Document:

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                                                                   EXHIBIT 10.36

                                PLEDGE AGREEMENT

         This Pledge Agreement (the "Agreement") is dated as of September 27,
2001, by and among IOS BRANDS CORPORATION, a Delaware corporation (the
"Parent"), FLORISTS' TRANSWORLD DELIVERY, INC., a Michigan corporation (the
"Borrower"), and the other parties executing this Agreement under the heading
"Pledgors" (the Parent, the Borrower and such other parties, along with any
parties who execute and deliver to the Agent (as defined below) an agreement
substantially in the form attached hereto as Schedule F being hereinafter
referred to collectively as the "Pledgors" and individually as a "Pledgor"),
each with its mailing address at 3113 Woodcreek Drive, Downers Grove, Illinois
60515, and Harris Trust and Savings Bank, an Illinois banking corporation
("HTSB"), with its mailing address at 111 West Monroe Street, Chicago, Illinois
60603, acting as administrative agent hereunder for the Secured Creditors
hereinafter identified and defined (HTSB acting as such administrative agent and
any successor or successors to HTSB acting in such capacity being hereinafter
referred to as the "Agent").

                             PRELIMINARY STATEMENTS

          A. The Borrower, the other Pledgors and HTSB, individually and as
Agent, have entered into a Credit Agreement dated as of September 27, 2001 (such
Credit Agreement, as the same may be amended or modified from time to time,
including amendments and restatements thereof in its entirety, being hereinafter
referred to as the "Credit Agreement"), pursuant to which HTSB and other banks
and financial institutions and letter of credit issuers from time to time party
to the Credit Agreement (HTSB, in its individual capacity, and such other banks
and financial institutions being hereinafter referred to collectively as the
"Lenders" and individually as a "Lender" and such letter of credit issuers being
hereinafter referred to collectively as the "L/C Issuers" and individually as an
"L/C Issuer") have agreed, subject to certain terms and conditions, to extend
credit and make certain other financial accommodations available to the Borrower
(the Agent, the Lenders and the L/C Issuers, together with any affiliates of the
Lenders party to the Hedging Agreements referred to below, being hereinafter
referred to collectively as the "Secured Creditors" and individually as a
"Secured Creditor").

          B. The Borrower and the other Pledgors may from time to time enter
into one or more Hedging Agreements (as such term is defined in the Credit
Agreement) with respect to, among other things, interest rate exchange, swap,
cap, collar, floor, or other similar agreements and one or more foreign currency
contracts, currency swap contracts or other similar agreements with one or more
of the Lenders party to the Credit Agreement, or their affiliates, for the
purpose of hedging or otherwise protecting against interest rate and foreign
currency exposure.

          C. As a condition to extending credit to the Borrower under the Credit
Agreement or entering into any Hedging Agreements, the Secured Creditors have
required, among other things, that each Pledgor grant to the Agent for the
benefit of the Secured Creditors a lien on and security interest in the personal
property of such Pledgor described herein subject to the terms and conditions
hereof.

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         D. The Parent owns, directly or indirectly, equity interests in each
of the other Pledgors and the Parent and the Borrower each provide the other
Pledgors with financial, management, administrative, and technical support which
enables such Pledgors to conduct their businesses in an orderly and efficient
manner in the ordinary course.

         E. Each Pledgor will benefit, directly or indirectly, from credit and
other financial accommodations extended by the Secured Creditors to the
Borrower.

         NOW, THEREFORE, for good and valuable consideration, receipt whereof is
hereby acknowledged, the parties hereto hereby agree as follows:

         Section 1. Terms Defined in Credit Agreement. All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement. The term "Pledgor" and "Pledgors" as used herein
shall mean and include the Pledgors collectively and also each individually,
with all grants, representations, warranties and covenants of and by the
Pledgors, or any of them, herein contained to constitute joint and several
grants, representations, warranties and covenants of and by the Pledgors;
provided, however, that unless the context in which the same is used shall
otherwise require, any grant, representation, warranty or covenant contained
herein related to the Collateral shall be made by each Pledgor only with respect
to the Collateral owned by it or represented by such Pledgor as owned by it.

         Section 2. Grant of Security Interest in the Collateral. Each Pledgor
hereby grants to the Agent for the benefit of the Secured Creditors a lien on
and security interest in, and acknowledges and agrees that the Agent has and
shall continue to have for the benefit of the Secured Creditors a continuing
lien on and security interest in, any and all right, title and interest of each
Pledgor in certain equity interests of each of its direct Subsidiaries as set
forth below, whether now owned or existing or hereafter created, acquired or
arising, and in whatever form, including the following:

                   (a) Stock Collateral. (i) All shares of the capital stock of
         each Subsidiary which is a corporation owned or held directly by such
         Pledgor, whether now owned or hereafter formed or acquired (those
         shares delivered to and deposited with the Agent on or prior to the
         date hereof being listed and described on Schedule A attached hereto),
         and all substitutions and additions to such shares (herein, the
         "Pledged Securities"), provided that, in the case of a lien and
         security interest on the capital stock of a company incorporated or
         otherwise organized outside of the United States of America or any
         State or territory thereof (herein a "Foreign Company"), if any such
         grant of lien would amount to more than 65% of the total combined
         voting stock of any such Foreign Company, then such lien and security
         interest shall be limited to a lien and security interest on the shares
         of capital stock representing 65% of the total combined voting stock of
         such Foreign Company if granting a lien and security interest in more
         than such 65% ownership interest would cause material adverse tax
         consequences to the Parent, and such voting stock of any Foreign
         Company not required to be pledged hereunder shall not be included in
         the definition of "Pledged Securities", (ii) all dividends,
         distributions and sums distributable or payable from, upon or in
         respect of the Pledged Securities, and

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         (iii) all other rights and privileges incident to the Pledged
         Securities (all of the foregoing being hereinafter referred to
         collectively as the "Stock Collateral");

                   (b) Partnership Interest Collateral. (i) All partnership or
         other equity interests in each Subsidiary which is a partnership
         (whether general or limited) owned or held directly by such Pledgor,
         whether now owned or hereafter formed or acquired (each of such equity
         interests existing on the date hereof being listed and identified on
         Schedule B attached hereto) (such partnerships being hereinafter
         referred to collectively as the "Partnerships" and individually as a
         "Partnership"), (ii) any and all payments and distributions of whatever
         kind or character, whether in cash or other property, at any time made,
         owing or payable to such Pledgor in respect of or on account of its
         present or hereafter acquired interests in each Partnership, whether
         due or to become due and whether representing profits, distributions
         pursuant to complete or partial liquidation or dissolution of any such
         Partnership, distributions representing the complete or partial
         redemption of such Pledgor's interest in any such Partnership or the
         complete or partial withdrawal of such Pledgor from any such
         Partnership, repayment of capital contributions, payment of management
         fees or commissions, or otherwise, and the right to receive, receipt
         for, use and enjoy all such payments and distributions, and (iii) all
         other rights and privileges incident to such Pledgor's interest in each
         Partnership (all of the foregoing being hereinafter collectively called
         the "Partnership Interest Collateral");

                   (c) LLC Collateral. (i) All membership or other equity
         interests in each Subsidiary which is a limited liability company owned
         or held directly by such Pledgor, whether now owned or hereafter formed
         or acquired (each of such equity interests existing on the date hereof
         being listed and identified on Schedule C attached hereto) (such
         limited liability companies being hereinafter referred to collectively
         as the "LLCs" and individually as a "LLC"), (ii) any and all payments
         and distributions of whatever kind or character, whether in cash or
         other property, at any time made, owing or payable to such Pledgor in
         respect of or on account of its present or hereafter acquired interests
         in each LLC, whether due or to become due and whether representing
         profits, distributions pursuant to complete or partial liquidation or
         dissolution of any such LLC, distributions representing the complete or
         partial redemption of such Pledgor's interest in such LLC or the
         complete or partial withdrawal of such Pledgor from any such LLC,
         repayment of capital contributions, payment of management fees or
         commissions, or otherwise, and the right to receive, receipt for, use
         and enjoy all such payments and distributions, and (iii) all other
         rights and privileges incident to such Pledgor's interest in each LLC
         (all of the foregoing being hereinafter referred to as the "LLC
         Collateral"); and

                   (d)     Proceeds.  All proceeds of the foregoing;

all of the foregoing being herein sometimes referred to as the "Collateral". All
terms which are used in this Agreement which are defined in the Uniform
Commercial Code of the State of Illinois as in effect from time to time ("UCC")
shall have the same meanings herein as such terms are defined in the UCC, unless
this Agreement shall otherwise specifically provide.

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         Section 3. Obligations Secured. This Agreement is made and given to
secure, and shall secure, the prompt payment and performance when due of (a) any
and all indebtedness, obligations and liabilities of the Pledgors, and of any of
them individually, to the Secured Creditors, and to any of them individually,
under or in connection with or evidenced by the Credit Agreement or any other
Loan Document, including, without limitation, all obligations evidenced by the
Notes of the Borrower heretofore or hereafter issued under the Credit Agreement,
all obligations of the Borrower to reimburse the Secured Creditors for the
amount of all drawings on all Letters of Credit issued pursuant to the Credit
Agreement and all other obligations of the Borrower under all Applications
therefor, all obligations of the Pledgors, and of any of them individually,
arising under or in connection with or otherwise evidenced by Hedging Agreements
with any one or more of the Secured Creditors, and all obligations of the
Pledgors, and of any of them individually, arising under any guaranty issued by
it relating to the foregoing or any part thereof, in each case whether now
existing or hereafter arising (and whether arising before or after the filing of
a petition in bankruptcy and including all interest accrued after the petition
date), due or to become due, direct or indirect, absolute or contingent, and
howsoever evidenced, held or acquired and (b) any and all expenses and charges,
legal or otherwise, suffered or incurred by the Secured Creditors, and any of
them individually, in collecting or enforcing any of such indebtedness,
obligations and liabilities or in realizing on or protecting or preserving any
security therefor, including, without limitation, the lien and security interest
granted hereby (all of the indebtedness, obligations, liabilities, expenses and
charges described above being hereinafter referred to as the "Obligations").
Notwithstanding anything in this Agreement to the contrary, the right of
recovery against any Pledgor under this Agreement (other than the Parent and the
Borrower to which this limitation shall not apply) shall not exceed $1.00 less
than the lowest amount which would render such Pledgor's obligations under this
Agreement void or voidable under applicable law, including fraudulent conveyance
law.

         Section 4. Covenants, Agreements, Representations and Warranties. Each
Pledgor hereby covenants and agrees with, and represents and warrants to, the
Secured Creditors that:

                   (a) Each Pledgor is duly organized and validly existing in
         good standing under the laws of the state of its organization. Each
         Pledgor's legal name, state of organization, chief executive office and
         organizational identification number (if any) are correctly set forth
         on Schedule D to this Agreement. No Pledgor shall change its legal name
         or chief executive office without giving 30 days' prior written notice
         of its intent to do so to the Agent (provided in all cases such chief
         executive office shall be within the United States of America). No
         Pledgor shall change its state of organization without the Agent's
         prior written consent. Each Pledgor is and shall be the sole and lawful
         legal, record and beneficial owner of its Collateral, and has full
         right, power, and authority to enter into this Agreement and to perform
         each and all of the matters and things herein provided for. The
         execution and delivery of this Agreement, and the observance and
         performance of each of the matters and things herein set forth, will
         not (i) contravene or constitute a default under any provision of law
         or any judgment, injunction, order, or decree binding upon any Pledgor
         or any provision of any Pledgor's organizational documents or any
         covenant, indenture, or agreement of or affecting any Pledgor or any of
         its property or (ii) result in the creation or imposition of any lien
         or encumbrance on any property of any Pledgor except for the lien and
         security interest granted to the Agent hereunder. No Pledgor shall,

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         without the Agent's prior written consent, sell, assign, or otherwise
         dispose of the Collateral or any interest therein, except to the extent
         permitted by Section 8.10 of the Credit Agreement.

                   (b) The Collateral, and every part thereof, is and shall be
         free and clear of all security interests, liens, rights, claims,
         attachments, levies and encumbrances of every kind, nature and
         description and whether voluntary or involuntary, except for the
         security interest of the Agent hereunder and for other Liens permitted
         by Section 8.8 of the Credit Agreement. Each Pledgor shall warrant and
         defend the Collateral against any claims and demands of all persons at
         any time claiming the same or any interest in the Collateral adverse to
         any Secured Creditor.

                   (c) Each Pledgor agrees to execute and deliver to the Agent
         such further agreements, assignments, instruments and documents and to
         do all such other things as the Agent may deem necessary, reasonable or
         appropriate to assure the Agent its lien and security interest
         hereunder, including such assignments, acknowledgments (including
         acknowledgments of collateral assignment in the form attached hereto as
         Schedule E), stock powers, financing statements, instruments and
         documents as the Agent may from time to time require in order to comply
         with the UCC. Each Pledgor hereby agrees that a carbon, photographic or
         other reproduction of this Agreement or any such financing statement is
         sufficient for filing as a financing statement by the Agent without
         prior notice thereof to such Pledgor wherever the Agent in its
         discretion desires to file the same. Each Pledgor hereby authorizes the
         Agent to file any and all financing statements covering Collateral or
         any part thereof as the Agent may require. Each Pledgor hereby
         authorizes the Agent to order lien searches from time to time as the
         Agent reasonably determines are necessary or advisable to protect the
         perfection and priority of its security interest in the Collateral
         against any Pledgor and the Collateral, and the Pledgors shall promptly
         reimburse the Agent for all reasonable costs and expenses incurred in
         connection with such lien searches. In the event for any reason the law
         of any jurisdiction other than Illinois becomes or is applicable to the
         Collateral or any part thereof, or to any of the Obligations, each
         Pledgor agrees to execute and deliver all such agreements, assignments,
         instruments and documents and to do all such other things as the Agent
         in its discretion deems necessary or appropriate to preserve, protect
         and enforce the lien and security interest of the Agent under the law
         of such other jurisdiction.

                   (d) Each Pledgor shall promptly notify the Agent of any Stock
         Collateral, Partnership Interest Collateral and LLC Collateral acquired
         or maintained by it after the date hereof and not listed on Schedule A,
         Schedule B, or Schedule C hereof, and shall submit to the Agent a
         supplement to the relevant Schedule reflecting the additional
         Collateral subject to this Agreement (provided a Pledgor's failure to
         do so shall not impair the Agent's security interest therein).

                   (e) Except as disclosed on the relevant Schedule, none of the
         Collateral constitutes margin stock (within the meaning of Regulation U
         of the Board of Governors of the Federal Reserve System).

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                   (f) If any Pledgor fails to perform when due any of the
         agreements and covenants herein contained, the Agent may, at its option
         and upon prior notice to such Debtor (unless the Agent reasonably
         determines that payment or performance without such notice is necessary
         to protect, preserve or perfect its interests in the relevant
         Collateral), perform the same and in so doing may expend such sums as
         the Agent reasonably deems advisable in the performance thereof,
         including, without limitation, the payment of any taxes, liens and
         encumbrances, expenditures made in defending against any adverse claim,
         and all other expenditures which the Agent may be compelled to make by
         operation of law or which Agent may make by agreement or otherwise for
         the protection of the security hereof. All such sums and amounts so
         expended shall be repayable by the Pledgors upon demand, shall
         constitute additional Obligations secured hereunder and shall bear
         interest from the date said amounts are expended at the rate per annum
         (computed on the basis of a year of 365 or 366 days, as the case may
         be, for the actual number of days elapsed) determined by adding 2% to
         the Base Rate from time to time in effect plus the Applicable Margin
         for Base Rate Loans under the Revolving Credit, with any change in such
         rate per annum as so determined by reason of a change in such Base Rate
         to be effective on the date of such change in said Base Rate (such rate
         per annum as so determined being hereinafter referred to as the
         "Default Rate"). No such performance of any covenant or agreement by
         the Agent on behalf of such Pledgor, and no such advancement or
         expenditure therefor, shall relieve such Pledgor of any default under
         the terms of this Agreement or in any way obligate any Secured Creditor
         to take any further or future action with respect thereto. The Agent,
         in making any payment hereby authorized, may do so according to any
         bill, statement or estimate procured from the appropriate public office
         or holder of the claim to be discharged without inquiry into the
         accuracy of such bill, statement or estimate, or into the validity of
         any tax assessment, sale, forfeiture, tax lien or title or claim. The
         Agent, in performing any act hereunder, shall be the sole judge of
         whether the relevant Pledgor is required to perform the same under the
         terms of this Agreement. The Agent is hereby authorized to charge any
         account of any Pledgor maintained with any Secured Creditor for the
         amount of such sums and amounts so expended.

           Section 5.    Special Provisions Re: Stock Collateral.

                   (a) Each Pledgor has the right to vote the Pledged Securities
         and there are no restrictions, other than those restrictions, if any,
         set forth in FTD.COM's charter documents as such documents are in
         effect on the date hereof and which relate to the Class B Common Stock
         of FTD.COM, upon the voting rights associated with, or the transfer of,
         any of the Pledged Securities, except as provided by federal, state and
         local and, with respect to Foreign Companies, foreign laws applicable
         to the sale of securities generally and the terms of this Agreement.

