0001104659-14-055068.txt : 20140731 0001104659-14-055068.hdr.sgml : 20140731 20140730184657 ACCESSION NUMBER: 0001104659-14-055068 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20140730 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140731 DATE AS OF CHANGE: 20140730 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FTD Companies, Inc. CENTRAL INDEX KEY: 0001575360 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-NONSTORE RETAILERS [5960] IRS NUMBER: 320255852 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-35901 FILM NUMBER: 141004088 BUSINESS ADDRESS: STREET 1: 3113 WOODCREEK DRIVE CITY: DOWNERS GROVE STATE: IL ZIP: 60515 BUSINESS PHONE: (630) 719-7800 MAIL ADDRESS: STREET 1: 3113 WOODCREEK DRIVE CITY: DOWNERS GROVE STATE: IL ZIP: 60515 8-K/A 1 a14-17851_58ka.htm 8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 8-K/A

Amendment No. 1

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 30, 2014

FTD Companies, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware		001-35901		32-0255852
(State or Other jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

3113 Woodcreek Drive

Downers Grove, Illinois 60515

(Address of Principal Executive Offices) (ZIP Code)

Telephone: (630) 719-7800

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

This Amendment No. 1 to Current Report on Form 8-K (this “Amendment”) is being filed to add Exhibit 2.1, Exhibit 10.1 and Exhibit 10.2 to the Current Report on Form 8-K filed by the registrant on July 30, 2014 (the “Original 8-K”), and to reflect these additions in Items 1.01 and 9.01. The registrant indicated in the Original 8-K that Exhibit 2.1, Exhibit 10.1 and Exhibit 10.2 would be filed by amendment. In addition, this Amendment is being filed to add the disclosure set forth under Item 5.02 herein.

Item 1.01 Entry into a Material Definitive Agreement.

Stock Purchase Agreement

On July 30, 2014, FTD Companies, Inc. (“FTD” or the “Company”), Liberty Interactive Corporation (“Liberty”) and Provide Commerce, Inc., an indirect wholly owned subsidiary of Liberty (“Provide Commerce”) entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”).

Pursuant to the terms of the Stock Purchase Agreement, FTD (through a wholly owned subsidiary) will acquire from Liberty all of the issued and outstanding shares of Provide Commerce’s common stock, par value $0.0001 per share, for an aggregate purchase price of approximately $430 million, consisting of (i) cash consideration of approximately $121 million and (ii) approximately 10.2 million shares (the “FTD Shares”) of FTD’s common stock, par value $0.0001 per share (the “FTD Common Stock”) (the “Transaction”). The cash portion of the purchase price is subject to adjustment for changes in Provide Commerce’s working capital as of the date of closing of the Transaction and certain transaction expenses. The stock portion of the purchase price consists of the number of shares of FTD Common Stock equal to 35% of the issued and outstanding shares of FTD Common Stock on July 29, 2014, valued at the volume weighted average closing price of FTD Common Stock for the ten trading days ended July 28, 2014.

The closing of the Transaction is subject to various customary closing conditions, including, among others, (1) approval by FTD’s stockholders of the issuance of the FTD Shares, (2) the absence of any law or order from any court or governmental authority preventing or prohibiting the Transaction, (3) expiration or termination of the waiting periods under applicable antitrust laws, (4) the absence of any event or development that has had a material adverse effect on FTD or Provide Commerce, and (5) the continued effectiveness of a waiver of section 203 of the General Corporation Law of the State of Delaware with respect to Liberty.

The Stock Purchase Agreement contains customary representations and warranties made by each of FTD, Liberty and Provide Commerce. The parties have also agreed to various covenants in the Stock Purchase Agreement, including, among other things, covenants (a) to conduct their respective operations in the ordinary course of business consistent with past practice, (b) to cooperate to prepare and file FTD’s proxy statement in connection with obtaining the approval of FTD’s stockholders of the issuance of the FTD Shares, (c) restricting, subject to certain limitations, FTD’s ability to solicit or enter into certain alternative transactions, and (d) to complete, and to cooperate in connection with, the financing transactions contemplated by the

Commitment Letter (as described below), or to obtain alternative financing for the Transaction. The parties have also agreed that prior to closing the Transaction, Liberty will separate, by means of a distribution, the RedEnvelope business from the Provide Commerce business that FTD will acquire in the Transaction.

In addition, pursuant to the terms of the Stock Purchase Agreement and the Investor Rights Agreement (as described below), FTD will increase the size of its board of directors from seven to eleven directors, with Liberty selecting four new directors for appointment to the board as of the closing of the Transaction.

The Stock Purchase Agreement contains certain termination rights for both FTD and Liberty (for itself and on behalf of Provide Commerce) and further provides that FTD must pay to Liberty certain termination fees upon termination of the Stock Purchase Agreement under the following circumstances:

· a termination fee of $10.75 million if (1) either party terminates the Stock Purchase Agreement because the Transaction has not closed by January 31, 2015 or a later date under certain circumstances or because FTD’s stockholders fail to approve the issuance of the FTD Shares, and (a) an alternative acquisition proposal for FTD was announced prior to the event giving rise to such termination right and (b) within twelve months of such termination FTD enters into a definitive agreement to consummate such alternative acquisition proposal, or (2) Liberty terminates the Stock Purchase Agreement because FTD’s board of directors changes its recommendation to stockholders regarding the issuance of the FTD Shares, fails to recommend against a third party tender offer for FTD, breaches its “no-shop” covenant, fails to take certain actions in connection with the solicitation of votes for approval of the issuance of the FTD Shares or fails to call and hold the special meeting of stockholders;

· a termination fee of $12.9 million if, subject to Liberty’s prior matching right, FTD terminates the Stock Purchase Agreement in order to enter into a superior proposal for the acquisition of FTD; and

· a termination fee of $17.2 million if, subject to Liberty’s prior matching right, Liberty terminates the Stock Purchase Agreement because FTD’s board of directors changes its recommendation to stockholders regarding the issuance of the FTD Shares due to the occurrence of certain not reasonably foreseeable intervening events materially and disproportionately favorable to FTD.

Further, the Stock Purchase Agreement provides that Liberty must pay a termination fee of $6 million to FTD if FTD terminates the Stock Purchase Agreement because of Provide Commerce’s failure to deliver certain audited and unaudited financial statements of Provide Commerce.

Subject to certain exceptions and other provisions, Liberty and FTD have agreed to indemnify each other for breaches of representations and warranties, breaches of covenants and certain other matters. The indemnification provided by each party to the other with respect to

breaches of certain representations and warranties is subject to a cap on losses of $86 million and applies only to the extent such losses exceed $4.3 million in the aggregate, each of which cap and deductible amounts is subject to certain exceptions.

Completion of the Transaction is anticipated to occur in late 2014, although there can be no assurance the Transaction will occur within the expected timeframe or at all.

Investor Rights Agreement

Concurrent with the closing of the Transaction, Liberty and FTD will enter into an Investor Rights Agreement (the “Investor Rights Agreement”).

Under the terms of the Investor Rights Agreement, Liberty will be restricted from acquiring additional shares of FTD Common Stock if, (1) until December 31, 2016, following such acquisition, Liberty would own in excess of 37.5% of the total number of the outstanding shares of FTD Common Stock and (2) after December 31, 2016, following such acquisition, Liberty would own in excess of 40% of the total number of outstanding shares of FTD Common Stock, in each case, subject to certain exceptions. Notwithstanding these restrictions, Liberty would be permitted, subject to certain conditions, to make a non-negotiated permitted tender offer to acquire additional shares of FTD Common Stock if, (a) after December 31, 2016, Liberty has negotiated in good faith with FTD’s board of directors for a period of at least thirty days and is unable to reach an agreement on a transaction or (b) at any time, a third party makes an unsolicited tender offer for shares of FTD Common Stock and FTD fails to take customary defensive actions, provided, (i) in either case, that Liberty’s tender offer must be an offer for all outstanding shares of FTD Common Stock and (ii) Liberty’s tender offer cannot close until a majority of the outstanding shares of FTD Common Stock not owned by Liberty have been tendered, provided that the requirement in this clause (ii) does not apply in the event a third party makes an unsolicited tender offer for shares of FTD Common Stock.

The Investor Rights Agreement further provides that during the 18 month period following the closing of the Transaction (the “Restricted Period”), Liberty will be bound by customary standstill provisions, including covenants not to solicit competing proxies or call special meetings of FTD’s stockholders, subject to the earlier expiration of the standstill provisions or certain waivers thereto upon the occurrence of certain events. In addition, during the Restricted Period, Liberty may not transfer any shares of FTD Common Stock that it owns, subject to certain exceptions. After the expiration of the Restricted Period, Liberty may sell shares of FTD Common Stock, subject to FTD’s right of first refusal with respect to certain market sales, provided that in no event may Liberty sell FTD Common Stock to any person if such person would beneficially own in excess of 15% of the total outstanding shares of FTD Common Stock, subject to certain exceptions. Beginning 36 months after closing of the Transaction, Liberty would be permitted to transfer its shares of FTD Common Stock in a block sale to a single party, subject to certain limitations with respect to the transferee and FTD’s right of first offer. The Investor Rights Agreement also includes limitations on pledging, stock lending transactions and hedging by Liberty of shares of FTD Common Stock.

Pursuant to the terms of the Investor Rights Agreement, Liberty is entitled to customary demand and piggyback registration rights and, subject to certain limitations, a participation right pursuant to which Liberty may maintain its ownership percentage of FTD Common Stock.

The Investor Rights Agreement provides that, for so long as Liberty owns at least 15% of the outstanding shares of FTD Common Stock, FTD is required to provide advance notice to Liberty before entering into an agreement regarding a merger, consolidation, change of control or other business combination transaction. In addition, if FTD enters into an agreement with a third party that would result in a change of control of FTD, FTD may issue to such third party, outside of Liberty’s participation right described above, a number of shares of FTD Common Stock equal to 19.9% of the total number of shares then outstanding. However, such issuance will not dilute Liberty’s right to representation on FTD’s board of directors.

As described above, Liberty will be entitled to select four new directors for appointment to FTD’s board of directors as of the closing of the Transaction. Pursuant to the Investor Rights Agreement, following the closing, (a) Liberty will be entitled to proportional representation on the board of directors based upon its ownership percentage, rounded up to the next whole number of directors, (b) FTD will be required to use its reasonable best efforts to cause the election of each Liberty nominee at subsequent FTD stockholders meetings, (c) at least half of Liberty’s nominees must be independent under applicable listing standards, subject to Liberty’s rights to have at least two Liberty officers serving as directors, and (d) FTD must appoint one of Liberty’s nominees to each committee of FTD’s board of directors, subject to applicable listing standards and provided that no such director may serve as chairman of the board or chairman of a committee. In addition, for a period of five years (or six years, in the event FTD’s board of directors ceases to be classified or FTD implements majority voting for directors), and so long as (x) a Liberty-nominated director remains on the board and (y) Liberty owns less than 50% of the outstanding shares, Liberty will be required to vote its shares of FTD Common Stock in favor of FTD’s director nomination slate at each stockholders meeting at which directors are to be elected. So long as Liberty owns at least 5% of the outstanding shares of FTD Common Stock, Liberty has agreed to attend, in person or by proxy, all meetings of FTD’s stockholders so that such shares may be counted for purposes of determining a quorum at such meetings.

Other Agreements

In connection with the Transaction, certain additional agreements have been or will be entered into, including a Services Agreement, which Liberty and Provide Commerce will enter into concurrent with the closing of the Transaction. Pursuant to the Services Agreement, Provide Commerce will, on a transitional basis, provide Liberty with certain support services and other assistance after the Transaction in respect of the distributed RedEnvelope business.

Commitment Letter

Concurrent with the signing of the Stock Purchase Agreement, FTD entered into a financing commitment letter (the “Commitment Letter”) with Bank of America, N.A. (“Bank of America”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”), Wells Fargo Bank, National Association (“WF Bank”) and Wells Fargo Securities, LLC (“WF Securities” and together with Bank of America, Merrill Lynch and WF Bank, the “Lenders”). The Commitment

Letter provides, on the terms and subject to the conditions set forth in the Commitment Letter, for a new term loan facility in an aggregate principal amount of $130 million (the “Term Loan”), which will be added to FTD’s existing credit agreement providing for its $350 million revolving credit facility (the “Existing Credit Agreement”). However, if the required consent of the lenders under the Existing Credit Agreement to amend the Existing Credit Agreement to add the Term Loan and permit the Transaction, as well as to make certain other amendments described in the Commitment Letter (the “Proposed Amendment”), cannot be obtained, the Term Loan will be advanced pursuant to documentation for a new backstop bank facility comprised of revolving credit facilities in an aggregate principal amount of up to $350 million and the Term Loan, which will refinance and replace the Existing Credit Agreement on terms materially similar to those of the Existing Credit Agreement, taking into account the Proposed Amendment (the “Backstop Bank Facility”). The Term Loan and the Backstop Bank Facility are fully underwritten by Bank of America and WF Bank. The Commitment Letter further provides for an advance under the Existing Credit Agreement or the Backstop Bank Facility, as applicable, in connection with the closing of the Transaction, which advance shall be used to finance the cash portion of the Transaction purchase price. The proceeds of the Term Loan will be used to repay outstanding revolving loans under the Existing Credit Agreement or the Backstop Bank Facility, as applicable. FTD expects the financing under the Commitment Letter, together with cash balances, to be sufficient to provide the financing necessary to pay the cash portion of the purchase price under the Stock Purchase Agreement. The financing commitments of the Lenders are subject to certain limited conditions set forth in the Commitment Letter.

