Document:

EXHIBIT
10.1

Summary
of Oral Agreement for Payment of Services

between Cephalon, Inc.

and

its Board of Directors

dated August 2, 2006

Cephalon, Inc. (
the “Company”) compensates its non-employee directors through a mix of base
cash compensation and stock option grants, summarized as follows: 

	
   

  	
   

  	
   

  
	
  Cash Compensation:

  	
   

  	
   

  
	
  ·   Board Service Annual Retainer

  	
   

  	
  $35,000

  
	
  ·   Per Meeting Fees

  	
   

  	
   

  
	
  ·   Attendance in person

  	
   

  	
  $3,000/mtg.

  
	
  ·   Attendance by telephone

  	
   

  	
  $2,000/mtg.

  
	
  ·   Committee Service Fees

  	
   

  	
   

  
	
  ·   Committee Chair Annual Retainer

  	
   

  	
  $12,000

  
	
  ·   Committee Member Annual Retainer

  	
   

  	
  $10,000

  
	
  ·   Presiding Director Annual Retainer

  	
   

  	
  $20,000

  
	
   

  	
   

  	
   

  
	
  Options:

  	
   

  	
   

  
	
  ·   Initial Grant (upon first election or
  appointment to Board)

  	
   

  	
  15,000 shares

  
	
  ·   Annual Grant (dated as of the date of the
  Annual Meeting)

  	
   

  	
  10,000 shares

  
	
   

  	
   

  	
   

  

Under the Company’s 2004
Equity Compensation Plan (the “2004 Plan”), all options granted to non-employee
directors prior to May 5, 2002 generally vest over a four-year period with
an exercise price equal to the closing market price of the Company’s Common
Stock on the date of the grant. Annual grants made to non-employee directors on
or after May 5, 2002, will be fully exercisable on the date of grant with
an exercise price equal to the closing market price of the Company’s Common
Stock on the date of grant.  Initial
grants made to non-employee directors on or after May 5, 2002 vest over a
four-year period with an exercise price equal to the closing market price of
the Company’s Common Stock on the date of grant.  The Board of Directors may also grant options
to non-employee directors in addition to the automatic grants described above.

Dr. Baldino receives no additional remuneration
for his service as a director. The Company also reimburses directors for travel
expenses incurred in connection with attending Board, committee and stockholder
meetings and for other Company business-related expenses. The Company does not
provide retirement benefits to non-employee directors under any current
program.Exhibit
10.1

Execution Version

CREDIT
AGREEMENT

DATED
AS OF JULY 28, 2006

AMONG

FTD, INC.,

THE LENDERS LISTED HEREIN,

as Lenders,

WELLS FARGO BANK, N.A.,

as Administrative Agent,

WELLS FARGO BANK, N.A.,

as Syndication Agent,

WELLS FARGO BANK, N.A.,

as Documentation Agent

and

WELLS FARGO BANK, N.A.,

as
Sole Lead Arranger

and Sole Book Manager

 

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page No.

  	
   

  
	
  SECTION
  1.

  	
  DEFINITIONS

  	
   

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
   

  	
  Certain Defined Terms

  	
   

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.2

  	
   

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

  	
   

  	
  30

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.3

  	
   

  	
  Other Definitional
  Provisions and Rules of Construction

  	
   

  	
  30

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  2.

  	
  AMOUNTS AND
  TERMS OF COMMITMENTS AND LOANS

  	
   

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
   

  	
  Commitments; Making of
  Loans; the Register; Optional Notes

  	
   

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
   

  	
  Interest on the Loans

  	
   

  	
  37

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
   

  	
  Fees

  	
   

  	
  42

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.4

  	
   

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

  	
   

  	
  43

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.5

  	
   

  	
  Use of Proceeds

  	
   

  	
  52

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.6

  	
   

  	
  Special Provisions
  Governing Eurodollar Rate Loans

  	
   

  	
  52

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.7

  	
   

  	
  Increased Costs; Taxes;
  Capital Adequacy

  	
   

  	
  54

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.8

  	
   

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

  	
   

  	
  59

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.9

  	
   

  	
  Replacement of a Lender

  	
   

  	
  59

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  3.

  	
  LETTERS OF
  CREDIT

  	
   

  	
  60

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
   

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

  	
   

  	
  60

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.2

  	
   

  	
  Letter of Credit Fees

  	
   

  	
  63

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.3

  	
   

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

  	
   

  	
  64

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.4

  	
   

  	
  Obligations Absolute

  	
   

  	
  67

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.5

  	
   

  	
  Nature of Issuing
  Lenders’ Duties

  	
   

  	
  68

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  4.

  	
  CONDITIONS TO
  LOANS AND LETTERS OF CREDIT

  	
   

  	
  69

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
   

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

  	
   

  	
  69

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
   

  	
  Conditions to All Loans

  	
   

  	
  75

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.3

  	
   

  	
  Conditions to Letters
  of Credit

  	
   

  	
  76

  	
   

  

 

 i
 

 

 

	
  SECTION 5.

  	
  COMPANY’S
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  76

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
   

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

  	
   

  	
  76

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
   

  	
  Authorization of
  Borrowing, etc

  	
   

  	
  77

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.3

  	
   

  	
  Financial Condition

  	
   

  	
  78

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.4

  	
   

  	
  No Material Adverse
  Change; No Restricted Junior Payments

  	
   

  	
  78

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.5

  	
   

  	
  Title to Properties;
  Liens; Real Property; Intellectual Property

  	
   

  	
  78

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.6

  	
   

  	
  Litigation; Adverse
  Facts

  	
   

  	
  79

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.7

  	
   

  	
  Payment of Taxes

  	
   

  	
  80

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.8

  	
   

  	
  Performance of
  Agreements; Material Contracts

  	
   

  	
  80

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.9

  	
   

  	
  Governmental Regulation

  	
   

  	
  80

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.10

  	
   

  	
  Securities Activities

  	
   

  	
  80

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.11

  	
   

  	
  Employee Benefit Plans

  	
   

  	
  81

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.12

  	
   

  	
  Certain Fees

  	
   

  	
  81

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.13

  	
   

  	
  Environmental
  Protection

  	
   

  	
  82

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.14

  	
   

  	
  Employee Matters

  	
   

  	
  82

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.15

  	
   

  	
  Solvency

  	
   

  	
  82

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.16

  	
   

  	
  Matters Relating to
  Collateral

  	
   

  	
  83

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.17

  	
   

  	
  Disclosure

  	
   

  	
  84

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.18

  	
   

  	
  Subordinated
  Indebtedness

  	
   

  	
  84

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.19

  	
   

  	
  Related Agreements

  	
   

  	
  84

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.20

  	
   

  	
  Reporting to IRS

  	
   

  	
  84

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.21

  	
   

  	
  Foreign Assets Control
  Regulations, etc.

  	
   

  	
  85

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.22

  	
   

  	
  Foreign Subsidiaries

  	
   

  	
  85

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  6.

  	
  COMPANY’S
  AFFIRMATIVE COVENANTS

  	
   

  	
  85

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
   

  	
  Financial Statements
  and Other Reports

  	
   

  	
  85

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
   

  	
  Existence, etc

  	
   

  	
  90

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.3

  	
   

  	
  Payment of Taxes and
  Claims; Tax

  	
   

  	
  90

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.4

  	
   

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

  	
   

  	
  91

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.5

  	
   

  	
  Inspection Rights;
  Lender Meeting

  	
   

  	
  93

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.6

  	
   

  	
  Compliance with Laws,
  etc.

  	
   

  	
  93

  	
   

  

 

 ii
 

 

 

	
  

  	
  6.7

  	
  Environmental Matters

  	
   

  	
  93

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.8

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

  	
   

  	
  94

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.9

  	
  Matters Relating to
  Additional Real Property Collateral

  	
   

  	
  96

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.10

  	
  Acquisition

  	
   

  	
  96

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.11

  	
  Other Post Closing
  Matters

  	
   

  	
  97

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  7.

  	
  COMPANY’S
  NEGATIVE COVENANTS

  	
   

  	
  97

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Indebtedness

  	
   

  	
  97

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  Liens and Related
  Matters

  	
   

  	
  99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.3

  	
  Investments;
  Acquisitions

  	
   

  	
  100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.4

  	
  Contingent Obligations

  	
   

  	
  102

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.5

  	
  Restricted Junior
  Payments

  	
   

  	
  103

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.6

  	
  Financial Covenants

  	
   

  	
  104

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.7

  	
  Restriction on
  Fundamental Changes; Asset Sales

  	
   

  	
  106

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.8

  	
  Consolidated Capital
  Expenditures

  	
   

  	
  108

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.9

  	
  Transactions with
  Shareholders and Affiliates

  	
   

  	
  108

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.10

  	
  Sales and Lease-Backs

  	
   

  	
  109

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.11

  	
  Conduct of Business

  	
   

  	
  109

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.12

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

  	
   

  	
  109

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.13

  	
  Fiscal Year

  	
   

  	
  110

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  8.

  	
  EVENTS OF
  DEFAULT

  	
   

  	
  110

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Failure to Make
  Payments When Due

  	
   

  	
  110

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  Default in Other
  Agreements

  	
   

  	
  110

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  Breach of Certain
  Covenants

  	
   

  	
  111

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.4

  	
  Breach of Warranty

  	
   

  	
  111

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.5

  	
  Other Defaults Under
  Loan Documents

  	
   

  	
  111

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.6

  	
  Involuntary Bankruptcy;
  Appointment of Receiver, etc.

  	
   

  	
  111

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.7

  	
  Voluntary Bankruptcy;
  Appointment of Receiver, etc.

  	
   

  	
  112

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.8

  	
  Judgments and
  Attachments

  	
   

  	
  112

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.9

  	
  Dissolution

  	
   

  	
  112

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.10

  	
  Employee Benefit Plans

  	
   

  	
  112

  	
   

  

 

 iii
 

 

 

	
  

  	
  8.11

  	
  Change in Control

  	
   

  	
  113

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.12

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

  	
   

  	
  113

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.13

  	
  Conduct of Business By
  Holdings

  	
   

  	
  113

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.14

  	
  Conduct of Business By
  Dormant Subsidiaries

  	
   

  	
  113

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.15

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

  	
   

  	
  114

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.16

  	
  Amendment of Certain
  Documents of Holdings

  	
   

  	
  114

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  9.

  	
  ADMINISTRATIVE
  AGENT

  	
   

  	
  114

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Appointment

  	
   

  	
  114

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.2

  	
  Powers and Duties;
  General Immunity

  	
   

  	
  116

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.3

  	
  Independent
  Investigation by Lenders; No Responsibility For Appraisal of Creditworthiness

  	
   

  	
  117

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.4

  	
  Right to Indemnity

  	
   

  	
  117

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.5

  	
  Successor
  Administrative Agent and Swing Line Lender

  	
   

  	
  118

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.6

  	
  Collateral Documents
  and Guaranties

  	
   

  	
  118

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.7

  	
  Duties of Other Agents

  	
   

  	
  119

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.8

  	
  Administrative Agent
  May File Proofs of Claim

  	
   

  	
  120

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  10.

  	
  MISCELLANEOUS

  	
   

  	
  120

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

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

  	
   

  	
  120

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.2

  	
  Expenses

  	
   

  	
  125

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.3

  	
  Indemnity

  	
   

  	
  126

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.4

  	
  Set-Off

  	
   

  	
  127

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.5

  	
  Ratable Sharing

  	
   

  	
  127

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.6

  	
  Amendments and Waivers

  	
   

  	
  128

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.7

  	
  Independence of
  Covenants

  	
   

  	
  129

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.8

  	
  Notices; Effectiveness
  of Signatures

  	
   

  	
  129

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.9

  	
  Survival of
  Representations, Warranties and Agreements

  	
   

  	
  130

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.10

  	
  Failure or Indulgence
  Not Waiver; Remedies Cumulative

  	
   

  	
  130

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.11

  	
  Marshalling; Payments
  Set Aside

  	
   

  	
  130

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.12

  	
  Severability

  	
   

  	
  131

  	
   

  

 

 iv
 

 

 

	
  

  	
  10.13

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

  	
   

  	
  131

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.14

  	
  Release of Security
  Interest or Guaranty

  	
   

  	
  131

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.15

  	
  Applicable Law

  	
   

  	
  132

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.16

  	
  Construction of
  Agreement; Nature of Relationship

  	
   

  	
  132

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.17

  	
  Consent to Jurisdiction
  and Service of Process

  	
   

  	
  132

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.18

  	
  Waiver of Jury Trial

  	
   

  	
  133

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.19

  	
  Confidentiality

  	
   

  	
  134

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.20

  	
  Counterparts;
  Effectiveness

  	
   

  	
  134

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature pages

  	
   

  	
  S-1

  	
   

  

 

 v
 

 

EXHIBITS

I                                            FORM
OF NOTICE OF BORROWING

II                                        FORM
OF NOTICE OF CONVERSION/CONTINUATION

III                                    FORM
OF REQUEST FOR ISSUANCE

IV                                    FORM
OF TERM NOTE

V                                        Intentionally
Deleted

VI                                    FORM
OF REVOLVING NOTE

VII                                FORM
OF SWING LINE NOTE

VIII                            FORM
OF COMPLIANCE CERTIFICATE

IX                                   FORM
OF OPINION OF COMPANY COUNSEL

X                                       FORM
OF OPINION OF O’MELVENY & MYERS LLP

XI                                   FORM
OF ASSIGNMENT AGREEMENT

XII                               FORM
OF SOLVENCY CERTIFICATE

XIII                           FORM
OF SUBSIDIARY GUARANTY

XIV                           FORM
OF SECURITY AGREEMENT

XV                               FORM
OF HOLDINGS GUARANTY

XVI                           FORM
OF NOTICE OF PREPAYMENT

XVII                       FORM
OF MORTGAGE

 vi
 

 

SCHEDULES

2.1                                 LENDERS’
COMMITMENTS AND PRO RATA SHARES

4.1C                         CORPORATE
AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT

4.1M                     CLOSING DATE
MORTGAGED PROPERTIES

5.1                                 SUBSIDIARIES
OF COMPANY

5.3                                 CONTINGENT
LIABILITIES

5.5B                         REAL
PROPERTY

5.5C                         INTELLECTUAL
PROPERTY

5.6                                 LITIGATION

5.8                                 MATERIAL
CONTRACTS

5.11                           CERTAIN
EMPLOYEE BENEFIT PLANS

7.1                                 CERTAIN
EXISTING INDEBTEDNESS

7.2                                 CERTAIN
EXISTING LIENS

7.3                                 CERTAIN
EXISTING INVESTMENTS

7.4                                 CERTAIN
EXISTING CONTINGENT OBLIGATIONS

7.9                                 AFFILIATE
TRANSACTIONS

 vii

 

FINAL

EXHIBITS

I               FORM
OF NOTICE OF BORROWING

II             FORM
OF NOTICE OF CONVERSION/CONTINUATION

III            FORM
OF REQUEST FOR ISSUANCE

IV            FORM
OF TERM NOTE

V             Intentionally
Deleted

VI            FORM
OF REVOLVING NOTE

VII           FORM
OF SWING LINE NOTE

VIII         FORM
OF COMPLIANCE CERTIFICATE

IX            FORM
OF OPINION OF COMPANY COUNSEL

X             Intentionally
Deleted

XI            FORM
OF ASSIGNMENT AGREEMENT

XII          FORM
OF SOLVENCY CERTIFICATE

XIII         FORM
OF SUBSIDIARY GUARANTY

XIV         FORM
OF SECURITY AGREEMENT

XV          FORM
OF HOLDINGS GUARANTY

XVI         FORM
OF NOTICE OF PREPAYMENT

XVII        FORM
OF MORTGAGE

 

 

Execution Version

 

FTD,
INC.

CREDIT
AGREEMENT

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

R E C I
T A L S

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

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

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

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

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

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

 

Section 1.                                          DEFINITIONS

1.1                               Certain
Defined Terms.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 2
 

 

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

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

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

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

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

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

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

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

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

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

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

 3
 

 

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

 

“Change in Control”
means:

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

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

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

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

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

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

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

 4
 

 

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

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

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

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

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

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

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

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

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

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

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

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

 5
 

 

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

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

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

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

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

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

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

 6
 

 

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

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

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

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

 7
 

 

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

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

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

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

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

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

 8
 

 

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

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

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

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

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

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

 9

 

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

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

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

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

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

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

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

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

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

 10
 

 

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

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

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

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

 11
 

 

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

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

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

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

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

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

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

 12
 

 

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

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

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

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

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

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

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

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

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

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

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

 13
 

 

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

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

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

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

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

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

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

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

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

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

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

 14
 

 

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

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

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

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

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

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

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

 15
 

 

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

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

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

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

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

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

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

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

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

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

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

 16
 

 

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

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

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

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

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

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

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

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

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

 17
 

 

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

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

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

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

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

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

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

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

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

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

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

 18
 

 

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

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

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

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

 19

 

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

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

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

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

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

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

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

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

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

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

 20
 

 

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

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

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

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

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

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

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

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

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

 21
 

 

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

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

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

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

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

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

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

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

(xi)           Liens granted pursuant to the
Collateral Documents;

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

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

 22
 

 

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

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

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

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

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

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

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

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

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

 23
 

 

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

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

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

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

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

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

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

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

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

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

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

 24
 

 

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

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

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

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

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

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

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

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

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

 25
 

 

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

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

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

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

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

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

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

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

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

 26
 

 

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

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

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

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

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

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

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

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

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

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

 27
 

 

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

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

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

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

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

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

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

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

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

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

 28

 

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

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

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

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

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

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

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

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

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

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

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

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

 29
 

 

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

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

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

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

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

1.3                               Other
Definitional Provisions and Rules of Construction.

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

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

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

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

Section 2.                                          AMOUNTS
AND TERMS OF COMMITMENTS AND LOANS

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

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

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

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

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

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

(iii)                               Swing
Line Loans.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2.2                               Interest
on the Loans.

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

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

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

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

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

	
  

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  	
  Eurodollar Rate

  Margin

  	
   

  	
  Base Rate Margin

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than

  	
   

  	
  3.50:1.00

  	
   

  	
  2.000

  	
  %

  	
  1.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than or
  equal to

  	
   

  	
  3.50:1.00

  	
   

  	
  1.750

  	
  %

  	
  0.750

  	
  %

  

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

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

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

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

 38
 

 

 

	
  

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  	
  Eurodollar Rate

  Margin

  	
   

  	
  Base

  Rate Margin

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than

  or equal to

  	
   

  	
  4.50:1.00

  	
   

  	
  2.500

  	
  %

  	
  1.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than

  or equal to

  but less than

  	
   

  	
  4.00:1.00

  4.50:1.00

  	
   

  	
  2.250

  	
  %

  	
  1.250

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than

  or equal to

  but less than

  	
   

  	
  3.50:1.00

  4.00:1.00

  	
   

  	
  2.000

  	
  %

  	
  1.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than

  or equal to

  but less than

  	
   

  	
  3.00:1.00

  3.50:1.00

  	
   

  	
  1.875

  	
  %

  	
  0.875

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than

  	
   

  	
  3.00:1.00

  	
   

  	
  1.750

  	
  %

  	
  0.750

  	
  %

  

 

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

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

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

 39
 

 

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

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

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

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

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

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

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

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

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

 40
 

 

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

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

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

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

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

 41
 

 

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

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

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

2.3                               Fees.

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

 42
 

 

 

	
  

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  	
  Commitment

  Fee Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than

  or equal to

  	
   

  	
  4.50:1.00

  	
   

  	
  0.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than

  or equal to

  but less than

  	
   

  	
  4.00:1.00

  4.50:1.00

  	
   

  	
  0.500

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than

  or equal to

  but less than

  	
   

  	
  3.50:1.00

  4.00:1.00

  	
   

  	
  0.375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than

  or equal to

  but less than

  	
   

  	
  3.00:1.00

  3.50:1.00

  	
   

  	
  0.375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than

  	
   

  	
  3.00:1.00

  	
   

  	
  0.250

  	
  %

  

 

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

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

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

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

 43

 

 

	
  Date

  	
   

  	
  Scheduled Repayment

  	
   

  
	
  October 31, 2006

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2007

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2007

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  July 31, 2007

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  October 31, 2007

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2008

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2008

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  July 31, 2008

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  October 31, 2008

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2009

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2009

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  July 31, 2009

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  October 31, 2009

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2010

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2010

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  July 31, 2010

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  October 31, 2010

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2011

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2011

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  July 31, 2011

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  October 31, 2011

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2012

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2012

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  July 31, 2012

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  October 31, 2012

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 31, 2013

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  April 30, 2013

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July 28, 2013

  	
   

  	
  $

  	
  139,875,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  150,000,000

  	
   

  

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

 44
 

 

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

B.            Prepayments
and Reductions in Revolving Loan Commitments.

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

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

 45
 

 

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

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

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

 46
 

 

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

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

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

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

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

 47
 

 

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

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

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

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

(iv)          Application of Prepayments.

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

 48
 

 

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

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

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

 49
 

 

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

C.            General
Provisions Regarding Payments.

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

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

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

 50
 

 

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

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

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

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

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

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

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

 51
 

 

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

2.5                               Use
of Proceeds.

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

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

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

2.6                               Special
Provisions Governing Eurodollar Rate Loans.

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

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

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

 52
 

 

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

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

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

 53
 

 

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

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

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

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

2.7                               Increased
Costs; Taxes; Capital Adequacy.

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

 54

 

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

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

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

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

B.                                    Taxes.

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

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

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

 55
 

 

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

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

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

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

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

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

 56
 

 

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

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

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

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

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

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

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

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

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

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

2.9                               Replacement
of a Lender.

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

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

Section 3.                                          LETTERS
OF CREDIT

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

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

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

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

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

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

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

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

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

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

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

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

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C.                                    Mechanics
of Issuance.

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

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

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

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

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

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

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

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

3.2                               Letter
of Credit Fees.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

D.                                    Interest
on Amounts Paid Under Letters of Credit.

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

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

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

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

3.4                               Obligations
Absolute.

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

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

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

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

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

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

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

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

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

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

3.5                               Nature
of Issuing Lenders’ Duties.

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

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

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

Section 4.                                          CONDITIONS
TO LOANS AND LETTERS OF CREDIT

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

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

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

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

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

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

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

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

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

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

C.                                    Corporate and Capital Structure; Ownership.

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

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

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

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

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

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

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

H.                                    Reserved.

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

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

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

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

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

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

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

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

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

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

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

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

(iii)          Reserved:

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

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

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

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

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

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

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

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

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

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

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

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

4.2                               Conditions
to All Loans.

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

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

B.            As
of that Funding Date:

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

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

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

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

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4.3                               Conditions
to Letters of Credit.

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

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

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

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

Section 5.              COMPANY’S REPRESENTATIONS AND
WARRANTIES

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

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

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

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

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

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

5.2                               Authorization
of Borrowing, etc.

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

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

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

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

5.3                               Financial
Condition.

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

5.4                               No
Material Adverse Change; No Restricted Junior Payments.

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

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

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

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

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

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

5.6                               Litigation;
Adverse Facts.

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

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

5.7                               Payment
of Taxes.

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

5.8                               Performance
of Agreements; Material Contracts.

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

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

5.9                               Governmental
Regulation.

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

5.10                        Securities
Activities.

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

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

5.11                        Employee
Benefit Plans.

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

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

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

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

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

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

5.12                        Certain
Fees.

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

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

5.13                        Environmental
Protection.

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

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

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

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

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

5.14                        Employee
Matters.

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

5.15                        Solvency.

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

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5.16                        Matters
Relating to Collateral.

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

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

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

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

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

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5.17                        Disclosure.

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

5.18                        Subordinated
Indebtedness.

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

5.19                        Related
Agreements.

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

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

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

5.20                        Reporting
to IRS.

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

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

5.21                        Foreign
Assets Control Regulations, etc.

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

5.22                        Foreign
Subsidiaries.

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

Section 6.                                          COMPANY’S
AFFIRMATIVE COVENANTS

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

6.1                               Financial
Statements and Other Reports.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

6.2                               Existence,
etc.

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

6.3                               Payment
of Taxes and Claims; Tax.

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

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

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

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

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

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

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C.                                    Application
of Net Insurance/Condemnation Proceeds.

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

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

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

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

6.5                               Inspection
Rights; Lender Meeting.

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

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

6.6                               Compliance
with Laws, etc.

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

6.7                               Environmental
Matters.

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

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

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

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

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

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

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

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

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

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

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

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

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

6.9                               Matters
Relating to Additional Real Property Collateral.

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

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

6.10                        Acquisition.

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

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

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

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

6.11                        Other
Post Closing Matters.

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

Section 7.                                          COMPANY’S
NEGATIVE COVENANTS

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

7.1                               Indebtedness.

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

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

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

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

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

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

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

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

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

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

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

 98
 

 

7.2                               Liens
and Related Matters.

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

(i)                                     Permitted
Encumbrances;

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

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

(iv)                              Liens
described in Schedule 7.2 annexed hereto;

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

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

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

 99
 

 

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

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

7.3                               Investments;
Acquisitions.

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

 100

 

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

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

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

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

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

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

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

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

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

 101
 

 

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

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

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

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

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

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

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

7.4                               Contingent
Obligations.

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

 102
 

 

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

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

(iii)          Hedge Agreements;

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

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

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

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

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

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

7.5                               Restricted
Junior Payments.

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

 103
 

 

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

7.6                               Financial
Covenants.

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

 104
 

 

 

	
  

  	
   

  	
  Minimum Fixed

  	
   

  
	
  Period Ending

  	
   

  	
  Charge Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2006

  	
   

  	
  1.30:1.00

  	
   

  
	
  December 31,
  2006

  	
   

  	
  1.30:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2007

  	
   

  	
  1.30:1.00

  	
   

  
	
  June 30, 2007

  	
   

  	
  1.30:1.00

  	
   

  
	
  September 30,
  2007

  	
   

  	
  1.30:1.00

  	
   

  
	
  December 31,
  2007

  	
   

  	
  1.30:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2008

  	
   

  	
  1.30:1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  1.30:1.00

  	
   

  
	
  September 30,
  2008

  	
   

  	
  1.35:1.00

  	
   

  
	
  December 31,
  2008

  	
   

  	
  1.35:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2009

  	
   

  	
  1.35:1.00

  	
   

  
	
  June 30, 2009

  	
   

  	
  1.35:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

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

  	
   

  	
  1.40:1.00

  	
   

  

 

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

 105
 

 

 

	
  Period Ending

  	
   

  	
  Maximum Leverage Ratio

  	
   

  
	
  September 30,
  2006

  	
   

  	
  5.75:1.00

  	
   

  
	
  December 31,
  2006

  	
   

  	
  5.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2007

  	
   

  	
  5.75:1.00

  	
   

  
	
  June 30, 2007

  	
   

  	
  5.75:1.00

  	
   

  
	
  September 30,
  2007

  	
   

  	
  5.50:1.00

  	
   

  
	
  December 31,
  2007

  	
   

  	
  5.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2008

  	
   

  	
  5.50:1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  5.50:1.00

  	
   

  
	
  September 30,
  2008

  	
   

  	
  5.25:1.00

  	
   

  
	
  December 31,
  2008

  	
   

  	
  5.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2009

  	
   

  	
  5.25:1.00

  	
   

  
	
  June 30, 2009

  	
   

  	
  5.25:1.00

  	
   

  
	
  September 30,
  2009

  	
   

  	
  5.00:1.00

  	
   

  
	
  December 31,
  2009

  	
   

  	
  5.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2010

  	
   

  	
  5.00:1.00

  	
   

  
	
  June 30, 2010

  	
   

  	
  5.00:1.00

  	
   

  
	
  September 30,
  2010

  	
   

  	
  4.75:1.00

  	
   

  
	
  December 31,
  2010

  	
   

  	
  4.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2011

  	
   

  	
  4.75:1.00

  	
   

  
	
  June 30, 2011

  	
   

  	
  4.75:1.00

  	
   

  
	
  September 30,
  2011

  	
   

  	
  4.50:1.00

  	
   

  
	
  December 31,
  2011

  	
   

  	
  4.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2012

  	
   

  	
  4.50:1.00

  	
   

  
	
  June 30, 2012

  	
   

  	
  4.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

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

  	
   

  	
  4.25:1.00

  	
   

  

 

7.7                               Restriction
on Fundamental Changes; Asset Sales.

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

 106
 

 

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

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

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

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

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

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

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

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

 107

 

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

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

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

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

7.8                               Consolidated
Capital Expenditures.

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

7.9                               Transactions
with Shareholders and Affiliates.

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

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

7.10                        Sales
and Lease-Backs.

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

7.11                        Conduct
of Business.

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

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

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

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

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

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

7.13                        Fiscal
Year.

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

Section
8.                                          EVENTS
OF DEFAULT

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

8.1                               Failure
to Make Payments When Due.

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

8.2                               Default
in Other Agreements.

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

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

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

8.3                               Breach
of Certain Covenants.

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

8.4                               Breach
of Warranty.

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

8.5                               Other
Defaults Under Loan Documents.

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

8.6                               Involuntary Bankruptcy; Appointment of Receiver,
etc.

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

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

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

8.7                               Voluntary Bankruptcy; Appointment of Receiver,
etc.

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

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

8.8                               Judgments
and Attachments.

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

8.9                               Dissolution.

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

8.10                        Employee
Benefit Plans.

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

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8.11                        Change
in Control.

A Change in Control shall have occurred; or

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

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

8.13                        Conduct
of Business By Holdings.

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

8.14                        Conduct
of Business By Dormant Subsidiaries.

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

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

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

8.16                        Amendment of Certain Documents of Holdings.

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

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

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

Section
9.                                          ADMINISTRATIVE
AGENT

9.1                               Appointment.

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

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

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

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

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

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

9.2                               Powers
and Duties; General Immunity.

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

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

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

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

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

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

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

9.4                               Right
to Indemnity.

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

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

9.5                               Successor
Administrative Agent and Swing Line Lender.

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

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

9.6                               Collateral
Documents and Guaranties.

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

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

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

9.7                               Duties
of Other Agents.

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

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

9.8                               Administrative Agent May File Proofs of Claim.

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

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

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

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

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

Section 10.            MISCELLANEOUS

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

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

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

B.            Assignments.

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

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

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

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

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

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

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

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

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

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

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

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

10.2                        Expenses.

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

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

10.3                        Indemnity.

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

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

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

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

10.4                        Set-Off.

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

10.5                        Ratable
Sharing.

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

 127
 

 

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

10.6                        Amendments
and Waivers.

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

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

10.7                        Independence
of Covenants.

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

10.8                        Notices;
Effectiveness of Signatures.

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

 129
 

 

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

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

10.9                        Survival
of Representations, Warranties and Agreements.

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

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

10.10                 Failure or Indulgence Not Waiver; Remedies
Cumulative.

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

10.11                 Marshalling; Payments Set Aside.

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

 130
 

 

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

10.12                 Severability.

In case any provision in or obligation under this
Agreement or the Notes shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

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

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

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

10.14                 Release
of Security Interest or Guaranty.

Upon the proposed sale or other disposition of any
Collateral that is permitted by this Agreement or to which Requisite Lenders
have otherwise consented, or the sale or other disposition of all of the
Capital Stock of a Subsidiary Guarantor to any Person (other than an Affiliate
of Company) permitted by this Agreement or to which Requisite Lenders have
otherwise consented, for which a Loan Party desires to obtain a security
interest release or a release of any Guaranty from Administrative Agent, such
Loan Party shall deliver an Officer’s Certificate (i) stating that the
Collateral or the Capital Stock subject to such disposition is being sold or
otherwise disposed of in compliance with the terms hereof and (ii) specifying
the Collateral or Capital Stock being sold or otherwise disposed of in the
proposed transaction.  Upon the receipt
of such Officer’s Certificate, Administrative Agent shall, at such Loan Party’s
expense, so long as Administrative Agent (a) has no reason to believe that the
facts stated in such Officer’s Certificate are not true and correct and (b), if
the sale or other disposition of such item of Collateral or Capital Stock
constitutes an Asset Sale, shall have received evidence satisfactory to it that
arrangements satisfactory to it have been made for delivery of the Net Asset
Sale Proceeds if and as required by subsection 2.4, execute and deliver such
releases of its security

 131
 

 

interest in such Collateral or such Subsidiary
Guaranty, as may be reasonably requested by such Loan Party.

10.15                 Applicable
Law.

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

10.16                 Construction
of Agreement; Nature of Relationship.

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

10.17                 Consent
to Jurisdiction and Service of Process.

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

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

(II)           WAIVES
ANY DEFENSE OF FORUM NON CONVENIENS;

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

(IV)         AGREES
THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER COMPANY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND

 132
 

 

OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;

(V)          AGREES
THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN THE COURTS OF ANY OTHER
JURISDICTION; AND

(VI)         AGREES
THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO JURISDICTION AND VENUE
SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW
YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.

10.18                 Waiver
of Jury Trial.

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

 133
 

 

10.19                 Confidentiality.

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

10.20                 Counterparts;
Effectiveness.

This Agreement and any amendments, waivers, consents
or supplements hereto or in connection herewith may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.  This

 134
 

 

Agreement shall become effective upon the execution of
a counterpart hereof by each of the parties hereto.

[Remainder of page intentionally left blank]

 135

 

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date first written
above.