                   (b) The certificates for all shares of the Pledged Securities
         shall be delivered by the relevant Pledgor to the Agent duly endorsed
         in blank for transfer or accompanied by an appropriate assignment or
         assignments or an appropriate undated stock power or powers, in every
         case sufficient to transfer title thereto. The Agent may, at any time
         after the occurrence of an Event of Default, cause to be transferred
         into its name or into the

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         name of its nominee or nominees any and all of the Pledged Securities.
         The Agent shall at all times have the right to exchange the
         certificates representing the Pledged Securities for certificates of
         smaller or larger denominations.

                   (c) The Pledged Securities have been validly issued and,
         except as described on Schedule A, are fully paid and non-assessable.
         Except as set forth on Schedule A, there are no outstanding commitments
         or other obligations of the issuers of any of the Pledged Securities to
         issue, and no options, warrants or other rights of any individual or
         entity to acquire, any share of any class or series of capital stock of
         such issuers. The Pledged Securities listed and described on Schedule A
         attached hereto constitute the percentage of the issued and outstanding
         capital stock of each series and class of the issuers thereof as set
         forth thereon owned by the relevant Pledgor. Each Pledgor further
         agrees that in the event any such issuer shall issue any additional
         capital stock of any series or class (whether or not entitled to vote)
         to such Pledgor or otherwise on account of its ownership interest
         therein, subject to the limitations set forth in Section 2(a) above,
         such Pledgor will forthwith pledge and deposit hereunder, or cause to
         be pledged and deposited hereunder, all such additional shares of such
         capital stock.

           Section 6.    Special Provisions Re: Partnership Interest Collateral
and LLC Collateral.

                   (a)     Each Pledgor represents and warrants to, and agrees
          with, the Secured  Creditors as follows:

                            (i) each Partnership is a valid and existing entity
                  of the type listed on Schedule B and is duly organized and
                  existing under applicable law; and each LLC is duly organized
                  and existing under applicable law;

                           (ii) the Partnership Interest Collateral listed and
                  described on Schedule B attached hereto constitutes the
                  percentage of the equity interest in each Partnership set
                  forth thereon owned by the relevant Pledgor; and the LLC
                  Collateral listed and described on Schedule C attached hereto
                  constitutes the percentage of the equity interest in each LLC
                  set forth thereon owned by the relevant Pledgor; and

                          (iii) the copies of the partnership agreements of each
                  Partnership and the articles of association and operating
                  agreements of each LLC (each such agreement being hereinafter
                  referred to as "Organizational Agreement") heretofore
                  delivered to the Agent are true and correct copies thereof and
                  have not been amended or modified in any respect.

                   (b) Each Pledgor agrees that it shall not, without the prior
         written consent of the Agent, agree to any amendment or modification to
         any of the Organizational Agreements which would in any manner
         materially adversely affect or impair the Partnership Interest
         Collateral or LLC Collateral or reduce or dilute the rights of such
         Pledgor with respect to any Partnership or LLC, any of such done
         without such prior written consent to be null and void. The Pledgors
         shall promptly send to the Agent

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         copies of all notices and communications with respect to each
         Partnership and each LLC alleging the existence of a default by any
         Pledgor in the performance of any of its obligations under any
         Organizational Agreement. Each Pledgor agrees that it will promptly
         notify the Agent of any litigation which is reasonably likely to have a
         Material Adverse Effect or is reasonably likely to materially and
         adversely affect a Partnership or a LLC or any of their respective
         properties and of any material adverse change in the operations,
         business properties, assets or conditions, financial or otherwise, of
         any Partnership or any LLC. Each Pledgor shall perform when due all of
         its obligations under each Organizational Agreement. In the event any
         Pledgor fails to pay or perform any obligation arising under any
         Organizational Agreement or otherwise related to any Partnership or any
         LLC, the Agent may, but need not, pay or perform such obligation at the
         expense and for the account of the Pledgors and all funds expended for
         such purposes shall constitute Obligations secured hereby which the
         Pledgors promise to pay to the Agent together with interest thereon at
         the Default Rate.

                   (c) The certificates, if any, at any time evidencing any
         Pledgor's interest in any Partnership or LLC shall be delivered to the
         Agent duly endorsed in blank for transfer or accompanied by an
         appropriate assignment or assignments or an appropriate undated stock
         power or powers, in every case sufficient to transfer title thereto.
         The Agent may, at any time after the occurrence of an Event of Default,
         cause to be transferred into its name or the name of its nominee or
         nominees, any and all of such Collateral. The Agent shall at all times
         have the right to exchange the certificates representing such
         Collateral for certificates of smaller or larger denominations.

                   (d) Each Pledgor has the right to vote its interest in each
         Partnership and LLC (except as set forth herein) and there are no
         restrictions upon the voting rights associated with, or the transfer
         of, any of the Partnership Interest Collateral or LLC Collateral,
         except as provided by federal, state and local laws applicable to the
         sale of securities generally, the terms of any Organizational Agreement
         under which such person is organized and the terms of this Agreement.

                   (e) Except as set forth on Schedule C, there are no
         outstanding commitments or other obligations of any LLC to issue, and
         no options, warrants or other rights of any individual or entity to
         acquire, any interest in such LLC.

         Section 7. Voting Rights and Dividends. So long as no Event of Default
hereunder has occurred and is continuing and thereafter until notified by the
Agent pursuant to Section 9(b) hereof:

                   (a) Each Pledgor shall be entitled to exercise all voting
         and/or consensual powers pertaining to the Collateral of such Pledgor,
         or any part thereof, for all purposes not inconsistent with the terms
         of this Agreement or any other document evidencing or otherwise
         relating to any of the Obligations.

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                   (b) Each Pledgor shall be entitled to receive and retain all
         dividends and distributions in respect of the Collateral which are paid
         in cash of whatsoever nature; provided, however, that such dividends
         and distributions representing:

                            (i) stock or liquidating dividends or a distribution
                  or return of capital upon or in respect of the Pledged
                  Securities or any part thereof or resulting from a split-up,
                  revision or reclassification of the Pledged Securities or any
                  part thereof or received in addition to, in substitution of or
                  in exchange for the Pledged Securities or any part thereof as
                  a result of a merger, consolidation or otherwise; or

                           (ii) distributions in complete or partial liquidation
                  of any Partnership or LLC or the interest of such Pledgor
                  therein;

         in each case, shall be paid, delivered or transferred, as appropriate,
         directly to the Agent immediately upon the receipt thereof by such
         Pledgor and may, in the case of cash, be applied by the Agent to the
         Obligations in accordance with the terms of the Credit Agreement,
         whether or not the same may then be due or otherwise adequately secured
         and shall, in the case of all other property, together with any cash
         received by the Agent and not applied as aforesaid, be held by the
         Agent pursuant hereto as part of the Collateral pledged under and
         subject to the terms of this Agreement. If an Event of Default shall
         have occurred and be continuing, all dividends and distributions
         received by the Agent and then held by it pursuant to this Section
         7(b)(ii) as part of the Collateral will be applied as provided in
         Section 10 hereof.

                   (c) In order to permit each Pledgor to exercise such voting
         and/or consensual powers which it is entitled to exercise under
         subsection (a) above and to receive such distributions which such
         Pledgor is entitled to receive and retain under subsection (b) above,
         the Agent will, if necessary, upon the written request of such Pledgor,
         from time to time execute and deliver to such Pledgor appropriate
         proxies and dividend orders.

           Section 8. Power of Attorney. Each Pledgor hereby appoints the Agent,
its nominee, or any other person whom the Agent may designate as such Pledgor's
attorney-in-fact, with full power and authority upon the occurrence and during
the continuation of any Event of Default to ask, demand, collect, receive,
receipt for, sue for, compound and give acquittance for any and all sums or
properties which may be or become due, payable or distributable in respect of
the Collateral or any part thereof, with full power to settle, adjust or
compromise any claim thereunder or therefor as fully as such Pledgor could
itself do, to endorse or sign the Pledgor's name on any assignments, stock
powers, or other instruments of transfer and on any checks, notes, acceptances,
money orders, drafts, and any other forms of payment or security that may come
into the Agent's possession and on all documents of satisfaction, discharge or
receipt required or requested in connection therewith, and, in its discretion,
to file any claim or take any other action or proceeding, either in its own name
or in the name of such Pledgor, or otherwise, which the Agent deems necessary or
appropriate to collect or otherwise realize upon all or any part of the
Collateral, or effect a transfer thereof, or which may be necessary or
appropriate to protect and preserve the right, title and interest of the Agent
in and to such Collateral and the

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security intended to be afforded hereby. Each Pledgor hereby ratifies and
approves all acts of any such attorney and agrees that neither the Agent nor any
such attorney will be liable for any such acts or omissions nor for any error of
judgment or mistake of fact or law other than such person's gross negligence or
willful misconduct. The Agent may file one or more financing statements
disclosing its security interest in all or any part of the Collateral without
any Pledgor's signature appearing thereon, and each Pledgor also hereby grants
the Agent a power of attorney to execute any such financing statements, and any
amendments or supplements thereto, to preserve the perfection and priority of
the security interests granted or purported to be granted hereby on behalf of
such Pledgor without notice thereof to such Pledgor. The foregoing powers of
attorney, being coupled with an interest, are irrevocable until the Obligations
have been fully satisfied and all commitments of the Lenders to extend credit to
or for the account of the Borrower under the Credit Agreement have expired or
otherwise terminated.

         Section 9. Defaults and Remedies. (a) The occurrence of any event or
the existence of any condition which is specified as an "Event of Default" under
the Credit Agreement shall constitute an "Event of Default" hereunder.

         (b) Upon the occurrence and during the continuation of any Event of
Default, all rights of the Pledgors to receive and retain the distributions
which they are entitled to receive and retain pursuant to Section 7(b) hereof
shall, at the option of the Agent cease and thereupon become vested in the Agent
which, in addition to all other rights provided herein or by law, shall then be
entitled solely and exclusively to receive and retain the distributions which
the Pledgors would otherwise have been authorized to retain pursuant to Section
7(b) hereof and all rights of the Pledgors to exercise the voting and/or
consensual powers which they are entitled to exercise pursuant to Section 7(a)
hereof shall, at the option of the Agent, cease and thereupon become vested in
the Agent which, in addition to all other rights provided herein or by law,
shall then be entitled solely and exclusively to exercise all voting and other
consensual powers pertaining to the Collateral and to exercise any and all
rights of conversion, exchange or subscription and any other rights, privileges
or options pertaining thereto as if the Agent were the absolute owner thereof
including, without limitation, the right to exchange, at its discretion, the
Collateral or any part thereof upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the respective issuer thereof or upon
the exercise by or on behalf of any such issuer or the Agent of any right,
privilege or option pertaining to the Collateral or any part thereof and, in
connection therewith, to deposit and deliver the Collateral or any part thereof
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Agent may determine. In the event
the Agent in good faith believes any of the Collateral constitutes restricted
securities within the meaning of any applicable securities law, any disposition
thereof in compliance with such laws shall not render the disposition
commercially unreasonable.

         (c) Upon the occurrence and during the continuation of any Event of
Default, the Agent shall have, in addition to all other rights provided herein
or by law, the rights and remedies of a secured party under the UCC in all
relevant jurisdictions, and further the Agent may, without demand and, to the
extent permitted by applicable law, without advertisement, notice, hearing or
process of law to the extent permitted by applicable law, all of which each
Pledgor hereby waives to the extent permitted by applicable law, at any time or
times, sell and deliver any or all of the

                                      -10-
<PAGE>

Collateral held by or for it at public or private sale, at any securities
exchange or broker's board or at any of the Agent's offices or elsewhere, for
cash, upon credit or otherwise, at such prices and upon such terms as the Agent
deems advisable, in its sole discretion. In the exercise of any such remedies,
the Agent may sell the Collateral as a unit even though the sales price thereof
may be in excess of the amount remaining unpaid on the Obligations. Also, if
less than all the Collateral is sold, the Agent shall have no duty to marshal or
apportion the part of the Collateral so sold as between the Pledgors, or any of
them, but may sell and deliver any or all of the Collateral without regard to
which of the Pledgors are the owners thereof. In addition to all other sums due
any Secured Creditor hereunder, each Pledgor shall pay the Secured Creditors all
costs and expenses incurred by the Secured Creditors, including reasonable
attorneys' fees and court costs, in obtaining, liquidating or enforcing payment
of Collateral or the Obligations or in the prosecution or defense of any action
or proceeding by or against any Secured Creditor or any Pledgor concerning any
matter arising out of or connected with this Agreement or the Collateral or the
Obligations including, without limitation, any of the foregoing arising in,
arising under or related to a case under the United States Bankruptcy Code (or
any successor statute). Any requirement of reasonable notice shall be met if
such notice is personally served on or mailed, postage prepaid, to the Pledgors
in accordance with Section 14(b) hereof at least 10 days before the time of sale
or other event giving rise to the requirement of such notice; provided, however,
no notification need be given to a Pledgor if such Pledgor has signed, after an
Event of Default has occurred, a statement renouncing any right to notification
of sale or other intended disposition. The Agent shall not be obligated to make
any sale or other disposition of the Collateral regardless of notice having been
given. Any Secured Creditor may be the purchaser at any such sale. Each Pledgor
hereby waives all of its rights of redemption from any such sale to the extent
permitted by applicable law. The Agent may postpone or cause the postponement of
the sale of all or any portion of the Collateral by announcement at the time and
place of such sale, and such sale may, without further notice, be made at the
time and place to which the sale was postponed or the Agent may further postpone
such sale by announcement made at such time and place. The Agent may sell or
otherwise dispose of the Collateral without giving any warranties as to the
Collateral or any part thereof, including disclaimers of any warranties of title
or the like, and each Pledgor acknowledges and agrees that the absence of such
warranties shall not render the disposition commercially unreasonable.

         EACH PLEDGOR AGREES THAT IF ANY PART OF THE COLLATERAL IS SOLD AT ANY
PUBLIC OR PRIVATE SALE, THE AGENT MAY ELECT TO SELL ONLY TO A BUYER WHO WILL
GIVE FURTHER ASSURANCES, SATISFACTORY IN FORM AND SUBSTANCE TO THE AGENT,
RESPECTING COMPLIANCE WITH THE REQUIREMENTS OF THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, AND A SALE SUBJECT TO
SUCH CONDITION SHALL BE DEEMED COMMERCIALLY REASONABLE.

         EACH PLEDGOR FURTHER AGREES THAT IN ANY SALE OF ANY PART OF THE
COLLATERAL, THE AGENT IS HEREBY AUTHORIZED TO COMPLY WITH ANY LIMITATION OR
RESTRICTION IN CONNECTION WITH SUCH SALE AS IT MAY BE ADVISED BY COUNSEL IS
NECESSARY IN ORDER TO AVOID ANY VIOLATION OF APPLICABLE LAW (INCLUDING, WITHOUT
LIMITATION, COMPLIANCE WITH SUCH PROCEDURES AS MAY RESTRICT THE NUMBER OF
PROSPECTIVE BIDDERS AND PURCHASERS AND/OR FURTHER RESTRICT SUCH PROSPECTIVE
BIDDERS OR PURCHASERS TO PERSONS WHO WILL REPRESENT AND AGREE THAT THEY ARE

                                      -11-
<PAGE>

PURCHASING FOR THEIR OWN ACCOUNT FOR INVESTMENT AND NOT WITH A VIEW TO THE
DISTRIBUTION OR RESALE OF SUCH COLLATERAL ), OR IN ORDER TO OBTAIN ANY REQUIRED
APPROVAL OF THE SALE OR OF THE PURCHASER BY ANY GOVERNMENTAL REGULATORY
AUTHORITY OR OFFICIAL, AND EACH PLEDGOR FURTHER AGREES THAT SUCH COMPLIANCE
SHALL NOT RESULT IN SUCH SALE BEING CONSIDERED OR DEEMED NOT TO HAVE BEEN MADE
IN A COMMERCIALLY REASONABLE MANNER, NOR SHALL THE AGENT BE LIABLE OR
ACCOUNTABLE TO ANY PLEDGOR FOR ANY DISCOUNT ALLOWED BY REASON OF THE FACT THAT
SUCH COLLATERAL IS SOLD IN COMPLIANCE WITH ANY SUCH LIMITATION OR RESTRICTION.

         (d) In the event the Agent shall sell or otherwise dispose of all or
any part of the Partnership Interest Collateral or LLC Collateral, each Pledgor
hereby grants the purchaser of such portion of the Partnership Interest
Collateral or LLC Collateral to the fullest extent of its capacity, the ability
(but not the obligation) to become a partner or member in the relevant
Partnership or LLC, as the case may be (subject to the approval of the relevant
Partnership or LLC, as the case may be, in the exercise of its discretion in
accordance with its Organizational Agreement and subject to any requirements of
applicable law), in the place and stead of such Pledgor. To exercise such right,
the purchaser shall give written notice to the relevant Partnership or LLC, as
the case may be, of its election to become a partner or member in such
Partnership or LLC. Following such election and giving of consent by all
necessary partners or members of the relevant Partnership or LLC as to the
purchaser becoming a partner or member, the purchaser shall have the right and
powers and be subject to the liabilities of a partner or member under the
relevant Organizational Agreement and the partnership or limited liability
company act governing the Partnership or LLC.