The foregoing descriptions of the Stock Purchase Agreement, Investor Rights Agreement and Commitment Letter do not purport to be complete and are qualified in their entirety by reference to the Stock Purchase Agreement, form of Investor Rights Agreement and Commitment Letter, which are filed as Exhibit 2.1, Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.

The Stock Purchase Agreement and form of Investor Rights Agreement have been included as exhibits to this Current Report on Form 8-K to provide investors and security holders with information regarding their respective terms. They are not intended to provide any other financial information about the parties thereto or their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Stock Purchase Agreement and the Investor Rights Agreement are made only for purposes of those agreements and as of specific dates; are solely for the benefit of the parties thereto; may be subject to limitations agreed upon by such parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties thereto instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the parties to the Stock Purchase Agreement or the Investor Rights Agreement or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the dates of the Stock Purchase Agreement or the Investor Rights Agreement, which subsequent information may or may not be fully reflected in public disclosures by the parties thereto.

Item 2.02 Results of Operations and Financial Condition.

On July 30, 2014, the Company issued a press release containing preliminary, unaudited financial results for the quarter ended June 30, 2014 and other financial information. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information in this Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing.

Item 3.02 Unregistered Sales of Equity Securities.

Pursuant to the Stock Purchase Agreement described above in Item 1.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference, FTD has agreed to deliver the FTD Shares to Liberty at the closing of the Transaction, subject to the satisfaction of the closing conditions set forth in the Stock Purchase Agreement. The issuance of the FTD Shares by FTD to Liberty will be made pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In connection with FTD’s entry into the Stock Purchase Agreement, on July 28, 2014, FTD entered into amended and restated employment agreements (the “Employment Agreements”) with its current President and Chief Executive Officer, Robert S. Apatoff, Executive Vice President and Chief Financial Officer, Becky A. Sheehan, and Executive Vice President, General Counsel and Secretary, Scott D. Levin. Each Employment Agreement will be effective on the date of the closing of the Transaction with a term expiring on December 31, 2019.

Pursuant to the Employment Agreements, Mr. Apatoff’s, Ms. Sheehan’s and Mr. Levin’s then-current annual base salaries will be increased by $100,000, $50,000 and $50,000, respectively, immediately upon the Employment Agreements’ effectiveness. In addition, upon the Employment Agreements’ effectiveness, Mr. Apatoff, Ms. Sheehan and Mr. Levin will be granted an award of restricted stock units with a value of $730,000, $438,000 and $306,000, respectively, which awards shall vest at the rate of one-third on each of the first three anniversaries of the grant date. The restricted stock unit awards will be granted pursuant to a Restricted Stock Unit Issuance Agreement for Officers with Employment Agreements, the form of which was previously filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 13, 2013. Each executive officer will remain eligible to participate in each of FTD’s employee benefit plans that are generally available to all employees or senior executives and to participate in an annual bonus program with a target bonus set by FTD’s board of directors in an amount of up to 100% of the executive’s annual base salary.

Each Employment Agreement also provides that if the executive’s employment is terminated without cause, or the executive resigns for good reason, in connection with, or within 24 months (36 months with regard to the consummation of the Transaction) following, a change in control of FTD, then the executive’s outstanding equity awards will vest in full (except to the extent that the award agreement provides for more favorable treatment). If the executive’s employment is terminated without cause, or the executive resigns for good reason, other than in connection with, or within 24 months following, a change in control, then the executive will receive an additional 12 months of vesting credit under the executive’s outstanding equity awards (except to the extent that the award agreement provides for more favorable treatment), applied as if such awards vested in equal monthly increments over the vesting period. If the executive’s employment is terminated without cause, or the executive resigns for good reason, whether or not in connection with a change in control, then the executive will be entitled to a severance payment, payable in 12 equal monthly installments (or in a lump sum in the case of a change in control separation), in an aggregate amount equal to the sum of (i) two times the executive’s then-current annual rate of base salary and (ii) two times the executive’s target bonus for the fiscal year in which the termination occurs. The executive will also be entitled to any earned but unpaid bonus for the fiscal year preceding the executive’s termination and a prorated bonus for the year of termination based on the actual level of performance goal attainment or, in the case of an involuntary termination during the same year as the change in control event, based on the executive’s target bonus for such year. Finally, the executive will be entitled to continued medical and dental coverage provided by the Company for a period of 12 months following the date of termination.

Each of Mr. Apatoff, Ms. Sheehan and Mr. Levin have agreed to a 12-month non-competition agreement and to provide FTD with a standard release of claims. If an executive’s employment is terminated due to the executive’s death or disability, then the executive will receive an additional 12 months of vesting credit under the executive’s outstanding equity awards, applied as if such awards vested in equal monthly increments over the vesting period.

For purposes of the Employment Agreements, “change of control” generally has the meaning assigned to such term in FTD’s most recently-adopted equity compensation plan, provided that a “change of control” also includes (1) the consummation of the Transaction, (2) the consummation of any subsequent transaction in which Liberty for the first time increases its beneficial ownership of FTD Common Stock to more than 50% (or such lesser percentage as may apply at such time under such equity compensation plan or outstanding award thereunder) of the total combined voting power of the Company’s outstanding securities and (3) any sale by Liberty of all or part of its interest in securities of the Company in a single transaction (or in a series of related transactions) to any non-affiliate of Liberty that results in such person having beneficial ownership to securities possessing at least 20% of the total combined voting power of the Company’s outstanding securities.

The foregoing description of the Employment Agreements does not purport to be complete and is qualified in its entirety by reference to the Employment Agreements, copies of which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014.

Item 8.01 Other Events.

On July 30, 2014, the Company and Liberty issued a joint press release announcing the Company’s acquisition of Provide Commerce. A copy of the press release is filed as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference.

The Company will host a conference call and webcast to discuss the Transaction at 9:00 a.m. Eastern Time on July 30, 2014. A copy of the slides to be presented as part of the webcast is filed as Exhibit 99.3 to this Current Report on Form 8-K and incorporated herein by reference.

Cautionary Information Regarding Forward-Looking Statements

This Current Report on Form 8-K contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended, based on our current expectations, estimates and projections about our operations, industry, financial condition, performance, results of operations, and liquidity. Statements containing words such as “may,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “project,” “projections,” “business outlook,” “estimate,” or similar expressions constitute forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding potential acquisitions, including the planned acquisition of Provide Commerce; statements regarding expected synergies and benefits of the planned acquisition of Provide Commerce; expectations about future business plans, prospective performance and opportunities; statements regarding regulatory approvals; statements regarding the expected timing of the completion of the planned acquisition of Provide Commerce; and statements about our strategies. Potential factors that could affect these forward-looking statements include, among others, the occurrence of any event, change or other circumstances that could give rise to the termination of the transaction agreements; the risk that the necessary stockholder approval may not be obtained; the risk that the necessary regulatory approvals may not be obtained or may be obtained subject to conditions that are not anticipated; the risk that the proposed transaction will not be consummated in a timely manner; risks that any of the closing conditions to the proposed transaction may not be satisfied or may not be satisfied in a timely manner; risks related to disruption of management time from ongoing business operations due to the proposed transaction; failure to realize the benefits expected from the proposed transaction; failure to promptly and effectively integrate the acquisition; and the effect of the announcement of the proposed transaction on the ability of FTD and Provide Commerce to retain customers and retain and hire key personnel, maintain relationships with suppliers, and on their operating results and businesses generally, as well as the factors disclosed in the Company’s filings with the Securities and Exchange Commission, including without limitation, information under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. Any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that may cause actual performance and results to differ materially from those predicted. Except as required by law, we undertake no obligation to publicly release the results of any revision or update to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Additional Information

FTD will solicit the required approval of its stockholders by means of a proxy statement, which will be mailed to stockholders upon completion of the required Securities and Exchange Commission (SEC) filing and review process. The proxy statement will contain information about FTD, Provide Commerce, the proposed transaction and related matters. FTD stockholders are urged to read the proxy statement carefully when it is available, as it will contain important information that stockholders should consider before making a decision about the transaction. In addition to receiving the proxy statement from FTD in the mail, stockholders will also be able to obtain the proxy statement, as well as other filings containing information about FTD, without charge, at the SEC’s web site, www.sec.gov, or from FTD at its website, www.ftdcompanies.com, or FTD Companies, Inc., 3113 Woodcreek Drive, Downers Grove, IL 60515, Attention: Corporate Secretary.

Participants in Solicitation

FTD and its executive officers and directors may be deemed to be participants in the solicitation of proxies from FTD’s stockholders with respect to the proposed transaction. Information regarding any interests that FTD’s executive officers and directors may have in the transaction will be set forth in the proxy statement.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description
2.1		Stock Purchase Agreement, by and among FTD Companies, Inc., Liberty Interactive Corporation and Provide Commerce, Inc., dated July 30, 2014*

10.1		Form of Investor Rights Agreement, by and between Liberty Interactive Corporation and FTD Companies, Inc.

10.2		Commitment Letter, by and among Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Bank, National Association, Wells Fargo Securities, LLC and FTD Companies, Inc., dated July 30, 2014

99.1		Press Release dated July 30, 2014†

99.2		Press Release dated July 30, 2014‡

99.3		Investor Presentation dated July 30, 2014‡

* Schedules and other similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant hereby undertakes to furnish supplementally copies of any of the omitted schedules and other similar attachments upon request by the Securities and Exchange Commission, provided that the registrant may request confidential treatment for any schedule or other similar attachment so furnished.

† Previously furnished.

‡ Previously filed.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FTD COMPANIES, INC.

Dated: July 30, 2014	By:	/s/ Becky A. Sheehan
		Name:	Becky A. Sheehan
		Title:	Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.		Description
2.1		Stock Purchase Agreement, by and among FTD Companies, Inc., Liberty Interactive Corporation and Provide Commerce, Inc., dated July 30, 2014*

10.1		Form of Investor Rights Agreement, by and between Liberty Interactive Corporation and FTD Companies, Inc.

10.2		Commitment Letter, by and among Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Bank, National Association, Wells Fargo Securities, LLC and FTD Companies, Inc., dated July 30, 2014

99.1		Press Release dated July 30, 2014†

99.2		Press Release dated July 30, 2014‡

99.3		Investor Presentation dated July 30, 2014‡

† Previously furnished.

‡ Previously filed.

EX-2.1 2 a14-17851_5ex2d1.htm EX-2.1

Exhibit 2.1

EXECUTION VERSION

STOCK PURCHASE AGREEMENT

BY AND AMONG

FTD COMPANIES, INC.,

LIBERTY INTERACTIVE CORPORATION

AND

PROVIDE COMMERCE, INC.

