAME OF GRANTOR], a                       
corporation (“Grantor”), owns and
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Patent Collateral (as defined below); and


 


WHEREAS,
FTD, Inc., a Delaware corporation (“Company”),
has entered into a Credit Agreement dated as of July 28, 2006 (said Credit
Agreement, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Credit Agreement”), with the
lenders named therein (collectively, together with their respective successors
and assigns party to the Credit Agreement from time to time, the “Lenders”), Wells Fargo Bank, N.A., as
Administrative Agent for the Lenders (in such capacity, “Secured Party”), and the other agents
listed therein, pursuant to which Lenders have made certain commitments,
subject to the terms and conditions set forth in the Credit Agreement, to
extend certain credit facilities to Company; and


 


WHEREAS,
Company may from time to time enter, or may from time to time have entered,
into one or more swap agreements (collectively, the “Lender Swap Agreements”) with one or more Persons that are
Lenders or Affiliates of Lenders at the time such Lender Swap Agreements are
entered into (in such capacity, collectively, “Swap
Counterparties”); and


 


[Insert if Grantor
is a Subsidiary:] [WHEREAS,
Grantor has executed and delivered that certain Subsidiary Guaranty dated as of
July 28, 2006 (said Subsidiary Guaranty, as it may heretofore have been and as
it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time, being the “Guaranty”),
in favor of Secured Party for the benefit of Lenders and any Swap
Counterparties, pursuant to which Grantor has guarantied the prompt payment and
performance when due of all obligations of Company under the Credit Agreement
and the other Loan Documents and all obligations of Company under the Lender
Swap Agreements, including, without limitation, the obligation of Company to
make payments thereunder in the event of early termination thereof; and]


 


WHEREAS,
pursuant to the terms of a Security Agreement dated as of July 28, 2006 (said
Security Agreement, as it may heretofore have been and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to
time, being the “Security Agreement”),
among Grantor, Secured Party and the other grantors named therein, Grantor
created in favor of Secured Party a security interest in, and Secured Party has
become a secured creditor with respect to, the Patent Collateral;


 


NOW,
THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Security Agreement, to evidence further the security interest
granted by Grantor to Secured Party pursuant to the Security Agreement, Grantor
hereby grants to Secured Party a security interest in all of


 


XIV-II-1

















 


Grantor’s right, title and interest in and to the following, in each
case whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located (the “Patent Collateral”):


 


(i)            all
rights, title and interest (including rights acquired pursuant to a license or
otherwise) in and to all patents and patent applications and rights and
interests in patents and patent applications under any domestic or foreign law
that are presently, or in the future may be, owned or held by such Grantor and
all patents and patent applications and rights, title and interests in patents
and patent applications under any domestic or foreign law that are presently,
or in the future may be, owned by such Grantor in whole or in part (including,
without limitation, the patents and patent applications set forth on Schedule A
annexed hereto), all rights (but not obligations) corresponding thereto to sue
for past, present and future infringements and all re-issues, divisions,
continuations, renewals, extensions and continuations-in-part thereof; and


 


(ii)           all
proceeds, products, rents and profits of or from any and all of the foregoing
Patent Collateral and, to the extent not otherwise included, all payments under
insurance (whether or not Secured Party is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Patent Collateral.  For purposes of this Grant of Patent Security
Interest, the term “proceeds”
includes whatever is receivable or received when Patent Collateral or proceeds
are sold, licensed, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary.


 


Notwithstanding
anything herein to the contrary, in no event shall the Patent Collateral
include, and Grantor shall not be deemed to have granted a security interest
in, any of such Grantor’s rights or interests in the Patent Collateral to the
extent that such a grant would, under the terms of any agreement related to the
Patent Collateral to which Grantor is a party (including any license ) result
in a breach of the terms of, or constitute a default under, such agreement
(other than to the extent that any such term would be rendered ineffective pursuant
to the UCC or any other applicable law (including the Bankruptcy Code) or
principles of equity); provided, that immediately upon the
ineffectiveness, lapse or termination of any such provision, the Patent
Collateral shall include, and Grantor shall be deemed to have granted a
security interest in, all such rights and interests as if such provision had
never been in effect.


 


In the event that any asset of a Grantor is excluded from the Patent
Collateral by virtue of the foregoing paragraph, Grantor agrees to use all
commercially reasonable efforts to obtain all requisite consents to enable such
Grantor to provide a security interest in such asset pursuant hereto as
promptly as practicable.


 


Grantor does
hereby further acknowledge and affirm that the rights, obligations and remedies
of Secured Party with respect to the security interest in the Patent Collateral
granted hereby are more fully set forth in the Security Agreement, the terms
and provisions of which are incorporated by reference herein as if fully set
forth herein.


 


[The remainder of this
page intentionally left blank.]


 


XIV-II-2

















 


IN
WITNESS WHEREOF, Grantor has caused this Grant of Patent
Security Interest to be duly executed and delivered by its officer thereunto
duly authorized as of the        day of                         ,
          .


 


	
   

  	
  [NAME
  OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						



 


XIV-II-3

















 


SCHEDULE A

TO

GRANT OF PATENT SECURITY INTEREST


 


Patents Issued:


 


	
  Patent No.

  	
   

  	
  Issue Date

  	
   

  	
  Title

  	
   

  	
  Inventor(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Patents Pending:


 


	
  Applicant’s

  Name

  	
   

  	
  Date

  Filed

  	
   

  	
  Application

  Number

  	
   

  	
  Invention

  	
   

  	
  Inventor(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


XIV-II-A-1

















 


EXHIBIT III TO

SECURITY AGREEMENT


 


[FORM OF GRANT OF
COPYRIGHT SECURITY INTEREST]



GRANT OF COPYRIGHT SECURITY INTEREST


 


WHEREAS,
[NAME OF GRANTOR], a                       
corporation (“Grantor”), owns and
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Copyright Collateral (as defined below); and


 


WHEREAS,
FTD, Inc., a Delaware corporation (“Company”),
has entered into a Credit Agreement dated as of July 28, 2006 (said Credit
Agreement, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Credit Agreement”), with the
lenders named therein (collectively, together with their respective successors
and assigns party to the Credit Agreement from time to time, the “Lenders”), Wells Fargo Bank, N.A., as
Administrative Agent for the Lenders (in such capacity, “Secured Party”), and the other agents
listed therein pursuant to which Lenders have made certain commitments, subject
to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Company; and


 


WHEREAS,
Company may from time to time enter, or may from time to time have entered,
into one or more swap agreements (collectively, the “Lender Swap Agreements”) with one or more Persons that are
Lenders or Affiliates of Lenders at the time such Lender Swap Agreements are
entered into (in such capacity, collectively, “Swap
Counterparties”); and


 


[Insert if Grantor
is a Subsidiary:] [WHEREAS,
Grantor has executed and delivered that certain Subsidiary Guaranty dated as of
July 28, 2006 (said Subsidiary Guaranty, as it may heretofore have been and as
it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time, being the “Guaranty”),
in favor of Secured Party for the benefit of Lenders and any Swap
Counterparties, pursuant to which Grantor has guarantied the prompt payment and
performance when due of all obligations of Company under the Credit Agreement
and the other Loan Documents and all obligations of Company under the Lender
Swap Agreements, including, without limitation, the obligation of Company to
make payments thereunder in the event of early termination thereof; and]


 


WHEREAS,
pursuant to the terms of a Security Agreement dated as of July 28, 2006 (said
Security Agreement, as it may heretofore have been and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to time,
being the “Security Agreement”),
among Grantor, Secured Party and the other grantors named therein, Grantor
created in favor of Secured Party a security interest in, and Secured Party has
become a secured creditor with respect to, the Copyright Collateral;


 


NOW,
THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Security Agreement, to evidence further the security interest
granted by Grantor to Secured Party pursuant to the Security Agreement, Grantor
hereby grants to Secured Party a security interest in all of


 


XIV-III-1

















 


Grantor’s right, title and interest in and to the following, in each
case whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located (the “Copyright Collateral”):


 


(i)            all
rights, title and interest (including rights acquired pursuant to a license or
otherwise) under copyright in various published and unpublished works of
authorship including, without limitation, computer programs, computer data
bases, other computer software layouts, trade dress, drawings, designs,
writings, and formulas (including, without limitation, the works set forth on Schedule
A annexed hereto, as the same may be amended pursuant hereto from time to
time) (collectively, the “Copyrights”),
all copyright registrations issued to Grantor and applications for copyright
registration that have been or may hereafter be issued or applied for thereon
in the United States and any state thereof and in foreign countries (including,
without limitation, the registrations set forth on Schedule A annexed
hereto, as the same may be amended pursuant hereto from time to time)
(collectively, the “Copyright Registrations”),
all common law and other rights in and to the Copyrights in the United States
and any state thereof and in foreign countries including all copyright licenses
(but with respect to such copyright licenses, only to the extent permitted by
such licensing arrangements) (the “Copyright
Rights”), including, without limitation, each of the Copyrights,
rights, titles and interests in and to the Copyrights, all derivative works and
other works protectable by copyright, which are presently, or in the future may
be, owned, created (as a work for hire for the benefit of Grantor), authored
(as a work for hire for the benefit of Grantor), or acquired by Grantor, in
whole or in part, and all Copyright Rights with respect thereto and all
Copyright Registrations therefor, heretofore or hereafter granted or applied
for, and all renewals and extensions thereof, throughout the world, including
all proceeds thereof (such as, by way of example and not by limitation, license
royalties and proceeds of infringement suits), the right (but not the
obligation) to renew and extend such Copyright Registrations and Copyright
Rights and to register works protectable by copyright and the right (but not
the obligation) to sue in the name of such Grantor or in the name of Secured
Party or Lenders for past, present and future infringements of the Copyrights
and Copyright Rights; and


 


(ii)           all
proceeds, products, rents and profits of or from any and all of the foregoing
Copyright Collateral and, to the extent not otherwise included, all payments
under insurance (whether or not Secured Party is the loss payee thereof), or
any indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Copyright Collateral.  For purposes of this Grant of Copyright
Security Interest, the term “proceeds”
includes whatever is receivable or received when Copyright Collateral or
proceeds are sold, licensed, exchanged, collected or otherwise disposed of, whether
such disposition is voluntary or involuntary.


 


Notwithstanding
anything herein to the contrary, in no event shall the Copyright Collateral
include, and Grantor shall not be deemed to have granted a security interest
in, any of such Grantor’s rights or interests in the Copyright Collateral to
the extent that such a grant would, under the terms of any agreement related to
the Copyright Collateral to which Grantor is a party (including any license )
result in a breach of the terms of, or constitute a default under, such
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to the UCC or any other applicable law (including the
Bankruptcy Code) or principles


 


XIV-III-2

















 


of equity); provided, that immediately upon the ineffectiveness,
lapse or termination of any such provision, the Copyright Collateral shall
include, and Grantor shall be deemed to have granted a security interest in,
all such rights and interests as if such provision had never been in effect.