	
   

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ JON R. BURNEY

  	
   

  
	
   

  	
  Name:

  	
  Jon R. Burney

  	
   

  
	
   

  	
  Title:

  	
  Vice-President, General Counsel & Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  3113 Woodcreek Drive

  
	
   

  	
  Downers Grove, DuPage County, Illinois 60515

  
	
   

  	
  Attention: Jon R. Burney

  
	
   

  	
  Facsimile: (630) 719 6183

  
						

 

 S-1
 

 

 

	
  

  	
  LENDERS:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A., individually as a Lender

  and as Administrative Agent, Syndication Agent and

  Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DAVID HEMENWAY

  	
   

  
	
   

  	
  Name:

  	
  David Hemenway

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  201 Third Street, Eighth Floor, MAC A0187-081

  
	
   

  	
  San Francisco, California 94103

  
	
   

  	
  Attention:

  	
  Vince Loomis

  
	
   

  	
  Facsimile:

  	
  415-512-7059

  
	
   

  	
   

  	
   

  
	
   

  	
  Payment Instructions:

  
	
   

  	
   

  	
   

  
	
   

  	
  Pay to:

  	
  Wells Fargo Bank, N.A.

  
	
   

  	
  ABA:

  	
  121000248

  
	
   

  	
  Address:

  	
  San Francisco, CA

  
	
   

  	
  Acct. No.:

  	
  4518151378

  
	
   

  	
  Payee Name:

  	
  SYNDIC/WFBCORP/FTD Inc.

  
	
   

  	
  Ref:

  	
  FTD Inc.

  
						

 

 S-2

 

EXHIBIT I

[FORM OF NOTICE OF
BORROWING]

NOTICE OF BORROWING

Pursuant to that certain Credit Agreement dated as of
July 28, 2006, as amended, supplemented or otherwise modified to the date
hereof (said Credit Agreement, as so amended, supplemented or otherwise
modified, being the “Credit Agreement”, the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among FTD, Inc., a Delaware corporation, as borrower (“Company”), the lenders listed therein as Lenders (“Lenders”),
Wells Fargo Bank, N.A., as Administrative Agent (“Administrative Agent”),
and the other agents listed therein, this represents Company’s request to
borrow as follows:

1.             Date
of borrowing:                            ,

2.             Amount
of borrowing:  $                         

3.             Lender(s):

o a.        Lenders,
in accordance with their applicable Pro Rata Shares

o b.        Swing
Line Lender

4.             Type
of Loans:

o a.        Term
Loans

o b.        Revolving
Loans

o c.        Swing
Line Loan

5.             Interest
rate option:

o a.        Base
Rate Loan(s)

o b.        Eurodollar
Rate Loans with an initial Interest Period of                
month(s)

The proceeds of such Loans are to be deposited
[details of the Company’s account].

The undersigned officer, to the best of his or her
knowledge and in his or her official (and not individual) capacity, and Company
certify that:

(i)            The
representations and warranties contained in the Credit Agreement and the other
Loan Documents are true, correct and complete in all material respects on and
as of the date hereof to the same extent as though made on and as of the date
hereof, except to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and warranties
were true, correct and complete in all material respects on and as

 I-1
 

 

of such earlier date; provided,
that, if a representation and warranty is qualified as to materiality, with
respect to such representation and warranty the materiality qualifier set forth
in this paragraph shall be disregarded for purposes of this condition;

(ii)           No
event has occurred and is continuing or would result from the consummation of
the borrowing contemplated hereby that would constitute an Event of Default or
a Potential Event of Default; and

(iii)          Each
Loan Party has performed in all material respects all agreements and satisfied
all conditions which the Credit Agreement provides shall be performed or
satisfied by it on or before the date hereof.

 I-2
 

 

 

	
  

  	
  DATED:

  	
   

  	
   

  	
   

  	
  FTD, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
									

 

 I-3

 

EXHIBIT II

[FORM OF NOTICE OF
CONVERSION/CONTINUATION]

NOTICE OF
CONVERSION/CONTINUATION

Pursuant to that certain Credit Agreement dated as of
July 28, 2006, as amended, supplemented or otherwise modified to the date
hereof (said Credit Agreement, as so amended, supplemented or otherwise
modified, being the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among FTD, Inc., a Delaware corporation, as borrower (“Company”), the lenders listed therein as Lenders (“Lenders”),
Wells Fargo Bank, N.A., as Administrative Agent (“Administrative Agent”),
and the other agents listed therein, this represents Company’s request to
convert or continue Loans as follows:

1.                                       Date
of conversion/continuation:                                         ,               

2.                                       Amount
of Loans being converted/continued:  $                          

3.                                       Type
of Loans being converted/continued:

o a.                        Term Loans

o b.                       Revolving
Loans

4.                                       Nature
of conversion/continuation:

o a.                        Conversion
of Base Rate Loans to Eurodollar Rate Loans

o b.                       Conversion
of Eurodollar Rate Loans to Base Rate Loans

o c.                        Continuation
of Eurodollar Rate Loans as such

5.                                       If
Loans are being continued as or converted to Eurodollar Rate Loans, the duration
of the new Interest Period that commences on the conversion/ continuation
date:                     
month(s)

In the case of a conversion to or continuation of
Eurodollar Rate Loans, the undersigned officer, to the best of his or her
knowledge and in his or her official (and not individual) capacity, and Company
certify that no Event of Default or Potential Event of Default has occurred and
is continuing under the Credit Agreement.

	
  DATED:

  	
   

  	
   

  	
   

  	
  FTD, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
										

 

 II-1

 

EXHIBIT III

[FORM OF REQUEST FOR
ISSUANCE]

REQUEST FOR ISSUANCE

Pursuant to that certain Credit Agreement dated as of
July 28, 2006, as amended, supplemented or otherwise modified to the date
hereof (said Credit Agreement, as so amended, supplemented or otherwise
modified, being the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among FTD, Inc., a Delaware corporation, as borrower (“Company”), the lenders listed therein as Lenders (“Lenders”),
Wells Fargo Bank, N.A., as Administrative Agent (“Administrative Agent”),
and the other agents listed therein, this represents Company’s request for the
issuance of a Letter of Credit by [Administrative Agent][name of other Lender]
as follows:

1.                                       Issuing
Lender:             [Administrative Agent]

[                                                          ]

2.                                       Date
of issuance of Letter of Credit:                                  ,

3.                                       Type
of Letter of Credit:

[  ] a.                      Commercial
Letter of Credit

[  ] b.                     Standby
Letter of Credit

4.                                       Face
amount of Letter of Credit:  $

5.                                       Expiration
date of Letter of Credit:                        ,

6.                                       Name
and address of beneficiary:

 

 

 

 

7.                                       Attached
hereto is:

o                                    the
verbatim text of such proposed Letter of Credit; or

o                                    a
description of the proposed terms and conditions of such Letter of Credit,
including a precise description of any documents to be presented by the
beneficiary which, if presented by the beneficiary prior to the expiration date
of such Letter of Credit, would require the Issuing Lender to make payment
under such Letter of Credit.

The undersigned officer, to the best of his or her
knowledge and in his or her official (and not individual) capacity, and Company
certify that:

 III-1
 

 

(i)                                     The
representations and warranties contained in the Credit Agreement and the other
Loan Documents are true, correct and complete in all material respects on and
as of the date hereof to the same extent as though made on and as of the date
hereof, except to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and warranties
were true, correct and complete in all material respects on and as of such
earlier date;  provided, that, if
a representation and warranty is qualified as to materiality, with respect to
such representation and warranty the materiality qualifier set in this
paragraph shall be disregarded for purposes of this condition;

(ii)                                  No
event has occurred and is continuing or would result from the issuance of the
Letter of Credit contemplated hereby that would constitute an Event of Default
or a Potential Event of Default; and

(iii)                               Each
Loan Party has performed in all material respects all agreements and satisfied
all conditions which the Credit Agreement provides shall be performed or
satisfied by it on or before the date hereof.

 III-2
 

 

 

	
  

  	
  DATED:

  	
   

  	
   

  	
   

  	
  FTD, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
									

 

 III-3

 

EXHIBIT IV

[FORM OF] TERM NOTE

FTD, INC.

	
  $

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
  July 28, 2006

  
	
   

  	
   

  	
   

  

FOR VALUE RECEIVED, FTD, INC., a Delaware corporation
(“Company”), promises to pay to                   
(“Payee”) or its registered
assigns the principal amount of                       
($             ).  The principal amount of this Note shall be
payable on the dates and in the amounts specified in the Credit Agreement;
provided that the last such installment shall be in an amount sufficient to repay
the entire unpaid principal balance of this Note, together with all accrued and
unpaid interest thereon.

Company also promises to pay interest on the unpaid
principal amount hereof, until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of July 28, 2006 by and among FTD, Inc., a Delaware
corporation, as borrower (“Company”), the
lenders listed therein as Lenders (“Lenders”), Wells Fargo Bank, N.A.,
as Administrative Agent (“Administrative Agent”), and the
other agents listed therein (said Credit Agreement, as it may be amended,
supplemented or otherwise modified from time to time, being the “Credit Agreement”, the terms defined
therein and not otherwise defined herein being used herein as therein defined).

This Note is one of Company’s “Term Notes” and is
issued pursuant to and entitled to the benefits of the Credit Agreement, to
which reference is hereby made for a more complete statement of the terms and
conditions under which the Term Loan evidenced hereby was made and is to be
repaid.

All payments of principal and interest in respect of
this Note shall be made in lawful money of the United States of America in same
day funds at the Funding and Payment Office or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Credit Agreement.  Unless and until an
Assignment Agreement effecting the assignment or transfer of this Note shall
have been accepted by Administrative Agent and recorded in the Register as
provided in the Credit Agreement, Company and Administrative Agent shall be
entitled to deem and treat Payee as the owner and holder of this Note and the
Loan evidenced hereby.  Payee hereby
agrees, by its acceptance hereof, that before disposing of this Note or any
part hereof it will make a notation hereon of all principal payments previously
made hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make, or any error in making, a notation of
any payment made on this Note shall not limit or otherwise affect the
obligations of Company hereunder with respect to payments of principal of or
interest on this Note.

Whenever any payment on this Note shall be stated to
be due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be included in
the computation of the payment of interest on this Note.

 IV-1
 

 

This Note is subject to mandatory prepayment as
provided in the Credit Agreement and to prepayment at the option of Company as
provided in the Credit Agreement.

THIS NOTE AND THE RIGHTS AND
OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

Upon the occurrence of an Event of Default, the unpaid
balance of the principal amount of this Note, together with all accrued and
unpaid interest thereon, may become, or may be declared to be, due and payable
in the manner, upon the conditions and with the effect provided in the Credit
Agreement.

The terms of this Note are subject to amendment only
in the manner provided in the Credit Agreement.

This Note is subject to restrictions on transfer or
assignment as provided in the Credit Agreement.

No reference herein to the Credit Agreement and no
provision of this Note or the Credit Agreement shall alter or impair the
obligations of Company, which are absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the respective times,
and in the currency herein prescribed.

Company promises to pay all costs and expenses,
including reasonable attorneys’ fees, all as provided in the Credit Agreement,
incurred in the collection and enforcement of this Note.  Company and any endorsers of this Note hereby
consent to renewals and extensions of time at or after the maturity hereof,
without notice, and hereby waive diligence, presentment, protest, demand and
notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.

 IV-2
 

 

IN WITNESS WHEREOF, Company has caused this Note to be
duly executed and delivered by its officer thereunto duly authorized as of the
date and at the place first written above.

	
  

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

 IV-3

 

EXHIBIT V

INTENTIONALLY DELETED

 

 V-1

 

EXHIBIT VI

[FORM OF] REVOLVING NOTE

FTD, INC.

	
  $

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
  July 28, 2006

  
	
   

  	
   

  	
   

  

FOR VALUE RECEIVED, FTD, INC., a Delaware corporation
(“Company”), promises to pay to          
(“Payee”) or its registered
assigns, the lesser of (x)            
($            ) and
(y) the unpaid principal amount of all advances made by Payee to Company as
Revolving Loans under the Credit Agreement referred to below.  The principal amount of this Note shall be
payable on the dates and in the amounts specified in the Credit Agreement.

Company also promises to pay interest on the unpaid
principal amount hereof, until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of July 28, 2006, by and among FTD, Inc., a Delaware
corporation, as borrower (“Company”), the
lenders listed therein as Lenders (“Lenders”), Wells Fargo Bank, N.A.,
as Administrative Agent (“Administrative Agent”), and the
other agents listed therein (said Credit Agreement, as it may be amended,
supplemented or otherwise modified from time to time, being the “Credit Agreement”, the terms defined
therein and not otherwise defined herein being used herein as therein defined).

This Note is one of Company’s “Revolving Notes” and is
issued pursuant to and entitled to the benefits of the Credit Agreement, to
which reference is hereby made for a more complete statement of the terms and
conditions under which the Revolving Loans evidenced hereby were made and are
to be repaid.

All payments of principal and interest in respect of
this Note shall be made in lawful money of the United States of America in same
day funds at the Funding and Payment Office or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Credit Agreement.  Unless and until an
Assignment Agreement effecting the assignment or transfer of this Note shall
have been accepted by Administrative Agent and recorded in the Register as
provided in the Credit Agreement, Company and Administrative Agent shall be
entitled to deem and treat Payee as the owner and holder of this Note and the
Loans evidenced hereby.  Payee hereby
agrees, by its acceptance hereof, that before disposing of this Note or any
part hereof it will make a notation hereon of all principal payments previously
made hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make, or any error in making, a notation of
any payment made on this Note shall not limit or otherwise affect the
obligations of Company hereunder with respect to payments of principal of or
interest on this Note.

Whenever any payment on this Note shall be stated to
be due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be included in
the computation of the payment of interest on this Note.

 VI-1
 

 

This Note is subject to mandatory prepayment as
provided in the Credit Agreement and to prepayment at the option of Company as
provided in the Credit Agreement.

THIS NOTE AND THE RIGHTS AND
OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

Upon the occurrence of an Event of Default, the unpaid
balance of the principal amount of this Note, together with all accrued and
unpaid interest thereon, may become, or may be declared to be, due and payable
in the manner, upon the conditions and with the effect provided in the Credit
Agreement.

The terms of this Note are subject to amendment only
in the manner provided in the Credit Agreement.

This Note is subject to restrictions on transfer or
assignment as provided in the Credit Agreement.

No reference herein to the Credit Agreement and no
provision of this Note or the Credit Agreement shall alter or impair the obligations
of Company, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the
currency herein prescribed.

Company promises to pay all costs and expenses,
including reasonable attorneys’ fees, all as provided in the Credit Agreement,
incurred in the collection and enforcement of this Note.  Company and any endorsers of this Note hereby
consent to renewals and extensions of time at or after the maturity hereof,
without notice, and hereby waive diligence, presentment, protest, demand and
notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.

 VI-2
 

 

IN WITNESS WHEREOF, Company has caused this Note to be
duly executed and delivered by its officer thereunto duly authorized as of the
date and at the place first written above.

	
  

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 VI-3
 

 

TRANSACTIONS

ON

REVOLVING NOTE

	
  Date

  	
   

  	
  Type of

  Loan Made

  This Date

  	
   

  	
  Amount of

  Loan Made

  This Date

  	
   

  	
  Amount of

  Principal Paid

  This Date

  	
   

  	
  Outstanding

  Principal

  Balance

  This Date

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 VI-4

 

EXHIBIT VII

[FORM OF] SWING LINE NOTE

FTD, INC.

	
  $5,000,000

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
  July 28, 2006

  
	
   

  	
   

  	
   

  

FOR VALUE RECEIVED, FTD, INC., a Delaware corporation
(“Company”), promises to pay to
Wells Fargo Bank, N.A. (“Payee”)
or its registered assigns, the lesser of 
(x) FIVE MILLION DOLLARS ($5,000,000) and (y) the unpaid principal
amount of all advances made by Payee to Company as Swing Line Loans under the
Credit Agreement referred to below.  The
principal amount of this Note shall be payable on the dates and in the amounts
specified in the Credit Agreement.

Company also promises to pay interest on the unpaid
principal amount hereof, until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of July 28, 2006, by and among FTD, Inc., a Delaware
corporation, as borrower (“Company”), the
lenders listed therein as Lenders (“Lenders”), Wells Fargo Bank, N.A.,
as Administrative Agent (“Administrative Agent”), and the
other agents listed therein (said Credit Agreement, as it may be amended,
supplemented or otherwise modified from time to time, being the “Credit Agreement”, the terms defined
therein and not otherwise defined herein being used herein as therein defined).

This Note is Company’s “Swing Line Note” and is issued
pursuant to and entitled to the benefits of the Credit Agreement, to which
reference is hereby made for a more complete statement of the terms and
conditions under which the Swing Line Loans evidenced hereby were made and are
to be repaid.

All payments of principal and interest in respect of
this Note shall be made in lawful money of the United States of America in same
day funds at the Swing Line Funding and Payment Office or at such other place
as shall be designated in writing for such purpose in accordance with the terms
of the Credit Agreement.

Whenever any payment on this Note shall be stated to
be due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be included in
the computation of the payment of interest on this Note.

This Note is subject to mandatory prepayment as
provided in the Credit Agreement and to prepayment at the option of Company as
provided in the Credit Agreement.

THIS NOTE AND THE RIGHTS AND
OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

 VII-1
 

 

Upon the occurrence of an Event of Default, the unpaid
balance of the principal amount of this Note, together with all accrued and
unpaid interest thereon, may become, or may be declared to be, due and payable
in the manner, upon the conditions and with the effect provided in the Credit
Agreement.

The terms of this Note are subject to amendment only
in the manner provided in the Credit Agreement.

This Note is subject to restrictions on transfer or
assignment as provided in the Credit Agreement.

No reference herein to the Credit Agreement and no
provision of this Note or the Credit Agreement shall alter or impair the
obligations of Company, which are absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the respective times,
and in the currency herein prescribed.

Company promises to pay all costs and expenses,
including reasonable attorneys’ fees, all as provided in the Credit Agreement,
incurred in the collection and enforcement of this Note.  Company and any endorsers of this Note hereby
consent to renewals and extensions of time at or after the maturity hereof,
without notice, and hereby waive diligence, presentment, protest, demand and
notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.

 VII-2
 

 

IN WITNESS WHEREOF, Company has caused this Note to be
duly executed and delivered by its officer thereunto duly authorized as of the
date and at the place first written above.

	
  

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 VII-3
 

 

TRANSACTIONS

ON

SWING LINE NOTE

	
  Date

  	
   

  	
  Amount of

  Loan Made

  This Date

  	
   

  	
  Amount of

  Principal Paid

  This Date

  	
   

  	
  Amount of

  Principal Paid

  This Date

  	
   

  	
  Outstanding

  Principal

  Balance

  This Date

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 VII-4

 

EXHIBIT VIII

[FORM OF COMPLIANCE
CERTIFICATE]

COMPLIANCE CERTIFICATE

THE UNDERSIGNED HEREBY CERTIFY THAT:

(1)           We
are the duly elected [Title] and [Title] of FTD, Inc., a Delaware corporation (“Company”);

(2)           We
have reviewed the terms of that certain Credit Agreement dated as of July 28,
2006, as amended, supplemented or otherwise modified to the date hereof (said
Credit Agreement, as so amended, supplemented or otherwise modified, being the “Credit Agreement”, the terms defined
therein and not otherwise defined in this Certificate (including Attachment No.
1 annexed hereto and made a part hereof) being used in this Certificate as
therein defined), by and among Company, the lenders listed therein as Lenders (“Lenders”),
Wells Fargo Bank, N.A., as Administrative Agent (“Administrative Agent”),
and the other agents listed therein, and the terms of the other Loan Documents,
and we have made, or have caused to be made under our supervision, a review in
reasonable detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by the attached financial
statements; and

(3)           The
examination described in paragraph (2) above did not disclose, and we have no
knowledge of, the existence of any condition or event which constitutes an
Event of Default or Potential Event of Default during or at the end of the
accounting period covered by the attached financial statements or as of the
date of this Certificate[, except as set forth below].

[Set forth [below] [in a separate attachment to this
Certificate] are all exceptions to paragraph (3) above listing, in detail, the
nature of the condition or event, the period during which it has existed and
the action which Company has taken, is taking, or proposes to take with respect
to each such condition or event:                   ]

The foregoing certifications, together with the
computations set forth in Attachment No. 1 annexed hereto and made a part
hereof and the financial statements delivered with this Certificate in support
hereof, are made and delivered by the undersigned in their official (and not
individual) capacities this                
day of        ,      
pursuant to subsection 6.1(v) of the Credit Agreement.

	
  

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 VIII-1
 

 

ATTACHMENT NO. 1

TO COMPLIANCE CERTIFICATE

 

	
  A.

  	
   

  	
  Indebtedness

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Purchase money or other Indebtedness secured by
  Liens permitted by subsection 7.2A(ii) plus Indebtedness in respect of
  Capital Leases permitted under subsection 7.1(iii):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Maximum permitted under subsection 7.1(iii):

  	
   

  	
  $

  	
  20,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Indebtedness of Foreign Subsidiaries to Company or
  any Subsidiary Guarantor permitted under subsection 7.1(iv):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Maximum permitted under subsection 7.1(iv):

  	
   

  	
  $

  	
  20,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Indebtedness assumed by Foreign Subsidiaries in
  connection with permitted acquisitions plus Indebtedness of the Person
  acquired in connection with any such acquisition that becomes a Foreign
  Subsidiary, each as permitted under subsection 7.1(ix):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  Maximum permitted under subsection 7.1(ix):

  	
   

  	
  $

  	
  10,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.

  	
   

  	
  Other Indebtedness of Company and its Subsidiaries
  permitted under subsection 7.1(x):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.

  	
   

  	
  Maximum permitted under subsection 7.1(x):

  	
   

  	
  $

  	
  20,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.

  	
   

  	
  Portion of Indebtedness permitted under subsection
  7.1(x) incurred by Company’s Domestic Subsidiaries:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.

  	
   

  	
  Maximum permitted under subsection 7.1(x):

  	
   

  	
  $

  	
  10,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Liens

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Indebtedness secured by Liens on assets of a Person
  that becomes a Subsidiary permitted under subsection 7.2A(iii):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Maximum permitted under subsection 7.2A(iii):

  	
   

  	
  $

  	
  5,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Indebtedness secured by other Liens permitted under
  subsection 7.2A(v):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Maximum permitted under subsection 7.2A(v):

  	
   

  	
  $

  	
  10,000,000

  

 

 VIII-2
 

 

 

	
  C.

  	
   

  	
  Investments

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Fair market value of Investments made by Company and
  its Domestic Subsidiaries consisting of acquired assets (including Capital
  Stock) during the current Fiscal Year permitted under subsection 7.3(vii):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Maximum permitted under subsection 7.3(vii):

  	
   

  	
  $

  	
  30,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Aggregate fair market value of all Investments made
  by Company and its Domestic Subsidiaries consisting of acquired assets
  (including Capital Stock) permitted under subsection 7.3(vii) (the sum of all
  amounts currently and previously reported in C.1):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Maximum permitted under subsection 7.3(vii):

  	
   

  	
  $

  	
  80,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Fair market value of Investments made by Foreign
  Subsidiaries consisting of acquired assets (including Capital Stock) during
  the current Fiscal Year permitted under subsection 7.3(viii):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  Maximum permitted under subsection 7.3(viii):

  	
   

  	
  $

  	
  15,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.

  	
   

  	
  Aggregate fair market value of all Investments made
  by Foreign Subsidiaries consisting of acquired assets (including Capital
  Stock) permitted under subsection 7.3(viii) (the sum of all amounts currently
  and previously reported in C.5):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.

  	
   

  	
  Maximum permitted under subsection 7.3(viii):

  	
   

  	
  $

  	
  40,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.

  	
   

  	
  Since the Closing Date, Investments in Foreign
  Subsidiaries permitted under subsection 7.3(ix), including the amount of all
  Contingent Obligations of Company permitted under subsections 7.4(viii) and
  (ix):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.

  	
   

  	
  Maximum Investments and Contingent Obligations
  permitted under subsection 7.3(ix):

  	
   

  	
  $

  	
  (1)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.

  	
   

  	
  Other Investments by Company and its Domestic
  Subsidiaries permitted under subsection 7.3(x):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.

  	
   

  	
  Maximum permitted under subsection 7.3(x):

  	
   

  	
  $

  	
  10,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.

  	
   

  	
  Investments during the current Fiscal Year by
  Company in respect of obligations of employees in connection with the payment
  of income taxes on employee owned stock permitted under subsection 7.3(xi):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  14.

  	
   

  	
  Maximum permitted under subsection 7.3(xi):

  	
   

  	
  $

  	
  1,000,000

  

 

(1)    The
maximum Investments and Contingent Obligations permitted under subsection
7.3(ix) of the Credit Agreement is $10,000,000 plus the amount of all loans or
advances permitted under subsection 7.1(iv) of the Credit Agreement.

 VIII-3
 

 

 

	
   

  	
   

  	
  15.

  	
   

  	
  Investments by Company and its Subsidiaries
  consisting of loans (financing equipment sold) or equipment leases to
  customers permitted under subsection 7.3(xiv):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.

  	
   

  	
  Maximum permitted under subsection 7.3(xiv):

  	
   

  	
  $

  	
  40,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  17.

  	
   

  	
  Investments by Company and its Subsidiaries
  consisting of loans to customers in settlement of accounts receivable
  permitted under subsection 7.3(xv):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  18.

  	
   

  	
  Maximum permitted under subsection 7.3(xv):

  	
   

  	
  $

  	
  15,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Contingent Obligations

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Other Contingent Obligations permitted under
  subsection 7.4(ix):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Maximum permitted under subsection 7.4(ix):

  	
   

  	
  $

  	
  5,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Restricted Junior Payments

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Restricted Junior Payments made to Holdings for
  administrative costs and expenses permitted under subsection 7.5(iii)(a):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Maximum permitted under subsection 7.5(iii)(a):

  	
   

  	
  $

  	
  3,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Since the Closing Date, the sum of Restricted Junior
  Payments made (i) to repurchase Capital Stock of employees and certain other
  persons upon death, disability or termination and (ii) in lieu of issuing
  fractional shares, permitted under subsections 7.5(iii)(c) and (d):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Maximum permitted under subsections 7.5(iii)(c) and
  (d):

  	
   

  	
  $

  	
  7,500,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Restricted Junior Payments for other repurchases of
  Capital Stock of Holdings permitted under subsection 7.5(iii)(e):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  Maximum permitted under subsection 7.5(iii)(e):

  	
   

  	
  $

  	
  30,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Minimum Fixed Charge Coverage Ratio(for the four-Fiscal Quarter period
  ending       ,    )

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Consolidated Net Income:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Consolidated Interest Expense:(2)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Provisions for taxes based on income:

  	
   

  	
  $

  	
   

  

 

(2)    The
amounts referenced in items F.2 through F.10 should only be included to the
extent deducted in determining Consolidated Net Income.

 VIII-4
 

 

 

	
   

  	
   

  	
  4.

  	
   

  	
  Total depreciation expense:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Total amortization expense:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  Transaction Costs:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.

  	
   

  	
  Management or employee retention or incentive
  payments under Company’s cliff bonus plan:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.

  	
   

  	
  Foreign currency translation or transaction gains or
  losses:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.

  	
   

  	
  All extraordinary, unusual or non-recurring losses,
  charges or expenses (minus any extraordinary, unusual or non-recurring
  gains):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.

  	
   

  	
  Other non-cash items (other than any such non-cash
  item to the extent it represents an accrual of or reserve for cash
  expenditures in any future period):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.

  	
   

  	
  Non-cash items added in the calculation of
  Consolidated Net Income (other than any such non-cash item to the extent it
  will result in the receipt of cash payments in any future period):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.

  	
   

  	
  Consolidated EBITDA (1+2+3+4+5+6+7+8+9+10+11-12):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.

  	
   

  	
  Consolidated Interest Expense (F.2 above):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  14.

  	
   

  	
  Interest expense not payable in cash:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  15.

  	
   

  	
  Consolidated Cash Interest Expense (13-14):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.

  	
   

  	
  Scheduled principal payments:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  17.

  	
   

  	
  Taxes based on income and paid in cash:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  18.

  	
   

  	
  Consolidated Fixed Charges (15+16+17):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  19.

  	
   

  	
  Fixed Charge Coverage Ratio (12):(18):

  	
   

  	
   

  	
        :1.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  20.

  	
   

  	
  Minimum ratio required under subsection 7.6A:

  	
   

  	
   

  	
        :1.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  Maximum Leverage Ratio (as of                             ,           )

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Consolidated Total Debt:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Consolidated EBITDA:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Leverage Ratio (1):(2):

  	
   

  	
   

  	
        :1.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Maximum ratio permitted under subsection 7.6B:

  	
   

  	
   

  	
        :1.00

  

 

 VIII-5
 

 

 

	
  H.

  	
   

  	
  Fundamental Changes

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Aggregate fair market
  value of assets sold in any one or more Asset Sales in the current Fiscal
  Year in one or more transactions permitted under subsection 7.7(iv):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Maximum permitted under
  subsection 7.7(iv):

  	
   

  	
  $

  	
  15,000,000(3)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
  Consolidated Capital Expenditures

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Consolidated Capital
  Expenditures for current Fiscal Year:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Consolidated Capital
  Expenditures for prior Fiscal Year:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Maximum amount of
  Consolidated Capital Expenditures permitted under subsection 7.8 for prior
  Fiscal Year without regard to any carryover amount:

  	
   

  	
  $

  	
  17,500,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Excess of permitted
  amount of Consolidated Capital Expenditures for prior Fiscal Year over
  Consolidated Capital Expenditures in prior Fiscal Year (3–2):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Maximum amount of
  unused permitted Consolidated Capital Expenditures that can be carried
  forward from prior Fiscal Year (50% of 3):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  Permitted carryover
  amount of Consolidated Capital Expenditures from prior Fiscal Year (smaller
  of (4) or (5)):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.

  	
   

  	
  Maximum amount of
  Consolidated Capital Expenditures permitted under subsection 7.8 for Fiscal
  Year without regard to carryover amount:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.

  	
   

  	
  Maximum permitted under
  subsection 7.8 (6+7):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  J.

  	
   

  	
  Consolidated Excess Cash Flow
  (for the Fiscal Year ended             )

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Consolidated EBITDA:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Consolidated Current
  Assets at beginning of Fiscal Year:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Consolidated Current
  Liabilities at beginning of Fiscal Year:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Consolidated Working
  Capital at beginning of Fiscal Year 
  (2–3) (may be negative number):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Consolidated Current
  Assets at end of Fiscal Year:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  Consolidated Current
  Liabilities at end of Fiscal Year:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.

  	
   

  	
  Consolidated Working
  Capital at end of Fiscal Year (5–6) (may be a negative number):

  	
   

  	
  $

  	
   

  

 

(3)    Other
than any permitted Asset Sale of Florists’ Transworld Delivery, Inc.’s headquarters
located at 3113 Woodcreek Drive, Downers Grove, Illinois the value of which
must not exceed $20,000,000.

 VIII-6
 

 

 

	
   

  	
   

  	
  8.

  	
   

  	
  Consolidated Working Capital Adjustment (4–7) (may
  be a negative number):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.

  	
   

  	
  Voluntary and scheduled repayments of Consolidated
  Total Debt (excluding voluntary repayments of the Loans and scheduled
  repayments of Revolving Loans except to the extent the Revolving Loan
  Commitments are permanently reduced in connection with such repayments):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.

  	
   

  	
  Consolidated Capital Expenditures (net of any
  proceeds of any related financings, other than the proceeds of Revolving
  Loans or Swing Line Loans, with respect to such expenditures):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.

  	
   

  	
  Consolidated Cash Interest Expense (F.4 above):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.

  	
   

  	
  Taxes based on income and paid in cash (F.6 above):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.

  	
   

  	
  To the extent expensed in a prior Fiscal Year, the
  amount, if any, of cliff bonus payments made during such Fiscal Year:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  14.

  	
   

  	
  Restricted Junior Payments permitted by subsection
  7.5:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  15.

  	
   

  	
  Other cash expenses incurred during such period to
  the extent added back in determining Consolidated EBITDA:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.

  	
   

  	
  Cash consideration paid in connection with
  Investments permitted pursuant to subsection 7.3(vii) or subsection
  7.3(viii):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  17.

  	
   

  	
  Consolidated Excess Cash Flow ((1+8) –
  (9+10+11+12+13+14+15+16)):

  	
   

  	
  $

  	
   

  

 

 VIII-7

 

EXHIBIT IX

[FORMS OF OPINIONS OF
COUNSEL TO LOAN PARTIES]

[see attached]

 

 IX-1

 

EXHIBIT X

INTENTIONALLY DELETED

 

 X-1

 

EXHIBIT XI

[FORM OF] ASSIGNMENT AND
ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement (the “Assignment”)
is dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor]
(the “Assignor”) and [Insert name of
Assignee] (the “Assignee”). 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Credit Agreement identified below (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth
in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment as if set forth herein in full.

For an agreed consideration, the Assignor hereby
irrevocably sells and assigns to the Assignee, and the Assignee hereby
irrevocably purchases and assumes from the Assignor, subject to and in
accordance with the Standard Terms and Conditions and the Credit Agreement, as
of the Effective Date inserted by Administrative Agent as contemplated below,
the interest in and to all of the Assignor’s rights and obligations under the
Credit Agreement and any other documents or instruments delivered pursuant thereto
that represents the amount and percentage interest identified below of all of
the Assignor’s outstanding rights and obligations under the respective
facilities identified below (including, to the extent included in any such
facilities, letters of credit and swingline loans) (the “Assigned Interest”).  Such sale and assignment is without recourse
to the Assignor and, except as expressly provided in this Assignment, without
representation or warranty by the Assignor.

	
  1.