DATED JULY 30, 2014

TABLE OF CONTENTS

		Page


Article 1. PURCHASE AND SALE		1

Section 1.1	Purchase and Sale of the Shares	1

Section 1.2	The Closing	1

Article 2. CONSIDERATION AND OTHER DELIVERIES		2

Section 2.1	Deliveries at the Closing	2

Section 2.2	Working Capital	3

Article 3. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY		6

Section 3.1	Organization and Qualification; Subsidiaries	6

Section 3.2	Certificate of Incorporation and Bylaws	6

Section 3.3	Capitalization	7

Section 3.4	Authority	7

Section 3.5	No Conflict; Required Filings and Consents	8

Section 3.6	Permits; Compliance with Law	9

Section 3.7	Financial Statements; Undisclosed Liabilities	9

Section 3.8	Proxy Statement	10

Section 3.9	Absence of Certain Changes or Events	11

Section 3.10	Employee Benefit Plans	11

Section 3.11	Labor and Other Employment Matters	13

Section 3.12	Material Contracts	14

Section 3.13	Litigation	17

Section 3.14	Environmental Matters	17

Section 3.15	Intellectual Property	17

Section 3.16	Assets and Properties	20

Section 3.17	Taxes	20

Section 3.18	Brokers	23

Section 3.19	Insurance	23

Section 3.20	Investigation by Seller; Limitation on Warranties; Investment Representations	23

Article 4. REPRESENTATIONS AND WARRANTIES OF BUYER		24

Section 4.1	Organization and Qualification; Subsidiaries	24

Section 4.2	Certificate of Incorporation and Bylaws	24

TABLE OF CONTENTS

(continued)

		Page

Section 4.3	Capitalization	24

Section 4.4	Authority	25

Section 4.5	No Conflict; Required Filings and Consents	26

Section 4.6	Permits; Compliance with Law	26

Section 4.7	SEC Filings; Financial Statements; Other Reports	27

Section 4.8	Proxy Statement	28

Section 4.9	Absence of Certain Changes or Events	29

Section 4.10	Employee Benefit Plans	29

Section 4.11	Labor and Other Employment Matters	31

Section 4.12	Material Contracts	31

Section 4.13	Litigation	32

Section 4.14	Environmental Matters	32

Section 4.15	Intellectual Property	32

Section 4.16	Assets and Properties	34

Section 4.17	Taxes	34

Section 4.18	Vote Required	37

Section 4.19	Brokers	37

Section 4.20	Investigation by Buyer; Limitation on Warranties	37

Section 4.21	Board Recommendation	38

Section 4.22	Buyer Resolution	38

Section 4.23	No Takeover Defenses Implemented	38

Section 4.24	Financing	38

Article 5. COVENANTS		39

Section 5.1	Conduct of Business by Seller and the Company Pending the Closing	39

Section 5.2	Conduct of Business by Buyer Pending the Closing	42

Section 5.3	Cooperation	43

Section 5.4	Proxy; Stockholder Approval	44

Section 5.5	Buyer Stockholders Meeting	45

Section 5.6	Access to Information; Confidentiality	45

Section 5.7	Acquisition Proposals	46

TABLE OF CONTENTS

(continued)

		Page

Section 5.8	Appropriate Action; Consents; Filings	49

Section 5.9	Certain Notices	51

Section 5.10	Public Announcements	52

Section 5.11	Employee Benefit Matters	52

Section 5.12	Certain Tax Matters	54

Section 5.13	Legal Representation and Attorney-Client Privilege	59

Section 5.14	Financing	59

Section 5.15	Financing Cooperation	61

Section 5.16	Financial Statements; Auditor Matters	63

Section 5.17	Investor Directors	65

Section 5.18	Buyer Board Committees	65

Section 5.19	Payoff Letters; Transaction Expenses	66

Section 5.20	RedEnvelope	66

Section 5.21	Insurance Policies	66

Section 5.22	Intercompany Matters	67

Article 6. CLOSING CONDITIONS		67

Section 6.1	Conditions to Obligations of Each Party Under This Agreement	67

Section 6.2	Additional Conditions to Obligations of Buyer	67

Section 6.3	Additional Conditions to Obligations of Seller and the Company	68

Article 7. TERMINATION		69

Section 7.1	Termination	69

Section 7.2	Effect of Termination	71

Article 8. INDEMNIFICATION		72

Section 8.1	Survival of Representations and Warranties	72

Section 8.2	Indemnification by Seller	73

Section 8.3	Indemnification by Buyer	75

Section 8.4	Indemnification Procedures	76

Section 8.5	Limitations on Indemnification for Breaches of Representations and Warranties	78

Section 8.6	Exclusivity	80

iii

TABLE OF CONTENTS

(continued)

		Page

Article 9. GENERAL PROVISIONS		80

Section 9.1	Fees and Expenses	80

Section 9.2	Notices	80

Section 9.3	Certain Definitions	81

Section 9.4	Interpretation; Terms Defined Elsewhere	97

Section 9.5	Headings	97

Section 9.6	Severability	97

Section 9.7	Entire Agreement	97

Section 9.8	Amendment	98

Section 9.9	Waiver	98

Section 9.10	Assignment	98

Section 9.11	Parties in Interest	98

Section 9.12	Mutual Drafting	99

Section 9.13	Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury	99

Section 9.14	Disclosure	100

Section 9.15	Counterparts	101

Section 9.16	Specific Performance	101

Section 9.17	Further Assurance	101

STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT, dated July 30, 2014 (this “Agreement”), is by and among FTD Companies, Inc., a Delaware corporation (“Buyer”), Liberty Interactive Corporation, a Delaware corporation (“Seller”), and Provide Commerce, Inc., a Delaware corporation and an indirect wholly owned Subsidiary of Seller (the “Company”).

RECITALS

WHEREAS, Seller is the beneficial owner of all of the issued and outstanding common stock, par value $0.0001 per share, of the Company (such class of authorized common stock, the “Company Common Stock” and all issued and outstanding shares thereof, the “Shares”).

WHEREAS, L LLC (as defined below) is the actual owner of record of all of the Shares, and Seller is the actual owner of record and the beneficial owner of all of the membership interests of L LLC.

WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, all of the Shares, subject to the terms and conditions set forth in this Agreement.

WHEREAS, it is intended that the Transaction constitute a taxable purchase of the Company Shares for U.S. federal income tax purposes.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement and intending to be legally bound hereby, the Parties agree as follows:

Article 1.
PURCHASE AND SALE

Section 1.1 Purchase and Sale of the Shares.

On the Closing Date, Buyer shall purchase, or cause to be purchased, from Seller, and Seller shall sell, transfer, assign, convey and deliver to FTD, Inc., a wholly owned subsidiary of Buyer (“FTD, Inc.”), all of the Shares, free and clear of any Liens, other than any Liens arising under applicable federal and state securities laws or Liens created by Buyer.

Section 1.2 The Closing.

Unless this Agreement is terminated in accordance with Article 7, the closing of the transactions contemplated hereby (the “Closing”) shall take place at the offices of Jones Day, 77 West Wacker Drive, Chicago, Illinois (or such other place as agreed by the Parties), not later than the second Business Day following the date on which all of

the conditions set forth in Article 6 are satisfied or, if permissible, waived (other than those conditions that by their nature are to be satisfied at the Closing and are in fact satisfied at the Closing, but subject to the satisfaction or, if permissible, waiver thereof), or at such other time as the Parties may agree in writing (the “Closing Date”).

Article 2.
CONSIDERATION AND OTHER DELIVERIES

Section 2.1 Deliveries at the Closing.

2.1.1 Purchase Price.

2.1.1.1 At the Closing, Buyer shall pay or cause to be paid to Seller, by wire transfer of immediately available funds, an amount (such amount, the “Closing Cash Consideration”) equal to (A) the Initial Cash Consideration, minus (B) if Estimated Closing Working Capital is less than Target Working Capital, the positive difference between Estimated Closing Working Capital and Target Working Capital (such amount, if any, the “Estimated Closing Working Capital Shortfall”), plus (C) if Estimated Closing Working Capital is greater than Target Working Capital, the positive difference between Estimated Closing Working Capital and Target Working Capital (such amount, if any, the “Estimated Closing Working Capital Excess”), minus (D) the amount of any and all outstanding Indebtedness of the Company or any Company Subsidiary set forth on Section 2.1.1.1 of the Company Disclosure Schedule, minus (E) Seller’s good faith estimate of any Transaction Expenses unpaid as of the Closing Date and plus (F) Seller’s good faith estimate of the amount of Cash as of the Closing (the “Estimated Cash”).

2.1.1.2 At the Closing, Buyer shall issue and deliver to Liberty Interactive, LLC, a Delaware limited liability company and wholly owned Subsidiary of Seller (“L LLC”), one or more certificates representing the Stock Consideration accompanied by duly executed instruments of transfer in the name of L LLC (or its designee(s)) or duly endorsed in blank, together with stock transfer tax stamps attached and/or other evidence reasonably satisfactory to L LLC that such Stock Consideration has been deposited by book entry transfer to an account of L LLC (or its designee(s)), which account shall have been identified to Buyer in writing by Seller three (3) Business Days prior to the Closing Date, maintained with a bank, brokerage firm or other financial institution. The issuance of the Stock Consideration to L LLC in connection with the transactions contemplated by this Agreement is referred to herein as the “Stock Issuance”.

2.1.1.3 If, between the date of this Agreement and the Closing Date, there is a subdivision, split, stock dividend, combination, reclassification or similar event with respect to any of the shares of Buyer Common Stock referred to in this Agreement, then, in any such event, the numbers and types of shares of such Buyer Common Stock referred to in this Agreement shall be adjusted to the number and types of shares of such Buyer Common Stock that a holder of such number of shares of such Buyer Common Stock would own or be entitled to receive as a result of such event if

such holder had held such number of shares immediately prior to the record date for, or effectiveness of, such event, and the prices for such shares shall be similarly adjusted.

2.1.2 Other Closing Deliveries. At the Closing:

2.1.2.1 Buyer and Seller shall execute and deliver the Investor Rights Agreement substantially in the form attached hereto as Exhibit B (the “Investor Rights Agreement”).

2.1.2.2 Seller shall deliver to Buyer certificates of good standing, dated not more than 10 Business Days prior to the Closing Date, with respect to the Company and each Company Subsidiary, issued by the Secretary of State of the state of their respective organization.

2.1.2.3 Seller shall deliver to Buyer all instruments and documents necessary to release any and all Liens other than Permitted Liens, including appropriate UCC financing statement amendments.

2.1.2.4 Seller shall deliver to Buyer a certification of non-foreign status that complies with Section 1.1445-2(b)(2) of the Treasury Regulations.

2.1.2.5 Seller shall deliver to Buyer executed terminations and releases in respect of any Contract required to be set forth in Section 2.1.2.5 of the Company Disclosure Schedule.

2.1.2.6 Seller shall deliver to Buyer executed letters from the persons set forth in Section 2.1.2.6 of the Company Disclosure Schedule resigning as an officer or director of the Company or Company Subsidiary, subject to and effective upon the Closing.

2.1.2.7 Seller shall deliver to FTD, Inc. stock certificates representing all of the Shares accompanied by duly executed stock powers sufficient to transfer the Shares to FTD, Inc. free and clear of all Liens.

2.1.2.8 Seller shall deliver to Buyer officer certificates certifying that each of Seller and L LLC have approved the transactions contemplated by this Agreement.

2.1.2.9 Buyer shall deliver to Seller and the Company an officer certificate certifying that Buyer has approved the transactions contemplated by this Agreement.

Section 2.2 Working Capital.

2.2.1 Good Faith Closing Estimate. Not later than three Business Days prior to the Closing Date, Seller shall provide Buyer with an estimated consolidated balance sheet of the Company and its Subsidiaries as of the open of business on the Closing Date (the “Estimated Closing Balance Sheet”) and a statement

of the estimated Closing Working Capital, derived from the Estimated Closing Balance Sheet (“Estimated Closing Working Capital”). The Estimated Closing Balance Sheet and Estimated Closing Working Capital shall be prepared by Seller in good faith and in accordance with the example statement of working capital set forth on Section 2.2.1 of the Company Disclosure Schedule (the “Example Statement”) and in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation and accrual methodologies that were used in the preparation of the Audited Financials, except as described in the notes thereto, and for the absence of footnotes and other presentation items and for normal year-end adjustments.

2.2.2 True-Up. Within 90 days following the Closing Date, Buyer shall deliver to Seller a consolidated balance sheet of the Company and its Subsidiaries as of the open of business on the Closing Date (the “Closing Balance Sheet”), a statement of Closing Working Capital derived from the Closing Balance Sheet (the “Closing Working Capital Statement”) and a statement of the Cash at the Closing (the “Closing Cash Statement”). The Closing Balance Sheet and the Closing Working Capital Statement shall be prepared in accordance with the Example Statement and in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Audited Financials. The Closing Cash Statement shall be prepared in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Audited Financials, and in accordance with the definition of “Cash” herein.

