Document:

Exhibit 10.63

EXECUTION COPY 

Interactive Network, Inc. 

6800 Broken Sound Parkway NW, Suite 100 

Boca Raton, FL 33487

October 8, 2009

Via e-mail 

To the Holders
and Agent under the SPA 

referred to below 

	
 

	
 

	
Re:

	
Amendment
  No. 2 and Waiver to Securities Purchase Agreement relating to Interactive
  Network, Inc. 

Ladies and
Gentlemen: 

We write this
Amendment No. 2 and Waiver to Securities Purchase Agreement (this “Amendment
and Waiver”) in connection with that certain Securities Purchase Agreement,
dated as of December 6, 2007, among Interactive Network, Inc., a Nevada
corporation (the “Issuer”), the “Senior Guarantors” and “Subordinated
Guarantors” defined therein and party thereto, the “Holders” defined therein
and party thereto and U.S. Bank National Association as administrative agent
and collateral agent for the Holders (the “Agent”), as amended by that
certain Amendment No. 1 to Securities Purchase Agreement, dated as of January
14, 2008 (as so amended, the “SPA”). Terms capitalized but not defined in this
Amendment and Waiver have the respective meanings ascribed in the SPA.  

1. Amendments
to SPA. The SPA is hereby amended as follows: 

          (a)
All references to “Penthouse Media Group Inc.” and “PMGI” in the SPA are hereby
deleted and replaced with “FriendFinder Networks Inc.” and “FFN”, respectively.
All references to “PMGI Notes” are hereby deleted and replaced with “FFN
Notes”. 

          (b)
Effective as of the Closing Date, the definition of “Consolidated Coverage
Ratio” in Section 1.01 of the SPA is amended it its entirety to read as
follows: 

““Consolidated
Coverage Ratio” means, with respect to the Issuer on any Determination Date,
the ratio of: 

          (a)
Consolidated EBITDA for the applicable Measurement Period, to 

          (b)
(i) Consolidated Interest Expense of the Issuer during such Measurement Period
plus (ii) dividends or distributions on or in respect of any Capital Stock of
any Senior Obligor paid during such Measurement Period (except dividends or
distributions paid to the Issuer or another Senior Obligor and to the extent
permitted by Section 7.02(h)); provided that the Consolidated Coverage Ratio
shall be calculated giving pro forma effect, as of the beginning of the
applicable Measurement Period, to any acquisition, incurrence, permanent repayment
or redemption of Indebtedness (including the Notes), issuance or redemption of
Disqualified Capital Stock, acquisition, Asset Sale, 

1

or purchases
of assets that were previously leased, at any time during or subsequent to such
Measurement Period, but on or prior to the applicable Determination Date. 

In making such
computation, Consolidated Interest Expense: 

          (a)
attributable to any Indebtedness bearing a floating interest rate shall be
computed on a pro forma basis as if the rate in effect on the date of
computation had been the applicable rate for the entire Measurement Period, 

          (b)
attributable to interest on any Indebtedness under a revolving Credit Facility
shall be computed on a pro forma basis based upon the average daily balance of
such Indebtedness outstanding during the applicable Measurement Period, 

          (c)
attributable to non-cash interest expense resulting from the amortization of
the original issue discount on the Notes, the Seller Notes and the Second Lien
Notes in accordance with GAAP shall be excluded from such computation (for the
avoidance of doubt, interest paid in kind with respect to unsecured promissory
notes issued to the Sellers in connection with the Various Acquisition shall be
included in such computation), and 

          (d)
excludes any Amendment Fee and Waiver Fee provided in Sections 2 and 3 of
Amendment No. 2 and Waiver to Securities Purchase Agreement dated as of October
8, 2009, so long as such Amendment Fee or Waiver Fee is not paid out of
proceeds from the Qualified Initial Public Offering. 

For purposes
of calculating Consolidated EBITDA of the Issuer for the applicable Measurement
Period, 

          (a)
any Person that is a Subsidiary on such Determination Date (or would become a
Subsidiary on such Determination Date in connection with the transaction that
requires the determination of the Consolidated Coverage Ratio) shall be deemed
to have been a Subsidiary at all times during such Measurement Period, 

          (b)
any Person that is not a Subsidiary on such Determination Date (or would cease
to be a Subsidiary on such Determination Date in connection with the
transaction that requires the determination of the Consolidated Coverage Ratio)
will be deemed not to have been a Subsidiary at any time during such
Measurement Period, 

          (c)
if any Senior Obligor shall have in any manner (i) acquired (including through
an asset acquisition or the commencement of activities constituting such
operating business), or (ii) disposed of (including by way of an Asset Sale or
the termination or discontinuance of activities constituting such operating
business) any operating business during such Measurement Period or after the
end of such Measurement Period and on or prior to the Determination Date, such
calculation shall be made on a pro forma basis in accordance with GAAP as if,
in the case of an asset acquisition or the commencement of activities
constituting such operating business, all such transactions had been
consummated on the first day of such Measurement Period and, in the case of an
Asset Sale or termination or discontinuance of activities 

2

constituting
such operating business, all such transactions had been consummated prior to
the first day of such Measurement Period; provided, however, that such pro
forma adjustment shall not give effect to the Consolidated EBITDA of any
acquired Person to the extent that such Person’s net income would be excluded
pursuant to clauses (a) through (g) of the definition of Consolidated Net
Income; and 

          (d)
any Indebtedness incurred and proceeds thereof received and applied as a result
of the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio will be deemed to have been so incurred, received and applied on
the first day of such Measurement Period.” 

          (c)
Effective as of the Closing Date, the definition of “Consolidated EBITDA” in
Section 1.01 of the SPA is hereby amended in its entirety to read as follows: 

          ““Consolidated
EBITDA” means, with respect to any period, Consolidated Net Income for such
period increased (without duplication), to the extent deducted in calculating
such Consolidated Net Income, by (a) Consolidated Income Tax Expense for such
period; (b) Consolidated Interest Expense for such period without regard to the
proviso therein relating to reduction of Consolidated Interest Expense for
Subsidiaries that are not Wholly-Owned Subsidiaries of the Issuer; (c) the
reduction in revenue for fiscal years ended 2007 and 2008 resulting from adjusting
deferred revenue for fair value in connection with the purchase accounting
adjustments; and (d) depreciation, amortization and any other non-cash items
for such period, less any non-cash items to the extent they increase
Consolidated Net Income (including the partial or entire reversal of reserves
taken in prior periods) for such period, of the Issuer and its Subsidiaries,
including without limitation, amortization of capitalized debt issuance costs
for such period, all of the foregoing determined on a consolidated basis for
the Issuer and its Subsidiaries in accordance with GAAP; provided that, if any
Subsidiary is not a Wholly Owned Subsidiary of the Issuer, Consolidated EBITDA
shall be reduced (to the extent not otherwise reduced in accordance with GAAP)
by an amount equal to (A) the amount of Consolidated EBITDA attributable to
such Subsidiary multiplied by (B) the percentage ownership interest in such
Subsidiary not owned on the last day of such period by the Issuer or any of its
Subsidiaries.” 

          (d)
The definition of “Consolidated Interest Expense” in Section 1.01 of the SPA is
amended to include any Amendment Fee and Waiver Fee provided for in Sections
2 and 3 hereof. 

          (e)
The definition of “Excess Cash Flow” in Section 1.01 of the SPA is hereby
amended in its entirety to read as follows: 

          ““Excess
Cash Flow” means, with respect to any Person for any period, (i)
Consolidated Net Income of such Person and its Subsidiaries for such period,
plus (ii) all non-cash items of such Person and its Subsidiaries deducted in
determining Consolidated Net Income for such period, plus (iii) the reduction
in revenue for such period resulting from adjusting deferred revenue for fair
value in connection with the purchase accounting adjustments, and less (iv) the
cash portion of Capital Expenditures made by such Person 

3

and its
Subsidiaries during such period to the extent permitted to be made under this
Agreement, plus (v) all cash and non-cash VAT Liability items deducted in determining
Consolidated Net Income for such period that relate to activities of Various,
Inc. or its Subsidiaries prior to July 1, 2008. For the avoidance of doubt, no
payment of VAT Liability that relates to activities of Various, Inc. or its
Subsidiaries prior to July 1, 2008, irrespective of whether such payments are
permitted by Section 7.02(q), shall be deducted in calculating Consolidated Net
Income. For the further avoidance of doubt, (y) any refunds of VAT Liability
payments made by any Governmental Authority, after any Obligor has deducted any
funds required by law to be reserved for refunds to customers relating to
transactions that have occurred on and after July 1, 2008, and (z) net cash
proceeds (after attorney’s fees and expenses and any funds required by law to
be reserved for refunds to customers) relating to any final nonappealable
judgments of any successful prosecution of claims relating to VAT Liability
against third parties corresponding to periods prior to July 1, 2008 relating
to the activities of Various, Inc. or its Subsidiaries shall in each case be
included in Excess Cash Flow.” 

          (f)
The definition of “Measurement Period” in Section 1.01 of the SPA is hereby
amended by adding the following at the end thereof: 

          “Notwithstanding
the foregoing, for purposes of the quarters ended March 31, 2008, June 30, 2008
and September 30, 2008, the Measurement Period shall be the quarterly period
most recently ended.” 

          (g)
The definition of “PMGI Notes” in Section 1.01 of the SPA is hereby amended in
its entirety to read as follows: 

          ““FFN
Notes” means (i) FFN’s 15% Senior Secured Notes due 2010 in the initial
aggregate principal amount of $5,000,000 issued pursuant to the Securities
Purchase Agreement, dated as of August 28, 2006, by and among FFN, each
Subsidiary of FFN listed as a guarantor therein, the holders of the securities
listed therein, and the agent party thereto, as amended, (ii) FFN’s 15% Senior
Secured Notes due 2010 in the initial aggregate principal amount of $33,000,000
issued pursuant to the Securities Purchase Agreement, dated as of August 17,
2005, by and among FFN, each Subsidiary of FFN listed as a guarantor therein,
the holders of the securities listed therein, and the agent party thereto, as amended
and (iii) the Subordinated Notes.” 

          (h)
In Section 1.01 of the SPA, the definition of “Qualified Initial Public
Offering” is hereby amended by deleting the references to “Company” therein and
inserting “FFN” in its place. 

          (i)
Section 1.01 of the SPA is hereby amended by the addition of the following
definitions (in the appropriate alphabetical location of Section 1.01): 

          ““Other
Waivers” means collectively (i) that certain Third Amendment and Limited
Waiver to the Securities Purchase Agreements relating to the FFN Notes (other
than the Subordinated Notes), (ii) the amendment and waiver agreement with
respect to 

4

the
Subordinated Notes dated October 8, 2009 and (iii) the waiver from the holders
of the Second Lien Notes, each as in effect as of the Second Amendment
Effective Date.” 

          ““Second
Amendment Effective Date” means the date on which Amendment No. 2 and
Waiver to Securities Purchase Agreement dated as of October 8, 2009, which
amends this Agreement, became effective pursuant to its terms.” 

          ““VAT”
means value added tax and related interest, fines and penalties.” 

          ““VAT
Liability” means all liabilities, monetary obligations, losses, damages,
punitive damages, consequential damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts and consultants
and costs of investigations, but excluding all such amounts arising in
connection with pursuit of indemnification and other damages and remedies concerning
the VAT Liability), fines, penalties, sanctions and interest incurred as a
result of any claim or demand by any Governmental Authority or any third party,
and which relate to payment of VAT by any Obligor.” 

          ““Waiver
Fees” means (i) a non-refundable waiver fee equal to 1.00% of the
outstanding principal amount of the Notes on the date of the earlier of (a)
consummation of a Qualified Initial Public Offering or (b) March 31, 2010
payable to the Holders of the Notes; and (ii) a non-refundable waiver fee equal
to 1.00% of the outstanding principal amount of the Second Lien Notes on the
date of the earlier of (a) consummation of a Qualified Initial Public Offering
or (b) March 31, 2010 payable to the Holders of the Second Lien Notes; provided,
however, that if the waiver fees with respect to the Notes are increased, the
waiver fees with respect to the Second Lien Notes will be similarly increased.”

          (j)
Section 2.04(b) of the SPA is hereby amended and restated in its entirety to
read as follows: 

                    “(b)
Default Interest. To the extent permitted by law, upon the occurrence
and during the continuance of a Default or an Event of Default other than a
Default or Event of Default which has been waived pursuant to Amendment No. 2
and Waiver to this Agreement dated as of October 8, 2009, the principal of, and
all accrued and unpaid interest on, all Notes, fees, indemnities or any other
Obligations of the Obligors under this Agreement and the other Note Documents,
shall bear interest, from the date such Default or Event of Default occurred
until the date such Default or Event of Default is cured or waived in writing
in accordance herewith, at a rate per annum equal at all times to the
Post-Default Rate.” 

          (k)
Section 2.04(e) of the SPA is hereby amended by deleting the following sentence
“Interest at the applicable Post-Default Rate shall be payable on demand.” and
replacing it with “Interest at the applicable Post-Default Rate shall be
payable in cash on demand. For the avoidance of doubt, Defaults waived by
Amendment No. 2 and Waiver to this Agreement dated as of October 8, 2009 shall
not be subject to the Post-Default Rate.” 

          (l)
Section 2.07(a) of the SPA is hereby amended in its entirety to read as follows:

5

          “(a)
On the 45th day (or the next succeeding Business Day if the 45th day is not a
Business Day) after the end of each Fiscal Quarter ending prior to the Second
Amendment Effective Date, or on the 35th day (or the next succeeding Business
Day if the 35th day is not a Business Day) after the end of each Fiscal Quarter
ending after the Second Amendment Effective Date, as applicable, in each case
other than any Fiscal Quarter ending December 31 which repayment shall be
governed pursuant to Section 2.07(b) below, the Issuer shall make principal
payments on the Notes, commencing March 31, 2008, in an aggregate amount equal
to 90% of the Excess Cash Flow (if any) of the Issuer and its Subsidiaries for
such quarterly period. The Issuer will provide written notice to the Agent
describing the amount of any payment to be made pursuant to this Section
2.07(a) no later than fifteen (15) days prior to the date any payment is
required to be made pursuant to the terms hereof.” 

          (m)
The first paragraph of Section 2.07(b) is hereby amended in its entirety to
read as follows: 

          “(b)
The Issuer shall make principal payments on the Notes in annual installments on
the 45th day (or the next succeeding Business Day if the 45th
day is not a Business Day) following the date set forth below (each such date,
an “Installment Payment Date”), or on the 35th day (or the
next succeeding Business Day if the 35th day is not a Business Day)
following an Installment Payment Date occurring after the Second Amendment
Effective Date, as applicable, commencing on December 31, 2008, in an aggregate
amount equal to the greater of (x) 90% of the Excess Cash Flow (if any) of the
Issuer and its Subsidiaries for the Fiscal Quarter most recently ended on
December 31 and (y) the amount specified below for each such Installment
Payment Date, less the aggregate amount of all repayments, if any, made
in the immediately preceding three Fiscal Quarters pursuant to Section 2.07(a)
above: 

	
 

	
 

	
 

	
 

	
 

	
Installment
  Payment Date

	
 

	
 

	
Installment Amount

	
 

	 

	
 

	 

	 

	
 

	
December 31,
  2008

	
 

	
$

	
25,733,763

	
 

	
December 31,
  2009

	
 

	
$

	
38,600,644

	
 

	
December 31,
  2010

	
 

	
$

	
51,467,526

	
 

	
Final
  Maturity Date

	
 

	
$

	
141,535,696”

	
 

          (n)
Section 2.07(e) of the SPA is hereby amended in its entirety to read as follows:

          “Not
later than ten Business Days following the receipt of cash proceeds (after
deduction of (i) underwriting discounts and commissions and (ii) unpaid
out-of-pocket expenses of up to $11,000,000 less any amounts already paid or
from time to time paid for expenses in connection with a Qualified Initial
Public Offering under clauses (1) and (2) of Section 7.02(h)(c) hereof) from a
Qualified Initial Public Offering, the Issuer shall (i) pay the Waiver Fees, if
not already paid on March 31, 2010 in accordance with the definition of “Waiver
Fees,” (ii) after payment of the Waiver Fees, prepay the Notes in an aggregate
amount equal to 50% of the remaining cash proceeds received from such 

6

Qualified
Initial Public Offering at a redemption price of 115% of the principal amount
redeemed, plus accrued and unpaid interest thereon to such redemption date, and
(iii) to the extent there are remaining cash proceeds received from such
Qualified Initial Public Offering, prepay as much as possible any remaining
Notes, at a redemption price of 105% of the principal amount redeemed, plus
accrued and unpaid interest thereon to such redemption date; provided that,
notwithstanding the foregoing, if any holder of Notes foregoes its right to
receive such prepayment, such funds must be used to prepay the other holders of
Notes on a pro rata basis with 50% of such proceeds to be paid at a redemption
price of 115% of the principal amount redeemed and the remaining 50% of such
proceeds to be paid at a redemption price of 105% of the principal amount
redeemed.” 

          (o)
Section 2.08 of the SPA is hereby amended by adding the phrase “Subject to the
third paragraph of this Section 2.08,” at the beginning of the first paragraph
and adding the following new paragraph at the end of Section 2.08: “The rights
described in the foregoing two paragraphs of this Section 2.08 shall not
commence until the consummation of a Qualified Initial Public Offering with
gross proceeds to FFN of less than $25,000,000. In the event that FFN consummates
a Qualified Initial Public Offering with gross proceeds to FFN of $25,000,000
or more, the rights described in the foregoing two paragraphs of this Section
2.08 shall terminate. The foregoing two sentences cannot be modified or deleted
without the written consent of the holders of the Class B Notes.” 

          (p)
Section 5.02(f) of the SPA is hereby amended by adding the following at the end
thereof: 

          “If
revenue generated from the credit card processing agreements referenced in the
officer certificate at any time (measured at the end of each calendar month)
accounts for less than 90% of the credit card processing revenue of the Issuer
or any of its Subsidiaries, the Issuer shall within 30 days of such date,
deliver additional credit card processing agreements to account for at least
90% of credit card processing revenue, together with a new certificate signed
by an Authorized Officer of the Issuer and the Senior Guarantors certifying
that the schedule of credit processing agreements attached to such certificate
account for at least 90% of the credit card processing revenue of the Issuer
and the Senior Guarantors.” 