  	
  Assignor:

  	
                                                              

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Assignee:

  	
                                                              
  [and is an Affiliate/Approved Fund (1)]

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Borrower:

  	
  FTD, Inc., a Delaware corporation (“Company”)

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Administrative Agent:

  	
  Wells Fargo Bank, N.A., as Administrative Agent
  under the Credit Agreement

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Credit Agreement

  	
  The $225,000,000 Credit Agreement dated as of July
  28, 2006 among Company, the lenders listed therein as Lenders (“Lenders”), Administrative Agent,
  and the other agents parties thereto

  

 

(1)    Select as
applicable.

 

 XI-1
 

 

6.             Assigned Interest:

	
  Facility Assigned

  	
   

  	
  Aggregate

  Amount of

  Commitment/Loans

  for all Lenders

  	
   

  	
  Amount of

  Commitment/Loans

  Assigned

  	
   

  	
  Percentage

  Assigned of

  Commitment/Loans(2)

  	
   

  
	
  Revolving Loan
  Commitment

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
  Term Loan

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  

 

Effective Date:                                ,
20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The terms set forth in this Assignment are hereby
agreed to:

	
   

  	
  ASSIGNOR

  
	
   

  	
  [NAME OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
  [NAME OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  

 

	
  Consented to and Accepted:

  
	
   

  
	
  WELLS FARGO BANK, N.A.,

  
	
  as Administrative Agent

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  
	
  [Consented to:]

  
	
   

  
	
  FTD, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

(2)    Set forth,
to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders
thereunder.

 XI-2
 

 

 

	
  [Consented
  to:]

  
	
  [WELLS FARGO BANK, N.A.,

  
	
  as Issuing Lender]

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 XI-3

 

ANNEX 1

FTD, INC. 

$225,000,000 CREDIT AGREEMENT

STANDARD TERMS AND
CONDITIONS FOR ASSIGNMENT

AND ASSUMPTION AGREEMENT

1.             Representations
and Warranties.

1.1           Assignor.  The Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the Assigned Interest,
(ii) the Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim and (iii) it has full power and authority, and has
taken all action necessary, to execute and deliver this Assignment and to consummate
the transactions contemplated hereby; and (b) assumes no responsibility
with respect to (i) any statements, warranties or representations made in
or in connection with any Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document delivered pursuant thereto, other
than this Assignment (herein collectively the “Loan Documents”), or any
collateral thereunder, (iii) the financial condition of Company, any of
its Subsidiaries or Affiliates or any other Person obligated in respect of any
Loan Document or (iv) the performance or observance by Company, any of its
Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

1.2           Assignee.  The Assignee (a) represents and warrants
that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it meets all requirements of an Eligible Assignee under
the Credit Agreement, (iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to subsection 6.1 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision, and (v) if it is a Non-US Lender, attached
to the Assignment is any documentation required to be delivered by it pursuant
to the terms of the Credit Agreement, duly completed and executed by the
Assignee; and (b) agrees that (i) it will, independently and without
reliance on Administrative Agent, the Assignor or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

2.             Payments.  From and after the Effective Date,
Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.

 XI-ANNEX 1-1
 

 

3.             General
Provisions.  This Assignment shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.  This
Assignment may be executed in any number of counterparts, which together shall
constitute one instrument.  Delivery of
an executed counterpart of a signature page of this Assignment by telecopy or
electronic mail shall be effective as delivery of a manually executed
counterpart of this Assignment.  THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.

 XI-ANNEX 1-2

 

EXHIBIT XII

[FORM OF] SOLVENCY
CERTIFICATE

This SOLVENCY
CERTIFICATE (this “Certificate”)
is delivered in connection with that certain Credit Agreement dated as of July
28, 2006 (the “Credit Agreement”),
by and among FTD, Inc., a Delaware corporation, as borrower (“Company”), the lenders listed therein as Lenders (“Lenders”),
Wells Fargo Bank, N.A., as Administrative Agent (“Administrative Agent”),
and the other agents listed therein. 
Capitalized terms used herein without definition have the same meanings as
in the Credit Agreement.

This Solvency Certificate is being delivered pursuant
to subsection 4.1O of the Credit Agreement. 
The undersigned is the [Vice President Finance] of Company and hereby
further certifies as of the date hereof, in [his] [her] capacity as an officer
of Company, and not individually, as follows:

1.             I
have responsibility for (a) the management of the financial affairs of
Company and the preparation of financial statements of Company, and
(b) reviewing the financial and other aspects of the transactions
contemplated by the Credit Agreement.

2.             I
have carefully prepared and/or reviewed the contents of this Solvency
Certificate and have conferred with counsel for Company for the purpose of
discussing the meaning of any provisions hereof that I desired to have
clarified.

3.            
Based upon the foregoing and upon the best of my knowledge after due diligence,
I have concluded as follows:

a.             The
“fair value” and “present fair saleable value” of the assets of Company
exceeds:  (x) the total liabilities of
Company (including its probable liability in respect of contingent and
unliquidated liabilities and its unmatured liabilities), and (y) the amount
required to pay such liabilities as they become absolute and matured in the
normal course of business.

b.             Company
has the ability to pay its debts and liabilities (including its probable
liability in respect of contingent and unliquidated liabilities and its
unmatured liabilities) as they become absolute and matured in the normal course
of business.

c.             Company
does not have an unreasonably small amount of capital with which to conduct its
business after giving due consideration to the industry in which it is engaged.

d.             Company
has not executed the Loan Documents or made any transfer or incurred any obligations
thereunder, with actual intent to hinder, delay or defraud either present or
future creditors.

In computing the amount of such contingent and
unliquidated liabilities as of the date hereof, such liabilities have been
computed at the amount that, in the light of all the facts

 XII-1
 

 

and circumstances existing as of the date hereof,
represents the amount that can reasonably be expected to become an actual or
matured liability.

For the purpose of the above analysis, the values of
Company’s assets have been computed by considering Company as a going concern
entity.  References to “Company” in this
paragraph 3 shall mean and refer to Company and the Subsidiary Guarantors on a
consolidated basis.

I understand that Administrative Agent and Lenders are
relying on this Solvency Certificate in extending credit to Company pursuant to
the Credit Agreement.

 XII-2
 

 

The undersigned has executed this Solvency
Certificate, in [his] [her] capacity as an officer of Company and not
individually, as of the 28th day of July, 2006.

	
  

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

 XII-3

 

EXHIBIT XIII

[FORM OF] SUBSIDIARY
GUARANTY

This SUBSIDIARY
GUARANTY is entered into as of July 28, 2006, by the undersigned
(each a “Guarantor”, and together
with any future Subsidiaries executing this Guaranty, being collectively
referred to herein as the “Guarantors”)
in favor of and for the benefit of WELLS FARGO BANK, N.A., as agent for and representative of (in
such capacity herein called “Guarantied Party”)
the lenders (“Lenders”) party to
the Credit Agreement referred to below and any Swap Counterparties (as
hereinafter defined), and in favor of and for the benefit of the other
Beneficiaries (as hereinafter defined).

RECITALS.

A.            FTD,
Inc., a Delaware corporation (“Company”),
has entered into that certain Credit Agreement dated as of July 28, 2006, with
Lenders, Guarantied Party, as Administrative Agent for Lenders, and the other
agents listed therein (said Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the “Credit Agreement”; capitalized terms
defined therein and not otherwise defined herein being used herein as therein
defined).

B.            Company
may from time to time enter, or may from time to time have entered, into one or
more Interest Rate Agreements, Currency Agreements or other swap agreements
(collectively, the “Lender Swap Agreements”)
with one or more Persons that are Lenders or Affiliates of Lenders at the time
such Lender Swap Agreements are entered into (in such capacity, collectively, “Swap Counterparties”) in accordance with
the terms of the Credit Agreement, and it is desired that the obligations of
Company under the Lender Swap Agreements, including without limitation the
obligation of Company to make payments thereunder in the event of early
termination thereof, together with all obligations of Company under the Credit
Agreement and the other Loan Documents, be guarantied hereunder.

C.            Guarantied
Party, Lenders and each Swap Counterparty for which Guarantied Party has
received the notice required by Section 18 hereof are sometimes referred to
herein as “Beneficiaries”.

D.            A
portion of the proceeds of the Loans may be advanced to other Guarantors that
are Subsidiaries of Company, and thus the Guarantied Obligations (as
hereinafter defined) are being incurred for and will inure to the benefit of
Guarantors (which benefits are hereby acknowledged).

E.             It
is a condition precedent to the making of Loans under the Credit Agreement
(other than the initial Term Loans to be made on the Closing Date) that Company’s
obligations thereunder be guarantied by Guarantors.

F.             Guarantors
are willing irrevocably and unconditionally to guaranty such obligations of
Company.

 XIII-1
 

 

NOW, THEREFORE,
based upon the foregoing and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and in order to induce
Lenders and Guarantied Party to enter into the Credit Agreement and to make
Loans and other extensions of credit thereunder and to induce Swap
Counterparties to enter into the Lender Swap Agreements, Guarantors hereby agree
as follows:

1.             Guaranty.              (a) Guarantors jointly and
severally irrevocably and unconditionally guaranty, as primary obligors and not
merely as sureties, the due and punctual payment in full of all Guarantied
Obligations (as hereinafter defined) when the same shall become due, whether at
stated maturity, by acceleration, demand or otherwise (including amounts that
would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)).  The term “Guarantied
Obligations” is used herein in its most comprehensive sense and
includes any and all Obligations of Company and all obligations of Company
under Lender Swap Agreements, now or hereafter made, incurred or created,
whether absolute or contingent, liquidated or unliquidated, whether due or not
due, and however arising under or in connection with the Credit Agreement, the
Lender Swap Agreements, this Guaranty and the other Loan Documents, including
those arising under successive borrowing transactions under the Credit
Agreement which shall either continue such obligations of Company or from time
to time renew them after they have been satisfied.

Each Guarantor acknowledges that a portion of the
Loans may be advanced to it, that Letters of Credit may be issued for the
benefit of its business and that the Guarantied Obligations are being incurred
for and will inure to its benefit.

Any interest on any portion of the Guarantied
Obligations that accrues after the commencement of any proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of Company (or, if interest on any
portion of the Guarantied Obligations ceases to accrue by operation of law by
reason of the commencement of said proceeding, such interest as would have
accrued on such portion of the Guarantied Obligations if said proceeding had
not been commenced) shall be included in the Guarantied Obligations because it
is the intention of each Guarantor and Guarantied Party that the Guarantied
Obligations should be determined without regard to any rule of law or order
that may relieve Company of any portion of such Guarantied Obligations.

In the event that all or any portion of the Guarantied
Obligations is paid by Company, the obligations of each Guarantor hereunder
shall continue and remain in full force and effect or be reinstated, as the
case may be, in the event that all or any part of such payment(s) is rescinded
or recovered directly or indirectly from Guarantied Party or any other
Beneficiary as a preference, fraudulent transfer or otherwise, and any such
payments that are so rescinded or recovered shall constitute Guarantied
Obligations.

Subject to the other provisions of this Section 1,
upon the failure of Company to pay any of the Guarantied Obligations when and
as the same shall become due, each Guarantor will upon demand pay, or cause to
be paid, in cash, to Guarantied Party for the ratable benefit of Beneficiaries,
an amount equal to the aggregate of the unpaid Guarantied Obligations.

 XIII-2
 

 

(b)           Anything
contained in this Guaranty to the contrary notwithstanding, the obligations of
each Guarantor under this Guaranty and the other Loan Documents shall be
limited to a maximum aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance as a fraudulent transfer
or conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law (collectively, the “Fraudulent Transfer Laws”), in each case
after giving effect to all other liabilities of such Guarantor, contingent or
otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of such Guarantor (x) in respect of
intercompany indebtedness to Company or other affiliates of Company to the
extent that such indebtedness would be discharged in an amount equal to the
amount paid by such Guarantor hereunder and (y) under any guaranty of
Subordinated Indebtedness which guaranty contains a limitation as to maximum
amount similar to that set forth in this Section 1(b), pursuant to which the
liability of such Guarantor hereunder is included in the liabilities taken into
account in determining such maximum amount) and after giving effect as assets
to the value (as determined under the applicable provisions of the Fraudulent
Transfer Laws) of any rights to subrogation, reimbursement, indemnification or
contribution of such Guarantor pursuant to applicable law or pursuant to the
terms of any agreement.

(c)           Each
Guarantor under this Guaranty, and each guarantor under other guaranties, if
any, relating to the Credit Agreement (the “Related
Guaranties”) that contain a contribution provision similar to that
set forth in this Section 1(c), together desire to allocate among themselves
(collectively, the “Contributing Guarantors”),
in a fair and equitable manner, their obligations arising under this Guaranty
and the Related Guaranties.  Accordingly,
in the event any payment or distribution is made on any date by a Guarantor
under this Guaranty or a guarantor under a Related Guaranty, each such
Guarantor or such other guarantor shall be entitled to a contribution from each
of the other Contributing Guarantors in the maximum amount permitted by law so
as to maximize the aggregate amount of the Guarantied Obligations paid to
Beneficiaries.

2.             Guaranty
Absolute; Continuing Guaranty.  The obligations of each Guarantor hereunder
are irrevocable, absolute, independent and unconditional and shall not be
affected by any circumstance which constitutes a legal or equitable discharge
of a guarantor or surety other than payment in full of the Guarantied
Obligations.  In furtherance of the
foregoing and without limiting the generality thereof, each Guarantor agrees
that:  (a) this Guaranty is a
guaranty of payment when due and not of collectibility; (b) Guarantied
Party may enforce this Guaranty upon the occurrence and during the continuance
of an Event of Default under the Credit Agreement or the occurrence of an early
termination date or similar event under any Lender Swap Agreements
notwithstanding the existence of any dispute between Company and any
Beneficiary with respect to the existence of such event; (c) the
obligations of each Guarantor hereunder are independent of the obligations of
Company under the Loan Documents or the Lender Swap Agreements and the
obligations of any other guarantor of obligations of Company and a separate
action or actions may be brought and prosecuted against each Guarantor whether
or not any action is brought against Company or any of such other guarantors
and whether or not Company is joined in any such action or actions; and
(d) a payment of a portion, but not all, of the Guarantied Obligations by
one or more Guarantors shall in no way limit, affect, modify or abridge the
liability of such or any other Guarantor for any portion of the Guarantied
Obligations that has not been paid.  This
Guaranty is a continuing guaranty and shall be binding upon each

 XIII-3
 

 

Guarantor and its
successors and assigns, and each Guarantor irrevocably waives any right to
revoke this Guaranty as to future transactions giving rise to any Guarantied
Obligations.

3.             Actions
by Beneficiaries.  Any
Beneficiary may from time to time, without notice or demand and without affecting
the validity or enforceability of this Guaranty or giving rise to any
limitation, impairment or discharge of any Guarantor’s liability hereunder,
(a) renew, extend, accelerate or otherwise change the time, place, manner
or terms of payment of the Guarantied Obligations, (b) settle, compromise,
release or discharge, or accept or refuse any offer of performance with respect
to, or substitutions for, the Guarantied Obligations or any agreement relating
thereto and/or subordinate the payment of the same to the payment of any other
obligations, (c) request and accept other guaranties of the Guarantied
Obligations and take and hold security for the payment of this Guaranty or the
Guarantied Obligations, (d) release, exchange, compromise, subordinate or
modify, with or without consideration, any security for payment of the
Guarantied Obligations, any other guaranties of the Guarantied Obligations, or
any other obligation of any Person with respect to the Guarantied Obligations,
(e) enforce and apply any security now or hereafter held by or for the
benefit of any Beneficiary in respect of this Guaranty or the Guarantied
Obligations and direct the order or manner of sale thereof, or exercise any
other right or remedy that Guarantied Party or the other Beneficiaries, or any
of them, may have against any such security, as Guarantied Party in its
discretion may determine consistent with the Credit Agreement, the Lender Swap
Agreements and any applicable security agreement, including foreclosure on any
such security pursuant to one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable, and
(f) exercise any other rights available to Guarantied Party or the other
Beneficiaries, or any of them, under the Loan Documents or the Lender Swap
Agreements.

4.             No
Discharge.  This
Guaranty and the obligations of Guarantors hereunder shall be valid and
enforceable and shall not be subject to any limitation, impairment or discharge
for any reason (other than payment in full of the Guarantied Obligations),
including without limitation the occurrence of any of the following, whether or
not any Guarantor shall have had notice or knowledge of any of them:  (a) any failure to assert or enforce or
agreement not to assert or enforce, or the stay or enjoining, by order of
court, by operation of law or otherwise, of the exercise or enforcement of, any
claim or demand or any right, power or remedy with respect to the Guarantied
Obligations or any agreement relating thereto, or with respect to any other
guaranty of or security for the payment of the Guarantied Obligations,
(b) any waiver or modification of, or any consent to departure from, any
of the terms or provisions of the Credit Agreement, any of the other Loan
Documents, the Lender Swap Agreements or any agreement or instrument executed
pursuant thereto, or of any other guaranty or security for the Guarantied
Obligations, (c) the Guarantied Obligations, or any agreement relating
thereto, at any time being found to be illegal, invalid or unenforceable in any
respect, (d) the application of payments received from any source to the
payment of indebtedness other than the Guarantied Obligations, even though
Guarantied Party or the other Beneficiaries, or any of them, might have elected
to apply such payment to any part or all of the Guarantied Obligations,
(e) any failure to perfect or continue perfection of a security interest
in any collateral which secures any of the Guarantied Obligations, (f) any
defenses, set-offs or counterclaims which Company may assert against Guarantied
Party or any Beneficiary in respect of the Guarantied Obligations, including
but not limited to failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and usury,
and (g) any other act or thing or omission, or delay

 XIII-4
 

 

to do any other act or
thing, which may or might in any manner or to any extent vary the risk of a
Guarantor as an obligor in respect of the Guarantied Obligations.

5.             Waivers.  Each Guarantor waives, for the benefit of
Beneficiaries:  (a) any right to
require Guarantied Party or the other Beneficiaries, as a condition of payment
or performance by such Guarantor, to (i) proceed against Company, any
other guarantor of the Guarantied Obligations or any other Person,
(ii) proceed against or exhaust any security held from Company, any other
guarantor of the Guarantied Obligations or any other Person, (iii) proceed
against or have resort to any balance of any deposit account or credit on the
books of any Beneficiary in favor of Company or any other Person, or
(iv) pursue any other remedy in the power of  any Beneficiary; (b) any defense arising
by reason of the incapacity, lack of authority or any disability or other
defense of Company including, without limitation, any defense based on or
arising out of the lack of validity or the unenforceability of the Guarantied
Obligations or any agreement or instrument relating thereto or by reason of the
cessation of the liability of Company from any cause other than payment in full
of the Guarantied Obligations; (c) any defense based upon any statute or
rule of law which provides that the obligation of a surety must be neither
larger in amount nor in other respects more burdensome than that of the
principal; (d) any defense based upon Guarantied Party’s or any other
Beneficiary’s errors or omissions in the administration of the Guarantied
Obligations, except behavior that amounts to bad faith; (e) (i) any
principles or provisions of law, statutory or otherwise, that are or might be
in conflict with the terms of this Guaranty and any legal or equitable
discharge of such Guarantor’s obligations hereunder, (ii) the benefit of
any statute of limitations affecting such Guarantor’s liability hereunder or
the enforcement hereof, (iii) any rights to set-offs, recoupments and
counterclaims, and (iv) promptness, diligence and any requirement that any
Beneficiary protect, secure, perfect or insure any Lien or any property subject
thereto; (f) except as expressly provided in the Loan Documents, notices,
demands, presentments, protests, notices of protest, notices of dishonor and
notices of any action or inaction, including acceptance of this Guaranty,
notices of default under the Credit Agreement, notices of default or early termination
under any Lender Swap Agreement or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Guarantied Obligations
or any agreement related thereto, notices of any extension of credit to Company
and notices of any of the matters referred to in Sections 3 and 4 and any right
to consent to any thereof; and (g) to the fullest extent permitted by law,
any defenses or benefits that may be derived from or afforded by law which
limit the liability of or exonerate guarantors or sureties, or which may
conflict with the terms of this Guaranty.

6.             Guarantors’
Rights of Subrogation, Contribution, Etc.; Subordination of Other Obligations.  Until the Guarantied Obligations shall have
been paid in full and the Commitments shall have terminated and all Letters of
Credit shall have expired or been cancelled or collateralized with cash or a
letter of credit, each Guarantor shall withhold exercise of (a) any claim,
right or remedy, direct or indirect, that such Guarantor now has or may
hereafter have against Company or any of its assets in connection with this
Guaranty or the performance by such Guarantor of its obligations hereunder, in
each case whether such claim, right or remedy arises in equity, under contract,
by statute, under common law or otherwise and including without limitation
(i) any right of subrogation, reimbursement or indemnification that such
Guarantor now has or may hereafter have against Company, (ii) any right to
enforce, or to participate in, any claim, right or remedy that any Beneficiary
now has or may hereafter have

 XIII-5
 

 

against Company, and
(iii) any benefit of, and any right to participate in, any collateral or
security now or hereafter held by any Beneficiary and (b) any right of
contribution such Guarantor now has or may hereafter have against any other
guarantor of any of the Guarantied Obligations. 
Each Guarantor further agrees that, to the extent the agreement to
withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
Company or against any collateral or security, and any rights of contribution
such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights Guarantied Party or the other Beneficiaries may have
against Company, to all right, title and interest Guarantied Party or the other
Beneficiaries may have in any such collateral or security, and to any right
Guarantied Party or the other Beneficiaries may have against such other
guarantor.

Any indebtedness of Company now or hereafter held by
any Guarantor is subordinated in right of payment to the Guarantied
Obligations, and any such indebtedness of Company to a Guarantor collected or
received by such Guarantor after an Event of Default has occurred and is
continuing, and any amount paid to a Guarantor on account of any subrogation,
reimbursement, indemnification or contribution rights referred to in the
preceding paragraph when all Guarantied Obligations have not been paid in full,
any Lender shall have any Commitment or any Swap Counterparty shall have any
obligation under any Lender Swap Agreement, shall be held for Guarantied Party
on behalf of Beneficiaries and shall forthwith be paid over to Guarantied Party
for the benefit of Beneficiaries to be credited and applied against the
Guarantied Obligations.

7.             Expenses.  Guarantors jointly and severally agree to
pay, or cause to be paid, on demand, and to save Guarantied Party and the other
Beneficiaries harmless against liability for, (i) any and all costs and
expenses (including reasonable fees, costs of settlement, and disbursements of
counsel and allocated costs of internal counsel) incurred or expended by
Guarantied Party or any other Beneficiary in connection with the enforcement of
or preservation of any rights under this Guaranty and (ii) any and all
costs and expenses (including those arising from rights of indemnification)
required to be paid by Guarantors under the provisions of any other Loan
Document.

8.             Financial
Condition of Company. 
No Beneficiary shall have any obligation, and each Guarantor waives any
duty on the part of any Beneficiary, to disclose or discuss with such Guarantor
its assessment, or such Guarantor’s assessment, of the financial condition of
Company or any matter or fact relating to the business, operations or condition
of Company.  Each Guarantor has adequate
means to obtain information from Company on a continuing basis concerning the
financial condition of Company and its ability to perform its obligations under
the Loan Documents and the Lender Swap Agreements, and each Guarantor assumes
the responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations.

9.             Representations
and Warranties.  Each
Guarantor makes, for the benefit of Beneficiaries, each of the representations
and warranties made in the Credit Agreement by Company as to such Guarantor,
its assets, financial condition, operations, organization, legal status,
business and the Loan Documents to which it is a party.

 XIII-6
 

 

10.          Covenants.  Each Guarantor agrees that, so long as any
part of the Guarantied Obligations shall remain unpaid, any Letter of Credit
shall be outstanding and not collateralized by cash or a letter of credit, or
any Lender shall have any Commitment or any Swap Counterparty shall have any
obligation under any Lender Swap Agreement, such Guarantor will, unless
Requisite Obligees (as such term is defined in Section 17(a)) shall
otherwise consent in writing, perform or observe, and cause its Subsidiaries,
if any, to perform or observe, all of the terms, covenants and agreements that
the Loan Documents state that Company is to cause a Guarantor and such
Subsidiaries to perform or observe.

11.          Set
Off.  In addition to
any other rights any Beneficiary may have under law or in equity, if any amount
shall at any time be due and owing by a Guarantor to any Beneficiary under this
Guaranty, such Beneficiary is authorized at any time or from time to time,
without notice (any such notice being expressly waived), to set off and to
appropriate and to apply any and all deposits (general or special, including
but not limited to indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness of such Beneficiary owing to a
Guarantor and any other property of such Guarantor held by a Beneficiary to or
for the credit or the account of such Guarantor against and on account of the
Guarantied Obligations and liabilities of such Guarantor to any Beneficiary
under this Guaranty.

12.          Discharge
of Guaranty Upon Sale of Guarantor.  If all of the stock of a Guarantor or any of
its successors in interest under this Guaranty shall be sold or otherwise
disposed of (including by merger or consolidation) in a sale or other
disposition not prohibited by the Credit Agreement or otherwise consented to by
Requisite Obligees (as such term is defined in Section 17(a)), such
Guarantor or such successor in interest, as the case may be, may request
Guarantied Party to, and Guarantied Party shall, execute and deliver documents
or instruments necessary to evidence the release and discharge of this Guaranty
as provided in subsection 10.14 of the Credit Agreement.

13.          Amendments
and Waivers.  No
amendment, modification, termination or waiver of any provision of this
Guaranty, and no consent to any departure by any Guarantor therefrom, shall in
any event be effective without the written concurrence of Guarantied Party and,
in the case of any such amendment or modification, Guarantors.  Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.

14.          Miscellaneous.  It is not necessary for Beneficiaries to
inquire into the capacity or powers of any Guarantor or Company or the
officers, directors or any agents acting or purporting to act on behalf of any
of them.

The rights, powers and remedies given to Beneficiaries
by this Guaranty are cumulative and shall be in addition to and independent of
all rights, powers and remedies given to Beneficiaries by virtue of any statute
or rule of law or in any of the Loan Documents or the Lender Swap Agreements or
any agreement between one or more Guarantors and one or more Beneficiaries or
between Company and one or more Beneficiaries. 
Any forbearance or failure to exercise, and any delay by any Beneficiary
in exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.

 XIII-7
 

 

In case any provision in or obligation under this
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.

THIS GUARANTY AND THE RIGHTS AND
OBLIGATIONS OF GUARANTORS, GUARANTIED PARTY AND THE OTHER BENEFICIARIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

This Guaranty shall inure to the benefit of
Beneficiaries and their respective successors and assigns.

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR
ARISING OUT OF OR RELATING TO THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS GUARANTY EACH GUARANTOR ACCEPTS FOR ITSELF AND
IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY.  Each Guarantor agrees that service of all
process in any such proceeding in any such court may be made by registered or
certified mail, return receipt requested, to such Guarantor at its address set
forth below its signature hereto, such service being acknowledged by such
Guarantor to be sufficient for personal jurisdiction in any action against such
Guarantor in any such court and to be otherwise effective and binding service
in every respect.  Nothing herein shall
affect the right to serve process in any other manner permitted by law or shall
limit the right of Guarantied Party or any Beneficiary to bring proceedings
against such Guarantor in the courts of any other jurisdiction.

EACH GUARANTOR AND, BY ITS ACCEPTANCE
OF THE BENEFITS HEREOF, GUARANTIED PARTY EACH AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS GUARANTY.  THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH GUARANTOR AND, BY
ITS ACCEPTANCE OF THE BENEFITS HEREOF, GUARANTIED PARTY EACH
(I) ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR SUCH
GUARANTOR AND GUARANTIED PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT SUCH
GUARANTOR AND GUARANTIED PARTY HAVE

 XIII-8
 

 

ALREADY
RELIED ON THIS WAIVER IN ENTERING INTO THIS GUARANTY OR ACCEPTING THE BENEFITS
THEREOF, AS THE CASE MAY BE, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER
IN THEIR RELATED FUTURE DEALINGS, AND (II) FURTHER WARRANTS AND REPRESENTS
THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.  THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS OF THIS GUARANTY.  In the event of litigation, this Guaranty may
be filed as a written consent to a trial by the court.

15.          Additional
Guarantors.  The
initial Guarantor(s) hereunder shall be such of the Subsidiaries of Company as
are signatories hereto on the date hereof. 
From time to time subsequent to the date hereof, Subsidiaries of Company
may become parties hereto, as additional Guarantors (each an “Additional Guarantor”), by executing a
counterpart of this Guaranty.  A form of
such a counterpart is attached as Exhibit A. 
Upon delivery of any such counterpart to Guarantied Party, notice of
which is hereby waived by Guarantors, each such Additional Guarantor shall be a
Guarantor and shall be as fully a party hereto as if such Additional Guarantor
were an original signatory hereof.  Each
Guarantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Guarantor
hereunder, nor by any election of the Guarantied Party not to cause any
Subsidiary of Company to become an Additional Guarantor hereunder.  This Guaranty shall be fully effective as to
any Guarantor that is or becomes a party hereto regardless of whether any other
Person becomes or fails to become or ceases to be a Guarantor hereunder.

16.          Counterparts;
Effectiveness.  This
Guaranty may be executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original for all purposes; but all such
counterparts together shall constitute but one and the same instrument.  This Guaranty shall become effective as to each
Guarantor upon the execution of a counterpart hereof by such Guarantor (whether
or not a counterpart hereof shall have been executed by any other Guarantor)
and receipt by the Guaranteed Party of written or telephonic notification of
such execution and authorization of delivery thereof.

17.          Guarantied Party as Agent.

(a)           Guarantied Party has been appointed
to act as Guarantied Party hereunder by Lenders and, by acceptance of any of
the benefits hereunder, each Swap Counterparty. 
Guarantied Party shall be obligated, and shall have the right hereunder,
to make demands, to give notices, to exercise or refrain from exercising any
rights, and to take or refrain from taking any action, solely in accordance
with this Guaranty and the Credit Agreement; provided that Guarantied
Party shall exercise, or refrain from exercising, any remedies under or with
respect to this Guaranty in accordance with the instructions of
(i) Requisite Lenders, or (ii) after payment in full of all
Obligations under the Credit Agreement and the other Loan Documents, the
cancellation, expiration or collateralization with cash or a letter of credit
of all Letters of Credit

 XIII-9
 

 

and the termination of
the Commitments, the holders of a majority of (A) the aggregate notional
amount under all Lender Swap Agreements (including Lender Swap Agreements that
have been terminated) or (B) if all Lender Swap Agreements have been
terminated in accordance with their terms, the aggregate amount then due and
payable (exclusive of expenses and similar payments but including any early
termination payments then due) under such Lender Swap Agreements (Requisite
Lenders or, if applicable, such holders being referred to herein as “Requisite Obligees”).

(b)           Guarantied Party shall at all times
be the same Person that is Administrative Agent under the Credit
Agreement.  Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement
shall also constitute notice of resignation as Guarantied Party under this
Guaranty; and appointment of a successor Administrative Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute appointment of a
successor Guarantied Party under this Guaranty. 
Upon the acceptance of any appointment as Administrative Agent under
subsection 9.5 of the Credit Agreement by a successor Administrative Agent,
that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Guarantied Party under this Guaranty, and the retiring Guarantied Party under
this Guaranty shall promptly (i) transfer to such successor Guarantied
Party all sums held hereunder, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of
the successor Guarantied Party under this Guaranty, and (ii) take such
other actions as may be necessary or appropriate in connection with the
assignment to such successor Guarantied Party of the rights created hereunder,
whereupon such retiring Guarantied Party shall be discharged from its duties
and obligations under this Guaranty. 
After any retiring Guarantied Party’s resignation hereunder as
Guarantied Party, the provisions of this Guaranty shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Guaranty while it
was Guarantied Party hereunder.

18.          Notice
of Lender Swap Agreements. 
Guarantied Party shall not be deemed to have any duty whatsoever with
respect to any Swap Counterparty until it shall have received written notice in
form and substance satisfactory to Guarantied Party from Company, a Guarantor
or the Swap Counterparty as to the existence and terms of the applicable Lender
Swap Agreement.

[Remainder of page intentionally left blank.]

 XIII-10

 

IN WITNESS WHEREOF,
each Guarantor and Guarantied Party, solely for the purposes of the waiver of
the right to jury trial contained in Section 14, have caused this Guaranty to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

	
  

  	
  FTD.COM INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FLORISTS’ TRANSWORLD DELIVERY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

 XIII-S-1
 

 

 

	
  

  	
  WELLS FARGO BANK, N.A., as
  Administrative

  Agent, as Guarantied Party

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

 XIII-S-2

 

EXHIBITA

[FORM OF COUNTERPART FOR
ADDITIONAL GUARANTORS]

This COUNTERPART (this “Counterpart”), dated               ,
20    , is delivered pursuant to Section 15 of the Guaranty
referred to below.  The undersigned
hereby agrees that this Counterpart may be attached to the Guaranty, dated as
of July 28, 2006 (as it may be from time to time amended, modified or
supplemented, the “Guaranty”;
capitalized terms used herein not otherwise defined herein shall have the
meanings ascribed therein), among the Guarantors named therein and Wells Fargo
Bank, N.A., as Guarantied Party.  The
undersigned, by executing and delivering this Counterpart, hereby becomes an
Additional Guarantor under the Guaranty in accordance with Section 15 thereof
and agrees to be bound by all of the terms thereof.

IN WITNESS WHEREOF,
the undersigned has caused this Counterpart to be duly executed and delivered
by its officer thereunto duly authorized as of                                ,
20     .