         (e) Upon the occurrence and during the continuation of any Event of
Default, in addition to all other rights provided herein or by law, the Agent
shall have the right to cause all or any part of the Partnership Interest
Collateral or LLC Collateral of any of the Pledgors in any one or more of the
Partnerships or LLCs to be redeemed and to cause a withdrawal, in whole or in
part, of any Pledgor from any Partnership or LLC or any of its interest therein.

         (f) The powers conferred upon the Agent hereunder are solely to protect
its interest in the Collateral and shall not impose on it any duties to exercise
such powers. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession or control if the
Collateral is accorded treatment substantially equivalent to that which the
Agent accords its own property, consisting of similar types securities, it being
understood, however, that the Agent shall have no responsibility for (i)
ascertaining or taking any action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Collateral, whether or not
the Agent has or is deemed to have knowledge of such matters, (ii) taking any
necessary steps to preserve rights against any parties with respect to any
Collateral, or (iii) initiating any action to protect the Collateral or any part
thereof against the possibility of a decline in market value. This Agreement
constitutes an assignment of rights only and not an assignment of any duties or
obligations of the Pledgors in any way related to the Collateral, and the Agent
shall have no duty or obligation to discharge any such duty or obligation. By
its acceptance hereof, the Agent does not undertake to perform or discharge and
shall not be responsible or liable for the performance or discharge of any such
duties or responsibilities and shall not in any event become a "Substituted
Limited Partner" or words of like import (as

                                      -12-
<PAGE>

defined in the relevant Organizational Agreement) in the relevant Partnership.
Neither any Secured Creditor, nor any party acting as attorney for any Secured
Creditor, shall be liable hereunder for any acts or omissions or for any error
of judgment or mistake of fact or law other than such person's gross negligence
or willful misconduct.

         (g) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between any Pledgor and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not operate
as a waiver; and no waiver shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then only to the
extent specifically stated. The rights and remedies of the Secured Creditors
under this Agreement shall be cumulative and not exclusive of any other right or
remedy which the any Secured Creditor may have. For purposes of this Agreement,
an Event of Default shall be construed as continuing after its occurrence until
the same is waived in writing by the Agent.

          Section 10. Application of Proceeds. The proceeds and avails of the
Collateral at any time received by the Agent upon the occurrence and during the
continuation of any Event of Default shall, when received by the Agent in cash
or its equivalent, be applied by the Agent in reduction of, or held as
collateral security for, the Obligations in accordance with the terms of the
Credit Agreement. The Pledgors shall remain liable to the Secured Creditors for
any deficiency. Any surplus remaining after the full payment and satisfaction of
the Obligations shall be returned to the Borrower, as agent for Pledgors, or to
whomsoever the Agent reasonably determines is lawfully entitled thereto.

          Section 11. Continuing Agreement. This Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect until all
of the Obligations, both for principal and interest, have been fully paid and
satisfied and the commitments of the Secured Creditors to extend credit to or
for the account of the Borrower under the Credit Agreement shall have expired or
otherwise terminated. Upon such termination of this Agreement, the Agent shall,
upon the request and at the expense of the Pledgors, forthwith release all its
liens and security interests hereunder.

          Section 12. The Agent. In acting under or by virtue of this Agreement,
the Agent shall be entitled to all the rights, authority, privileges, and
immunities provided in the Credit Agreement, all of which provisions of said
Credit Agreement (including, without limitation, Section 11 thereof) are
incorporated by reference herein with the same force and effect as if set forth
herein in their entirety. The Agent hereby disclaims any representation or
warranty to the other Secured Creditors or any other holders of the Obligations
concerning the perfection of the liens and security interests granted hereunder
or in the value of the Collateral.

          Section 13. Primary Security; Obligations Absolute. The lien and
security herein created and provided for stand as direct and primary security
for the Obligations of the Borrower arising under or otherwise relating to the
Credit Agreement as well as for the other Obligations secured hereby. No
application of any sums received by the Agent in respect of the Collateral or
any disposition thereof to the reduction of the Obligations or any portion
thereof shall in any manner entitle any Pledgor to any right, title or interest
in or to the Obligations or any collateral security therefor, whether by
subrogation or otherwise, unless and until all Obligations have been

                                      -13-
<PAGE>

fully paid and satisfied and all commitments to extend credit to or for the
account of the Borrower under the Credit Agreement have expired or otherwise
terminated. Each Pledgor acknowledges and agrees that the lien and security
hereby created and provided for are absolute and unconditional and shall not in
any manner be affected or impaired by any acts or omissions whatsoever of any
Secured Creditor or any other holder of any of the Obligations, and without
limiting the generality of the foregoing, the lien and security hereof shall not
be impaired by any acceptance by any Secured Creditor or any other holder of any
of the Obligations of any other security for or guarantors upon any Obligations
or by any failure, neglect or omission on the part of any Secured Creditor or
any other holder of any of the Obligations to realize upon or protect any of the
Obligations or any collateral security therefor. The lien and security hereof
shall not in any manner be impaired or affected by (and the Secured Creditors,
without notice to anyone, are hereby authorized to make from time to time) any
sale, pledge, surrender, compromise, settlement, release, renewal, extension,
indulgence, alteration, substitution, exchange, change in, modification or
disposition of any of the Obligations, or of any collateral security therefor,
or of any guaranty thereof, or of any instrument or agreement setting forth the
terms and conditions pertaining to any of the foregoing. The Secured Creditors
may at their discretion at any time grant credit to the Borrower without notice
to the other Pledgors in such amounts and on such terms as the Secured Creditors
may elect without in any manner impairing the lien and security hereby created
and provided for. In order to realize hereon and to exercise the rights granted
the Secured Creditors hereunder and under applicable law, there shall be no
obligation on the part of any Secured Creditor or any other holder of any of the
Obligations at any time to first resort for payment to the Borrower or any other
Pledgor or to any guaranty of the Obligations or any portion thereof or to
resort to any other collateral security, property, liens or any other rights or
remedies whatsoever, and the Secured Creditors shall have the right to enforce
this Agreement as against any Pledgor or any of its Collateral irrespective of
whether or not other proceedings or steps seeking resort to or realization upon
or from any of the foregoing are pending.

          Section 14. Miscellaneous. (a) This Agreement cannot be changed or
terminated orally. This Agreement shall create a continuing lien on and security
interest in the Collateral and shall be binding upon each Pledgor, its
successors and permitted assigns, and shall inure, together with the rights and
remedies of the Secured Creditors hereunder, to the benefit of the Secured
Creditors, and their successors and assigns; provided, however, that no Pledgor
may assign its rights or delegate its duties hereunder without the Agent's prior
written consent. Without limiting the generality of the foregoing, and subject
to the provisions of the Credit Agreement, any Lender may assign or otherwise
transfer any indebtedness held by it secured by this Agreement to any other
person, and such other person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise.

         (b) All notices and other communications provided for hereunder shall
be given in the manner provided in and otherwise in accordance with the terms of
Section 13.8 of the Credit Agreement, provided that any notice to a Pledgor
other than the Borrower shall be sent in care of the Borrower in the same manner
as notices to the Borrower under the Credit Agreement.

         (c) No Lender shall have the right to institute any suit, action or
proceeding in equity or at law for the foreclosure or other realization upon any
Collateral subject to this Agreement or for the execution of any trust or power
hereof or for the appointment of a receiver, or for the

                                      -14-
<PAGE>

enforcement of any other remedy under or upon this Agreement; it being
understood and intended that no one or more of the Lenders shall have any right
in any manner whatsoever to affect, disturb or prejudice the lien and security
interest of this Agreement by its or their action or to enforce any right
hereunder, and that all proceedings at law or in equity shall be instituted, had
and maintained by the Agent in the manner herein provided for the benefit of the
Secured Creditors.

         (d) In the event that any provision hereof shall be deemed to be
invalid or unenforceable by reason of the operation of any law or by reason of
the interpretation placed thereon by any court, this Agreement shall be
construed as not containing such provision, but only as to such jurisdictions
where such law or interpretation is operative, and the invalidity or
unenforceability of such provision shall not affect the validity of any
remaining provision hereof, and any and all other provisions hereof which are
otherwise lawful and valid shall remain in full force and effect. Without
limiting the generality of the foregoing, in the event that this Agreement shall
be deemed to be invalid or otherwise unenforceable with respect to any Pledgor,
such invalidity or unenforceability shall not affect the validity of this
Agreement with respect to the other Pledgors.

         (e) In the event the Secured Creditors shall at any time in their
discretion permit a substitution of Pledgors hereunder or a party shall wish to
become a Pledgor hereunder, such substituted or additional Pledgor shall, upon
executing an agreement in the form attached hereto as Schedule F, become a party
hereto and be bound by all the terms and conditions hereof to the same extent as
though such Pledgor had originally executed this Agreement and, in the case of a
substitution, in lieu of the Pledgor being replaced. Any such agreement shall
contain information as to such Pledgor necessary to update Schedules A, B, C and
D with respect to it. No such substitution shall be effective absent the written
consent of the Agent nor shall it in any manner affect the obligations of the
other Pledgors hereunder.

         (f) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same instrument. Each
Pledgor acknowledges that this Agreement is and shall be effective upon its
execution and delivery by such Pledgor to the Agent, and it shall not be
necessary for the Agent to execute this Agreement or any other acceptance hereof
or otherwise to signify or express its acceptance hereof.

         (g) This Agreement shall be deemed to have been made in the State of
Illinois and shall be governed by, and construed in accordance with, the laws of
the State of Illinois. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of any
provision hereof.

         (h) Each Pledgor hereby submits to the non-exclusive jurisdiction of
the United States District Court for the Northern District of Illinois and of
any Illinois state court sitting in the City of Chicago, Illinois for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. Each Pledgor irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient form. EACH PLEDGOR AND, BY

                                      -15-
<PAGE>

ACCEPTING THE BENEFITS OF THIS AGREEMENT, EACH SECURED CREDITOR HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

         (i) Termination; Release. At such time as the Commitments are
terminated, all Letters of Credit have expired or have been cash collateralized
and the principal and interest on the Notes and all other Obligations of the
Parent, the Borrower or any Subsidiary under the Credit Agreement and the other
Loan Documents, including without limitation all Hedging Liability, shall have
been paid in full, this Agreement shall terminate (except for provisions that by
their terms survive such termination). Upon such termination, the Agent, at the
expense of the Pledgors, shall take such actions as are appropriate and
reasonably requested by the Pledgors in connection therewith to evidence such
termination. Upon any disposition of Collateral by any Pledgor permitted under
the Credit Agreement, such Collateral shall be sold or otherwise disposed of
free and clear of the Lien created by the Collateral Documents and the
obligations of this Agreement and the Agent, at the expense of the Pledgors,
shall take such actions as are appropriate and reasonably requested by the
Pledgors in connection therewith.

                           [SIGNATURE PAGES TO FOLLOW]

                                      -16-
<PAGE>

         IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly
executed and delivered as of the date first above written.

                                         "PLEDGORS"

                                         FLORISTS' TRANSWORLD DELIVERY, INC.

                                         By ___________________________________
                                            Name ______________________________
                                            Title _____________________________

                                         IOS BRANDS CORPORATION

                                         By ___________________________________
                                            Name ______________________________
                                            Title _____________________________

                                         VALUE NETWORK SERVICE, INC.

                                         By ___________________________________
                                            Name _____________________________
                                            Title ____________________________

                                         FTD HOLDINGS, INCORPORATED

                                         By ___________________________________
                                            Name ______________________________
                                            Title _____________________________

                                         By ___________________________________
                                            Name ______________________________
                                            Title _____________________________

                                      -17-
<PAGE>

                                         FTD INTERNATIONAL CORPORATION

                                         By ___________________________________
                                            Name ______________________________
                                            Title _____________________________

                                         RENAISSANCE GREETING CARDS, INC.

                                         By ___________________________________
                                            Name ______________________________
                                            Title _____________________________

         Acknowledged and agreed to in Chicago, Illinois as of the date first
above written.

                                         HARRIS TRUST AND SAVINGS BANK, as Agent

                                         By ___________________________________
                                            Name ______________________________
                                            Title _____________________________

                                      -18-
<PAGE>

                         SCHEDULE A TO PLEDGE AGREEMENT

                             THE PLEDGED SECURITIES

<TABLE>
<CAPTION>

                                                                                                                        PERCENTAGE
                                                                   JURISDICTION OF        NO. OF                        OF ISSUER'S
    NAME OF PLEDGOR                 NAME OF ISSUER                  INCORPORATION         SHARES      CERTIFICATE NO       STOCK
    ---------------                 --------------                  -------------         ------      ---------------      -----
<S>                      <C>                                    <C>                    <C>           <C>                <C>
IOS Brands Corporation   Florists' Transworld Delivery, Inc.    Michigan                   100              #1             100%

                         Value Network Service, Inc.            Delaware                   100              #1             100%

                         FTD International Corporation          Delaware                  1,000             #1             100%

Florists' Transworld     FTD Holdings, Incorporated             Delaware                  3,000        #1 (1 share)        100%
Delivery, Inc.                                                                                       #2 (2,999 shares)

                         FTD.COM, Inc.                          Delaware                40,395,000          #2              83%
                                                                                         class B
                         Florists' Transworld Delivery          Ontario                    9.75             #2              65%
                         Association of Canada Limited
                         Interflora, Inc.                       Michigan                   500              #1              33%

Value Network Service,   None
Inc.

FTD Holdings,            Renaissance Greeting Cards, Inc.       Maine                      800         #1 (1 share)        100%
Incorporated                                                                                          #2 (799 shares)

FTD International        Florists' Transworld Delivery de       Mexico, Federal         1,950 MXP           N/A             65%
Corporation              Mexico, S. de R.L. de C.V.             District

Renaissance Greeting     None
Cards, Inc.
</TABLE>

<PAGE>

                         SCHEDULE B TO PLEDGE AGREEMENT

                         PARTNERSHIP INTEREST COLLATERAL

<TABLE>
<CAPTION>
                         NAME OF               TYPE OF        JURISDICTION OF       PERCENTAGE OF
    NAME OF PLEDGOR      PARTNERSHIP        ORGANIZATION       ORGANIZATION           OWNERSHIP
    ---------------      -----------        ------------       ------------           ---------
<S>                      <C>                <C>               <C>                   <C>
IOS Brands Corporation         None

Florists' Transworld           None
Delivery, Inc.

Value Network Service,         None
Inc.

FTD Holdings,                  None
Incorporated

FTD International              None
Corporation

Renaissance Greeting           None
Cards, Inc.
</TABLE>

<PAGE>

                         SCHEDULE C TO PLEDGE AGREEMENT

                                 LLC COLLATERAL

<TABLE>
<CAPTION>
                                                                               PERCENTAGE OF EQUITY
                                                         JURISDICTION OF        INTEREST OWNED BY
    NAME OF PLEDGOR         NAME OF LLC                   INCORPORATION               PLEDGOR
    ---------------         -----------                   -------------               -------
<S>                         <C>                          <C>                   <C>
IOS Brands Corporation                None

Florists' Transworld                  None
Delivery, Inc.

Value Network Service,                None
Inc.

FTD Holdings,                         None
Incorporated

FTD International                     None
Corporation

Renaissance Greeting                  None
Cards, Inc.
</TABLE>

                                      -2-
<PAGE>

                         SCHEDULE D TO PLEDGE AGREEMENT

                           ORGANIZATIONAL INFORMATION

<TABLE>
<CAPTION>
                                     STATE OF            ORGANIZATION NO.
NAME OF PLEDGOR                    ORGANIZATION              (IF ANY)           CHIEF EXECUTIVE OFFICE
<S>                             <C>                     <C>                     <C>
Florists' Transworld                                                            3113 Woodcreek Drive
Delivery, Inc.                        Michigan                195-978           Downers Grove, IL 60515

                                                                                3113 Woodcreek Drive
IOS Brands Corporation                Delaware                2328319           Downers Grove, IL 60515

                                                                                3113 Woodcreek Drive
Value Network Service, Inc.           Delaware                3070831           Downers Grove, IL 60515

                                                                                3113 Woodcreek Drive
FTD Holdings, Incorporated            Delaware                2291883           Downers Grove, IL 60515

                                                                                3113 Woodcreek Drive
FTD International Corporation         Delaware                3160529           Downers Grove, IL 60515

Renaissance Greeting Cards,                                                     3113 Woodcreek Drive
Inc.                                    Maine                19930532D          Downers Grove, IL 60515
</TABLE>

<PAGE>

                         SCHEDULE E TO PLEDGE AGREEMENT

                     ACKNOWLEDGMENT TO COLLATERAL ASSIGNMENT

                                                              ____________, 20__

___________________________________
___________________________________
___________________________________
___________________________________
Attention:_________________________

Ladies and Gentlemen:

         _________________________ ("Pledgor") is a party to that certain Pledge
Agreement dated as of September 27, 2001 (the "Pledge Agreement") in favor of
Harris Trust and Savings Bank (the "Agent"), a copy of which you have received.
Pursuant to the Pledge Agreement, Pledgor assigned its equity interests in
___________________ (the "Partnership/LLC") as collateral security for, among
other things, indebtedness and obligations of Florists' Transworld Delivery,
Inc. (the "Borrower") now or from time to time owing pursuant to that certain
Credit Agreement dated as of September 27, 2001 (such Credit Agreement as the
same may be amended, modified or restated from time to time being hereinafter
referred to as the "Credit Agreement") among the Borrower, the Borrower's
affiliates party thereto as guarantors, the Agent, and various other lenders
party thereto.