 


In the event that any asset of a Grantor is excluded from the Copyright
Collateral by virtue of the foregoing paragraph, Grantor agrees to use all
commercially reasonable efforts to obtain all requisite consents to enable such
Grantor to provide a security interest in such asset pursuant hereto as
promptly as practicable.


 


Grantor does
hereby further acknowledge and affirm that the rights, obligations and remedies
of Secured Party with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.


 


XIV-III-3

















 


IN
WITNESS WHEREOF, Grantor has caused this Grant of Copyright
Security Interest to be duly executed and delivered by its officer thereunto
duly authorized as of the        day of                       ,
          .


 


	
   

  	
  [NAME
  OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						



 


XIV-III-4

















 


SCHEDULE A

TO

GRANT OF COPYRIGHT SECURITY INTEREST


 


U.S. Copyright Registrations:


 


	
  Title

  	
   

  	
  Registration No.

  	
   

  	
  Date of Issue

  	
   

  	
  Registered Owner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Foreign Copyright Registrations:


 


	
  Country

  	
   

  	
  Title

  	
   

  	
  Registration No.

  	
   

  	
  Date of Issue

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Pending U.S. Copyright Registration Applications:


 


	
  Title

  	
   

  	
  Appl. No.

  	
   

  	
  Date of Application

  	
   

  	
  Copyright Claimant

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Pending Foreign Copyright Registration
Applications:


 


	
  Country

  	
   

  	
  Title

  	
   

  	
  Appl. No.

  	
   

  	
  Date of Application

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


XIV-III-A-1

















 


EXHIBIT IV TO

SECURITY AGREEMENT


 


PLEDGE SUPPLEMENT


 


This Pledge Supplement,
dated as of                                     ,
is delivered pursuant to the Security Agreement, dated as of July 28, 2006,
between                                         ,
a                               
(“Grantor”), the other Grantors
named therein, and Wells Fargo Bank, N.A., as Secured Party (said Security
Agreement, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Security Agreement”).  Capitalized terms used herein not otherwise
defined herein shall have the meanings ascribed thereto in the Security
Agreement.


 


Grantor hereby
agrees that the [Pledged Equity] [Pledged Debt] set forth on Schedule A annexed
hereto shall be deemed to be part of the [Pledged Equity] [Pledged Debt] and
shall become part of the Securities Collateral and shall secure all Secured
Obligations.


 


IN
WITNESS WHEREOF, Grantor has caused this Pledge Supplement to
be duly executed and delivered by its duly authorized officer as of                               .


 


	
   

  	
  [GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
					



 


XIV-IV-1

















 


SCHEDULE A

TO

PLEDGE SUPPLEMENT


 


XIV-IV-A-1

















 


EXHIBIT V TO

SECURITY AGREEMENT


 


IP SUPPLEMENT


 


This IP
SUPPLEMENT, dated as of               ,
is delivered pursuant to and supplements (i) the Security Agreement, dated
as of July 28, 2006 (said Security Agreement, as it may heretofore have been
and as it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time, being the “Security
Agreement”), among [FTD, Inc.], [Insert Name of Grantor] (“Grantor”), the other grantors named
therein, and Wells Fargo Bank, N.A., as Secured Party, and (ii) the [Grant
of Trademark Security Interest] [Grant of Patent Security Interest] [Grant of
Copyright Security Interest] dated as of               ,
        (the “Grant”) executed by Grantor. 
Capitalized terms used herein not otherwise defined herein shall have
the meanings ascribed thereto in the Grant.


 


Grantor grants to
Secured Party a security interest in all of Grantor’s right, title and interest
in and to the [Trademark Collateral] [Patent Collateral] [Copyright Collateral]
set forth on Schedule A annexed hereto. 
All such [Trademark Collateral] [Patent Collateral] [Copyright
Collateral] shall be deemed to be part of the [Trademark Collateral] [Patent
Collateral] [Copyright Collateral] and shall be hereafter subject to each of
the terms and conditions of the Security Agreement and the Grant.


 


IN
WITNESS WHEREOF, Grantor has caused this IP Supplement to be
duly executed and delivered by its duly authorized officer as of                             .


 


	
   

  	
  [GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
					



 


XIV-V-1

















 


EXHIBIT VI TO

SECURITY AGREEMENT


 


[FORM OF COUNTERPART]


 


COUNTERPART (this “Counterpart”), dated as of               ,
is delivered pursuant to Section 21 of the Security Agreement referred to
below.  The undersigned hereby agrees
that this Counterpart may be attached to the Security Agreement, dated as of
July 28, 2006 (said Security Agreement, as it may heretofore have been and as
it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time being the “Security
Agreement”; capitalized terms used herein not otherwise defined
herein shall have the meanings ascribed therein), among [FTD, Inc.], [Insert
Name of Grantor] (“Grantor”), the
other Grantors named therein, and Wells Fargo Bank, N.A., as Secured
Party.  The undersigned by executing and
delivering this Counterpart hereby becomes a Grantor under the Security
Agreement in accordance with Section 21 thereof and agrees to be bound by all of
the terms thereof.  Without limiting the
generality of the foregoing, the undersigned hereby:


 


(i)            authorizes
the Secured Party to add the information set forth on the Schedules to this
Agreement to the correlative Schedules attached to the Security Agreement;(1)


 


(ii)           agrees
that all Collateral of the undersigned, including the items of property
described on the Schedules hereto, shall become part of the Collateral and
shall secure all Secured Obligations; and


 


(iii)          makes
the representations and warranties set forth in the Security Agreement, as
amended hereby, to the extent relating to the undersigned as of the date
hereof.


 


	
   

  	
  [NAME
  OF ADDITIONAL GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						



 






(1)           The Schedules to the
Counterpart should include copies of all Schedules that identify collateral to
be granted by the Additional Grantor.


 


XIV-VI-1

















 


EXHIBIT XV



[FORM OF] HOLDINGS GUARANTY


 


This HOLDINGS GUARANTY is entered into as of
July 28, 2006, by the undersigned (the “Guarantor”),
in favor of and for the benefit of WELLS FARGO BANK, N.A., 
as agent for and representative of (in such capacity herein called “Guarantied Party”) the lenders (“Lenders”) party to the Credit Agreement
referred to below and any Swap Counterparties (as hereinafter defined), and in
favor of and for the benefit of the Beneficiaries (as hereinafter defined).


 


RECITALS.


 


A.            FTD,
Inc., a Delaware corporation (“Company”),
has entered into that certain Credit Agreement dated as of July 28, 2006, with
Lenders and Guarantied Party, as Administrative Agent for Lenders (said Credit
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the “Credit
Agreement”; capitalized terms defined therein and not otherwise
defined herein being used herein as therein defined).


 


B.            Company
may from time to time enter, or may from time to time have entered, into one or
more Interest Rate Agreements, Currency Agreements and other swap agreements
(collectively, the “Lender Swap Agreements”)
with one or more Persons that are Lenders or Affiliates of Lenders at the time
such Lender Swap Agreements are entered into (in such capacity, collectively, “Swap Counterparties”) in accordance with
the terms of the Credit Agreement, and it is desired that the obligations of
Company under the Lender Swap Agreements, including without limitation the
obligation of Company to make payments thereunder in the event of early
termination thereof, together with all obligations of Company under the Credit
Agreement and the other Loan Documents, be guarantied hereunder.


 


C.            Guarantied
Party, Lenders and each Swap Counterparty for which Guarantied Party has
received the notice required by Section 16 hereof are sometimes referred to
herein as “Beneficiaries”.


 


D.            Company
is a wholly owned Subsidiary of Guarantor and thus the Guarantied Obligations
(as hereinafter defined) are being incurred for and will inure to the benefit
of Guarantor (which benefits are hereby acknowledged).


 


E.             It
is a condition precedent to the making of the initial Loans under the Credit
Agreement that Company’s obligations thereunder be guarantied by Guarantor.


 


F.             Guarantor
is willing irrevocably and unconditionally to guaranty such obligations of
Company.


 


1.             Guaranty.  (a) In order to induce Lenders to extend credit
to Company pursuant to the Credit Agreement and Swap Counterparties to enter
into the Lender Swap Agreements, Guarantor irrevocably and unconditionally
guaranties, as primary obligor and not merely as surety, the due and punctual
payment in full of all Guarantied Obligations (as


 


XV-1

















 


hereinafter defined) when the same shall become due, whether at stated
maturity, by acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. § 362(a)). 
The term “Guarantied Obligations”
is used herein in its most comprehensive sense and includes any and all
Obligations of Company and all obligations of Company under Lender Swap
Agreements, now or hereafter made, incurred or created, whether absolute or
contingent, liquidated or unliquidated, whether due or not due, and however
arising under or in connection with the Credit Agreement, the Lender Swap Agreements,
this Guaranty and the other Loan Documents, including those arising under
successive borrowing transactions under the Credit Agreement which shall either
continue such obligations of Company or from time to time renew them after they
have been satisfied.


 


Any interest on
any portion of the Guarantied Obligations that accrues after the commencement
of any proceeding, voluntary or involuntary, involving the bankruptcy,
insolvency, receivership, reorganization, liquidation or arrangement of Company
(or, if interest on any portion of the Guarantied Obligations ceases to accrue
by operation of law by reason of the commencement of said proceeding, such
interest as would have accrued on such portion of the Guarantied Obligations if
said proceeding had not been commenced) shall be included in the Guarantied
Obligations because it is the intention of Guarantor and Guarantied Party that
the Guarantied Obligations should be determined without regard to any rule of
law or order that may relieve Company of any portion of such Guarantied
Obligations.


 


In the event that
all or any portion of the Guarantied Obligations is paid by Company, the
obligations of Guarantor hereunder shall continue and remain in full force and
effect or be reinstated, as the case may be, in the event that all or any part
of such payment(s) is rescinded or recovered directly or indirectly from
Guarantied Party or any other Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments that are so rescinded or recovered shall
constitute Guarantied Obligations.


 


Subject to the
other provisions of this Section 1, upon the failure of Company to pay any of
the Guarantied Obligations when and as the same shall become due, Guarantor
will upon demand pay, or cause to be paid, in cash, to Guarantied Party for the
ratable benefit of Beneficiaries, an amount equal to the aggregate of the
unpaid Guarantied Obligations.


 


(b)           Guarantor
under this Guaranty, and each guarantor under other guaranties, if any,
relating to the Credit Agreement (the “Related
Guaranties”) that contain a contribution provision similar to that
set forth in this Section 1(b), together desire to allocate among themselves
(collectively, the “Contributing Guarantors”),
in a fair and equitable manner, their obligations arising under this Guaranty
and the Related Guaranties.  Accordingly,
in the event any payment or distribution is made on any date by Guarantor under
this Guaranty or a guarantor under a Related Guaranty, Guarantor or such other
guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the maximum amount permitted by law so as to
maximize the aggregate amount of the Guarantied Obligations paid to
Beneficiaries.