2.2.3 Acceptance of Statements; Dispute Procedures. The Closing Balance Sheet, the Closing Working Capital Statement (and the computation of Closing Working Capital indicated thereon) and the Closing Cash Statement delivered by Buyer to Seller shall be conclusive and binding upon the Parties unless Seller, within 20 days after delivery to Seller of the Closing Cash Statement, Closing Balance Sheet and the Closing Working Capital Statement, that, in each case, complies with Section 2.2.2 notifies Buyer in writing that Seller disputes any of the amounts set forth therein, specifying the nature of the dispute and the basis therefor. During such 20 day period and the pendency of any such disputes, (A) the Buyer and the Company will provide the Seller and its Representatives with reasonable access to (x) any documents, schedules, work papers or other information used in the preparation of the Closing Cash Statement, Closing Balance Sheet and Closing Working Capital Statement and (y) employees of the Company and Buyer responsible for the preparation of the Closing Cash Statement, Closing Balance Sheet and Closing Working Capital Statement and (B) the Seller will provide Buyer with reasonable access to any documents, schedules, work papers or other information used in the preparation of the Closing Cash Statement, Closing Balance Sheet and Closing Working Capital Statement. The Parent Parties shall in good faith attempt to resolve any such dispute and, if the Parent Parties so resolve all such disputes, the Closing Cash Statement, Closing Balance Sheet and

the Closing Working Capital Statement (and the computation of Closing Working Capital indicated thereon), as amended to the extent necessary to reflect the resolution of such disputes and the agreement thereto of the Parent Parties, shall be conclusive and binding on the Parties. If the Parties do not reach an agreement in resolving the dispute within 20 days after notice is given by Seller to Buyer pursuant to the second preceding sentence, the Parties shall submit the dispute to an internationally recognized accounting firm mutually acceptable to Seller and Buyer (the “Arbiter”) for resolution. As promptly as reasonably practicable, but no later than 20 days after acceptance of its appointment as Arbiter, the Arbiter shall determine (it being understood that in making such determination, the Arbiter shall be functioning as an expert and not as an arbitrator), based solely on written submissions by Buyer and Seller, and not by independent review, only those issues in dispute and shall render a written report as to the resolution of the dispute and the resulting computation of the amount of Cash at the Closing and the Closing Working Capital which shall be conclusive and binding on the Parties. In resolving any disputed item, the Arbiter (x) shall be bound by the provisions of this Section 2.2 and (y) may not assign a value to any item greater than the greatest value for such items claimed by either Parent Party or less than the smallest value for such items claimed by either Parent Party. The fees, costs and expenses of the Arbiter (the “Arbiter’s Costs”) shall be allocated to and borne by Buyer and Seller based on the inverse of the percentage that the Arbiter’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Arbiter. For example, should the items in dispute total in amount to $1,000 and the Arbiter awards $600 in favor of Seller’s position, 60% of the Arbiter’s Costs of its review would be borne by Buyer and 40% of the Arbiter’s Costs would be borne by Seller.

2.2.4 Payment. Upon final determination of Closing Working Capital and the amount of Cash at the Closing as provided in Section 2.2.3 above, (A) if the sum of the Closing Working Capital and the Cash at the Closing is greater than the sum of the Estimated Closing Working Capital and the Estimated Cash, Buyer shall as promptly as reasonably practicable, but in no event later than five (5) Business Days after such final determination, pay the amount of such difference to Seller and (B) if the sum of the Closing Working Capital and the Cash at the Closing is less than the sum of the Estimated Closing Working Capital and the Estimated Cash, Seller shall as promptly as reasonably practicable, but in no event later than five (5) Business Days after such final determination, pay to Buyer the amount of such difference, in each case, such payments will be made by wire transfer of immediately available funds to the account designated by the Party receiving such payment. So long as such amounts are paid in accordance with this Section 2.2.4, no interest shall be payable on such amounts.

2.2.5 Tax Withholding. Notwithstanding any other provision hereof, Buyer shall be entitled to deduct and withhold from any amounts otherwise payable in accordance with this Agreement such amounts as Buyer is required to deduct and withhold with respect to the making of such payment under the Code or any other Tax Law. To the extent that amounts are so withheld and paid over to the appropriate Taxing Authority, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the person in respect of which such deduction and

withholding was made. Buyer will notify Seller in writing of any such withholding at least five Business Days before the Closing Date. Buyer shall use reasonable best efforts to request any appropriate Tax forms or similar information from Seller in order to reduce or eliminate any such withholding.

Article 3.
REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY

Except as set forth in the Seller SEC Filings filed prior to the date of this Agreement (but disregarding disclosures contained under the heading “Risk Factors,” or disclosures set forth in any “forward-looking statements” disclaimer or any other statements that are similarly non-specific or cautionary, predictive or forward-looking in nature), provided, that this clause shall not apply to any representation set forth in Section 3.3, Seller and the Company hereby represent and warrant to Buyer, as of the date hereof and as of the Closing Date, as follows:

Section 3.1 Organization and Qualification; Subsidiaries.

The Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. Section 3.1 of the Company Disclosure Schedule sets forth a true and complete list of all of the Subsidiaries of the Company (each such Subsidiary, other than RedEnvelope, a “Company Subsidiary” and, collectively, the “Company Subsidiaries”), together with the jurisdiction of incorporation of each Company Subsidiary and the authorized capitalization of each Company Subsidiary. Each Company Subsidiary is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, as the case may be. The Company and each of the Company Subsidiaries has the requisite corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted. The Company and each of the Company Subsidiaries is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification, licensing or good standing necessary. None of the Company, any Company Subsidiary nor RedEnvelope holds an Equity Interest in any other person other than any Company Subsidiary or RedEnvelope.

Section 3.2 Certificate of Incorporation and Bylaws.

The Company’s Amended and Restated Certificate of Incorporation, as amended (the “Company Charter”), and Amended and Restated Bylaws (the “Company Bylaws”) that have been made available to Buyer are true, complete and correct copies thereof. The Company has made available to Buyer a true, complete and correct copy of the charter and bylaws (or equivalent organizational documents) of each Company Subsidiary.

Section 3.3 Capitalization.

3.3.1 The authorized capital stock of the Company consists of 10,000 shares of capital stock, all of which shares are designated Company Common Stock. 1,000 shares of Company Common Stock (constituting the Shares) are issued and outstanding, all of which (A) were duly authorized, validly issued, fully paid and non-assessable, (B) were not issued in violation of any purchase or call option, right of first refusal, subscription right, preemptive right or any similar rights, and (C) are owned beneficially by Seller and of record by L LLC and are free and clear of all Liens, other than Liens created by or on behalf of Buyer and applicable federal and state securities law restrictions. There is no outstanding capital stock of the Company other than the Shares.

3.3.2 There are no outstanding contractual obligations of Seller, the Company or any Company Subsidiary (A) restricting the transfer of, (B) affecting the voting rights of, (C) requiring the issuance, repurchase, redemption or disposition of, or containing any right of first refusal with respect to, (D) requiring the registration for sale of any shares of the capital stock of, or (E) granting any preemptive, antidilutive, or subscription right with respect to, any shares of Company Common Stock or any capital stock of, or other Equity Interests in, the Company or any Company Subsidiary. Each outstanding share of capital stock of each Company Subsidiary is duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights and is owned, beneficially and of record, by the Company or another Company Subsidiary free and clear of all Liens.

Section 3.4 Authority.

3.4.1 The Company has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated by this Agreement to be consummated by the Company. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of the Company and, other than the written consent of L LLC, no vote of the holders of any class or series of capital stock or other Equity Interests of the Company is necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Company and, assuming due authorization, execution and delivery by Buyer, constitutes a legally valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors and by general principles of equity regardless of whether enforcement is considered in a proceeding in equity or at Law.

3.4.2 Seller has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to

consummate the transactions contemplated by this Agreement to be consummated by Seller, and to direct and cause L LLC to perform all actions contemplated to be performed by it hereunder. The execution and delivery of this Agreement by Seller and the consummation by Seller of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of Seller are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by Seller and, assuming due authorization, execution and delivery by Buyer, constitutes a legally valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors and by general principles of equity regardless of whether enforcement is considered in a proceeding in equity or at Law.

Section 3.5 No Conflict; Required Filings and Consents.

3.5.1 The execution and delivery of this Agreement by Seller and the Company does not, and the performance of this Agreement and the consummation of the transactions contemplated hereby by Seller and the Company will not (A) conflict with or violate any provision of the Company Charter or the Company Bylaws, the certificate of incorporation of Seller or the bylaws of Seller, or any equivalent organizational documents of any Company Subsidiary, (B) assuming that all consents, approvals, authorizations and permits described in Section 3.5.2 have been obtained and all filings and notifications described in Section 3.5.2 have been made and any waiting periods thereunder have terminated or expired, conflict with or violate any Law applicable to Seller, the Company or any Company Subsidiary or by which any property or asset of Seller, the Company or any Company Subsidiary is bound or (C) except as set forth in Section 3.5.1 of the Company Disclosure Schedule, result in any breach of or any loss of any benefit under, or constitute a change of control or default (or an event which with notice or lapse of time or both would become a default) under, or give to others any right of termination, acceleration or cancellation of, or result in the creation of a lien or other encumbrance (other than Permitted Liens) on any property or asset of Seller, the Company or any Company Subsidiary pursuant to any note, bond, mortgage, indenture, Contract, agreement, lease, Company Permit or other legally binding obligation to which Seller, the Company or any Company Subsidiary is a party, except, as to clauses (B) and (C), respectively, for any such conflicts, violations, breaches, defaults or other occurrences that would not reasonably be expected to, individually or in the aggregate, materially and adversely affect the Company or any Company Subsidiary.

3.5.2 Except as set forth in Section 3.5.2 of the Company Disclosure Schedule, the execution and delivery of this Agreement by Seller and the Company does not, and the performance of this Agreement by Seller and the Company will not, require any consent, license, waivers, approval, authorization, order or permit of, or filing with or notification to, any Governmental Authority (collectively, “Governmental

Authorizations”), except as may be required under the Securities Act, the Exchange Act, any applicable Blue Sky Laws or the Antitrust Laws.

Section 3.6 Permits; Compliance with Law.

Except as set forth in Section 3.6 of the Company Disclosure Schedule, (A) each of the Company and each Company Subsidiary is in possession of all authorizations, licenses, permits, certificates, approvals and clearances of any Governmental Authority, to the knowledge of the Company, necessary for the Company and each Company Subsidiary to own, lease and operate its properties or to carry on its respective business substantially as it is being conducted as of the date hereof (the “Company Permits”), and all such Company Permits are valid and in full force and effect, except where the failure to be in possession of, the suspension or cancellation of, the failure to be valid or in full force and effect of any of the Company Permits has not, and would not reasonably be expected to, individually or in the aggregate, materially and adversely affect the Company or any Company Subsidiary; (B) since December 31, 2010, the Company, RedEnvelope and each Company Subsidiary has conducted its respective business in all material respects in accordance with any Law applicable to the Company or any Company Subsidiary or by which any property or asset of the Company or any Company Subsidiary is bound or any Company Permits; and (C) since December 31, 2010, neither the Company, RedEnvelope nor any Company Subsidiary has received, nor has Seller received in respect of any of them, any written notification or communication from any Governmental Authority asserting that any of the Company or any Company Subsidiary is not in compliance with any applicable Laws, initiating any proceeding or, to the knowledge of Seller, threatening an investigation into the business or operations of the Company or any Company Subsidiary.

Section 3.7 Financial Statements; Undisclosed Liabilities.

3.7.1 Set forth in Section 3.7.1 of the Company Disclosure Schedule is (A) the Company’s unaudited consolidated balance sheet as of June 30, 2014 and the related statements of operations and cash flows for the 6-month period then ended (the “Interim Balance Sheet”), (B) the Company’s unaudited consolidated balance sheet and statements of operations, stockholder’s equity and cash flows for the fiscal years ended December 31, 2012 and December 31, 2011, (C) the Company’s unaudited statement of operations for the twelve-month period ended March 31, 2014 and (D) the Company’s audited consolidated balance sheets and statements of operations, stockholder’s equity and cash flows for the fiscal years ended December 31, 2013 (such audited statements, including the related notes and schedules thereto, the “Audited Financials”, and together with such unaudited statements, including, if any, the related notes and schedules thereto, the “Financial Statements”).

3.7.2 Except as set forth in Section 3.7.2 of the Company Disclosure Schedule, each of the Financial Statements have been based upon the information contained in the Company’s, the Company Subsidiaries’ and RedEnvelope’s books and records and (A) presents fairly in all material respects the consolidated financial condition, results of operations and cash flows of the Company and its Subsidiaries as

at the dates and for the periods indicated therein, and (B) has been prepared in accordance with GAAP consistently applied by the Company without modification of the accounting principles used in the preparation thereof throughout the periods presented (subject in the case of the interim financial statements to (x) the absence of footnote disclosures and similar presentation items not required by GAAP to be contained in interim financial statements (none of which footnote disclosures or presentational items that are materially different from the footnote disclosures and presentational items set forth in the Audited Financials (applied mutatis mutandis) would, individually or in the aggregate, be materially adverse to the business operations, assets, liabilities or financial condition of the Company or the Company Subsidiaries other than any such differences that are reasonably apparent from the information contained in any Financial Statements), (y) changes resulting from normal year-end adjustments and (z) as otherwise specifically described in such Financial Statements).

3.7.3 All books, records and accounts of the Company and the Company Subsidiaries are accurate and complete and are maintained in all material respects in accordance with all applicable Laws. Except as set forth in Section 3.7.3 of the Company Disclosure Schedule, the Company and the Company Subsidiaries maintain systems of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorization, (B) transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP and to maintain accountability for assets and (C) access to assets is permitted only in accordance with management’s general or specific authorization.