         We ask you, by accepting this letter below on behalf of the
Partnership/LLC and as its general partner/manager, to confirm the following:

                    1. Pledgor is a partner/member in the Partnership/LLC.

                    2. You consent to the collateral assignment of Pledgor's
         interest in the Partnership/LLC to the Agent, notwithstanding anything
         to the contrary contained in the Partnership Agreement/Limited
         Liability Company Articles of Association and Operating Agreement. This
         letter will serve to evidence the consent to this collateral assignment
         from the Partnership/LLC and its general partner/manager.

                    3. All parties required by the terms of the Partnership
         Agreement/Limited Liability Company Articles of Association and
         Operating Agreement to approve the collateral assignment made by the
         Pledge Agreement have done so, and the interest of the Agent by virtue
         of that assignment has been reflected on the books and records of the
         Partnership/LLC.

<PAGE>

                    4. The Partnership/LLC has been formed under the Partnership
         Agreement dated as of ______________, _____/the Articles of Association
         dated ______________, ______, and the Operating Agreement dated as of
         ________________, _____ (the "Organizational Documents"), and the
         Organizational Documents have not subsequently been modified or amended
         and continue in full force and effect. The Organizational Documents
         shall not be amended without the consent of the Agent. The Agent agrees
         with the Partnership/LLC that the Agent will not unreasonably withhold
         its consent to modifications or amendments to the Organizational
         Documents which do not adversely affect the interests of the Secured
         Creditors identified and defined in the Pledge Agreement.

                    5. All payments and distributions due and to become due to
         Pledgor pursuant to the Organizational Documents shall continue to be
         paid directly to such Pledgor, unless and until the Agent notifies the
         Partnership/LLC in writing to do otherwise. If the Agent so notifies
         the Partnership/LLC, the Partnership/LLC will immediately cease making
         such payments and distributions to the Pledgor and will as soon as
         possible, but in any event within 5 days after receiving such notice,
         remit all such payments and distributions directly to the Agent at 111
         West Monroe Street, Chicago, Illinois 60603.

                    6. By virtue of the Pledge Agreement, the Agent has the
         right, upon the occurrence and during the continuation of any Event of
         Default under the Credit Agreement, at its option to exercise Pledgor's
         right (if any) to withdraw all or any part of such Pledgor's interest
         in the Partnership/LLC by so notifying the Partnership/LLC in writing
         no less than 10 days prior to the proposed withdrawal date. All
         payments and distributions due or to become due under the
         Organizational Documents to the Pledgor as a result of such withdrawal
         shall be remitted directly to the Agent as stated above. If given at
         all, the notice provided pursuant to this paragraph may (but need not)
         be given concurrently with any notice provided pursuant to the
         immediately preceding paragraph.

                    7. The Pledgor agrees that any such payment to the Agent
         shall be a good receipt and acquittance as against it -- that is to
         say, the Partnership/LLC should make the payment directly to the Agent
         and in so doing, the Partnership/LLC discharges any liability to such
         Pledgor for that payment.

                    8. The terms of the Pledge Agreement prohibit Pledgor from
         making any transfer of its interest in the Partnership/LLC without the
         Agent's prior written consent. You agree not to honor any such transfer
         of Pledgor's interest without the Agent's prior written consent.

                                       -2-
<PAGE>

         The agreements in this letter shall be modified only in a writing
signed by the Agent, the Pledgor and the Partnership/LLC. We acknowledge that
the Partnership/LLC shall be entitled to assume that the Pledge Agreement
continues in full force and effect unless and until the Partnership/LLC receives
actual written notice of a termination of same from the Agent.

                                  Very truly yours,

                                  [PLEDGOR]

                                  By
                                    Name_______________________________________
                                    Title______________________________________

                                  HARRIS TRUST AND SAVINGS BANK, as Agent

                                  By
                                    Name_______________________________________
                                    Title______________________________________

         The undersigned, both as the general partner/manager of the
Partnership/LLC and on behalf of the Partnership/LLC, join in this letter to
evidence their acknowledgment and agreement to the same.

                                  [PARTNERSHIP/LLC]

                                  By
                                    Name_______________________________________
                                    Title______________________________________

                                  [GENERAL PARTNER/MANAGER OF PARTNERSHIP]

                                  By
                                    Name_______________________________________
                                    Title______________________________________

                                      -3-
<PAGE>

                         SCHEDULE F TO PLEDGE AGREEMENT

                  ASSUMPTION AND SUPPLEMENTAL PLEDGE AGREEMENT

         THIS AGREEMENT dated as of this _____ day of ______________, 20__ from
[NEW PLEDGOR], a __________ CORPORATION/PARTNERSHIP/LIMITED LIABILITY COMPANY
(the "New Pledgor"), to Harris Trust and Savings Bank ("HTSB") as administrative
agent for the Secured Creditors (defined in the Pledge Agreement hereinafter
identified and defined) (HTSB acting as such administrative agent and any
successor or successors to HTSB in such capacity being hereinafter referred to
as the "Agent");

                             PRELIMINARY STATEMENTS

          A. Florists' Transworld Delivery, Inc. (the "Borrower") and certain
other Pledgors have executed and delivered to the Agent that certain Pledge
Agreement dated as of September 27, 2001 (such Pledge Agreement, as the same may
from time to time be modified or amended, including supplements thereto which
add additional parties as Pledgors thereunder, being hereinafter referred to as
the "Pledge Agreement") pursuant to which such parties (the "Existing Pledgors")
have granted to the Agent for the benefit of the Secured Creditors a lien on and
security interest in the Existing Pledgors' Collateral (as such term is defined
in the Pledge Agreement) to secure the Obligations (as such term is defined in
the Pledge Agreement).

         B. The New Pledgor benefits, directly and indirectly, from credit and
other financial accommodations extended by the Secured Creditors to the
Borrower.

         NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances
made or to be made, or credit accommodations given or to be given, to the
Borrower by the Secured Creditors from time to time, the New Pledgor hereby
agrees as follows:

          1. The New Pledgor acknowledges and agrees that it shall become a
"Pledgor" party to the Pledge Agreement effective upon the date the New
Pledgor's execution of this Agreement and the delivery of this Agreement to the
Agent, and that upon such execution and delivery, all references in the Pledge
Agreement to the terms "Pledgor" or "Pledgors" shall be deemed to include the
New Pledgor. Without limiting the generality of the foregoing, the New Pledgor
hereby repeats and reaffirms all grants (including the grant of a lien and
security interest), covenants, agreements, representations and warranties
contained in the Pledge Agreement as amended hereby, each and all of which are
and shall remain applicable to the Collateral from time to time owned by the New
Pledgor or in which the New Pledgor from time to time has any rights. Without
limiting the foregoing, in order to secure payment of the Obligations, whether
now existing or hereafter arising, the New Pledgor does hereby grant to the
Agent for the benefit of the Secured Creditors, and hereby agrees that the Agent
has and shall continue to have for the benefit of the Secured Creditors a
continuing security interest in, among other things, all of the New Pledgor's
Collateral (as such term is defined in the Pledge Agreement) described in
Section 2 of the Pledge Agreement, each and all of such granting clauses being
incorporated herein by reference with the same force and effect as if set forth
in their entirety except that all

<PAGE>

references in such clauses to the Existing Pledgors or any of them shall be
deemed to include references to the New Pledgor. Nothing contained herein shall
in any manner impair the priority of the liens and security interests heretofore
granted in favor of the Agent under the Pledge Agreement.

          2. The following information shall be added to Schedules A, B and/or C
and to Schedule D to the Pledge Agreement, as applicable:

                                   SCHEDULE A
                             THE PLEDGED SECURITIES

<TABLE>
<CAPTION>

 NAME AND                                                                               PERCENTAGE
LOCATION OF      NAME OF     JURISDICTION OF      NO. OF                CERTIFICATE    OF  ISSUER'S
  PLEDGOR        ISSUER      INCORPORATION        SHARES       CLASS         NO.         STOCK
<S>              <C>         <C>                  <C>          <C>      <C>            <C>

</TABLE>

                                       OR

                                   SCHEDULE B
                         PARTNERSHIP INTEREST COLLATERAL

<TABLE>
<CAPTION>

NAME AND LOCATION OF       NAME OF        TYPE OF       JURISDICTION OF      PERCENT OF
      PLEDGOR            PARTNERSHIP    ORGANIZATION     ORGANIZATION        OWNERSHIP

<S>                      <C>            <C>             <C>                  <C>

</TABLE>

                                       OR

                                   SCHEDULE C
                                 LLC COLLATERAL

<TABLE>
<CAPTION>
                                                                 PERCENTAGE OF
                                                                EQUITY INTEREST
NAME AND LOCATION OF                        JURISDICTION OF        OWNED BY
      PLEDGOR            NAME OF LLC         ORGANIZATION          PLEDGOR
<S>                      <C>                <C>                 <C>

</TABLE>

                                      -2-
<PAGE>
                                       AND

                                   SCHEDULE D
                           ORGANIZATIONAL INFORMATION
<TABLE>
<CAPTION>

                       STATE OF      ORGANIZATION NO.   CHIEF EXECUTIVE
NAME OF PLEDGOR      ORGANIZATION        (IF ANY)           OFFICE
<S>                  <C>             <C>                <C>

</TABLE>

          3. The New Pledgor hereby acknowledges and agrees that the Obligations
are secured by all of the Collateral according to, and otherwise on and subject
to, the terms and conditions of the Pledge Agreement to the same extent and with
the same force and effect as if the New Pledgor had originally been one of the
Existing Pledgors under the Pledge Agreement and had originally executed the
same as such an Existing Pledgor.

          4. All capitalized terms used in this Agreement without definition
shall have the same meaning herein as such terms have in the Pledge Agreement,
except that any reference to the term "Pledgor" or "Pledgors" and any provision
of the Pledge Agreement providing meaning to such term shall be deemed a
reference to the Existing Pledgors and the New Pledgor. Except as specifically
modified hereby, all of the terms and conditions of the Pledge Agreement shall
stand and remain unchanged and in full force and effect.

          5. The New Pledgor agrees to execute and deliver such further
instruments and documents and do such further acts and things as the Agent may
deem necessary or proper to carry out more effectively the purposes of this
Agreement.

          6. No reference to this Agreement need be made in the Pledge Agreement
or in any other document or instrument making reference to the Pledge Agreement,
any reference to the Pledge Agreement in any of such to be deemed a reference to
the Pledge Agreement as modified hereby.

          7. This Agreement shall be governed by and construed in accordance
with the State of Illinois (without regard to principles of conflicts of law).

                                       [NEW PLEDGOR]

                                       By
                                         Name__________________________________
                                         Title_________________________________

                                      -3-
<PAGE>

         Acknowledged and agreed to as of the date first above written.

                                         HARRIS TRUST AND SAVINGS BANK, as Agent

                                         By
                                           Name________________________________
                                           Title_______________________________

                                      -4-<PAGE>
                                                                   EXHIBIT 10.37

                               SECURITY AGREEMENT

         This Security Agreement (the "Agreement") is dated as of September 27,
2001, by and among IOS Brands CORPORATION, a Delaware corporation (the
"Parent"), Florists' Transworld Delivery, Inc., a Michigan corporation (the
"Borrower"), and the other parties executing this Agreement under the heading
"Debtors" (the Parent, the Borrower and such other parties, along with any
parties who execute and deliver to the Agent (as defined below) an agreement
substantially in the form attached hereto as Schedule F, being hereinafter
referred to collectively as the "Debtors" and individually as a "Debtor"), each
with its mailing address at 3113 Woodcreek Drive, Downers Grove, Illinois 60515,
and HARRIS TRUST AND SAVINGS BANK, an Illinois banking corporation ("HTSB"),
with its mailing address at 111 West Monroe Street, Chicago, Illinois 60603,
acting as administrative agent hereunder for the Secured Creditors hereinafter
identified and defined (HTSB acting as such administrative agent and any
successor or successors to HTSB acting in such capacity being hereinafter
referred to as the "Agent").

                             PRELIMINARY STATEMENTS

          A. The Borrower, the other Debtors, and HTSB, individually and as
Agent, have entered into a Credit Agreement dated as of September 27, 2001 (such
Credit Agreement as the same may be amended or modified from time to time,
including amendments and restatements thereof in its entirety, being hereinafter
referred to as the "Credit Agreement"), pursuant to which HTSB and such other
banks and financial institutions and letter of credit issuers from time to time
party to the Credit Agreement (HTSB, in its individual capacity, and such other
banks and financial institutions being hereinafter referred to collectively as
the "Lenders" and individually as a "Lender" and such letter of credit issuers
being hereinafter referred to collectively as the "L/C Issuers" and individually
as a "L/C Issuer") have agreed, subject to certain terms and conditions, to
extend credit and make certain other financial accommodations available to the
Borrower (the Agent, the Lenders, and the L/C Issuers, together with any
affiliates of the Lenders party to the Hedging Agreements referred to below,
being hereinafter referred to collectively as the "Secured Creditors" and
individually as a "Secured Creditor").

          B. The Borrower and the other Debtors may from time to time enter into
one or more Hedging Agreements (as such term is defined in the Credit Agreement)
with respect to, among other things, interest rate exchange, swap, cap, collar,
floor, or other similar agreements and one or more foreign currency contracts,
currency swap contracts or other similar agreements with one or more of the
Lenders party to the Credit Agreement, or their affiliates, for the purpose of
hedging or otherwise protecting against interest rate and foreign currency
exposure.

          C. As a condition to extending credit to the Borrower under the Credit
Agreement or entering into any Hedging Agreements, the Secured Creditors have
required, among other things, that each Debtor grant to the Agent for the
benefit of the Secured Creditors a lien on and security interest in the personal
property of such Debtor described herein subject to the terms and conditions
hereof.

<PAGE>

          D. The Parent owns, directly or indirectly, equity interests in each
other Debtor and the Parent and the Borrower provide the other Debtors with
financial, management, administrative, and technical support which enables such
Debtors to conduct their businesses in an orderly and efficient manner in the
ordinary course.

          E.    Each Debtor will benefit,  directly or indirectly,  from credit
and other financial accommodations extended by the Secured Creditors to the
Borrower.

         NOW, THEREFORE, for good and valuable consideration, receipt whereof is
hereby acknowledged, the parties hereto hereby agree as follows:

           Section 1. Terms defined in Credit Agreement. All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement. The term "Debtor" and "Debtors" as used herein
shall mean and include the Debtors collectively and also each individually, with
all grants, representations, warranties and covenants of and by the Debtors, or
any of them, herein contained to constitute joint and several grants,
representations, warranties and covenants of and by the Debtors; provided,
however, that unless the context in which the same is used shall otherwise
require, any grant, representation, warranty or covenant contained herein
related to the Collateral shall be made by each Debtor only with respect to the
Collateral owned by it or represented by such Debtor as owned by it.

           Section 2. Grant of Security Interest in the Collateral. (a) Each
Debtor hereby grants to the Agent for the benefit of the Secured Creditors a
lien on and security interest in, and right of set-off against, and acknowledges
and agrees that the Agent has and shall continue to have for the benefit of the
Secured Creditors a continuing lien on and security interest in, and right of
set-off against, all right, title and interest, whether now owned or existing or
hereafter created, acquired or arising, in and to all personal property of each
Debtor, including all of the following:

                    (a)  Accounts (including Health-Care-Insurance Receivables,
                         if any);

                    (b)  Chattel Paper;

                    (c)  Instruments (including Promissory Notes);

                    (d)  Documents;

                    (e)  General Intangibles (including Payment Intangibles and
                         Software);

                    (f)  Letter-of-Credit Rights;

                    (g)  Supporting Obligations;

                    (h)  Deposit Accounts;

                                      -2-
<PAGE>

                    (i)  Investment Property (including certificated and
       uncertificated Securities, Securities Accounts, Security Entitlements,
       Commodity Accounts, and Commodity Contracts);

                    (j)  Inventory;

                    (k)  Equipment (including all software, whether or not the
       same constitutes embedded software, used in the operation thereof);

                    (l)  Fixtures;

                    (m)  All rights to merchandise and other Goods (including
       rights to returned or repossessed Goods and rights of stoppage in
       transit) which are represented by, arise from, or relate to any of the
       foregoing;

                    (n)  All other personal property and interests in personal
       property of such Debtor of any kind or description now held by any
       Secured Creditor or at any time hereafter transferred or delivered to, or
       coming into the possession, custody, or control of, any Secured Creditor,
       or any agent or affiliate of any Secured Creditor, whether expressly as
       collateral security or for any other purpose (whether for safekeeping,
       custody, collection or otherwise), and all dividends and distributions on
       or other rights in connection with any such property;

                    (o)  All supporting evidence and documents relating to any
       of the above-described property, including, without limitation, computer
       programs, disks, tapes and related electronic data processing media, and
       all rights of such Debtor to retrieve the same from third parties,
       written applications, credit information, account cards, payment records,
       correspondence, delivery and installation certificates, invoice copies,
       delivery receipts, notes, and other evidences of indebtedness, insurance
       certificates and the like, together with all books of account, ledgers,
       and cabinets in which the same are reflected or maintained;

                    (p)  All Accessions and additions to, and substitutions and
       replacements of, any and all of the foregoing; and

                    (q)  All Proceeds and products of the foregoing, and all
       insurance of the foregoing and proceeds thereof;

all of the foregoing being herein sometimes referred to as the "Collateral". All
capitalized terms which are used in this Agreement which are defined in the
Uniform Commercial Code of the State of Illinois as in effect from time to time
("UCC") shall have the same meanings herein as such terms are defined in the
UCC, unless this Agreement shall otherwise specifically provide. For purposes of
this Agreement, the term "Receivables" means all rights to the payment of a
monetary obligation, whether or not earned by performance, and whether evidenced
by an Account, Chattel Paper, Instrument, General Intangible, or otherwise.