 


2.             Guaranty Absolute; Continuing Guaranty.  The obligations of Guarantor hereunder are
irrevocable, absolute, independent and unconditional and shall not be affected
by any circumstance which constitutes a legal or equitable discharge of a
guarantor or


 


XV-2

















 


surety other than payment in full of the Guarantied Obligations.  In furtherance of the foregoing and without
limiting the generality thereof, Guarantor agrees that:  (a) this Guaranty is a guaranty of payment
when due and not of collectibility; (b) Guarantied Party may enforce this
Guaranty upon the occurrence and during the continuance of an Event of Default
under the Credit Agreement or the occurrence of an early termination date or
similar event under any Lender Swap Agreements notwithstanding the existence of
any dispute between Company and any Beneficiary with respect to the existence
of such event; (c) the obligations of Guarantor hereunder are independent of
the obligations of Company under the Loan Documents or the Lender Swap
Agreements and the obligations of any other guarantor of the obligations of
Company and a separate action or actions may be brought and prosecuted against
Guarantor whether or not any action is brought against Company or any of such
other guarantors and whether or not Company is joined in any such action or
actions; and (d) Guarantor’s payment of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge
Guarantor’s liability for any portion of the Guarantied Obligations that has
not been paid.  This Guaranty is a
continuing guaranty and shall be binding upon Guarantor and its successors and
assigns, and Guarantor irrevocably waives any right to revoke this Guaranty as
to future transactions giving rise to any Guarantied Obligations.


 


3.             Actions by Beneficiaries.  Any Beneficiary may from time to time,
without notice or demand and without affecting the validity or enforceability
of this Guaranty or giving rise to any limitation, impairment or discharge of
Guarantor’s liability hereunder, (a) renew, extend, accelerate or otherwise
change the time, place, manner or terms of payment of the Guarantied
Obligations, (b) settle, compromise, release or discharge, or accept or refuse
any offer of performance with respect to, or substitutions for, the Guarantied
Obligations or any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations, (c) request and accept other
guaranties of the Guarantied Obligations and take and hold security for the
payment of this Guaranty or the Guarantied Obligations, (d) release, exchange,
compromise, subordinate or modify, with or without consideration, any security
for payment of the Guarantied Obligations, any other guaranties of the
Guarantied Obligations, or any other obligation of any Person with respect to
the Guarantied Obligations, (e) enforce and apply any security now or hereafter
held by or for the benefit of any Beneficiary in respect of this Guaranty or
the Guarantied Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that Guarantied Party or the other
Beneficiaries, or any of them, may have against any such security, as
Guarantied Party in its discretion may determine consistent with the Credit
Agreement, the Lender Swap Agreements and any applicable security agreement,
including foreclosure on any such security pursuant to one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable, and (f) exercise any other rights available to Guarantied Party or
the other Beneficiaries, or any of them, under the Loan Documents or the Lender
Swap Agreements.


 


4.             No Discharge.  This Guaranty and the obligations of
Guarantor hereunder shall be valid and enforceable and shall not be subject to
any limitation, impairment or discharge for any reason (other than payment in
full of the Guarantied Obligations), including without limitation the
occurrence of any of the following, whether or not Guarantor shall have had
notice or knowledge of any of them:  (a)
any failure to assert or enforce or agreement not to assert or enforce, or the
stay or enjoining, by order of court, by operation of law or otherwise, of the
exercise or enforcement of, any claim or demand or any right, power or remedy
with respect to


 


XV-3

















 


the Guarantied Obligations or any agreement relating thereto, or with
respect to any other guaranty of or security for the payment of the Guarantied
Obligations, (b) any waiver or modification of, or any consent to departure
from, any of the terms or provisions of the Credit Agreement, any of the other
Loan Documents, the Lender Swap Agreements or any agreement or instrument
executed pursuant thereto, or of any other guaranty or security for the
Guarantied Obligations, (c) the Guarantied Obligations, or any agreement
relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect, (d) the application of payments received from any
source to the payment of indebtedness other than the Guarantied Obligations,
even though Guarantied Party or the other Beneficiaries, or any of them, might
have elected to apply such payment to any part or all of the Guarantied
Obligations, (e) any failure to perfect or continue perfection of a security
interest in any collateral which secures any of the Guarantied Obligations, (f)
any defenses, set-offs or counterclaims which Company may assert against
Guarantied Party or any Beneficiary in respect of the Guarantied Obligations, including
but not limited to failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and usury,
and (g) any other act or thing or omission, or delay to do any other act or
thing, which may or might in any manner or to any extent vary the risk of
Guarantor as an obligor in respect of the Guarantied Obligations.


 


5.             Waivers.  Guarantor waives, for the benefit of
Beneficiaries:  (a) any right to require
Guarantied Party or the other Beneficiaries, as a condition of payment or
performance by Guarantor, to (i) proceed against Company, any other
guarantor of the Guarantied Obligations or any other Person, (ii) proceed
against or exhaust any security held from Company, any other guarantor of the
Guarantied Obligations or any other Person, (iii) proceed against or have
resort to any balance of any deposit account or credit on the books of any
Beneficiary in favor of Company or any other Person, or (iv) pursue any
other remedy in the power of any Beneficiary; (b) any defense arising by
reason of the incapacity, lack of authority or any disability or other defense
of Company including, without limitation, any defense based on or arising out
of the lack of validity or the unenforceability of the Guarantied Obligations
or any agreement or instrument relating thereto or by reason of the cessation
of the liability of Company from any cause other than payment in full of the
Guarantied Obligations; (c) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal; (d) any
defense based upon Guarantied Party’s or any other Beneficiary’s errors or
omissions in the administration of the Guarantied Obligations, except behavior
that amounts to bad faith; (e) (i) any principles or provisions of law,
statutory or otherwise, that are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of Guarantor’s obligations
hereunder, (ii) the benefit of any statute of limitations affecting
Guarantor’s liability hereunder or the enforcement hereof, (iii) any
rights to set-offs, recoupments and counterclaims, and (iv) promptness,
diligence and any requirement that any Beneficiary protect, secure, perfect or
insure any Lien or any property subject thereto; (f) except as expressly
provided in the Loan Documents, notices, demands, presentments, protests,
notices of protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guaranty, notices of default under the Credit
Agreement, notices of default or early termination under any Lender Swap
Agreement or any agreement or instrument related thereto, notices of any
renewal, extension or modification of the Guarantied Obligations or any
agreement related thereto, notices of any extension of credit to Company and
notices of any of the matters referred to in Sections 3 and 4 and any right to
consent to any thereof; and (g) to the fullest extent permitted by law,
any defenses or benefits


 


XV-4

















 


that may be derived from or afforded by law which limit the liability
of or exonerate guarantors or sureties, or which may conflict with the terms of
this Guaranty.


 


6.             Guarantor’s Rights of Subrogation,
Contribution, Etc.; Subordination of Other Obligations. Until the
Guarantied Obligations shall have been paid in full and the Commitments shall
have terminated and all Letters of Credit shall have expired or been cancelled
or collateralized with cash or a letter of credit, Guarantor shall withhold
exercise of (a) any claim, right or remedy, direct or indirect, that
Guarantor now has or may hereafter have against Company or any of its assets in
connection with this Guaranty or the performance by Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise and
including without limitation (i) any right of subrogation, reimbursement
or indemnification that Guarantor now has or may hereafter have against
Company, (ii) any right to enforce, or to participate in, any claim, right
or remedy that any Beneficiary now has or may hereafter have against Company, and
(iii) any benefit of, and any right to participate in, any collateral or
security now or hereafter held by any Beneficiary and (b) any right of
contribution Guarantor may have against any other guarantor of any of the
Guarantied Obligations.  Guarantor further
agrees that, to the extent the agreement to withhold exercise of its rights of
subrogation, reimbursement, indemnification and contribution as set forth
herein is found by a court of competent jurisdiction to be void or voidable for
any reason, any rights of subrogation, reimbursement or indemnification
Guarantor may have against Company or against any collateral or security, and
any rights of contribution Guarantor may have against any such other guarantor,
shall be junior and subordinate to any rights Guarantied Party or the other
Beneficiaries may have against Company, to all right, title and interest
Guarantied Party or the other Beneficiaries may have in any such collateral or
security, and to any right Guarantied Party or the other Beneficiaries may have
against such other guarantor.


 


Any indebtedness
of Company now or hereafter held by Guarantor is subordinated in right of
payment to the Guarantied Obligations, and any such indebtedness of Company to
Guarantor collected or received by Guarantor after an Event of Default has
occurred and is continuing, and any amount paid to Guarantor on account of any
subrogation, reimbursement, indemnification or contribution rights referred to
in the preceding paragraph when all Guarantied Obligations have not been paid
in full, any Lender shall have any Commitment or any Swap Counterparty shall
have any obligation under any Lender Swap Agreement, shall be held for
Guarantied Party on behalf of Beneficiaries and shall forthwith be paid over to
Guarantied Party for the benefit of Beneficiaries to be credited and applied
against the Guarantied Obligations.


 


7.             Expenses.  Guarantor agrees to pay, or cause to be paid,
on demand, and to save Guarantied Party and the other Beneficiaries harmless
against liability for, (i) any and all costs and expenses (including reasonable
fees, costs of settlement and disbursements of counsel and allocated costs of
internal counsel) incurred or expended by Guarantied Party or any other
Beneficiary in connection with the enforcement of or preservation of any rights
under this Guaranty and (ii) any and all costs and expenses (including those
arising from rights of indemnification) required to be paid by Guarantor under
the provisions of any other Loan Document.


 


XV-5

















 


8.             Financial Condition of Company.  No Beneficiary shall have any obligation, and
Guarantor waives any duty on the part of any Beneficiary, to disclose or
discuss with Guarantor its assessment, or Guarantor’s assessment, of the financial
condition of Company or any matter or fact relating to the business, operations
or condition of Company.  Guarantor has
adequate means to obtain information from Company on a continuing basis
concerning the financial condition of Company and its ability to perform its
obligations under the Loan Documents and the Lender Swap Agreements, and
Guarantor assumes the responsibility for being and keeping informed of the
financial condition of Company and of all circumstances bearing upon the risk
of nonpayment of the Guarantied Obligations.


 


9.             Representations and Warranties.  Guarantor makes, for the benefit of
Beneficiaries, each of the representations and warranties made in the Credit
Agreement by Company as to Guarantor, its assets, financial condition, operations,
organization, legal status, business and the Loan Documents to which it is a
party.


 


10.          Covenants.  Guarantor agrees that, so long as any part of
the Guarantied Obligations shall remain unpaid, any Letter of Credit shall be
outstanding and not collateralized with cash or a letter of credit, or any
Lender shall have any Commitment or any Swap Counterparty shall have any
obligation under any Lender Swap Agreement, Guarantor will, unless Requisite
Obligees (as that term is defined in Section 15) shall otherwise consent
in writing, perform or observe, and cause its Subsidiaries to perform or
observe, all of the terms, covenants and agreements that the Loan Documents
state that Company is to cause Guarantor and such Subsidiaries to perform or
observe.