	
  

  	
  [NAME OF ADDITIONAL GUARANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
						

 

 XIII-Exhibit A-1

 

EXHIBIT XIV

[FORM OF] SECURITY
AGREEMENT

This SECURITY
AGREEMENT (this “Agreement”)
is dated as of July 28, 2006, and entered into by and among FTD, INC., a Delaware corporation (“Company”),
FTD GROUP, INC., a Delaware corporation
(“Holdings”), each of THE UNDERSIGNED DIRECT AND INDIRECT SUBSIDIARIES
of Company (each of such undersigned Subsidiaries being a “Subsidiary Grantor” and collectively “Subsidiary Grantors”) and each ADDITIONAL GRANTOR that may become a party
hereto after the date hereof in accordance with Section 21 hereof (each of
Company, Holdings, each Subsidiary Grantor, and each Additional Grantor being a
“Grantor” and collectively the “Grantors”) and WELLS FARGO BANK, N.A.,
as Administrative Agent for and representative of (in such capacity herein
called “Secured Party”) the
Beneficiaries (as hereinafter defined).

PRELIMINARY STATEMENTS

A.            Pursuant
to the Credit Agreement dated as of July 28, 2006 (said Credit Agreement, as it
may hereafter be amended, restated, supplemented or otherwise modified from
time to time, being the “Credit Agreement”;
the terms defined therein and not otherwise defined in Section 32 or elsewhere
herein being used herein as therein defined), by and among Company, the lenders
listed therein as Lenders, Wells Fargo Bank, N.A., as Administrative Agent (in
such capacity, “Administrative Agent”),
and the other agents listed therein, Lenders have made certain commitments,
subject to the terms and conditions set forth in the Credit Agreement, to
extend certain credit facilities to Company.

B.            Company
may from time to time enter, or may from time to time have entered, into one or
more Lender Swap Agreements with one or more Swap Counterparties in accordance
with the terms of the Credit Agreement, and it is desired that the obligations
of Company under the Lender Swap Agreements, including, without limitation, the
obligation of Company to make payments thereunder in the event of early
termination thereof, together with all obligations of Company under the Credit
Agreement and the other Loan Documents, be secured hereunder.

C.            Holdings
has executed and delivered the Holdings Guaranty, and Subsidiary Grantors have
executed and delivered the Subsidiary Guaranty, in each case in favor of
Secured Party for the benefit of Lenders and any Swap Counterparties, pursuant
to which Holdings and each Subsidiary Grantor have guarantied the prompt
payment and performance when due of all obligations of Company under the Credit
Agreement and all obligations of Company under the Lender Swap Agreements.

D.            It is a
condition precedent to the initial extensions of credit by Lenders under the
Credit Agreement that Grantors listed on the signature pages hereof shall have
granted the security interests and undertaken the obligations contemplated by
this Agreement.

NOW, THEREFORE, in
consideration of the agreements set forth herein and in the Credit Agreement
and in order to induce Lenders to make Loans and other extensions of

 XIV-1
 

 

credit under the Credit
Agreement and to induce Swap Counterparties to enter into the Lender Swap
Agreements, each Grantor hereby agrees with Secured Party as follows:

SECTION 1.                                               Grant
of Security.

Each Grantor hereby assigns to Secured Party, and
hereby grants to Secured Party a security interest in, all of such Grantor’s
right, title and interest in and to all of the personal property of such
Grantor, in each case whether now or hereafter existing, whether tangible or
intangible, whether now owned or hereafter acquired, wherever the same may be
located and whether or not subject to the Uniform Commercial Code as it exists
on the date of this Agreement, or as it may hereafter be amended in the State
of New York (the “UCC”), including
all Assigned Agreements and the following (the “Collateral”):

(a)           all
Accounts;

(b)           all
Chattel Paper;

(c)           all Money
and all Deposit Accounts, together with all amounts on deposit from time to
time in such Deposit Accounts;

(d)           all
Documents;

(e)           all
General Intangibles, including all intellectual property, Payment Intangibles
and Software;

(f)            all
Goods, including Inventory, Equipment and Fixtures;

(g)           all
Instruments;

(h)           all
Investment Property;

(i)            all
Letter-of-Credit Rights and other Supporting Obligations;

(j)            all
Records;

(k)           all
Commercial Tort Claims, including those set forth on Schedule 1 annexed
hereto; and

(l)            all
Proceeds and Accessions with respect to any of the foregoing Collateral.

Each category of Collateral set forth above shall have
the meaning set forth in the UCC (to the extent such term is defined in the
UCC), it being the intention of Grantors that the description of the Collateral
set forth above be construed to include the broadest possible range of assets.

Notwithstanding anything herein to the contrary, in no
event shall the Collateral include, and no Grantor shall be deemed to have granted
a security interest in, any of such Grantor’s rights or interests in or under,
(a) any license, contract, permit, Instrument, Security or

 XIV-2
 

 

franchise to which such
Grantor is a party or any of its rights or interests thereunder to the extent,
but only to the extent, that such a grant would, under the terms of such
license, contract, permit, Instrument, Security or franchise, result in a
breach of the terms of, or constitute a default under, such license, contract,
permit, Instrument, Security or franchise (other than to the extent that any
such term would be rendered ineffective pursuant to the UCC or any other
applicable law (including the Bankruptcy Code) or principles of equity); provided,
that immediately upon the ineffectiveness, lapse or termination of any such
provision the Collateral shall include, and such Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect, or (b)  any property or asset
hereafter acquired by any Grantor that is subject to a Lien permitted to be
incurred pursuant to the Credit Agreement solely to the extent that the
documents evidencing such Lien prohibit the grant of a security interest in or
Lien on such property or asset; provided that, upon such property or asset no
longer being subject to such Lien or prohibition, such property or asset shall
(without any act or delivery by any Person) constitute Collateral hereunder.

Notwithstanding anything herein to the contrary, the
Collateral shall not include any equity interests issued by a Person if such
Person is a controlled foreign corporation (used hereinafter as such term is
defined in Section 957(a) or any successor provision of the Internal Revenue
Code), in excess of the amount of such equity interests possessing up to but
not exceeding 66% of the voting power of all classes of such equity interests
entitled to vote of such Person.

SECTION 2.                                               Security
for Obligations.

This Agreement secures, and the Collateral is
collateral security for, the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise, of all Secured Obligations of each Grantor.  “Secured
Obligations” means:

(a)           with
respect to Company, all obligations and liabilities of every nature of Company
now or hereafter existing under or arising out of or in connection with the
Credit Agreement and the other Loan Documents and any Lender Swap Agreement;

(b)           with
respect to each Subsidiary Grantor and Additional Grantor, all obligations and
liabilities of every nature of such Subsidiary Grantor now or hereafter
existing under or arising out of or in connection with the Subsidiary Guaranty;
and

(c)           with
respect to Holdings, all obligations and liabilities of every nature of
Holdings now or hereafter existing under or arising out of or in connection
with the Holdings Guaranty;

in each case together with all extensions or renewals
thereof, whether for principal, interest, reimbursement of amounts drawn under
Letters of Credit, payments for early termination of Lender Swap Agreements,
fees, expenses, indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated, whether
or not jointly owed with others, and whether or not from time to time decreased
or extinguished and later increased, created or incurred, and all or any
portion of such obligations or liabilities that

 XIV-3
 

 

are paid, to the extent all or any part of such
payment is avoided or recovered directly or indirectly from Secured Party or
any Lender or Swap Counterparty as a preference, fraudulent transfer or
otherwise, and all obligations of every nature of Grantors now or hereafter
existing under this Agreement (including, without limitation, interest and
other amounts that, but for the filing of a petition in bankruptcy with respect
to Company or any other Grantor, would accrue on such obligations, whether or
not a claim is allowed against Company or such Grantor for such amounts in the
related bankruptcy proceeding).

SECTION 3.                                               Grantors
Remain Liable.

Anything contained herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under any contracts and
agreements included in the Collateral, to the extent set forth therein, to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by Secured Party of any
of its rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) Secured Party shall not have any obligation or liability under any
contracts, licenses, and agreements included in the Collateral by reason of
this Agreement, nor shall Secured Party be obligated to perform any of the
obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.

SECTION 4.                                               Representations
and Warranties.

Each Grantor represents
and warrants as follows:

(a)           Ownership of Collateral.  Except as expressly permitted by the Credit
Agreement, such Grantor owns its interests in the Collateral free and clear of
any Lien and no effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office, in the PTO (to such Grantor’s knowledge) or in the Copyright
Office, except for which proper terminations have been delivered to Secured
Party for filing.

(b)           Perfection. 
The security interests in the Collateral granted to Secured Party for
the ratable benefit of Lenders and Swap Counterparties hereunder constitute
valid security interests in the Collateral, securing the payment of the Secured
Obligations.  Upon (i) the filing of
UCC financing statements naming each Grantor as “debtor”, naming Secured Party
as “secured party” and describing the Collateral in the filing offices with
respect to such Grantor set forth on Schedule 2 annexed hereto,
(ii) in the case of the Securities Collateral consisting of certificated
Securities or evidenced by Instruments, in addition to filing of such UCC
financing statements, delivery of the certificates representing such
certificated Securities and delivery of such Instruments to Secured Party, in
each case duly endorsed or accompanied by duly executed instruments of
assignment or transfer in blank, (iii) in the case of the Intellectual
Property Collateral, in addition to the filing of such UCC financing
statements, the recordation of a Grant with the PTO or with the Copyright
Office, as applicable, (iv) in the case of Equipment that is covered by a
certificate of title, to the extent requested by Secured Party, the filing with
the registrar of motor vehicles or other appropriate authority in the applicable
jurisdiction of an application requesting the notation of the security interest
created hereunder on

 XIV-4
 

 

such certificate of
title, and (v), in the case of any Deposit Account and any Investment Property
constituting a Security Entitlement, Securities Account, Commodity Contract or
Commodity Account, to the extent requested by Secured Party, the execution and
delivery to Secured Party of an agreement providing for control by Secured
Party thereof, the security interests in the Collateral granted to Secured Party
for the ratable benefit of Lenders and Swap Counterparties will constitute
perfected security interests therein prior to all other Liens (except for
Permitted Encumbrances and Liens permitted by subsection 7.2(A) of the Credit
Agreement), and all filings and other actions necessary or desirable to perfect
and protect such security interests have been, or promptly after the Closing
Date will be, duly made or taken.

(c)           Office Locations; Type and Jurisdiction of
Organization; Locations of Equipment and Inventory.  As of the Closing Date or, in the case of an
Additional Grantor, the date of the applicable Counterpart, the office where
such Grantor keeps its Records regarding the Accounts and all Intellectual
Property and all originals of all Chattel Paper that evidence Accounts are
located at the locations set forth on Schedule 3 annexed hereto; such
Grantor’s name as it appears in official filings in the jurisdiction of its
organization, type of organization (i.e. corporation, limited partnership,
etc.), jurisdiction of organization and organization number provided by the
applicable Government Authority of the jurisdiction of organization are set
forth on Schedule 3 annexed hereto. 
All of the Equipment and Inventory is, as of the date hereof, or in the
case of an Additional Grantor, the date of the applicable Counterpart, located
at the places set forth on Schedule 4 annexed hereto, except for
Inventory which, in the ordinary course of business, is in transit either
(i) from a supplier to a Grantor, (ii) between the locations set
forth on Schedule 4 annexed hereto, or (iii) to customers of a
Grantor.

(d)           Reserved.

(e)           Delivery of Certain Collateral.  As of the Closing Date, all certificates or
Instruments (excluding checks) evidencing, comprising or representing the
Collateral have been delivered to Secured Party duly endorsed or accompanied by
duly executed instruments of transfer or assignment in blank.

(f)            Securities Collateral.  All of the Pledged Subsidiary Equity set
forth on Schedule 6 annexed hereto has been duly authorized and validly
issued and is fully paid and non-assessable; all of the Pledged Subsidiary Debt
set forth on Schedule 7 annexed hereto has been duly authorized and is
the legally valid and binding obligation of the issuers thereof and is not in
default; there are no outstanding warrants, options or other rights to
purchase, or other agreements outstanding with respect to, or property that is
now or hereafter convertible into, or that requires the issuance or sale of,
any Pledged Subsidiary Equity, other than the Put/Call Agreements; Schedule
6 annexed hereto sets forth all of the Equity Interests and the Pledged
Equity owned by each Grantor, and the percentage ownership in each issuer
thereof, on the date hereof; and Schedule 7 annexed hereto sets forth
all of the Pledged Debt in existence on the date hereof.

(g)           Intellectual Property Collateral.  As of the Closing Date, a true and complete
list of all material Trademark Registrations and applications for any material
Trademark owned, held (whether pursuant to a license or otherwise) or used by
such Grantor, in whole or in part, is set forth on Schedule 8 annexed
hereto; as of the Closing Date, a true and

 XIV-5
 

 

complete list of all
material Patents owned, held (whether pursuant to a license or otherwise) or
used by such Grantor, in whole or in part, is set forth on Schedule 9
annexed hereto; as of the Closing Date, a true and complete list of all
material Copyright Registrations and applications for Copyright Registrations
held (whether pursuant to a license or otherwise) by such Grantor, in whole or
in part, is set forth on Schedule 10 annexed hereto; and after
reasonable inquiry, such Grantor is not aware of any pending or threatened
claim by any third party that any of the Intellectual Property Collateral
owned, held or used by such Grantor is invalid or unenforceable that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.

(h)           Deposit Accounts, Security Accounts, Commodity
Accounts.  Schedule 11
annexed hereto lists all Deposit Accounts, Security Accounts and Commodity
Accounts owned by each Grantor as of the Closing Date  and indicates the institution or intermediary
at which the account is held and the account number.

(i)            Chattel Paper.  As of the date hereof, such Grantor has no
interest in any Chattel Paper, except as set forth in Schedule 12
annexed hereto.

(j)            Letter-of-Credit Rights.  As of the date hereof, such Grantor has no
interest in any Letter-of-Credit Rights, except as set forth on Schedule 13
annexed hereto.

(k)           Documents. 
As of the date hereof, no negotiable Documents are outstanding with
respect to any of the Inventory, except as set forth on Schedule 14
annexed hereto.

(l)            Assigned Agreements.  As of the date hereof, to the applicable
Grantor’s knowledge, each Assigned Agreement is in full force and effect and is
enforceable against the parties thereto in accordance with its terms.

(m)          Motor Vehicles. As of the date hereof, such
Grantor owns no motor vehicles.

SECTION 5.                                               Further
Assurances.

(a)           Generally. 
Each Grantor agrees that from time to time, at the expense of Grantors,
such Grantor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral.  Without
limiting the generality of the foregoing, each Grantor will:  (i) (A) notify Secured Party in writing
of receipt by such Grantor of any interest in Chattel Paper (other than Chattel
Paper received by such Grantor in connection with the making of loans
(financing equipment sold) or equipment leases to customers permitted by
subsection 7.3(xiv) of the Credit Agreement), (B) at the reasonable request of
Secured Party, notify Secured Party in writing of receipt by such Grantor of
any interest in Chattel Paper received in connection with the making of loans
(financing equipment sold) or equipment leases to customers permitted by
subsection 7.3(xiv) of the Credit Agreement and (C) at the reasonable request
of Secured Party, mark conspicuously each item of Chattel Paper, with a legend,
in form and substance

 XIV-6
 

 

reasonably satisfactory
to Secured Party, indicating that such Chattel Paper is subject to the security
interest granted hereby, (ii) deliver to Secured Party all promissory
notes and other Instruments with a principal amount in excess of $100,000 and,
at the reasonable request of Secured Party, all original counterparts of
Chattel Paper, duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to Secured
Party, (iii) (A) execute (if necessary) and file such financing or
continuation statements, or amendments thereto, (B) at the reasonable
request of Secured Party, execute and deliver, and cause to be executed and
delivered, agreements establishing that Secured Party has control of electronic
Chattel Paper, Deposit Accounts, Investment Property and Letter-of-Credit
Rights of such Grantor and (C) deliver such other instruments or notices,
in each case, as may be necessary or desirable, or as Secured Party may
reasonably request, in order to perfect and preserve the security interests
granted or purported to be granted hereby, (iv) furnish to Secured Party
from time to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as Secured
Party may reasonably request, all in reasonable detail, (v) promptly after
the acquisition by such Grantor of any item of Equipment with a value in excess
of $100,000 that is covered by a certificate of title under a statute of any
jurisdiction under the law of which indication of a security interest on such
certificate is required as a condition of perfection thereof, execute and file
with the registrar of motor vehicles or other appropriate authority in such
jurisdiction an application or other document requesting the notation or other
indication of the security interest created hereunder on such certificate of
title, (vi) within 30 days after the end of each calendar quarter, deliver
to Secured Party copies of all such applications or other documents filed
during such calendar quarter and copies of all such certificates of title
issued during such calendar quarter indicating the security interest created
hereunder in the items of Equipment covered thereby, (vii) at any
reasonable time, upon request and reasonable prior notice by Secured Party,
exhibit the Collateral to and allow inspection of the Collateral by Secured
Party, or persons designated by Secured Party, (viii) at Secured Party’s
reasonable request, appear in and defend any action or proceeding that may
affect such Grantor’s title to or Secured Party’s security interest in all or
any material part of the Collateral, and (ix) at Secured Party’s reasonable
request, use commercially reasonable efforts to obtain any necessary consents
of third parties to the creation and perfection of a security interest in favor
of Secured Party with respect to any Collateral.  Each Grantor hereby authorizes Secured Party
to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral (including any financing
statement indicating that it covers “all assets” or “all personal property” of
such Grantor) without the signature of any Grantor.

(b)           Securities Collateral.  Without limiting the generality of the
foregoing Section 5(a), each Grantor agrees that (i) all certificates or
Instruments with a principal amount in excess of $100,000 representing or
evidencing the Securities Collateral shall be delivered to and held by or on
behalf of Secured Party pursuant hereto and shall be in suitable form for
transfer by delivery or, as applicable, shall be accompanied by such Grantor’s
endorsement, where necessary, or duly executed instruments of transfer or
assignment in blank, all in form and substance reasonably satisfactory to
Secured Party and (ii) it will, upon obtaining any additional Equity
Interests or Indebtedness, promptly (and in any event within ten Business Days)
deliver to Secured Party a Pledge Supplement, duly executed by such Grantor, in
respect of such additional Pledged Equity or Pledged Debt; provided,
that the failure of any Grantor to execute a Pledge Supplement with respect to
any additional Pledged Equity or Pledged Debt shall not impair the security
interest of Secured Party therein or otherwise adversely affect the rights and
remedies of

 XIV-7
 

 

Secured Party hereunder
with respect thereto.  Upon each such
acquisition, the representations and warranties contained in

Section 4(f) hereof shall be deemed to have been made by such Grantor as to
such Pledged Equity or Pledged Debt, whether or not such Pledge Supplement is
delivered.

(c)           Intellectual Property Collateral.  Without limiting the generality of the
foregoing Section 5(a), if any Grantor shall hereafter obtain rights to any new
Intellectual Property Collateral or become entitled to the benefit of
(i) any Patent or any reissue, division, continuation, renewal, extension
or continuation-in-part of any Patent or any improvement of any Patent or
(ii) any Copyright Registration, application for Copyright Registration or
renewals or extension of any Copyright, then in any such case, the provisions
of this Agreement shall automatically apply thereto.  At least quarterly, within 20 Business Days
after the end of each calendar quarter, each Grantor shall notify Secured Party
in writing of any of the foregoing rights acquired by such Grantor after the
date hereof and of any Trademark Registrations issued or application for a
Trademark Registration made, any Patent issued or application for a Patent
made, and any Copyright Registrations issued or application for Copyright
Registration made, in any such case, after the date hereof.  At least quarterly, within 20 Business Days
after the end of each calendar quarter, each Grantor shall execute and deliver
to Secured Party an IP Supplement, and submit a Grant for recordation with
respect thereto in the PTO or Copyright Office, as applicable; provided,
the failure of any Grantor to execute an IP Supplement or submit a Grant for
recordation with respect to any additional Intellectual Property Collateral
shall not impair the security interest of Secured Party therein or otherwise
adversely affect the rights and remedies of Secured Party hereunder with
respect thereto.  Upon delivery to
Secured Party of an IP Supplement, Schedules 8, 9 and 10 annexed hereto
and Schedule A to each Grant, as applicable, shall be deemed modified to
include reference to any right, title or interest in any existing Intellectual
Property Collateral or any Intellectual Property Collateral set forth on Schedule
A to such IP Supplement.  Upon each
such acquisition, the representations and warranties contained in Section 4(g)
hereof shall be deemed to have been made by such Grantor as to such
Intellectual Property Collateral, whether or not such IP Supplement is
delivered.

(d)           Commercial Tort Claims.  Grantors have no Commercial Tort Claims as of
the date hereof, except as set forth on Schedule 1 annexed hereto.  In the event that a Grantor shall at any time
after the date hereof have any Commercial Tort Claims, such Grantor shall
promptly notify Secured Party thereof in writing, which notice shall
(i) set forth in reasonable detail the basis for and nature of such
Commercial Tort Claim and (ii) constitute an amendment to this Agreement
by which such Commercial Tort Claim shall constitute part of the Collateral.

SECTION 6.                                               Certain
Covenants of Grantors.

Each Grantor shall:

(a)           not use or
knowingly permit any Collateral to be used unlawfully or in violation of any
provision of this Agreement or any applicable statute, regulation or ordinance
or any policy of insurance covering the Collateral;

(b)           give
Secured Party at least 10 days’ prior written notice of (i) any change in
such Grantor’s name, identity or corporate structure and (ii) any
reincorporation,

 XIV-8
 

 

reorganization or other
action that results in a change of the jurisdiction of organization of such
Grantor;

(c)           if Secured
Party gives value to enable such Grantor to acquire rights in or the use of any
Collateral, use such value for such purposes;

(d)           keep
correct and accurate (in all material respects) Records of Collateral at the
locations described in Schedule 3 annexed hereto;

(e)           permit
representatives of Secured Party at any time upon reasonable prior notice
during normal business hours to inspect and make abstracts from such Records,
and each Grantor agrees to render to Secured Party, at Grantor’s cost and
expense, such clerical and other assistance as may be reasonably requested with
regard thereto;

(f)            not
permit any Person other than Secured Party or such Grantor to have possession
or control of any Chattel Paper; and

(g)           not enter
into any Control Agreement covering any Collateral with any Person unless such
Control Agreement is in favor of Secured Party.

SECTION 7.                                               Special
Covenants With Respect to Equipment and Inventory.

Each Grantor shall:

(a)           if any
Inventory is in possession or control of any of such Grantor’s agents or
processors, if the aggregate book value of all such Inventory exceeds $250,000,
and in any event upon the occurrence of an Event of Default and at the written
request of Secured Party, instruct such agent or processor to hold all such
Inventory for the account of Secured Party and subject to the instructions of
Secured Party;

(b)           if any
Inventory is located on premises leased by such Grantor, at the written request
of Secured Party, use commercially reasonable efforts to deliver to Secured
Party a fully executed Collateral Access Agreement; and

(c)           promptly
upon the issuance and delivery to such Grantor of any negotiable Document with
a value in excess of $100,000, deliver such Document to Secured Party.

SECTION 8.                                               Special
Covenants with respect to Accounts and Assigned Agreements.

(a)           Each
Grantor shall, for not less than two years from the date on which each Account
of such Grantor arose, maintain (i) complete Records of such Account,
including records of all payments received, credits granted and merchandise
returned, and (ii) all documentation relating thereto.

(b)           Except as
otherwise provided in this subsection (b), each Grantor shall continue to
collect, at its own expense, all amounts due or to become due to such Grantor
under the Accounts.  In connection with
such collections, each Grantor may take (and, at Secured Party’s direction,
shall take) such action as such Grantor or Secured Party may deem necessary

 XIV-9
 

 

or advisable to enforce
collection of amounts due or to become due under the Accounts; provided,
however, that Secured Party shall have the right at any time, upon the
occurrence and during the continuation of an Event of Default and upon written
notice to such Grantor of its intention to do so, to (i) notify the
account debtors or obligors under any Accounts of the assignment of such Accounts
to Secured Party and to direct such account debtors or obligors to make payment
of all amounts due or to become due to such Grantor thereunder directly to
Secured Party, (ii) notify each Person maintaining a lockbox or similar
arrangement to which account debtors or obligors under any Accounts have been
directed to make payment to remit all amounts representing collections on
checks and other payment items from time to time sent to or deposited in such
lockbox or other arrangement directly to Secured Party, (iii) enforce
collection of any such Accounts at the expense of Grantors, and
(iv) adjust, settle or compromise the amount or payment thereof, in the
same manner and to the same extent as such Grantor might have done.  After receipt by such Grantor of the notice
from Secured Party referred to in the proviso to the preceding sentence, (A)
all amounts and proceeds (including checks and other Instruments) received by
such Grantor in respect of the Accounts shall be received for the benefit of
Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 17 hereof, and (B) such Grantor shall not,
without the written consent of Secured Party, adjust, settle or compromise the
amount or payment of any Account, or release wholly or partly any account
debtor or obligor thereof, or allow any credit or discount thereon except to
the extent not prohibited by the terms of the Credit Agreement.

(c)           Each
Grantor shall at its expense:

(i)            if
consistent with sound business practices, perform and observe all terms and
provisions of the Assigned Agreements to be performed or observed by it,
maintain the Assigned Agreements in full force and effect, enforce the Assigned
Agreements in accordance with their terms, and take all such action to such end
as may be from time to time requested by Secured Party; and

(ii)           upon
request of Secured Party, (A) furnish to Secured Party, promptly upon
receipt thereof, copies of all notices, requests and other documents received
by such Grantor under or pursuant to the Assigned Agreements and from time to
time such information and reports regarding the Assigned Agreements as Secured
Party may reasonably request and (B) make to the parties to such Assigned
Agreements such demands and requests for information and reports or for action
as such Grantor is entitled to make under the Assigned Agreements.

(d)           Upon the
occurrence and during the continuance of an Event of Default, no Grantor shall
(i) cancel or terminate any of the Assigned Agreements or consent to or
accept any cancellation or termination thereof; (ii) amend or otherwise
modify the Assigned Agreements or give any consent, waiver or approval
thereunder that could reasonably be expected to materially impair the interest
or rights of Secured Party; (iii) waive any default under or breach of the
Assigned Agreements; (iv) consent to or permit or accept any prepayment of
amounts to become due under or in connection with the Assigned Agreements,
except as expressly provided therein; or (v) take any other action in
connection with the Assigned

 XIV-10

 

Agreements that could
reasonably be expected to materially impair the value of the interest or rights
of such Grantor thereunder or that could reasonably be expected to materially
impair the interest or rights of Secured Party.

SECTION 9.                                               Special
Covenants With Respect to the Securities Collateral.

(a)           Form of Securities Collateral.  Secured Party shall have the right at any
time to exchange certificates or instruments representing or evidencing
Securities Collateral for certificates or instruments of smaller or larger
denominations.  If any Securities
Collateral is not a security pursuant to Section 8-103 of the UCC, no Grantor
shall take any action that, under such Section, converts such Securities
Collateral into a security without causing the issuer thereof to issue to it
certificates or instruments evidencing such Securities Collateral, which it
shall promptly deliver to Secured Party as provided in this Section 9(a).

(b)           Covenants. 
Each Grantor shall (i) not, except as expressly permitted by the
Credit Agreement, permit any issuer of Pledged Subsidiary Equity to merge or
consolidate unless all the outstanding Equity Interests of the surviving or
resulting Person are, upon such merger or consolidation, pledged hereunder and
no cash, securities or other property is distributed in respect of the
outstanding Equity Interests of any other constituent corporation; provided
that, if the surviving or resulting Person upon any such merger or
consolidation is a controlled foreign corporation, then such Grantor shall only
be required to pledge outstanding Equity Interests of such surviving or
resulting Person possessing up to but not exceeding 66% of the voting power of
all classes of Equity Interests of such issuer entitled to vote;
(ii) cause each issuer of Pledged Subsidiary Equity not to issue Equity
Interests in addition to or in substitution for the Pledged Subsidiary Equity
issued by such issuer, except to such Grantor; (iii) immediately upon its
acquisition (directly or indirectly) of any Equity Interests, including
additional Equity Interests in each issuer of Pledged Equity, comply with
Section 5(b); provided that, notwithstanding anything contained in this
clause (iii) to the contrary, such Grantor shall only be required to pledge the
outstanding Equity Interests of a controlled foreign corporation possessing up
to but not exceeding 66% of the voting power of all classes of capital stock of
such controlled foreign corporation entitled to vote; (iv) immediately
upon issuance of any and all Instruments or other evidences of additional
Indebtedness from time to time owed to such Grantor by any obligor on the
Pledged Debt, comply with Sections 5(a) and (b); (v) promptly deliver to
Secured Party all written notices received by it with respect to the Securities
Collateral; (vi) at its expense (A) perform and comply in all material
respects with all terms and provisions of any agreement related to the
Securities Collateral required to be performed or complied with by it, (B)
maintain all such agreements in full force and effect and (C) enforce all such
agreements in accordance with their terms; and (vii), at the request of Secured
Party, promptly execute and deliver to Secured Party an agreement providing for
control by Secured Party of all Securities Entitlements, Securities Accounts,
Commodity Contracts and Commodity Accounts of such Grantor.

(c)           Voting and Distributions.  So long as no Event of Default shall have
occurred and be continuing, (i) each Grantor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not prohibited by the terms of
this Agreement or the Credit Agreement; provided, no Grantor shall
exercise or refrain from exercising any such right if Secured Party shall have
notified such

 XIV-11
 

 

Grantor that, in Secured
Party’s reasonable judgment, such action would have a material adverse effect
on the value of the Securities Collateral or any part thereof; and
(ii) each Grantor shall be entitled to receive and retain any and all
dividends, other distributions and interest paid in respect of the Securities
Collateral.

Upon the occurrence and during the continuation of an
Event of Default, (x) upon written notice from Secured Party to any Grantor,
all rights of such Grantor to exercise the voting and other consensual rights
which it would otherwise be entitled to exercise pursuant hereto shall cease,
and all such rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to exercise such voting and other consensual
rights; (y) except as otherwise specified in the Credit Agreement, all rights
of such Grantor to receive the dividends, other distributions, principal and
interest payments which it would otherwise be authorized to receive and retain
pursuant hereto shall cease, and all such rights shall thereupon become vested
in Secured Party who shall thereupon have the sole right to receive and hold as
Collateral such dividends, other distributions and interest payments; and (z)
all dividends, principal, interest payments and other distributions which are
received by such Grantor contrary to the provisions of clause (y) above shall
be received for the benefit of Secured Party, shall be segregated from other
funds of such Grantor and shall forthwith be paid over to Secured Party as
Collateral in the same form as so received (with any necessary endorsements).

In order to permit Secured Party to exercise the
voting and other consensual rights which it may be entitled to exercise
pursuant hereto and to receive all dividends and other distributions which it
may be entitled to receive hereunder, (I) each Grantor shall promptly execute
and deliver (or cause to be executed and delivered) to Secured Party all such
proxies, dividend payment orders and other instruments as Secured Party may
from time to time reasonably request, and (II) without limiting the effect of
clause (I) above, each Grantor hereby grants to Secured Party an irrevocable
proxy to vote the Pledged Equity and to exercise all other rights, powers,
privileges and remedies to which a holder of the Pledged Equity would be
entitled (including giving or withholding written consents of holders of Equity
Interests, calling special meetings of holders of Equity Interests and voting
at such meetings), which proxy shall be effective, automatically and without
the necessity of any action (including any transfer of any Pledged Equity on
the record books of the issuer thereof) by any other Person (including the
issuer of the Pledged Equity or any officer or agent thereof), upon the
occurrence of an Event of Default and which proxy shall only terminate upon the
payment in full of the Secured Obligations, the cure of such Event of Default
or waiver thereof as evidenced by a writing executed by Secured Party.

SECTION
10.                                             Special
Covenants With Respect to the Intellectual Property Collateral.

(a)           Each Grantor shall:

(i)            use commercially reasonable efforts
so as not to permit the inclusion in any contract to which it hereafter becomes
a party of any provision that could reasonably be expected to impair or prevent
the creation of a security interest in, or the assignment of, such Grantor’s
rights and interests in any property included within the definitions of any
Intellectual Property Collateral acquired under such contracts;

 XIV-12
 

 

(ii)           use commercially reasonable efforts
to protect the secrecy of all trade secrets that constitute Intellectual
Property Collateral, including, without limitation, where appropriate entering
into confidentiality agreements with employees and labeling and restricting
access to secret information and documents;

(iii)          use proper statutory notice in
connection with its use of any of the Intellectual Property Collateral and
products and services covered by the Intellectual Property Collateral; and

(iv)          use a commercially appropriate
standard of quality (which may be consistent with such Grantor’s past
practices) in the manufacture, sale and delivery of products and services sold
or delivered under or in connection with the Trademarks.

(b)           Except
as otherwise provided in this Section 10, each Grantor shall continue to
collect, at its own expense, all amounts due or to become due to such Grantor
in respect of the Intellectual Property Collateral or any portion thereof.  In connection with such collections, each
Grantor may take such action as such Grantor may reasonably deem necessary or
advisable to enforce collection of such amounts; provided, Secured Party shall
have the right at any time, upon the occurrence and during the continuation of an
Event of Default and upon written notice to such Grantor of its intention to do
so, to notify the obligors with respect to any such amounts of the existence of
the security interest created hereby and to direct such obligors to make
payment of all such amounts directly to Secured Party, and, upon such
notification and at the expense of such Grantor, to enforce collection of any
such amounts and to adjust, settle or compromise the amount or payment thereof,
in the same manner and to the same extent as such Grantor might have done.  After receipt by any Grantor of the notice
from Secured Party referred to in the proviso to the preceding sentence and
upon the occurrence and during the continuance of any Event of Default,
(i) all amounts and proceeds (including checks and Instruments) received
by each Grantor in respect of amounts due to such Grantor in respect of the
Intellectual Property Collateral or any portion thereof shall be received for
the benefit of Secured Party hereunder, shall be segregated from other funds of
such Grantor and shall be forthwith paid over or delivered to Secured Party in
the same form as so received (with any necessary endorsement) to be held as
cash Collateral and applied as provided by Section 17 hereof, and
(ii) such Grantor shall not adjust, settle or compromise the amount or
payment of any such amount or release wholly or partly any obligor with respect
thereto or allow any credit or discount thereon.