          (q)
Section 7.01(a)(4) of the SPA is hereby amended by adding the following at the
end thereof: “Such officer’s certificate shall contain an affirmative statement
that no Default or Event of Default has occurred and is continuing with respect
to Sections 7.02(a) and (q) or, if a Default or Event of Default existed,
describing the nature and period of existence thereof and the action which the
Obligors propose to take or have taken with respect thereto;” 

          (r)
Section 7.01(i)(2) of the SPA is hereby amended in its entirety to read as
follows: 

          “(2)
Without limitation to Section 7.01(i)(1), (A) promptly notify the Agent of any
material accounts established after the Closing Date that would have been
required to be disclosed on Schedule 6.01(v) if they had been maintained
as of the Closing Date, (B) cause to be promptly executed and delivered an
Account Control Agreement relating 

7

to each new
account required to be disclosed pursuant to the foregoing clause (A), except
for the Accommodation Bank Accounts, as such term is defined below, and (C)
take such other action reasonably requested by the Agent to maintain the
validity, perfection and priority of the Holders’ Liens on such accounts,
except for the Accommodation Bank Accounts (other than the Wells Fargo Bank
Account listed on Schedule 7.01(u), to which this clause (C) does apply).” 

          (s)
Section 7.01(u) of the SPA is hereby amended in its entirety to read as
follows: 

          “(u)
Accommodation Bank Accounts. Cause the following conditions to be met
with respect to the bank accounts listed on Schedule 7.01(u) hereto (the
“Accommodation Bank Accounts”): 

	
 

	
 

	
 

	
 

	
(1)

	
Sweep all
  funds contained in the account of Wachovia Bank, National Association
  described on Schedule 7.01(u) to a Secured Obligor’s operating account
  that is subject to an effective Account Control Agreement at the following
  times: (i) at least once each calendar month following the Second Amendment
  Effective Date, and (ii) at such time as the account balance equals or
  exceeds $25,000, which sweep shall be the only means by which the account
  holder may deduct funds from this account. Following any sweep, a maximum of
  $2,500 may remain in the account and no sweep will be required if the account
  balance is not greater than $2,500; 

	
 

	
 

	
 

	
 

	
(2)

	
Sweep all
  funds contained in each account of Bank of America described on Schedule
  7.01(u) to a Secured Obligor’s operating account that is subject to an
  effective Account Control Agreement at the following times: (i) at least once
  each calendar month following the Second Amendment Effective Date, and (ii)
  at such time as the account balance of each such account equals or exceeds
  $25,000, which sweep shall be the only means by which the account holder may
  deduct funds from each such account. Following any sweep, a maximum of $2,500
  may remain in each account and no sweep will be required if the account
  balance is not greater than $2,500; 

	
 

	
 

	
 

	
 

	
(3)

	
Sweep all
  funds contained in the account of PayPal described on Schedule 7.01(u)
  to a Secured Obligor’s operating account that is subject to an effective
  Account Control Agreement at the following times: (i) at least once each
  calendar month following the Second Amendment Effective Date, and (ii) at
  such time as the account balance equals or exceeds $25,000, which sweep shall
  be the only means by which the account holder may deduct funds from this
  account. Following any sweep, a maximum of $2,500 may remain in the account
  and no sweep will be required if the account balance is not greater than
  $2,500; 

8

	
 

	
 

	
 

	
 

	
(4)

	
Cause the
  aggregate account balances of the Dresdner Bank AG accounts described on Schedule
  7.01(u) to remain below €35,000 at all times following the Second
  Amendment Effective Date; 

	
 

	
 

	
 

	
 

	
(5)

	
Cause the
  Wells Fargo Bank account listed on Schedule 7.01(u) to be subject to
  an Account Control Agreement no later than sixty (60) days following the
  Second Amendment Effective Date; and 

	
 

	
 

	
 

	
 

	
(6)

	
Cause the
  funds deposited into the ING EURO – Belgium account listed on Schedule
  7.01(u) to be used solely to pay VAT Liability for Spain in a manner
  otherwise consistent with this Agreement. 

          (t)
Section 7.01(v) of the SPA is hereby amended in its entirety to read as
follows: 

          “(v)
Board Composition. To the extent allowed by the national securities
exchange on which FFN’s securities are listed, if applicable, FFN shall take
reasonable steps to cause (i) to be nominated one designee of the Required
Holders to the Board of Directors of FFN (and every committee thereof, except
as set forth in this paragraph), which designee shall be (A) reasonably
satisfactory to FFN so long as no Event of Default has occurred and is
occurring or (B) upon the consummation of a Qualified Initial Public Offering,
reasonably acceptable to FFN’s Nominating Committee of the Board of Directors
and subject to compliance with the applicable national securities exchange regulations
(the “Board Designee”) and (ii) one designee of the Required Holders to
be permitted to attend all meetings of the Board of Directors of FFN (and every
committee thereof, except as set forth in this paragraph) as an observer (the “Board
Observer”). The Board of Directors of FFN will meet at least one (1) time
per Fiscal Quarter. If the Board Designee has been designated, he or she will
be entitled to receive copies of all materials distributed at all meetings of
the Board of Directors of FFN. If the Board Observer has been designated, he or
she will be entitled to receive copies of all materials distributed at all
meetings of the Board of Directors of FFN (and every committee thereof, except
as set forth in this paragraph). However, the Board Observer may be excused
from any meeting of the Board of Directors or any committee thereof, and may be
limited from receiving any board materials, upon the advice of FFN’s outside
counsel and, among other things, will be subject to the same confidentiality
requirements as if he or she were a Director. Upon election of the Board
Designee, FFN will execute a customary form of indemnification agreement in
favor of the Board Designee in his or her capacity as a director of FFN. At all
times during the tenure of the Board Designee, FFN shall maintain a directors’
and officers’ liability insurance policy with coverage in an amount not less
than $10,000,000 from financially sound and reputable insurers. FFN shall pay
to the Board Designee the same compensation for his or her services as a
director of FFN as the compensation, if any, paid to non-employee directors of
FFN. Notwithstanding any of the foregoing, the Board Designee shall not be
entitled to representation on FFN’s Audit Committee, Nominating and Corporate
Governance Committee and Compensation Committee.” 

          (u)
Section 7.01(w) of the SPA is hereby amended in its entirety to read as
follows: 

9

          “(w)
Back-Up Data Center. Cause a Back-Up Data Center to be established,
completed and fully operational by March 31, 2009.” 

          (v)
Section 7.01 of the SPA is hereby amended by adding the following new clauses
at the end thereof: 

          “(x)
Registration Statement. Cause the first Demand Registration Statement
(as defined in the Registration Rights Agreement) to be filed in accordance
with the Registration Rights Agreement no later than four months after the
consummation of the Qualified Initial Public Offering and use its best efforts
to cause the first Demand Registration Statement to be declared effective by
the SEC no later than 180 days after the consummation of the Qualified Initial
Public Offering. Notwithstanding the foregoing, the declaration of
effectiveness of such Demand Registration Statement may be delayed to provide
for any customary lock-up period and extension required by the underwriters of
the Qualified Initial Public Offering, and such delay shall not constitute a
breach of this covenant. 

          (y)
Landlord and Collocation Consents. No later than sixty (60) days after
entering into a real property lease (including a production facility lease)
(but in no event less than sixty (60) days after the Second Amendment Effective
Date), use its commercially reasonable efforts to obtain a landlord consent, in
form and substance satisfactory to the Required Holders, for each such real
property lease. No later than sixty (60) days after entering into a service
agreement concerning the collocation of servers, obtain a letter agreement, in
form and substance satisfactory to the Required Holders, from each such new
counterparty to a service agreement relating to such servers. 

          (z)
Application of Proceeds from VAT Refunds. Cause (i) any refunds or
similar payments by Governmental Authorities of VAT corresponding to periods
prior to July 1, 2008 relating to the activities of Various, Inc. or its
Subsidiaries or (ii) net cash proceeds (after attorney’s fees and expenses and
any funds required by law to be reserved for refunds to customers) relating to
any final nonappealable judgments of any successful prosecution of claims
relating to VAT Liability against third parties corresponding to periods prior
to July 1, 2008 relating to the activities of Various, Inc. or its Subsidiaries
to be treated as Excess Cash Flow.” 

          (w)
Section 7.02(a) of the SPA is hereby amended by adding the following at the end
thereof: “Notwithstanding anything to the contrary set forth in this Agreement
or any other Note Document, any Lien upon or with respect to any of the
properties of any Obligor arising from, or in connection with, any VAT
Liability shall constitute an immediate Event of Default, except for Liens that
may be deemed to arise on frozen assets not exceeding €610,343 with respect to
that certain Various, Inc. credit card processing account administered by
Global Collect, NV located in the Netherlands.” 

          (x)
Section 7.02(h) of the SPA is hereby amended in its entirety to read as
follows: 

10

          “(h)
Restricted Payments. (i) Declare or pay any dividend or other
distribution, direct or indirect, on account of its Capital Stock now or
hereafter outstanding, (ii) make any payment pursuant to a guaranty by Issuer
or any Subsidiary of the Issuer of any FFN Note or any Seller Note, (iii)
repurchase, redeem, retire, defease, make any payment in respect of a sinking
fund or similar payment, purchase or make any other acquisition for value,
direct or indirect, of its Capital Stock or any direct or indirect parent of
any Obligor, now or hereafter outstanding, (iv) make any payment to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights
for the purchase or acquisition of shares of any class of its Capital Stock,
now or hereafter outstanding, (v) return its Capital Stock to any shareholders
or other equity holders of any Obligor or any of its Subsidiaries, or make any
other distribution of property, assets, shares of Capital Stock, warrants,
rights, options, obligations or securities thereto as such or (vi) except for
transactions set forth on Schedule 7.02(h)(i) with respect to the Issuer
and Schedule 7.02(h)(ii) with respect to FFN, hereto, pay any salaries,
bonuses, management fees, or other form of compensation, fees or expenses
(including the reimbursement thereof by any Obligor or its Subsidiaries) to any
of its stockholders or other equityholders, Subsidiaries or Affiliates, or to
any employees or family members thereof (collectively, “Restricted Payments”);
provided, however, (a) in connection with the payment of any tax
obligations of FFN pursuant to a consolidated tax return, the Issuer and any
Subsidiary of the Issuer may make payments to FFN in such amounts equal to the
tax obligations attributable to the operations of Issuer and such Subsidiaries
of Issuer, (Schedule 7.02(h)(a) sets forth the true, correct and
complete list of the amounts and dates of the payments made as of the Second
Amendment Effective Date by the Issuer or its Subsidiaries under this clause
(a), and also sets forth Obligors’ good faith estimate of such payments to be
made after the Second Amendment Effective Date), (b) any Subsidiary of the
Issuer may pay dividends to the Issuer or any Wholly-Owned Subsidiary of the
Issuer, and any Subsidiary of FFN which is a Subordinated Guarantor and not a
Subsidiary of the Issuer may pay dividends to FFN, and (c) provided that no
Default or Event of Default is continuing or would result therefrom (except for
defaults that have been waived by Amendment No. 2 and Waiver to Securities
Purchase Agreement dated as of October 8, 2009), (1) the Issuer may make
Restricted Payments described in clause (i) above to FFN in the amounts of not
more than $6,000,000 during the first Fiscal Quarter of 2008 ($5,000,000 of
which is to be used for general corporate purposes, including but not limited
to the payment of fees and expenses incurred by FFN in connection with and
related to the preparation and filing of registration statements for the public
offering of securities of FFN and $1,000,000 of which shall be limited in use
to payment of actual fees and expenses of third parties in connection with such
public offering of FFN securities); (2) the Issuer or Various, Inc. may pay or
make Restricted Payments to provide funds for FFN to pay the actual fees and
expenses of third parties in connection with a Qualified Initial Public
Offering up to and including the fourth Fiscal Quarter of 2009 in an aggregate
additional amount not to exceed $5,000,000; and (3) the Issuer or Various, Inc.
may make additional Restricted Payments to make cash interest payments on the
FFN Notes and to pay operating expenses, in an aggregate amount not to exceed
an amount per Fiscal Quarter commencing the second Fiscal Quarter of 2008 equal
to $1,000,000 plus the Available Excess Cash Flow for the Fiscal Quarter most
recently ended before an additional Restricted Payment is proposed to be made,
and FFN shall be required to use the full amount of such Available Excess Cash
Flow to make such cash interest payments; provided, however, that no $1,000,000
payments in this clause  (3) shall be
made if FFN is able to make cash interest payments on the FFN Notes and meet
its other obligations for operating expenses (which operating expenses have
been incurred in the ordinary course of business in an amount not to exceed
110% of historical levels over the preceding three fiscal quarters) without
such $1,000,000 payments but with such Available Excess Cash Flow and net
operating cash flow from FFN’s business operations.” 

11

          (y)
Section 7.02 of the SPA is hereby amended by adding a new clause (q) at the end
thereof to read as follows: 

          “(q)
VAT Payments. Make any payments arising from, or in connection with, any
VAT Liability (i) that was accrued prior to July 1, 2008, (ii) that is past due
or (iii) that relates to any activities of Various, Inc. or its Subsidiaries
prior to July 1, 2008, including in each case fees and penalties relating
thereto, (A) in excess of $10,000,000 (inclusive of all such payments made
prior to the Second Amendment Effective Date) in aggregate through the third
Fiscal Quarter of 2010 or (B) in excess of $10,000,000 in aggregate from the
fourth Fiscal Quarter of 2010 through June 30, 2011; provided that the payments
permitted under the immediately preceding clause (A) shall in no event be paid
with cash of the Obligors other than cash reimbursed with proceeds from the
Working Capital Escrow Amount (as defined in the Various Acquisition Agreement)
attributable to the VAT Liability (or for payments made prior to the Second
Amendment Effective Date, reimbursed from the Working Capital Escrow Amount).” 

          (z)
Section 7.03(c) of the SPA is hereby amended in its entirety to read as
follows: 

          “(c)
Consolidated Coverage Ratio. Permit the Consolidated Coverage Ratio
during any period to be less than the amount specified for such period in Schedule
7.03(c); provided however, for the following Measurement Periods ending
after the Second Amendment Effective Date, they shall be as follows: 

	
 

	
 

	
 

	
 

	
i.

	
September
  30, 2009

	
 

	
1.7 to 1.0

	
 

	
 

	
 

	
 

	
ii.

	
December 31,
  2009

	
 

	
1.7 to 1.0

	
 

	
 

	
 

	
 

	
iii.

	
March 31,
  2010

	
 

	
1.8 to 1.0

	
 

	
 

	
 

	
 

	
iv.

	
June 30,
  2010

	
 

	
1.8 to 1.0

	
 

	
 

	
 

	
 

	
v.

	
September
  30, 2010

	
 

	
1.8 to 1.0

	
 

	
 

	
 

	
 

	
vi.

	
December 31,
  2010

	
 

	
1.8 to 1.0

	
 

	
 

	
 

	
 

	
vii.

	
March 31,
  2011

	
 

	
2.0 to 1.0

	
 

	
 

	
 

	
 

	
viii.

	
June 30,
  2011, and at the end of each Measurement Period thereafter

	
 

	
2.1 to 1.0”

          (aa)
Section 7.03(e) of the SPA is hereby amended in its entirety to read as
follows: 

12

          “(e)
Total Debt Ratio. Permit the Total Debt Ratio of the Issuer and its
Subsidiaries during any period to be greater than the amount specified for such
period in Schedule 7.03(e); provided however, for the following three
month periods ending after the Second Amendment Effective Date, they shall be
as follows: 

	
 

	
 

	
 

	
 

	
i.

	
September
  30, 2009

	
 

	
5.6 to 1.0

	
 

	
 

	
 

	
 

	
ii.

	
December 31,
  2009

	
 

	
5.6 to 1.0

	
 

	
 

	
 

	
 

	
iii.

	
March 31,
  2010

	
 

	
5.3 to 1.0

	
 

	
 

	
 

	
 

	
iv.

	
June 30,
  2010

	
 

	
5.3 to 1.0

	
 

	
 

	
 

	
 

	
v.

	
September
  30, 2010

	
 

	
5.3 to 1.0

	
 

	
 

	
 

	
 

	
vi.

	
December 31,
  2010

	
 

	
5.3 to 1.0

	
 

	
 

	
 

	
 

	
vii.

	
March 31,
  2011

	
 

	
4.8 to 1.0

	
 

	
 

	
 

	
 

	
viii.

	
June 30, 2011,
  and at the end of each Measurement Period thereafter

	
 

	
3.4 to 1.0”

          (bb)
Section 9.01(c) of the SPA is hereby amended by (i) deleting “and (i)(2)” and
inserting “, (i)(2) and (z)” in its place and (ii) deleting “and (l)” therein
and inserting “(l) and (q)” in its place. 

          (cc)
Section 9.01 of the SPA is hereby amended by (i) deleting the “or” at the end
of clause (o) thereof, (ii) deleting the period and adding “; or” at the end of
the new clause (q) thereof, (iii) adding the following new clause (q)
immediately after clause (p) thereof to read “if at any time the total VAT
Liability of FFN, the Issuer or any Subsidiary of FFN or the Issuer that
relates to activities of Various, Inc. or its Subsidiaries prior to July 1,
2008 exceeds $45,416,000 plus accrued interest and penalties after June 30,
2009, exclusive of the effect of increases attributable to changes in exchange
rates after June 30, 2009;” (iv) adding the following new clause (r)
immediately after the new clause (q) thereof to read “if the gross proceeds
from a Qualified Initial Public Offering are less than $100 million.” and (v)
amending the phrase “clause (f) or (g)” in clause (i) of the last paragraph of
Section 9.01 to read “clause (f), (g) or (i).” 

          (dd)
Schedule 7.01(u) attached hereto is hereby added as Schedule 7.01(u) to the
SPA. 

          (ee)
Schedule 7.02(h)(a) attached hereto is hereby added as Schedule 7.02(h)(a) to
the SPA. 

          (ff)
Schedule 7.02(h)(ii) is hereby deleted from the SPA and replaced with Schedule
7.02(h)(ii) attached hereto. 