3.7.4 Except as set forth in Section 3.7.4 of the Company Disclosure Schedule, Seller’s and the Company’s executive officers and their financial officers have disclosed, based on their most recent evaluation, to Seller’s and the Company’s auditors and to the boards of directors of Seller and the Company and to Buyer (A) all material weaknesses and significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data and have identified for the Company’s auditors and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls.

3.7.5 None of the Company or any Company Subsidiary has any Indebtedness or liabilities of a nature required under GAAP to be reflected on a balance sheet or the notes thereto other than those (A) incurred in connection with the transactions contemplated hereby, (B) specifically reflected on or reserved against in the Financial Statements, (C) incurred in the Ordinary Course of Business since January 1, 2014 or (D) that, individually and in the aggregate, are immaterial to the Company and the Company Subsidiaries, taken as a whole.

Section 3.8 Proxy Statement.

The Proxy Statement, or amendments or supplements thereto, insofar as it reflects information supplied by or on behalf of Seller or the Company for use therein, at

(A) the time the Proxy Statement (or any amendment thereof or supplement thereto) is first made publicly available to Buyer’s stockholders and (B) the time of the Buyer Meeting, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

Section 3.9 Absence of Certain Changes or Events.

Except as set forth in Section 3.9 of the Company Disclosure Schedule, during the period beginning on December 31, 2013 and ending on the date of this Agreement, there has not been a Company Material Adverse Effect and neither the Company nor any Company Subsidiary has, directly or indirectly, done, or agreed to do, any of the following: (A) increased in any manner the compensation of, or entered into any new or amended compensatory agreement or arrangement with, any of the directors, officers, employees, consultants or independent contractors of the Company or any Company Subsidiary, except, in each case, as required by an existing agreement or as made in the Ordinary Course of Business; (B) paid or agreed to pay any pension, retirement allowance or other employee benefit to any such individual, whether past or present, except, in each case, as required by an existing agreement or as made in the Ordinary Course of Business; (C) made any commitment or incurred any liability to any labor organization; (D) other than in the Ordinary Course of Business, or as required by an existing Contract to which the Company or any Company Subsidiary is a party, (i) hired any individual to be a director, officer, employee, consultant or independent contractor of the Company or any Company Subsidiary or (ii) terminated any director, officer, employee, consultant or independent contractor of the Company or any Subsidiary, other than terminations for cause (as determined by the Company in the Ordinary Course of Business); (E) sold, leased, transferred or otherwise disposed of any of their assets outside the Ordinary Course of Business (other than sales of inventory or sales or other dispositions of obsolete assets or assets with no book value); (F) made any capital expenditures, or commitments for capital expenditures, in either case, which are not otherwise a part of the current annual operating plan furnished to Buyer; (G) made any operating expenditures, or any new binding commitments for operating expenditures, in either case (i) in excess of $500,000 in the aggregate and (ii) which are not reflected on the Interim Balance Sheet or the current annual operating plan furnished to Buyer; (H) permitted the Company or any Company Subsidiary to enter into or agree to enter into any merger or consolidation with, any corporation or other entity, or invest in the equity of, make a loan or capital contribution to, or otherwise acquire the securities of any other person; (I) waived or released any material right of the Company or any Company Subsidiary; or (J) made any investments in or loans to, or entered into or modified any Contract with Seller or any Affiliate of Seller other than the Company or any Company Subsidiary.

Section 3.10 Employee Benefit Plans.

3.10.1 Section 3.10.1 of the Company Disclosure Schedule sets forth a true and complete list of each Company Benefit Plan. “Company Benefit Plan” means each “employee benefit plan” as defined in Section 3(3) of the Employee Retirement

Income Security Act of 1974, as amended (“ERISA”), and any other plan, policy, program, practice, agreement, understanding or arrangement (whether written or oral) providing compensation or other benefits to any current or former director, officer, employee or consultant of the Company or any Company Subsidiary (or to any dependent or beneficiary thereof), which is maintained, sponsored or contributed to by the Company or any Company Subsidiary, or under which the Company or any Company Subsidiary has any actual or contingent obligation or liability, including all incentive, bonus, deferred compensation, cafeteria, medical, disability, severance, stock purchase or equity based compensation plans, policies or programs.

3.10.2 The Company has delivered or made available to Buyer true and complete copies of (A) each material Company Benefit Plan, (B) any amendments thereto, (C) the related summary plan description (together with all summaries of material modifications) and prospectus, if any, (D) each related trust or custodial agreement, (E) each deposit administration, group annuity, insurance or other funding agreement associated with each Company Benefit Plan, (F) the most recent actuarial reports relating to post-employment benefits or other benefit plans for which such materials are in the possession of the Company and (G) the most recent 5500 annual return for any Company Benefit Plan that files such returns.

3.10.3 Each Company Benefit Plan has been administered in all respects in accordance with its terms and all applicable Laws, including ERISA and the Code.

3.10.4 Each Company Benefit Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter or notification, advisory or opinion letter, as applicable, from the IRS as to its qualified status, copies of which have been delivered to or made available to Buyer, and, to Seller’s knowledge, no fact or event has occurred that would reasonably be expected to adversely affect the qualified status of any such Company Benefit Plan. There has been no prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code, other than a transaction that is exempt under a statutory or administrative exemption) with respect to any Company Benefit Plan that would result in liability to the Company. No suit, administrative proceeding, action or other litigation has been brought, or to the knowledge of Seller, is threatened against or with respect to any Company Benefit Plan, including any audit or inquiry by the IRS or United States Department of Labor (other than routine benefits claims).

3.10.5 No Company Benefit Plan is a multiemployer pension plan (as defined in Section 3(37) of ERISA). Neither the Company nor any Company Subsidiary has incurred any liability under Title IV of ERISA which has not been satisfied in full. No event has occurred, and no condition or circumstance exists that, alone or together with any other event, condition or circumstance, would result in any liability under Title IV of ERISA or Section 412 of the Code being imposed upon the Company or any Company Subsidiary.

3.10.6 The Company has no unfunded liabilities in connection with any of the Company Benefit Plans that are not appropriately reflected in the Financial Statements in accordance with GAAP. All contributions, premium payments and other payments due from the Company or any Company Subsidiary to or under the Company Benefit Plans have been paid or deposited, as applicable, in a timely manner.

3.10.7 Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement will, alone or in connection with any other event (including any termination of employment or service), (A) result in any payment or benefit becoming due under any Company Benefit Plan, (B) increase any payments or benefits otherwise payable under any Company Benefit Plan, (C) result in the acceleration of the time of payment or vesting of any payments or benefits under any Company Benefit Plan to any extent, or (D) result in the forgiveness in whole or in part of any outstanding loans made by the Company or any Company Subsidiary to any person.

3.10.8 No amount that would be received from any Company Benefit Plan (whether in cash or property or the vesting of property) as a result of the consummation of the transactions contemplated by this Agreement (whether alone or together with any other event or circumstance) by any employee, officer or director of the Company or any Company Subsidiary who is a “disqualified individual” (as such term is defined in Treasury Regulation Section 1.280G-1) would be characterized as an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code).

3.10.9 Except as required by Law, no Company Benefit Plan provides any post-employment medical or life insurance benefits.

3.10.10 The Company and each applicable Company Subsidiary has reserved all rights necessary to amend or terminate each of the Company Benefit Plans that provide health and/or welfare benefits without the consent of any other person or entity and without any liability other than for benefit claims owed with respect to the period prior to the date of termination.

3.10.11 Each Company Benefit Plan that is a nonqualified deferred compensation plan subject to Section 409A of the Code has been maintained, operated and administered in good faith compliance under published guidance under Section 409A of the Code in terms of both operation and documentation. No Company Benefit Plan provides any individual with an indemnity, a “gross up” or any similar payment or right in respect of any Taxes that may become payable under Section 409A or Section 4999 of the Code.

Section 3.11 Labor and Other Employment Matters.

3.11.1 Except as set forth on Section 3.11.1 of the Company Disclosure Schedule, each of the Company and each Company Subsidiary is in compliance in all material respects with all applicable Laws respecting labor, employment, fair employment practices, terms and conditions of employment, workers’

compensation, occupational safety, plant closings, and wages and hours. Neither the Company, any Company Subsidiary, nor Seller (with regard to the Company or any Company Subsidiary) is, nor have any of them been within the past three years, a party to a collective bargaining agreement and no labor union has been certified to represent any employee of the Company or any Company Subsidiary, or Seller with regard to the Company or any Company Subsidiary or has applied to represent or is attempting to organize so as to represent such employees. There is no pending or, to the knowledge of Seller, threatened work stoppage, slowdown or labor strike against the Company or any Company Subsidiary or Seller with regard to the Company or any Company Subsidiary.

3.11.2 Except as set forth on Section 3.11.2 of the Company Disclosure Schedule, there are no (A) severance, change in control, or stay bonus agreements with directors, officers or employees of the Company or any Company Subsidiary or (B) severance programs of the Company or any Company Subsidiary with or relating to their respective employees.

Section 3.12 Material Contracts.

3.12.1 As of the date of this Agreement, except as set forth on the applicable subsection in Section 3.12 of the Company Disclosure Schedule, neither the Company nor any Company Subsidiary is a party to any:

3.12.1.1 Contract with Seller, any of Seller’s Affiliates (other than the Company or any of its wholly owned Subsidiaries), or any of their respective directors, officers or employees;

3.12.1.2 Contract with any Company Subsidiary or RedEnvelope;

3.12.1.3 Contract for the sale of any of the assets of the Company or any Company Subsidiary other than in the Ordinary Course of Business or for the grant to any person of any preferential rights to purchase any of its assets;

3.12.1.4 Contract for joint ventures, partnerships or similar arrangements;

3.12.1.5 Contract, nor is RedEnvelope party to any Contract, containing covenants of the Company or any Company Subsidiary (or containing any covenants otherwise obligating the Company or any Company Subsidiary) not to compete in any line of business or with any person in any geographical area or not to solicit or hire any person with respect to employment or covenants of any third party not to compete with the Company or any Company Subsidiary in any line of business or in any geographical area or, other than employee non-solicit covenants with respect to service agreements entered into with contractors or consultants in the Ordinary Course of Business, not to solicit or hire any employee of the Company or any Company Subsidiary with respect to employment;

3.12.1.6 Contract relating to the acquisition by any of the Company or any Company Subsidiary of any operating business or assets outside of the Ordinary Course of Business, whether by merger, the purchase of equity interests or the purchase of all or substantially all of the assets of any other person;

3.12.1.7 Contract relating to the incurrence, assumption or guarantee of any Indebtedness or imposing a Lien on any of the assets of the Company or any Company Subsidiary, including indentures, guarantees, loan or credit agreements, sale and leaseback agreements, purchase money obligations incurred in connection with the acquisition of property, mortgages, pledge agreements, security agreements, or conditional sale or title retention agreements;

3.12.1.8 purchase Contract giving rise to liabilities or obligations of the Company or any Company Subsidiary in excess of $1,000,000 in any fiscal year;

3.12.1.9 Contract providing for payments to the Company or any Company Subsidiary in excess of $250,000 in any fiscal year or $500,000 in the aggregate during the term thereof;

3.12.1.10 Contract obligating the Company or any Company Subsidiary to provide or obtain products for a period of one year or more or requiring the Company or any Company Subsidiary to purchase or sell a stated portion of its requirements or outputs;

3.12.1.11 Contract under which the Company or any Company Subsidiary has made advances or loans to any other person (excluding trade receivables in the Ordinary Course of Business and advances to employees in the Ordinary Course of Business);

3.12.1.12 Contract providing for severance, retention or change in control payments to be made to employees, directors or independent contractors;

3.12.1.13 Contract for the employment of any individual on a full-time or part-time basis providing annual base salary in excess of $100,000;

3.12.1.14 Contract with any individual that is a consultant or independent contractor pursuant to which the Company or any Company Subsidiary is required to make payments to such consultant or independent contractor in excess of $100,000 in any fiscal year;

3.12.1.15 outstanding Contract of guaranty, surety or indemnification (other than commercial Contracts entered into in the Ordinary Course of Business containing indemnification provisions), direct or indirect, by the Company or any Company Subsidiary;

3.12.1.16 Contract (or group of related Contracts) which involve the expenditure by the Company or any Company Subsidiary of more than $1,000,000

annually or $2,000,000 in the aggregate, and is not terminable upon sixty (60) days’ or less notice without penalty;

3.12.1.17 Contract under which the Company grants to a third party rights to Company Owned IP, or under which the Company is granted rights to Intellectual Property owned by a third party which Intellectual Property is material to the Company’s operations, including any agreement entered into to resolve Intellectual Property Litigation or any threatened Intellectual Property Litigation but excluding any Contract for off-the-shelf software;

3.12.1.18 Contract that is a Real Estate Lease; and

3.12.1.19 Contract that is otherwise material to the Company or any Company Subsidiary, the termination, cancellation or modification of which would have, or be reasonably expected to have, a material and adverse effect on the operation of the Company’s business.