                                      -3-
<PAGE>

           Section 3. Obligations Secured. This Agreement is made and given to
secure, and shall secure, the prompt payment and performance when due of (a) any
and all indebtedness, obligations and liabilities of the Debtors, and of any of
them individually, to the Secured Creditors, and to any of them individually,
under or in connection with or evidenced by the Credit Agreement or any other
Loan Document, including, without limitation, all obligations evidenced by the
Notes of the Borrower heretofore or hereafter issued under the Credit Agreement,
all obligations of the Borrower to reimburse the Secured Creditors for the
amount of all drawings on all Letters of Credit issued pursuant to the Credit
Agreement and all other obligations of the Borrower under all Applications
therefor, all obligations of the Debtors, and of any of them individually,
arising under or in connection with or otherwise evidenced by Hedging Agreements
with any one or more of the Secured Creditors, and all obligations of the
Debtors, and of any of them individually, arising under any guaranty issued by
it relating to the foregoing or any part thereof, in each case whether now
existing or hereafter arising (and whether arising before or after the filing of
a petition in bankruptcy and including all interest accrued after the petition
date), due or to become due, direct or indirect, absolute or contingent, and
howsoever evidenced, held or acquired and (ii) any and all expenses and charges,
legal or otherwise, suffered or incurred by the Secured Creditors, and any of
them individually, in collecting or enforcing any of such indebtedness,
obligations and liabilities or in realizing on or protecting or preserving any
security therefor, including, without limitation, the lien and security interest
granted hereby (all of the indebtedness, obligations, liabilities, expenses and
charges described above being hereinafter referred to as the "Obligations").
Notwithstanding anything in this Agreement to the contrary, the right of
recovery against any Debtor under this Agreement (other than the Parent and the
Borrower to which this limitation shall not apply) shall not exceed $1.00 less
than the lowest amount which would render such Debtor's obligations under this
Agreement void or voidable under applicable law, including fraudulent conveyance
law.

         Section 4. Covenants, Agreements, Representations and Warranties. The
Debtors hereby covenant and agree with, and represent and warrant to, the
Secured Creditors that:

                   (a) Each Debtor is duly organized and validly existing in
         good standing under the laws of the state of its organization. No
         Debtor shall change its state of organization without the Agent's prior
         written consent. Each Debtor is the sole and lawful owner of its
         Collateral, and has full right, power, and authority to enter into this
         Agreement and to perform each and all of the matters and things herein
         provided for. The execution and delivery of this Agreement, and the
         observance and performance of each of the matters and things herein set
         forth, will not (i) contravene or constitute (x) a default under any
         provision of any Debtor's organizational documents or, (y) a default
         under any provision of law or any judgment, injunction, order or decree
         binding on any Debtor or any covenant, indenture, or agreement of or
         affecting any Debtor or any of its property which, in the case of any
         default described in this clause (y), is reasonably likely to have a
         Material Adverse Effect, or (ii) result in the creation or imposition
         of any lien or encumbrance on any property of any Debtor except for the
         lien and security interest granted to the Agent hereunder.

                   (b) Each Debtor's respective chief executive office is at the
         location listed under Column 2 on Schedule A attached hereto opposite
         such Debtor's name; and such

                                      -4-
<PAGE>

         Debtor has no other executive offices or places of business other than
         those listed under Column 3 on Schedule A attached hereto opposite such
         Debtor's name. The Collateral owned or leased by each Debtor is and
         shall remain in such Debtor's possession or control at the locations
         listed under Columns 2 and 3 on Schedule A attached hereto opposite
         such Debtor's name (collectively for each Debtor, the "Permitted
         Collateral Locations"), except for (i) Collateral which in the ordinary
         course of such Debtor's business is in transit between Permitted
         Collateral Locations, (ii) Collateral aggregating less than $100,000 in
         fair market value outstanding at any one time, and (iii) Inventory
         temporarily located in warehouses not owned by the Debtor as described
         in and pursuant to the conditions of Section 7(d) hereof. If for any
         reason any Collateral is at any time kept or located at a location
         other than a Permitted Collateral Location, the Agent shall
         nevertheless have and retain a lien on and security interest therein.
         The Debtors own and shall at all times own all Permitted Collateral
         Locations, except to the extent otherwise disclosed under Columns 2 and
         3 on Schedule A. No Debtor shall move its chief executive office or
         maintain a place of business at a location other than those specified
         under Columns 2 or 3 on Schedule A or permit any Collateral to be
         located at a location other than a Permitted Collateral Location, in
         each case without first providing the Agent at least 30 days' prior
         written notice of the Debtor's intent to do so; provided that each
         Debtor shall at all times maintain its chief executive office, places
         of business, and Permitted Collateral Locations in the United States of
         America and, with respect to any new chief executive office or place of
         business or location of Collateral, such Debtor shall have taken all
         action reasonably requested by the Agent to maintain the lien and
         security interest of the Agent in the Collateral at all times fully
         perfected and in full force and effect.

                   (c) Each Debtor's legal name, state of organization and
         organizational number (if any) are correctly set forth under Column 1
         on Schedule A of this Agreement. No Debtor has transacted business at
         any time during the immediately preceding five-year period, and does
         not currently transact business, under any other legal names or trade
         names other than the prior legal names and trade names (if any) set
         forth on Schedule B attached hereto. No Debtor shall change its legal
         name or transact business under any other trade name without first
         giving 30 days' prior written notice of its intent to do so to the
         Agent.

                   (d) The Collateral and every part thereof is and shall be
         free and clear of all security interests, liens (including, without
         limitation, mechanics', laborers' and statutory liens), attachments,
         levies and encumbrances of every kind, nature and description and
         whether voluntary or involuntary, except for the lien and security
         interest of the Agent therein and other Liens permitted by Section 8.8
         of the Credit Agreement. Each Debtor shall warrant and defend the
         Collateral against any material claims and demands of all persons at
         any time claiming the same or any interest in the Collateral adverse to
         any of the Secured Creditors.

                   (e) Each Debtor shall promptly pay when due all taxes,
         assessments and governmental charges and levies upon or against it or
         its Collateral, in accordance with the provisions of the Credit
         Agreement.

                                      -5-
<PAGE>

                   (f) Each Debtor agrees it shall not waste or destroy the
         Collateral or any part thereof and shall not be negligent in the care
         or use of any Collateral. Each Debtor agrees it will not use,
         manufacture, sell or distribute any Collateral in violation of any
         statute, ordinance or other governmental requirement. Each Debtor will
         perform in all material respects its obligations under any contract or
         other agreement constituting part of the Collateral, it being
         understood and agreed that the Secured Creditors have no responsibility
         to perform such obligations.

                   (g) Subject to Sections 5(d), 6(a), 7(b), 7(c), and 8(c)
         hereof and the terms of the Credit Agreement (including, without
         limitation, Section 8.10 thereof), each Debtor agrees it will not,
         without the Agent's prior written consent, sell, assign, mortgage,
         lease, or otherwise dispose of the Collateral or any interest therein.

                   (h) Each Debtor shall insure its Collateral consisting of
         tangible personal property against such risks and hazards as other
         companies similarly situated insure against, and including in any event
         loss or damage by fire, theft, burglary, pilferage, and loss in
         transit, in amounts and under policies containing loss payable clauses
         to the Agent as its interest may appear (and, if the Agent requests,
         naming the Agent as additional insureds therein) by insurers reasonably
         acceptable to the Agent. All premiums on such insurance shall be paid
         by the Debtors and the policies of such insurance (or certificates
         therefor) delivered to the Agent. All insurance required hereby shall
         provide that any loss shall be payable notwithstanding any act or
         negligence of the relevant Debtor, shall provide that no cancellation
         thereof shall be effective until at least 30 days after receipt by the
         relevant Debtor and the Agent of written notice thereof, and shall be
         reasonably satisfactory to the Agent in all other respects. In case of
         any material loss, damage to or destruction of the Collateral or any
         part thereof, the relevant Debtor shall promptly give written notice
         thereof to the Agent generally describing the nature and extent of such
         damage or destruction. In case of any loss, damage to or destruction of
         the Collateral or any part thereof, the relevant Debtor, whether or not
         the insurance proceeds, if any, received on account of such damage or
         destruction shall be sufficient for that purpose, at such Debtor's cost
         and expense, will promptly repair or replace the Collateral so lost,
         damaged or destroyed, except to the extent such Collateral is not
         necessary to the conduct of such Debtor's business in the ordinary
         course. In the event any Debtor shall receive any proceeds of such
         insurance, such Debtor shall immediately pay over such proceeds of
         insurance to the Agent which will thereafter be applied to the
         reduction of the Obligations (whether or not then due) or held as
         collateral security therefor, as the Agent may then determine or as
         otherwise provided for in the Credit Agreement; provided, however, that
         the Agent agrees to release such insurance proceeds to the relevant
         Debtor for replacement or restoration of the portion of the Collateral
         lost, damaged, or destroyed if, but only if, (i) at the time of release
         no Default or Event of Default exists, (ii) written application for
         such release is received by the Agent from the relevant Debtor within
         30 days of the receipt of such proceeds, and (iii) the Agent has
         received evidence reasonably satisfactory to it that the collateral
         lost, damaged, or destroyed has been or will be replaced or restored to
         its condition immediately prior to the loss, destruction, or other
         event giving rise to the payment of such insurance proceeds. Each
         Debtor hereby authorizes the Agent, at the Agent's option, to adjust,
         compromise and settle any losses

                                      -6-
<PAGE>

         under any insurance afforded at any time after the occurrence and
         during the continuation of any Default or Event of Default, and such
         Debtor does hereby irrevocably constitute the Agent, its officers,
         agents and attorneys, as such Debtor's attorneys-in-fact, with full
         power and authority after the occurrence and during the continuation of
         any Default or Event of Default to effect such adjustment, compromise
         and/or settlement and to endorse any drafts drawn by an insurer of the
         Collateral or any part thereof and to do everything necessary to carry
         out such purposes and to receive and receipt for any unearned premiums
         due under policies of such insurance. Unless the Agent elects to
         adjust, compromise or settle losses as aforesaid, any adjustment,
         compromise and/or settlement of any losses under any insurance shall be
         made by the relevant Debtor subject to final approval of the Agent
         (regardless of whether or not an Event of Default shall have occurred)
         in the case of losses exceeding $100,000. All insurance proceeds shall
         be subject to the lien and security interest of the Agent hereunder.

                  UNLESS THE DEBTORS PROVIDE THE AGENT WITH EVIDENCE OF THE
         INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE AGENT MAY PURCHASE
         INSURANCE AT THE DEBTORS' EXPENSE TO PROTECT THE AGENT'S INTERESTS IN
         THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT ANY DEBTOR'S
         INTERESTS IN THE COLLATERAL. THE COVERAGE PURCHASED BY THE AGENT MAY
         NOT PAY ANY CLAIMS THAT ANY DEBTOR MAKES OR ANY CLAIM THAT IS MADE
         AGAINST SUCH DEBTOR IN CONNECTION WITH THE COLLATERAL. THE DEBTORS MAY
         LATER CANCEL ANY SUCH INSURANCE PURCHASED BY THE AGENT, BUT ONLY AFTER
         PROVIDING THE AGENT WITH EVIDENCE THAT THE DEBTORS HAVE OBTAINED
         INSURANCE AS REQUIRED BY THIS AGREEMENT. IF THE AGENT PURCHASES
         INSURANCE FOR THE COLLATERAL, THE DEBTORS WILL BE RESPONSIBLE FOR THE
         COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT
         THE AGENT MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE,
         UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE
         INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE OBLIGATIONS
         SECURED HEREBY. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF
         INSURANCE THE DEBTORS MAY BE ABLE TO OBTAIN ON THEIR OWN.

                   (i) Each Debtor will at all times allow the Secured Creditors
         and their respective representatives free access to and right of
         inspection of the Collateral at such reasonable times and intervals as
         the Agent or any other Secured Creditor may reasonably designate and,
         in the absence of any existing Default or Event of Default, with
         reasonable prior written notice to the relevant Debtor.

                   (j) If any Collateral is in the possession or control of any
         agents or processors of a Debtor and the Agent so requests, such Debtor
         agrees to notify such agents or processors in writing of the Agent's
         security interest therein and instruct them to hold all such Collateral
         for the Agent's account and subject to the Agent's instructions. Each
         Debtor will, upon the request of the Agent, authorize and instruct all
         bailees and any other parties, if any, at any time processing,
         labeling, packaging, holding, storing, shipping or transferring all or
         any part of the Collateral to permit the Secured Creditors and their
         respective representatives to examine and inspect any of the Collateral
         then in such

                                      -7-
<PAGE>

         party's possession and to verify from such party's own books and
         records any information concerning the Collateral or any part thereof
         which the Secured Creditors or their respective representatives may
         seek to verify. As to any premises not owned by a Debtor wherein any of
         the Collateral is located, if any, such Debtor shall, upon the Agent's
         request, cause each party having any right, title or interest in, or
         lien on, any of such premises to enter into an agreement (any such
         agreement to contain a legal description of such premises) whereby such
         party disclaims any right, title and interest in, and lien on, the
         Collateral, allows the removal of such Collateral by the Agent or its
         agents or representatives, and otherwise is in form and substance
         reasonably acceptable to the Agent.

                   (k) Upon the Agent's request, each Debtor agrees from time to
         time to deliver to the Agent such evidence of the existence, identity
         and location of its Collateral and of its availability as collateral
         security pursuant hereto (including, without limitation, schedules
         describing all Receivables created or acquired by such Debtor, copies
         of customer invoices or the equivalent and original shipping or
         delivery receipts for all merchandise and other goods sold or leased or
         services rendered by it, together with such Debtor's warranty of the
         genuineness thereof, and reports stating the book value of its
         Inventory and Equipment by major category and location), in each case
         the Agent may reasonably request. The Agent shall have the right to
         verify all or any part of the Collateral in any manner, and through any
         medium, which the Agent considers appropriate and reasonable, and each
         Debtor agrees to furnish all assistance and information, and perform
         any acts, which the Agent may reasonably require in connection
         therewith.

                   (l) Each Debtor will comply in all material respects with the
         terms and conditions of any and all leases, easements, right-of-way
         agreements and other agreements binding upon such Debtor or affecting
         the Collateral, in each case which cover the premises wherein the
         Collateral is located, and any orders, ordinances, laws or statutes of
         any city, state or other governmental entity, department or agency
         having jurisdiction with respect to such premises or the conduct of
         business thereon.

                   (m) Schedule C (or, in the case of trade names, Schedule B)
         attached hereto contains a true, complete, and current listing of all
         copyrights, copyright applications, trademarks, trademark applications,
         tradenames, patents, patent rights or licenses, patent applications and
         other intellectual property rights owned by each of the Debtors that
         are registered with any governmental authority. The Debtors shall
         promptly notify the Agent in writing of any additional intellectual
         property rights acquired or arising after the date hereof, and shall
         submit to the Agent a supplement to Schedule C to reflect such
         additional rights (provided any Debtor's failure to do so shall not
         impair the Agent's security interest therein). Each Debtor owns or
         possesses rights to use all franchises, licenses, copyrights, copyright
         applications, patents, patent rights or licenses, patent applications,
         trademarks, trademark rights, trade names, trade name rights,
         copyrights and rights with respect to the foregoing which are required
         to conduct its business. No event has occurred which permits, or after
         notice or lapse of time or both would permit, the revocation or
         termination of any such rights, and the Debtors are not liable to any
         person

                                      -8-
<PAGE>

         for infringement under applicable law with respect to any such rights
         as a result of its business operations.