2. Amendment
Fee. Issuer shall pay to the Agent on October 8, 2009 a non-refundable
amendment fee of $3,994,343 which equals 2.00% of the outstanding principal
amount of the Notes (the “Amendment Fee”), which fee shall be due and
payable in cash upon the effective 

13

date of this
Amendment and Waiver and shall be deemed fully earned on such date (it being
understood that the Amendment Fee shall be in addition to any other fees
payable under the SPA and to reimbursement of the fees and expenses of counsel
to the Holders). Payment of the foregoing fee will not be subject to
counterclaim or set-off for, or be otherwise affected by, any claim or dispute
relating to any other matter. The Amendment Fee shall be distributed by the
Agent to the Holders ratably in proportion to the size of each Holder’s Pro
Rata Share. 

3. Waiver
Fees. Issuer shall pay to the Agent the Waiver Fee (described in clause (i)
of the definition of “Waiver Fees”) on the date of the earlier of (a)
consummation of a Qualified Initial Public Offering or (b) March 31, 2010, as
described in Section 2.07(e) of the SPA, as amended by this Amendment and
Waiver (it being understood that such Waiver Fee shall be in addition to any
other fees payable under the SPA and to reimbursement of the fees and expenses
of counsel to the Holders). Payment of such Waiver Fee will not be subject to
counterclaim or set-off for, or be otherwise affected by, any claim or dispute
relating to any other matter. Such Waiver Fee shall be distributed by the Agent
to the Holders ratably in proportion to the size of each Holder’s Pro Rata
Share based on its holdings as of the earlier of (i) the business day
immediately prior to March 31, 2010 and (ii) the business day immediately prior
to the consummation of a Qualified Initial Public Offering. 

4. Limited
Waivers. The undersigned, constituting the Required Holder under the SPA,
hereby waives: 

          (a)
each of the covenants or other provisions or agreements identified on Exhibit
1 attached to this Amendment and Waiver, solely to the extent described on Exhibit
1. Each such respective waiver shall remain effective only if the Issuer
complies with the applicable respective restated obligation (if any) specified
therefor on Exhibit 1; and 

          (b)
any Default or Event of Default in connection with Sections 6.01(h), (i), (k),
(m), (s), (aa), (ee), (ii), (jj), (kk), (mm), and (oo), 7.01(b), 7.03 and
9.01(n) of the SPA arising from, or in connection with, the incurrence or existence
of any VAT Liability of FFN, the Issuer or any Subsidiary of FFN or the Issuer
through the Second Amendment Effective Date (with no cure being required) that
relates to activities of Various, Inc. or its Subsidiaries prior to July 1,
2008. 

          (c)
The parties hereto agree and acknowledge that (i) for purposes of Section 9 of
the Seller Note Subordination Agreement, the execution by U.S. Bank National
Association of this Amendment and Waiver constitutes the prior written consent
of the Senior Interactive Agent for purposes of Section 9 of the Seller Note
Subordination Agreement with respect to the modifications as set forth in Exhibit
D and as described in Exhibit E with respect to the Seller Notes,
(ii) for purposes of Section 5.3(b) of the Interactive First Lien Intercreditor
Agreement, the execution by U.S. Bank National Association of this Amendment
and Waiver constitutes the prior written consent of the Senior Lien Collateral
Agent for purposes of Section 5.3(b) of the Interactive First Lien Intercreditor
Agreement with respect to the modifications set forth in the waiver from the
holders of the Second Lien Notes dated as of the Second Amendment Effective
Date (the “Second Lien Waiver”), (iii) the Required Holders of this Amendment
and Waiver and the holders of the Second Lien Notes pursuant to the Second Lien
Waiver in their capacity as Second Lien Claimholders consent to the
modification of the Subordinated Notes for purposes of Section 5.5(b) of the
PMGI Senior Lien Intercreditor Agreement (for the avoidance of doubt, the 

14

Required
Holders make no representation or warranty as to whether such consent is
sufficient for purposes of Section 5.5(b) of the PMGI Senior Lien Intercreditor
Agreement), and (iv) payment of the amendment and waiver fees pursuant to the
Other Waivers, payment in kind of any interest on the Subordinated Notes or
payment in kind of any interest to be paid pursuant to the modifications as set
forth in Exhibit D and as described in Exhibit E with respect to
the Seller Notes are not subject to the payment subordination provisions of
Section 4.1 of the PMGI Senior Lien Intercreditor Agreement or Section 4.1 of
the Interactive First Lien Intercreditor Agreement; provided, for the avoidance
of doubt, that no interest on the Subordinated Notes or the Seller Notes will
be paid in cash until the prior repayment in full in cash of the Notes. 

5. Most
Favored Nation Provision. It is understood that the Obligors contemplate
entering into the Other Waivers. Except with regard to the Amendment Fee and
Waiver Fee set forth in Sections 2 and 3 hereof vis a vis (i) the
amendment fees and/or the waiver fees provided for in Section 4 of the Third
Amendment and Limited Waiver to the Securities Purchase Agreements relating to
the FFN Notes (other than the Subordinated Notes) and (ii) the amendment fee
provided in the amendment and waiver agreement with respect to the Subordinated
Notes dated October 8, 2009, in the event that the language or provisions of
the Other Waivers with respect to a provision common to, or covering the same
subject matter as, both the SPA and the financing agreement relating to the
Other Waivers executed in connection with the Other Waivers is more favorable
to the holders of such financing agreement than is the corresponding restated
obligation to the Holders under this Amendment and Waiver, such more favorable
restated obligation shall supersede and be deemed substituted for such
corresponding Amendment and Waiver obligation herein for the benefit of all
Holders under the SPA. 

6. Representations
and Warranties of the Issuer. To induce the Holders to enter into this
Amendment and Waiver, the Issuer hereby represents and warrants to each Holder
as follows: 

          (a)
The Issuer’s Due Organization, Power and Authority, Etc. The Issuer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada, having full power and authority (i) to own its
properties and to carry on its business as presently conducted and as proposed
to be conducted, (ii) to execute and deliver this Amendment and Waiver and
(iii) to consummate the other transactions contemplated hereby. The Issuer is
duly qualified to transact business and is validly existing and in good
standing in each jurisdiction in which the failure so to qualify, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect. 

          (b)
Binding Obligations. All corporate action on the part of the Issuer and
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Amendment and Waiver and the performance of all
obligations of the Issuer hereunder has been taken. This Amendment and Waiver
has been duly executed and delivered by the Issuer. This Amendment and Waiver
constitutes the valid, legal and binding obligations of the Issuer, enforceable
against the Issuer in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally and subject to
general principles of equity (regardless of whether such enforcement is
considered in a proceeding at law or at equity). 

15

          (c)
VAT Payments. Attached hereto as Schedule 1 is a true, correct
and complete disclosure of all payments made by any Obligor to any Governmental
Authorities in connection with any VAT Liability of FFN, the Issuer or any
Subsidiary of FFN or the Issuer through the Second Amendment Effective Date
(including a breakdown of (i) all such payments of VAT Liability relating to
activities prior to July 1, 2008, (ii) all such payments of VAT liability
relating to activities after July 1, 2008 and (iii) a reasonably detailed
description of the Obligors’ good faith estimate of its VAT liability relating
to activities prior to July 1, 2008). 

          (d)
FriendFinder (Switzerland) AG. Pursuant to that certain Friendfinder
(Switzerland) AG Share Sale and Purchase Agreement, by and between Various,
Inc. and Translex International Ltd. (“Translex”), effective date October 27,
2008, Various, Inc. sold the outstanding shares of FriendFinder (Switzerland)
AG to Translex for the purchase price of CHF 1.00, payable in cash. Other than
cash in FriendFinder (Switzerland) AG’s bank account not exceeding U.S.
$30,000, which was paid to Various, Inc., FriendFinder (Switzerland) AG had no
assets of greater than nominal value immediately prior to transfer of the
shares in FriendFinder (Switzerland) AG to Translex. 

          (e)
Terminated Subsidiaries. The Board of Directors of FFN has determined
that the preservation of each of FriendFinder Processing (India) Private
Limited and FriendFinder (Switzerland) AG is no longer necessary or desirable
in the conduct of the business of FFN and its Subsidiaries. In addition, each
of Streamray Processing Philippines, Inc. and FriendFinder Processing
Philippines, Inc. has expired pursuant to the terms of its organizational
documents. Each of FriendFinder Processing (India) Private Limited, FriendFinder
(Switzerland) AG, Streamray Processing Philippines, Inc. and FriendFinder
Processing Philippines, Inc. (together, the “Terminated Subsidiaries”)
has been dissolved, divested, sold or expired and had either no assets or
nominal assets at the time of such dissolution, divestiture, sale or
expiration. 

7. Effectiveness
of Amendment and Waiver. This Amendment and Waiver shall become effective
only upon the satisfaction or waiver by the Required Holders of all of the
following conditions precedent: 

          (a)
Agent shall have received this Amendment and Waiver, duly executed and
delivered by the Issuer, the Required Holders and the Guarantors; 

          (b)
Payment by the Issuer of all accrued fees and expenses due and payable on the
date hereof (including, without limitation, legal fees and expenses of counsel
to the Agent and the Holders), and, to the extent invoiced, reimbursement or
other payment of out-of-pocket expenses required to be reimbursed or paid by
the Issuer hereunder or under any other Funding Document; 

          (c)
Required Holders shall have received, or shall be simultaneously receiving, the
Other Waivers and the letter agreement between the Issuer, the holders of the
Seller Notes, and the other parties thereto, in the form attached hereto as Exhibit
E, in form and substance satisfactory to the Required Holders; 

          (d)
Agent shall have received payment of the Amendment Fee provided in Section 2
above; 

16

          (e)
Issuer shall have delivered to Agent an updated copyright schedule as of August
1, 2009; 

          (f)
The Registration Rights Agreement shall have been amended to effectuate the
provisions of 7.01(x) of the SPA, as amended hereby; 

          (g)
Any necessary consents have been obtained to use the proceeds of a Qualified
Initial Public Offering in accordance with the terms of this Amendment and
Waiver; 

          (h)  The letter agreement, dated the date hereof,
relating to the representations and warranties and covenants of FriendFinder
GmbH, a German corporation, shall have been executed and delivered by the
parties thereto; 

          (i)  The Obligors shall have received confirmation
from its independent accountant that upon the effectiveness of the Amendment
and Waiver and the Other Waivers, any going concern qualifications in the
Obligors’ 2008 audited financials will be removed; 

          (j)
Agent shall have received evidence reasonably satisfactory to Holders that
there are sufficient funds in the Working Capital Escrow Amount that will be
released to Issuer to reimburse Issuer for payments for VAT Liability to
Governmental Authorities already made, and to reimburse additional VAT
Liability amounts through September 30, 2010, in an aggregate amount of
$10,000,000; 

          (k)
The receipt by the Required Holders of a certificate or certificates (i)
executed by a duly authorized officer of the Issuer attaching true and complete
copies of resolutions or a written consent of the board of directors of the
Issuer authorizing the execution, delivery and performance of this Amendment
and Waiver, (ii) executed by a duly authorized officer of FFN attaching true
and complete copies of resolutions or written consents of the board of
directors of FFN and the Guarantors listed on Schedule 3 hereto
authorizing the execution, delivery and performance of this Amendment and
Waiver; provided, however, that no later than 60 days after the Second
Amendment Effective Date, FFN shall provide a certificate or certificates of a
duly authorized officer of FFN (the “Additional Officer’s Certificate”)
attaching true and complete copies of resolutions or a written consent of the
board of directors of the Guarantors listed on Schedule 4 hereto
authorizing the execution, delivery and performance of this Amendment and
Waiver, (iii) executed by a duly authorized officer of FFN attaching true and
complete copies of written consents of the requisite stockholders of FFN
consenting to the amendment and restatement of the Certificate of Designations,
Preferences and Rights of Series A Convertible Preferred Stock of FFN
substantially in the form of Exhibit C-1 attached hereto and the
amendment and restatement of the Certificate of Designations, Preferences and
Rights of Series B Convertible Preferred Stock of FFN substantially in the form
of Exhibit C-2 attached hereto, and (iv) executed by a duly authorized
officer of each of the Obligors certifying that all deposit accounts and
securities accounts are subject to Account Control Agreements in favor of the
Collateral Agent, except for the Accommodation Bank Accounts; 

          (l)
The receipt by the Required Holders of a certificate executed by Obligors
certifying that they have delivered credit card notification letter agreements
to the Collateral Agent that account for at least 90% of the current credit
card processing revenue; 

17

          (m)
The receipt by the Agent (with a copy to the Holders) of an opinion of counsel
(which may constitute more than one opinion of counsel) in form and substance
satisfactory to the Holders to the effect that this Amendment and Waiver has
been duly authorized, executed and delivered by the Issuer and FriendFinder
Networks Inc. and constitute valid and binding obligations of the Issuer and
FriendFinder Networks Inc., enforceable in accordance with their respective
terms (subject to customary exceptions); and 

          (n)
The simultaneous consummation of the transactions contemplated by those certain
letter agreements, each dated October 8, 2009, among Marc H. Bell, Staton
Family Investments, Ltd., Florescue Family Corporation and certain holders of
equity securities of FFN, pertaining to the purchase and sale of such equity
securities on the terms set forth therein. 

8. Affirmation
of Obligations. Each Obligor hereby ratifies, affirms and confirms all of the
Funding Documents and each and every Obligation, covenant and agreement of such
Obligor thereunder in all respects, except as otherwise expressly modified or
waived by this Amendment and Waiver upon the terms set forth herein. In
addition, each Obligor hereby represents and warrants that, as of the date
hereof, no counterclaim, right of set-off, claim or defense of any kind exists
or is outstanding with respect to any of the Obligations or against any of the
Holders. Each Guarantor hereby agrees and acknowledges that such Guarantor’s
guarantee of all Obligations of the Issuer under the Note Documents remains and
continues in full force and effect and is hereby ratified and reaffirmed in all
respects. 

9. Miscellaneous.

          (a)
Agent Authorized and Directed to Act. By their signatures below, the
Required Holders hereby authorize and instruct the Agent (i) to execute,
deliver and perform its duties under the documents set forth in Section 7(a)
hereof to which it is a party and (ii) to take all other actions reasonable or
necessary to accomplish or document any of the waivers contemplated by this
Amendment and Waiver. The recitals contained herein shall be taken as the
statements of the other parties hereto, and the Agent assumes no responsibility
for their correctness. The Agent makes no representation as to the validity or
sufficiency of this Amendment and Waiver or the satisfaction of the conditions
listed in Effectiveness of Amendment and Waiver in Section 7 hereof. 

          (b)
Headings. Section and subsection headings in this Amendment and Waiver
are included herein for convenience of reference only and shall not constitute
a part of this Amendment and Waiver for any other purpose or be given any
substantive effect. 

          (c)
Funding Documents Ratified. Except as expressly set forth herein, this
Amendment and Waiver shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights and remedies of, the
Holders under the SPA, the Security Documents or any other Funding Documents;
or be construed to alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the SPA, the
Security Documents or any other Funding Documents, all of which are hereby confirmed
and ratified in all respects and shall continue in full force and effect. 

18

          (d)
Survival of Agreement. All covenants, agreements, representations and
warranties made by any party in this Amendment and Waiver shall be considered
to have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Amendment and Waiver. 

          (e)
Funding Documents. From and after the Second Amendment Effective Date,
this Amendment and Waiver shall be considered a Funding Document for all
purposes of the SPA and the other Funding Documents, entitled to all of the
benefits and protections thereof, and all references to the Funding Documents
shall thereafter be construed to include this Amendment and Waiver. 

          (f)
Applicable Law. THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK. 

          (g)
Counterparts. This Amendment and Waiver may be executed via facsimile or
e-mail, and in counterparts, all of which shall constitute one and the same
instrument. 

[Remainder of page intentionally left blank.]

19

[signature page]

Very truly yours, 

ISSUER:

INTERACTIVE NETWORK, INC.

By:    /s/ Ezra Shashoua                                         

Name:

Ezra Shashoua

Title: 

Chief Financial Officer

SUBORDINATED GUARANTORS:

FRIENDFINDER NETWORKS INC. 

GENERAL MEDIA ART HOLDING, INC.

GENERAL MEDIA COMMUNICATIONS, INC.

GENERAL MEDIA ENTERTAINMENT, INC.

GMCI INTERNET OPERATIONS, INC.

GMI ON-LINE VENTURES, LTD.

PENTHOUSE CLUBS INTERNATIONAL  ESTABLISHMENT

PENTHOUSE IMAGES ACQUISITIONS, LTD.

WEST COAST FACILITIES INC.

PMGI HOLDINGS INC.

PURE ENTERTAINMENT 

TELECOMMUNICATIONS, INC.

By:    /s/ Paul Asher                                                

Name:

Paul Asher

Title: 

Secretary

PENTHOUSE FINANCIAL SERVICES N.V.

By:    /s/ Daniel C. Staton                                       

Name:

Daniel C. Staton

Title: 

Director

[Signature Page to Amendment No. 2 and Waiver to Securities Purchase Agreement]

PENTHOUSE DIGITAL MEDIA PRODUCTIONS INC.

VIDEO BLISS, INC.

DANNI ASHE, INC.

By:    /s/ Ezra Shashoua                                         

Name:

Ezra Shashoua

Title:  

Chief Financial Officer

SNAPSHOT PRODUCTIONS, LLC

By:    /s/ Ezra Shashoua                                         

Name:

Ezra Shashoua

Title:  

Chief Financial Officer

TAN DOOR MEDIA INC. 

By:    /s/ Ezra Shashoua                                         

Name:

Ezra Shashoua

Title:  

Chief Financial Officer

[Signature Page to Amendment No. 2 and Waiver to Securities Purchase Agreement]

SENIOR GUARANTORS:

VARIOUS, INC. 

By:    /s/ Ezra Shashoua                                        

Name:

Ezra Shashoua

Title:  

Chief Financial Officer

GLOBAL ALPHABET, INC.

SHARKFISH, INC.

TRAFFIC CAT, INC.

BIG ISLAND TECHNOLOGY GROUP, INC.

FASTCUPID, INC.

MEDLEY.COM INCORPORATED

PPM TECHNOLOGY GROUP, INC.

FRIENDFINDER CALIFORNIA INC. 

By:    /s/ Ezra Shashoua                                         

Name:

Ezra Shashoua

Title:  

Chief Financial Officer

FRIENDFINDER PROCESSING LTD. 