3.12.2 Each Contract required to be disclosed in Section 3.12 of the Company Disclosure Schedule (each, a “Company Material Contract”) is in full force and effect and is the legal, valid and binding obligation of the Company or Company Subsidiary which is party thereto (except as such enforceability may be limited by bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors and by general principles of equity regardless of whether enforcement is considered in a proceeding in equity or at Law and assuming that such Contracts are the legal, valid and binding obligation of the other party thereto), and, to the knowledge of Seller, of the other parties thereto enforceable against each of them in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors and by general principles of equity regardless of whether enforcement is considered in a proceeding in equity or at Law) and, upon consummation of the transactions contemplated by this Agreement, shall, except as otherwise stated in Section 3.12 of the Company Disclosure Schedule, continue in full force and effect. Except as set forth on Section 3.12.2 of the Company Disclosure Schedule, (A) neither the Company nor any Company Subsidiary is in default under any Company Material Contract, nor, to Seller’s knowledge, is any other party to any Company Material Contract in breach of or default thereunder, and no event has occurred that with the lapse of time or the giving of notice or both would constitute a breach or default on the part of the Company or any Company Subsidiary or any other party thereunder and (B) no party to any of the Company Material Contracts has exercised any termination rights with respect thereto, and no party has given written notice of any significant dispute with respect to any Company Material Contract. Buyer has been given access to a true and correct copy of all written Company Material Contracts, together with all amendments, waivers or other changes thereto. Seller has provided Buyer with written summaries of all oral Company Material Contracts.

Section 3.13 Litigation.

3.13.1 Except as set forth on Section 3.13.1 of the Company Disclosure Schedule, as of the date of this Agreement, to the knowledge of Seller, there is no Litigation threatened, nor, to the knowledge of Seller, is there any investigation pending, in each case, against the Company, RedEnvelope or any Company Subsidiary or against Seller with regard to the Company, RedEnvelope or any Company Subsidiary.

3.13.2 Section 3.13.2 of the Company Disclosure Schedule sets forth a list of all Litigation as of the date of this Agreement to which the Company, RedEnvelope or any Company Subsidiary is a party, or to which Seller is party with regard to the Company, RedEnvelope or any Company Subsidiary and involves a claim for damages in excess of $1,000,000 or for injunctive or other similar equitable relief. Section 3.13.2 of the Company Disclosure Schedule sets forth a list of all outstanding judgments, orders, writs, injunctions or decrees as of the date of this Agreement to which the Company, RedEnvelope or any Company Subsidiary or any of their Assets is subject or to which Seller is subject with regard to the Company, RedEnvelope or any Company Subsidiary.

Section 3.14 Environmental Matters.

3.14.1 Each of the Company and each Company Subsidiary is and, since December 31, 2010, has been in compliance with applicable Environmental Laws and hold all Environmental Permits necessary to conduct their current operations.

3.14.2 Except as set forth on Section 3.14.2 of the Company Disclosure Schedule, none of the Company or any Company Subsidiary has entered into or agreed to any consent decree or order or is subject to any judgment, decree or judicial order relating to compliance with or liability under Environmental Laws, Environmental Permits or the investigation, sampling, monitoring, treatment, remediation, removal or cleanup of or exposure to Hazardous Materials and no investigation, Litigation or other proceeding is pending or, to the knowledge of Seller, threatened in writing with respect thereto.

3.14.3 Except as set forth on Section 3.14.3 of the Company Disclosure Schedule, to the knowledge of Seller, there is currently no contamination from Hazardous Materials on any real property currently or previously owned, leased or operated by the Company or any Company Subsidiary, including any real property that the Company or any Company Subsidiary is the beneficial owner of as trustee, that requires cleanup, remediation or any other type of response action by the Company or any Company Subsidiary pursuant to any Environmental Law or contractual obligation.

Section 3.15 Intellectual Property.

3.15.1 Section 3.15.1 of the Company Disclosure Schedule sets forth, with the owner, country(ies) or region, registration and application numbers and

registration and application dates indicated, as applicable, all Company Owned IP that is issued or registered or that has been applied for and is pending issuance or registration with any Governmental Authority. All fees, taxes, annuities and other payments associated with filing, prosecuting, issuing, recording, registering or maintaining all such Company Owned IP owed to any Governmental Authority and due as of the Closing Date have been paid in full through the Closing Date in a timely manner to the proper Governmental Authority. All Company Owned IP listed or required to be listed thereon is active, to the knowledge of Seller is valid and enforceable, and is owned solely by the Company and/or any Company Subsidiary.

3.15.2 (A) each of the Company and the Company Subsidiaries owns or possesses valid rights to use all Intellectual Property necessary to conduct the business of the Company and the Company Subsidiaries as is currently conducted, and except as set forth on Section 3.15.2 of the Company Disclosure Schedule, (B) (i) during the past six years, the Company has not received any written complaint, demand or notice alleging that the Company or any Company Subsidiary has infringed upon or misappropriated any Intellectual Property right of any third party in connection with the operation of their business, there is no suit, claim, action or proceeding pending or, to the knowledge of Seller or the Company, threatened, alleging that the Company or any Company Subsidiary has infringed upon or misappropriated any Intellectual Property right of any third party in connection with the operation of their business, and (ii) to the Company’s knowledge, no third party is currently infringing or misappropriating any Company Owned IP. None of the Company Owned IP, and, to the knowledge of Seller, none of the Company Licensed IP, is the subject of any order, decree or injunction of any Governmental Authority, and neither the Company nor any Company Subsidiary has been subject to any order, decree or injunction of any Governmental Authority in respect of any other person’s Intellectual Property.

3.15.3 Except as set forth on Section 3.15.3 of the Company Disclosure Schedule, to the knowledge of the Seller, the operation of the business of the Company and Company Subsidiaries as currently conducted by Company or any part thereof, and the possession or use of the Acquired Company IP has, does not and will not infringe, misappropriate, dilute, violate or otherwise conflict with any Intellectual Property right of any other person (including any Affiliate of the Company), nor does or will the operation of the business of the Company or Company Subsidiaries as currently conducted by the Company constitute unfair competition or deceptive or unfair trade practice.

3.15.4 To the knowledge of Seller, all data and personal information used or maintained by the Company and/or the Company Subsidiaries have been collected, maintained, used and transferred in all respects in accordance with the Company and/or Company Subsidiaries’ applicable data protection and privacy principles and policies. All such data protection and privacy principles and policies are designed and administered in all respects in accordance with applicable Laws. Except as set forth on Section 3.15.4 of the Company Disclosure Schedule, the Company has not within the past three years initiated an investigation for any claim based on the loss

of or unauthorized disclosure or transfer of personal data or information, and, to the knowledge of Seller, no facts or circumstances exist that might give rise to such a claim.

3.15.5 To the knowledge of Seller, no director, officer, stockholder, employee, consultant, contractor, agent or other representative of the Company or any Company Subsidiary owns or claims any rights in (nor has any of them made application for) any Company Owned IP.

3.15.6 Except as set forth in Section 3.15.6 of the Company Disclosure Schedule, the Company and Company Subsidiaries have entered into an “Employee Nondisclosure and Assignment Agreement” with each of their officers, employees, consultants, contractors and agents and any other person with access to the confidential Acquired Company IP, including the trade secrets therein, to protect the confidentiality and value thereof, and, to the knowledge of Seller, there has not been any breach by any of the foregoing to any such agreement. The Company and Company Subsidiaries have taken commercially reasonable measures at least commensurate with industry standards to maintain the confidentiality thereof and in each such case using not less than a reasonable degree of care under the circumstances.

3.15.7 Except as set forth in Section 3.15.7 of the Company Disclosure Schedule, the Company owns or has a valid right to access and use all Company IT Systems. The Company IT Systems (A) are adequate for, and operate and perform in all respects as required in connection with, the operation of the business of Company as currently conducted, and (B) do not, to the knowledge of Seller, contain any viruses, worms, trojan horses, bugs, faults or other devices, errors, contaminants or effects that are specifically designed to maliciously (i) disrupt or adversely affect the functionality of any Company IT Systems, except as disclosed in their documentation, or (ii) enable or assist any person to access without authorization any Company IT Systems. No Company or Company Subsidiary developed Software, or Software developed on behalf of or for the Company or any Company Subsidiary, incorporates, uses or includes any Open Source Materials known to be in violation of an Open Source License.

3.15.8 Except as set forth on Section 3.15.8 of the Company Disclosure Schedule, (A) the Company has taken reasonable steps in accordance with normal industry standards to secure the Company IT Systems from unauthorized access or use by any person, and to ensure the continued, uninterrupted, and error-free operation of the Company IT Systems, including employing security, maintenance, disaster recovery, redundancy, backup, archiving, and virus or malicious device scanning/protection measures in accordance with normal industry standards and (B) to the knowledge of Seller, no person has gained unauthorized access to any Company IT Systems.

Section 3.16 Assets and Properties.

Each of the Company and the Company Subsidiaries has good (and with respect to real estate, marketable) title to, or a valid leasehold interest in, as applicable, all of its owned or leased real property (including all rights, title, privileges and appurtenances pertaining or relating thereto) free and clear of any and all liens, except for Permitted Liens and for liens, defects or failures to be in full force and effect which do not in the aggregate detract from the value of such property or assets or impair the use thereof in the operation of the business of the Company or any Company Subsidiary. Neither the Company nor any of the Company Subsidiaries owns any real property. Section 3.16 of the Company Disclosure Schedule lists all leases, licenses and subleases of any real property to which the Company or any Company Subsidiary is a party as of the date of this Agreement (each, a “Real Estate Lease”). Each of the Company and the Company Subsidiaries has title to, or a valid leasehold interest in, as applicable, all personal property necessary to operate their respective businesses free and clear of any and all liens, except for Permitted Liens and for liens, defects or failures to be in full force and effect which do not detract from the value of such property or assets or impair the use thereof in the operation of the business of the Company or any Company Subsidiary. Such personal property and owned or leased property are in good operating condition and repair, ordinary wear and tear and commercially reasonable deferred maintenance excepted, and except for such failures to be in good operating condition and repair which would not reasonably be expected to impair the use thereof in the operation of the business of the Company or any Company Subsidiary. The assets and properties owned by the Company and the Company Subsidiaries constitute all of the assets and properties necessary to operate their respective businesses as currently conducted, and are sufficient for the Company and the Company Subsidiaries to conduct their respective businesses from and after the Closing without interruption and in the Ordinary Course of Business.

Section 3.17 Taxes.

3.17.1 Except as set forth in Section 3.17.1 of the Company Disclosure Schedule, (A) all Tax Returns required to be filed with any Taxing Authority by or on behalf of the Company and each Company Subsidiary (including any consolidated, combined, unitary or affiliated Tax group Tax Returns of which the Company or any Company Subsidiary is or has been a member) have been timely filed (taking into account any extension of time within which to file); (B) all such Tax Returns were complete and correct and have been prepared in substantial compliance with applicable Law; and (C) all Taxes due and payable by the Company and each Company Subsidiary have been timely paid (whether or not such Taxes were shown on any Tax Return to be due). Section 3.17.1 of the Company Disclosure Schedule sets forth all jurisdictions in which the Company and/or Company Subsidiaries are currently required to file any Income Tax Returns.

3.17.2 Except as set forth in Section 3.17.2 of the Company Disclosure Schedule, (A) no outstanding written claim has been received, and no audit, action, suit, nexus inquiry or proceeding is in progress, against or with respect to the Company or

any Company Subsidiary in respect of any Tax; and (B) all deficiencies, assessments or proposed adjustments asserted against the Company or any Company Subsidiary, directly or by reason of inclusion in a consolidated, combined, unitary or affiliated Tax group, by any Taxing Authority have been paid or fully and finally settled.

3.17.3 Except as set forth in Section 3.17.3 of the Company Disclosure Schedule, neither the Company nor any Company Subsidiary has waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect to any Tax assessment or deficiency for any open tax year.

3.17.4 There are no Tax liens upon any property or assets of the Company or any Company Subsidiary, except for Permitted Liens.

3.17.5 Except as set forth in Section 3.17.5 of the Company Disclosure Schedule, neither the Company nor any Company Subsidiary (A) has been a member of an affiliated, combined, consolidated or unitary Tax group since January 1, 2009 for purposes of filing any Tax Return, other than a group of which Seller or any of its Subsidiaries was the common parent (a “Seller Affiliated Group”), (B) has any liability for Taxes of any person under Treasury Regulations Section 1.1502-6 or any similar provision of state, local or foreign Law (other than any liability arising from membership in a Seller Affiliated Group) or as a transferee or successor, or (C) is a party to or bound by any Tax sharing, Tax indemnity or Tax allocation agreement (other than commercial agreements the primary purpose of which does not relate to Taxes).