 


11.          Set Off. 
In addition to any other rights any Beneficiary may have under law or in
equity, if any amount shall at any time be due and owing by Guarantor to any
Beneficiary under this Guaranty, such Beneficiary is authorized at any time or
from time to time, without notice (any such notice being expressly waived), to
set off and to appropriate and to apply any and all deposits (general or
special, including but not limited to indebtedness evidenced by certificates of
deposit, whether matured or unmatured) and any other indebtedness of such
Beneficiary owing to Guarantor and any other property of Guarantor held by a
Beneficiary to or for the credit or the account of Guarantor against and on
account of the Guarantied Obligations and liabilities of Guarantor to any
Beneficiary under this Guaranty.


 


12.          Amendments and Waivers.  No amendment, modification, termination or
waiver of any provision of this Guaranty, and no consent to any departure by
Guarantor therefrom, shall in any event be effective without the written
concurrence of Guarantied Party and, in the case of any such amendment or
modification, Guarantor.  Any such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.


 


13.          Miscellaneous.  It is not necessary for Beneficiaries to
inquire into the capacity or powers of Guarantor or Company or the officers,
directors or any agents acting or purporting to act on behalf of any of them.


 


The rights, powers
and remedies given to Beneficiaries by this Guaranty are cumulative and shall
be in addition to and independent of all rights, powers and remedies given


 


XV-6

















 


to Beneficiaries by virtue of any statute or rule of law or in any of
the Loan Documents or the Lender Swap Agreements or any agreement between
Guarantor and one or more Beneficiaries or between Company and one or more
Beneficiaries.  Any forbearance or failure
to exercise, and any delay by any Beneficiary in exercising, any right, power
or remedy hereunder shall not impair any such right, power or remedy or be
construed to be a waiver thereof, nor shall it preclude the further exercise of
any such right, power or remedy.


 


In case any
provision in or obligation under this Guaranty shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.


 


THIS
GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTOR, GUARANTIED PARTY AND THE
OTHER BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.


 


This Guaranty
shall inure to the benefit of Beneficiaries and their respective successors and
assigns.


 


ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY
GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY
AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY.  Guarantor agrees that service of all process
in any such proceeding in any such court may be made by registered or certified
mail, return receipt requested, to Guarantor at its address set forth below its
signature hereto, such service being acknowledged by Guarantor to be sufficient
for personal jurisdiction in any action against Guarantor in any such court and
to be otherwise effective and binding service in every respect.  Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Guarantied Party or any Beneficiary to bring proceedings against Guarantor in
the courts of any other jurisdiction.


 


GUARANTOR
AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, GUARANTIED PARTY EACH AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS GUARANTY. 
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION CONTRACT


 


XV-7

















 


CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. 
GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, GUARANTIED
PARTY EACH (I) ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR
GUARANTOR AND GUARANTIED PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
GUARANTOR AND GUARANTIED PARTY HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING
INTO THIS GUARANTY OR ACCEPTING THE BENEFITS THEREOF, AS THE CASE MAY BE, AND
THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE
DEALINGS, AND (II) FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF THIS
GUARANTY.  In the event
of litigation, this Guaranty may be filed as a written consent to a trial by
the court.


 


14.          Counterparts.  This Guaranty may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
for all purposes; but all such counterparts together shall constitute but one
and the same instrument.


 


15.          Guarantied Party as Agent.


 


(a)           Guarantied
Party has been appointed to act as Guarantied Party hereunder by Lenders and,
by acceptance of any of the benefits hereunder, each Swap Counterparty.  Guarantied Party shall be obligated, and
shall have the right hereunder, to make demands, to give notices, to exercise
or refrain from exercising any rights, and to take or refrain from taking any action,
solely in accordance with this Guaranty and the Credit Agreement; provided
that Guarantied Party shall exercise, or refrain from exercising, any remedies
under or with respect to this Guaranty in accordance with the instructions of
(i) Requisite Lenders, or (ii) after payment in full of all
Obligations under the Credit Agreement and the other Loan Documents, the
cancellation, expiration or collateralization with cash or a letter of credit
of all Letters of Credit and the termination of the Commitments, the holders of
a majority of (A) the aggregate notional amount under all Lender Swap
Agreements (including Lender Swap Agreements that have been terminated) or
(B) if all Lender Swap Agreements have been terminated in accordance with
their terms, the aggregate amount then due and payable (exclusive of expenses
and similar payments but including any early termination payments then due)
under such Lender Swap Agreements (Requisite Lenders or, if applicable, such
holders being referred to herein as “Requisite
Obligees”).


 


(b)           Guarantied
Party shall at all times be the same Person that is Administrative Agent under
the Credit Agreement.  Written notice of
resignation by Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute notice of resignation as Guarantied Party under
this Guaranty; and appointment of a successor


 


XV-8

















 


Administrative Agent pursuant to subsection 9.5 of the Credit Agreement
shall also constitute appointment of a successor Guarantied Party under this
Guaranty.  Upon the acceptance of any
appointment as Administrative Agent under subsection 9.5 of the Credit
Agreement by a successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Guarantied Party under this Guaranty, and
the retiring Guarantied Party under this Guaranty shall promptly
(i) transfer to such successor Guarantied Party all sums held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Guarantied Party
under this Guaranty, and (ii) take such other actions as may be necessary
or appropriate in connection with the assignment to such successor Guarantied
Party of the rights created hereunder, whereupon such retiring Guarantied Party
shall be discharged from its duties and obligations under this Guaranty.  After any retiring Guarantied Party’s
resignation hereunder as Guarantied Party, the provisions of this Guaranty
shall inure to its benefits as to any actions taken or omitted to be taken by
it under this Guaranty while it was Guarantied Party hereunder.


 


16.          Notice of Lender Swap Agreements.  Guarantied Party shall not be deemed to have
any duty whatsoever with respect to any Swap Counterparty until it shall have
received written notice in form and substance satisfactory to Guarantied Party
from Company, Guarantor or the Swap Counterparty as to the existence and terms
of the applicable Lender Swap Agreement.


 


 


[Remainder of page
intentionally left blank.]


 


XV-9

















 


IN
WITNESS WHEREOF, Guarantor and, solely for purposes of the
waiver of the right to jury trial contained in Section 13, Guarantied Party
have caused this Guaranty to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.


 


	
   

  	
  FTD GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A.,
  as Administrative

  Agent, as Guarantied Party

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
									



 


XV-S-1

















 


EXHIBIT XVI


 


[FORM OF NOTICE OF PREPAYMENT]


 


NOTICE OF PREPAYMENT


 


Pursuant to that
certain Credit Agreement dated as of July 28, 2006, as amended, supplemented,
amended and restated or otherwise modified to the date hereof (said Credit
Agreement, as so amended, amended and restated, supplemented or otherwise
modified, being the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among FTD, Inc., a Delaware corporation (“Company”), the lenders listed therein as Lenders, Wells
Fargo Bank, N.A., as Administrative Agent (“Administrative
Agent”), and the other agents listed therein, this represents
Company’s notice of prepayment as follows:


 


1.     Date
of Notice:                                  ,
20    


 


2.     Type
of Prepayment/Reduction/Termination:


 


o  a.       Voluntary Prepayment of:


 


o i.             Swing
Line Loan


 


o ii.            Term
Loan


 


o iii.           Revolving
Loan


 


o  b.       Voluntary
Reduction/Termination of Revolving Loan Commitments


 


o  c.       Mandatory Prepayment and/or
Reduction of Revolving Loan Commitments(1) (specify the circumstance requiring
said prepayment and/or reduction by checking the appropriate box below):


 


o i.         Receipt
of Net Asset Sale Proceeds (check one of the options below)


 


o 1.                Prepayment/Reduction
of Revolving Loan Commitments with Net Asset Sale Proceeds that will not be
reinvested


 


o 2.                Prepayment
of Revolving Loans pending reinvestment of Net Asset Sale Proceeds


 


o ii.        Receipt
of Net Insurance/Condemnation Proceeds


 


o iii.         Receipt
of Net Securities Proceeds from the issuance of equity securities


 


o iv.         Receipt
of Net Securities Proceeds from the issuance of indebtedness


 






(1) Mandatory prepayments or reductions in Revolving Loan Commitments
shall be applied as specified in subsections 2.4B(iv) and 2.4D of the Credit
Agreement.


 


XVI-1

















 


o v.          Consolidated
Excess Cash Flow


 


3.     Amount
of prepayment/reduction of Revolving Loan Commitments (as applicable):


 


o  a.       Voluntary/Mandatory 

        Prepayment:(2)                                     $                                                


 


o  b.       Reduction/Termination 

        of
Revolving Loan 

        Commitments:(3)                                  $                                                


 


4.     If
applicable, specify desired application of voluntary prepayment:(4)                                          
                                                                                                                                                                                                                                                                                                            


 


5.     Date
of prepayment or date voluntary reduction/termination of Revolving Loan
Commitments will take effect:                      ,
20    


 


6.     Attached
hereto is (if applicable):


 


o    a.     Officer’s Certificate setting
forth (x) the portion of any Net Asset Sale Proceeds that Company or any
Subsidiary intends to reinvest in equipment or other productive assets of the
general type used in the business of Company or its Subsidiaries and (y) the
proposed use of such portion of the Net Asset Sale Proceeds and such other
information with respect to such reinvestment as Administrative Agent may
reasonable request.


 


o    b.     Officer’s Certificate
demonstrating the calculation of the amount of the applicable Net Asset Sale
Proceeds, Net Insurance/Condemnation Proceeds, Net Securities Proceeds, or
Consolidated Excess Cash Flow, as the case may be, that gave rise to a
mandatory prepayment and/or reduction in Revolving Loan Commitments.


 






(2) This option should be selected for all voluntary and mandatory
prepayments of the Loans.


(3) This option should be selected only if a voluntary termination
or reduction of the Revolving Loan Commitments is the subject of this notice.


(4) Irrespective of any application specified by Company,
voluntary prepayments shall first be applied as specified in subsection
2.4B(iv)(a) of the Credit Agreement.  


 


XVI-2

















 


IN WITNESS
WHEREOF, the undersigned authorized officer of Company has executed this notice
as of the date set forth above.


 


	
   

  	
   

  	
  FTD, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							



 


XVI-3

















 


EXHIBIT XVII



[FORM OF MORTGAGE]


 


This
space reserved for Recorder’s use only


 


MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF RENTS


AND LEASES AND FIXTURE FILING (                    )


 


by and from


 


                                                                          


 


“Mortgagor”


 


to


 


WELLS FARGO BANK, N.A., as
Administrative Agent


 


“Mortgagee”


 


Dated as of                     ,
200    


 


Location:


Municipality:


County:


State:


Tax ID Nos.:


 


THE
SECURED PARTY (MORTGAGEE) DESIRES THIS FIXTURE FILING TO BE


INDEXED
AGAINST THE RECORD OWNER OF THE REAL ESTATE DESCRIBED


HEREIN


 


PREPARED
BY, RECORDING REQUESTED BY,


AND WHEN
RECORDED MAIL TO:


 


O’Melveny
& Myers LLP


400 South
Hope Street


Los
Angeles, California 90071-2899


Attention:  Warren C. Jacob, Esq.