                   (n) Each Debtor agrees to execute and deliver to the Agent
         such further agreements, assignments, instruments and documents, and to
         do all such other things, as the Agent may reasonably deem necessary or
         appropriate to assure the Agent its lien and security interest
         hereunder, including without limitation, (i) executing such financing
         statements or other instruments and documents as the Agent may from
         time to time reasonably require to comply with the UCC and any other
         applicable law, (ii) executing such patent, trademark, and copyright
         agreements as the Agent may from time to time reasonably require to
         comply with the filing requirements of the United States Patent and
         Trademark Office and the United States Copyright Office, (iii)
         executing such control agreements with respect to all Deposit Accounts,
         Securities Accounts, Letter-of-Credit Rights, and electronic Chattel
         Paper, and to use commercially reasonable efforts to cause the relevant
         depository institutions, financial intermediaries, and letter of credit
         issuers to execute and deliver such control agreements, as the Agent
         may from time to time reasonably require, and (iv) after the occurrence
         of an Event of Default, assigning to the Agent its rights under any
         surety bonds or instruments of which it is the beneficiary and
         delivering the same to the Agent. Each Debtor hereby agrees that a
         carbon, photographic, or other reproduction of this Agreement or any
         such financing statement is sufficient for filing as a financing
         statement by the Agent without notice thereof to such Debtor wherever
         the Agent in its sole discretion desires to file the same. Each Debtor
         hereby authorizes the Agent to file any and all financing statements
         covering the Collateral or any part thereof as the Agent may require,
         including financing statements describing the Collateral as "all
         assets" or "all personal property" or words of like meaning. The Agent
         may order such lien searches from time to time against each Debtor and
         the Collateral as the Agent reasonably determines are necessary or
         advisable to protect the perfection and priority of its security
         interest in the Collateral, and the Debtor shall promptly reimburse the
         Agent for all reasonable costs and expenses incurred in connection with
         such lien searches. In the event for any reason the law of any
         jurisdiction other than Illinois becomes or is applicable to the
         Collateral or any part thereof, or to any of the Obligations, each
         Debtor agrees to execute and deliver all such instruments and documents
         and to do all such other things as the Agent deems necessary or
         appropriate to preserve, protect and enforce the security interest of
         the Agent under the law of such other jurisdiction.

                   (o) If any Debtor fails to perform any of the covenants and
         agreements herein contained, the Agent may, at its option, and upon
         prior notice to such Debtor (unless the Agent reasonably determines
         that payment or performance without such notice is necessary to
         protect, preserve or perfect its interests in the relevant Collateral),
         perform the same and in so doing may expend such sums as the Agent
         reasonably deems advisable in the performance thereof, including,
         without limitation, the payment of any insurance premiums, the payment
         of any taxes, liens and encumbrances, expenditures made in defending
         against any adverse claims, and all other expenditures which the Agent
         may be compelled to make by operation of law or which the Agent may
         make by agreement or otherwise for the protection of the security
         hereof. All such sums and amounts so expended shall be repayable by
         such Debtor immediately upon demand, shall constitute

                                      -9-
<PAGE>

         additional Obligations secured hereunder, and shall bear interest from
         the date said amounts are expended at the rate per annum (computed on
         the basis of a year of 365 or 366 days, as the case may be, for the
         actual number of days elapsed) determined by adding 2% to the Base Rate
         from time to time in effect plus the Applicable Margin for Base Rate
         Loans under the Revolving Credit, with any change in such rate per
         annum as so determined by reason of a change in such Base Rate to be
         effective on the date of such change in said Base Rate (such rate per
         annum as so determined being hereinafter referred to as the "Default
         Rate"). No such performance of any covenant or agreement by the Agent
         on behalf of a Debtor, and no such advancement or expenditure therefor,
         shall relieve any Debtor of any default under the terms of this
         Agreement or in any way obligate any Secured Creditor to take any
         further or future action with respect thereto. The Agent in making any
         payment hereby authorized may do so according to any bill, statement or
         estimate procured from the appropriate public office or holder of the
         claim to be discharged without inquiry into the accuracy of such bill,
         statement or estimate or into the validity of any tax assessment, sale,
         forfeiture, tax lien or title or claim. The Agent in performing any act
         hereunder shall be the sole judge of whether the relevant Debtor is
         required to perform the same under the terms of this Agreement. The
         Agent is hereby authorized to charge any depository or other account of
         any Debtor maintained with any Secured Creditor for the amount of such
         sums and amounts so expended.

         Section 5. Special Provisions Re: Receivables. (a) As of the time any
Receivable becomes subject to the security interest provided for hereby and at
all times thereafter, each Debtor shall be deemed to have warranted as to each
Receivable that all warranties of such Debtor set forth in this Agreement are
true and correct with respect to such Receivable; that each Receivable and all
papers and documents relating thereto are genuine and in all respects what they
purport to be; that each Receivable is valid and subsisting; and, except as
disclosed to the Agent in writing, that no surety bond was required of the
Debtor or given by the Debtor in connection with such Receivable or the
contracts or purchase orders out of which the same arose.

         (b) To the extent any Receivable or other item of Collateral is
evidenced by an Instrument or tangible Chattel Paper, each Debtor shall cause
such Instrument or tangible Chattel Paper to be pledged and delivered to the
Agent; provided, however, that, prior to the existence of a Default or Event of
Default and thereafter until otherwise required by the Agent, a Debtor shall not
be required to deliver any such Instrument or tangible Chattel Paper if and only
so long as the aggregate unpaid principal balance of all such Instruments and
tangible Chattel Paper held by the Debtors and not delivered to the Agent under
the Collateral Documents is less than $1,000,000 at any one time outstanding.
Unless delivered to the Agent or its agent, all tangible Chattel Paper and
Instruments shall contain a legend acceptable to the Agent indicating that such
Chattel Paper or Instrument is subject to the security interest of the Agent
contemplated by this Agreement.

         (c) If any Receivable arises out of a contract with the United States
of America or any of its departments, agencies or instrumentalities, the
relevant Debtor agrees to, at the request of the Agent, execute whatever
instruments and documents are required by the Agent in order that such
Receivable shall be assigned to the Agent and that proper notice of such
assignment shall be given under the federal Assignment of Claims Act (or any
successor statute) or any similar statute relating to the assignment of such
Receivables.

                                      -10-
<PAGE>

         (d) Unless and until an Event of Default occurs, any merchandise or
other goods which are returned by a customer or account debtor or otherwise
recovered may be resold by a Debtor in the ordinary course of its business as
presently conducted in accordance with Section 7(b) hereof; and, during the
existence of any Event of Default, such merchandise and other goods shall be set
aside at the request of the Agent and held by the relevant Debtor as trustee for
the Secured Creditors and shall remain part of the Secured Creditors'
Collateral. Unless and until an Event of Default occurs, the Debtors may settle
and adjust disputes and claims with its customers and account debtors, handle
returns and recoveries, and grant discounts, credits, and allowances in the
ordinary course of its business as presently conducted for amounts and on terms
which the relevant Debtor in good faith considers advisable; and, during the
existence of any Event of Default, at the Agent's request, the Debtors shall
notify the Agent promptly of all returns and recoveries and, on the Agent's
request, deliver any such merchandise or other goods to the Agent. During the
existence of any Event of Default, at the Agent's request, the Debtors shall
also notify the Agent promptly of all material disputes and claims and settle or
adjust them at no expense to the Agent, but no discount, credit, or allowance
other than on normal trade terms in the ordinary course of business as presently
conducted shall be granted to any customer or account debtor and no returns of
merchandise or other goods shall be accepted by any Debtor without the Agent's
consent. The Agent may, at all times during the existence of any Event of
Default, settle or adjust disputes and claims directly with customers or account
debtors for amounts and upon terms which the Agent reasonably considers
advisable.

         Section 6. Collection of Receivables. (a) Except as otherwise provided
in this Agreement, each Debtor shall make collection of all of its Receivables
and may use the same to carry on its business in accordance with ordinary and
customary business practice and otherwise subject to the terms hereof.

         (b) Upon the occurrence of any Default or Event of Default, whether or
not the Agent has exercised any or all of its rights under other provisions of
this Section 6, in the event the Agent reasonably requests any Debtor to do so:

                   (i) all Instruments and Chattel Paper at any time
         constituting part of the Receivables (including any postdated checks)
         shall, upon receipt by such Debtor, be immediately endorsed to and
         deposited with Agent; and/or

                  (ii) such Debtor shall instruct all customers and account
         debtors to remit all payments in respect of Receivables or any other
         Collateral to a lockbox or lockboxes under the sole custody and control
         of the Agent and which are maintained at one or more post offices
         selected by the Agent.

         (c) Upon the occurrence and during the continuation of any Default or
Event of Default hereunder, whether or not the Agent has exercised any or all of
its rights under the other provisions of this Section 6, the Agent or its
designee may notify the relevant Debtor's customers and account debtors at any
time that Receivables have been assigned to the Agent or of the Agent's security
interest therein, and either in its own name, or such Debtor's name, or both,
demand, collect (including, without limitation, through a lockbox analogous to
that described in Section 6(b)(ii) hereof), receive, receipt for, sue for,
compound and give acquittance for any or

                                      -11-
<PAGE>

all amounts due or to become due on Receivables, and in the Agent's discretion
file any claim or take any other action or proceeding which the Agent may
reasonably deem necessary or appropriate to protect and realize upon the
security interest of the Agent in the Receivables or any other Collateral.

         (d) Any proceeds of Receivables or other Collateral transmitted to or
otherwise received by the Agent pursuant to any of the provisions of Sections
6(b) or 6(c) hereof may be handled and administered by the Agent in and through
a remittance account or accounts maintained at the Agent or by the Agent at a
commercial bank or banks selected by the Agent (collectively the "Depositary
Banks" and individually a "Depositary Bank"), and each Debtor acknowledges that
the maintenance of such remittance accounts by the Agent is solely for the
Agent's convenience and that the Debtors do not have any right, title or
interest in such remittance accounts or any amounts at any time standing to the
credit thereof. The Agent may, after the occurrence and during the continuation
of any Default or Event of Default, apply all or any part of any proceeds of
Receivables or other Collateral received by it from any source to the payment of
the Obligations (whether or not then due and payable), such applications to be
made in such amounts, in such manner and order and at such intervals as the
Agent may from time to time in its discretion determine, but not less often than
once each week. The Agent need not apply or give credit for any item included in
proceeds of Receivables or other Collateral until the Depositary Bank has
received final payment therefor at its office in cash or final solvent credits
current at the site of deposit acceptable to the Agent and the Depositary Bank
as such. However, if the Agent does permit credit to be given for any item prior
to a Depositary Bank receiving final payment therefor and such Depositary Bank
fails to receive such final payment or an item is charged back to the Agent or
any Depositary Bank for any reason, the Agent may at its election in either
instance charge the amount of such item back against any such remittance
accounts or any depository account of any Debtor maintained with any Secured
Creditor, together with interest thereon at the Default Rate. Concurrently with
each transmission of any proceeds of Receivables or other Collateral to any such
remittance account, upon the Agent's request, the relevant Debtor shall furnish
the Agent with a report in such form as Agent shall reasonably require
identifying the particular Receivable or such other Collateral from which the
same arises or relates. Unless and until a Default or an Event of Default shall
have occurred and be continuing, the Agent will release proceeds of Collateral
which the Agent has not applied to the Obligations as provided above from the
remittance account from time to time promptly after receipt thereof. Each Debtor
hereby indemnifies the Secured Creditors from and against all liabilities,
damages, losses, actions, claims, judgments, and all reasonable costs, expenses,
charges and attorneys' fees suffered or incurred by any Secured Creditor because
of the maintenance of the foregoing arrangements; provided, however, that no
Debtor shall be required to indemnify any Secured Creditor for any of the
foregoing to the extent they arise solely from the gross negligence or willful
misconduct of the person seeking to be indemnified. The Secured Creditors shall
have no liability or responsibility to any Debtor for the Agent or any other
Depositary Bank accepting any check, draft or other order for payment of money
bearing the legend "payment in full" or words of similar import or any other
restrictive legend or endorsement whatsoever or be responsible for determining
the correctness of any remittance.

         Section 7. Special Provisions Re: Inventory and Equipment. (a) Each
Debtor shall at its own cost and expense maintain, keep and preserve its
Inventory in good and merchantable

                                      -12-
<PAGE>

condition and keep and preserve its Equipment in good repair, working order and
condition, ordinary wear and tear excepted, and, without limiting the foregoing,
make all necessary and proper repairs, replacements and additions to its
Equipment so that the efficiency thereof shall be fully preserved and
maintained.

         (b) Each Debtor may, until an Event of Default has occurred and is
continuing and thereafter until otherwise notified by the Agent, use, consume,
sell and lease the Inventory in the ordinary course of its business, provided
that any transfer or sale of Inventory in satisfaction, partial or complete, of
a debt owing by such Debtor shall be made for fair market value.

         (c) Each Debtor may, until an Event of Default has occurred and is
continuing and thereafter until otherwise notified by the Agent, sell Equipment
to the extent permitted by Section 8.10 of the Credit Agreement.

         (d) As of the time any Inventory or Equipment of a Debtor becomes
subject to the security interest provided for hereby and at all times
thereafter, such Debtor shall be deemed to have warranted as to any and all of
such Inventory and Equipment that all warranties of such Debtor set forth in
this Agreement are true and correct with respect to such Inventory and
Equipment; that all of such Inventory and Equipment is located at a location set
forth pursuant to Section 3(b) hereof, other than any Inventory with an
aggregate fair market value not to exceed $2,000,000 at any time which is
temporarily located in warehouses not owned by a Debtor. Each Debtor warrants
and agrees that none of its Inventory is or will be consigned to any other
person or entity without the Agent's prior written consent.

         (e) Upon the Agent's request, each Debtor shall at its own cost and
expense cause the lien of the Agent in and to any portion of its Collateral
subject to a certificate of title law to be duly noted on such certificate of
title or to be otherwise filed in such manner as is prescribed by law in order
to perfect such lien and will cause all such certificates of title and evidences
of lien to be deposited with the Agent.

         (f) Except for Equipment from time to time located on the real estate
described on Schedule D attached hereto or as otherwise hereafter disclosed to
the Secured Creditors in writing, none of the Equipment is or will be attached
to real estate in such a manner that the same may become a fixture.

         (g) If any of the Inventory is at any time evidenced by a document of
title, such document shall be promptly delivered by the relevant Debtor to the
Agent.

         Section 8. Special Provisions Re: Investment Property and Deposits. (a)
Unless and until an Event of Default has occurred and is continuing and
thereafter until notified to the contrary by the Agent pursuant to Section 10(d)
hereof:

                   (i) each Debtor shall be entitled to exercise all voting
         and/or consensual powers pertaining to its Investment Property or any
         part thereof, for all purposes not inconsistent with the terms of this
         Agreement, the Credit Agreement or any other document evidencing or
         otherwise relating to any Obligations; and

                                      -13-
<PAGE>

                  (ii) each Debtor shall be entitled to receive and retain all
         cash dividends paid upon or in respect of its Investment Property.

         (b) All Investment Property maintained by each Debtor (including all
securities, certificated or uncertificated, securities accounts, and commodity
accounts) as of the date hereof is listed and identified on Schedule E attached
hereto and made a part hereof. Each Debtor shall promptly notify the Agent of
any other Investment Property acquired or maintained by such Debtor after the
date hereof, and shall submit to the Agent a supplement to Schedule E to reflect
such additional rights (provided any Debtor's failure to do so shall not impair
the Agent's security interest therein). Certificates for all certificated
securities now or at any time constituting Investment Property and part of the
Collateral hereunder shall be promptly delivered by the relevant Debtor to the
Agent duly endorsed in blank for transfer or accompanied by an appropriate
assignment or assignments or an appropriate undated stock power or powers, in
every case sufficient to transfer title thereto, including, without limitation,
all stock received in respect of a stock dividend or resulting from a split-up,
revision or reclassification of the Investment Property or any part thereof or
received in addition to, in substitution of or in exchange for the Investment
Property or any part thereof as a result of a merger, consolidation or
otherwise. With respect to any uncertificated securities or any Investment
Property held by a securities intermediary, commodity intermediary, or other
financial intermediary of any kind, at the Agent's request, the relevant Debtor
shall execute and deliver, and shall cause any such issuer or intermediary to
execute and deliver, an agreement among such Debtor, the Agent, and such issuer
or intermediary in form and substance satisfactory to the Agent which provides,
among other things, for the issuer's or intermediary's agreement that it will
comply with such entitlement orders, and apply any value distributed on account
of any Investment Property, as directed by the Agent without further consent by
such Debtor. The Agent may, at any time after the occurrence and during the
continuation of an Event of Default at any time when the Obligations are, or
have been declared to be, due and payable in full, cause to be transferred into
its name or the name of its nominee or nominees any and all of the Investment
Property hereunder.

         (c) Unless and until a Default or an Event of Default has occurred and
is continuing, the Debtors may sell or otherwise dispose of any of its
Investment Property to the extent permitted by the Credit Agreement, provided
that, except to the extent permitted by the Credit Agreement, no Debtor shall
sell or otherwise dispose of any capital stock or other equity interest in any
direct or indirect Subsidiary without the prior written consent of the Agent.
After the occurrence and during the continuation of any Default or Event of
Default, no Debtor shall sell all or any part of the Investment Property without
the prior written consent of the Agent.

         (d) Each Debtor represents that on the date of this Agreement, none of
its Investment Property consists of margin stock (as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System) except to
the extent such Debtor has delivered to the Agent a duly executed and completed
Form U-1 with respect to such stock. If at any time the Investment Property or
any part thereof consists of margin stock, the relevant Debtor shall promptly so
notify the Agent and deliver to the Agent a duly executed and completed Form U-1
and such other instruments and documents reasonably requested by the Agent in
form and substance satisfactory to the Agent.