By:    /s/ Daniel C. Staton                                      

Name:

Daniel C. Staton

Title:  

Chief Financial Officer

FRIENDFINDER UNITED KINGDOM LTD. 

By:    /s/ Paul Asher                                                

Name:

Paul Asher

Title:  

Director

STREAMRAY, INC.

By:    /s/ Daniel C. Staton                                   

Name:

Daniel C. Staton

Title:  

Chief Financial Officer

[Signature Page to Amendment No. 2 and Waiver to Securities Purchase Agreement]

CONFIRM ID, INC.

FRNK TECHNOLOGY GROUP

TRANSBLOOM, INC.

STREAMRAY INC. 

By:    /s/ Ezra Shashoua                                    

Name:

Ezra Shashoua

Title:  

Chief Financial Officer

STREAMRAY PROCESSING LTD.

By:    /s/ Ezra Shashoua                                   

Name:

Ezra Shashoua

Title:  

Attorney

STREAMRAY STUDIOS INC. 

By:    /s/ Ezra Shashoua                                   

Name:

Ezra Shashoua

Title:  

Chief Financial Officer

VENTNOR ENTERPRISE LIMITED 

By:    /s/ Paul Asher                                         

Name:

Paul Asher

Title:  

Director

WIGHT ENTERPRISE LIMITED

By:    /s/ Paul Asher                                         

Name:

Paul Asher

Title:  

Director

[Signature Page to Amendment No. 2 and Waiver to Securities Purchase Agreement]

ACCEPTED AND AGREED

REQUIRED HOLDER:

SATELLITE SENIOR INCOME FUND, LLC

By: 

Satellite Asset Management, L.P.

/s/ Simon Raykher                                   

By:

Name:  Simon Raykher

Title:    General Counsel & Principal

AGENT:

U.S. BANK NATIONAL ASSOCIATION,

As Administrative Agent and Collateral Agent

By:  /s/ Kathy L. Mitchell                             

Name:  Kathy L. Mitchell

Title:    Vice President

[Signature Page to Amendment No. 2 and Waiver to Securities Purchase Agreement]

EXHIBIT 1:
Specified Waivers  

The descriptions of SPA Sections and other
agreements referenced herein are summaries and do not purport to include every
element of the referenced Section. To the extent that SPA Sections are listed,
they shall be waived in their entirety (subject to the Restated Obligation (if
any)) solely with respect to the breach described herein, and no summary of the
provisions in such Section shall be construed to limit the scope of such
waiver. 

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
1.

	
The
  obligations (i) pursuant to SPA Section 7.01(a)(2) to deliver items required
  for the 2007 and 2008 Fiscal Years, respectively, within 90 days after the
  end of the 2007 and 2008 Fiscal Years, respectively, and (ii) pursuant to SPA
  Section 7.01(a)(4) to deliver officer’s certificates for the Fiscal Quarters
  ended March 31, 2008, June 30, 2008, September 30, 2008, March 31, 2009 and
  June 30, 2009.

	
 

	
Issuer must
  deliver all such items for the 2007 and 2008 Fiscal Years and the Fiscal
  Quarters ended March 31, 2008, June 30, 2008, September 30, 2008, March 31,
  2009 and June 30, 2009 on or before 5 days after the effectiveness of this
  Amendment and Waiver.

	
 

	 

	 

	 

	 

	
2.

	
Solely with
  respect to matters waived by this Amendment and Waiver, the obligation
  pursuant to SPA Section 7.01(a)(6) to deliver as soon as possible, and in any
  event within three (3) days after the occurrence of an Event of Default or
  Default, event or development that could have a Material Adverse Effect and
  the action which the affected Obligor proposes to take with respect thereto.

	
 

	
None.

	
 

	 

	 

	 

	 

	
3.

	
Solely as
  concerns the respective legal entity name changes for Penthouse Media Group
  Inc. to FriendFinder Networks Inc. and for its indirect wholly-owned
  subsidiary FriendFinder Network, Inc. to FriendFinder California Inc., the
  obligation pursuant to SPA Section 7.01(a)(12) to provide, no later than 30
  days before such change becomes effective, all information relating to any
  change of name, organizational structure or jurisdiction or organization of
  any Obligor or the obligation pursuant to SPA Section 7.02(l)(iii) not to
  amend the certificates of incorporation related to such name changes.

	
 

	
Not
  applicable.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
4.

	
Solely as
  concerns the legal entity name change from PMGI to FriendFinder Networks
  Inc., the obligation pursuant to Parent Security and Pledge Agreement Section
  4 to not change its name, organizational structure or jurisdiction of
  organization in any manner, without providing at least 15 days’ prior written
  notice to Agent.

	
 

	
None.

	
 

	 

	 

	 

	 

	
5.

	
Solely as
  concerns the legal entity name change from FriendFinder Network, Inc. to
  FriendFinder California Inc., the obligation pursuant to the Issuer Security
  and Pledge Agreement Section 4 to not change its name, organizational
  structure or jurisdiction of organization in any manner, without providing at
  least 15 days’ prior written notice to Agent.

	
 

	
None.

	
 

	 

	 

	 

	 

	
6.

	
Solely as
  concerns the amendment and restatement of the articles of incorporation of
  FFN substantially in the form of Exhibit A attached hereto (and the
  filing thereof with the Nevada Secretary of State) in connection with the
  consummation of a Qualified Initial Public Offering, any obligation of any
  Obligor pursuant to SPA Section 7.02(l)(iii).

	
 

	
Not applicable.

	
 

	 

	 

	 

	 

	
7.

	
Solely as
  concerns the prospective changes to effect a reverse stock split of the
  Series A Convertible Preferred Stock of FFN, a reverse stock split of the
  Series B Convertible Preferred Stock of FFN and a reverse stock split of the
  Common Stock of FFN, each in the range of 15:1 to 25:1, as determined by the
  Board of Directors of FFN to be in the best interests of FFN in connection
  with the consummation of a Qualified Initial Public Offering, any obligation
  of any Obligor pursuant to SPA Section 7.02(l)(iii).

	
 

	
Not
  applicable.

	
 

	 

	 

	 

	 

	
8.

	
Solely as
  concerns the amendment and restatement of the bylaws of FFN substantially in
  the form of Exhibit B attached hereto in connection with the
  consummation of a Qualified Initial Public Offering, any obligation of any
  Obligor pursuant to SPA Section 7.02(l)(iii)(A).

	
 

	
Not
  applicable.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
9.

	
Solely as
  concerns (i) the amendment and restatement of the Certificate of Designations,
  Preferences and Rights of Series A Convertible Preferred Stock of FFN
  substantially in the form of Exhibit C-1 attached hereto (and the
  filing thereof with the Nevada Secretary of State), or if all shares of
  Series A Convertible Preferred Stock of FFN have been converted into common
  stock of FFN, the withdrawal of the Certificate of Designations, Preferences
  and Rights of Series A Convertible Preferred Stock of FFN and (ii) the
  amendment and restatement of the Certificate of Designations, Preferences and
  Rights of Series B Convertible Preferred Stock of FFN substantially in the
  form of Exhibit C-2 attached hereto (and the filing thereof with the
  Nevada Secretary of State), or, if all shares of Series B Convertible
  Preferred Stock of FFN have been converted into common stock of FFN, the
  withdrawal of the Certificate of Designations, Preferences and Rights of
  Series B Convertible Preferred Stock of FFN, in each case in connection with
  the consummation of a Qualified Initial Public Offering, any obligation of
  any Obligor pursuant to SPA Section 7.02(l)(iii).

	
 

	
Not
  applicable.

	
 

	 

	 

	 

	 

	
10.

	
The
  obligation pursuant to SPA Section 5.02(b) to deliver within 60 days after
  the Closing Date for each Non-Obligor the documents contemplated by Section
  5.01(f)(2), (3), (7), (8), (9), (10) and (18), together with (i) a copy of
  the charter, certificate of formation, certificate of limited partnership or
  other publicly filed organizational document of such Obligor certified as of
  a date not more than 30 days prior to the Closing Date by an appropriate
  official of the jurisdiction of organization of such Non-Obligor which shall
  set forth the

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
 

	
same
  complete name of such Non-Obligor as is set forth herein and the
  organizational number of such Non-Obligor, if an organized number is issued
  in such jurisdiction and (ii) a certificate of an officer of each Non-Obligor
  attaching a copy of the by-laws, limited liability company agreement,
  operating agreement, agreement of limited partnership or other organizational
  document of such Non-Obligor, together with all amendments thereto.

	
 

	
 

	
 

	 

	 

	 

	 

	
11.

	
The
  obligation pursuant to SPA Section 5.02(c) to deliver Account Control Agreements.

	
 

	
See Section
  7.01(u).

	
 

	 

	 

	 

	 

	
12.

	
The
  obligation pursuant to SPA Section 5.02(d) to deliver the foreign senior
  guarantor perfection certificate within 75 days of the Closing Date.

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	 

	 

	 

	 

	
13.

	
The
  obligation pursuant to SPA Section 5.02(e) to deliver the FFN perfection
  certificate within 90 days of the Closing Date.

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	 

	 

	 

	 

	
14.

	
The
  obligation pursuant to SPA Section 5.02(f) to deliver letter agreements
  concerning credit card processing agreements and an officer certificate
  within 90 days after the Closing Date, and to deliver letter agreements
  concerning new credit card processing agreements within 150 days after the
  Closing Date.

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	 

	 

	 

	 

	
15.

	
Solely with
  respect to the leased locations at 445 Sherman Avenue, Palo Alto, CA 94306,
  260 Sheridan Avenue, Palo Alto, CA 94306 and 5258 South Eastern Avenue, Las
  Vegas, Nevada 89119, the obligation pursuant to SPA Section 5.02(g)(i) to
  deliver landlord consents within 90 days after the Closing Date.

	
 

	
Obligation
  deemed timely fulfilled. Company shall make commercially reasonable efforts
  for a period not to exceed 45 days after the Second Amendment Effective Date
  to obtain landlord waivers for (i) 20 Broad Street, New York lease on
  substantially the same terms as the landlord waiver previously obtained for 2
  Penn Plaza lease, and (ii) the 19749 Dearborn Street, Chatsworth, CA 91311
  lease on terms reasonably acceptable to Agent.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
16.

	
The
  obligation pursuant to SPA Section 7.01(j) with respect to notice to Agent of
  any change in the location of any Collateral in connection with the leased
  locations at 220 Humboldt Ct., Sunnyvale, CA 94089 and 19749 Dearborn Street,
  Chatsworth, CA 91311.

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	 

	 

	 

	 

	
17.

	
Solely with
  respect to Obligors FriendFinder United Kingdom Ltd., Streamray Processing
  Ltd., Tan Door Media Inc., Streamray Studios Inc., Wight Enterprise Limited
  and Ventnor Enterprise Limited, the obligation pursuant to SPA Sections
  7.01(i) to execute, acknowledge and deliver certain documents as the Agent
  may reasonably require and notify the Agent of certain accounts, deliver
  Account Control Agreements relating thereto and take action to maintain the
  liens on such accounts and 7.01(m) to execute the Guaranty, pursuant to a
  joinder agreement, and deliver an opinion of counsel to the Agent within 10
  Business Days of the date on which it was acquired or created.

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	 

	 

	 

	 

	
18.

	
Solely with
  respect to FriendFinder Processing (India) Private Limited, FriendFinder
  GmbH, Streamray Processing Philippines, Inc., FriendFinder Processing
  Philippines, Inc. and FriendFinder (Switzerland) AG, the obligation pursuant
  to SPA Section 7.01(i) to execute, acknowledge and deliver certain documents
  as the Agent may reasonably require and notify the Agent of certain accounts,
  deliver Account Control Agreements relating thereto and take action to
  maintain the liens on such accounts and SPA Section 7.01(m) to execute the
  Guaranty, pursuant to a joinder agreement, and deliver an opinion of counsel
  to the Agent within 10 Business Days of the date on which it was acquired or
  created.

	
 

	
None, based
on the representations of the Obligors that FriendFinder Processing (India)
Private Limited, Streamray Processing Philippines, Inc. and FriendFinder
Processing Philippines, Inc. have each been dissolved and FriendFinder
(Switzerland) AG has been sold pursuant to Section 6(e) hereof and in the
letter agreement delivered pursuant to Section 7(h) hereof with respect to
FriendFinder GmbH.  

	
 

	 

	 

	 

	 

	
19.

	
SPA Sections
  7.01(i) and (m) with respect to all accounts listed on Schedule 7.01(u), up
  to the Second Amendment Effective Date.

	
 

	
None.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
20.

	
The
  obligation pursuant to SPA Section 5.02(g)(ii) to deliver letter agreements
  within 90 days after the Closing Date.

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	 

	 

	 

	 

	
21.

	
As to the
  Fiscal Quarters ended March 31, 2008 and September 30, 2008, respectively,
  the obligation under SPA Section 7.01(v) to have held a meeting of the Board
  of Directors of FFN.

	
 

	
None.

	
 

	 

	 

	 

	 

	
22.

	
SPA Section
  7.02(l) as it relates to the Other Waivers and the amendment and waiver
  agreements with respect to the Subordinated Notes dated December 19, 2008 and
  March 20, 2009 (provided that such waiver is given with respect to the
  Subordinated Notes amendment and waiver agreement dated December 19, 2008,
  only provided that the amendment fee described therein has been amended and
  restated pursuant to the Other Waiver pertaining to the Subordinated Notes to
  provide that such fee will be paid in additional Subordinated Notes).

	
 

	
None.

	
 

	 

	 

	 

	 

	
23.

	
SPA Sections
  7.02(b), 7.02(l), 7.03(e) and 7.03(f) as they relate to (i) the payment of
  the amendment fee in Section 4 of the Third Amendment and Limited Waiver to
  the Securities Purchase Agreements relating to the FFN Notes (other than the Subordinated
  Notes) dated October 8, 2009 and (ii) the amendment fee provided in the
  amendment and waiver agreement with respect to the Subordinated Notes dated
  October 8, 2009, which amendment fees described in (i) and (ii) above are to
  be paid in additional Indebtedness.

	
 

	
None.

	
 

	 

	 

	 

	 

	
24.

	
SPA Section
  7.02(l) as it relates to the amendment and restatement of the Seller Note
  substantially in the form attached hereto as Exhibit D (which, for the
  avoidance of doubt, shall not permit the granting of any security

	
 

	
None.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
 

	
interests
  with respect to the Seller Note until the Notes have been repaid in full in
  cash) and SPA Sections 7.02(b) and 7.03(e) solely to the extent that (i) the
  adjustment in principal amount reflected in the amendment and restatement of
  the Seller Note or (ii) any adjustment in principal amount made in accordance
  with Section 4(a) of the letter agreement, dated October 8, 2009, between the
  Issuer, the holders of the Seller Notes, and the other parties thereto, in
  the form attached hereto as Exhibit E, constitutes an increase in
  Indebtedness.

	
 

	
 

	
 

	 

	 

	 

	 

	
25.

	
Solely as
  concerns the payments made to Bell & Staton, Inc., or any of its
  affiliates, in 2007, 2008 and 2009 as described on Schedule 2-A
  hereto, any obligation of any Obligor pursuant to SPA Section 7.02(h) not to
  make payments except as set forth on Schedule 7.02(h)(i) and Schedule
  7.02(h)(ii) and pursuant to SPA Section 7.02(j) not to make payments to
  Affiliates other than permitted by SPA Section 7.02(h), to the extent that
  the management payments listed on Schedule 2-A were made during the
  continuance of an event of default under the FFN Notes (except for the
  Subordinated Notes).

	
 

	
None.

	
 

	 

	 

	 

	 

	
26.

	
Solely as
  concerns the payments made to Hinok Media Inc. (and payments made to YouMu,
  Inc. in lieu of Hinok Media Inc. in violation of Section 10 of the
  Independent Contractor Agreement, dated September 21, 2007, between Hinok
  Media Inc. and Various, Inc. which prohibits such assignment) and Legendary
  Technology Inc. set forth on Schedule 2-B hereto, any obligation of
  any Obligor pursuant to SPA Section 7.02(h) not to make payments to any
  stockholder or equity holder except as set forth on Schedule 7.02(h)(i) and Schedule
  7.02(h)(ii) and pursuant to SPA Section 7.02(j) not to enter into
  transactions with Affiliates other than permitted by SPA Section 7.02(h).

	
 

	
None.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
27.

	
Solely as
  concerns the entry by FFN into agreements with each of Marc H. Bell, Daniel
  C. Staton, Andrew Conru and Lars Mapstead or their affiliates as described in
  Section 7 of the letter agreement, dated October 8, 2009, between the Issuer,
  the holders of the Seller Notes, and the other parties thereto, in the form
  attached hereto as Exhibit E, any obligation of FFN pursuant to SPA
  Section 7.02(j) not to enter into transactions with Affiliates other than
  permitted by SPA Section 7.02(h); provided, for the avoidance of doubt, that
  no payments of any kind under such agreements will be made until the prior
  repayment in full in cash of the Notes.

	
 

	
None.

	
 

	 

	 

	 

	 

	
28.

	
Solely as it
  concerns frozen assets not exceeding €610,343 with respect to that certain
  Various, Inc. credit card processing account administered by Global Collect,
  NV located in the Netherlands, an obligation of any Obligor not to create,
  incur, assume or suffer to exist any Liens other than permitted by SPA
  Section 7.02(a).

	
 

	
None.

	
 

	 

	 

	 

	 

	
29.

	
SPA Section
  9.01(e) with respect to defaults arising under the FFN Notes and the Second
  Lien Notes, solely to the extent such defaults have been duly waived pursuant
  to the Other Waivers and the amendment and waiver agreements with respect to
  the Subordinated Notes dated December 19, 2008 and March 20, 2009.

	
 

	
None.Exhibit 10.64

EXECUTION COPY 

Interactive Network, Inc.

6800 Broken Sound Parkway NW, Suite 100 

Boca Raton, FL 33487

October 8, 2009

Via e-mail 

To the Holders
and Agent under the SSA referred to below 

	
   

  	
   

  
	
  Re:

  	
  Amendment
  No. 2 and Waiver to Sellers’ Securities Agreement relating to the
  Subordinated Secured Notes due 2011 of Interactive Network, Inc.
  