File
918,120-335


 

















 


MORTGAGE,
SECURITY AGREEMENT, ASSIGNMENT OF RENTS


AND
LEASES AND FIXTURE FILING (ILLINOIS)


 


THIS MORTGAGE, SECURITY
AGREEMENT, ASSIGNMENT OF RENTS AND LEASES AND FIXTURE FILING
(                        )
(this “Mortgage”) is dated as of                 ,
200   and from                                                       ,
a                                           
(“Mortgagor”), whose address is                                                                                 
to WELLS FARGO BANK, N.A., as
Administrative Agent (“Mortgagee”),
having an address at 201 Third Street, Eighth Floor, MAC A0187-081, San
Francisco, California  94103, as administrative agent for Lenders.


 


ARTICLE I.


DEFINITIONS


 


Section 1.               Definitions.  All
capitalized terms used herein without definition shall have the respective
meanings ascribed to them in that certain Credit Agreement dated as July 28,
2006 entered into by and among FTD, INC., a
Delaware corporation, as borrower, (“Borrower”),
certain Subsidiaries of Borrower including Mortgagor, as Subsidiary Guarantors,
THE FINANCIAL INSTITUTIONS PARTY FROM TIME TO
TIME TO THE CREDIT AGREEMENT (each individually referred to therein
as a “Lender” and collectively as “Lenders”), WELLS FARGO
BANK, N.A., as syndication agent for Lenders, WELLS FARGO
BANK, N.A., as documentation agent for Lenders, and WELLS FARGO BANK, N.A., as
administrative agent for Lenders (as amended, supplemented, renewed, replaced
or otherwise modified from time to time, the “Credit
Agreement”).  As used herein,
the following terms shall have the following meanings:


 


“Indebtedness”:  (1) All indebtedness of Borrower to Mortgagee
and Lenders, the full and prompt payment of which has been guaranteed by
Mortgagor, including, without limitation, the sum of all (a) principal,
interest and other amounts evidenced or secured by the Loan Documents or any
Hedge Agreements (as defined in the Subsidiary Guaranty), and (b) principal,
interest and other amounts which may hereafter be loaned under or in connection
with the Credit Agreement, any of the other Loan Documents or any Hedge
Agreements, whether evidenced by a promissory note or other instrument which,
by its terms, is secured hereby, and (2) all other indebtedness, obligations
and liabilities now or hereafter existing of any kind of Mortgagor or Borrower
to Mortgagee under the Subsidiary Guaranty and all other documents which recite
that they are intended to be secured by this Mortgage.  Pursuant to the Credit Agreement, Lenders
have agreed to provide Borrower with a term loan credit facility and with a
revolving credit facility, which permits Borrower to borrow certain principal
amounts, repay all or a portion of such principal amounts, and reborrow the
amounts previously paid to Lenders, all upon satisfaction of certain conditions
stated in the Credit Agreement.  The
amount of such revolving credit facility may increase and decrease from time to
time as Lenders advance, Borrower repays, and Lenders re-advance sums on
account of the revolving credit, all as more fully described in the Credit
Agreement.  Additionally, pursuant to the
Credit Agreement, Borrower may enter into Hedge Agreements.  The term “Indebtedness” includes without
limitation all advances and re-advances under the revolving credit feature of
the Credit Agreement and all amounts under the Hedge Agreements.


 


2

















 


“Mortgaged Property”:  All of Mortgagor’s right, title and interest
in and to (1) the fee interest in the real property described in Exhibit A
attached hereto and incorporated herein by this reference, together with any
greater estate therein as hereafter may be acquired by Mortgagor (the “Land”), (2) all improvements now owned or
hereafter acquired by Mortgagor, now or at any time situated, placed or
constructed upon the Land (the “Improvements”;
the Land and Improvements are collectively referred to as the “Premises”), (3) all materials, supplies,
equipment, apparatus and other items of personal property now owned or
hereafter acquired by Mortgagor and now or hereafter attached to, installed in
or used in connection with any of the Improvements or the Land, and water, gas,
electrical, telephone, storm and sanitary sewer facilities and all other
utilities whether or not situated in easements (the “Fixtures”), (4) all reserves, escrows or impounds required
under the Credit Agreement and all deposit accounts maintained by Mortgagor with
respect to the Mortgaged Property (the “Deposit
Accounts”), (5) all leases, licenses, concessions, occupancy
agreements or other agreements (written or oral, now or at any time in effect)
which grant to any Person a possessory interest in, or the right to use, all or
any part of the Mortgaged Property, together with all related security and
other deposits (the “Leases”), (6)
all of the rents, revenues, royalties, income, proceeds, profits, security and
other types of deposits, and other benefits paid or payable by parties to the
Leases for using, leasing, licensing possessing, operating from, residing in,
selling or otherwise enjoying the Mortgaged Property (the “Rents”), (7) all other agreements, such as
construction contracts, architects’ agreements, engineers’ contracts, utility
contracts, maintenance agreements, management agreements, service contracts,
listing agreements, guaranties, warranties, permits, licenses, certificates and
entitlements in any way relating to the construction, use, occupancy, operation,
maintenance, enjoyment or ownership of the Mortgaged Property (the “Property Agreements”), (8) all rights,
privileges, tenements, hereditaments, rights-of-way, easements, appendages and
appurtenances appertaining to the foregoing, (9) all property tax refunds (the “Tax Refunds”), (10) all accessions,
replacements and substitutions for any of the foregoing and all proceeds
thereof (the “Proceeds”), (11) all
insurance policies, unearned premiums therefor and proceeds from such policies
covering any of the above property now or hereafter acquired by Mortgagor (the “Insurance”), and (12) all awards,
damages, remunerations, reimbursements, settlements or compensation heretofore
made or hereafter to be made by any governmental authority pertaining to the Land,
Improvements, or Fixtures (the “Condemnation
Awards”).  As used in this
Mortgage, the term “Mortgaged Property” shall mean all or, where the context
permits or requires, any portion of the above or any interest therein.


 


“Obligations”:  All of the agreements, covenants, conditions,
warranties, representations and other obligations of Mortgagor or Borrower
under the Credit Agreement, the other Loan Documents and any Hedge Agreements.


 


“UCC”: 
The Uniform Commercial Code of                               
or, if the creation, perfection and enforcement of any security interest herein
granted is governed by the laws of a state other than                     ,
then, as to the matter in question, the Uniform Commercial Code in effect in
that state.


 


ARTICLE II.


 


MORTGAGE
OF MORTGAGED PROPERTY


 


Section 1.               Mortgage of Mortgaged
Property.  To secure the full and timely payment of the
Indebtedness and the full and timely performance of the Obligations, Mortgagor


 


3

















 


MORTGAGES, GRANTS, BARGAINS, ASSIGNS, SELLS and
CONVEYS, to Mortgagee the Mortgaged Property, subject, however, to the
Permitted Encumbrances, TO HAVE AND TO HOLD the Mortgaged Property to
Mortgagee, and Mortgagor does hereby bind itself, its successors and assigns to
WARRANT AND FOREVER DEFEND the title to the Mortgaged Property unto Mortgagee.


 


ARTICLE III.


WARRANTIES, REPRESENTATIONS AND COVENANTS


 


Mortgagor warrants,
represents and covenants to Mortgagee as follows:


 


Section 1.               Title to Mortgaged Property
and Lien of this Instrument.  Mortgagor owns the Mortgaged Property free
and clear of any liens, claims or interests, except the Permitted
Encumbrances.  This Mortgage creates
valid, enforceable first priority liens and security interests against the Mortgaged
Property.


 


Section 2.               First Lien Status.  Mortgagor
shall preserve and protect the first lien and security interest status of this
Mortgage and the other Loan Documents. 
If any lien or security interest other than the Permitted Encumbrances
is asserted against the Mortgaged Property, Mortgagor shall promptly, and at
its expense, (a) give Mortgagee a detailed written notice of such lien or
security interest (including origin, amount and other terms), and (b) pay the
underlying claim in full or take such other action so as to cause it to be
released or contest the same in compliance with the requirements of the Credit
Agreement (including the requirement of providing a bond or other security
satisfactory to Mortgagee).


 


Section 3.               Payment and Performance.  Mortgagor
shall pay the Indebtedness when due and shall perform the Obligations in full
when they are required to be performed.


 


Section 4.               Replacement of Fixtures.  Mortgagor
shall not, without the prior written consent of Mortgagee, permit any of the
Fixtures owned or leased by Mortgagor to be removed at any time from the Land
or Improvements, unless the removed item is removed temporarily for maintenance
and repair or, if removed permanently, is permitted to be removed by the Credit
Agreement, or is obsolete and is replaced by an article of equal or better
suitability and value, owned by Mortgagor subject to the liens and security
interests of this Mortgage and the other Loan Documents, and free and clear of
any other lien or security interest except such as may be permitted under the
Credit Agreement or first approved in writing by Mortgagee.


 


Section 5.               Inspection.  Mortgagor
shall permit Mortgagee, and Mortgagee’s agents, representatives and employees,
upon reasonable prior notice to Mortgagor, to inspect the Mortgaged Property
and all books and records of Mortgagor located thereon, and to conduct such
environmental and engineering studies as Mortgagee may reasonably require,
provided that such inspections and studies shall not materially interfere with
the use and operation of the Mortgaged Property.


 


Section 6.               Other Covenants.  All of the
covenants of Borrower (and, if a party thereto, Mortgagor) in the Credit
Agreement are incorporated herein by reference and, together with covenants in
this Article 3, shall be covenants running with the Land.


 


Section 7.               Condemnation Awards and
Insurance Proceeds.


 


Condemnation Awards.  Mortgagor assigns all awards and compensation
to which it is entitled for any condemnation or other taking, or any purchase
in lieu thereof, to Mortgagee


 


4

















 


and authorizes Mortgagee
to collect and receive such awards and compensation and to give proper receipts
and acquittances therefor, subject to the terms of the Credit Agreement.


 


Insurance Proceeds.  Mortgagor assigns to Mortgagee all proceeds
of any insurance policies insuring against loss or damage to the Mortgaged
Property.  Mortgagor authorizes Mortgagee
to collect and receive such proceeds and authorizes and directs the issuer of
each of such insurance policies to make payment for all such losses directly to
Mortgagee, instead of to Mortgagor and Mortgagee jointly, subject to the terms
of the Credit Agreement.