(c)           Each
Grantor shall have the duty diligently, through counsel reasonably acceptable
to such Grantor and Secured Party, to prosecute, file and/or make, unless and
until such Grantor, in its commercially reasonable judgment, decides otherwise,
(i) any application for registration relating to any of the Intellectual
Property Collateral owned, held or used by such Grantor and set forth on Schedules
8, 9 or 10 annexed hereto, as applicable, that is pending as
of the date of this Agreement, (ii) any Copyright Registration on any
existing or future unregistered but copyrightable works (except for works of
nominal commercial value or with respect to which such Grantor has determined
in the exercise of its commercially reasonable judgment that it shall not seek
registration), (iii) any application on any future patentable but unpatented
innovation or invention comprising Intellectual Property Collateral, and
(iv) any Trademark opposition and cancellation proceedings, renew
Trademark Registrations and Copyright Registrations and do any and all acts
which are necessary or desirable to preserve and maintain all rights in all

 XIV-13
 

 

Intellectual Property
Collateral.  Any expenses incurred in
connection therewith shall be borne solely by Grantors.

(d)           Except
as provided herein, each Grantor shall have the right to commence and prosecute
in its own name, as real party in interest, for its own benefit and at its own
expense, such suits, proceedings or other actions for infringement, unfair
competition, dilution, misappropriation or other damage, or reexamination or
reissue proceedings as are necessary to protect the Intellectual Property
Collateral.  Each Grantor shall promptly,
following its becoming aware thereof, notify Secured Party of the institution
of, or of any adverse determination in, any proceeding (whether in the PTO, the
Copyright Office or any federal, state, local or foreign court) or regarding
such Grantor’s ownership, right to use, or interest in any Intellectual
Property Collateral material to such Grantor’s business.  Each Grantor shall provide to Secured Party
any information with respect thereto reasonably requested by Secured Party and
of which such Grantor has knowledge.

(e)           In
addition to, and not by way of limitation of, the granting of a security
interest in the Collateral pursuant hereto, each Grantor, effective upon the
occurrence and during the continuance of an Event of Default, hereby grants to
Secured Party the nonexclusive right and license to use all Trademarks,
tradenames, Copyrights, Patents or technical processes included within the
Intellectual Property Collateral owned or used by such Grantor that relate to
the Collateral, together with any goodwill associated therewith, all to the
extent necessary to enable Secured Party to realize on the Collateral in
accordance with this Agreement and to enable any transferee or assignee of the
Collateral to enjoy the benefits of the Collateral.  This right shall inure to the benefit of all
successors, assigns and transferees of Secured Party and its successors,
assigns and transferees, whether by voluntary conveyance, operation of law, assignment,
transfer, foreclosure, deed in lieu of foreclosure or otherwise.  Such right and license shall be granted free
of charge, without requirement that any monetary payment whatsoever be made to
such Grantor.  If and to the extent that
any Grantor is permitted to license the Intellectual Property Collateral,
Secured Party shall promptly enter into a non-disturbance agreement or other
similar arrangement, at such Grantor’s request and expense, with such Grantor
and any licensee of any Intellectual Property Collateral permitted hereunder in
form and substance reasonably satisfactory to such licensee, such Grantor and
Secured Party pursuant to which (i) Secured Party shall agree not to
disturb or interfere with such licensee’s rights under its license agreement
with such Grantor so long as such licensee is not in default thereunder, and
(ii) such licensee shall acknowledge and agree that the Intellectual
Property Collateral licensed to it is subject to the security interest created
in favor of Secured Party and the other terms of this Agreement.

(f)            The
parties hereto acknowledge and agree that, subject to the other terms and
provisions of this Agreement and of the Credit Agreement, including Secured
Party’s rights upon the occurrence and during the continuance of an Event of
Default, the grant of a security interest in each Grantor’s Intellectual
Property contained herein shall not diminish such Grantor’s exclusive right and
license to use, or grant to other Persons licenses or sublicenses in, such
Intellectual Property, except to the extent such actions by any Grantor would
inhibit or prevent Secured Party from enforcing its rights hereunder or under
the Credit Agreement.

 XIV-14
 

 

SECTION 11.                                        Collateral
Account.

Secured Party is hereby authorized to establish and maintain
as a blocked account under the sole dominion and control of Secured Party, a
restricted Deposit Account designated as “FTD, Inc. Collateral Account” (the “Collateral
Account”).  All amounts at any time held
in the Collateral Account shall be beneficially owned by Grantors but shall be
held in the name of Secured Party hereunder, for the benefit of Beneficiaries,
as collateral security for the Secured Obligations upon the terms and
conditions set forth herein.  Grantors
shall have no right to withdraw, transfer or, except as expressly set forth
herein, otherwise receive any funds deposited into the Collateral Account.  Notwithstanding the foregoing, amounts
deposited by Company into the Collateral Account pursuant to subsection 3.3E of
the Credit Agreement shall be released to Company upon satisfaction of the
conditions specified in such subsection. 
Anything contained herein to the contrary notwithstanding, the
Collateral Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate banking or Government Authority, as may now or
hereafter be in effect.  All deposits of
funds in the Collateral Account shall be made by wire transfer (or, if
applicable, by intra-bank transfer from another account of a Grantor) of
immediately available funds, in each case addressed in accordance with
instructions of Secured Party.  Each
Grantor shall, promptly after initiating a transfer of funds to the Collateral
Account, give notice to Secured Party by telefacsimile of the date, amount and
method of delivery of such deposit.  Cash
held by Secured Party in the Collateral Account shall not be invested by
Secured Party but instead shall be maintained as a cash deposit in the
Collateral Account pending application thereof as elsewhere provided in this
Agreement.  To the extent permitted under
Regulation Q of the Board of Governors of the Federal Reserve System, any cash
held in the Collateral Account shall bear interest at the standard rate paid by
Secured Party to its customers for deposits of like amounts and terms.  Subject to Secured Party’s rights hereunder,
any interest earned on deposits of cash in the Collateral Account shall be
deposited directly in, and held in the Collateral Account.

SECTION 12.                                        Secured
Party Appointed Attorney-in-Fact.

Each Grantor hereby irrevocably appoints Secured Party
as such Grantor’s attorney-in-fact, with full authority in the place and stead
of such Grantor and in the name of such Grantor, Secured Party or otherwise,
from time to time in Secured Party’s discretion to take any action and to
execute any instrument that Secured Party may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:

(a)           upon
the occurrence and during the continuance of an Event of Default, to obtain and
adjust insurance required to be maintained by such Grantor or paid to Secured
Party pursuant to the Credit Agreement;

(b)           upon
the occurrence and during the continuance of an Event of Default, to ask for,
demand, collect, sue for, recover, compound, receive and give acquittance and
receipts for moneys due and to become due under or in respect of any of the
Collateral;

 XIV-15
 

 

(c)           upon
the occurrence and during the continuance of an Event of Default, to receive,
endorse and collect any drafts or other Instruments, Documents, Chattel Paper
and other documents in connection with clauses (a) and (b) above;

(d)           upon
the occurrence and during the continuance of an Event of Default, to file any
claims or take any action or institute any proceedings that Secured Party may
deem necessary or desirable for the collection of any of the Collateral or
otherwise to enforce or protect the rights of Secured Party with respect to any
of the Collateral;

(e)           to
pay or discharge taxes or Liens (other than taxes not required to be discharged
pursuant to the Credit Agreement and Liens permitted under this Agreement or
the Credit Agreement) levied or placed upon or threatened against the
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by Secured Party in its sole discretion,
any such payments made by Secured Party to become obligations of such Grantor
to Secured Party, due and payable immediately without demand;

(f)            upon
the occurrence and during the continuance of an Event of Default, to sign and
endorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications and notices
in connection with Accounts and other documents relating to the Collateral; and

(g)           upon
the occurrence and during the continuance of an Event of Default, generally to
sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though Secured Party were
the absolute owner thereof for all purposes, and to do, at Secured Party’s
option and Grantors’ expense, at any time or from time to time, all acts and
things that Secured Party deems necessary to protect, preserve or realize upon
the Collateral and Secured Party’s security interest therein in order to effect
the intent of this Agreement, all as fully and effectively as such Grantor
might do.

SECTION 13.                                        Secured
Party May Perform.

If any Grantor fails to perform any agreement
contained herein, Secured Party may itself perform, or cause performance of,
such agreement, and the expenses of Secured Party incurred in connection
therewith shall be payable by Grantors under Section 18(b) hereof.

SECTION 14.                                        Standard
of Care.

The powers conferred on Secured Party hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. 
Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Secured Party shall have no duty as to any Collateral or as to
the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. 
Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which Secured Party accords its
own property.

 XIV-16
 

 

SECTION 15.                                        Remedies.

(a)           Generally. 
If any Event of Default shall have occurred and be continuing, Secured
Party may, subject to Section 20 hereof, 
exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the UCC (whether or not the
UCC applies to the affected Collateral), and also may (i) require each
Grantor to, and each Grantor hereby agrees that it will at its expense and upon
request of Secured Party forthwith, assemble all or part of the Collateral as
directed by Secured Party and make it available to Secured Party at a place to
be designated by Secured Party that is reasonably convenient to both parties,
(ii) enter onto the property where any Collateral is located and take
possession thereof with or without judicial process, (iii) prior to the
disposition of the Collateral, store, process, repair or recondition the Collateral
or otherwise prepare the Collateral for disposition in any manner to the extent
Secured Party deems appropriate, (iv) take possession of any Grantor’s
premises or place custodians in exclusive control thereof, remain on such
premises and use the same and any of such Grantor’s equipment for the purpose
of completing any work in process, taking any actions described in the
preceding clause (iii) and collecting any Secured Obligation, (v) without
notice except as specified below, sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any of Secured Party’s
offices or elsewhere, for cash, on credit or for future delivery, at such time
or times and at such price or prices and upon such other terms as Secured Party
may deem commercially reasonable, (vi) exercise dominion and control over
and refuse to permit further withdrawals from any Deposit Account maintained
with Secured Party or any Lender and provide instructions directing the
disposition of funds in Deposit Accounts not maintained with Secured Party or
any Lender and (vii) provide entitlement orders with respect to Security
Entitlements and other Investment Property constituting a part of the
Collateral and, without notice to any Grantor, transfer to or register in the
name of Secured Party or any of its nominees any or all of the Securities
Collateral.  To the extent permitted by
law, Secured Party or any Lender or Swap Counterparty may be the purchaser of
any or all of the Collateral at any such sale and Secured Party, as agent for
and representative of Lenders and Swap Counterparties (but not any Lender or
Swap Counterparty in its individual capacity unless Requisite Obligees shall
otherwise agree in writing), shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply any of the
Secured Obligations as a credit on account of the purchase price for any
Collateral payable by Secured Party at such sale.  Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by applicable
law) all rights of redemption, stay and/or appraisal which it now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.  Each Grantor agrees
that, to the extent notice of sale shall be required by law, at least ten days’
notice to such Grantor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification.  Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given.  Secured Party may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. 
Each Grantor hereby waives any claims against Secured Party arising by
reason of the fact that the price at which any Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a
public sale, even if Secured Party accepts the first offer received and does
not

 XIV-17
 

 

offer such Collateral to
more than one offeree.  If the proceeds
of any sale or other disposition of the Collateral are insufficient to pay all
the Secured Obligations, Grantors shall be jointly and severally liable for the
deficiency and the fees of any attorneys employed by Secured Party to collect
such deficiency.  Each Grantor further
agrees that a breach of any of the covenants contained in this Section 15 will
cause irreparable injury to Secured Party, that Secured Party has no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section shall be specifically enforceable
against such Grantor, and each Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants
except for a defense that no default has occurred giving rise to the Secured
Obligations becoming due and payable prior to their stated maturities.

(b)           Securities Collateral.  Each Grantor recognizes that, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws, Secured Party may be compelled, with respect to any sale of
all or any part of the Securities Collateral conducted without prior
registration or qualification of such Securities Collateral under the
Securities Act and/or such state securities laws, to limit purchasers to those
who will agree, among other things, to acquire the Securities Collateral for
their own account, for investment and not with a view to the distribution or
resale thereof.  Each Grantor
acknowledges that any such private placement may be at prices and on terms less
favorable than those obtainable through a sale without such restrictions (including
an offering made pursuant to a registration statement under the Securities Act)
and, notwithstanding such circumstances, each Grantor agrees that any such
private placement shall not be deemed, in and of itself, to be commercially
unreasonable and that Secured Party shall have no obligation to delay the sale
of any Securities Collateral for the period of time necessary to permit the
issuer thereof to register it for a form of sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it.  If Secured Party determines to exercise its
right to sell any or all of the Securities Collateral, upon written request,
each Grantor shall and shall cause each issuer of any Securities Collateral to
be sold hereunder from time to time to furnish to Secured Party all such
information as Secured Party may request in order to determine the amount of
Securities Collateral which may be sold by Secured Party in exempt transactions
under the Securities Act and the rules and regulations of the Securities and
Exchange Commission thereunder, as the same are from time to time in effect.

(c)           Collateral Account.  If an Event of Default has occurred and is
continuing and, in accordance with Section 8 of the Credit Agreement, Company
is required to pay to Secured Party an amount (the “Aggregate Available Amount”) equal to the maximum amount that
may at any time be drawn under all Letters of Credit then outstanding under the
Credit Agreement, Company shall deliver funds in such an amount for deposit in
the Collateral Account.  In the event a
Letter of Credit is denominated in a currency other than Dollars, the portion
of the Aggregate Available Amount related to such Letter of Credit shall be
calculated based upon the applicable Exchange Rate for such currency as of the
applicable date of determination.  If for
any reason the aggregate amount delivered by Company for deposit in the
Collateral Account as aforesaid is less than the Aggregate Available Amount,
the aggregate amount so delivered by Company shall be apportioned among all
outstanding Letters of Credit for purposes of this Section in accordance with
the ratio of the maximum amount available for drawing under each such Letter of
Credit (as to such Letter of Credit, the “Maximum
Available Amount”) to the Aggregate Available Amount.  Upon any drawing under any outstanding Letter

 XIV-18
 

 

of Credit in respect of
which Company has deposited in the Collateral Account an amount described
above, Secured Party shall apply the amount apportioned to such Letter of
Credit to reimburse the Issuing Lender for the amount of such drawing.  In the event of cancellation or expiration of
any Letter of Credit in respect of which Company has deposited in the Collateral
Account any amounts described above, or in the event of any reduction in the
Maximum Available Amount under such Letter of Credit, Secured Party shall apply
the amount then on deposit in the Collateral Account in respect of such Letter
of Credit (less, in the case of such a reduction, the Maximum Available Amount
under such Letter of Credit immediately after such reduction) first, to the
payment of any amounts payable to Secured Party pursuant to Section 17 hereof,
second, to the extent of any excess, to the cash collateralization pursuant to
the terms of this Agreement of any outstanding Letters of Credit in respect of
which Company has failed to pay all or a portion of the amounts described above
(such cash collateralization to be apportioned among all such Letters of Credit
in the manner described above), third, to the extent of any further excess, to
the payment of any other outstanding Secured Obligations in such order as
Secured Party shall elect, and fourth, to the extent of any further excess, to
the payment to whomsoever shall be lawfully entitled to receive such funds.

SECTION 16.                                        Additional
Remedies for Intellectual Property Collateral.

(a)           Anything
contained herein to the contrary notwithstanding, upon the occurrence and
during the continuation of an Event of Default, (i) Secured Party shall
have the right (but not the obligation) to bring suit, in the name of any
Grantor, Secured Party or otherwise, to enforce any Intellectual Property
Collateral, in which event each Grantor shall, at the reasonable request of
Secured Party, do any and all lawful acts and execute any and all documents
required by Secured Party in aid of such enforcement and each Grantor shall
promptly, upon demand, reimburse and indemnify Secured Party as provided in
subsections 10.2 and 10.3 of the Credit Agreement and Section 18 hereof, as
applicable, in connection with the exercise of its rights under this Section
16, and, to the extent that Secured Party shall elect not to bring suit to
enforce any such Intellectual Property Collateral as provided in this Section, each
Grantor agrees to use all reasonable measures, whether by action, suit,
proceeding or otherwise, which, in such Grantor’s reasonable judgment are
necessary to prevent the infringement of any of the Intellectual Property
Collateral material to such Grantor’s business by others and for that purpose
agrees to use its commercially reasonable judgment in maintaining any action,
suit or proceeding against any Person so infringing reasonably necessary to
prevent such infringement; (ii) upon written demand from Secured Party,
each Grantor shall execute and deliver to Secured Party an assignment or
assignments of the Intellectual Property Collateral and such other documents as
are necessary or appropriate to carry out the intent and purposes of this
Agreement; (iii) each Grantor agrees that such an assignment and/or
recording shall be applied to reduce the Secured Obligations outstanding only
to the extent that Secured Party (or any Lender) receives cash proceeds in
respect of the sale of, or other realization upon, the Intellectual Property
Collateral; and (iv) within five Business Days after written notice from
Secured Party, each Grantor shall make available to Secured Party, to the
extent within such Grantor’s power and authority, such personnel in such Grantor’s
employ as Secured Party may reasonably designate, by name, title or job
responsibility, to permit such Grantor to continue, directly or indirectly, to
produce, advertise and sell the products and services sold or delivered by such
Grantor under or in connection with the Trademarks, Trademark Registrations and
Trademark Rights, such persons to be available to perform their prior functions
on Secured Party’s behalf

 XIV-19
 

 

and to be compensated by
Secured Party at such Grantor’s expense on a per diem, pro-rata basis
consistent with the salary and benefit structure applicable to each as of the
date of such Event of Default.

(b)           If
(i) an Event of Default shall have occurred and, by reason of cure,
waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing,
(iii) an assignment to Secured Party of any rights, title and interests in
and to the Intellectual Property Collateral shall have been previously made,
and (iv) the Secured Obligations shall not have become immediately due and
payable, upon the written request of any Grantor, Secured Party shall promptly
execute and deliver to such Grantor such assignments as may be necessary to
reassign to such Grantor any such rights, title and interests as may have been
assigned to Secured Party as aforesaid, subject to any disposition thereof that
may have been made by Secured Party; provided, after giving effect to such
reassignment, Secured Party’s security interest granted pursuant hereto, as well
as all other rights and remedies of Secured Party granted hereunder, shall
continue to be in full force and effect; and provided further, the rights,
title and interests so reassigned shall be free and clear of all Liens other
than Liens (if any) encumbering such rights, title and interest at the time of
their assignment to Secured Party and Permitted Encumbrances.

SECTION 17.                                        Application
of Proceeds.

Except as expressly provided elsewhere in this
Agreement, all proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
shall be applied as provided in the Credit Agreement.

SECTION 18.                                        Indemnity
and Expenses.

(a)           Grantors
jointly and severally agree to indemnify Secured Party, each Lender and each
Swap Counterparty from and against any and all claims, losses and liabilities
in any way relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party’s or such Lender’s or Swap Counterparty’s gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction.

(b)           Grantors
jointly and severally agree to pay to Secured Party upon demand the amount of
any and all costs and expenses in accordance with subsection 10.2 of the Credit
Agreement.

(c)           The
obligations of Grantors in this Section 18 shall (i) survive the termination of
this Agreement and the discharge of Grantors’ other obligations under this
Agreement, the Lender Swap Agreements, the Credit Agreement and the other Loan
Documents and (ii), as to any Grantor that is a party to a Guaranty, be subject
to the provisions of Section 1(b) thereof.

 XIV-20

 

SECTION 19.                                        Continuing
Security Interest; Transfer of Loans; Termination and Release.

(a)           This
Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until the payment in full of the
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit (or the
collateralization thereof with cash or a letter of credit), (ii) be
binding upon Grantors and their respective successors and assigns, and
(iii) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party, each of the Lenders and the Swap
Counterparties and its successors, transferees and assigns.  Without limiting the generality of the
foregoing clause (iii), (A) but subject to the provisions of subsection 10.1 of
the Credit Agreement, any Lender may assign or otherwise transfer any Loans
held by it to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to Lenders herein or
otherwise and (B) any Swap Counterparty may assign or otherwise transfer any
Lender Swap Agreement to which it is a party to any other Person in accordance
with the terms of such Lender Swap Agreement, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Swap Counterparties herein or otherwise.

(b)           Upon
the payment in full of all Secured Obligations (other than contingent
obligations as to which no claim has been made), the cancellation or
termination of the Commitments and the cancellation or expiration of all
outstanding Letters of Credit (or the collateralization thereof with cash or a
letter of credit), the security interest granted hereby (other than with
respect to any cash collateral in respect of Letters of Credit) shall terminate
and all rights to the Collateral shall revert to the applicable Grantors.  Upon any such termination Secured Party will,
at Grantors’ expense, execute and deliver to Grantors such documents as
Grantors shall reasonably request to evidence such termination.  In addition, upon the proposed sale or other
disposition of any Collateral by a Grantor in accordance with, or not
prohibited by, the Credit Agreement for which such Grantor desires a security
interest release from Secured Party, such a release may be obtained pursuant to
the provisions of subsection 10.14 of the Credit Agreement.

SECTION 20.                                        Secured
Party as Agent.

(a)           Secured
Party has been appointed to act as Secured Party hereunder by Lenders and, by
their acceptance of the benefits hereof, Swap Counterparties.  Secured Party shall be obligated, and shall
have the right hereunder, to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking any
action (including, without limitation, the release or substitution of
Collateral), solely in accordance with this Agreement and the Credit Agreement;
provided that Secured Party shall exercise, or refrain from exercising, any
remedies provided for in Section 15 hereof in accordance with the instructions
of Requisite Obligees.  In furtherance of
the foregoing provisions of this Section 20(a), each Swap Counterparty, by its
acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral hereunder, it being
understood and agreed by such Swap Counterparty that all rights and remedies
hereunder may be exercised solely by Secured Party for the benefit of Lenders
and Swap Counterparties in accordance with the terms of this Section 20(a).

 XIV-21
 

 

(b)           Secured
Party shall at all times be the same Person that is Administrative Agent under
the Credit Agreement.  Written notice of
resignation by Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute notice of resignation as Secured Party under
this Agreement; and appointment of a successor Administrative Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute appointment of a
successor Secured Party under this Agreement. 
Upon the acceptance of any appointment as Administrative Agent under
subsection 9.5 of the Credit Agreement by a successor Administrative Agent,
that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Secured Party under this Agreement, and the retiring Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute (if necessary) and deliver to such successor Secured
Party such amendments to financing statements, and take such other actions, as
may be necessary or appropriate in connection with the assignment to such
successor Secured Party of the security interests created hereunder, whereupon
such retiring Secured Party shall be discharged from its duties and obligations
under this Agreement.  After any retiring
Administrative Agent’s resignation hereunder as Secured Party, the provisions
of this Agreement shall inure to its benefit as to any actions taken or omitted
to be taken by it under this Agreement while it was Secured Party hereunder.

(c)           Secured
Party shall not be deemed to have any duty whatsoever with respect to any Swap
Counterparty until it shall have received written notice in form and substance
satisfactory to Secured Party from a Grantor or the Swap Counterparty as to the
existence and terms of the applicable Lender Swap Agreement.

SECTION 21.                                        Additional
Grantors.

The initial Grantors hereunder shall be Company,
Holdings and such of the Subsidiaries of Company as are signatories hereto on
the date hereof.  From time to time
subsequent to the date hereof, additional Subsidiaries of Company may become
Additional Grantors, by executing a Counterpart.  Upon delivery of any such Counterpart to
Secured Party, notice of which is hereby waived by Grantors, each such
Additional Grantor shall be a Grantor and shall be as fully a party hereto as
if such Additional Grantor were an original signatory hereto.  Each Grantor expressly agrees that its
obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Grantor hereunder, nor by any election of
Secured Party not to cause any Subsidiary of Company to become an Additional
Grantor hereunder.  This Agreement shall
be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder.

SECTION 22.                                        Amendments;
Etc.

No amendment, modification, termination or waiver of
any provision of this Agreement, and no consent to any departure by any Grantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Secured Party and, in the case of any

 XIV-22
 

 

such amendment or
modification, by Grantors; provided this Agreement may be modified by
the execution of a Counterpart by an Additional Grantor in accordance with
Section 21 hereof and Grantors hereby waive any requirement of notice of or
consent to any such amendment.  Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.

SECTION 23.                                        Notices.

Any notice or other communication herein required or
permitted to be given shall be in writing and may be personally served or sent
by telefacsimile or United States mail or courier service and shall be deemed
to have been given when delivered in person or by courier service, upon receipt
of telefacsimile, or three Business Days after depositing it in the United
States mail with postage prepaid and properly addressed; provided that
notices to Secured Party shall not be effective until received.  For the purposes hereof, the address of each
party hereto shall be as provided in subsection 10.8 of the Credit Agreement or
as set forth under such party’s name on the signature pages hereof or such
other address as shall be designated by such party in a written notice
delivered to the other parties hereto.

SECTION 24.                                        Failure
or Indulgence Not Waiver; Remedies Cumulative.

No failure or delay on the part of Secured Party in
the exercise of any power, right or privilege hereunder shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude any other or further exercise thereof or of
any other power, right or privilege.  All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.

SECTION 25.                                        Severability.

In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or obligations,
or of such provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.

SECTION 26.                                        Headings.

Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive
effect.

SECTION 27.                                        Governing
Law; Rules of Construction.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT
THAT THE UCC

 XIV-23
 

 

PROVIDES THAT THE
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK, IN WHICH CASE THE LAWS OF SUCH JURISDICTION
SHALL GOVERN WITH RESPECT TO THE PERFECTION OF THE SECURITY INTEREST IN, OR THE
REMEDIES WITH RESPECT TO, SUCH PARTICULAR COLLATERAL.  The rules of construction set forth in
subsection 1.3 of the Credit Agreement shall be applicable to this Agreement mutatis mutandis.

SECTION 28.                                        Consent
to Jurisdiction and Service of Process.

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE, COUNTY AND CITY OF NEW YORK.  BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS; (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY
SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE
WITH SECTION 23 HEREOF; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE
(III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH GRANTOR IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT SECURED PARTY RETAINS
THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SECTION 28 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT
PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.

SECTION 29.                                        Waiver
of Jury Trial.

GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT.  THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT
MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH GRANTOR AND SECURED PARTY ACKNOWLEDGE
THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR GRANTORS AND SECURED PARTY TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT GRANTORS AND SECURED PARTY HAVE
ALREADY RELIED ON THIS

 XIV-24
 

 

WAIVER IN ENTERING INTO
THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED
FUTURE DEALINGS.  EACH GRANTOR AND
SECURED PARTY FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 29 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.  In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.

SECTION 30.                                        Counterparts.

This Agreement may be executed in one or more counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.

SECTION
31.               Security Agreement To
Govern Grants.

Each Grantor and Secured Party hereby acknowledge and
agree that the rights, obligations and remedies of each Grantor and Secured
Party set forth in this Agreement with respect any Intellectual Property
Collateral shall be applicable to each Grant (and any supplement thereof)
executed by any Grantor as if the terms and provisions of this Agreement were
incorporated into each such Grant (and any supplement thereof).

SECTION 32.                                        Definitions.

(a)           Each
capitalized term utilized in this Agreement that is not defined in the Credit
Agreement or in this Agreement, but that is defined in the UCC, including the
categories of Collateral listed in Section 1 hereof, shall have the meaning set
forth in Articles 1, 8 or 9 of the UCC.

(b)           In
addition, the following terms used in this Agreement shall have the following
meanings:

“Additional Grantor”
means a Subsidiary of Company that becomes a party hereto after the date hereof
as an additional Grantor by executing a Counterpart.

“Assigned Agreements”
means, with respect to any Grantor, the agreements set forth on Schedule 15
annexed hereto, as each such agreement may be amended, restated, supplemented
or otherwise modified from time to time, including, without limitation, (a) all
rights of such Grantor to receive moneys due or to become due under or pursuant
to the Assigned Agreements, (b) all rights of such Grantor to receive proceeds
of any Supporting Obligations with respect to the Assigned Agreements, (c) all
claims of such Grantor for damages arising out of any breach of or

 XIV-25
 

 

default under the
Assigned Agreements, and (d) all rights of such Grantor to terminate, amend,
supplement, modify or exercise rights or options under the Assigned Agreements,
to perform thereunder and to compel performance and otherwise exercise all
remedies thereunder.

“Beneficiary” means
Administrative Agent, each Lender and each Swap Counterparty.

“Collateral” has
the meaning set forth in Section 1 hereof.

“Copyright Office” means the United States
Copyright Office or any successor or substitute office in which it is necessary
or, in the reasonable opinion of Secured Party, advisable to record a Grant in
order to create or perfect Liens on Copyrights, Copyright Registrations and
Copyright Rights.

“Copyrights” means
all items under copyright in various published and unpublished works of
authorship including, without limitation, computer programs, computer data
bases, other computer software layouts, trade dress, drawings, designs,
writings, and formulas (including, without limitation, the works set forth on Schedule
10 annexed hereto, as the same may be amended pursuant hereto from time to
time).

“Copyright Registrations”
means all copyright registrations issued to any Grantor and applications for
copyright registration that have been or may hereafter be issued or assigned to
a Grantor or applied for by a Grantor thereon in the United States and any
state thereof and in foreign countries (including, without limitation, the
registrations set forth on Schedule 10 annexed hereto, as the same may
be amended pursuant hereto from time to time).

“Copyright Rights”
means all common law and other rights in and to the Copyrights in the United
States and any state thereof and in foreign countries including all copyright
licenses (but with respect to such copyright licenses, only to the extent
permitted by such licensing arrangements), the right (but not the obligation)
to renew and extend Copyright Registrations and any such rights and to register
works protectable by copyright and the right (but not the obligation) to sue in
the name of any Grantor or in the name of Secured Party or Lenders for past,
present and future infringements of such Copyrights and any such rights.

“Counterpart” means
a counterpart to this Agreement entered into by a Subsidiary of Company
pursuant to Section 21 hereof.

“Credit Agreement”
has the meaning set forth in the Preliminary Statements of this Agreement.

“Equity Interests”
means all shares of stock, partnership interests, interests in Joint Ventures,
limited liability company interests and all other equity interests in a Person,
whether such stock or interests are classified as Investment Property or
General Intangibles under the UCC.

“Event of Default”
means any Event of Default as defined in the Credit Agreement or, after payment
in full of all Obligations under the Credit Agreement and the other Loan
Documents, the cancellation, expiration or collateralization with cash or a
letter of credit of all Letters of Credit and the termination of the
Commitments, the occurrence of an Early

 XIV-26
 

 

Termination Date (as
defined in a Master Agreement in the form prepared by the International Swap
and Derivatives Association, Inc. or a similar event under any similar swap
agreement) under any Lender Swap Agreement.

“Grant” means a
Grant of Trademark Security Interest, substantially in the form of Exhibit I
annexed hereto, and a Grant of Patent Security Interest, substantially in the
form of Exhibit II annexed hereto, and a Grant of Copyright Security Interest,
substantially in the form of Exhibit III annexed hereto.

“Intellectual Property Collateral”
means, with respect to any Grantor all right, title and interest (including
rights acquired pursuant to a license or otherwise but only to the extent
permitted by agreements governing such license or other use) of such Grantor in
and to all:

(a)           Copyrights,
Copyright Registrations and Copyright Rights, including, without limitation,
each of the Copyrights, rights, titles and interests in and to the Copyrights,
all derivative works and other works protectable by copyright, which are
presently, or in the future may be, owned, created (as a work for hire for the
benefit of such Grantor), authored (as a work for hire for the benefit of such
Grantor), or acquired by such Grantor, in whole or in part, and all Copyright
Rights with respect thereto and all Copyright Registrations therefor,
heretofore or hereafter granted or applied for, and all renewals and extensions
thereof, throughout the world, including all proceeds thereof (such as, by way
of example and not by limitation, license royalties and proceeds of
infringement suits),

(b)           Patents;

(c)           Trademarks,
Trademark Registrations, the Trademark Rights and goodwill of such Grantor’s
business symbolized by the Trademarks and associated therewith; and

(d)           all
trade secrets, trade secret rights, know-how, customer lists, processes of
production, ideas, confidential business information, techniques, processes,
formulas, and all other proprietary information.

“IP Supplement”
means an IP Supplement, substantially in the form of Exhibit V annexed
hereto.

“Lender Swap Agreement”
means an Interest Rate Agreement, Currency Agreement or other swap agreement
between Company or a Subsidiary of Company and a Swap Counterparty.

“Patents” means all
patents and patent applications and rights and interests in patents and patent
applications under any domestic or foreign law that are presently, or in the
future may be, owned or held by a Grantor and all patents and patent
applications and rights, title and interests in patents and patent applications
under any domestic or foreign law that are presently, or in the future may be,
owned by such Grantor in whole or in part (including, without limitation, the
patents and patent applications set forth on Schedule 9 annexed hereto),
all rights (but not obligations) corresponding thereto to sue for past, present
and future infringements and all re-issues, divisions, continuations, renewals,
extensions and continuations-in-part thereof.