  

Ladies and
Gentlemen: 

We write this
Amendment No. 2 and Waiver to Sellers’ Securities Agreement relating to the
Subordinated Secured Notes due 2011 of Interactive Network, Inc. (this “Amendment
and Waiver”) in connection with that certain Sellers’ Securities Agreement,
dated as of December 6, 2007, among Interactive Network, Inc., a Nevada
corporation (the “Issuer”), the “Senior Subordinated Guarantors” and
“Junior Subordinated Guarantors” defined therein and party thereto, the
“Holders” defined therein and party thereto and U.S. Bank National Association
as administrative agent and collateral agent for the Holders (the “Agent”),
as amended by that certain Amendment to Sellers’ Securities Agreement dated as
of December 6, 2008 (as so amended, the “SSA”). Terms capitalized but
not defined in this Amendment and Waiver have the respective meanings ascribed
in the SSA. 

1. Amendments
to SSA. The SSA is hereby amended as follows: 

          (a)
All references to “Penthouse Media Group Inc.” and “PMGI” in the SSA are hereby
deleted and replaced with “FriendFinder Networks Inc.” and “FFN”, respectively.
All references to “PMGI Notes” are hereby deleted and replaced with “FFN
Notes”. 

          (b)
Effective as of the Closing Date, the definition of “Consolidated Coverage
Ratio” in Section 1.01 of the SSA is amended it its entirety to read as
follows: 

	
   

  	
   

  
	
   

  	
  ““Consolidated
  Coverage Ratio” means, with respect to the Issuer on any Determination Date,
  the ratio of: 

  
	
   

  	
   

  
	
   

  	
            (a)
  Consolidated EBITDA for the applicable Measurement Period, to 

  
	
   

  	
   

  
	
   

  	
            (b)
  (i) Consolidated Interest Expense of the Issuer during such Measurement
  Period plus (ii) dividends or distributions on or in respect of any Capital
  Stock of any Senior Subordinated Obligor paid during such Measurement Period
  (except dividends or distributions paid to the Issuer or another Senior
  Subordinated Obligor and to the extent permitted by Section 7.02(h));
  provided that the Consolidated Coverage Ratio shall be calculated giving pro
  forma effect, as of the beginning of the applicable Measurement Period, to
  any acquisition, incurrence, permanent repayment or redemption of 

  

1

 

	
   

  	
   

  
	
   

  	
  Indebtedness
  (including the Sellers’ Secured Notes), issuance or redemption of
  Disqualified Capital Stock, acquisition, Asset Sale, or purchases of assets
  that were previously leased, at any time during or subsequent to such
  Measurement Period, but on or prior to the applicable Determination Date. 

  
	
   

  	
   

  
	
   

  	
  In making
  such computation, Consolidated Interest Expense: 

  
	
   

  	
   

  
	
   

  	
            (a)
  attributable to any Indebtedness bearing a floating interest rate shall be
  computed on a pro forma basis as if the rate in effect on the date of
  computation had been the applicable rate for the entire Measurement Period, 

  
	
   

  	
   

  
	
   

  	
            (b)
  attributable to interest on any Indebtedness under a revolving Credit
  Facility shall be computed on a pro forma basis based upon the average daily
  balance of such Indebtedness outstanding during the applicable Measurement
  Period, 

  
	
   

  	
   

  
	
   

  	
            (c)
  attributable to non-cash interest expense resulting from the amortization of
  the original issue discount on the Sellers’ Secured Notes, the Seller Notes
  and the Senior Secured Notes in accordance with GAAP shall be excluded from
  such computation (for the avoidance of doubt, interest paid in kind with
  respect to unsecured promissory notes issued to the Sellers in connection
  with the Various Acquisition shall be included in such computation), and 

  
	
   

  	
   

  
	
   

  	
            (d) excludes
  any Amendment Fee and Waiver Fee provided in Sections 2 and 3 of Amendment
  No. 2 and Waiver to Sellers’ Securities Agreement dated as of October 8,
  2009, so long as such Amendment Fee or Waiver Fee is not paid out of proceeds
  from the Qualified Initial Public Offering.

  
	
   

  	
   

  
	
   

  	
  For purposes
  of calculating Consolidated EBITDA of the Issuer for the applicable
  Measurement Period, 

  
	
   

  	
   

  
	
   

  	
            (a)
  any Person that is a Subsidiary on such Determination Date (or would become a
  Subsidiary on such Determination Date in connection with the transaction that
  requires the determination of the Consolidated Coverage Ratio) shall be
  deemed to have been a Subsidiary at all times during such Measurement Period,
  

  
	
   

  	
   

  
	
   

  	
            (b)
  any Person that is not a Subsidiary on such Determination Date (or would
  cease to be a Subsidiary on such Determination Date in connection with the
  transaction that requires the determination of the Consolidated Coverage
  Ratio) will be deemed not to have been a Subsidiary at any time during such
  Measurement Period, 

  
	
   

  	
   

  
	
   

  	
            (c)
  if any Senior Subordinated Obligor shall have in any manner (i) acquired
  (including through an asset acquisition or the commencement of activities
  constituting such operating business), or (ii) disposed of (including by way
  of an Asset Sale or the termination or discontinuance of activities
  constituting such operating business) any operating business during such
  Measurement Period or after the end of such Measurement Period and on or
  prior to the Determination Date, such calculation shall be made on a pro
  forma basis in accordance with GAAP as if, in the case of an asset
  acquisition or the commencement of activities constituting such operating
  business, all

  

2

	
   

  	
   

  
	
   

  	
  such
  transactions had been consummated on the first day of such Measurement Period
  and, in the case of an Asset Sale or termination or discontinuance of
  activities constituting such operating business, all such transactions had
  been consummated prior to the first day of such Measurement Period; provided,
  however, that such pro forma adjustment shall not give effect to the
  Consolidated EBITDA of any acquired Person to the extent that such Person’s
  net income would be excluded pursuant to clauses (a) through (g) of the
  definition of Consolidated Net Income; and 

  
	
   

  	
   

  
	
   

  	
            (d)
  any Indebtedness incurred and proceeds thereof received and applied as a
  result of the transaction giving rise to the need to calculate the
  Consolidated Coverage Ratio will be deemed to have been so incurred, received
  and applied on the first day of such Measurement Period.” 

  

          (c)
Effective as of the Closing Date, the definition of “Consolidated EBITDA” in
Section 1.01 of the SSA is hereby amended in its entirety to read as follows: 

	
   

  	
   

  
	
   

  	
            ““Consolidated
  EBITDA” means, with respect to any period, Consolidated Net Income for
  such period increased (without duplication), to the extent deducted in
  calculating such Consolidated Net Income, by (a) Consolidated Income Tax
  Expense for such period; (b) Consolidated Interest Expense for such period
  without regard to the proviso therein relating to reduction of Consolidated
  Interest Expense for Subsidiaries that are not Wholly-Owned Subsidiaries of
  the Issuer; (c) the reduction in revenue for fiscal years ended 2007 and 2008
  resulting from adjusting deferred revenue for fair value in connection with
  the purchase accounting adjustments; and (d) depreciation, amortization and
  any other non-cash items for such period, less any non-cash items to the
  extent they increase Consolidated Net Income (including the partial or entire
  reversal of reserves taken in prior periods) for such period, of the Issuer
  and its Subsidiaries, including without limitation, amortization of
  capitalized debt issuance costs for such period, all of the foregoing
  determined on a consolidated basis for the Issuer and its Subsidiaries in
  accordance with GAAP; provided that, if any Subsidiary is not a Wholly Owned
  Subsidiary of the Issuer, Consolidated EBITDA shall be reduced (to the extent
  not otherwise reduced in accordance with GAAP) by an amount equal to (A) the
  amount of Consolidated EBITDA attributable to such Subsidiary multiplied by
  (B) the percentage ownership interest in such Subsidiary not owned on the
  last day of such period by the Issuer or any of its Subsidiaries.” 

  

          (d)
The definition of “Consolidated Interest Expense” in Section 1.01 of the SSA is
amended to include any Amendment Fee and Waiver Fee provided for in Sections
2 and 3 hereof. 

          (e)
The definition of “Excess Cash Flow” in Section 1.01 of the SSA is hereby
amended in its entirety to read as follows: 

3

	
   

  	
   

  
	
   

  	
            ““Excess
  Cash Flow” means, with respect to any Person for any period, (i)
  Consolidated Net Income of such Person and its Subsidiaries for such period,
  plus (ii) all non-cash items of such Person and its Subsidiaries deducted in
  determining Consolidated Net Income for such period, plus (iii) the reduction
  in revenue for such period resulting from adjusting deferred revenue for fair
  value in connection with the purchase accounting adjustments, and less (iv)
  the cash portion of Capital Expenditures made by such Person and its
  Subsidiaries during such period to the extent permitted to be made under this
  Agreement, plus (v) all cash and non-cash VAT Liability items deducted in
  determining Consolidated Net Income for such period that relate to activities
  of Various, Inc. or its Subsidiaries prior to July 1, 2008. For the avoidance
  of doubt, no payment of VAT Liability that relates to activities of Various, Inc.
  or its Subsidiaries prior to July 1, 2008, irrespective of whether such
  payments are permitted by Section 7.02(q), shall be deducted in calculating
  Consolidated Net Income. For the further avoidance of doubt, (y) any refunds
  of VAT Liability payments made by any Governmental Authority, after any
  Obligor has deducted any funds required by law to be reserved for refunds to
  customers relating to transactions that have occurred on and after July 1,
  2008, and (z) net cash proceeds (after attorney’s fees and expenses and any
  funds required by law to be reserved for refunds to customers) relating to
  any final nonappealable judgments of any successful prosecution of claims
  relating to VAT Liability against third parties corresponding to periods
  prior to July 1, 2008 relating to the activities of Various, Inc. or its
  Subsidiaries shall in each case be included in Excess Cash Flow.” 

  

          (f)
The definition of “Measurement Period” in Section 1.01 of the SPA is hereby
amended by adding the following at the end thereof: 

	
   

  	
   

  
	
   

  	
            “Notwithstanding
  the foregoing, for purposes of the quarters ended March 31, 2008, June 30,
  2008 and September 30, 2008, the Measurement Period shall be the quarterly
  period most recently ended.” 

  

          (g)
The definitions of “PMGI Notes” and “Required Holders” in Section 1.01 of the
SSA are amended in their entirety to read as follows: 

	
   

  	
   

  
	
   

  	
            ““FFN
  Notes” means (i) FFN’s 15% Senior Secured Notes due 2010 in the initial
  aggregate principal amount of $5,000,000 issued pursuant to the Securities
  Purchase Agreement, dated as of August 28, 2006, by and among FFN, each
  Subsidiary of FFN listed as a guarantor therein, the holders of the
  securities listed therein, and the agent party thereto, as amended, (ii)
  FFN’s 15% Senior Secured Notes due 2010 in the initial aggregate principal
  amount of $33,000,000 issued pursuant to the Securities Purchase Agreement,
  dated as of August 17, 2005, by and among FFN, each Subsidiary of FFN listed
  as a guarantor therein, the holders of the securities listed therein, and the
  agent party thereto, as amended and (iii) the Subordinated Notes.” 

  
	
   

  	
   

  
	
   

  	
            ““Required
  Holders” means the Holders whose Pro Rata Shares aggregate at least 51%.” 

  

          (h)
In Section 1.01 of the SSA, the definition of “Qualified Initial Public
Offering” is hereby amended by deleting the references to “Company” therein and
inserting “FFN” in its place. 

          (i)
Section 1.01 of the SSA is hereby amended by the addition of the following
definitions (in the appropriate alphabetical location of Section 1.01): 

4

	
   

  	
   

  
	
   

  	
            ““Other
  Waivers” means collectively (i) that certain Third Amendment and Limited
  Waiver to the Securities Purchase Agreements relating to the FFN Notes (other
  than the Subordinated Notes), (ii) the amendment and waiver agreement with
  respect to the Subordinated Notes dated October 8, 2009 and (iii) the waiver
  from the holders of the Senior Secured Notes, each as in effect as of the
  Second Amendment Effective Date.” 

  
	
   

  	
   

  
	
   

  	
            ““Second
  Amendment Effective Date” means the date on which Amendment No. 2 and
  Waiver to Sellers’ Security Agreement dated as of October 8, 2009, which
  amends this Agreement, became effective pursuant to its terms.” 

  
	
   

  	
   

  
	
   

  	
            ““VAT”
  means value added tax and related interest, fines and penalties.” 

  
	
   

  	
   

  
	
   

  	
            ““VAT
  Liability” means all liabilities, monetary obligations, losses, damages,
  punitive damages, consequential damages, costs and expenses (including all
  reasonable fees, disbursements and expenses of counsel, experts and
  consultants and costs of investigations, but excluding all such amounts
  arising in connection with pursuit of indemnification and other damages and
  remedies concerning the VAT Liability), fines, penalties, sanctions and
  interest incurred as a result of any claim or demand by any Governmental
  Authority or any third party, and which relate to payment of VAT by any
  Obligor.” 

  
	
   

  	
   

  
	
   

  	
            ““Waiver
  Fees” means (i) a non-refundable waiver fee equal to 1.00% of the
  outstanding principal amount of the Senior Secured Notes on the date of the
  earlier of (a) consummation of a Qualified Initial Public Offering or (b)
  March 31, 2010 payable to the Holders of the Senior Secured Notes; and (ii) a
  non-refundable waiver fee equal to 1.00% of the outstanding principal amount
  of the Sellers’ Secured Notes on the date of the earlier of (a) consummation
  of a Qualified Initial Public Offering or (b) March 31, 2010 payable to the
  Holders of the Sellers’ Secured Notes; provided, however, that if the waiver
  fees with respect to the Senior Secured Notes are increased, the waiver fees
  with respect to the Seller’s Secured Notes will be similarly increased.” 

  

          (j)
Section 2.04(c) of the SSA is hereby amended and restated in its entirety to
read as follows: 

               
“(c) Default Interest. To the extent permitted by law, upon the occurrence and
during the continuance of a Default or an Event of Default other than a Default
or Event of Default which has been waived pursuant to Amendment No. 2 and Waiver
to this Agreement dated as of October 8, 2009, the principal of, and all
accrued and unpaid interest on, all Sellers’ Secured Notes, fees, indemnities
or any other Obligations of the Obligors under this Agreement and the other
Sellers’ Secured Note Documents, shall bear interest, from the date such
Default or Event of Default occurred until the date such Default or Event of
Default is cured or waived in writing in accordance herewith, at a rate per
annum equal at all times to the Post-Default Rate.”  

          (k)
Section 2.04(d) of the SSA is hereby amended by deleting the following sentence
“Interest at the applicable Post-Default Rate shall be payable on demand.” and
replacing it with “Interest at the applicable Post-Default Rate shall be
payable in cash on demand. For the avoidance of doubt, Defaults waived by
Amendment No. 2 and Waiver to this Agreement dated as of October 8, 2009 shall
not be subject to the Post-Default Rate.” 

5

	
   

  	
   

  
	
   

  	
  (l) Section
  2.07(d) of the SSA is hereby amended in its entirety to read as follows: 

  
	
   

  	
   

  
	
   

  	
            “Not
  later than ten Business Days following the receipt of cash proceeds (after
  deduction of (i) underwriting discounts and commissions and (ii) unpaid
  out-of-pocket expenses of up to $11,000,000 less any amounts already paid or
  from time to time paid for expenses in connection with a Qualified Initial
  Public Offering under clauses (1) and (2) of Section 7.02(h)(c) hereof) from
  a Qualified Initial Public Offering, the Issuer shall (i) pay the Waiver
  Fees, if not already paid on March 31, 2010 in accordance with the definition
  of “Waiver Fees,” (ii) after payment of the Waiver Fees, prepay the Senior
  Secured Notes in an aggregate amount equal to 50% of the remaining cash
  proceeds received from such Qualified Initial Public Offering at a redemption
  price of 115% of the principal amount redeemed, plus accrued and unpaid
  interest thereon to such redemption date, (iii) to the extent there are
  remaining cash proceeds received from such Qualified Initial Public Offering,
  prepay as much as possible any remaining Senior Secured Notes, at a
  redemption price of 105% of the principal amount redeemed, plus accrued and
  unpaid interest thereon to such redemption date; provided that
  notwithstanding the foregoing, if any holder of Senior Secured Notes foregoes
  its right to receive such prepayment, such funds must be used to prepay the
  other holders of Senior Secured Notes on a pro rata basis with 50% of such
  proceeds to be paid at a redemption price of 115% of the principal amount
  redeemed and the remaining 50% of such proceeds to be paid at a redemption
  price of 105% of the principal amount redeemed, (iv) to the extent there are
  remaining cash proceeds received from such Qualified Initial Public Offering,
  prepay the Sellers’ Secured Notes, at a redemption price of 100% of the
  principal amount redeemed, in an aggregate amount equal to the greater of (1)
  the amount by which such remaining cash proceeds, after reduction for the
  portion thereof required to be paid on the Senior Secured Notes under the
  terms of the Senior Secured Note Documents, exceeds Issuer’s reasonable
  allocation of a portion of such net proceeds for use as working capital and
  then identified strategic acquisitions and (2) ninety percent (90.0%) of such
  cash proceeds, after reduction for the portion thereof required to be paid on
  the Senior Secured Notes under the terms of the Senior Secured Note
  Documents, and (v) to the extent there are any remaining cash proceeds after
  payment in full of the Senior Secured Notes and Sellers’ Secured Notes,
  prepay in cash as much as possible of the FFN Notes (excluding the
  Subordinated Notes) on a pro rata basis at a redemption price equal to 100%
  of the principal amount redeemed, plus accrued and unpaid interest thereon to
  such date of redemption.” 

  

          (m)
Section 5.02(f) of the SSA is hereby amended by adding the following at the end
thereof: 

	
   

  	
   

  
	
   

  	
            “If
  revenue generated from the credit card processing agreements referenced in
  the officer certificate at any time (measured at the end of each calendar
  month) accounts for less than 90% of the credit card processing revenue of
  the Issuer or any of its Subsidiaries, the Issuer shall within 30 days of
  such date, deliver additional credit card processing agreements to account
  for at least 90% of credit card processing revenue, together with a new
  certificate signed by an Authorized Officer of the Issuer and the Senior
  Subordinated Guarantors certifying that the schedule of credit processing
  agreements attached to such certificate account for at least 90% of the
  credit card processing revenue of the Issuer and the Senior Subordinated
  Guarantors.” 