 


Collateral Protection Act.  Pursuant to the terms of the Collateral
Protection Act (815 ILCS 180/1 et seq.), Mortgagor is hereby notified that
unless Mortgagor provides Mortgagee with evidence of the insurance coverage
required by this Mortgage, Mortgagee may purchase insurance at Mortgagee’s
expense to protect Mortgagor’s interests in the Premises, which insurance may,
but need not, protect the interests of Mortgagor in the Premises.  The coverage purchased by Mortgagee may not
pay any claim made by Mortgagor or any claim made against Mortgagor in
connection with the Premises.  Mortgagor
may later cancel any insurance purchased by Mortgagee, but only after providing
Mortgagee with evidence that Mortgagor has obtained the insurance as required
hereunder.  If Mortgagee purchases
insurance, the Mortgagor will be responsible for the costs of such insurance,
including interest and any other charges imposed in connection with the
placement of the insurance, until the effective date of the cancellation or
expiration of the insurance.  The costs
of the insurance may be added to the total obligation secured by this
Mortgage.  The costs of such insurance
may be greater than the cost of insurance Mortgagor may be able to obtain for
itself.


 


ARTICLE IV.


[Intentionally Omitted]


 


ARTICLE V.


DEFAULT AND FORECLOSURE


 


Section 1.               Remedies.  If an Event of
Default exists, Mortgagee may, at Mortgagee’s election, exercise any or all of
the following rights, remedies and recourses:


 


Acceleration.  Declare the Indebtedness to be immediately
due and payable, without further notice, presentment, protest, notice of intent
to accelerate, notice of acceleration, demand or action of any nature
whatsoever (each of which hereby is expressly waived by Mortgagor), whereupon
the same shall become immediately due and payable.


 


Entry on Mortgaged
Property.  Enter the
Mortgaged Property and take exclusive possession thereof and of all books,
records and accounts relating thereto or located thereon.  If Mortgagor remains in possession of the
Mortgaged Property after an Event of Default and without Mortgagee’s prior
written consent, Mortgagee may invoke any legal remedies to dispossess
Mortgagor.


 


Operation of Mortgaged
Property.  Hold, lease,
develop, manage, operate or otherwise use the Mortgaged Property upon such
terms and conditions as Mortgagee may deem reasonable under the circumstances
(making such repairs, alterations, additions and


 


5

















 


improvements and taking
other actions, from time to time, as Mortgagee deems necessary or desirable),
and apply all Rents and other amounts collected by Mortgagee in connection
therewith in accordance with the provisions of Section 5.7.


 


Foreclosure and Sale.  Institute proceedings for the complete
foreclosure of this Mortgage by judicial action, in which case the Mortgaged
Property may be sold for cash or credit in one or more parcels.  With respect to any notices required or
permitted under the UCC, Mortgagor agrees that ten (10) days’ prior written
notice shall be deemed commercially reasonable. 
At any such sale by virtue of any judicial proceedings or any other
legal right, remedy or recourse, the title to and right of possession of any
such property shall pass to the purchaser thereof, and to the fullest extent
permitted by law, Mortgagor shall be completely and irrevocably divested of all
of its right, title, interest, claim, equity, equity of redemption, and demand
whatsoever, either at law or in equity, in and to the property sold and such
sale shall be a perpetual bar both at law and in equity against Mortgagor, and
against all other Persons claiming or to claim the property sold or any part
thereof, by, through or under Mortgagor. 
Mortgagee may be a purchaser at such sale and if Mortgagee is the
highest bidder, Mortgagee may credit the portion of the purchase price that
would be distributed to Mortgagee against the Indebtedness in lieu of paying
cash.  In the event this Mortgage is
foreclosed by judicial action, appraisement of the Mortgaged Property is
waived.


 


Receiver.  Make application to a court of competent
jurisdiction for, and obtain from such court as a matter of strict right and
without notice to Mortgagor or regard to the adequacy of the Mortgaged Property
for the repayment of the Indebtedness, the appointment of a receiver of the
Mortgaged Property, and Mortgagor irrevocably consents to such
appointment.  Any such receiver shall
have all the usual powers and duties of receivers in similar cases, including
the full power to rent, maintain and otherwise operate the Mortgaged Property
upon such terms as may be approved by the court, and shall apply such Rents in
accordance with the provisions of Section 5.7.


 


Other.  Exercise all other rights, remedies and
recourses granted under the Loan Documents, any Hedge Agreements or otherwise
available at law or in equity.


 


Section 2.               Separate Sales.  The Mortgaged
Property may be sold in one or more parcels and in such manner and order as
Mortgagee in its sole discretion may elect; the right of sale arising out of
any Event of Default shall not be exhausted by any one or more sales.


 


Section 3.               Remedies Cumulative,
Concurrent and Nonexclusive.  Mortgagee shall have all rights, remedies and
recourses granted in the Loan Documents and available at law or equity
(including the UCC), which rights (a) shall be cumulated and concurrent, (b)
may be pursued separately, successively or concurrently against Mortgagor or
others obligated under the Loan Documents, or against the Mortgaged Property,
or against any one or more of them, at the sole discretion of Mortgagee, (c)
may be exercised as often as occasion therefor shall arise, and the exercise or
failure to exercise any of them shall not be construed as a waiver or release
thereof or of any other right, remedy or recourse, and (d) are intended to
be, and shall be, nonexclusive.  No action
by Mortgagee in the enforcement of any rights, remedies or recourses under the
Loan Documents, any Hedge Agreements or otherwise at law or equity shall be
deemed to cure any Event of Default.


 


Section 4.               Release of and Resort to
Collateral.  Mortgagee may release, regardless of
consideration and without the necessity for any notice to or consent by the
holder of any


 


6

















 


subordinate lien on the Mortgaged Property, any part
of the Mortgaged Property without, as to the remainder, in any way impairing,
affecting, subordinating or releasing the lien or security interest created in
or evidenced by the Loan Documents or their status as a first and prior lien
and security interest in and to the Mortgaged Property.  For payment of the Indebtedness, Mortgagee
may resort to any other security in such order and manner as Mortgagee may
elect.


 


Section 5.               Waiver of Redemption,
Notice and Marshalling of Assets.  To the fullest
extent permitted by law, Mortgagor hereby irrevocably and unconditionally
waives and releases (a) all benefit that might accrue to Mortgagor by virtue of
any present or future statute of limitations or law or judicial decision
exempting the Mortgaged Property from attachment, levy or sale on execution or
providing for any stay of execution, exemption from civil process, redemption
or extension of time for payment, (b) all notices of any Event of Default or of
Mortgagee’s election to exercise or the actual exercise of any right, remedy or
recourse provided for under the Loan Documents, and (c) any right to a
marshalling of assets or a sale in inverse order of alienation.


 


Section 6.               Discontinuance of
Proceedings.  If Mortgagee shall have proceeded to invoke
any right, remedy or recourse permitted under the Loan Documents and shall
thereafter elect to discontinue or abandon it for any reason, Mortgagee shall
have the unqualified right to do so and, in such an event, Mortgagor and
Mortgagee shall be restored to their former positions with respect to the Indebtedness,
the Obligations, the Loan Documents, the Mortgaged Property and otherwise, and
the rights, remedies, recourses and powers of Mortgagee shall continue as if
the right, remedy or recourse had never been invoked, but no such
discontinuance or abandonment shall waive any Event of Default which may then
exist or the right of Mortgagee thereafter to exercise any right, remedy or
recourse under the Loan Documents for such Event of Default.


 


Section 7.               Application of Proceeds.  The proceeds
of any sale of, and the Rents and other amounts generated by the holding,
leasing, management, operation or other use of the Mortgaged Property, shall be
applied by Mortgagee (or the receiver, if one is appointed) in the following
order unless otherwise required by applicable law:


 


to the payment of the
costs and expenses of taking possession of the Mortgaged Property and of
holding, using, leasing, repairing, improving and selling the same, including,
without limitation (1) receiver’s fees and expenses, including the repayment of
the amounts evidenced by any receiver’s certificates, (2) court costs, (3)
reasonable attorneys’ and accountants’ fees and expenses, and (4) costs of
advertisement;


 


to the payment of the
Indebtedness and performance of the Obligations in accordance with the Credit
Agreement; and


 


the balance, if any, to
the payment of the Person or Persons legally entitled thereto.


 


Section 8.               Occupancy After
Foreclosure.  Any sale of the Mortgaged Property or any
part thereof in accordance with Section 5.1(d) will divest all right,
title and interest of Mortgagor in and to the property sold.  Subject to applicable law, any purchaser at a
foreclosure sale will receive immediate possession of the property purchased.  If Mortgagor retains possession of such property
or any part thereof subsequent to such sale, Mortgagor will be considered a
tenant at sufferance of the purchaser, and will, if Mortgagor remains in
possession after demand to remove, be subject to eviction and removal, forcible
or otherwise, with or without process of law.


 


7

















 


Section 9.               Additional Advances and
Disbursements; Costs of Enforcement.


 


If any Event of Default
exists, Mortgagee shall have the right, but not the obligation, to cure such
Event of Default in the name and on behalf of Mortgagor.  All sums advanced and expenses incurred at
any time by Mortgagee under this Section 5.9, or otherwise under this
Mortgage, any of the other Loan Documents, any Hedge Agreements or applicable
law, shall bear interest from the date that such sum is advanced or expense
incurred, to and including the date of reimbursement, computed at the rate or
rates at which interest is then computed on the Indebtedness, and all such
sums, together with interest thereon, shall be secured by this Mortgage.


 


Mortgagor shall pay all
expenses (including reasonable attorneys’ fees and expenses) of or incidental
to the perfection and enforcement of this Mortgage, the other Loan Documents
and any Hedge Agreements, or the enforcement, compromise or settlement of the
Indebtedness or any claim under this Mortgage, the other Loan Documents and any
Hedge Agreements, and for the curing thereof, or for defending or asserting the
rights and claims of Mortgagee in respect thereof, by litigation or otherwise.


 


Section 10.             No Mortgagee in Possession. Neither the enforcement of any of the remedies under
this Article 5, the assignment of the Rents and Leases under Article
6, the security interests under Article 7, nor any other remedies
afforded to Mortgagee under the Loan Documents, at law or in equity shall cause
Mortgagee to be deemed or construed to be a mortgagee in possession of the
Mortgaged Property, to obligate Mortgagee to lease the Mortgaged Property or
attempt to do so, or to take any action, incur any expense, or perform or
discharge any obligation, duty or liability whatsoever under any of the Leases
or otherwise.


 


ARTICLE VI.


ASSIGNMENT
OF RENTS AND LEASES


 


Section 1.               Assignment.  In furtherance
of and in addition to the assignment made by Mortgagor in Section 2.1 of
this Mortgage, Mortgagor hereby absolutely and unconditionally assigns, sells,
transfers and conveys to Mortgagee all of its right, title and interest in and
to all Leases, whether now existing or hereafter entered into, and all of its
right, title and interest in and to all Rents. 
This assignment is an absolute assignment and not an assignment for
additional security only.  So long as no
Event of Default shall have occurred and be continuing, Mortgagor shall have a
revocable license from Mortgagee to exercise all rights extended to the
landlord under the Leases, including the right to receive and collect all Rents
and to hold the Rents in trust for use in
the payment of the Indebtedness and performance of the Obligations and to
otherwise use the same.  The foregoing
license is granted subject to the conditional limitation that no Event of
Default shall have occurred and be continuing. 
Upon the occurrence and during the continuance of an Event of Default,
whether or not legal proceedings have commenced, and without regard to waste,
adequacy of security for the Indebtedness or the Obligations or solvency of
Mortgagor, the license herein granted shall automatically expire and terminate,
without notice to Mortgagor by Mortgagee (any such notice being hereby
expressly waived by Mortgagor to the extent permitted by applicable law).