 XIV-27
 

 

“Pledged Debt”
means the Indebtedness from time to time owed to a Grantor, including the
Indebtedness set forth on Schedule 7 annexed hereto and issued by the
obligors named therein, the Instruments and certificates evidencing such
Indebtedness and all interest, cash or other property received, receivable or
otherwise distributed in respect of or exchanged therefor.

“Pledged Equity”
means all Equity Interests now or hereafter owned by a Grantor, including all
securities convertible into, and rights, warrants, options and other rights to
purchase or otherwise acquire, any of the foregoing, including those owned on
the date hereof and set forth on Schedule 6 annexed hereto, the
certificates or other instruments representing any of the foregoing and any
interest of such Grantor in the entries on the books of any securities
intermediary pertaining thereto and all distributions, dividends and other
property received, receivable or otherwise distributed in respect of or
exchanged therefor.

“Pledged Subsidiary Debt”
means Pledged Debt owed to a Grantor by any obligor that is, or becomes, a
direct or indirect Subsidiary of such Grantor, of which such Grantor is a
direct or indirect Subsidiary or that controls, is controlled by or under
common control with such Grantor.

“Pledged Subsidiary Equity”
means Pledged Equity in a Person that is, or becomes a direct Subsidiary of a
Grantor.

“Pledge Supplement”
means a Pledge Supplement, in substantially the form of Exhibit IV
annexed hereto, in respect of the additional Pledged Equity or Pledged Debt
pledged pursuant to this Agreement.

“Requisite Obligees”
means either (i) Requisite Lenders or (ii), after payment in full of all
Obligations under the Credit Agreement and the other Loan Documents, the
cancellation, expiration or collateralization with cash or a letter of credit
of all Letters of Credit and the termination of the Commitments, the holders of
a majority of (A) the aggregate notional amount under all Lender Swap
Agreements (including Lender Swap Agreements that have been terminated) or (B)
if all Lender Swap Agreements have been terminated in accordance with their
terms, the aggregate amount then due and payable (exclusive of expenses and
similar payments but including any early termination payments then due) under
such Lender Swap Agreements.

“Secured Obligations”
has the meaning set forth in Section 2 hereof.

“Securities
Collateral” means, with respect to any Grantor, the Pledged Equity,
the Pledged Debt and any other Investment Property in which such Grantor has an
interest.

“Swap Counterparty”
means a Person that enters into a swap agreement with Company or a Subsidiary
and is a Lender or an Affiliate of a Lender at the time such agreement is
entered into.

“Trademarks” means
all trademarks, service marks, designs, logos, indicia, tradenames, trade
dress, corporate names, company names, business names, fictitious business
names, trade styles and/or other source and/or business identifiers and
applications pertaining thereto, owned by such Grantor, or hereafter adopted
and used by a Grantor, in its business (including, without limitation, the
trademarks specifically set forth on Schedule 10 annexed hereto).

 XIV-28
 

 

“Trademark Registrations”
means all registrations that have been or may hereafter be issued or assigned
to a Grantor or applied for by a Grantor thereon in the United States and any
state thereof and in foreign countries (including, without limitation, the
registrations and applications set forth on Schedule 10 annexed hereto).

“Trademark Rights”
means all common law and other rights (but in no event any of the obligations)
in and to the Trademarks in the United States and any state thereof and in
foreign countries.

“UCC” means the
Uniform Commercial Code, as it exists on the date of this Agreement or as it
may hereafter be amended, in the State of New York.

 [Remainder of page intentionally left blank]

 XIV-29

 

IN WITNESS WHEREOF,
Grantors and Secured Party have caused this Agreement to be duly executed and
delivered by their respective officers thereunto duly authorized as of the date
first written above.

	
  HOLDINGS:

  
	
   

  	
  FTD GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
   

  	
  11111 Santa Monica Blvd., Suite 2000

  
	
   

  	
   

  	
  Los Angeles, California  90025

  
	
   

  	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
   

  
										

 

 XIV-S-1
 

 

 

	
  

  	
  FTD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
   

  	
  3113 Woodcreek Drive

  
	
   

  	
   

  	
  Downers Grover, DuPage County, Illinois  60515

  
	
   

  	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
   

  
										

 

 XIV-S-2
 

 

 

	
  SUBSIDIARY GRANTORS:

  	
   

  
	
   

  	
   

  
	
   

  	
  FTD.COM INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
   

  	
  3113 Woodcreek Drive

  
	
   

  	
   

  	
  Downers Grove, DuPage County, Illinois  60515

  
	
   

  	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FLORISTS’ TRANSWORLD DELIVERY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
   

  	
  3113 Woodcreek Drive

  
	
   

  	
   

  	
  Downers Grove, DuPage County, Illinois  60515

  
	
   

  	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
   

  
										

 

 XIV-S-3
 

 

 

	
  

  	
  WELLS FARGO BANK, N.A., as
  Administrative

  Agent, as Secured Party

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
   

  	
  201 Third Street, Eighth Floor, MAC A0187-081

  
	
   

  	
   

  	
  San Francisco, California  94103

  
	
   

  	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
   

  
									

 

 XIV-S-4

 

SCHEDULE A

TO

SECURITY AGREEMENT

	
  Name

  	
   

  	
  Notice Address for each Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 XIV-Schedule A-1

 

SCHEDULE 1

TO

SECURITY AGREEMENT

Commercial Tort Claims

 XIV-Schedule 1-1

 

SCHEDULE 2

TO

SECURITY AGREEMENT

Filing Offices

 

	
  Grantor

  	
   

  	
  Filing Offices

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 XIV-Schedule 2-1

 

SCHEDULE 3

TO

SECURITY AGREEMENT

Office Locations,
Type and Jurisdiction of Organization

 

	
  Name of

  Grantor

  	
   

  	
  Type of

  Organization

  	
   

  	
  Office Locations

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Organization

  Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 XIV-Schedule 3-1

 

SCHEDULE 4

TO

SECURITY AGREEMENT

Locations of
Equipment and Inventory

 

	
  Name of
  Grantor

  	
   

  	
  Locations of Equipment and Inventory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 XIV-Schedule 4-1

 

SCHEDULE 5

TO

SECURITY AGREEMENT

[Reserved]

 XIV-Schedule 5-1

 

SCHEDULE 6

TO

SECURITY AGREEMENT

 

	
  Equity Issuer

  	
   

  	
  Class

  of

  Equity

  	
   

  	
  Equity

  Certificate Nos.

  	
   

  	
  Par

  Value

  	
   

  	
  Amount of

  Equity Interests

  	
   

  	
  Percentage of

  Outstanding

  Equity Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 XIV-Schedule 6-1

 

SCHEDULE 7

TO

SECURITY AGREEMENT

	
  Debt Issuer

  	
   

  	
  Amount of

  Indebtedness

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 XIV-Schedule 7-1

 

SCHEDULE 8

TO

SECURITY AGREEMENT

U.S. Trademarks:

	
  Registered Owner

  	
   

  	
  Trademark

  Description

  	
   

  	
  Registration

  Number

  	
   

  	
  Registration

  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

Foreign Trademarks:

	
  Registered Owner

  	
   

  	
  Trademark

  Description

  	
   

  	
  Registration

  Number

  	
   

  	
  Registration

  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 XIV-Schedule 8-1

 

SCHEDULE 9

TO

SECURITY AGREEMENT

U.S. Patents Issued:

	
  Patent No.

  	
   

  	
  Issue Date

  	
   

  	
  Title

  	
   

  	
  Inventor(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

U.S. Patents Pending:

	
  Date

  Filed

  	
   

  	
  Application

  Number

  	
   

  	
  Title

  	
   

  	
  Inventor(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

Foreign Patents Issued:

	
  Country

  	
   

  	
  Patent No.

  	
   

  	
  Issue Date

  	
   

  	
  Title

  	
   

  	
  Inventor(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

Foreign Patents Pending:

	
  Country

  	
   

  	
  Applicant’s

  Name

  	
   

  	
  Date

  Filed

  	
   

  	
  Application

  Number

  	
   

  	
  Title

  	
   

  	
  Inventor(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 XIV-Schedule 9-1

 

SCHEDULE 10

TO

SECURITY AGREEMENT

U.S. Copyright Registrations:

	
  Title

  	
   

  	
  Registration No.

  	
   

  	
  Date of Issue

  	
   

  	
  Registered Owner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

Foreign Copyright Registrations:

	
  Country

  	
   

  	
  Title

  	
   

  	
  Registration No.

  	
   

  	
  Date of Issue

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

Pending U.S. Copyright
Registration Applications:

	
  Title

  	
   

  	
  Appl. No.

  	
   

  	
  Date of Application

  	
   

  	
  Copyright Claimant

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

Pending Foreign Copyright
Registration Applications:

	
  Country

  	
   

  	
  Title

  	
   

  	
  Appl. No.

  	
   

  	
  Date of Application

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 XIV-Schedule 10-1

 

SCHEDULE 11

TO

SECURITY AGREEMENT

Deposit Accounts, Security Accounts, Commodity
Accounts

	
  Type of Account

  	
   

  	
  Depository Bank or

  Securities Intermediary

  	
   

  	
  Address of Depository Bank

  or Securities Intermediary

  	
   

  	
  Account Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 XIV-Schedule 11-1

 

SCHEDULE 12 

TO

SECURITY AGREEMENT

Chattel Paper

 XIV-Schedule 12-1

 

SCHEDULE 13 

TO

SECURITY AGREEMENT

Letter-of-Credit Rights

 XIV-Schedule 13-1

 

SCHEDULE 14 

TO

SECURITY AGREEMENT

Documents

 XIV-Schedule 14-1

 

SCHEDULE 15

TO

SECURITY AGREEMENT

Assigned Agreements

 XIV-Schedule 15-1

 

EXHIBIT I TO

SECURITY AGREEMENT

[FORM OF GRANT OF
TRADEMARK SECURITY INTEREST]

GRANT OF TRADEMARK
SECURITY INTEREST

WHEREAS, [NAME OF GRANTOR],
a                         
corporation (“Grantor”), owns and
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Trademark Collateral (as defined below); and

WHEREAS, FTD, Inc.,
a Delaware corporation (“Company”),
has entered into a Credit Agreement dated as of July 28, 2006 (said Credit
Agreement, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Credit Agreement”), with the
lenders named therein (collectively, together with their respective successors
and assigns party to the Credit Agreement from time to time, the “Lenders”), Wells Fargo Bank, N.A., as
Administrative Agent for the Lenders (in such capacity, “Secured Party”), and the other agents
listed therein pursuant to which Lenders have made certain commitments, subject
to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Company; and

WHEREAS, Company
may from time to time enter, or may from time to time have entered, into one or
more swap agreements (collectively, the “Lender
Swap Agreements”) with one or more Persons that are Lenders or
Affiliates of Lenders at the time such Lender Swap Agreements are entered into
(in such capacity, collectively, “Swap
Counterparties”); and

[Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed and delivered
that certain Subsidiary Guaranty dated as of July 28, 2006 (said Subsidiary
Guaranty, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Guaranty”), in favor of
Secured Party for the benefit of Lenders and any Swap Counterparties, pursuant
to which Grantor has guarantied the prompt payment and performance when due of
all obligations of Company under the Credit Agreement and the other Loan
Documents and all obligations of Company under the Lender Swap Agreements,
including, without limitation, the obligation of Company to make payments
thereunder in the event of early termination thereof; and]

WHEREAS, pursuant
to the terms of a Security Agreement dated as of July 28, 2006 (said Security
Agreement, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Security Agreement”), among
Grantor, Secured Party and the other grantors named therein, Grantor has
created in favor of Secured Party a security interest in, and Secured
Party  has become a secured creditor with
respect to, the Trademark Collateral;

NOW, THEREFORE, for
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, subject to the terms and conditions of the Security Agreement, to
evidence further the security interest granted by Grantor to Secured Party
pursuant to the Security Agreement, Grantor hereby grants to Secured Party a
security interest in all of

 XIV-I-1
 

 

Grantor’s right, title
and interest in and to the following, in each case whether now or hereafter
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the “Trademark
Collateral”):

(i)            all rights, title and interest
(including rights acquired pursuant to a license or otherwise) in and to all
trademarks, service marks, designs, logos, indicia, tradenames, trade dress,
corporate names, company names, business names, fictitious business names,
trade styles and/or other source and/or business identifiers and applications
pertaining thereto, owned by such Grantor, or hereafter adopted and used, in
its business (including, without limitation, the trademarks set forth on
Schedule A annexed hereto) (collectively, the “Trademarks”),
all registrations that have been or may hereafter be issued or applied for
thereon in the United States and any state thereof and in foreign countries
(including, without limitation, the registrations and applications set forth on
Schedule A annexed hereto), all common law and other rights (but in no
event any of the obligations) in and to the Trademarks in the United States and
any state thereof and in foreign countries, and all goodwill of such Grantor’s
business symbolized by the Trademarks and associated therewith; and

(ii)           all proceeds, products, rents and
profits of or from any and all of the foregoing Trademark Collateral and, to
the extent not otherwise included, all payments under insurance (whether or not
Secured Party is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Trademark Collateral. 
For purposes of this Grant of Trademark Security Interest, the term “proceeds” includes whatever is receivable
or received when Trademark Collateral or proceeds are sold, licensed,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.

Notwithstanding anything herein to the contrary, in no
event shall the Trademark Collateral include, and Grantor shall not be deemed
to have granted a security interest in, any of such Grantor’s rights or
interests in the Trademark Collateral to the extent that such a grant would,
under the terms of any agreement related to the Trademark Collateral to which
Grantor is a party (including any license ) result in a breach of the terms of,
or constitute a default under, such agreement (other than to the extent that
any such term would be rendered ineffective pursuant to the UCC or any other
applicable law (including the Bankruptcy Code) or principles of equity); provided,
that immediately upon the ineffectiveness, lapse or termination of any such provision,
the Trademark Collateral shall include, and Grantor shall be deemed to have
granted a security interest in, all such rights and interests as if such
provision had never been in effect.

In the event that any asset of a Grantor is excluded
from the Trademark Collateral by virtue of the foregoing paragraph, Grantor
agrees to use all commercially reasonable efforts to obtain all requisite
consents to enable such Grantor to provide a security interest in such asset
pursuant hereto as promptly as practicable.

Grantor does hereby further acknowledge and affirm
that the rights, obligations and remedies of Secured Party with respect to the
security interest in the Trademark Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.

 XIV-I-2
 

 

[The remainder of
this page is intentionally left blank.]

 XIV-I-3
 

 

IN WITNESS WHEREOF,
Grantor has caused this Grant of Trademark Security Interest to be duly
executed and delivered by its officer thereunto duly authorized as of the    
day of               ,
            .

	
  

  	
  [NAME
  OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						

 

 XIV-I-4

 

SCHEDULE A

TO

GRANT OF TRADEMARK SECURITY INTEREST

	
  Owner

  	
   

  	
  Trademark

  Description

  	
   

  	
  Registration/

  Appl. Number

  	
   

  	
  Registration/

  Appl. Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 XIV-I-A-1

 

EXHIBIT II TO

SECURITY AGREEMENT

[FORM OF GRANT OF PATENT
SECURITY INTEREST]

GRANT OF PATENT SECURITY
INTEREST

WHEREAS, [NAME OF GRANTOR], a                        
corporation (“Grantor”), owns and
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Patent Collateral (as defined below); and

WHEREAS, FTD, Inc.,
a Delaware corporation (“Company”),
has entered into a Credit Agreement dated as of July 28, 2006 (said Credit
Agreement, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Credit Agreement”), with the
lenders named therein (collectively, together with their respective successors
and assigns party to the Credit Agreement from time to time, the “Lenders”), Wells Fargo Bank, N.A., as
Administrative Agent for the Lenders (in such capacity, “Secured Party”), and the other agents
listed therein, pursuant to which Lenders have made certain commitments,
subject to the terms and conditions set forth in the Credit Agreement, to
extend certain credit facilities to Company; and

WHEREAS, Company
may from time to time enter, or may from time to time have entered, into one or
more swap agreements (collectively, the “Lender
Swap Agreements”) with one or more Persons that are Lenders or
Affiliates of Lenders at the time such Lender Swap Agreements are entered into
(in such capacity, collectively, “Swap
Counterparties”); and

[Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed and delivered
that certain Subsidiary Guaranty dated as of July 28, 2006 (said Subsidiary
Guaranty, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Guaranty”), in favor of
Secured Party for the benefit of Lenders and any Swap Counterparties, pursuant
to which Grantor has guarantied the prompt payment and performance when due of
all obligations of Company under the Credit Agreement and the other Loan
Documents and all obligations of Company under the Lender Swap Agreements,
including, without limitation, the obligation of Company to make payments
thereunder in the event of early termination thereof; and]

WHEREAS, pursuant
to the terms of a Security Agreement dated as of July 28, 2006 (said Security
Agreement, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Security Agreement”), among
Grantor, Secured Party and the other grantors named therein, Grantor created in
favor of Secured Party a security interest in, and Secured Party has become a
secured creditor with respect to, the Patent Collateral;

NOW, THEREFORE, for
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, subject to the terms and conditions of the Security Agreement, to
evidence further the security interest granted by Grantor to Secured Party
pursuant to the Security Agreement, Grantor hereby grants to Secured Party a
security interest in all of

 XIV-II-1
 

 

Grantor’s right, title
and interest in and to the following, in each case whether now or hereafter
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the “Patent
Collateral”):

(i)            all rights, title and interest
(including rights acquired pursuant to a license or otherwise) in and to all
patents and patent applications and rights and interests in patents and patent
applications under any domestic or foreign law that are presently, or in the
future may be, owned or held by such Grantor and all patents and patent
applications and rights, title and interests in patents and patent applications
under any domestic or foreign law that are presently, or in the future may be,
owned by such Grantor in whole or in part (including, without limitation, the
patents and patent applications set forth on Schedule A annexed hereto), all
rights (but not obligations) corresponding thereto to sue for past, present and
future infringements and all re-issues, divisions, continuations, renewals,
extensions and continuations-in-part thereof; and

(ii)           all proceeds, products, rents and
profits of or from any and all of the foregoing Patent Collateral and, to the
extent not otherwise included, all payments under insurance (whether or not
Secured Party is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Patent Collateral. 
For purposes of this Grant of Patent Security Interest, the term “proceeds” includes whatever is receivable
or received when Patent Collateral or proceeds are sold, licensed, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary or
involuntary.

Notwithstanding anything herein to the contrary, in no
event shall the Patent Collateral include, and Grantor shall not be deemed to
have granted a security interest in, any of such Grantor’s rights or interests
in the Patent Collateral to the extent that such a grant would, under the terms
of any agreement related to the Patent Collateral to which Grantor is a party
(including any license ) result in a breach of the terms of, or constitute a
default under, such agreement (other than to the extent that any such term
would be rendered ineffective pursuant to the UCC or any other applicable law
(including the Bankruptcy Code) or principles of equity); provided, that
immediately upon the ineffectiveness, lapse or termination of any such provision,
the Patent Collateral shall include, and Grantor shall be deemed to have
granted a security interest in, all such rights and interests as if such
provision had never been in effect.

In the event that any
asset of a Grantor is excluded from the Patent Collateral by virtue of the
foregoing paragraph, Grantor agrees to use all commercially reasonable efforts
to obtain all requisite consents to enable such Grantor to provide a security
interest in such asset pursuant hereto as promptly as practicable.

Grantor does hereby further acknowledge and affirm
that the rights, obligations and remedies of Secured Party with respect to the
security interest in the Patent Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.

[The remainder of
this page intentionally left blank.]

 XIV-II-2
 

 

IN WITNESS WHEREOF,
Grantor has caused this Grant of Patent Security Interest to be duly executed
and delivered by its officer thereunto duly authorized as of the       
day of                     ,
         .

	
  

  	
  [NAME
  OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						

 

 XIV-II-3

 

SCHEDULE A

TO

GRANT OF PATENT SECURITY INTEREST

Patents Issued:

	
  Patent No.

  	
   

  	
  Issue Date

  	
   

  	
  Title

  	
   

  	
  Inventor(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

Patents Pending:

	
  Applicant’s

  Name

  	
   

  	
  Date

  Filed

  	
   

  	
  Application

  Number

  	
   

  	
  Invention

  	
   

  	
  Inventor(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 XIV-II-A-1

 

EXHIBIT III TO

SECURITY AGREEMENT

[FORM OF GRANT OF
COPYRIGHT SECURITY INTEREST]

GRANT OF COPYRIGHT
SECURITY INTEREST

WHEREAS, [NAME OF GRANTOR],
a                     
corporation (“Grantor”), owns and
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Copyright Collateral (as defined below); and

WHEREAS, FTD, Inc.,
a Delaware corporation (“Company”),
has entered into a Credit Agreement dated as of July 28, 2006 (said Credit
Agreement, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Credit Agreement”), with the
lenders named therein (collectively, together with their respective successors
and assigns party to the Credit Agreement from time to time, the “Lenders”), Wells Fargo Bank, N.A., as
Administrative Agent for the Lenders (in such capacity, “Secured Party”), and the other agents
listed therein pursuant to which Lenders have made certain commitments, subject
to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Company; and

WHEREAS, Company
may from time to time enter, or may from time to time have entered, into one or
more swap agreements (collectively, the “Lender
Swap Agreements”) with one or more Persons that are Lenders or
Affiliates of Lenders at the time such Lender Swap Agreements are entered into
(in such capacity, collectively, “Swap
Counterparties”); and

[Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed and delivered
that certain Subsidiary Guaranty dated as of July 28, 2006 (said Subsidiary
Guaranty, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Guaranty”), in favor of
Secured Party for the benefit of Lenders and any Swap Counterparties, pursuant
to which Grantor has guarantied the prompt payment and performance when due of
all obligations of Company under the Credit Agreement and the other Loan
Documents and all obligations of Company under the Lender Swap Agreements,
including, without limitation, the obligation of Company to make payments
thereunder in the event of early termination thereof; and]

WHEREAS, pursuant
to the terms of a Security Agreement dated as of July 28, 2006 (said Security
Agreement, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Security Agreement”), among Grantor,
Secured Party and the other grantors named therein, Grantor created in favor of
Secured Party a security interest in, and Secured Party has become a secured
creditor with respect to, the Copyright Collateral;

NOW, THEREFORE, for
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, subject to the terms and conditions of the Security Agreement, to
evidence further the security interest granted by Grantor to Secured Party
pursuant to the Security Agreement, Grantor hereby grants to Secured Party a
security interest in all of

 XIV-III-1
 

 

Grantor’s right, title
and interest in and to the following, in each case whether now or hereafter
existing or in which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the “Copyright
Collateral”):

(i)            all rights, title and interest
(including rights acquired pursuant to a license or otherwise) under copyright
in various published and unpublished works of authorship including, without
limitation, computer programs, computer data bases, other computer software
layouts, trade dress, drawings, designs, writings, and formulas (including,
without limitation, the works set forth on Schedule A annexed hereto, as
the same may be amended pursuant hereto from time to time) (collectively, the “Copyrights”), all copyright registrations
issued to Grantor and applications for copyright registration that have been or
may hereafter be issued or applied for thereon in the United States and any
state thereof and in foreign countries (including, without limitation, the
registrations set forth on Schedule A annexed hereto, as the same may be
amended pursuant hereto from time to time) (collectively, the “Copyright Registrations”), all common law
and other rights in and to the Copyrights in the United States and any state
thereof and in foreign countries including all copyright licenses (but with
respect to such copyright licenses, only to the extent permitted by such
licensing arrangements) (the “Copyright
Rights”), including, without limitation, each of the Copyrights,
rights, titles and interests in and to the Copyrights, all derivative works and
other works protectable by copyright, which are presently, or in the future may
be, owned, created (as a work for hire for the benefit of Grantor), authored
(as a work for hire for the benefit of Grantor), or acquired by Grantor, in
whole or in part, and all Copyright Rights with respect thereto and all
Copyright Registrations therefor, heretofore or hereafter granted or applied
for, and all renewals and extensions thereof, throughout the world, including
all proceeds thereof (such as, by way of example and not by limitation, license
royalties and proceeds of infringement suits), the right (but not the
obligation) to renew and extend such Copyright Registrations and Copyright
Rights and to register works protectable by copyright and the right (but not
the obligation) to sue in the name of such Grantor or in the name of Secured
Party or Lenders for past, present and future infringements of the Copyrights
and Copyright Rights; and

(ii)           all proceeds, products, rents and
profits of or from any and all of the foregoing Copyright Collateral and, to
the extent not otherwise included, all payments under insurance (whether or not
Secured Party is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Copyright Collateral. 
For purposes of this Grant of Copyright Security Interest, the term “proceeds” includes whatever is receivable
or received when Copyright Collateral or proceeds are sold, licensed,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.

Notwithstanding anything herein to the contrary, in no
event shall the Copyright Collateral include, and Grantor shall not be deemed
to have granted a security interest in, any of such Grantor’s rights or
interests in the Copyright Collateral to the extent that such a grant would,
under the terms of any agreement related to the Copyright Collateral to which
Grantor is a party (including any license ) result in a breach of the terms of,
or constitute a default under, such agreement (other than to the extent that
any such term would be rendered ineffective pursuant to the UCC or any other
applicable law (including the Bankruptcy Code) or principles

 XIV-III-2
 

 

of equity); provided,
that immediately upon the ineffectiveness, lapse or termination of any such
provision, the Copyright Collateral shall include, and Grantor shall be deemed
to have granted a security interest in, all such rights and interests as if
such provision had never been in effect.

In the event that any
asset of a Grantor is excluded from the Copyright Collateral by virtue of the
foregoing paragraph, Grantor agrees to use all commercially reasonable efforts
to obtain all requisite consents to enable such Grantor to provide a security
interest in such asset pursuant hereto as promptly as practicable.

Grantor does hereby further acknowledge and affirm
that the rights, obligations and remedies of Secured Party with respect to the
security interest in the Copyright Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.

 XIV-III-3
 

 

IN WITNESS WHEREOF,
Grantor has caused this Grant of Copyright Security Interest to be duly
executed and delivered by its officer thereunto duly authorized as of the      
day of                    ,
           .

	
  

  	
  [NAME
  OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						

 

 XIV-III-4

 

SCHEDULE A

TO

GRANT OF COPYRIGHT SECURITY INTEREST

U.S. Copyright Registrations:

	
  Title

  	
   

  	
  Registration No.

  	
   

  	
  Date of Issue

  	
   

  	
  Registered Owner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

Foreign Copyright Registrations:

	
  Country

  	
   

  	
  Title

  	
   

  	
  Registration No.

  	
   

  	
  Date of Issue

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

Pending U.S. Copyright
Registration Applications:

	
  Title

  	
   

  	
  Appl. No.

  	
   

  	
  Date of Application

  	
   

  	
  Copyright Claimant

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

Pending Foreign Copyright
Registration Applications:

	
  Country

  	
   

  	
  Title

  	
   

  	
  Appl. No.

  	
   

  	
  Date of Application

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 XIV-III-A-1

 

EXHIBIT IV TO

SECURITY AGREEMENT

PLEDGE SUPPLEMENT

This Pledge Supplement, dated as of                                     ,
is delivered pursuant to the Security Agreement, dated as of July 28, 2006,
between                                   ,
a                           
(“Grantor”), the other Grantors
named therein, and Wells Fargo Bank, N.A., as Secured Party (said Security
Agreement, as it may heretofore have been and as it may hereafter be further
amended, restated, supplemented or otherwise modified from time to time, being
the “Security Agreement”).  Capitalized terms used herein not otherwise
defined herein shall have the meanings ascribed thereto in the Security
Agreement.

Grantor hereby agrees that the [Pledged Equity]
[Pledged Debt] set forth on Schedule A annexed hereto shall be deemed to be
part of the [Pledged Equity] [Pledged Debt] and shall become part of the
Securities Collateral and shall secure all Secured Obligations.

IN WITNESS WHEREOF,
Grantor has caused this Pledge Supplement to be duly executed and delivered by
its duly authorized officer as of                                 .

	
  

  	
  [GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
					

 

 XIV-IV-1

 

SCHEDULE A

TO

PLEDGE SUPPLEMENT

 XIV-IV-A-1

 

EXHIBIT V TO

SECURITY AGREEMENT

IP SUPPLEMENT

This IP SUPPLEMENT, dated as of              ,
is delivered pursuant to and supplements (i) the Security Agreement, dated
as of July 28, 2006 (said Security Agreement, as it may heretofore have been
and as it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time, being the “Security
Agreement”), among [FTD, Inc.], [Insert Name of Grantor] (“Grantor”), the other grantors named
therein, and Wells Fargo Bank, N.A., as Secured Party, and (ii) the [Grant
of Trademark Security Interest] [Grant of Patent Security Interest] [Grant of
Copyright Security Interest] dated as of                          ,
          (the “Grant”) executed by Grantor.  Capitalized terms used herein not otherwise
defined herein shall have the meanings ascribed thereto in the Grant.

Grantor grants to Secured Party a security interest in
all of Grantor’s right, title and interest in and to the [Trademark Collateral]
[Patent Collateral] [Copyright Collateral] set forth on Schedule A annexed
hereto.  All such [Trademark Collateral]
[Patent Collateral] [Copyright Collateral] shall be deemed to be part of the
[Trademark Collateral] [Patent Collateral] [Copyright Collateral] and shall be
hereafter subject to each of the terms and conditions of the Security Agreement
and the Grant.

IN WITNESS WHEREOF,
Grantor has caused this IP Supplement to be duly executed and delivered by its
duly authorized officer as of                               .

	
  

  	
  [GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
					

 

 XIV-V-1

 

EXHIBIT VI TO

SECURITY AGREEMENT

[FORM OF COUNTERPART]

COUNTERPART (this “Counterpart”),
dated as of                ,
is delivered pursuant to Section 21 of the Security Agreement referred to
below.  The undersigned hereby agrees
that this Counterpart may be attached to the Security Agreement, dated as of
July 28, 2006 (said Security Agreement, as it may heretofore have been and as
it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time being the “Security
Agreement”; capitalized terms used herein not otherwise defined
herein shall have the meanings ascribed therein), among [FTD, Inc.], [Insert
Name of Grantor] (“Grantor”), the
other Grantors named therein, and Wells Fargo Bank, N.A., as Secured
Party.  The undersigned by executing and
delivering this Counterpart hereby becomes a Grantor under the Security
Agreement in accordance with Section 21 thereof and agrees to be bound by all
of the terms thereof.  Without limiting
the generality of the foregoing, the undersigned hereby:

(i)            authorizes the Secured Party to add
the information set forth on the Schedules to this Agreement to the correlative
Schedules attached to the Security Agreement;(1)

(ii)           agrees that all Collateral of the
undersigned, including the items of property described on the Schedules hereto,
shall become part of the Collateral and shall secure all Secured Obligations;
and

(iii)          makes the representations and
warranties set forth in the Security Agreement, as amended hereby, to the
extent relating to the undersigned as of the date hereof.

	
  

  	
  [NAME OF ADDITIONAL GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						

(1)                                  The
Schedules to the Counterpart should include copies of all Schedules that
identify collateral to be granted by the Additional Grantor.

 XIV-VI-1

 

EXHIBIT XV

[FORM OF] HOLDINGS GUARANTY

This HOLDINGS
GUARANTY is entered into as of July 28, 2006, by the undersigned
(the “Guarantor”), in favor of and
for the benefit of WELLS
FARGO BANK, N.A.,  as agent for
and representative of (in such capacity herein called “Guarantied Party”) the lenders (“Lenders”) party to the Credit Agreement
referred to below and any Swap Counterparties (as hereinafter defined), and in
favor of and for the benefit of the Beneficiaries (as hereinafter defined).

RECITALS.

A.            FTD,
Inc., a Delaware corporation (“Company”),
has entered into that certain Credit Agreement dated as of July 28, 2006, with
Lenders and Guarantied Party, as Administrative Agent for Lenders (said Credit
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the “Credit
Agreement”; capitalized terms defined therein and not otherwise
defined herein being used herein as therein defined).

B.            Company
may from time to time enter, or may from time to time have entered, into one or
more Interest Rate Agreements, Currency Agreements and other swap agreements
(collectively, the “Lender Swap Agreements”)
with one or more Persons that are Lenders or Affiliates of Lenders at the time
such Lender Swap Agreements are entered into (in such capacity, collectively, “Swap Counterparties”) in accordance with
the terms of the Credit Agreement, and it is desired that the obligations of
Company under the Lender Swap Agreements, including without limitation the
obligation of Company to make payments thereunder in the event of early
termination thereof, together with all obligations of Company under the Credit
Agreement and the other Loan Documents, be guarantied hereunder.

C.            Guarantied
Party, Lenders and each Swap Counterparty for which Guarantied Party has
received the notice required by Section 16 hereof  are sometimes referred to herein as “Beneficiaries”.

D.            Company
is a wholly owned Subsidiary of Guarantor and thus the Guarantied Obligations
(as hereinafter defined) are being incurred for and will inure to the benefit
of Guarantor (which benefits are hereby acknowledged).

E.             It
is a condition precedent to the making of the initial Loans under the Credit
Agreement that Company’s obligations thereunder be guarantied by Guarantor.