                                      -14-
<PAGE>

         (e) Notwithstanding anything to the contrary contained herein, in the
event any Investment Property is subject to the terms of a separate security
agreement in favor of the Agent, the terms of such separate security agreement
shall govern and control unless otherwise agreed to in writing by the Agent.

         (f) All Deposit Accounts maintained by each Debtor on the date hereof
are listed and identified (by account number and depository institution) on
Schedule E attached hereto and made a part hereof. Each Debtor shall promptly
notify the Agent of any other Deposit Account opened or maintained by such
Debtor after the date hereof, and shall submit to the Agent a supplement to
Schedule E to reflect such additional accounts (provided such Debtor's failure
to do so shall not impair the Agent's security interest therein). With respect
to any Deposit Account maintained by a depository institution other than the
Agent, and as a condition to the establishment and maintenance of any such
Deposit Account, except as otherwise permitted by the Credit Agreement, such
Debtor, the depository institution, and the Agent shall execute and deliver an
account control agreement in form and substance satisfactory to the Agent which
provides, among other things, for the depository institution's agreement that it
will comply with instructions originated by the Agent directing the disposition
of the funds in the Deposit Account without further consent by such Debtor.

         Section 9. Power of Attorney. In addition to any other powers of
attorney contained herein, each Debtor hereby appoints the Agent, its nominee,
or any other person whom the Agent may designate as such Debtor's
attorney-in-fact, with full power during the existence of any Default or Event
of Default to sign such Debtor's name on verifications of Receivables and other
Collateral; to send requests for verification of Collateral to such Debtor's
customers, account debtors and other obligors; to endorse such Debtor's name on
any checks, notes, acceptances, money orders, drafts and any other forms of
payment or security that may come into the Agent's possession; to endorse the
Collateral in blank or to the order of the Agent or its nominee; to sign such
Debtor's name on any invoice or bill of lading relating to any Collateral, on
claims to enforce collection of any Collateral, on notices to and drafts against
customers and account debtors and other obligors, on schedules and assignments
of Collateral, on notices of assignment and on public records; to notify the
post office authorities to change the address for delivery of such Debtor's mail
to an address designated by the Agent; to receive, open and dispose of all mail
addressed to such Debtor; and to do all things necessary to carry out this
Agreement. Each Debtor hereby ratifies and approves all acts of any such
attorney and agrees that neither the Agent nor any such attorney will be liable
for any acts or omissions nor for any error of judgment or mistake of fact or
law other than such person's gross negligence or willful misconduct. The Agent
may file one or more financing statements and/or effective financing statements
disclosing its security interest in any or all of the Collateral without any
Debtor's signature appearing thereon, and each Debtor also hereby grants the
Agent a power of attorney to execute any such financing statements and/or
effective financing statements, or amendments and supplements to financing
statements and/or effective financing statements to perfect and preserve the
security interests granted or purported to be granted hereby, on behalf of such
Debtor without notice thereof to any Debtor. The foregoing powers of attorney,
being coupled with an interest, are irrevocable until the Obligations have been
fully paid and satisfied and the commitments of the Lenders to extend credit to
or for the account of the Borrower under the Credit Agreement have expired or
otherwise terminated; provided, however, that the Agent agrees, as a covenant to
the

                                      -15-
<PAGE>

Debtors, not to exercise the powers of attorney set forth in this Section unless
an Event of Default exists.

         Section 10. Defaults and Remedies. (a) The occurrence of any event or
the existence of any condition which is specified as an "Event of Default" under
the Credit Agreement shall constitute an "Event of Default" hereunder.

         (b) Upon the occurrence and during the continuation of any Event of
Default, the Agent shall have, in addition to all other rights provided herein
or by law, the rights and remedies of a secured party under the UCC in all
relevant jurisdictions, and further the Agent may, without demand and, to the
extent permitted by applicable law, without advertisement, notice, hearing or
process of law, all of which each Debtor hereby waives to the extent permitted
by applicable law, at any time or times, sell and deliver any or all Collateral
held by or for it at public or private sale, at any securities exchange or
broker's board or at any Secured Creditor's office or elsewhere, for cash, upon
credit or otherwise, at such prices and upon such terms as the Agent deems
advisable, in its sole discretion. Upon the occurrence and during the
continuation of any Event of Default, in addition to any other right or remedies
set forth herein or by applicable law, the Agent may by written demand direct
any securities intermediary, commodities intermediary, or other financial
intermediary at any time holding any Investment Property, or any issuer thereof,
to deliver such Collateral, or any part thereof, to the Agent and/or liquidate
such Collateral, or any part thereof, and deliver the proceeds thereof to the
Agent. In the exercise of any such remedies, the Agent may sell the Collateral
as a unit even though the sales price thereof may be in excess of the amount
remaining unpaid on the Obligations. Also, if less than all the Collateral is
sold, the Agent shall have no duty to marshal or apportion the part of the
Collateral so sold as between the Debtors, or any of them, but may sell and
deliver any or all of the Collateral without regard to which of the Debtors are
the owners thereof. In addition to all other sums due any Secured Creditor
hereunder, each Debtor shall pay the Secured Creditors all costs and expenses
incurred by the Secured Creditors, including reasonable attorneys' fees and
court costs, in obtaining, liquidating or enforcing payment of Collateral or the
Obligations or in the prosecution or defense of any action or proceeding by or
against any Secured Creditor or any Debtor concerning any matter arising out of
or connected with this Agreement or the Collateral or the Obligations,
including, without limitation, any of the foregoing arising in, arising under or
related to a case under the United States Bankruptcy Code (or any successor
statute). Any requirement of reasonable notice shall be met if such notice is
personally served on or mailed, postage prepaid, to the Debtors in accordance
with Section 15(b) hereof at least 10 days before the time of sale or other
event giving rise to the requirement of such notice; provided, however, no
notification need be given to a Debtor if such Debtor has signed, after an Event
of Default hereunder has occurred, a statement renouncing any right to
notification of sale or other intended disposition. The Agent shall not be
obligated to make any sale or other disposition of the Collateral regardless of
notice having been given. Any Secured Creditor may be the purchaser at any such
sale. Each Debtor hereby waives all of its rights of redemption from any such
sale to the extent permitted by applicable law. The Agent may postpone or cause
the postponement of the sale of all or any portion of the Collateral by
announcement at the time and place of such sale, and such sale may, without
further notice, be made at the time and place to which the sale was postponed or
the Agent may further postpone such sale by announcement made at such time and
place. The Agent has no obligation to prepare the Collateral for sale. The Agent
may sell or

                                      -16-
<PAGE>

otherwise dispose of the Collateral without giving any warranties as to the
Collateral or any part thereof, including disclaimers of any warranties of title
or the like, and each Debtor acknowledges and agrees that the absence of such
warranties shall not render the disposition commercially unreasonable.

         (c) Without in any way limiting the foregoing, upon the occurrence and
during the continuation of any Event of Default hereunder, the Agent shall have
the right, in addition to all other rights provided herein or by law, to take
physical possession of any and all of the Collateral and anything found therein,
the right for that purpose to enter without legal process any premises where the
Collateral may be found (provided such entry be done lawfully), and the right to
maintain such possession on the relevant Debtor's premises (each Debtor hereby
agreeing, to the extent it may lawfully do so, to lease such premises without
cost or expense to the Agent or its designee if the Agent so requests) or to
remove the Collateral or any part thereof to such other places as the Agent may
desire. Upon the occurrence and during the continuation of any Event of Default
hereunder, the Agent shall have the right to exercise any and all rights with
respect to all Deposit Accounts of each Debtor, including, without limitation,
the right to direct the disposition of the funds in each Deposit Account and to
collect, withdraw and receive all amounts due or to become due or payable under
each such Deposit Account. Upon the occurrence and during the continuation of
any Event of Default hereunder, each Debtor shall, upon the Agent's demand,
promptly assemble the Collateral and make it available to the Agent at a place
reasonably designated by the Agent. If the Agent exercises its right to take
possession of the Collateral, each Debtor shall also at its expense perform any
and all other steps requested by the Agent to preserve and protect the security
interest hereby granted in the Collateral, such as placing and maintaining signs
indicating the security interest of the Agent, appointing overseers for the
Collateral and maintaining Collateral records.

         (d) Without in any way limiting the foregoing, upon the occurrence and
during the continuation of any Event of Default, all rights of a Debtor to
exercise the voting and/or consensual powers which it is entitled to exercise
pursuant to Section 8(a)(i) hereof and/or to receive and retain the
distributions which it is entitled to receive and retain pursuant to Section
8(a)(ii) hereof, shall, at the option of the Agent, cease and thereupon become
vested in the Agent, which, in addition to all other rights provided herein or
by law, shall then be entitled solely and exclusively to exercise all voting and
other consensual powers pertaining to the Investment Property (including,
without limitation, the right to deliver notice of control with respect to any
Investment Property held in a securities account or commodity account and
deliver all entitlement orders with respect thereto) and/or to receive and
retain the distributions which such Debtor would otherwise have been authorized
to retain pursuant to Section 8(a)(ii) hereof and shall then be entitled solely
and exclusively to exercise any and all rights of conversion, exchange or
subscription or any other rights, privileges or options pertaining to any
Investment Property as if the Agent were the absolute owner thereof including,
without limitation, the rights to exchange, at its discretion, any and all of
the Investment Property upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the respective issuer thereof or upon
the exercise by or on behalf of any such issuer or the Agent of any right,
privilege or option pertaining to any Investment Property and, in connection
therewith, to deposit and deliver any and all of the Investment Property with
any committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Agent may determine.

                                      -17-
<PAGE>

In the event the Agent in good faith believes any of the Collateral constitutes
restricted securities within the meaning of any applicable securities laws, any
disposition thereof in compliance with such laws shall not render the
disposition commercially unreasonable.

         (e) Without in any way limiting the foregoing, each Debtor hereby
grants to the Secured Creditors a royalty-free irrevocable license and right to
use all of such Debtor's patents, patent applications, patent licenses,
trademarks, trademark applications, trademark licenses, trade names, and similar
intangibles in connection with any foreclosure or other realization by the Agent
or the Secured Creditors on all or any part of the Collateral to the extent
permitted by law. The license and right granted the Secured Creditors hereby
shall be without any royalty or fee or charge whatsoever.

         (f) The powers conferred upon the Secured Creditors hereunder are
solely to protect their interest in the Collateral and shall not impose on them
any duty to exercise such powers. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession or control if such Collateral is accorded treatment substantially
equivalent to that which the Agent accords its own property, consisting of
similar type assets, it being understood, however, that the Agent shall have no
responsibility for ascertaining or taking any action with respect to calls,
conversions, exchanges, maturities, tenders, or other matters relating to any
such Collateral, whether or not the Agent has or is deemed to have knowledge of
such matters. This Agreement constitutes an assignment of rights only and not an
assignment of any duties or obligations of the Debtors, or any of them, in any
way related to the Collateral, and the Agent shall have no duty or obligation to
discharge any such duty or obligation. The Agent shall have no responsibility
for taking any necessary steps to preserve rights against any parties with
respect to any Collateral or initiating any action to protect the Collateral
against the possibility of a decline in market value. Neither any Secured
Creditor nor any party acting as attorney for any Secured Creditor shall be
liable for any acts or omissions or for any error of judgment or mistake of fact
or law other than their gross negligence or willful misconduct.

         (g) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between any Debtor and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not operate
as a waiver; and no waiver shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then only to the
extent specifically stated. Neither any Secured Creditor, nor any party acting
as attorney for any Secured Creditor, shall be liable hereunder for any acts or
omissions or for any error of judgment or mistake of fact or law other than
their gross negligence or willful misconduct. The rights and remedies of the
Secured Creditors under this Agreement shall be cumulative and not exclusive of
any other right or remedy which any Secured Creditor may have. For purposes of
this Agreement, an Event of Default shall be construed as continuing after its
occurrence until the same is waived in writing by the Agent.

         Section 11. Application of Proceeds. The proceeds and avails of the
Collateral at any time received by the Agent upon the occurrence and during the
continuation of any Event of Default shall, when received by the Agent in cash
or its equivalent, be applied by the Agent in reduction of, or held as
collateral security for, the Obligations in accordance with the terms of the
Credit Agreement. The Debtors shall remain liable to the Secured Creditors for
any deficiency.

                                      -18-
<PAGE>

Any surplus remaining after the full payment and satisfaction of the Obligations
shall be returned to the Borrower, as agent for the Debtors, or to whomsoever
the Agent reasonably determines is lawfully entitled thereto.

         Section 12. Continuing Agreement. This Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect until all
of the Obligations, both for principal and interest, have been fully paid and
satisfied and the commitments of the Lenders to extend credit to or for the
account of the Borrower under the Credit Agreement have expired or otherwise
terminated. Upon such termination of this Agreement, the Agent shall, upon the
request and at the expense of the Debtors, forthwith release its security
interest hereunder.

         Section 13. The Agent. In acting under or by virtue of this Agreement,
the Agent shall be entitled to all the rights, authority, privileges, and
immunities provided in the Credit Agreement, all of which provisions of said
Credit Agreement (including, without limitation, Section 11 thereof) are
incorporated by reference herein with the same force and effect as if set forth
herein in their entirety. The Agent hereby disclaims any representation or
warranty to the other Secured Creditors or any other holders of the Obligations
concerning the perfection of the liens and security interests granted hereunder
or in the value of any of the Collateral.

         Section 14. Primary Security; Obligations Absolute. The lien and
security interest herein created and provided for stand as direct and primary
security for the Obligations of the Borrower as well as for any of the other
Obligations secured hereby. No application of any sums received by the Secured
Creditors in respect of the Collateral or any disposition thereof to the
reduction of the Obligations or any part thereof shall in any manner entitle any
Debtor to any right, title or interest in or to the Obligations or any
collateral or security therefor, whether by subrogation or otherwise, unless and
until all Obligations have been fully paid and satisfied and all agreements of
the Secured Creditors to extend credit to or for the account of each Debtor have
expired or otherwise have been terminated. Each Debtor acknowledges that the
lien and security interest hereby created and provided are absolute and
unconditional and shall not in any manner be affected or impaired by any acts of
omissions whatsoever of any Secured Creditor or any other holder of any
Obligations, and without limiting the generality of the foregoing, the lien and
security interest hereof shall not be impaired by any acceptance by the Secured
Creditors or any other holder of any Obligations of any other security for or
guarantors upon any of the Obligations or by any failure, neglect or omission on
the part of any Secured Creditor or any other holder of any Obligations to
realize upon or protect any of the Obligations or any collateral or security
therefor. The lien and security interest hereof shall not in any manner be
impaired or affected by (and the Secured Creditors, without notice to anyone,
are hereby authorized to make from time to time) any sale, pledge, surrender,
compromise, settlement, release, renewal, extension, indulgence, alteration,
substitution, exchange, change in, modification or disposition of any of the
Obligations or of any collateral or security therefor, or of any guaranty
thereof, or of any instrument or agreement setting forth the terms and
conditions pertaining to any of the foregoing. The Secured Creditors may at
their discretion at any time grant credit to any Debtor without notice to the
other Debtors in such amounts and on such terms as the Secured Creditors may
elect (all of such to constitute additional Obligations hereby secured) without
in any manner impairing the lien and security interest created and provided for
herein. In order to realize hereon and to exercise the rights granted the
Secured Creditors hereunder and under applicable law,

                                      -19-
<PAGE>

there shall be no obligation on the part of any Secured Creditor or any other
holder of any Obligations at any time to first resort for payment to any one or
more Debtors or to any guaranty of the Obligations or any portion thereof or to
resort to any other collateral, security, property, liens or any other rights or
remedies whatsoever, and the Secured Creditors shall have the right to enforce
this Agreement against any Debtor or any of its Collateral irrespective of
whether or not other proceedings or steps seeking resort to or realization upon
or from any of the foregoing are pending.

          Section 15. Miscellaneous. (a) This Agreement cannot be changed or
terminated orally. This Agreement shall create a continuing lien on and security
interest in the Collateral and shall be binding upon each Debtor, its successors
and assigns and shall inure, together with the rights and remedies of the
Secured Creditors hereunder, to the benefit of the Secured Creditors and their
successors and permitted assigns; provided, however, that no Debtor may assign
its rights or delegate its duties hereunder without the Agent's prior written
consent. Without limiting the generality of the foregoing, and subject to the
provisions of the Credit Agreement, any Lender may assign or otherwise transfer
any indebtedness held by it secured by this Agreement to any other person, and
such other person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise.

         (b) All notices and other communications provided for hereunder shall
be given in the manner provided in and otherwise in accordance with the terms of
Section 13.8 of the Credit Agreement, provided that any notice to a Debtor other
than the Borrower shall be sent in care of the Borrower in the same manner as
notices to the Borrower under the Credit Agreement.

         (c) No Lender shall have the right to institute any suit, action or
proceeding in equity or at law for the foreclosure or other realization upon any
Collateral subject to this Agreement or for the execution of any trust or power
hereof or for the appointment of a receiver, or for the enforcement of any other
remedy under or upon this Agreement; it being understood and intended that no
one or more of the Lenders shall have any right in any manner whatsoever to
affect, disturb or prejudice the lien and security interest of this Agreement by
its or their action or to enforce any right hereunder, and that all proceedings
at law or in equity shall be instituted, had and maintained by the Agent in the
manner herein provided for the benefit of the Secured Creditors.