 


Section 2.               Perfection Upon
Recordation.  Mortgagor covenants that upon recordation
of this Mortgage Mortgagee shall have, to the extent permitted under applicable
law, a valid and fully perfected, first priority, present assignment of the
Rents arising out of the Leases and all security for such Leases.  Mortgagor acknowledges and agrees that upon
recordation of this Mortgage Mortgagee’s interest in the Rents shall be deemed
to be fully perfected, “choate” and enforced as to Mortgagor and all third
parties following recovery of possession of the Mortgaged Property by
Mortgagee.  For purposes of this Section
6.2, “possession” shall mean any one of the following to the


 


8

















 


extent permitted by applicable law: (a) actual
possession of the Mortgaged Property or (b) taking affirmative actions to gain
possession of the Mortgaged Property that would constitute constructive
possession of the Mortgaged Property such as court authorization to collect
Rents or appointment of a receiver.  To
the extent permitted by applicable law, Mortgagee shall have the right to
collect Rents without taking possession of the Mortgaged Property.


 


Section 3.               Bankruptcy Provisions. 
Without
limitation of the absolute nature of the assignment of the Rents hereunder,
Mortgagor and Mortgagee agree that (a) this Mortgage shall constitute a “security
agreement” for purposes of Section 552(b) of Title 11 of the United States Code
(the “Bankruptcy Code”), (b) the security
interest created by this Mortgage extends to property of Mortgagor acquired
before the commencement of a case in bankruptcy and to all amounts paid as
Rents and (c) such security interest shall extend to all Rents acquired by the
estate after the commencement of any case in bankruptcy.


 


Section 4.               No Merger of Estates.  So long as
part of the Indebtedness and the Obligations secured hereby remain unpaid and
undischarged, the fee and leasehold estates to the Mortgaged Property shall not
merge, but shall remain separate and distinct, notwithstanding the union of
such estates either in Mortgagor, Mortgagee, any tenant or any third party by
purchase or otherwise.


 


ARTICLE VII.


SECURITY AGREEMENT


 


Section 1.               Security Interest.  This Mortgage
constitutes a “security agreement” on personal property within the meaning of
the UCC and other applicable law and with respect to the Fixtures, Deposit
Accounts, Leases, Rents, Property Agreements, Tax Refunds, Proceeds, Insurance
and Condemnation Awards.  To this end,
Mortgagor grants to Mortgagee a first and prior security interest in the
Fixtures, Deposit Accounts, Leases, Rents, Property Agreements, Tax Refunds,
Proceeds, Insurance, Condemnation Awards and all other Mortgaged Property which
is personal property to secure the payment of the Indebtedness and performance
of the Obligations, and agrees that Mortgagee shall have all the rights and
remedies of a secured party under the UCC with respect to such property.  Any notice of sale, disposition or other
intended action by Mortgagee with respect to the Fixtures, Deposit Accounts,
Leases, Rents, Property Agreements, Tax Refunds, Proceeds, Insurance and Condemnation
Awards sent to Mortgagor at least ten (10) days prior to any action under the
UCC shall constitute reasonable notice to Mortgagor.


 


Section 2.               Financing Statements.  Mortgagor
shall execute (if applicable) and deliver to Mortgagee, in form and substance
satisfactory to Mortgagee, such financing statements and such further
assurances as Mortgagee may, from time to time, reasonably consider necessary
to create, perfect and preserve Mortgagee’s security interest hereunder and
Mortgagee may cause such statements and assurances to be recorded and filed, at
such times and places as may be required or permitted by law to so create,
perfect and preserve such security interest. 
Mortgagor’s chief executive office is in the State of                                       at the address set forth in the first
paragraph of this Mortgage.


 


Section 3.               Fixture Filing.  This Mortgage
shall also constitute a “fixture filing” for the purposes of the UCC against
all of the Mortgaged Property which is or is to become fixtures.  Mortgagor grants to Mortgagee a security
interest in all existing and future goods which are now or in the future become
fixtures relating to the Mortgaged Property and the proceeds thereof.  For purposes of the UCC, the following
information concerning the security interest herein granted is furnished:


 


The name of the Debtor (Mortgagor) is:                                         ,
a                                 ,
having an address as set forth in the first paragraph of this Mortgage, whose
corporate organizational number is                           .


 


9

















 


The name of the Secured Party (Mortgagee) is: Wells
Fargo Bank, N.A., having an address as set forth in the first paragraph of this
Mortgage.


 


Information concerning the security interest evidenced
by this instrument may be obtained from the Secured Party at its address above.


 


Mortgagor is the record owner of the real estate
described in this Security Instrument.


 


This document is to be filed in the real estate
records.  A description of the real
estate is attached hereto as Exhibit A.


 


ARTICLE VIII.


 


[Intentionally
Omitted]


 


ARTICLE IX.


MISCELLANEOUS


 


Section 1.               Notices.  Any notice
required or permitted to be given under this Mortgage shall be given in
accordance with Section 10.8 of the Credit Agreement.


 


Section 2.               Covenants Running with the
Land. 
All Obligations contained in this Mortgage are intended by Mortgagor and
Mortgagee to be, and shall be construed as, covenants running with the
Mortgaged Property.  As used herein, “Mortgagor”
shall refer to the party named in the first paragraph of this Mortgage and to
any subsequent owner of all or any portion of the Mortgaged Property.  All Persons who may have or acquire an
interest in the Mortgaged Property shall be deemed to have notice of, and be
bound by, the terms of the Credit Agreement and the other Loan Documents;
however, no such party shall be entitled to any rights thereunder without the
prior written consent of Mortgagee.


 


Section 3.               Attorney-in-Fact.  Mortgagor
hereby irrevocably appoints Mortgagee and its successors and assigns, as its
attorney-in-fact, which agency is coupled with an interest and with full power
of substitution, (a) to execute and/or record any notices of completion,
cessation of labor or any other notices that Mortgagee deems appropriate to
protect Mortgagee’s interest, if Mortgagor shall fail to do so within ten (10)
days after written request by Mortgagee, (b) upon the issuance of a deed
pursuant to the foreclosure of this Mortgage or the delivery of a deed in lieu
of foreclosure, to execute all instruments of assignment, conveyance or further
assurance with respect to the Leases, Rents, Deposit Accounts, Property
Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards in favor
of the grantee of any such deed and as may be necessary or desirable for such
purpose, (c) to prepare, execute and file or record financing statements,
continuation statements, applications for registration and like papers
necessary to create, perfect or preserve Mortgagee’s security interests and
rights in or to any of the Mortgaged Property, and (d) while any Event of
Default exists, to perform any obligation of Mortgagor hereunder, however: (1)
Mortgagee shall not under any circumstances be obligated to perform any obligation
of Mortgagor; (2) any sums advanced by Mortgagee in such performance shall be
added to and included in the Indebtedness and shall bear interest at the rate
or rates at which interest is then computed on the Indebtedness; (3) Mortgagee
as such attorney-in-fact shall only be accountable for such funds as are
actually received by Mortgagee; and (4) Mortgagee shall not be liable to
Mortgagor or any other person or entity for any failure to take any action
which it is empowered to take under this Section 9.3.


 


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Section 4.               Successors and Assigns.  This Mortgage
shall be binding upon and inure to the benefit of Mortgagee and Mortgagor and
their respective successors and assigns. 
Mortgagor shall not, without the prior written consent of Mortgagee,
assign any rights, duties or obligations hereunder.


 


Section 5.               No Waiver.  Any failure by
Mortgagee to insist upon strict performance of any of the terms, provisions or
conditions of the Loan Documents shall not be deemed to be a waiver of same,
and Mortgagee shall have the right at any time to insist upon strict
performance of all of such terms, provisions and conditions.


 


Section 6.               Credit Agreement.  If any
conflict or inconsistency exists between this Mortgage and the Credit
Agreement, the Credit Agreement shall govern.


 


Section 7.               Release or Reconveyance.  Upon payment
in full of the Indebtedness and performance in full of the Obligations or upon
a sale or other disposition of the Mortgaged Property permitted by the Credit
Agreement, Mortgagee, at Mortgagor’s expense, shall release the liens and
security interests created by this Mortgage or reconvey the Mortgaged Property
to Mortgagor.


 


Section 8.               Waiver of Stay, Moratorium
and Similar Rights.  Mortgagor agrees, to the full extent that it
may lawfully do so, that it will not at any time insist upon or plead or in any
way take advantage of any stay, marshalling of assets, extension, redemption or
moratorium law now or hereafter in force and effect so as to prevent or hinder
the enforcement of the provisions of this Mortgage or the Indebtedness or
Obligations secured hereby, or any agreement between Mortgagor and Mortgagee or
any rights or remedies of Mortgagee.


 


Section 9.               Applicable Law.  The provisions
of this Mortgage regarding the creation, perfection and enforcement of the
liens and security interests herein granted shall be governed by and construed
under the laws of the state in which the Mortgaged Property is located.  All other provisions of this Mortgage shall
be governed by the laws of the State of New York (including, without
limitation, Section 5-1401 of the General Obligations Law of the State of New
York), without regard to conflicts of laws principles.


 


Section 10.             Headings.  The Article,
Section and Subsection titles hereof are inserted for convenience of reference
only and shall in no way alter, modify or define, or be used in construing, the
text of such Articles, Sections or Subsections.


 


Section 11.             Entire Agreement.  This Mortgage
and the other Loan Documents embody the entire agreement and understanding
between Mortgagee and Mortgagor and supersede all prior agreements and
understandings between such parties relating to the subject matter hereof and
thereof.  Accordingly, the Loan Documents
may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements of the parties.  There
are no unwritten oral agreements between the parties.


 


Section 12.             Mortgagee as
Administrative Agent; Successor Agents.


 


(a)           Mortgagee has been appointed to act as Administrative
Agent hereunder by the Lenders and by acceptance of any of the benefits
hereunder, each Counterparty under a Hedge Agreement. Mortgagee shall have the
right hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of the Mortgaged
Property) in accordance with the terms of the Credit Agreement, any related
agency agreement among Mortgagee and the Lenders or any such Counterparty (collectively, as
amended, supplemented or otherwise modified or replaced from time to time, the “Agency Documents”) and this Mortgage.  Mortgagor and
all other persons shall be entitled to


 


11

















 


rely
on releases, waivers, consents, approvals, notifications and other acts of Mortgagee, without inquiry into the
existence of required consents or approvals of the Lenders or any such
Counterparty therefor.