F.             Guarantor
is willing irrevocably and unconditionally to guaranty such obligations of
Company.

1.             Guaranty.  (a) In order to induce Lenders to extend
credit to Company pursuant to the Credit Agreement and Swap Counterparties to
enter into the Lender Swap Agreements, Guarantor irrevocably and
unconditionally guaranties, as primary obligor and not merely as surety, the
due and punctual payment in full of all Guarantied Obligations (as

 XV-1
 

 

hereinafter defined) when
the same shall become due, whether at stated maturity, by acceleration, demand
or otherwise (including amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
§ 362(a)).  The term “Guarantied Obligations” is used herein in
its most comprehensive sense and includes any and all Obligations of Company
and all obligations of Company under Lender Swap Agreements, now or hereafter
made, incurred or created, whether absolute or contingent, liquidated or
unliquidated, whether due or not due, and however arising under or in
connection with the Credit Agreement, the Lender Swap Agreements, this Guaranty
and the other Loan Documents, including those arising under successive
borrowing transactions under the Credit Agreement which shall either continue
such obligations of Company or from time to time renew them after they have
been satisfied.

Any interest on any portion of the Guarantied
Obligations that accrues after the commencement of any proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of Company (or, if interest on any
portion of the Guarantied Obligations ceases to accrue by operation of law by
reason of the commencement of said proceeding, such interest as would have
accrued on such portion of the Guarantied Obligations if said proceeding had
not been commenced) shall be included in the Guarantied Obligations because it
is the intention of Guarantor and Guarantied Party that the Guarantied
Obligations should be determined without regard to any rule of law or order
that may relieve Company of any portion of such Guarantied Obligations.

In the event that all or any portion of the Guarantied
Obligations is paid by Company, the obligations of Guarantor hereunder shall continue
and remain in full force and effect or be reinstated, as the case may be, in
the event that all or any part of such payment(s) is rescinded or recovered
directly or indirectly from Guarantied Party or any other Beneficiary as a
preference, fraudulent transfer or otherwise, and any such payments that are so
rescinded or recovered shall constitute Guarantied Obligations.

Subject to the other provisions of this Section 1,
upon the failure of Company to pay any of the Guarantied Obligations when and
as the same shall become due, Guarantor will upon demand pay, or cause to be
paid, in cash, to Guarantied Party for the ratable benefit of Beneficiaries, an
amount equal to the aggregate of the unpaid Guarantied Obligations.

(b)           Guarantor
under this Guaranty, and each guarantor under other guaranties, if any,
relating to the Credit Agreement (the “Related
Guaranties”) that contain a contribution provision similar to that
set forth in this Section 1(b), together desire to allocate among themselves
(collectively, the “Contributing Guarantors”),
in a fair and equitable manner, their obligations arising under this Guaranty
and the Related Guaranties.  Accordingly,
in the event any payment or distribution is made on any date by Guarantor under
this Guaranty or a guarantor under a Related Guaranty, Guarantor or such other
guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the maximum amount permitted by law so as to
maximize the aggregate amount of the Guarantied Obligations paid to
Beneficiaries.

2.             Guaranty
Absolute; Continuing Guaranty.  The obligations of Guarantor hereunder are
irrevocable, absolute, independent and unconditional and shall not be affected
by any circumstance which constitutes a legal or equitable discharge of a
guarantor or

 XV-2
 

 

surety other than payment
in full of the Guarantied Obligations. 
In furtherance of the foregoing and without limiting the generality
thereof, Guarantor agrees that:  (a) this
Guaranty is a guaranty of payment when due and not of collectibility; (b)
Guarantied Party may enforce this Guaranty upon the occurrence and during the
continuance of an Event of Default under the Credit Agreement or the occurrence
of an early termination date or similar event under any Lender Swap Agreements notwithstanding
the existence of any dispute between Company and any Beneficiary with respect
to the existence of such event; (c) the obligations of Guarantor hereunder are
independent of the obligations of Company under the Loan Documents or the
Lender Swap Agreements and the obligations of any other guarantor of the
obligations of Company and a separate action or actions may be brought and
prosecuted against Guarantor whether or not any action is brought against
Company or any of such other guarantors and whether or not Company is joined in
any such action or actions; and (d) Guarantor’s payment of a portion, but not
all, of the Guarantied Obligations shall in no way limit, affect, modify or
abridge Guarantor’s liability for any portion of the Guarantied Obligations
that has not been paid.  This Guaranty is
a continuing guaranty and shall be binding upon Guarantor and its successors
and assigns, and Guarantor irrevocably waives any right to revoke this Guaranty
as to future transactions giving rise to any Guarantied Obligations.

3.             Actions
by Beneficiaries.  Any
Beneficiary may from time to time, without notice or demand and without
affecting the validity or enforceability of this Guaranty or giving rise to any
limitation, impairment or discharge of Guarantor’s liability hereunder, (a)
renew, extend, accelerate or otherwise change the time, place, manner or terms
of payment of the Guarantied Obligations, (b) settle, compromise, release or
discharge, or accept or refuse any offer of performance with respect to, or
substitutions for, the Guarantied Obligations or any agreement relating thereto
and/or subordinate the payment of the same to the payment of any other
obligations, (c) request and accept other guaranties of the Guarantied
Obligations and take and hold security for the payment of this Guaranty or the
Guarantied Obligations, (d) release, exchange, compromise, subordinate or
modify, with or without consideration, any security for payment of the
Guarantied Obligations, any other guaranties of the Guarantied Obligations, or
any other obligation of any Person with respect to the Guarantied Obligations,
(e) enforce and apply any security now or hereafter held by or for the benefit
of any Beneficiary in respect of this Guaranty or the Guarantied Obligations
and direct the order or manner of sale thereof, or exercise any other right or
remedy that Guarantied Party or the other Beneficiaries, or any of them, may
have against any such security, as Guarantied Party in its discretion may
determine consistent with the Credit Agreement, the Lender Swap Agreements and
any applicable security agreement, including foreclosure on any such security
pursuant to one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, and (f) exercise any other
rights available to Guarantied Party or the other Beneficiaries, or any of
them, under the Loan Documents or the Lender Swap Agreements.

4.             No
Discharge.  This
Guaranty and the obligations of Guarantor hereunder shall be valid and enforceable
and shall not be subject to any limitation, impairment or discharge for any
reason (other than payment in full of the Guarantied Obligations), including
without limitation the occurrence of any of the following, whether or not
Guarantor shall have had notice or knowledge of any of them:  (a) any failure to assert or enforce or
agreement not to assert or enforce, or the stay or enjoining, by order of
court, by operation of law or otherwise, of the exercise or enforcement of, any
claim or demand or any right, power or remedy with respect to

 XV-3
 

 

the Guarantied
Obligations or any agreement relating thereto, or with respect to any other
guaranty of or security for the payment of the Guarantied Obligations, (b) any
waiver or modification of, or any consent to departure from, any of the terms
or provisions of the Credit Agreement, any of the other Loan Documents, the
Lender Swap Agreements or any agreement or instrument executed pursuant
thereto, or of any other guaranty or security for the Guarantied Obligations,
(c) the Guarantied Obligations, or any agreement relating thereto, at any time
being found to be illegal, invalid or unenforceable in any respect, (d) the
application of payments received from any source to the payment of indebtedness
other than the Guarantied Obligations, even though Guarantied Party or the
other Beneficiaries, or any of them, might have elected to apply such payment
to any part or all of the Guarantied Obligations, (e) any failure to perfect or
continue perfection of a security interest in any collateral which secures any
of the Guarantied Obligations, (f) any defenses, set-offs or counterclaims
which Company may assert against Guarantied Party or any Beneficiary in respect
of the Guarantied Obligations, including but not limited to failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury, and (g) any other act or thing
or omission, or delay to do any other act or thing, which may or might in any
manner or to any extent vary the risk of Guarantor as an obligor in respect of
the Guarantied Obligations.

5.             Waivers.  Guarantor waives, for the benefit of
Beneficiaries:  (a) any right to require
Guarantied Party or the other Beneficiaries, as a condition of payment or
performance by Guarantor, to (i) proceed against Company, any other
guarantor of the Guarantied Obligations or any other Person, (ii) proceed
against or exhaust any security held from Company, any other guarantor of the
Guarantied Obligations or any other Person, (iii) proceed against or have
resort to any balance of any deposit account or credit on the books of any
Beneficiary in favor of Company or any other Person, or (iv) pursue any
other remedy in the power of  any
Beneficiary; (b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including, without
limitation, any defense based on or arising out of the lack of validity or the
unenforceability of the Guarantied Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of Company from
any cause other than payment in full of the Guarantied Obligations; (c) any
defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal; (d) any defense based upon
Guarantied Party’s or any other Beneficiary’s errors or omissions in the
administration of the Guarantied Obligations, except behavior that amounts to
bad faith; (e) (i) any principles or provisions of law, statutory or
otherwise, that are or might be in conflict with the terms of this Guaranty and
any legal or equitable discharge of Guarantor’s obligations hereunder,
(ii) the benefit of any statute of limitations affecting Guarantor’s
liability hereunder or the enforcement hereof, (iii) any rights to
set-offs, recoupments and counterclaims, and (iv) promptness, diligence
and any requirement that any Beneficiary protect, secure, perfect or insure any
Lien or any property subject thereto; (f) except as expressly provided in
the Loan Documents, notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction, including
acceptance of this Guaranty, notices of default under the Credit Agreement,
notices of default or early termination under any Lender Swap Agreement or any
agreement or instrument related thereto, notices of any renewal, extension or
modification of the Guarantied Obligations or any agreement related thereto,
notices of any extension of credit to Company and notices of any of the matters
referred to in Sections 3 and 4 and any right to consent to any thereof; and
(g) to the fullest extent permitted by law, any defenses or benefits

 XV-4
 

 

that may be derived from
or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty.

6.             Guarantor’s
Rights of Subrogation, Contribution, Etc.; Subordination of Other Obligations.
Until the Guarantied Obligations shall have been paid in full and the
Commitments shall have terminated and all Letters of Credit shall have expired
or been cancelled or collateralized with cash or a letter of credit, Guarantor
shall withhold exercise of (a) any claim, right or remedy, direct or
indirect, that Guarantor now has or may hereafter have against Company or any
of its assets in connection with this Guaranty or the performance by Guarantor
of its obligations hereunder, in each case whether such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise and
including without limitation (i) any right of subrogation, reimbursement
or indemnification that Guarantor now has or may hereafter have against
Company, (ii) any right to enforce, or to participate in, any claim, right
or remedy that any Beneficiary now has or may hereafter have against Company,
and (iii) any benefit of, and any right to participate in, any collateral
or security now or hereafter held by any Beneficiary and (b) any right of
contribution Guarantor may have against any other guarantor of any of the
Guarantied Obligations.  Guarantor
further agrees that, to the extent the agreement to withhold exercise of its
rights of subrogation, reimbursement, indemnification and contribution as set
forth herein is found by a court of competent jurisdiction to be void or
voidable for any reason, any rights of subrogation, reimbursement or
indemnification Guarantor may have against Company or against any collateral or
security, and any rights of contribution Guarantor may have against any such
other guarantor, shall be junior and subordinate to any rights Guarantied Party
or the other Beneficiaries may have against Company, to all right, title and
interest Guarantied Party or the other Beneficiaries may have in any such
collateral or security, and to any right Guarantied Party or the other
Beneficiaries may have against such other guarantor.

Any indebtedness of Company now or hereafter held by
Guarantor is subordinated in right of payment to the Guarantied Obligations,
and any such indebtedness of Company to Guarantor collected or received by
Guarantor after an Event of Default has occurred and is continuing, and any
amount paid to Guarantor on account of any subrogation, reimbursement,
indemnification or contribution rights referred to in the preceding paragraph
when all Guarantied Obligations have not been paid in full, any Lender shall
have any Commitment or any Swap Counterparty shall have any obligation under
any Lender Swap Agreement, shall be held for Guarantied Party on behalf of
Beneficiaries and shall forthwith be paid over to Guarantied Party for the
benefit of Beneficiaries to be credited and applied against the Guarantied Obligations.

7.             Expenses.  Guarantor agrees to pay, or cause to be paid,
on demand, and to save Guarantied Party and the other Beneficiaries harmless
against liability for, (i) any and all costs and expenses (including reasonable
fees, costs of settlement and disbursements of counsel and allocated costs of
internal counsel) incurred or expended by Guarantied Party or any other
Beneficiary in connection with the enforcement of or preservation of any rights
under this Guaranty and (ii) any and all costs and expenses (including those
arising from rights of indemnification) required to be paid by Guarantor under
the provisions of any other Loan Document.

 XV-5
 

 

8.             Financial
Condition of Company. 
No Beneficiary shall have any obligation, and Guarantor waives any duty
on the part of any Beneficiary, to disclose or discuss with Guarantor its
assessment, or Guarantor’s assessment, of the financial condition of Company or
any matter or fact relating to the business, operations or condition of
Company.  Guarantor has adequate means to
obtain information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the Loan
Documents and the Lender Swap Agreements, and Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations.

9.             Representations
and Warranties. 
Guarantor makes, for the benefit of Beneficiaries, each of the representations
and warranties made in the Credit Agreement by Company as to Guarantor, its
assets, financial condition, operations, organization, legal status, business
and the Loan Documents to which it is a party.

10.          Covenants.  Guarantor agrees that, so long as any part of
the Guarantied Obligations shall remain unpaid, any Letter of Credit shall be
outstanding and not collateralized with cash or a letter of credit, or any
Lender shall have any Commitment or any Swap Counterparty shall have any
obligation under any Lender Swap Agreement, Guarantor will, unless Requisite
Obligees (as that term is defined in Section 15) shall otherwise consent
in writing, perform or observe, and cause its Subsidiaries to perform or
observe, all of the terms, covenants and agreements that the Loan Documents
state that Company is to cause Guarantor and such Subsidiaries to perform or
observe.

11.          Set
Off.  In addition to
any other rights any Beneficiary may have under law or in equity, if any amount
shall at any time be due and owing by Guarantor to any Beneficiary under this
Guaranty, such Beneficiary is authorized at any time or from time to time,
without notice (any such notice being expressly waived), to set off and to
appropriate and to apply any and all deposits (general or special, including
but not limited to indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness of such Beneficiary owing to
Guarantor and any other property of Guarantor held by a Beneficiary to or for the
credit or the account of Guarantor against and on account of the Guarantied
Obligations and liabilities of Guarantor to any Beneficiary under this
Guaranty.

12.          Amendments
and Waivers.  No
amendment, modification, termination or waiver of any provision of this
Guaranty, and no consent to any departure by Guarantor therefrom, shall in any
event be effective without the written concurrence of Guarantied Party and, in
the case of any such amendment or modification, Guarantor.  Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.

13.          Miscellaneous.  It is not necessary for Beneficiaries to
inquire into the capacity or powers of Guarantor or Company or the officers,
directors or any agents acting or purporting to act on behalf of any of them.

The rights, powers and remedies given to Beneficiaries
by this Guaranty are cumulative and shall be in addition to and independent of
all rights, powers and remedies given

 XV-6
 

 

to Beneficiaries by
virtue of any statute or rule of law or in any of the Loan Documents or the
Lender Swap Agreements or any agreement between Guarantor and one or more
Beneficiaries or between Company and one or more Beneficiaries.  Any forbearance or failure to exercise, and
any delay by any Beneficiary in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to
be a waiver thereof, nor shall it preclude the further exercise of any such
right, power or remedy.

In case any provision in or obligation under this
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.

THIS GUARANTY AND THE RIGHTS AND
OBLIGATIONS OF GUARANTOR, GUARANTIED PARTY AND THE OTHER BENEFICIARIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

This Guaranty shall inure to the benefit of
Beneficiaries and their respective successors and assigns.

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR
ARISING OUT OF OR RELATING TO THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS GUARANTY GUARANTOR ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH THIS GUARANTY. 
Guarantor agrees that service of all process in any such proceeding in
any such court may be made by registered or certified mail, return receipt requested,
to Guarantor at its address set forth below its signature hereto, such service
being acknowledged by Guarantor to be sufficient for personal jurisdiction in
any action against Guarantor in any such court and to be otherwise effective
and binding service in every respect. 
Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of Guarantied Party or any
Beneficiary to bring proceedings against Guarantor in the courts of any other
jurisdiction.

GUARANTOR AND, BY ITS ACCEPTANCE OF THE
BENEFITS HEREOF, GUARANTIED PARTY EACH AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
GUARANTY.  THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
WITHOUT LIMITATION CONTRACT

 XV-7
 

 

CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS.  GUARANTOR AND, BY ITS ACCEPTANCE
OF THE BENEFITS HEREOF, GUARANTIED PARTY EACH (I) ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCEMENT FOR GUARANTOR AND GUARANTIED PARTY TO ENTER
INTO A BUSINESS RELATIONSHIP, THAT GUARANTOR AND GUARANTIED PARTY HAVE ALREADY
RELIED ON THIS WAIVER IN ENTERING INTO THIS GUARANTY OR ACCEPTING THE BENEFITS
THEREOF, AS THE CASE MAY BE, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER
IN THEIR RELATED FUTURE DEALINGS, AND (II) FURTHER WARRANTS AND REPRESENTS
THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.  THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS OF THIS GUARANTY.  In the event of litigation, this Guaranty may
be filed as a written consent to a trial by the court.

14.          Counterparts.  This Guaranty may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
for all purposes; but all such counterparts together shall constitute but one
and the same instrument.

15.          Guarantied Party as Agent.

(a)           Guarantied
Party has been appointed to act as Guarantied Party hereunder by Lenders and,
by acceptance of any of the benefits hereunder, each Swap Counterparty.  Guarantied Party shall be obligated, and
shall have the right hereunder, to make demands, to give notices, to exercise
or refrain from exercising any rights, and to take or refrain from taking any
action, solely in accordance with this Guaranty and the Credit Agreement; provided
that Guarantied Party shall exercise, or refrain from exercising, any remedies
under or with respect to this Guaranty in accordance with the instructions of
(i) Requisite Lenders, or (ii) after payment in full of all
Obligations under the Credit Agreement and the other Loan Documents, the cancellation,
expiration or collateralization with cash or a letter of credit of all Letters
of Credit and the termination of the Commitments, the holders of a majority of
(A) the aggregate notional amount under all Lender Swap Agreements
(including Lender Swap Agreements that have been terminated) or (B) if all
Lender Swap Agreements have been terminated in accordance with their terms, the
aggregate amount then due and payable (exclusive of expenses and similar
payments but including any early termination payments then due) under such
Lender Swap Agreements (Requisite Lenders or, if applicable, such holders being
referred to herein as “Requisite Obligees”).

(b)           Guarantied
Party shall at all times be the same Person that is Administrative Agent under
the Credit Agreement.  Written notice of
resignation by Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute notice of resignation as Guarantied Party under
this Guaranty; and appointment of a successor

 XV-8
 

 

Administrative Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute
appointment of a successor Guarantied Party under this Guaranty.  Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a
successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Guarantied Party under this Guaranty, and the
retiring Guarantied Party under this Guaranty shall promptly (i) transfer
to such successor Guarantied Party all sums held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Guarantied Party under this Guaranty,
and (ii) take such other actions as may be necessary or appropriate in
connection with the assignment to such successor Guarantied Party of the rights
created hereunder, whereupon such retiring Guarantied Party shall be discharged
from its duties and obligations under this Guaranty.  After any retiring Guarantied Party’s
resignation hereunder as Guarantied Party, the provisions of this Guaranty
shall inure to its benefits as to any actions taken or omitted to be taken by
it under this Guaranty while it was Guarantied Party hereunder.

16.          Notice
of Lender Swap Agreements. 
Guarantied Party shall not be deemed to have any duty whatsoever with
respect to any Swap Counterparty until it shall have received written notice in
form and substance satisfactory to Guarantied Party from Company, Guarantor or
the Swap Counterparty as to the existence and terms of the applicable Lender
Swap Agreement.

[Remainder of page
intentionally left blank.]

 XV-9

 

IN WITNESS WHEREOF,
Guarantor and, solely for purposes of the waiver of the right to jury trial
contained in Section 13, Guarantied Party have caused this Guaranty to be duly
executed and delivered by their respective officers thereunto duly authorized
as of the date first written above.

	
  

  	
  FTD GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A., as
  Administrative

  Agent, as Guarantied Party

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
								

 

 XV-S-1

 

EXHIBIT XVI

[FORM OF
NOTICE OF PREPAYMENT]

NOTICE OF PREPAYMENT

Pursuant to that certain Credit Agreement dated as of
July 28, 2006, as amended, supplemented or otherwise modified to the date
hereof (said Credit Agreement, as so amended, supplemented or otherwise
modified, being the “Credit Agreement”,
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among FTD, Inc., a Delaware corporation (“Company”), the lenders listed therein as Lenders, Wells
Fargo Bank, N.A., as Administrative Agent (“Administrative
Agent”), and the other agents listed therein, this represents
Company’s notice of prepayment as follows:

1.               Date
of Notice:                                  ,
20     

2.               Type
of Prepayment/Reduction/Termination:

o  a.                     Voluntary
Prepayment of:

o i.             Swing Line Loan

o ii.            Term Loan

o iii.           Revolving Loan

o  b.                    Voluntary
Reduction/Termination of Revolving Loan Commitments

o  c.                     Mandatory
Prepayment and/or Reduction of Revolving Loan Commitments(1) (specify the
circumstance requiring said prepayment and/or reduction by checking the
appropriate box below):

o i.         Receipt of Net Asset Sale Proceeds
(check one of the options below)

o
1.                        Prepayment/Reduction
of Revolving Loan Commitments with Net Asset Sale Proceeds that will not be
reinvested

o
2.                        Prepayment
of Revolving Loans pending reinvestment of Net Asset Sale Proceeds

o ii.        Receipt of Net Insurance/Condemnation
Proceeds

o iii.       Receipt of Net Securities Proceeds from
the issuance of equity securities

o iv.       Receipt of Net Securities Proceeds from
the issuance of indebtedness

(1)                                  Mandatory
prepayments or reductions in Revolving Loan Commitments shall be applied as
specified in subsections 2.4B(iv) and 2.4D of the Credit Agreement.

 XVI-1
 

 

o
v.          Consolidated Excess Cash Flow

3.               Amount
of prepayment/reduction of Revolving Loan Commitments (as applicable):

	
  o  a.

  	
  Voluntary/Mandatory Prepayment:(2)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  
	
  o  b.

  	
  Reduction/Termination of Revolving Loan
  Commitments:(3)

  	
   

  	
  $

  

 

4.               If applicable,
specify desired application of voluntary prepayment:(4) 

 

 

5.               Date
of prepayment or date voluntary reduction/termination of Revolving Loan
Commitments will take effect:                       ,
20   

6.               Attached
hereto is (if applicable):

o            a.     Officer’s Certificate setting forth (x) the
portion of any Net Asset Sale Proceeds that Company or any Subsidiary intends
to reinvest in equipment or other productive assets of the general type used in
the business of Company or its Subsidiaries and (y) the proposed use of such portion
of the Net Asset Sale Proceeds and such other information with respect to such
reinvestment as Administrative Agent may reasonable request.

o            b.     Officer’s Certificate demonstrating the
calculation of the amount of the applicable Net Asset Sale Proceeds, Net
Insurance/Condemnation Proceeds, Net Securities Proceeds, or Consolidated
Excess Cash Flow, as the case may be, that gave rise to a mandatory prepayment
and/or reduction in Revolving Loan Commitments.

(2)                                  This
option should be selected for all voluntary and mandatory prepayments of the
Loans.

(3)                                  This
option should be selected only if a voluntary termination or reduction of the
Revolving Loan Commitments is the subject of this notice.

(4)                                  Irrespective
of any application specified by Company, voluntary prepayments shall first be
applied as specified in subsection 2.4B(iv)(a) of the Credit Agreement.  

 XVI-2
 

 

IN WITNESS
WHEREOF, the undersigned authorized officer of Company has executed this notice
as of the date set forth above.

	
  

  	
  FTD,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 XVI-3

EXHIBIT XVII

[FORM OF MORTGAGE]

This space reserved for
Recorder’s use only

MORTGAGE,
SECURITY AGREEMENT, ASSIGNMENT OF RENTS

AND LEASES AND FIXTURE FILING (                  )

by and
from

“Mortgagor”

to

WELLS
FARGO BANK, N.A., as Administrative Agent

“Mortgagee”

Dated as
of                      ,
200    

	
  Location:

  
	
  Municipality:

  
	
  County:

  
	
  State:

  
	
  Tax ID
  Nos.:

  

 

THE SECURED PARTY (MORTGAGEE) DESIRES THIS FIXTURE
FILING TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE DESCRIBED
HEREIN

PREPARED BY, RECORDING REQUESTED BY,

AND WHEN RECORDED MAIL TO:

O’Melveny
& Myers LLP

400 South
Hope Street

Los
Angeles, California 90071-2899

Attention:  Warren C. Jacob, Esq.

File
918,120-335

 

MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS

AND LEASES AND FIXTURE FILING (ILLINOIS)

THIS
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND LEASES AND FIXTURE FILING
(                        )
(this “Mortgage”) is dated as of                 ,
200   and from                                            ,
a                                          
(“Mortgagor”), whose address is                                                                            
to WELLS FARGO BANK, N.A., as
Administrative Agent (“Mortgagee”),
having an address at 201 Third Street, Eighth Floor, MAC  A0187-081, San Francisco, California  94103, as
administrative agent for Lenders.

ARTICLE 1

DEFINITIONS

Section
1.1.           Definitions. 
All capitalized terms used herein without definition shall have the respective
meanings ascribed to them in that certain Credit Agreement dated as July 28,
2006 entered into by and among FTD, INC., a
Delaware corporation, as borrower, (“Borrower”),
certain Subsidiaries of Borrower including Mortgagor, as Subsidiary Guarantors,
THE FINANCIAL INSTITUTIONS PARTY FROM TIME TO
TIME TO THE CREDIT AGREEMENT (each individually referred to therein
as a “Lender” and collectively as “Lenders”), WELLS FARGO
BANK, N.A., as syndication agent for Lenders, WELLS FARGO
BANK, N.A., as documentation agent for Lenders, and WELLS FARGO BANK, N.A., as
administrative agent for Lenders (as amended, supplemented, renewed, replaced
or otherwise modified from time to time, the “Credit
Agreement”).  As used herein,
the following terms shall have the following meanings:

(a)           “Indebtedness”:  (1) All indebtedness of Borrower to Mortgagee
and Lenders, the full and prompt payment of which has been guaranteed by
Mortgagor, including, without limitation, the sum of all (a) principal,
interest and other amounts evidenced or secured by the Loan Documents or any
Hedge Agreements (as defined in the Subsidiary Guaranty), and (b) principal,
interest and other amounts which may hereafter be loaned under or in connection
with the Credit Agreement, any of the other Loan Documents or any Hedge
Agreements, whether evidenced by a promissory note or other instrument which,
by its terms, is secured hereby, and (2) all other indebtedness, obligations
and liabilities now or hereafter existing of any kind of Mortgagor or Borrower to
Mortgagee under the Subsidiary Guaranty and all other documents which recite
that they are intended to be secured by this Mortgage.  Pursuant to the Credit Agreement, Lenders
have agreed to provide Borrower with a term loan credit facility and with a revolving
credit facility, which permits Borrower to borrow certain principal amounts,
repay all or a portion of such principal amounts, and reborrow the amounts
previously paid to Lenders, all upon satisfaction of certain conditions stated
in the Credit Agreement.  The amount of
such revolving credit facility may increase and decrease from time to time as
Lenders advance, Borrower repays, and Lenders re-advance sums on account of the
revolving credit, all as more fully described in the Credit Agreement.  Additionally, pursuant to the Credit
Agreement, Borrower may enter into Hedge Agreements.  The term “Indebtedness” includes without
limitation all advances and re-advances under the revolving credit feature of
the Credit Agreement and all amounts under the Hedge Agreements.

(b)           “Mortgaged Property”:  All of Mortgagor’s right, title and interest
in and to (1) the fee interest in the real property described in Exhibit A
attached hereto and incorporated herein by this reference, together with any
greater estate therein as hereafter may be acquired by Mortgagor (the “Land”), (2) all improvements now owned or hereafter acquired
by Mortgagor, now or at any time

 2
 

 

situated, placed or
constructed upon the Land (the “Improvements”;
the Land and Improvements are collectively referred to as the “Premises”), (3) all materials, supplies, equipment,
apparatus and other items of personal property now owned or hereafter acquired
by Mortgagor and now or hereafter attached to, installed in or used in
connection with any of the Improvements or the Land, and water, gas,
electrical, telephone, storm and sanitary sewer facilities and all other
utilities whether or not situated in easements (the “Fixtures”),
(4) all reserves, escrows or impounds required under the Credit Agreement and all
deposit accounts maintained by Mortgagor with respect to the Mortgaged Property
(the “Deposit Accounts”), (5) all leases,
licenses, concessions, occupancy agreements or other agreements (written or
oral, now or at any time in effect) which grant to any Person a possessory
interest in, or the right to use, all or any part of the Mortgaged Property,
together with all related security and other deposits (the “Leases”), (6) all of the rents, revenues, royalties, income,
proceeds, profits, security and other types of deposits, and other benefits
paid or payable by parties to the Leases for using, leasing, licensing
possessing, operating from, residing in, selling or otherwise enjoying the
Mortgaged Property (the “Rents”), (7)
all other agreements, such as construction contracts, architects’ agreements,
engineers’ contracts, utility contracts, maintenance agreements, management
agreements, service contracts, listing agreements, guaranties, warranties,
permits, licenses, certificates and entitlements in any way relating to the
construction, use, occupancy, operation, maintenance, enjoyment or ownership of
the Mortgaged Property (the “Property Agreements”),
(8) all rights, privileges, tenements, hereditaments, rights-of-way, easements,
appendages and appurtenances appertaining to the foregoing, (9) all property
tax refunds (the “Tax Refunds”),
(10) all accessions, replacements and substitutions for any of the
foregoing and all proceeds thereof (the “Proceeds”),
(11) all insurance policies, unearned premiums therefor and proceeds from such
policies covering any of the above property now or hereafter acquired by
Mortgagor (the “Insurance”), and (12) all
awards, damages, remunerations, reimbursements, settlements or compensation
heretofore made or hereafter to be made by any governmental authority
pertaining to the Land, Improvements, or Fixtures (the “Condemnation
Awards”).  As used in this
Mortgage, the term “Mortgaged Property” shall mean all or, where the context
permits or requires, any portion of the above or any interest therein.

(c)           “Obligations”:  All of the agreements, covenants, conditions,
warranties, representations and other obligations of Mortgagor or Borrower
under the Credit Agreement, the other Loan Documents and any Hedge Agreements.

(d)           “UCC”:  The Uniform Commercial Code of                           
or, if the creation, perfection and enforcement of any security interest herein
granted is governed by the laws of a state other than                   ,
then, as to the matter in question, the Uniform Commercial Code in effect in
that state.

ARTICLE 2

MORTGAGE OF MORTGAGED PROPERTY

Section
2.1.           Mortgage of Mortgaged
Property.  To secure the full and timely payment of the
Indebtedness and the full and timely performance of the Obligations, Mortgagor
MORTGAGES, GRANTS, BARGAINS, ASSIGNS, SELLS and CONVEYS, to Mortgagee the
Mortgaged Property, subject, however, to the Permitted Encumbrances, TO HAVE
AND TO HOLD the Mortgaged Property to Mortgagee, and Mortgagor does hereby bind
itself, its successors and assigns to WARRANT AND FOREVER DEFEND the title to
the Mortgaged Property unto Mortgagee.

 3
 

 

ARTICLE 3

WARRANTIES, REPRESENTATIONS AND COVENANTS

Mortgagor
warrants, represents and covenants to Mortgagee as follows:

Section
3.1.           Title to Mortgaged
Property and Lien of this Instrument.  Mortgagor owns
the Mortgaged Property free and clear of any liens, claims or interests, except
the Permitted Encumbrances.  This
Mortgage creates valid, enforceable first priority liens and security interests
against the Mortgaged Property.

Section
3.2.           First Lien Status. 
Mortgagor shall preserve and protect the first lien and security
interest status of this Mortgage and the other Loan Documents.  If any lien or security interest other than
the Permitted Encumbrances is asserted against the Mortgaged Property,
Mortgagor shall promptly, and at its expense, (a) give Mortgagee a detailed
written notice of such lien or security interest (including origin, amount and
other terms), and (b) pay the underlying claim in full or take such other
action so as to cause it to be released or contest the same in compliance with
the requirements of the Credit Agreement (including the requirement of
providing a bond or other security satisfactory to Mortgagee).

Section
3.3.           Payment and Performance. 
Mortgagor shall pay the Indebtedness when due and shall perform the
Obligations in full when they are required to be performed.

Section
3.4.           Replacement of Fixtures. 
Mortgagor shall not, without the prior written consent of Mortgagee,
permit any of the Fixtures owned or leased by Mortgagor to be removed at any
time from the Land or Improvements, unless the removed item is removed
temporarily for maintenance and repair or, if removed permanently, is permitted
to be removed by the Credit Agreement, or is obsolete and is replaced by an
article of equal or better suitability and value, owned by Mortgagor subject to
the liens and security interests of this Mortgage and the other Loan Documents,
and free and clear of any other lien or security interest except such as may be
permitted under the Credit Agreement or first approved in writing by Mortgagee.

Section
3.5.           Inspection. 
Mortgagor shall permit Mortgagee, and Mortgagee’s agents,
representatives and employees, upon reasonable prior notice to Mortgagor, to
inspect the Mortgaged Property and all books and records of Mortgagor located
thereon, and to conduct such environmental and engineering studies as Mortgagee
may reasonably require, provided that such inspections and studies shall not
materially interfere with the use and operation of the Mortgaged Property.

Section
3.6.           Other Covenants. 
All of the covenants of Borrower (and, if a party thereto, Mortgagor) in
the Credit Agreement are incorporated herein by reference and, together with
covenants in this Article 3, shall be covenants running with the Land.