         (d) In the event and to the extent that any provision hereof shall be
deemed to be invalid or unenforceable by reason of the operation of any law or
by reason of the interpretation placed thereon by any court, this Agreement
shall to such extent be construed as not containing such provision, but only as
to such locations where such law or interpretation is operative, and the
invalidity or unenforceability of such provision shall not affect the validity
of any remaining provisions hereof, and any and all other provisions hereof
which are otherwise lawful and valid shall remain in full force and effect.
Without limiting the generality of the foregoing, in the event that this
Agreement shall be deemed to be invalid or otherwise unenforceable with respect
to any Debtor, such invalidity or unenforceability shall not affect the validity
of this Agreement with respect to the other Debtors.

                                      -20-
<PAGE>

         (e) In the event the Secured Creditors shall at any time in their
discretion permit a substitution of Debtors hereunder or a party shall wish to
become a Debtor hereunder, such substituted or additional Debtor shall, upon
executing an agreement in the form attached hereto as Schedule F, become a party
hereto and be bound by all the terms and conditions hereof to the same extent as
though such Debtor had originally executed this Agreement and, in the case of a
substitution, in lieu of the Debtor being replaced. Any such agreement shall
contain information as to such Debtor necessary to update Schedule A, B, C, D,
and E hereto with respect to it. No such substitution shall be effective absent
the written consent of the Agent nor shall it in any manner affect the
obligations of the other Debtors hereunder.

         (f) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same instrument. Each
Debtor acknowledges that this Agreement is and shall be effective upon its
execution and delivery by such Debtor to the Agent, and it shall not be
necessary for the Agent to execute this Agreement or any other acceptance hereof
or otherwise to signify or express its acceptance hereof.

         (g) This Agreement shall be deemed to have been made in the State of
Illinois and shall be governed by, and construed in accordance with, the laws of
the State of Illinois. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of any
provision hereof.

         (h) Each Debtor hereby submits to the non-exclusive jurisdiction of the
United States District Court for the Northern District of Illinois and of any
Illinois state court sitting in the City of Chicago, Illinois, for purposes of
all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. Each Debtor irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient form. EACH DEBTOR AND, BY ACCEPTING THE BENEFITS OF THIS AGREEMENT,
EACH SECURED CREDITOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

         (i) Termination; Release. At such time as the Commitments are
terminated, all Letters of Credit have expired or have been cash collateralized
and the principal and interest on the Notes and all other Obligations of the
Parent, the Borrower or any Subsidiary under the Credit Agreement and the other
Loan Documents, including without limitation all Hedging Liability, shall have
been paid in full, this Agreement shall terminate (except for provisions that by
their terms survive such termination). Upon such termination, the Agent, at the
expense of the Debtors, shall take such actions as are appropriate and
reasonably requested by the Debtors in connection therewith to evidence such
termination. Upon any disposition of Collateral by any Debtor permitted under
the Credit Agreement, such Collateral shall be sold or otherwise disposed of
free and clear of the Lien created by the Collateral Documents and the
obligations of this Agreement and the Agent, at the expense of the Debtors,
shall take such actions as are appropriate and reasonably requested by the
Debtors in connection therewith.

                                      -21-
<PAGE>

                           [SIGNATURE PAGES TO FOLLOW]

                                      -22-
<PAGE>

         IN WITNESS WHEREOF, each Debtor has caused this Security Agreement to
be duly executed and delivered as of the date first above written.

                    "DEBTORS"

                    FLORISTS' TRANSWORLD DELIVERY, INC.

                    By
                       Name
                           --------------------------------------------------
                       Title
                            -------------------------------------------------

                    IOS BRANDS CORPORATION

                    By
                       Name
                           --------------------------------------------------
                       Title
                            -------------------------------------------------

                    VALUE NETWORK SERVICE, INC.

                    By
                       Name
                           --------------------------------------------------
                       Title
                            -------------------------------------------------

                    FTD HOLDINGS, INCORPORATED

                    By
                       Name
                           --------------------------------------------------
                       Title
                            -------------------------------------------------

                    By
                       Name
                           --------------------------------------------------
                       Title
                            -------------------------------------------------

                    FTD INTERNATIONAL CORPORATION

                    By
                       Name
                           --------------------------------------------------
                       Title
                            -------------------------------------------------

                                      -23-
<PAGE>

                    RENAISSANCE GREETING CARDS, INC.

                    By
                       Name
                           --------------------------------------------------
                       Title
                            -------------------------------------------------

         Accepted and agreed to in Chicago, Illinois, as of the date first above
written.

                    HARRIS TRUST AND SAVINGS BANK, as Agent

                    By
                       Name
                           --------------------------------------------------
                       Title
                            -------------------------------------------------

                                      -24-
<PAGE>

                        SCHEDULE A TO SECURITY AGREEMENT

                                    LOCATIONS

<TABLE>
<CAPTION>
                                                                                     ADDITIONAL PLACES OF
                                                                                          BUSINESS AND
                NAME OF DEBTOR                    CHIEF EXECUTIVE OFFICE             COLLATERAL LOCATIONS
                --------------                    ----------------------             --------------------
<S>     <C>                            <C>                                          <C>
        IOS Brands Corporation          3113 Woodcreek Drive                         None
        (Delaware 2328319)              Downers Grove, Illinois  60515

        Florists' Transworld            3113 Woodcreek Drive                         None
        Delivery, Inc.                  Downers Grove, Illinois  60515
        (Michigan 195-978)

        Value Network Service, Inc.     3113 Woodcreek Drive                         None
        (Delaware 3070831)              Downers Grove, Illinois  60515

        FTD Holdings, Incorporated      3113 Woodcreek Drive                         None
        (Delaware 2291883)              Downers Grove, Illinois  60515

        FTD International Corporation   3113 Woodcreek Drive                         None
        (Delaware 3160529)              Downers Grove, Illinois  60515

        Renaissance Greeting Cards,     3113 Woodcreek Drive                         10 Renaissance Way
        Inc.                            Downers Grove, Illinois  60515               Sanford, ME 04073
        (Maine 19930532D)
                                                                                     993 Bar Harbor Road
                                                                                     Trenton, ME 04605

</TABLE>

<PAGE>

                        SCHEDULE B TO SECURITY AGREEMENT

                                   OTHER NAMES

A. PRIOR LEGAL NAMES

Name of Debtor

IOS Brands Corporation                        FTD Corporation

Florists' Transworld Delivery, Inc.           No change in the last five years

Value Network Service, Inc.                   No change in the last five years

FTD Holdings, Incorporated                    No change in the last five years

FTD International Corporation                 No change in the last five years

Renaissance Greeting Cards, Inc.              No change in last five years

B. TRADE NAMES

[Please see Schedule C for additional Trade Names, if any]

IOS Brands Corporation                        IOS

Florists' Transworld Delivery, Inc.           FTD

Value Network Service, Inc.                   VNS

FTD Holdings, Incorporated                    None

FTD International Corporation                 None

Renaissance Greeting Cards, Inc.              Renaissance

                                      -2-
<PAGE>

                        SCHEDULE C TO SECURITY AGREEMENT

                          INTELLECTUAL PROPERTY RIGHTS

                 NAME OF DEBTOR

           IOS Brands Corporation                               See attached.

           Florists' Transworld Delivery,                       See attached.
           Inc.

           Value Network Service, Inc.                          See attached.

           FTD Holdings, Incorporated                           See attached.

           FTD International Corporation                        See attached.

           Renaissance Greeting Cards, Inc.                     See attached.

                                      -3-
<PAGE>

                        SCHEDULE D TO SECURITY AGREEMENT

                         REAL ESTATE LEGAL DESCRIPTIONS

Debtor

Florists' Transworld Delivery, Inc.

Legal Description

File No.: CC201388

LOTS 1 AND 2 IN ESCHEM SUBDIVISION OF LOT 7 IN THE WOODCREEK BUSINESS PARK,
BEING A SUBDIVISION OF LOT 7 IN WOODCREEK BUSINESS PARK RESUBDIVISION OF LOTS 1
THROUGH 14 AND VACATED EDGEBROOK PLACE, ALL IN WOODCREEK BUSINESS PARK, BEING A
SUBDIVISION OF PARTS OF SECTIONS 25 AND 36, TOWNSHIP 39 NORTH, RANGE 10, EAST OF
THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT OF SAID ESCHEM SUBDIVISION
OF LOT 7 IN THE WOODCREEK BUSINESS PARK, RECORDED OCTOBER 22, 1985 AS DOCUMENT
R85-91342 AND CERTIFICATE OF CORRECTION RECORDED DECEMBER 2, 1985 AS DOCUMENT
R85-105018, IN DUPAGE COUNTY, ILLINOIS.

                                      -4-
<PAGE>

                        SCHEDULE E TO SECURITY AGREEMENT

                        INVESTMENT PROPERTY AND DEPOSITS

<TABLE>
<CAPTION>

A. INVESTMENT PROPERTY
<S>                                                <C>
Name of Debtor

IOS Brands Corporation                              None

Florists' Transworld Delivery, Inc.                 Holds a 33% interest in Interflora, Inc.

                                                    Holds Banc One account #51-152961 which owns:
                                                          10 shares of Gerald Stevens Inc
                                                          10 shares of 1 800 FLOWERS.COM
                                                          10 shares of Peapod Inc.
                                                          10 shares of Sun Cut Floral Network Inc.
                                                          10 shares of USA Floral Prods Inc.

Value Network Service, Inc.                         None

FTD Holdings, Incorporated                          None

FTD International Corporation                       None

Renaissance Greeting Cards, Inc.                    None

B.  DEPOSITS

Name of Debtor
IOS Brands Corporation                              None

Florists' Transworld Delivery, Inc.                 Michigan National Bank #6800002799
                                                    Michigan National Bank #6800002807
                                                    Harris Insight Funds #25611
                                                    Bank One #5490871
                                                    Bank One #0000180143
                                                    Bank One #0000415306
                                                    Firstar Bank #1005036817
                                                    Firstar Bank #3500720739
                                                    Firstar Bank #3500720663
                                                    Bank of Montreal #0001258238
                                                    Toronto Dominion #2930514801

</TABLE>

                                      -5-
<PAGE>

<TABLE>

<S>                                                <C>
Value Network Service, Inc.                         Bank One #1031277
                                                    Key Bank #359681037628
                                                    Key Bank #359681037636
                                                    Key Bank #440993502184
                                                    Key Bank #440993502192
                                                    Michigan National Bank #6856295552
                                                    Bank of Montreal #00181042778

FTD Holdings, Incorporated                          None

FTD International Corporation                       None

Renaissance Greeting Cards, Inc.                    Fleet Bank #9353740662, #9439937546, #9354137128
                                                    First National Bank of Bar Harbor #85135659

</TABLE>

                                      -6-
<PAGE>

                                   SCHEDULE F

                 ASSUMPTION AND SUPPLEMENTAL SECURITY AGREEMENT

         THIS ASSUMPTION AND SUPPLEMENTAL SECURITY AGREEMENT (this "Agreement")
dated as of this _____ day of _____________, 20__ from [NEW DEBTOR], a
_______________ CORPORATION/LIMITED LIABILITY COMPANY/PARTNERSHIP (the "New
Debtor"), to Harris Trust and Savings Bank ("HTSB"), as agent for the Secured
Creditors (defined in the Security Agreement hereinafter identified and defined)
(HTSB acting as such agent and any successor or successors to HTSB in such
capacity being hereinafter referred to as the "Agent");

                             PRELIMINARY STATEMENTS

          A. Florists' Transworld Delivery, Inc. (the "Borrower") and certain
other parties have executed and delivered to the Agent that certain Security
Agreement dated as of September 27, 2001 (such Security Agreement, as the same
may from time to time be amended, modified, or restated, including supplements
thereto which add additional parties as Debtors thereunder, being hereinafter
referred to as the "Security Agreement"), pursuant to which such parties (the
"Existing Debtors") have granted to the Agent for the benefit of the Secured
Creditors a lien on and security interest in each such Existing Debtor's
Collateral (as such term is defined in the Security Agreement) to secure the
Obligations (as such term is defined in the Security Agreement).

          B. The Borrower provides the New Debtor with substantial financial,
managerial, administrative, and technical support and the New Debtor will
directly and substantially benefit from credit and other financial
accommodations extended and to be extended by the Secured Creditors to the
Borrower.

         NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances
made or to be made, or credit accommodations given or to be given, to the
Borrower by the Secured Creditors from time to time, the New Debtor hereby
agrees as follows:

          1. The New Debtor acknowledges and agrees that it shall become a
"Debtor" party to the Security Agreement effective upon the date the New
Debtor's execution of this Agreement and the delivery of this Agreement to the
Agent, and that upon such execution and delivery, all references in the Security
Agreement to the terms "Debtor" or "Debtors" shall be deemed to include the New
Debtor. Without limiting the generality of the foregoing, the New Debtor hereby
repeats and reaffirms all grants (including the grant of a lien and security
interest), covenants, agreements, representations and warranties contained in
the Security Agreement as amended hereby, each and all of which are and shall
remain applicable to the Collateral from time to time owned by the New Debtor or
in which the New Debtor from time to time has any rights. Without limiting the
foregoing, in order to secure payment of the Obligations, whether now existing
or hereafter arising, the New Debtor does hereby grant to the Agent for the
benefit of itself and the other Secured Creditors, and hereby agrees that the
Agent has and shall continue to have for the benefit of itself and the other
Secured Creditors a continuing lien on and security

<PAGE>

interest in, among other things, all of the New Debtor's Collateral (as such
term is defined in the Security Agreement), including, without limitation, all
of the New Debtor's Receivables, General Intangibles, Inventory, Equipment,
Investment Property, and all of the other Collateral described in Section 2 of
the Security Agreement, each and all of such granting clauses being incorporated
herein by reference with the same force and effect as if set forth in their
entirety except that all references in such clauses to the Existing Debtors or
any of them shall be deemed to include references to the New Debtor. Nothing
contained herein shall in any manner impair the priority of the liens and
security interests heretofore granted in favor of the Agent under the Security
Agreement.

          2. Schedules A (Locations), Schedule B (Other Names), Schedule C
(Intellectual Property Rights), Schedule D (Real Estate), and Schedule E
(Investment Property and Deposits) to the Security Agreement shall be
supplemented by the information stated below with respect to the New Debtor:

<TABLE>
<CAPTION>

<S><C>

                                              SUPPLEMENT TO SCHEDULE A

    NAME OF DEBTOR (AND STATE OF                                                ADDITIONAL PLACES OF BUSINESS AND
   ORGANIZATION AND ORGANIZATIONAL      CHIEF EXECUTIVE OFFICE (AND NAME OF     COLLATERAL LOCATIONS (AND NAME OF
        REGISTRATION NUMBER)              RECORD OWNER OF SUCH LOCATION)         RECORD OWNER OF SUCH LOCATIONS)

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

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

                                                   SUPPLEMENT TO SCHEDULE B

                       NAME OF DEBTOR                           PRIOR LEGAL NAMES AND TRADE NAMES OF
                                                                            SUCH DEBTOR

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

                                                     SUPPLEMENT TO SCHEDULE C

                                                   INTELLECTUAL PROPERTY RIGHTS

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

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

</TABLE>

                                      -2-
<PAGE>

                            SUPPLEMENT TO SCHEDULE D

                         REAL ESTATE LEGAL DESCRIPTIONS

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

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

                            SUPPLEMENT TO SCHEDULE E

                        INVESTMENT PROPERTY AND DEPOSITS

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

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

          3. The New Debtor hereby acknowledges and agrees that the Obligations
are secured by all of the Collateral according to, and otherwise on and subject
to, the terms and conditions of the Security Agreement to the same extent and
with the same force and effect as if the New Debtor had originally been one of
the Existing Debtors under the Security Agreement and had originally executed
the same as such an Existing Debtor.

          4. All capitalized terms used in this Agreement without definition
shall have the same meaning herein as such terms have in the Security Agreement,
except that any reference to the term "Debtor" or "Debtors" and any provision of
the Security Agreement providing meaning to such term shall be deemed a
reference to the Existing Debtors and the New Debtor. Except as specifically
modified hereby, all of the terms and conditions of the Security Agreement shall
stand and remain unchanged and in full force and effect.

          5. The New Debtor agrees to execute and deliver such further
instruments and documents and do such further acts and things as the Agent may
deem necessary or proper to carry out more effectively the purposes of this
Agreement.

          6. No reference to this Agreement need be made in the Security
Agreement or in any other document or instrument making reference to the
Security Agreement, any reference to the Security Agreement in any of such to be
deemed a reference to the Security Agreement as modified hereby.

                                      -3-
<PAGE>

          7. This Agreement shall be governed by and construed in accordance
with the State of Illinois (without regard to principles of conflicts of law).

                         [INSERT NAME OF NEW DEBTOR]

                         By
                          Name
                              --------------------------------------------------
                          Title
                               -------------------------------------------------

         Accepted and agreed to as of the date first above written.

                         HARRIS TRUST AND SAVINGS BANK, as Agent

                         By
                          Name
                              --------------------------------------------------

                          Title
                               -------------------------------------------------

                                      -4-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}]]