3.17.6 The Company and each Company Subsidiary have complied with all applicable Laws relating to the payment and withholding of Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 3121 and 3402 of the Code or similar provisions under any Federal, state, local or foreign Laws) and have, within the time and in substantial compliance with the manner prescribed by applicable Law, withheld from employee wages and paid over to the proper Taxing Authority all amounts required to be so withheld and paid over under applicable Law.

3.17.7 Except as set forth in Section 3.17.7 of the Company Disclosure Schedule, none of the Company, the Company Subsidiaries, or their respective predecessors has been the “distributing corporation” or “controlled corporation” (as such terms are defined in Section 355 of the Code) with respect to a distribution of stock described in or intended to qualify for tax-free treatment (in whole or in part) under Section 355(a) or 361 of the Code (A) within the two-year period ending as of the date of this Agreement, or (B) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) that includes the transactions contemplated by this Agreement.

3.17.8 Except as set forth in Section 3.17.8 of the Company Disclosure Schedule, no written claim or nexus inquiry, in each case which has not been resolved, has been received by the Company or any Company Subsidiary from a Taxing Authority in a jurisdiction where the Company or such Company Subsidiary does not file a Tax

Return asserting that the Company or such Company Subsidiary is or may be subject to taxation by that jurisdiction.

3.17.9 Neither the Company nor any Company Subsidiary is or has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code.

3.17.10 Except as set forth in Section 3.17.10 of the Company Disclosure Schedule, neither the Company nor any Company Subsidiary will be required to include any material amount of income in taxable income for any Post-Closing Tax Period (A) under Section 481(c) of the Code (or any comparable provision of Law) as a result of a change in method of accounting made prior to the Closing, (B) pursuant to any installment sale or other open transaction disposition occurring prior to the Closing, (C) as a result of an election under Section 108(i) of the Code made prior to the Closing in connection with any indebtedness of the Company or any Company Subsidiary which is discharged, (D) as a result of any prepaid amount received prior to the Closing, or (E) pursuant to the provisions of any agreement entered into prior to the Closing with any Taxing Authority with regard to any Tax liability of the Company or any Company Subsidiary.

3.17.11 Neither the Company nor any Company Subsidiary has participated in any “listed transaction” as defined in Treasury Regulation Section 1.6011-4(b)(2).

3.17.12 None of the Company Subsidiaries is a “controlled foreign corporation” as defined in Section 957 of the Code.

3.17.13 Neither the Company nor any Company Subsidiary has ever participated in an international boycott within the meaning of Section 999 of the Code.

3.17.14 Section 3.17.14 of the Company Disclosure Schedule sets forth each Tax ruling, Tax holiday or abatement and other agreement with any Taxing Authority with respect to Taxes of the Company or the Company Subsidiaries which will (A) remain in effect following the Closing or (B) terminate as a result of the transactions contemplated by this Agreement with respect to the Company or any Company Subsidiary; the Company and the Company Subsidiaries are in substantial compliance with each such Tax ruling, Tax holiday and other agreement.

3.17.15 The Company and its Subsidiaries are and have been in substantial compliance with applicable transfer pricing laws and regulations, including the execution and maintenance of contemporaneous documentation substantiating transfer pricing practices of the Company and its Subsidiaries.

3.17.16 Section 3.17.16 of the Company Disclosure Schedule contains a true and complete list for the current Tax year and each of the previous three Tax years of (A) each country (other than the United States) in which the Company or any Company Subsidiary has or had a permanent establishment, as defined in any

applicable Tax treaty or convention between the United States and such foreign country; and (B) each country (other than the United States) within which the Company or any Company Subsidiary is currently or was previously engaged in a trade or business for tax purposes under applicable Law.

3.17.17 The Company and the Company Subsidiaries have timely filed, or caused to be timely filed, all reports, statements, information returns or declarations required by any abandonment or unclaimed property, escheat and similar Law. All amounts due to any Governmental Authority under any abandonment or unclaimed property, escheat or similar Law have been timely remitted by the Company or the Company Subsidiaries.

Section 3.18 Brokers.

No broker, investment banker, financial advisor or other person is entitled to any brokerage, finder’s, financial advisor’s or other similar fee or commission from the Company or any Company Subsidiary in connection with the transactions contemplated by this Agreement.

Section 3.19 Insurance.

Seller has insurance policies (the “Policies”) in full force and effect (A) for such amounts as are sufficient for all requirements of Law and all Company Material Contracts to which the Company or any of the Company Subsidiaries is a party, and (B) which are in such amounts, with such deductibles and against such risks and losses, as, to the knowledge of Seller, are reasonable for the business, assets and properties of the Company and the Company Subsidiaries.

Section 3.20 Investigation by Seller; Limitation on Warranties; Investment Representations.

3.20.1 Seller (A) has such knowledge and experience in business and financial matters as to be capable of evaluating the risks and merits of the transactions contemplated hereby, (B) has adequate information and has made its own independent investigation concerning the business, assets, properties, condition (financial or otherwise), risks, and results of operations of Buyer to make an informed decision regarding the purchase of the Restricted Securities, (C) has relied solely upon its own investigation and analysis, without reliance upon any information other than what is publicly available, and (D) acknowledges that Buyer specifically makes no representation or warranty of any kind regarding the Restricted Stock and the business, operations, financial condition or prospects of Buyer, and Seller hereby disclaims reliance on any representation or warranty of any kind (including as to the accuracy or completeness thereof), other than those expressly set forth in this Agreement.

3.20.2 Seller is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act.

3.20.3 Seller is acquiring the Restricted Stock solely for the purpose of investment for its own account, not as a nominee or agent, and not with a view to, or for offer or sale in connection with, any distribution thereof in any transaction which would be in violation of federal or state securities laws. Seller has no Contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to any other person with respect to any of the Restricted Stock.

Article 4.
REPRESENTATIONS AND WARRANTIES OF BUYER

Except as set forth in Buyer’s SEC Filings filed prior to the date of this Agreement (but disregarding disclosures contained under the heading “Risk Factors,” or disclosures set forth in any “forward-looking statements” disclaimer or any other statements that are similarly non-specific or cautionary, predictive or forward-looking in nature), Buyer hereby represents and warrants to Seller and the Company, as of the date hereof and as of the Closing Date, as follows:

Section 4.1 Organization and Qualification; Subsidiaries.

Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. Section 4.1 of the Buyer Disclosure Schedule sets forth a true and complete list of all of the Subsidiaries of Buyer (each a “Buyer Subsidiary” and, collectively, the “Buyer Subsidiaries”). Each Buyer Subsidiary is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, as the case may be. Buyer and each Buyer Subsidiary has the requisite corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted. Buyer and each Buyer Subsidiary is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification, licensing or good standing necessary. None of Buyer or any Buyer Subsidiary holds an Equity Interest in any other person other than any Buyer Subsidiary.

Section 4.2 Certificate of Incorporation and Bylaws.

Buyer’s Certificate of Incorporation (the “Buyer Charter”) and bylaws (the “Buyer Bylaws”) listed as exhibits to the Buyer SEC Filings are true, complete and correct copies. Buyer has made available to Seller and the Company a true, complete and correct copy of the charter and bylaws (or equivalent organizational documents) of each Buyer Subsidiary.

Section 4.3 Capitalization.

4.3.1 Prior to the consummation of the transactions contemplated hereby, the authorized capital stock of Buyer consists of 65,000,000 shares of capital

stock, of which 60,000,000 are designated Buyer Common Stock and 5,000,000 are designated preferred stock, par value $0.0001 (“Buyer Preferred Stock”). As of July 29, 2014, (A) 18,948,447 shares of Buyer Common Stock were issued and outstanding, all of which were duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights, (B) zero (0) shares of Buyer Common Stock were held in the treasury of Buyer or by the Buyer Subsidiaries (other than shares held in trust accounts or otherwise held for or on behalf of third parties in a fiduciary, custodian or similar capacity where none of Buyer or the Buyer Subsidiaries is the beneficial owner), (C) 280,777 shares of Buyer Common Stock are reserved for issuance under the FTD Companies, Inc. Incentive Compensation Plan (the “Buyer Stock Plan”) and (D) 388,408 shares of Buyer Common Stock are reserved for issuance under the FTD Companies, Inc. Amended and Restated 2013 Employee Stock Purchase Plan. As of the date hereof, (i) 388,952 shares of Buyer Common Stock are subject to issuance pursuant to the exercise of options to purchase Buyer Common Stock (“Buyer Options”) outstanding under the Buyer Stock Plan and (ii) there are 578,640 shares of Buyer Common Stock reserved for issuance upon the settlement of restricted stock units granted under the Buyer Stock Plan (“Buyer Stock Award”). As of the date hereof, zero (0) shares of Buyer Preferred Stock are issued and outstanding.

4.3.2 As of July 29, 2014, except for Buyer Options issued under the Buyer Stock Plan to purchase 388,952 shares of Buyer Common Stock in the aggregate and 578,640 shares of Buyer Stock Award in the aggregate, there are no options, warrants or other rights to acquire capital stock or other Equity Interests of Buyer or any Buyer Subsidiary, or securities convertible into or exchangeable for capital stock or other Equity Interests of Buyer or any Buyer Subsidiary, or other rights, instruments or obligations which derive value based upon Buyer Common Stock but are not settled solely in shares of Buyer Common Stock. Since July 29, 2014, and through the date of this Agreement, Buyer has not issued any shares of its capital stock or other Equity Interests or securities convertible into or exchangeable or exercisable for capital stock or other Equity Interests of Buyer, other than Buyer Options issued pursuant to the Buyer Stock Plan, shares pursuant to exercise of Buyer Options, and shares of Buyer Stock Award. The shares of Restricted Stock to be issued at the Closing, when issued as contemplated herein, will be duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights.

4.3.3 Except with respect to the Buyer Options, the shares of Buyer Stock Award, the Buyer Stock Plan and the related grant agreements, there are no outstanding Rights with respect to Buyer or any of the Buyer Subsidiaries. Each outstanding share of capital stock of each Buyer Subsidiary is duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights.

Section 4.4 Authority.

Buyer has requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and, subject to Buyer Stockholder Approval, to consummate the transactions contemplated by this Agreement to be consummated by Buyer. The execution and delivery of this Agreement by Buyer and

the consummation by Buyer of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of Buyer and no vote of the holders of any class or series of capital stock or other Equity Interests of Buyer are necessary to authorize this Agreement or to consummate the transactions contemplated hereby other than the Buyer Stockholder Approval. This Agreement has been duly executed and delivered by Buyer and, assuming due authorization, execution and delivery by Seller and the Company, constitutes a legally valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors and by general principles of equity regardless of whether enforcement is considered in a proceeding in equity or at Law.

Section 4.5 No Conflict; Required Filings and Consents.

4.5.1 The execution and delivery of this Agreement by Buyer does not, and the performance of this Agreement and the consummation of the transactions contemplated hereby by Buyer will not, (A) conflict with or violate any provision of the Buyer Charter or the Buyer Bylaws, (B) assuming that all consents, approvals, authorizations and permits described in Section 4.5.1 have been obtained and all filings and notifications described in Section 4.5.1 have been made and any waiting periods thereunder have terminated or expired, conflict with or violate any Law applicable to Buyer or any Buyer Subsidiary or by which any property or asset of Buyer or any Buyer Subsidiary is bound or (C) except as set forth in Section 4.5.1 of the Buyer Disclosure Schedule, result in any breach of, or any loss of any benefit under, or constitute a change of control or default (or an event which with notice or lapse of time or both would become a default) under, or give to others any right of termination, acceleration or cancellation of, or result in the creation of a lien or other encumbrance (other than Permitted Liens) on any property or asset of Buyer or any Buyer Subsidiary pursuant to, any note, bond, mortgage, indenture, Contract, agreement, lease, Buyer Permit or other legally binding obligation to which Buyer or any Buyer Subsidiary is party, except, as to clauses (B) and (C), respectively, for any such conflicts, violations, breaches, defaults or other occurrences which would not reasonably be expected to, individually or in the aggregate, materially and adversely affect Buyer.

4.5.2 The execution and delivery of this Agreement by Buyer does not, and the performance of this Agreement by Buyer will not, require any Governmental Authorizations, except as may be required under the Exchange Act, the Securities Act, any applicable Blue Sky Laws or the Antitrust Laws.

Section 4.6 Permits; Compliance with Law.