Section
3.7.           Condemnation Awards and
Insurance Proceeds.

(a)           Condemnation Awards.  Mortgagor assigns all awards and compensation
to which it is entitled for any condemnation or other taking, or any purchase
in lieu thereof, to Mortgagee and authorizes Mortgagee to collect and receive
such awards and compensation and to give proper receipts and acquittances
therefor, subject to the terms of the Credit Agreement.

(b)           Insurance Proceeds.  Mortgagor assigns to Mortgagee all proceeds
of any insurance policies insuring against loss or damage to the Mortgaged
Property.  Mortgagor authorizes Mortgagee
to collect and receive such proceeds and authorizes and directs the issuer of
each of such insurance policies to make payment for all such losses directly to
Mortgagee, instead of to Mortgagor and Mortgagee jointly, subject to the terms
of the Credit Agreement.

(c)           Collateral Protection Act.  Pursuant to the terms of the Collateral
Protection Act (815 ILCS 180/1 et seq.), Mortgagor is hereby notified that
unless Mortgagor provides Mortgagee with

 4
 

 

evidence of the insurance
coverage required by this Mortgage, Mortgagee may purchase insurance at
Mortgagee’s expense to protect Mortgagor’s interests in the Premises, which
insurance may, but need not, protect the interests of Mortgagor in the
Premises.  The coverage purchased by
Mortgagee may not pay any claim made by Mortgagor or any claim made against
Mortgagor in connection with the Premises. 
Mortgagor may later cancel any insurance purchased by Mortgagee, but
only after providing Mortgagee with evidence that Mortgagor has obtained the
insurance as required hereunder.  If
Mortgagee purchases insurance, the Mortgagor will be responsible for the costs
of such insurance, including interest and any other charges imposed in
connection with the placement of the insurance, until the effective date of the
cancellation or expiration of the insurance. 
The costs of the insurance may be added to the total obligation secured
by this Mortgage.  The costs of such
insurance may be greater than the cost of insurance Mortgagor may be able to
obtain for itself.

ARTICLE 4

[Intentionally Omitted]

ARTICLE 5

DEFAULT AND FORECLOSURE

Section
5.1.           Remedies. 
If an Event of Default exists, Mortgagee may, at Mortgagee’s election,
exercise any or all of the following rights, remedies and recourses:

(a)           Acceleration.  Declare the Indebtedness to be immediately
due and payable, without further notice, presentment, protest, notice of intent
to accelerate, notice of acceleration, demand or action of any nature
whatsoever (each of which hereby is expressly waived by Mortgagor), whereupon
the same shall become immediately due and payable.

(b)           Entry on Mortgaged Property.  Enter the Mortgaged Property and take
exclusive possession thereof and of all books, records and accounts relating
thereto or located thereon.  If Mortgagor
remains in possession of the Mortgaged Property after an Event of Default and
without Mortgagee’s prior written consent, Mortgagee may invoke any legal
remedies to dispossess Mortgagor.

(c)           Operation of Mortgaged Property.  Hold, lease, develop, manage, operate or
otherwise use the Mortgaged Property upon such terms and conditions as
Mortgagee may deem reasonable under the circumstances (making such repairs,
alterations, additions and improvements and taking other actions, from time to
time, as Mortgagee deems necessary or desirable), and apply all Rents and other
amounts collected by Mortgagee in connection therewith in accordance with the
provisions of Section 5.7.

(d)           Foreclosure and Sale.  Institute proceedings for the complete
foreclosure of this Mortgage by judicial action, in which case the Mortgaged
Property may be sold for cash or credit in one or more parcels.  With respect to any notices required or
permitted under the UCC, Mortgagor agrees that ten (10) days’ prior written
notice shall be deemed commercially reasonable. 
At any such sale by virtue of any judicial proceedings or any other
legal right, remedy or recourse, the title to and right of possession of any
such property shall pass to the purchaser thereof, and to the fullest extent
permitted by law, Mortgagor shall be completely and irrevocably divested of all
of its right, title, interest, claim, equity, equity of redemption, and demand
whatsoever, either at law or in equity, in and to the property sold and such
sale shall be a perpetual bar both at law and in equity against Mortgagor, and
against all other Persons claiming or to claim the property sold or any part
thereof, by, through or under Mortgagor. 
Mortgagee may be a purchaser at such sale and if Mortgagee is the
highest bidder, Mortgagee may credit

 5
 

 

the portion of the
purchase price that would be distributed to Mortgagee against the Indebtedness
in lieu of paying cash.  In the event
this Mortgage is foreclosed by judicial action, appraisement of the Mortgaged
Property is waived.

(e)           Receiver.  Make application to a court of competent
jurisdiction for, and obtain from such court as a matter of strict right and
without notice to Mortgagor or regard to the adequacy of the Mortgaged Property
for the repayment of the Indebtedness, the appointment of a receiver of the
Mortgaged Property, and Mortgagor irrevocably consents to such
appointment.  Any such receiver shall
have all the usual powers and duties of receivers in similar cases, including
the full power to rent, maintain and otherwise operate the Mortgaged Property
upon such terms as may be approved by the court, and shall apply such Rents in
accordance with the provisions of Section 5.7.

(f)            Other.  Exercise all other rights, remedies and
recourses granted under the Loan Documents, any Hedge Agreements or otherwise
available at law or in equity.

Section
5.2.           Separate Sales. 
The Mortgaged Property may be sold in one or more parcels and in such
manner and order as Mortgagee in its sole discretion may elect; the right of
sale arising out of any Event of Default shall not be exhausted by any one or
more sales.

Section
5.3.           Remedies Cumulative,
Concurrent and Nonexclusive.  Mortgagee shall
have all rights, remedies and recourses granted in the Loan Documents and
available at law or equity (including the UCC), which rights (a) shall be
cumulated and concurrent, (b) may be pursued separately, successively or
concurrently against Mortgagor or others obligated under the Loan Documents, or
against the Mortgaged Property, or against any one or more of them, at the sole
discretion of Mortgagee, (c) may be exercised as often as occasion therefor
shall arise, and the exercise or failure to exercise any of them shall not be
construed as a waiver or release thereof or of any other right, remedy or
recourse, and (d) are intended to be, and shall be, nonexclusive.  No action by Mortgagee in the enforcement of
any rights, remedies or recourses under the Loan Documents, any Hedge
Agreements or otherwise at law or equity shall be deemed to cure any Event of
Default.

Section
5.4.           Release of and Resort to
Collateral.  Mortgagee may release, regardless of
consideration and without the necessity for any notice to or consent by the
holder of any subordinate lien on the Mortgaged Property, any part of the
Mortgaged Property without, as to the remainder, in any way impairing,
affecting, subordinating or releasing the lien or security interest created in
or evidenced by the Loan Documents or their status as a first and prior lien
and security interest in and to the Mortgaged Property.  For payment of the Indebtedness, Mortgagee
may resort to any other security in such order and manner as Mortgagee may
elect.

Section
5.5.           Waiver of Redemption,
Notice and Marshalling of Assets.  To the fullest
extent permitted by law, Mortgagor hereby irrevocably and unconditionally
waives and releases (a) all benefit that might accrue to Mortgagor by virtue of
any present or future statute of limitations or law or judicial decision
exempting the Mortgaged Property from attachment, levy or sale on execution or
providing for any stay of execution, exemption from civil process, redemption
or extension of time for payment, (b) all notices of any Event of Default or of
Mortgagee’s election to exercise or the actual exercise of any right, remedy or
recourse provided for under the Loan Documents, and (c) any right to a
marshalling of assets or a sale in inverse order of alienation.

Section 5.6.           Discontinuance of Proceedings. 
If Mortgagee shall have proceeded to invoke any right, remedy or
recourse permitted under the Loan Documents and shall thereafter elect to
discontinue or abandon it for any reason, Mortgagee shall have the unqualified
right to do so and, in such an event, Mortgagor and Mortgagee shall be restored
to their former positions with respect to the

 6
 

 

Indebtedness, the
Obligations, the Loan Documents, the Mortgaged Property and otherwise, and the
rights, remedies, recourses and powers of Mortgagee shall continue as if the
right, remedy or recourse had never been invoked, but no such discontinuance or
abandonment shall waive any Event of Default which may then exist or the right
of Mortgagee thereafter to exercise any right, remedy or recourse under the
Loan Documents for such Event of Default.

Section
5.7.           Application of Proceeds. 
The proceeds of any sale of, and the Rents and other amounts generated
by the holding, leasing, management, operation or other use of the Mortgaged
Property, shall be applied by Mortgagee (or the receiver, if one is appointed)
in the following order unless otherwise required by applicable law:

(a)           to the payment of the costs and
expenses of taking possession of the Mortgaged Property and of holding, using,
leasing, repairing, improving and selling the same, including, without
limitation (1) receiver’s fees and expenses, including the repayment of the
amounts evidenced by any receiver’s certificates, (2) court costs, (3)
reasonable attorneys’ and accountants’ fees and expenses, and (4) costs of
advertisement;

(b)           to the payment of the Indebtedness
and performance of the Obligations in accordance with the Credit Agreement; and

(c)           the balance, if any, to the payment
of the Person or Persons legally entitled thereto.

Section
5.8.           Occupancy After
Foreclosure.  Any sale of the Mortgaged Property or any
part thereof in accordance with Section 5.1(d) will divest all right,
title and interest of Mortgagor in and to the property sold.  Subject to applicable law, any purchaser at a
foreclosure sale will receive immediate possession of the property
purchased.  If Mortgagor retains
possession of such property or any part thereof subsequent to such sale,
Mortgagor will be considered a tenant at sufferance of the purchaser, and will,
if Mortgagor remains in possession after demand to remove, be subject to
eviction and removal, forcible or otherwise, with or without process of law.

Section
5.9.           Additional Advances and
Disbursements; Costs of Enforcement.

(a)           If any Event of Default exists,
Mortgagee shall have the right, but not the obligation, to cure such Event of
Default in the name and on behalf of Mortgagor. 
All sums advanced and expenses incurred at any time by Mortgagee under
this Section 5.9, or otherwise under this Mortgage, any of the other
Loan Documents, any Hedge Agreements or applicable law, shall bear interest
from the date that such sum is advanced or expense incurred, to and including
the date of reimbursement, computed at the rate or rates at which interest is
then computed on the Indebtedness, and all such sums, together with interest
thereon, shall be secured by this Mortgage.

(b)           Mortgagor shall pay all expenses
(including reasonable attorneys’ fees and expenses) of or incidental to the
perfection and enforcement of this Mortgage, the other Loan Documents and any
Hedge Agreements, or the enforcement, compromise or settlement of the
Indebtedness or any claim under this Mortgage, the other Loan Documents and any
Hedge Agreements, and for the curing thereof, or for defending or asserting the
rights and claims of Mortgagee in respect thereof, by litigation or otherwise.

Section
5.10.        No Mortgagee in Possession. Neither the enforcement of any of the
remedies under this Article 5, the assignment of the Rents and Leases
under Article 6, the security interests under Article 7, nor any
other remedies afforded to Mortgagee under the Loan Documents, at

 7
 

 

law or in equity shall
cause Mortgagee to be deemed or construed to be a mortgagee in possession of
the Mortgaged Property, to obligate Mortgagee to lease the Mortgaged Property
or attempt to do so, or to take any action, incur any expense, or perform or
discharge any obligation, duty or liability whatsoever under any of the Leases
or otherwise.

ARTICLE 6

ASSIGNMENT OF RENTS AND LEASES

Section
6.1.           Assignment. 
In furtherance of and in addition to the assignment made by Mortgagor in
Section 2.1 of this Mortgage, Mortgagor hereby absolutely and
unconditionally assigns, sells, transfers and conveys to Mortgagee all of its
right, title and interest in and to all Leases, whether now existing or
hereafter entered into, and all of its right, title and interest in and to all
Rents.  This assignment is an absolute
assignment and not an assignment for additional security only.  So long as no Event of Default shall have
occurred and be continuing, Mortgagor shall have a revocable license from
Mortgagee to exercise all rights extended to the landlord under the Leases,
including the right to receive and collect all Rents and to
hold the Rents in trust for use in the payment of the Indebtedness and
performance of the Obligations and to otherwise use the same.  The foregoing license is granted subject to
the conditional limitation that no Event of Default shall have occurred and be
continuing.  Upon the occurrence and
during the continuance of an Event of Default, whether or not legal proceedings
have commenced, and without regard to waste, adequacy of security for the
Indebtedness or the Obligations or solvency of Mortgagor, the license herein
granted shall automatically expire and terminate, without notice to Mortgagor
by Mortgagee (any such notice being hereby expressly waived by Mortgagor to the
extent permitted by applicable law).

Section
6.2.           Perfection Upon
Recordation.  Mortgagor covenants that upon recordation
of this Mortgage Mortgagee shall have, to the extent permitted under applicable
law, a valid and fully perfected, first priority, present assignment of the
Rents arising out of the Leases and all security for such Leases.  Mortgagor acknowledges and agrees that upon
recordation of this Mortgage Mortgagee’s interest in the Rents shall be deemed
to be fully perfected, “choate” and enforced as to Mortgagor and all third
parties following recovery of possession of the Mortgaged Property by
Mortgagee.  For purposes of this Section
6.2, “possession” shall mean any one of the following to the extent
permitted by applicable law: (a) actual possession of the Mortgaged Property or
(b) taking affirmative actions to gain possession of the Mortgaged Property
that would constitute constructive possession of the Mortgaged Property such as
court authorization to collect Rents or appointment of a receiver.  To the extent permitted by applicable law,
Mortgagee shall have the right to collect Rents without taking possession of
the Mortgaged Property.

Section
6.3.           Bankruptcy Provisions.  Without limitation of the absolute nature of the
assignment of the Rents hereunder, Mortgagor and Mortgagee agree that (a) this
Mortgage shall constitute a “security agreement” for purposes of Section 552(b)
of Title 11 of the United States Code (the “Bankruptcy
Code”), (b) the security interest created by this Mortgage extends
to property of Mortgagor acquired before the commencement of a case in
bankruptcy and to all amounts paid as Rents and (c) such security interest
shall extend to all Rents acquired by the estate after the commencement of any
case in bankruptcy.

Section
6.4.           No Merger of Estates. 
So long as part of the Indebtedness and the Obligations secured hereby
remain unpaid and undischarged, the fee and leasehold estates to the Mortgaged
Property shall not merge, but shall remain separate and distinct,
notwithstanding the union of such estates either in Mortgagor, Mortgagee, any
tenant or any third party by purchase or otherwise.

 8
 

 

ARTICLE 7

SECURITY AGREEMENT

Section
7.1.           Security Interest. 
This Mortgage constitutes a “security agreement” on personal property
within the meaning of the UCC and other applicable law and with respect to the
Fixtures, Deposit Accounts, Leases, Rents, Property Agreements, Tax Refunds,
Proceeds, Insurance and Condemnation Awards. 
To this end, Mortgagor grants to Mortgagee a first and prior security
interest in the Fixtures, Deposit Accounts, Leases, Rents, Property Agreements,
Tax Refunds, Proceeds, Insurance, Condemnation Awards and all other Mortgaged
Property which is personal property to secure the payment of the Indebtedness
and performance of the Obligations, and agrees that Mortgagee shall have all
the rights and remedies of a secured party under the UCC with respect to such
property.  Any notice of sale,
disposition or other intended action by Mortgagee with respect to the Fixtures,
Deposit Accounts, Leases, Rents, Property Agreements, Tax Refunds, Proceeds,
Insurance and Condemnation Awards sent to Mortgagor at least ten (10) days
prior to any action under the UCC shall constitute reasonable notice to
Mortgagor.

Section
7.2.           Financing Statements. 
Mortgagor shall execute (if applicable) and deliver to Mortgagee, in
form and substance satisfactory to Mortgagee, such financing statements and
such further assurances as Mortgagee may, from time to time, reasonably
consider necessary to create, perfect and preserve Mortgagee’s security
interest hereunder and Mortgagee may cause such statements and assurances to be
recorded and filed, at such times and places as may be required or permitted by
law to so create, perfect and preserve such security interest.  Mortgagor’s chief executive office is in the
State of                                   at the address set forth in the first
paragraph of this Mortgage.

Section 7.3.           Fixture Filing. 
This Mortgage shall also constitute a “fixture filing” for the purposes
of the UCC against all of the Mortgaged Property which is or is to become fixtures.  Mortgagor grants to Mortgagee a security
interest in all existing and future goods which are now or in the future become
fixtures relating to the Mortgaged Property and the proceeds thereof.  For purposes of the UCC, the following
information concerning the security interest herein granted is furnished:

(a)           The name of the Debtor (Mortgagor)
is:                                       ,
a                            ,
having an address as set forth in the first paragraph of this Mortgage, whose
corporate organizational number is                  .

(b)           The name of the Secured Party
(Mortgagee) is: Wells Fargo Bank, N.A., having an address as set forth in the
first paragraph of this Mortgage.

(c)           Information concerning the security
interest evidenced by this instrument may be obtained from the Secured Party at
its address above.

(d)           Mortgagor is the record owner of the
real estate described in this Security Instrument.

(e)           This document is to be filed in the
real estate records.  A description of
the real estate is attached hereto as Exhibit A.

ARTICLE 8

 

[Intentionally
Omitted]

 9
 

 

ARTICLE 9

MISCELLANEOUS

 

Section
9.1.           Notices. 
Any notice required or permitted to be given under this Mortgage shall
be given in accordance with Section 10.8 of the Credit Agreement.

Section
9.2.           Covenants Running with
the Land.  All Obligations contained in this Mortgage
are intended by Mortgagor and Mortgagee to be, and shall be construed as,
covenants running with the Mortgaged Property. 
As used herein, “Mortgagor” shall refer to the party named in the first
paragraph of this Mortgage and to any subsequent owner of all or any portion of
the Mortgaged Property.  All Persons who
may have or acquire an interest in the Mortgaged Property shall be deemed to
have notice of, and be bound by, the terms of the Credit Agreement and the
other Loan Documents; however, no such party shall be entitled to any rights
thereunder without the prior written consent of Mortgagee.

Section
9.3.           Attorney-in-Fact. 
Mortgagor hereby irrevocably appoints Mortgagee and its successors and
assigns, as its attorney-in-fact, which agency is coupled with an interest and
with full power of substitution, (a) to execute and/or record any notices of
completion, cessation of labor or any other notices that Mortgagee deems
appropriate to protect Mortgagee’s interest, if Mortgagor shall fail to do so
within ten (10) days after written request by Mortgagee, (b) upon the issuance
of a deed pursuant to the foreclosure of this Mortgage or the delivery of a
deed in lieu of foreclosure, to execute all instruments of assignment,
conveyance or further assurance with respect to the Leases, Rents, Deposit
Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards in favor of the grantee of any such deed and as may be
necessary or desirable for such purpose, (c) to prepare, execute and file or
record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve Mortgagee’s
security interests and rights in or to any of the Mortgaged Property, and (d)
while any Event of Default exists, to perform any obligation of Mortgagor
hereunder, however: (1) Mortgagee shall not under any circumstances be
obligated to perform any obligation of Mortgagor; (2) any sums advanced by
Mortgagee in such performance shall be added to and included in the
Indebtedness and shall bear interest at the rate or rates at which interest is
then computed on the Indebtedness; (3) Mortgagee as such attorney-in-fact shall
only be accountable for such funds as are actually received by Mortgagee; and
(4) Mortgagee shall not be liable to Mortgagor or any other person or entity
for any failure to take any action which it is empowered to take under this Section
9.3.

Section
9.4.           Successors and Assigns. 
This Mortgage shall be binding upon and inure to the benefit of
Mortgagee and Mortgagor and their respective successors and assigns.  Mortgagor shall not, without the prior written
consent of Mortgagee, assign any rights, duties or obligations hereunder.

Section
9.5.           No Waiver. 
Any failure by Mortgagee to insist upon strict performance of any of the
terms, provisions or conditions of the Loan Documents shall not be deemed to be
a waiver of same, and Mortgagee shall have the right at any time to insist upon
strict performance of all of such terms, provisions and conditions.

Section
9.6.           Credit Agreement. 
If any conflict or inconsistency exists between this Mortgage and the
Credit Agreement, the Credit Agreement shall govern.

Section
9.7.           Release or Reconveyance. 
Upon payment in full of the Indebtedness and performance in full of the
Obligations or upon a sale or other disposition of the Mortgaged Property
permitted by the Credit Agreement, Mortgagee, at Mortgagor’s expense, shall release
the liens and security interests created by this Mortgage or reconvey the
Mortgaged Property to Mortgagor.

 10

 

Section
9.8.           Waiver of Stay, Moratorium
and Similar Rights.  Mortgagor agrees, to the full extent that it
may lawfully do so, that it will not at any time insist upon or plead or in any
way take advantage of any stay, marshalling of assets, extension, redemption or
moratorium law now or hereafter in force and effect so as to prevent or hinder
the enforcement of the provisions of this Mortgage or the Indebtedness or
Obligations secured hereby, or any agreement between Mortgagor and Mortgagee or
any rights or remedies of Mortgagee.

Section
9.9.           Applicable Law.  The provisions
of this Mortgage regarding the creation, perfection and enforcement of the
liens and security interests herein granted shall be governed by and construed
under the laws of the state in which the Mortgaged Property is located.  All other provisions of this Mortgage shall
be governed by the laws of the State of New York (including, without
limitation, Section 5-1401 of the General Obligations Law of the State of New
York), without regard to conflicts of laws principles.

Section
9.10.        Headings.  The Article, Section and Subsection titles
hereof are inserted for convenience of reference only and shall in no way
alter, modify or define, or be used in construing, the text of such Articles,
Sections or Subsections.

Section
9.11.        Entire Agreement.  This Mortgage
and the other Loan Documents embody the entire agreement and understanding
between Mortgagee and Mortgagor and supersede all prior agreements and
understandings between such parties relating to the subject matter hereof and
thereof.  Accordingly, the Loan Documents
may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements of the parties.  There
are no unwritten oral agreements between the parties.

Section 9.12.        Mortgagee as
Administrative Agent; Successor Agents.

(a)           Mortgagee has been appointed to act as Administrative
Agent hereunder by the Lenders and by acceptance of any of the benefits
hereunder, each Counterparty under a Hedge Agreement. Mortgagee shall have the
right hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of the Mortgaged
Property) in accordance with the terms of the Credit Agreement, any related
agency agreement among Mortgagee and the Lenders or any such Counterparty (collectively, as
amended, supplemented or otherwise modified or replaced from time to time, the “Agency Documents”) and this Mortgage.  Mortgagor and
all other persons shall be entitled to rely on releases, waivers, consents,
approvals, notifications and other acts of Mortgagee, without inquiry into the existence of required consents
or approvals of the Lenders or any such Counterparty therefor.

(b)           Mortgagee shall at all times be the same Person that is
Administrative Agent under the Agency Documents.  Written notice of resignation by
Administrative Agent pursuant to the Agency Documents shall also constitute
notice of resignation as Mortgagee under this Mortgage.  Removal of Administrative Agent pursuant to
any provision of the Agency Documents shall also constitute removal as Mortgagee under
this Mortgage.  Appointment of a successor Administrative
Agent pursuant to the Agency Documents shall also constitute appointment of a
successor Mortgagee under this Mortgage.  Upon the acceptance of any appointment as
Administrative Agent by a successor Administrative Agent under the Agency
Documents, that successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring or removed Mortgagee under this Mortgage,
and the retiring or removed Mortgagee shall promptly (i) assign and transfer to such successor Mortgagee all
of its right, title and interest in and to this Mortgage and the
Mortgaged Property, and (ii) execute and deliver to such successor Mortgagee such
assignments and amendments and take such other actions, as may be necessary or
appropriate in connection with the

 11
 

 

assignment to such
successor Mortgagee of the liens and security interests created under this Mortgage. After any retired or removed
Administrative Agent’s resignation or removal hereunder as Mortgagee, the provisions of this Mortgage and the Agency Documents
shall inure to its benefit as to any actions taken or omitted to be taken by it
under this Mortgage while it was the Mortgagee hereunder.

ARTICLE 10

LOCAL LAW PROVISIONS

Section 10.1.        Inconsistencies.  In the event of any inconsistencies
between the terms and conditions of this Article 10 and the other
provisions of this Mortgage, the terms and conditions of this Article 10
shall control and be binding.

Section 10.2.        Maximum Principal Sum.  The Indebtedness and Obligations may be
secured by other mortgages and deeds of trust on other real estate in other
counties and other states.  Each and all
of such mortgages and deeds of trust are intended to and shall constitute
security for the entire Indebtedness and all of the Obligations without
allocation.  Notwithstanding anything
herein to the contrary, it is agreed that the maximum amount of Indebtedness
secured by this Mortgage, including all advancements, at any one time shall not
exceed Two Hundred and Twenty Five Million Dollars ($225,000,000.00).

Section 10.3.        In Rem Proceedings.  Supplementing Section 5.1 hereof,
mortgage foreclosures and other In Rem
proceedings against Mortgagor may be brought in DuPage County, Illinois or any
federal court of competent jurisdiction in Illinois.

Section 10.4.          Future
Advances; Revolving Credit.  This
Mortgage secures, among other things, “revolving credit” as that term is
defined in 815 ILCS 205/4.1, and will secure not only existing indebtedness,
but also future advances, whether such advances are obligatory or to be made at
the option of the Mortgagor or the Lenders, or otherwise, as are made within
twenty (20) years from the date hereof, to the same extent as if such future
advances were made on the date of execution of this Mortgage, although there
may be no advance made at the time of execution hereof, and although there may
be no indebtedness outstanding at the time any advance is made.  The lien of this Mortgage shall be valid as
to all such indebtedness and future advances from the time this Mortgage is recorded.

The proceeds of the
indebtedness secured hereby referred to herein shall be used solely for
business purposes and in furtherance of the regular business affairs of
Mortgagor, and the entire principal obligation secured by this Mortgage
constitutes (i) a “business loan” as that term is defined in, and for all
purposes of, 815 ILCS 205/4 (1)(c), and (ii) a “loan secured by a mortgage on
real estate” within the purview and operation of 815 ILCS 205/4(1)(l).

Section 10.5.          Illinois
Mortgage Foreclosure Law.  It is
the intention of Mortgagor and Mortgagee that the enforcement of the terms and
provisions of this Mortgage shall be accomplished in accordance with the
Illinois Mortgage Foreclosure Law (the “Act”), 735 ILCS
5/15-1101, et seq., and with respect to such Act Mortgagor agrees and
covenants that:

(a)           Mortgagor and Mortgagee
shall have the benefit of all of the provisions of the Act, including all
amendments thereto which may become effective from time

 12
 

 

to time after the
date hereof.  In the event any provision
of the Act which is specifically referred to herein may be repealed, Mortgagee
shall have the benefit of such provision as most recently existing prior to
such repeal, as though the same were incorporated herein by express reference;

(b)           Wherever provision is
made in this Mortgage or the Credit Agreement for insurance policies to bear
mortgage clauses or other loss payable clauses or endorsements in favor of
Mortgagee, or to confer authority upon Mortgagee to settle or participate in
the settlement of losses under policies of insurance or to hold and disburse or
otherwise control use of insurance proceeds, from and after the entry of
judgment of foreclosure, all such rights and powers of Mortgagee shall continue
in Mortgagee as judgment creditor or mortgagee until confirmation of sale;

(c)           All advances,
disbursements and expenditures made or incurred by Mortgagee before and during
a foreclosure, and before and after judgment of foreclosure, and at any time
prior to sale, and, where applicable, after sale, and during the pendency of
any related proceedings, for the following purposes, in addition to those
otherwise authorized by the Mortgage, or the Credit Agreement or by the Act
(collectively “Protective Advances”), shall have
the benefit of all applicable provisions of the Act, herein below referred to:

(1)           all advances by Mortgagee in
accordance with the terms of the Mortgage or the Loan Agreement to: (i)
preserve, maintain, repair, restore or rebuild the improvements upon the
Mortgaged Property; (ii) preserve the lien of the Mortgage or the priority
thereof; (iii) enforce the Mortgage, as referred to in Subsection (b) (5) of
Section 5/15-1302 of the Act;

(2)           payments by Mortgagee of (i)
principal, interest or other obligations in accordance with the terms of any
senior mortgage or other prior lien or encumbrances; (ii) real estate taxes and
assessments, general and special, and all other taxes and assessments of any
kind or nature whatsoever which are assessed or imposed upon the Mortgaged
Property or any part thereof; (iii) other obligations authorized by the
Mortgagee; (iv) with court approval, any other amounts in connection with other
liens, encumbrances or interests reasonably necessary to preserve the status of
title, as referred to in Section 5/15-1505 of the Act;

(3)           advances by Mortgagee in
settlement or compromise of any claims asserted by claimants under senior
mortgages or any other prior liens;

(4)           reasonable attorneys’ fees
and other costs incurred: (i) in connection with the foreclosure of the
Mortgage as referred to in Section 5/15-1504(d)(2) and 5/15-1510 of the Act;
(ii) in connection with any action, suit, or proceeding brought by or against
the Mortgagee for the enforcement of the Mortgage or arising from the interest
of the Mortgagee hereunder; or (iii) in preparation for or in connection with
the commencement, prosecution or defense of any other action related to the
Mortgage or the Mortgaged Property;

(5)           Mortgagee’s fees and costs,
including reasonable attorneys’ fees, arising between the entry of judgment of
foreclosure and the confirmation hearings as referred to in Section 5/15-1508
(b)(1) of the Act;

 13
 

 

(6)           expenses deductible from the
proceeds of sale as referred to in Section 5/15-1512 (a) and (b) of the Act;

(7)           expenses incurred and
expenditures made by Mortgagee for any one or more of the following: (i) if the
Mortgaged Property or any portion thereof constitutes one or more units under a
condominium declaration, assessments imposed on the unit owner thereof; (ii) if
Mortgagor’s interest in the Mortgaged Property is a leasehold estate under a
lease or sublease, rentals or other payments required to be made by the lessee
under the terms of the lease or sublease; (iii) premiums for casualty and
liability insurance paid by Mortgagee whether or not Mortgagee or a receiver is
in possession, if reasonably required in reasonable amounts, and all renewals
thereof, without regard to the limitation to maintaining of existing insurance
in effect at the time any receiver or mortgagee takes possession of the
Mortgage Property imposed by Section 5/15-1704(c)(1) of Act; (iv) repair or
restoration of damage or destruction in excess of available insurance proceeds
or condemnation awards; (v) payments 
deemed by Mortgagee to be required for the benefit of the Mortgaged
Property or required to be made by the owner of the Mortgaged Property under
any grant or declaration of easement, easement agreement, agreement with any
adjoining land owners or instruments creating covenants or restrictions for the
benefit of or affecting the Mortgaged Property; (vi) shared or common expense
assessments payable to any association or corporation in which the owner of the
Mortgaged Property is a member in any way affecting the Mortgaged Property;
(vii) if the loan secured hereby is a construction loan, as may be authorized
by the applicable commitment, loan agreement or other agreement; (viii)
payments required to be paid by Mortgagor or Mortgagee pursuant to any lease or
other agreement for occupancy of the Mortgaged Property; and (ix) if the
Mortgage is insured, payment of FHA or private mortgage insurance required to
keep such insurance in force.

All
Protective Advances shall be so much additional indebtedness secured by this
Mortgage, and shall become immediately due and payable without notice and with
interest thereon from the date of the advance until paid at the rate of
interest payable after default under the terms of the Credit Agreement.

This Mortgage shall be a
lien for all Protective Advances as to subsequent purchasers and judgment
creditors from the time this Mortgage is recorded pursuant to Subsection (b)(5)
of Section 15-1302 of the Act.

(d)           In addition to any
provision of this Mortgage authorizing the Mortgagee to take or be placed in
possession of the Mortgaged Property, or for the appointment of a receiver,
Mortgagee shall have the right, in accordance with Sections 15-1701 and 15-1702
of the Act, to be placed in possession of the Mortgaged Property or at its
request to have a receiver appointed, and such receiver, or Mortgagee, if and
when placed in possession, shall have, in addition to any other powers provided
in this Mortgage, all rights, powers, immunities, and duties as provided for in
Sections 15-1701 and 15-1703 of the Act; and

(e)           Mortgagor acknowledges
that the Mortgaged Property does not constitute agricultural real estate, as
said term is defined in Section 15-1201 of the Act or residential real estate
as defined in Section 15-1219 of the Act. 
Pursuant to Section 15-1601(b) of the Act, Mortgagor hereby waives any
and all right of reinstatement or redemption.

 14

 

IN WITNESS WHEREOF,
Mortgagor has on the date set forth in the acknowledgement hereto, effective as
of the date first above written, caused this instrument to be duly EXECUTED AND
DELIVERED by authority duly given.

	
  MORTGAGOR:

  	
   

  	
                                                                          ,

  
	
   

  	
   

  	
  a 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

 S-1

 

 

	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF

  	
  )

  

 

I,                                                       ,
a Notary Public in and for said County and State, DO HEREBY CERTIFY, that  on the        
day of             ,
200 ,                                       ,
personally known to me to be the                                                
of                                               ,
a                                       
, appeared before me and first being duly sworn by me acknowledged that he/she
signed the foregoing instrument in the capacity therein set forth and
acknowledged that he/she signed and delivered the said instrument as his/her
free and voluntary act and as the free and voluntary act and deed of said
corporation, for the uses and purposes therein set forth and that the
statements therein contained are true.

In
Witness Whereof, I have hereunto set my hand and Notarial Seal, this       
day of             ,
200  .

	
  

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
  My Commission Expires:

  

 

 N-1

 

EXHIBIT A

Legal Description of
premises located at                                              :

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