  

6

          (n)
Section 7.01(a)(4) of the SSA is hereby amended by adding the following at the
end thereof: “Such officer’s certificate shall contain an affirmative statement
that no Default or Event of Default has occurred and is continuing with respect
to Sections 7.02(a) and (q) or, if a Default or Event of Default existed,
describing the nature and period of existence thereof and the action which the
Obligors propose to take or have taken with respect thereto;” 

          (o)
Section 7.01(i)(2) of the SSA is hereby amended in its entirety to read as
follows: 

	
   

  	
   

  
	
   

  	
            “(2)
  Without limitation to Section 7.01(i)(1), (A) promptly notify the Agent of
  any material accounts established after the Closing Date that would have been
  required to be disclosed on Schedule 6.01(v) to the Securities
  Purchase Agreement if they had been maintained as of the Closing Date, (B)
  cause to be promptly executed and delivered an Account Control Agreement
  relating to each new account required to be disclosed pursuant to the
  foregoing clause (A) except for the Accommodation Bank Accounts, as such term
  is defined below, and (C) take such other action reasonably requested by the
  Agent to maintain the validity, perfection and priority of the Holders’ Liens
  on such accounts, except for the Accommodation Bank Accounts (other than the
  Wells Fargo Bank Account listed on Schedule 7.01(u), to which this clause (C)
  does apply).” 

  
	
   

  	
   

  
	
   

  	
  (p) Section
  7.01(u) of the SSA is hereby amended in its entirety to read as follows:

  
	
   

  	
   

  
	
   

  	
            “(u)
  Accommodation Bank Accounts. Cause the following conditions to be met
  with respect to the bank accounts listed on Schedule 7.01(u) hereto
  (the “Accommodation Bank Accounts”):

  

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

  	
  Sweep all
  funds contained in the account of Wachovia Bank, National Association
  described on Schedule 7.01(u) to a Secured Obligor’s operating account
  that is subject to an effective Account Control Agreement at the following
  times: (i) at least once each calendar month following the Second Amendment
  Effective Date, and (ii) at such time as the account balance equals or
  exceeds $25,000, which sweep shall be the only means by which the account
  holder may deduct funds from this account. Following any sweep, a maximum of
  $2,500 may remain in the account and no sweep will be required if the account
  balance is not greater than $2,500; 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
  Sweep all
  funds contained in each account of Bank of America described on Schedule
  7.01(u) to a Secured Obligor’s operating account that is subject to an
  effective Account Control Agreement at the following times: (i) at least once
  each calendar month following the Second Amendment Effective Date, and (ii)
  at such time as the account balance of each such account equals or exceeds
  $25,000, which sweep shall be the only means by which the account holder may
  deduct funds from each such account. Following any sweep, a maximum of $2,500
  may remain in each account and no sweep will be required if the account
  balance is not greater than $2,500; 

  

7

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)

  	
  Sweep all
  funds contained in the account of PayPal described on Schedule 7.01(u)
  to a Secured Obligor’s operating account that is subject to an effective
  Account Control Agreement at the following times: (i) at least once each
  calendar month following the Second Amendment Effective Date, and (ii) at
  such time as the account balance equals or exceeds $25,000, which sweep shall
  be the only means by which the account holder may deduct funds from this
  account. Following any sweep, a maximum of $2,500 may remain in the account
  and no sweep will be required if the account balance is not greater than
  $2,500; 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (4)

  	
  Cause the
  aggregate account balances of the Dresdner Bank AG accounts described on Schedule
  7.01(u) to remain below €35,000 at all times following the Second
  Amendment Effective Date; 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (5)

  	
  Cause the
  Wells Fargo Bank account listed on Schedule 7.01(u) to be subject to
  an Account Control Agreement no later than sixty (60) days following the
  Second Amendment Effective Date; and 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (6)

  	
  Cause the
  funds deposited into the ING EURO – Belgium account listed on Schedule
  7.01(u) to be used solely to pay VAT Liability for Spain in a manner
  otherwise consistent with this Agreement. 

  

	
   

  	
   

  
	
   

  	
  (q) Section
  7.01(v) of the SSA is hereby amended in its entirety to read as follows: 

  
	
   

  	
   

  
	
   

  	
            “(v)
  Board Composition. To the extent allowed by the national securities
  exchange on which FFN’s securities are listed, if applicable, FFN shall take
  reasonable steps to cause (i) to be nominated one designee of the Required
  Holders to the Board of Directors of FFN (and every committee thereof, except
  as set forth in this paragraph), which designee shall be (A) reasonably
  satisfactory to FFN so long as no Event of Default has occurred and is
  occurring or (B) upon the consummation of a Qualified Initial Public
  Offering, reasonably acceptable to FFN’s Nominating Committee of the Board of
  Directors and subject to compliance with the applicable national securities
  exchange regulations (the “Board Designee”) and (ii) one designee of
  the Required Holders to be permitted to attend all meetings of the Board of
  Directors of FFN (and every committee thereof, except as set forth in this
  paragraph) as an observer (the “Board Observer”). The Board of
  Directors of FFN will meet at least one (1) time per Fiscal Quarter. If the
  Board Designee has been designated, he or she will be entitled to receive
  copies of all materials distributed at all meetings of the Board of Directors
  of FFN. If the Board Observer has been designated, he or she will be entitled
  to receive copies of all materials distributed at 

  

8

	
   

  	
   

  
	
   

  	
  all meetings
  of the Board of Directors of FFN (and every committee thereof, except as set
  forth in this paragraph). However, the Board Observer may be excused from any
  meeting of the Board of Directors or any committee thereof, and may be
  limited from receiving any board materials, upon the advice of FFN’s outside
  counsel and, among other things, will be subject to the same confidentiality
  requirements as if he or she were a Director. Upon election of the Board
  Designee, FFN will execute a customary form of indemnification agreement in
  favor of the Board Designee in his or her capacity as a director of FFN. At
  all times during the tenure of the Board Designee, FFN shall maintain a
  directors’ and officers’ liability insurance policy with coverage in an
  amount not less than $10,000,000 from financially sound and reputable
  insurers. FFN shall pay to the Board Designee the same compensation for his
  or her services as a director of FFN as the compensation, if any, paid to
  non-employee directors of FFN. Notwithstanding any of the foregoing, the
  Board Designee shall not be entitled to representation on FFN’s Audit
  Committee, Nominating and Corporate Governance Committee and Compensation
  Committee.” 

  
	
   

  	
   

  
	
   

  	
  (r) Section
  7.01(w) of the SSA is hereby amended in its entirety to read as follows: 

  
	
   

  	
   

  
	
   

  	
            “(w)
  Back-Up Data Center. Cause a Back-Up Data Center to be established,
  completed and fully operational by March 31, 2009.” 

  
	
   

  	
   

  
	
   

  	
  (s) Section
  7.01 of the SSA is hereby amended by adding the following new clauses at the
  end thereof: 

  
	
   

  	
   

  
	
   

  	
            “(x)
  Registration Statement. Cause the first Demand Registration Statement
  (as defined in the Registration Rights Agreement) to be filed in accordance
  with the Registration Rights Agreement no later than four months after the
  consummation of the Qualified Initial Public Offering and use its best
  efforts to cause the first Demand Registration Statement to be declared
  effective by the SEC no later than 180 days after the consummation of the
  Qualified Initial Public Offering. Notwithstanding the foregoing, the
  declaration of effectiveness of such Demand Registration Statement may be
  delayed to provide for any customary lock-up period and extension required by
  the underwriters of the Qualified Initial Public Offering, and such delay
  shall not constitute a breach of this covenant. 

  
	
   

  	
   

  
	
   

  	
            (y)
  Landlord and Collocation Consents. No later than sixty (60) days after
  entering into a real property lease (including a production facility lease)
  (but in no event less than sixty (60) days after the Second Amendment
  Effective Date), use its commercially reasonable efforts to obtain a landlord
  consent, in form and substance satisfactory to the Required Holders, for each
  such real property lease. No later than sixty (60) days after entering into a
  service agreement concerning the collocation of servers, obtain a letter
  agreement, in form and substance satisfactory to the Required Holders, from
  each such new counterparty to a service agreement relating to such servers.

  

9

          (z)
Application of Proceeds from VAT Refunds. Cause (i) any refunds or similar
payments by Governmental Authorities of VAT corresponding to periods prior to
July 1, 2008 relating to the activities of Various, Inc. or its Subsidiaries or
(ii) net cash proceeds (after attorney’s fees and expenses and any funds
required by law to be reserved for refunds to customers) relating to any final
nonappealable judgments of any successful prosecution of claims relating to VAT
Liability against third parties corresponding to periods prior to July 1, 2008
relating to the activities of Various, Inc. or its Subsidiaries to be treated
as Excess Cash Flow.”  

          (t)
Section 7.02(a) of the SSA is hereby amended by adding the following at the end
thereof: “Notwithstanding anything to the contrary set forth in this Agreement
or any other Note Document, any Lien upon or with respect to any of the
properties of any Obligor arising from, or in connection with, any VAT
Liability shall constitute an immediate Event of Default, except for Liens that
may be deemed to arise on frozen assets not exceeding €610,343 with respect to
that certain Various, Inc. credit card processing account administered by
Global Collect, NV located in the Netherlands.” 

          (u)  Section 7.02(h) of the SSA is hereby amended
in its entirety to read as follows: 

          “(h)
Restricted Payments. (i) Declare or pay any dividend or other
distribution, direct or indirect, on account of its Capital Stock now or
hereafter outstanding, (ii) make any payment pursuant to a guaranty by Issuer
or any Subsidiary of the Issuer of any FFN Note or any Seller Note, (iii)
repurchase, redeem, retire, defease, make any payment in respect of a sinking
fund or similar payment, purchase or make any other acquisition for value,
direct or indirect, of its Capital Stock or any direct or indirect parent of
any Obligor, now or hereafter outstanding, (iv) make any payment to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights
for the purchase or acquisition of shares of any class of its Capital Stock,
now or hereafter outstanding, (v) return its Capital Stock to any shareholders
or other equity holders of any Obligor or any of its Subsidiaries, or make any
other distribution of property, assets, shares of Capital Stock, warrants,
rights, options, obligations or securities thereto as such or (vi) except for
transactions set forth on Schedule 7.02(h)(i) with respect to the Issuer
and Schedule 7.02(h)(ii) with respect to FFN, hereto, pay any salaries,
bonuses, management fees, or other form of compensation, fees or expenses
(including the reimbursement thereof by any Obligor or its Subsidiaries) to any
of its stockholders or other equityholders, Subsidiaries or Affiliates, or to
any employees or family members thereof (collectively, “Restricted Payments”);
provided, however, (a) in connection with the payment of any tax
obligations of FFN pursuant to a consolidated tax return, the Issuer and any
Subsidiary of the Issuer may make payments to FFN in such amounts equal to the
tax obligations attributable to the operations of Issuer and such Subsidiaries
of Issuer, (Schedule 7.02(h)(a) sets forth the true, correct and
complete list of the amounts and dates of the payments made as of the Second
Amendment Effective Date by the Issuer or its Subsidiaries under this clause
(a), and also sets forth Obligors’ good faith estimate of such payments to be
made after the Second Amendment Effective Date), (b) any Subsidiary of the
Issuer may pay dividends to the Issuer or any Wholly-Owned Subsidiary of the
Issuer, and any Subsidiary of FFN which is a Junior Subordinated Guarantor and
not a Subsidiary of the Issuer may pay dividends to FFN, and (c) provided that
no Default or Event of Default is continuing or would result therefrom (except
for defaults that have been waived by Amendment No. 2 and Waiver to Sellers’
Securities Agreement dated as of October 8, 2009), (1) the Issuer may make
Restricted Payments 

10

described in
clause (i) above to FFN in the amounts of not more than $6,000,000 during the
first Fiscal Quarter of 2008 ($5,000,000 of which is to be used for general
corporate purposes, including but not limited to the payment of fees and
expenses incurred by FFN in connection with and related to the preparation and
filing of registration statements for the public offering of securities of FFN
and $1,000,000 of which shall be limited in use to payment of actual fees and
expenses of third parties in connection with such public offering of FFN securities);
(2) the Issuer or Various, Inc. may pay or make Restricted Payments to provide
funds for FFN to pay the actual fees and expenses of third parties in
connection with a Qualified Initial Public Offering up to and including the
fourth Fiscal Quarter of 2009 in an aggregate additional amount not to exceed
$5,000,000; and (3) the Issuer or Various, Inc. may make additional Restricted
Payments to make cash interest payments on the FFN Notes and to pay operating
expenses, in an aggregate amount not to exceed an amount per Fiscal Quarter
commencing the second Fiscal Quarter of 2008 equal to $1,000,000 plus the
Available Excess Cash Flow for the Fiscal Quarter most recently ended before an
additional Restricted Payment is proposed to be made, and FFN shall be required
to use the full amount of such Available Excess Cash Flow to make such cash
interest payments; provided, however, that no $1,000,000 payments in this
clause (3) shall be made if FFN is able to make cash interest payments on the
FFN Notes and meet its other obligations for operating expenses (which
operating expenses have been incurred in the ordinary course of business in an
amount not to exceed 110% of historical levels over the preceding three fiscal
quarters) without such $1,000,000 payments but with such Available Excess Cash
Flow and net operating cash flow from FFN’s business operations.” 

          (v)
Section 7.02 of the SSA is hereby amended by adding a new clause (q) at the end
thereof to read as follows: 

          “(q)
VAT Payments. Make any payments arising from, or in connection with, any
VAT Liability (i) that was accrued prior to July 1, 2008, (ii) that is past due
or (iii) that relates to any activities of Various, Inc. or its Subsidiaries
prior to July 1, 2008, including in each case fees and penalties relating
thereto, (A) in excess of $10,000,000 (inclusive of all such payments made
prior to the Second Amendment Effective Date) in aggregate through the third
Fiscal Quarter of 2010 or (B) in excess of $10,000,000 in aggregate from the
fourth Fiscal Quarter of 2010 through June 30, 2011; provided that the payments
permitted under the immediately preceding clause (A) shall in no event be paid
with cash of the Obligors other than cash reimbursed with proceeds from the
Working Capital Escrow Amount (as defined in the Various Acquisition Agreement)
attributable to the VAT Liability (or for payments made prior to the Second
Amendment Effective Date, reimbursed from the Working Capital Escrow Amount).” 

          (w)
Section 7.03(c) of the SSA is hereby amended in its entirety to read as
follows: 

          “(c)
Consolidated Coverage Ratio. Permit the Consolidated Coverage Ratio
during any period to be less than the amount specified for such period in
Schedule 7.03(c) to the Securities Purchase Agreement; provided however, for
the following Measurement Periods ending after the Second Amendment Effective
Date, they shall be as follows:  

11

	
 

	
 

	
 

	
 

	
 

	
i.

	
 

	
September
  30, 2009

	
 

	
1.7 to 1.0

	
ii.

	
 

	
December 31,
  2009

	
 

	
1.7 to 1.0

	
iii.

	
 

	
March 31,
  2010

	
 

	
1.8 to 1.0

	
iv.

	
 

	
June 30,
  2010

	
 

	
1.8 to 1.0

	
v.

	
 

	
September
  30, 2010

	
 

	
1.8 to 1.0

	
vi.

	
 

	
December 31,
  2010

	
 

	
1.8 to 1.0

	
vii.

	
 

	
March 31,
  2011

	
 

	
2.0 to 1.0

	
viii.

	
 

	
June 30,
  2011, and at the end of each Measurement Period thereafter

	
 

	
2.1 to 1.0”

          (x)
Section 7.03(e) of the SSA is hereby amended in its entirety to read as
follows: 

          “(e)
Total Debt Ratio. Permit the Total Debt Ratio of the Issuer and its
Subsidiaries during any period to be greater than the amount specified for such
period in Schedule 7.03(e) to the Securities Purchase Agreement; provided
however, for the following three month periods ending after the Second
Amendment Effective Date, they shall be as follows:  

	
 

	
 

	
 

	
 

	
 

	
i.

	
 

	
September
  30, 2009

	
 

	
5.6 to 1.0

	
ii.

	
 

	
December 31,
  2009

	
 

	
5.6 to 1.0

	
iii.

	
 

	
March 31,
  2010

	
 

	
5.3 to 1.0

	
iv.

	
 

	
June 30,
  2010

	
 

	
5.3 to 1.0

	
v.

	
 

	
September
  30, 2010

	
 

	
5.3 to 1.0

	
vi.

	
 

	
December 31,
  2010

	
 

	
5.3 to 1.0

	
vii.

	
 

	
March 31,
  2011

	
 

	
4.8 to 1.0

	
viii.

	
 

	
June 30,
  2011, and at the end of each Measurement
  Period thereafter

	
 

	
3.4 to 1.0”

          (y)
Section 9.01(c) of the SSA is hereby amended by (i) deleting “and (i)(2)” and
inserting “, (i)(2) and (z)” in its place and (ii) deleting “and (l)” therein
and inserting “(l) and (q)” in its place. 

          (z)
Section 9.01 of the SSA is hereby amended by (i) deleting the “or” at the end
of clause (o) thereof, (ii) deleting the period and adding “; or” at the end of
the new clause (q) thereof, (iii) adding the following new clause (q)
immediately after clause (p) thereof to read “if 

12

at any time
the total VAT Liability of FFN, the Issuer or any Subsidiary of FFN or the
Issuer that relates to activities of Various, Inc. or its Subsidiaries prior to
July 1, 2008 exceeds $45,416,000 plus accrued interest and penalties after June
30, 2009, exclusive of the effect of increases attributable to changes in
exchange rates after June 30, 2009;” (iv) adding the following new clause (r)
immediately after the new clause (q) thereof to read “if the gross proceeds
from a Qualified Initial Public Offering are less than $100 million.” and (v)
amending the phrase “clause (f) or (g)” in clause (i) of the last paragraph of
Section 9.01 to read “clause (f), (g) or (i).” 

          (aa)
Schedule 7.01(u) attached hereto is hereby added as Schedule 7.01(u) to the
SSA. 

          (bb)
Schedule 7.02(h)(a) attached hereto is hereby added as Schedule 7.02(h)(a) to
the SSA. 

          (cc)
Schedule 7.02(h)(ii) is hereby deleted from the SSA and replaced with Schedule
7.02(h)(ii) attached hereto. 