 


(b)           Mortgagee shall at all times be the same Person that is Administrative
Agent under the Agency Documents. 
Written notice of resignation by Administrative Agent pursuant to the
Agency Documents shall also constitute notice of resignation as Mortgagee under this Mortgage.  Removal of Administrative Agent pursuant to
any provision of the Agency Documents shall also constitute removal as Mortgagee under this Mortgage.  Appointment of a successor Administrative
Agent pursuant to the Agency Documents shall also constitute appointment of a
successor Mortgagee under this Mortgage.  Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent under the Agency Documents, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Mortgagee under
this Mortgage, and the
retiring or removed Mortgagee shall promptly (i) assign and transfer to
such successor Mortgagee all of its right, title and interest in
and to this Mortgage and the Mortgaged Property, and (ii)
execute and deliver to such successor Mortgagee such assignments and amendments and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Mortgagee of the liens and security interests
created under this Mortgage.
After any retired or removed Administrative Agent’s resignation or removal
hereunder as Mortgagee, the
provisions of this Mortgage
and the Agency Documents shall inure to its benefit as to any actions taken or
omitted to be taken by it under this Mortgage while it was the Mortgagee hereunder.


 


ARTICLE X.


LOCAL LAW
PROVISIONS


 


Section 10.1.        Inconsistencies.  In the event of any inconsistencies
between the terms and conditions of this Article 10 and the other
provisions of this Mortgage, the terms and conditions of this Article 10
shall control and be binding.


 


Section 10.2.        Maximum Principal Sum.  The Indebtedness and Obligations may be
secured by other mortgages and deeds of trust on other real estate in other
counties and other states.  Each and all
of such mortgages and deeds of trust are intended to and shall constitute
security for the entire Indebtedness and all of the Obligations without
allocation.  Notwithstanding anything
herein to the contrary, it is agreed that the maximum amount of Indebtedness
secured by this Mortgage, including all advancements, at any one time shall not
exceed Two Hundred and Twenty Five Million Dollars ($225,000,000.00).


 


Section 10.3.        In Rem Proceedings.  Supplementing Section 5.1 hereof,
mortgage foreclosures and other In Rem
proceedings against Mortgagor may be brought in DuPage County, Illinois or any
federal court of competent jurisdiction in Illinois.


 


Section 10.4.          Future
Advances; Revolving Credit.  This
Mortgage secures, among other things, “revolving credit” as that term is
defined in 815 ILCS 205/4.1, and will secure not only existing indebtedness,
but also future advances, whether such advances are obligatory or to be made at
the option of the Mortgagor or the Lenders, or otherwise, as are made


 


12

















 


within twenty (20) years from the date hereof, to the
same extent as if such future advances were made on the date of execution of
this Mortgage, although there may be no advance made at the time of execution
hereof, and although there may be no indebtedness outstanding at the time any
advance is made.  The lien of this
Mortgage shall be valid as to all such indebtedness and future advances from the
time this Mortgage is recorded.


 


The
proceeds of the indebtedness secured hereby referred to herein shall be used
solely for business purposes and in furtherance of the regular business affairs
of Mortgagor, and the entire principal obligation secured by this Mortgage
constitutes (i) a “business loan” as that term is defined in, and for all
purposes of, 815 ILCS 205/4 (1)(c), and (ii) a “loan secured by a mortgage on
real estate” within the purview and operation of 815 ILCS 205/4(1)(l).


 


Section 10.5.          Illinois
Mortgage Foreclosure Law.  It is
the intention of Mortgagor and Mortgagee that the enforcement of the terms and
provisions of this Mortgage shall be accomplished in accordance with the
Illinois Mortgage Foreclosure Law (the “Act”), 735 ILCS
5/15-1101, et seq., and with respect to such Act Mortgagor agrees and
covenants that:


 


(a)           Mortgagor
and Mortgagee shall have the benefit of all of the provisions of the Act,
including all amendments thereto which may become effective from time to time
after the date hereof.  In the event any
provision of the Act which is specifically referred to herein may be repealed,
Mortgagee shall have the benefit of such provision as most recently existing
prior to such repeal, as though the same were incorporated herein by express
reference;


 


(b)           Wherever
provision is made in this Mortgage or the Credit Agreement for insurance
policies to bear mortgage clauses or other loss payable clauses or endorsements
in favor of Mortgagee, or to confer authority upon Mortgagee to settle or
participate in the settlement of losses under policies of insurance or to hold
and disburse or otherwise control use of insurance proceeds, from and after the
entry of judgment of foreclosure, all such rights and powers of Mortgagee shall
continue in Mortgagee as judgment creditor or mortgagee until confirmation of
sale;


 


(c)           All
advances, disbursements and expenditures made or incurred by Mortgagee before
and during a foreclosure, and before and after judgment of foreclosure, and at
any time prior to sale, and, where applicable, after sale, and during the
pendency of any related proceedings, for the following purposes, in addition to
those otherwise authorized by the Mortgage, or the Credit Agreement or by the
Act (collectively “Protective Advances”),
shall have the benefit of all applicable provisions of the Act, herein below
referred to:


 


all
advances by Mortgagee in accordance with the terms of the Mortgage or the Loan
Agreement to: (i) preserve, maintain, repair, restore or rebuild the
improvements upon the Mortgaged Property; (ii) preserve the lien of the
Mortgage or the priority thereof; (iii) enforce the Mortgage, as referred to in
Subsection (b) (5) of Section 5/15-1302 of the Act;


 


payments
by Mortgagee of (i) principal, interest or other obligations in accordance with
the terms of any senior mortgage or other prior lien or encumbrances; (ii) real
estate taxes and assessments, general and special, and all other taxes and
assessments of any kind or nature whatsoever which are assessed or imposed upon
the Mortgaged Property or any part thereof; (iii) other obligations authorized
by the Mortgagee; (iv) with court approval, any other


 


13

















 


amounts
in connection with other liens, encumbrances or interests reasonably necessary
to preserve the status of title, as referred to in Section 5/15-1505 of the
Act;


 


advances
by Mortgagee in settlement or compromise of any claims asserted by claimants
under senior mortgages or any other prior liens;


 


reasonable
attorneys’ fees and other costs incurred: (i) in connection with the
foreclosure of the Mortgage as referred to in Section 5/15-1504(d)(2) and
5/15-1510 of the Act; (ii) in connection with any action, suit, or proceeding
brought by or against the Mortgagee for the enforcement of the Mortgage or
arising from the interest of the Mortgagee hereunder; or (iii) in preparation
for or in connection with the commencement, prosecution or defense of any other
action related to the Mortgage or the Mortgaged Property;


 


Mortgagee’s
fees and costs, including reasonable attorneys’ fees, arising between the entry
of judgment of foreclosure and the confirmation hearings as referred to in
Section 5/15-1508 (b)(1) of the Act;


 


expenses
deductible from the proceeds of sale as referred to in Section 5/15-1512 (a)
and (b) of the Act;


 


expenses
incurred and expenditures made by Mortgagee for any one or more of the
following: (i) if the Mortgaged Property or any portion thereof constitutes one
or more units under a condominium declaration, assessments imposed on the unit
owner thereof; (ii) if Mortgagor’s interest in the Mortgaged Property is a
leasehold estate under a lease or sublease, rentals or other payments required
to be made by the lessee under the terms of the lease or sublease; (iii)
premiums for casualty and liability insurance paid by Mortgagee whether or not
Mortgagee or a receiver is in possession, if reasonably required in reasonable
amounts, and all renewals thereof, without regard to the limitation to
maintaining of existing insurance in effect at the time any receiver or
mortgagee takes possession of the Mortgage Property imposed by Section
5/15-1704(c)(1) of Act; (iv) repair or restoration of damage or destruction in
excess of available insurance proceeds or condemnation awards; (v) payments
deemed by Mortgagee to be required for the benefit of the Mortgaged Property or
required to be made by the owner of the Mortgaged Property under any grant or
declaration of easement, easement agreement, agreement with any adjoining land owners
or instruments creating covenants or restrictions for the benefit of or
affecting the Mortgaged Property; (vi) shared or common expense assessments
payable to any association or corporation in which the owner of the Mortgaged
Property is a member in any way affecting the Mortgaged Property; (vii) if the
loan secured hereby is a construction loan, as may be authorized by the
applicable commitment, loan agreement or other agreement; (viii) payments
required to be paid by Mortgagor or Mortgagee pursuant to any lease or other
agreement for occupancy of the Mortgaged Property; and (ix) if the Mortgage is
insured, payment of FHA or private mortgage insurance required to keep such
insurance in force.


 


All Protective Advances shall be so much additional
indebtedness secured by this Mortgage, and shall become immediately due and
payable without notice and with interest thereon from the date of the advance
until paid at the rate of interest payable after default under the terms of the
Credit Agreement.


 


14

















 


This
Mortgage shall be a lien for all Protective Advances as to subsequent
purchasers and judgment creditors from the time this Mortgage is recorded
pursuant to Subsection (b)(5) of Section 15-1302 of the Act.


 


(d)           In
addition to any provision of this Mortgage authorizing the Mortgagee to take or
be placed in possession of the Mortgaged Property, or for the appointment of a
receiver, Mortgagee shall have the right, in accordance with Sections 15-1701
and 15-1702 of the Act, to be placed in possession of the Mortgaged Property or
at its request to have a receiver appointed, and such receiver, or Mortgagee,
if and when placed in possession, shall have, in addition to any other powers
provided in this Mortgage, all rights, powers, immunities, and duties as
provided for in Sections 15-1701 and 15-1703 of the Act; and


 


(e)           Mortgagor
acknowledges that the Mortgaged Property does not constitute agricultural real
estate, as said term is defined in Section 15-1201 of the Act or residential
real estate as defined in Section 15-1219 of the Act.  Pursuant to Section 15-1601(b) of the Act,
Mortgagor hereby waives any and all right of reinstatement or redemption.


 


15

















 


IN WITNESS WHEREOF, Mortgagor
has on the date set forth in the acknowledgement hereto, effective as of the
date first above written, caused this instrument to be duly EXECUTED AND
DELIVERED by authority duly given.


 


	
  MORTGAGOR:

  	
   

  	
   

  	
  ,

  
	
   

  	
   

  	
  a

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
										



 


S-1

















 


	
  STATE OF           

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF           

  	
  )

  



 


I,                                                         ,
a Notary Public in and for said County and State, DO HEREBY CERTIFY, that on
the          day of             ,
200  ,                                                 ,
personally known to me to be the                                             
of                                                       ,
a                                                 
, appeared before me and first being duly sworn by me acknowledged that he/she
signed the foregoing instrument in the capacity therein set forth and
acknowledged that he/she signed and delivered the said instrument as his/her
free and voluntary act and as the free and voluntary act and deed of said
corporation, for the uses and purposes therein set forth and that the
statements therein contained are true.


 


In Witness Whereof, I have hereunto set my hand and
Notarial Seal, this          day
of                  ,
200  .


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Notary Public

  	
   

  
	
  My Commission Expires:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


N-1

















 


EXHIBIT A


 


Legal Description of premises located at                                                             :


 


i