2. Amendment
Fee. Issuer shall pay to the Agent on October 8, 2009 a non-refundable
amendment fee of $1,600,000, which equals 2.00% of the outstanding principal
amount of the Sellers’ Secured Notes (the “Amendment Fee”), which fee
shall be due and payable in cash upon the effective date of this Amendment and
Waiver and shall be deemed fully earned on such date (it being understood that
the Amendment Fee shall be in addition to any other fees payable under the SSA
and to reimbursement of the fees and expenses of counsel to the Holders).
Payment of the foregoing fee will not be subject to counterclaim or set-off
for, or be otherwise affected by, any claim or dispute relating to any other
matter. The Amendment Fee shall be distributed by the Agent to the Holders
ratably in proportion to the size of each Holder’s Pro Rata Share. 

3. Waiver
Fees. Issuer shall pay to the Agent the Waiver Fee (described in clause
(ii) of the definition of “Waiver Fees”) on the date of the earlier of (a)
consummation of a Qualified Initial Public Offering or (b) March 31, 2010, as
described in Section 2.07(d) of the SSA, as amended by this Amendment and
Waiver (it being understood that such Waiver Fee shall be in addition to any
other fees payable under the SSA and to reimbursement of the fees and expenses
of counsel to the Holders). Payment of such Waiver Fee will not be subject to
counterclaim or set-off for, or be otherwise affected by, any claim or dispute
relating to any other matter. Such Waiver Fee shall be distributed by the Agent
to the Holders ratably in proportion to the size of each Holder’s Pro Rata
Share based on its holdings as of the earlier of (i) the business day
immediately prior to March 31, 2010 and (ii) the business day immediately prior
to the consummation of a Qualified Initial Public Offering. 

4. Limited
Waivers. The undersigned, constituting the Required Holder under the SSA,
hereby waives: 

          (a)
each of the covenants or other provisions or agreements identified on Exhibit
1 attached to this Amendment and Waiver, solely to the extent described on Exhibit
1. Each such respective waiver shall remain effective only if the Issuer
complies with the applicable respective restated obligation (if any) specified
therefor on Exhibit 1; and 

          (b)
any Default or Event of Default in connection with Sections 6.01(h), (i), (k),
(m), (s), (aa), (ee), (ii), (jj), (kk), (mm), and (oo), 7.01(b), 7.03 and
9.01(n) of the SSA arising from, 

13

or in
connection with, the incurrence or existence of any VAT Liability of FFN, the Issuer
or any Subsidiary of FFN or the Issuer through the Second Amendment Effective
Date (with no cure being required) that relates to activities of Various, Inc.
or its Subsidiaries prior to July 1, 2008. 

          (c)
The parties hereto agree and acknowledge that (i) for purposes of Section 9 of
the Seller Note Subordination Agreement, the execution by U.S. Bank National
Association of this Amendment and Waiver constitutes the prior written consent
of the Second Interactive Agent for purposes of Section 9 of the Seller Note
Subordination Agreement with respect to the modifications as set forth in Exhibit
D and as described in Exhibit E with respect to the Seller Notes,
(ii) the Required Holders of this Amendment and Waiver and the holders of the
Senior Secured Notes pursuant to the waiver from the holders of the Senior
Secured Notes in their capacity as Second Lien Claimholders consent to the
modification of the Subordinated Notes for purposes of Section 5.5(b) of the
PMGI Senior Lien Intercreditor Agreement (for the avoidance of doubt, the
Required Holders make no representation or warranty as to whether such consent
is sufficient for purposes of Section 5.5(b) of the PMGI Senior Lien
Intercreditor Agreement), and (iii) payment of the amendment and waiver fees
pursuant to the Other Waivers, payment in kind of any interest on the
Subordinated Notes or payment in kind of any interest to be paid pursuant to
the modifications as set forth in Exhibit D and as described in Exhibit
E with respect to the Seller Notes are not subject to the payment
subordination provisions of Section 4.1 of the PMGI Senior Lien Intercreditor
Agreement; provided, for the avoidance of doubt, that no interest on the
Subordinated Notes or the Seller Notes will be paid in cash until the prior
repayment in full in cash of the Seller Secured Notes.

5. Most
Favored Nation Provision. It is understood that the Obligors contemplate
entering into the Other Waivers. Except with regard to the use of proceeds from
a Qualified Initial Public Offering which will be as outlined in subsection
1(l) herein and except with regard to the Amendment Fee and Waiver Fee set
forth in Sections 2 and 3 hereof vis a vis (i) the amendment fees and/or
the waiver fees provided for in Section 4 of the Third Amendment and Limited
Waiver to the Securities Purchase Agreements relating to the FFN Notes (other
than the Subordinated Notes), (ii) the amendment fee provided in the amendment
and waiver agreement with respect to the Subordinated Notes dated October 8,
2009 and (iii) Sections 2 and 3 of the waiver from the holders of the Senior
Secured Notes (but with due regard to the definition of the Waiver Fees
included in this Amendment and Waiver, which contemplate increases if the fees
for the Senior Secured Notes increase), in the event that the language or
provisions of the Other Waivers with respect to a provision common to, or
covering the same subject matter as, both the SSA and the financing agreement
relating to the Other Waivers executed in connection with the Other Waivers is
more favorable to the holders of such financing agreement than is the
corresponding restated obligation to the Holders under this Amendment and
Waiver, such more favorable restated obligation shall supersede and be deemed
substituted for such corresponding Amendment and Waiver obligation herein for
the benefit of all Holders under the SSA. 

6. Representations
and Warranties of the Issuer. To induce the Holders to enter into this
Amendment and Waiver, the Issuer hereby represents and warrants to each Holder
as follows: 

          (a)
The Issuer’s Due Organization, Power and Authority, Etc. The Issuer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada, having full power and authority (i) to own its
properties and to carry on its business as 

14

presently
conducted and as proposed to be conducted, (ii) to execute and deliver this
Amendment and Waiver and (iii) to consummate the other transactions
contemplated hereby. The Issuer is duly qualified to transact business and is
validly existing and in good standing in each jurisdiction in which the failure
so to qualify, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect. 

          (b)
Binding Obligations. All corporate action on the part of the Issuer and
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Amendment and Waiver and the performance of all
obligations of the Issuer hereunder has been taken. This Amendment and Waiver
has been duly executed and delivered by the Issuer. This Amendment and Waiver
constitutes the valid, legal and binding obligations of the Issuer, enforceable
against the Issuer in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally and subject to
general principles of equity (regardless of whether such enforcement is
considered in a proceeding at law or at equity). 

          (c)
VAT Payments. Attached hereto as Schedule 1 is a true, correct
and complete disclosure of all payments made by any Obligor to any Governmental
Authorities in connection with any VAT Liability of FFN, the Issuer or any
Subsidiary of FFN or the Issuer through the Second Amendment Effective Date
(including a breakdown of (i) all such payments of VAT Liability relating to
activities prior to July 1, 2008, (ii) all such payments of VAT liability
relating to activities after July 1, 2008 and (iii) a reasonably detailed
description of the Obligors’ good faith estimate of its VAT liability relating
to activities prior to July 1, 2008). 

          (d)
FriendFinder (Switzerland) AG. Pursuant to that certain Friendfinder
(Switzerland) AG Share Sale and Purchase Agreement, by and between Various,
Inc. and Translex International Ltd. (“Translex”), effective date October 27,
2008, Various, Inc. sold the outstanding shares of FriendFinder (Switzerland)
AG to Translex for the purchase price of CHF 1.00, payable in cash. Other than
cash in FriendFinder (Switzerland) AG’s bank account not exceeding U.S.
$30,000, which was paid to Various, Inc., FriendFinder (Switzerland) AG had no
assets of greater than nominal value immediately prior to transfer of the
shares in FriendFinder (Switzerland) AG to Translex. 

          (e)
Terminated Subsidiaries. The Board of Directors of FFN has determined
that the preservation of each of FriendFinder Processing (India) Private
Limited and FriendFinder (Switzerland) AG is no longer necessary or desirable
in the conduct of the business of FFN and its Subsidiaries. In addition, each
of Streamray Processing Philippines, Inc. and FriendFinder Processing
Philippines, Inc. has expired pursuant to the terms of its organizational
documents. Each of FriendFinder Processing (India) Private Limited,
FriendFinder (Switzerland) AG, Streamray Processing Philippines, Inc. and
FriendFinder Processing Philippines, Inc. (together, the “Terminated
Subsidiaries”) has been dissolved, divested, sold or expired and had either
no assets or nominal assets at the time of such dissolution, divestiture, sale
or expiration. 

7. Effectiveness
of Amendment and Waiver. This Amendment and Waiver shall become effective
only upon the satisfaction or waiver by the Required Holders of all of the
following conditions precedent: 

15

          (a)
Agent shall have received this Amendment and Waiver, duly executed and
delivered by the Issuer, the Required Holders and the Guarantors; 

          (b)
Payment by the Issuer of all accrued fees and expenses due and payable on the
date hereof (including, without limitation, legal fees and expenses of counsel
to the Agent and the Holders), and, to the extent invoiced, reimbursement or
other payment of out-of-pocket expenses required to be reimbursed or paid by
the Issuer hereunder or under any other Funding Document; 

          (c)
Required Holders shall have received, or shall be simultaneously receiving, the
Other Waivers and the letter agreement between the Issuer, the holders of the
Seller Notes, and the other parties thereto, in the form attached hereto as Exhibit
E, in form and substance satisfactory to the Required Holders; 

          (d)
Agent shall have received payment of the Amendment Fee provided in Section 2
above; 

          (e)
Issuer shall have delivered to Agent an updated copyright schedule as of August
1, 2009; 

          (f)
The Registration Rights Agreement shall have been amended to effectuate the
provisions of 7.01(x) of the SSA, as amended hereby; 

          (g)
Any necessary consents have been obtained to use the proceeds of a Qualified
Initial Public Offering in accordance with the terms of this Amendment and
Waiver; 

          (h)
The letter agreement, dated the date hereof, relating to the representations
and warranties and covenants of FriendFinder GmbH, a German corporation, shall
have been executed and delivered by the parties thereto; 

          (i)
The Obligors shall have received confirmation from its independent accountant
that upon the effectiveness of the Amendment and Waiver and the Other Waivers,
any going concern qualifications in the Obligors’ 2008 audited financials will
be removed; 

          (j)
Agent shall have received evidence reasonably satisfactory to Holders that
there are sufficient funds in the Working Capital Escrow Amount that will be
released to Issuer to reimburse Issuer for payments for VAT Liability to
Governmental Authorities already made, and to reimburse additional VAT
Liability amounts through September 30, 2010, in an aggregate amount of
$10,000,000; 

          (k)
The receipt by the Required Holders of a certificate or certificates (i)
executed by a duly authorized officer of the Issuer attaching true and complete
copies of resolutions or a written consent of the board of directors of the
Issuer authorizing the execution, delivery and performance of this Amendment
and Waiver, (ii) executed by a duly authorized officer of FFN attaching true
and complete copies of resolutions or written consents of the board of
directors of FFN and the Guarantors listed on Schedule 3 hereto
authorizing the execution, delivery and performance of this Amendment and
Waiver; provided, however, that no later than 60 days after the Second
Amendment Effective Date, FFN shall provide a certificate or certificates of a
duly 

16

authorized
officer of FFN (the “Additional Officer’s Certificate”) attaching true
and complete copies of resolutions or a written consent of the board of
directors of the Guarantors listed on Schedule 4 hereto authorizing the
execution, delivery and performance of this Amendment and Waiver, (iii)
executed by a duly authorized officer of FFN attaching true and complete copies
of written consents of the requisite stockholders of FFN consenting to the
amendment and restatement of the Certificate of Designations, Preferences and
Rights of Series A Convertible Preferred Stock of FFN substantially in the form
of Exhibit C-1 attached hereto and the amendment and restatement of the
Certificate of Designations, Preferences and Rights of Series B Convertible
Preferred Stock of FFN substantially in the form of Exhibit C-2 attached
hereto, and (iv) executed by a duly authorized officer of each of the Obligors
certifying that all deposit accounts and securities accounts are subject to
Account Control Agreements in favor of the Collateral Agent, except for the
Accommodation Bank Accounts; 

          (l)
The receipt by the Required Holders of a certificate executed by Obligors
certifying that they have delivered credit card notification letter agreements
to the Collateral Agent that account for at least 90% of the current credit
card processing revenue; 

          (m)
The receipt by the Agent (with a copy to the Holders) of an opinion of counsel
(which may constitute more than one opinion of counsel) in form and substance
satisfactory to the Holders to the effect that this Amendment and Waiver has
been duly authorized, executed and delivered by the Issuer and FriendFinder
Networks Inc. and constitute valid and binding obligations of the Issuer and
FriendFinder Networks Inc., enforceable in accordance with their respective
terms (subject to customary exceptions); and 

          (n)
The simultaneous consummation of the transactions contemplated by those certain
letter agreements, each dated October 8, 2009, among Marc H. Bell, Staton
Family Investments, Ltd., Florescue Family Corporation and certain holders of
equity securities of FFN, pertaining to the purchase and sale of such equity
securities on the terms set forth therein. 

8. Affirmation
of Obligations. Each Obligor hereby ratifies, affirms and confirms all of
the Funding Documents and each and every Obligation, covenant and agreement of
such Obligor thereunder in all respects, except as otherwise expressly modified
or waived by this Amendment and Waiver upon the terms set forth herein. In
addition, each Obligor hereby represents and warrants that, as of the date
hereof, no counterclaim, right of set-off, claim or defense of any kind exists
or is outstanding with respect to any of the Obligations or against any of the
Holders. Each Guarantor hereby agrees and acknowledges that such Guarantor’s
guarantee of all Obligations of the Issuer under the Sellers’ Secured Note
Documents remains and continues in full force and effect and is hereby ratified
and reaffirmed in all respects. 

9.Miscellaneous.

          (a)
Agent Authorized and Directed to Act. By their signatures below, the
Required Holders hereby authorize and instruct the Agent (i) to execute,
deliver and perform its duties under the documents set forth in Section 7(a)
hereof to which it is a party and (ii) to take all other actions reasonable or
necessary to accomplish or document any of the waivers contemplated by this
Amendment and Waiver. The recitals contained herein shall be taken as the
statements of the other parties hereto, and the Agent assumes no responsibility
for their correctness. The Agent makes no representation as to the validity or
sufficiency of this Amendment and Waiver or the satisfaction of the conditions
listed in Effectiveness of Amendment and Waiver in Section 7 hereof. 

17

          (b)
Headings. Section and subsection headings in this Amendment and Waiver
are included herein for convenience of reference only and shall not constitute
a part of this Amendment and Waiver for any other purpose or be given any
substantive effect. 

          (c)
Funding Documents Ratified. Except as expressly set forth herein, this
Amendment and Waiver shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights and remedies of, the
Holders under the SSA, the Sellers’ Security Documents or any other Funding
Documents; or be construed to alter, modify, amend or in any way affect any of
the terms, conditions, obligations, covenants or agreements contained in the
SSA, the Sellers’ Security Documents or any other Funding Documents, all of
which are hereby confirmed and ratified in all respects and shall continue in
full force and effect. 

          (d)
Survival of Agreement. All covenants, agreements, representations and
warranties made by any party in this Amendment and Waiver shall be considered
to have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Amendment and Waiver. 

          (e)
Funding Documents. From and after the Second Amendment Effective Date,
this Amendment and Waiver shall be considered a Funding Document for all
purposes of the SSA and the other Funding Documents, entitled to all of the
benefits and protections thereof, and all references to the Funding Documents
shall thereafter be construed to include this Amendment and Waiver. 

          (f)
Applicable Law. THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK. 

          (g)
Counterparts. This Amendment and Waiver may be executed via facsimile or
e-mail, and in counterparts, all of which shall constitute one and the same
instrument. 

[Remainder of page intentionally left blank.]

18

[signature page]

Very truly yours, 

ISSUER:

INTERACTIVE NETWORK, INC.

By:    /s/ Ezra Shashoua                                          

Name:

Ezra Shashoua

Title: 

Chief Financial Officer

JUNIOR SUBORDINATED GUARANTORS:

FRIENDFINDER NETWORKS INC. 

GENERAL MEDIA ART HOLDING, INC.

GENERAL MEDIA COMMUNICATIONS, INC.

GENERAL MEDIA ENTERTAINMENT, INC.

GMCI INTERNET OPERATIONS, INC.

GMI ON-LINE VENTURES, LTD.

PENTHOUSE CLUBS INTERNATIONAL  ESTABLISHMENT

PENTHOUSE IMAGES ACQUISITIONS, LTD.

WEST COAST FACILITIES INC.

PMGI HOLDINGS INC.

PURE ENTERTAINMENT 

TELECOMMUNICATIONS, INC.

By:    /s/ Paul Asher                                                

Name:

Paul Asher

Title: 

Secretary

PENTHOUSE FINANCIAL SERVICES N.V.

By:    /s/ Daniel C. Staton                                       

Name:

Daniel C. Staton

Title: 

Director

[Signature Page to Amendment No. 2 and Waiver to Sellers' Securities Agreement]

PENTHOUSE DIGITAL MEDIA PRODUCTIONS INC.

VIDEO BLISS, INC.

DANNI ASHE, INC.

By:    /s/ Ezra Shashoua                                          

Name:

Ezra Shashoua

Title:

Chief Financial Officer

SNAPSHOT PRODUCTIONS, LLC

By:    /s/ Ezra Shashoua                                          

Name:

Ezra Shashoua

Title:

Chief Financial Officer

TAN DOOR MEDIA INC.

By:    /s/ Ezra Shashoua                                          

Name:

Ezra Shashoua

Title:

Chief Financial Officer

SENIOR SUBORDINATED GUARANTORS:

VARIOUS, INC. 

By:    /s/ Ezra Shashoua                                          

Name:

Ezra Shashoua

Title:

Chief Financial Officer

[Signature Page to Amendment No. 2 and Waiver to Sellers' Securities Agreement]

GLOBAL ALPHABET, INC.

SHARKFISH, INC.

TRAFFIC CAT, INC.

BIG ISLAND TECHNOLOGY GROUP, INC.

FASTCUPID, INC.

MEDLEY.COM INCORPORATED

PPM TECHNOLOGY GROUP, INC.

FRIENDFINDER CALIFORNIA INC. 

By:    /s/ Ezra Shashoua                                    

Name:

Ezra Shashoua

Title:

Chief Financial Officer

FRIENDFINDER PROCESSING LTD. 

By:    /s/ Daniel C. Staton                                   

Name:  Daniel C. Staton

Title:    Chief Financial Officer

FRIENDFINDER UNITED KINGDOM LTD. 

By:    /s/ Paul Asher                                          

Name:  Paul Asher

Title:    Director

STREAMRAY, INC. 

By:    /s/ Daniel C. Staton                                 

Name:  Daniel C. Staton

Title:    Chief Financial Officer

CONFIRM ID, INC.

FRNK TECHNOLOGY GROUP

TRANSBLOOM, INC.

STREAMRAY INC. 

By:    /s/ Ezra Shashoua                                     

Name:

Ezra Shashoua

Title:

Chief Financial Officer

[Signature Page to Amendment No. 2 and Waiver to Sellers' Securities Agreement]

STREAMRAY PROCESSING LTD.

By:    /s/ Ezra Shashoua                                     

Name:

Ezra Shashoua

Title:

Attorney

STREAMRAY STUDIOS INC.

By:    /s/ Ezra Shashoua                                    

Name:

Ezra Shashoua

Title:

Chief Financial Officer

VENTNOR ENTERPRISE LIMITED

By:    /s/ Paul Asher                                          

Name:  Paul Asher

Title:    Director

WIGHT ENTERPRISE LIMITED

By:    /s/ Paul Asher                                          

Name:  Paul Asher

Title:    Director

[Signature Page to Amendment No. 2 and Waiver to Sellers' Securities Agreement]

ACCEPTED AND AGREED

REQUIRED HOLDERS:

ANDREW B. CONRU TRUST AGREEMENT 

By:    /s/ Andrew B. Conru                                      

Andrew B. Conru, Trustee

MAPSTEAD TRUST,

CREATED ON APRIL 16, 2002

By:    /s/ Lars Mapstead                                          

Lars Mapstead, Trustee

By:    /s/ Marin A. Mapstead                                   

Marin A. Mapstead, Trustee

AGENT:

U. S. BANK NATIONAL ASSOCIATION, 

As Administrative Agent and Collateral Agent

By:    /s/ Kathy L. Mitchell                                     

Name: Kathy L. Mitchell

Title:   Vice President

[Signature Page to Amendment No. 2 and Waiver to Sellers' Securities Agreement]

EXHIBIT 1: Specified Waivers. 

The
descriptions of SSA Sections and other agreements referenced herein are
summaries and do not purport to include every element of the referenced
Section. To the extent that SSA Sections are listed, they shall be waived in
their entirety (subject to the Restated Obligation (if any)) solely with
respect to the breach described herein, and no summary of the provisions in
such Section shall be construed to limit the scope of such waiver. 

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
1.

	
The
  obligations (i) pursuant to SSA Section 7.01(a)(2) to deliver items required
  for the 2007 and 2008 Fiscal Years, respectively, within 90 days after the
  end of the 2007 and 2008 Fiscal Years, respectively, and (ii) pursuant to SSA
  Section 7.01(a)(4) to deliver officer’s certificates for the Fiscal Quarters
  ended March 31, 2008, June 30, 2008, September 30, 2008, March 31, 2009 and
  June 30, 2009.

	
 

	
Issuer must
  deliver all such items for the 2007 and 2008 Fiscal Years and the Fiscal
  Quarters ended March 31, 2008, June 30, 2008, September 30, 2008, March 31,
  2009 and June 30, 2009 on or before 5 days after the effectiveness of this
  Amendment and Waiver.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
2.

	
Solely with
  respect to matters waived by this Amendment and Waiver, the obligation
  pursuant to SSA Section 7.01(a)(6) to deliver as soon as possible, and in any
  event within three (3) days after the occurrence of an Event of Default or
  Default, event or development that could have a Material Adverse Effect and
  the action which the affected Obligor proposes to take with respect thereto.

	
 

	
None.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
3.

	
Solely as
  concerns the respective legal entity name changes for Penthouse Media Group
  Inc. to FriendFinder Networks Inc. and for its indirect wholly-owned
  subsidiary FriendFinder Network, Inc. to FriendFinder California Inc., the
  obligation pursuant to SSA Section 7.01(a)(12) to provide, no later than 30
  days before such change becomes effective, all information relating to any
  change of name, organizational structure or jurisdiction or organization of
  any Obligor or the obligation pursuant to SSA Section 7.02(l)(iii) not to
  amend the certificates of incorporation related to such name changes.

	
 

	
Not
  applicable.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
4.

	
Solely as
  concerns the legal entity name change from PMGI to FriendFinder Networks
  Inc., the obligation pursuant to Parent Security and Pledge Agreement Section
  4 to not change its name, organizational structure or jurisdiction of
  organization in any manner, without providing at least 15 days’ prior written
  notice to Agent.

	
 

	
None.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
5.

	
Solely as
  concerns the legal entity name change from FriendFinder Network, Inc. to
  FriendFinder California Inc., the obligation pursuant to the Issuer Security
  and Pledge Agreement Section 4 to not change its name, organizational
  structure or jurisdiction of organization in any manner, without providing at
  least 15 days’ prior written notice to Agent.

	
 

	
None.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
6.

	
Solely as
  concerns the amendment and restatement of the articles of incorporation of
  FFN substantially in the form of Exhibit A attached hereto (and the filing
  thereof with the Nevada Secretary of State) in connection with the
  consummation of a Qualified Initial Public Offering, any obligation of any
  Obligor pursuant to SSA Section 7.02(l)(iii).

	
 

	
Not
  applicable.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
7.

	
Solely as
  concerns the prospective changes to effect a reverse stock split of the
  Series A Convertible Preferred Stock of FFN, a reverse stock split of the
  Series B Convertible Preferred Stock of FFN and a reverse stock split of the
  Common Stock of FFN, each in the range of 15:1 to 25:1, as determined by the
  Board of Directors of FFN to be in the best interests of FFN in connection
  with the consummation of a Qualified Initial Public Offering, any obligation
  of any Obligor pursuant to SSA Section 7.02(l)(iii).

	
 

	
Not
  applicable.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
8.

	
Solely as
  concerns the amendment and restatement of the bylaws of FFN substantially in
  the form of Exhibit B attached hereto in connection with the
  consummation of a Qualified Initial Public Offering, any obligation of any
  Obligor pursuant to SSA Section 7.02(l)(iii)(A).

	
 

	
Not
  applicable.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
9.

	
Solely as
  concerns (i) the amendment and restatement of the Certificate of
  Designations, Preferences and Rights of Series A Convertible Preferred Stock
  of FFN substantially in the form of Exhibit C- 1 attached hereto (and
  the filing thereof with the Nevada Secretary of State), or if all shares of
  Series A Convertible Preferred Stock of FFN have been converted into common
  stock of FFN, the withdrawal of the Certificate of Designations, Preferences
  and Rights of Series A Convertible Preferred Stock of FFN and (ii) the
  amendment and restatement of the Certificate of Designations, Preferences and
  Rights of Series B Convertible Preferred Stock of FFN substantially in the
  form of Exhibit C-2 attached hereto (and the filing thereof with the
  Nevada Secretary of State), or, if all shares of Series B Convertible
  Preferred Stock of FFN have been converted into common stock of FFN, the
  withdrawal of the Certificate of Designations, Preferences and Rights of
  Series B Convertible Preferred Stock of FFN, in each case in connection with
  the consummation of a Qualified Initial Public Offering, any obligation of
  any Obligor pursuant to SSA Section 7.02(l)(iii).

	
 

	
Not
  applicable.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
10.

	
The
  obligation pursuant to SSA Section 5.02(b) to deliver within 60 days after
  the Closing Date for each Non-Obligor the documents contemplated by Section
  5.01(f)(2), (3), (7), (8), (9), (10) and (18),

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
 

	
together
  with (i) a copy of the charter, certificate of formation, certificate of
  limited partnership or other publicly filed organizational document of such
  Obligor certified as of a date not more than 30 days prior to the Closing
  Date by an appropriate official of the jurisdiction of organization of such
  Non-Obligor which shall set forth the same complete name of such Non-Obligor
  as is set forth herein and the organizational number of such Non- Obligor, if
  an organized number is issued in such jurisdiction and (ii) a certificate of
  an officer of each Non-Obligor attaching a copy of the by-laws, limited
  liability company agreement, operating agreement, agreement of limited partnership
  or other organizational document of such Non- Obligor, together with all
  amendments thereto.

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
11.

	
The
  obligation pursuant to SSA Section 5.02(c) to deliver Account Control
  Agreements.

	
 

	
See Section
  7.01(u).

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
12.

	
The
  obligation pursuant to SSA Section 5.02(d) to deliver the foreign senior
  guarantor perfection certificate within 75 days of the Closing Date.

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
13.

	
The
  obligation pursuant to SSA Section 5.02(e) to deliver the FFN perfection
  certificate within 90 days of the Closing Date.

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
14.

	
The
  obligation pursuant to SSA Section 5.02(f) to deliver letter agreements
  concerning credit card processing agreements and an officer certificate
  within 90 days after the Closing Date, and to deliver letter agreements
  concerning new credit card processing agreements within 150 days after the
  Closing Date.

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
15.

	
Solely with
  respect to the leased locations at 445 Sherman Avenue, Palo Alto, CA 94306,
  260 Sheridan Avenue, Palo Alto, CA 94306 and 5258 South Eastern Avenue, Las
  Vegas, Nevada 89119, the obligation pursuant to SSA Section 5.02(g)(i) to
  deliver landlord consents within 90 days after the Closing Date.

	
 

	
Obligation
  deemed timely fulfilled. Company shall make commercially reasonable efforts
  for a period not to exceed 45 days after the Second Amendment Effective Date
  to obtain landlord waivers for (i) 20 Broad Street, New York lease on
  substantially the same terms as the landlord waiver previously obtained for 2
  Penn Plaza lease, and (ii) the 19749 Dearborn Street, Chatsworth, CA 91311
  lease on terms reasonably acceptable to Agent.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
16.

	
The
  obligation pursuant to SSA Section 7.01(j) with respect to notice to Agent of
  any change in the location of any Collateral in connection with the leased
  locations at 220 Humboldt Ct., Sunnyvale, CA 94089 and 19749 Dearborn Street,
  Chatsworth, CA 91311.

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
17.

	
Solely with
  respect to Obligors FriendFinder United Kingdom Ltd., Streamray Processing
  Ltd., Tan Door Media Inc., Streamray Studios Inc., Wight Enterprise Limited
  and Ventnor Enterprise Limited, the obligation pursuant to SSA Sections
  7.01(i) to execute, acknowledge and deliver certain documents as the Agent
  may reasonably require and notify the Agent of certain accounts, deliver
  Account Control Agreements relating thereto and take action to maintain the
  liens on such accounts and 7.01(m) to execute the Guaranty, pursuant to a
  joinder agreement, and deliver an opinion of counsel to the Agent within 10
  Business Days of the date on which it was acquired or created.

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
18.

	
Solely with
  respect to FriendFinder Processing (India) Private Limited, FriendFinder
  GmbH, Streamray Processing Philippines, Inc., FriendFinder Processing
  Philippines, Inc. and FriendFinder (Switzerland) AG, the obligation pursuant
  to SSA Section 7.01(i) to execute, acknowledge and deliver certain documents

	
 

	
None, based
  on the representations of the Obligors that FriendFinder Processing (India)
  Private Limited, Streamray Processing Philippines, Inc. and FriendFinder
  Processing Philippines, Inc. have each been dissolved and FriendFinder
  (Switzerland) AG has been sold pursuant to Section 6(e) hereof and in
  the letter agreement delivered pursuant to Section 7(h) hereof with
  respect to FriendFinder GmbH.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
 

	
as the Agent
  may reasonably require and notify the Agent of certain accounts, deliver
  Account Control Agreements relating thereto and take action to maintain the
  liens on such accounts and SSA Section 7.01(m) to execute the Guaranty,
  pursuant to a joinder agreement, and deliver an opinion of counsel to the
  Agent within 10 Business Days of the date on which it was acquired or
  created.

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
19.

	
SSA Sections
  7.01(i) and (m) with respect to all accounts listed on Schedule 7.01(u), up
  to the Second Amendment Effective Date.

	
 

	
None.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
20.

	
The
  obligation pursuant to SSA Section 5.02(g)(ii) to deliver letter agreements
  within 90 days after the Closing Date.

	
 

	
Obligation
  deemed timely fulfilled.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
21.

	
As to the
  Fiscal Quarters ended March 31, 2008 and September 30, 2008, respectively,
  the obligation under SSA Section 7.01(v) to have held a meeting of the Board
  of Directors of FFN.

	
 

	
None.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
22.

	
SSA Section
  7.02(l) as it relates to the Other Waivers and the amendment and waiver
  agreements with respect to the Subordinated Notes dated December 19, 2008 and
  March 20, 2009 (provided that such waiver is given with respect to the
  Subordinated Notes amendment and waiver agreement dated December 19, 2008,
  only provided that the amendment fee described therein has been amended and
  restated pursuant to the Other Waiver pertaining to the Subordinated Notes to
  provide that such fee will be paid in additional Subordinated Notes).

	
 

	
None.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
23.

	
SSA Sections
  7.02(b), 7.02(l), 7.03(e) and 7.03(f) as they relate to (i) the payment of
  the amendment fee in Section 4 of the Third Amendment and Limited Waiver to

	
 

	
None.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
 

	
the
  Securities Purchase Agreements relating to the FFN Notes (other than the
  Subordinated Notes) dated October 8, 2009 and (ii) the amendment fee provided
  in the amendment and waiver agreement with respect to the Subordinated Notes
  dated October 8, 2009, which amendment fees described in (i) and (ii) above
  are to be paid in additional Indebtedness.

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
24.

	
SSA Section
  7.02(l) as it relates to the amendment and restatement of the Seller Note
  substantially in the form attached hereto as Exhibit D and SSA
  Sections 7.02(b) and 7.03(e) solely to the extent that (i) the adjustment in
  principal amount reflected in the amendment and restatement of the Seller
  Note or (ii) any adjustment in principal amount made in accordance with
  Section 4(a) of the letter agreement, dated October 8, 2009, between the
  Issuer, the holders of the Seller Notes, and the other parties thereto, in
  the form attached hereto as Exhibit E, constitutes an increase in
  Indebtedness.

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
25.

	
SSA Section
  7.02(l), solely to the extent necessary to allow the Issuer or any of its
  Subsidiaries to (i) grant a security interest in the collateral (whether now
  existing or hereafter arising) securing the Senior Secured Notes and Sellers’
  Secured Notes (“Security Interest”) in favor of the Seller Notes upon
  the repayment in full of the Senior Secured Notes and Sellers’ Secured Notes
  and (ii) grant a security interest in any portion of the collateral (whether
  now existing or hereafter arising) securing the Senior Secured Notes and
  Sellers’ Secured Notes in favor of up to $150,000,000 in additional debt (“New
  Debt”), which New Debt may be secured, if and to the extent such New Debt
  is to be secured, after the repayment in full of the Senior Secured Notes and
  Sellers’ Secured Notes and the

	
 

	
None.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
 

	
granting of
  the Security Interest in favor of the Seller Notes, such that the Seller
  Notes would share dollar for
  dollar with the New Debt in any amount realized from the lien securing the
  New Debt.

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
26.

	
Solely as
concerns the payments made to Bell & Staton, Inc., or any of its
affiliates, in 2007, 2008 and 2009 as described on Schedule 2-A
hereto, any obligation of any Obligor pursuant to SSA Section 7.02(h) not to
make payments except as set forth on Schedule 7.02(h)(i) and Schedule
7.02(h)(ii) and pursuant to SSA Section 7.02(j) not to make payments to
Affiliates other than permitted by SSA Section 7.02(h), to the extent that
the management payments listed on Schedule 2-A were made during the
continuance of an event of default under the FFN Notes (except for the
Subordinated Notes). 

	
 

	
None.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
27.

	
Solely as
  concerns the payments made to Hinok Media Inc. (and payments made to YouMu,
  Inc. in lieu of Hinok Media Inc. in violation of Section 10 of the
  Independent Contractor Agreement, dated September 21, 2007, between Hinok
  Media Inc. and Various, Inc. which prohibits such assignment) and Legendary
  Technology Inc. set forth on Schedule 2-B hereto, any obligation of
  any Obligor pursuant to SSA Section 7.02(h) not to make payments to any
  stockholder or equity holder except as set forth on Schedule 7.02(h)(i) and
  Schedule 7.02(h)(ii) and pursuant to SSA Section 7.02(j) not to enter into
  transactions with Affiliates other than permitted by SSA Section 7.02(h).

	
 

	
None.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
28.

	
Solely as
  concerns the entry by FFN into agreements with each of Marc H. Bell, Daniel
  C. Staton, Andrew Conru and Lars Mapstead or their affiliates as described in
  Section 7 of the letter agreement, dated October 8, 2009, between the Issuer,
  the

	
 

	
None.

	
 

	
 

	
 

	
 

	
 

	
Obligation Waived

	
 

	
Restated Obligation (if any)

	 

	 

	 

	 

	
 

	
holders of
  the Seller Notes, and the other parties thereto, in the form attached hereto
  as Exhibit E, any obligation of FFN pursuant to SSA Section 7.02(j)
  not to enter into transactions with Affiliates other than permitted by SSA
  Section 7.02(h); provided, for the avoidance of doubt, that no payments of
  any kind under such agreements will be made until the prior repayment in full
  in cash of the Subordinated Secured Notes.

	
 

	
 

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
29.

	
Solely as it
  concerns frozen assets not exceeding €610,343 with respect to that certain
  Various, Inc. credit card processing account administered by Global Collect,
  NV located in the Netherlands, an obligation of any Obligor not to create,
  incur, assume or suffer to exist any Liens other than permitted by SSA
  Section 7.02(a).

	
 

	
None.

	
 

	
 

	
 

	
 

	 

	 

	 

	 

	
30.

	
SSA Section
  9.01(e) with respect to defaults arising under the FFN Notes and the Senior Secured Notes, solely to the
  extent such defaults have been duly waived pursuant to the Other Waivers and
  the amendment and waiver agreements with respect to the Subordinated Notes
  dated December 19, 2008 and March 20, 2009.

	
 

	
None.

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