Each of Buyer and each Buyer Subsidiary is in possession of all authorizations, licenses, permits, certificates, approvals and clearances of any Governmental Authority, to the knowledge of the Buyer, necessary for Buyer and each Buyer Subsidiary to own, lease and operate its properties or to carry on its respective

business substantially as it is being conducted as of the date hereof (the “Buyer Permits”), and all such Buyer Permits are valid, and in full force and effect, except where the failure to be in possession of, the suspension or cancellation of, failure to be valid or in full force and effect of, any of the Buyer Permits has not, and would not reasonably be expected to, individually or in the aggregate, materially and adversely affect Buyer or any Buyer Subsidiary. Since December 31, 2010, Buyer and each Buyer Subsidiary has conducted its respective business in all material respects in accordance with any Law applicable to Buyer or any Buyer Subsidiary or by which any property or asset of Buyer or any Buyer Subsidiary is bound or any Buyer Permits. Since December 31, 2010, neither Buyer nor any Buyer Subsidiary has received any written notification or communication from any Governmental Authority asserting that any of Buyer or any Buyer Subsidiary is not in compliance with any Laws, initiating any proceeding or, to the knowledge of Buyer, threatening an investigation into the business or operations of Buyer or any Buyer Subsidiary.

Section 4.7 SEC Filings; Financial Statements; Other Reports.

4.7.1 Buyer has filed all registration statements, information statements, prospectuses, forms, reports, definitive proxy statements, schedules and other documents required to be filed with the SEC by it under the Securities Act or the Exchange Act, as the case may be, from and after November 1, 2013 (collectively, the “Buyer SEC Filings”). Each Buyer SEC Filing, (A) as of its date, or, if amended or supplemented, as of the date of the most recent amendment or supplement thereto prior to the date hereof, complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and (B) did not, at the time it was filed (or became effective in the case of registration statements), or, if amended or supplemented prior to the date hereof, as of the date of the most recent amendment or supplement thereto, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No Buyer Subsidiary is separately subject to the periodic reporting requirements of the Exchange Act.

4.7.2 Each of the principal executive officer of Buyer and the principal financial officer of Buyer (or each former principal executive officer of Buyer and each former principal financial officer of Buyer, as applicable) has made all applicable certifications required by Rule 13a-14 or 15d-14 under the Exchange Act and Sections 302 and 906 of SOX with respect to the Buyer SEC Filings.

4.7.3 Except as has not had, individually or in the aggregate, a Buyer Material Adverse Effect, Buyer maintains a system of “internal control over financial reporting” (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable assurances to Buyer and the Buyer Board (A) that transactions of Buyer and the Buyer Subsidiaries are recorded as necessary to permit preparation of financial statements in conformity with GAAP, (B) that receipts and expenditures of Buyer and the Buyer Subsidiaries are made only in accordance with the authorizations of management and the Buyer Board and (C) regarding prevention or

timely detection of the unauthorized acquisition, use or disposition of Buyer’s assets that would have an effect on Buyer’s financial statements. The books and records of Buyer and the Buyer Subsidiaries have been, and are being, maintained in all material respects in accordance with applicable legal and accounting requirements and reflect only actual transactions.

4.7.4 Except as has not had, individually or in the aggregate, a Buyer Material Adverse Effect, Buyer has not received any written notification from its outside auditors of any (A) “significant deficiency” or (B) “material weakness” in Buyer’s internal controls over financial reporting on or after January 1, 2013. To the knowledge of Buyer, there is no outstanding “significant deficiency” or “material weakness” (in each case, as defined by Public Company Accounting Oversight Board rule) that has not been appropriately and adequately remedied by Buyer.

4.7.5 Each of the consolidated financial statements (including any notes thereto) contained in the Buyer SEC Filings, as amended, supplemented or restated, if applicable prior to the date hereof, was prepared in accordance with GAAP applied (in the case of unaudited quarterly financial statements, as permitted by Form 10-Q under the Exchange Act) on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto), and each of such consolidated financial statements, presented fairly, in all material respects, the consolidated financial position, results of operations, comprehensive income (as required by GAAP), changes in stockholders’ equity, and cash flows of Buyer and the consolidated Buyer Subsidiaries as of the respective dates thereof and for the respective periods indicated therein (subject, in the case of unaudited quarterly financial statements, to normal year-end adjustments).

4.7.6 Except as and to the extent set forth (A) on the consolidated balance sheet of Buyer and the consolidated Buyer Subsidiaries as of December 31, 2013, included in Buyer’s annual report filed on Form 10-K for the year ended December 31, 2013, including the notes thereto, or (B) in the Buyer SEC Filings filed after December 31, 2013, none of Buyer or any consolidated Buyer Subsidiary had at the relevant balance sheet date, any liabilities or obligations that would be required to be reflected or reserved against on a balance sheet (or in the notes thereto) prepared in accordance with GAAP and none have arisen since such date, except, in each case, for liabilities or obligations (i) incurred in connection with the transactions contemplated hereby, (ii) incurred in the Ordinary Course of Business since January 1, 2014 or (iii) that have not had, individually or in the aggregate, a Buyer Material Adverse Effect.

Section 4.8 Proxy Statement.

4.8.1 The Proxy Statement, and any amendments or supplements thereto, that Buyer is responsible for filing at (A) the time the Proxy Statement (or any amendment thereof or supplement thereto) is first made publicly available to the stockholders of Buyer and (B) the time of the Buyer Meeting will comply as to form in all material respects with the applicable requirements of the Securities Act, the Exchange Act and other applicable Law.

4.8.2 The representations and warranties contained in this Section 4.8 will not apply to the failure of the Proxy Statement to comply as to form as a result of, or statements or omissions included therein based upon, information supplied to Buyer by or on behalf of Seller or the Company.

Section 4.9 Absence of Certain Changes or Events.

Since December 31, 2013, except as (A) disclosed in the Buyer SEC Filings filed after December 31, 2013, and prior to the date of this Agreement (but disregarding disclosures contained under the heading “Risk Factors,” or disclosures set forth in any “forward-looking statements” disclaimer or any other statements that are similarly non-specific or cautionary, predictive or forward-looking in nature), or (B) contemplated by this Agreement, there has not been (i) a Buyer Material Adverse Effect or (ii) any action taken by Buyer or any Buyer Subsidiary during the period from December 31, 2013 through the date of this Agreement that would have required Seller’s consent if Buyer had been subject to Section 5.2 at such time.

Section 4.10 Employee Benefit Plans.

4.10.1 Section 4.10.1 of the Buyer Disclosure Schedule sets forth a true and complete list of each Buyer Benefit Plan. “Buyer Benefit Plan” means each “employee benefit plan” as defined in Section 3(3) of ERISA, and any other plan, policy, program, practice, agreement (excluding employment agreements and offer letters with employees entered into in the Ordinary Course of Business, and agreements with consultants or contractors that are not cancelable without penalty or further payment and without more than 30 days’ notice), understanding or arrangement (whether written or oral) providing compensation or other benefits to any current or former director, officer, employee or consultant of Buyer or any Buyer Subsidiary (or to any dependent or beneficiary thereof), which is maintained, sponsored or contributed to by Buyer or any Buyer Subsidiary, or under which Buyer or any Buyer Subsidiary has any actual or contingent obligation or liability, including all incentive, bonus, deferred compensation, cafeteria, medical, disability, severance, stock purchase or equity based compensation plans, policies or programs.

4.10.2 Buyer has delivered or made available to the Company true and complete copies of (A) each material Buyer Benefit Plan, (B) any amendments thereto, (C) the related summary plan description (together with all summaries of material modifications) and prospectus, if any, (D) each related trust or custodial agreement, (E) each deposit administration, group annuity, insurance or other funding agreement associated with each Buyer Benefit Plan, (F) the most recent actuarial reports relating to post-employment benefits and (G) the most recent 5500 annual return for any Buyer Benefit Plan that files such returns.

4.10.3 Each Buyer Benefit Plan has been administered in all respects in accordance with its terms and all applicable Laws, including ERISA and the Code.

4.10.4 Each Buyer Benefit Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter or notification, advisory or opinion letter, as applicable, from the IRS as to its qualified status and, to Buyer’s knowledge, no fact or event has occurred that would reasonably be expected to adversely affect the qualified status of any such Buyer Benefit Plan. There has been no prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code, other than a transaction that is exempt under a statutory or administrative exemption) with respect to any Buyer Benefit Plan that would result in liability to Buyer. No suit, administrative proceeding, action or other litigation has been brought, or to the knowledge of Buyer, is threatened against or with respect to any Buyer Benefit Plan, including any audit or inquiry by the IRS or United States Department of Labor (other than routine benefits claims).

4.10.5 No Buyer Benefit Plan is a multiemployer pension plan (as defined in Section 3(37) of ERISA). Neither Buyer nor any Buyer Subsidiary has incurred any liability under Title IV of ERISA which has not been satisfied in full. No event has occurred, and no condition or circumstance exists that, alone or together with any other event, condition or circumstance, would result in any liability under Title IV of ERISA being imposed upon Buyer or any Buyer Subsidiary as a result of the transactions contemplated by this Agreement.

4.10.6 Buyer has no unfunded liabilities in connection with any of Buyer Benefit Plans that are not appropriately reflected in the Buyer’s financial statements in accordance with GAAP. All contributions, premium payments and other payments due from Buyer or any Buyer Subsidiary to or under Buyer Benefit Plans have been paid or deposited, as applicable, in a timely manner.

4.10.7 Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement will, alone or in connection with any other event (including any termination of employment or service), (A) result in any payment or benefit becoming due under any Buyer Benefit Plan, (B) increase any payments or benefits otherwise payable under any Buyer Benefit Plan, (C) result in the acceleration of the time of payment or vesting of any payments or benefits under any Buyer Benefit Plan to any extent, or (D) result in the forgiveness in whole or in part of any outstanding loans made by Buyer or any Buyer Subsidiary to any person.

4.10.8 No amount that would be received from any Buyer Benefit Plan (whether in cash or property or the vesting of property) as a result of the consummation of the transactions contemplated by this Agreement (whether alone or together with any other event or circumstance) by any employee, officer or director of the Buyer or any Buyer Subsidiary who is a “disqualified individual” (as such term is defined in Treasury Regulation Section 1.280G-1) would be characterized as an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code).

4.10.9 Except as required by Law, no Buyer Benefit Plan provides any post-employment medical or life insurance benefits.

4.10.10 Buyer and each applicable Buyer Subsidiary has reserved all rights necessary to amend or terminate each of the Buyer Benefit Plans that provide health and/or welfare benefits without the consent of any other person or entity and without any liability other than for benefit claims owed with respect to the period prior to the date of termination.

4.10.11 Each Buyer Benefit Plan that is a nonqualified deferred compensation plan subject to Section 409A of the Code has been maintained, operated and administered in good faith compliance under published guidance under Section 409A of the Code in terms of both operation and documentation. No Buyer Benefit Plan provides any individual with an indemnity, a “gross up” or any similar payment or right in respect of any Taxes that may become payable under Section 409A or Section 4999 of the Code.

Section 4.11 Labor and Other Employment Matters.

Buyer and each Buyer Subsidiary is in compliance in all material respects with all applicable Laws respecting labor, employment, fair employment practices, terms and conditions of employment, workers’ compensation, occupational safety, plant closings, and wages and hours. Neither Buyer nor any Buyer Subsidiary is, or has been within the past three years, a party to a collective bargaining agreement and no labor union has been certified to represent any employee or Buyer or any Buyer Subsidiary, or has applied to represent or is attempting to organize so as to represent such employees. There is no pending or, to the knowledge of Buyer, threatened work stoppage, slowdown or labor strike against Buyer or any Buyer Subsidiary.

Section 4.12 Material Contracts.

4.12.1 Except for Contracts set forth on the “Exhibit Index” included in Buyer’s Form 10-K for the year ended December 31, 2013 or the Buyer SEC Filings filed before the date of this Agreement, as of the date of this Agreement, neither Buyer nor any Buyer Subsidiary, nor any of their respective assets, properties, businesses or operations is a party to, bound or affected by, or receives benefits under any Contract which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) (a “Buyer Material Contract”).

4.12.2 Each Buyer Material Contract is in full force and effect and is the legal, valid and binding obligation of Buyer or Buyer Subsidiary which is party thereto, and, to the knowledge of Buyer, of the other parties thereto enforceable against each of them in accordance with its terms and, upon consummation of the transactions contemplated by this Agreement, shall, except as otherwise stated in Section 4.12 of the Buyer Disclosure Schedule, continue in full force and effect. Neither the Buyer nor any Buyer Subsidiary is in default under any Buyer Material Contract, nor, to Buyer’s knowledge, is any other party to any Buyer Material Contract in breach of or default thereunder, and no event has occurred that with the lapse of time or the giving of notice or both would constitute a breach or default on the part of Buyer or any Buyer Subsidiary or any other party thereunder. No party to any of the Buyer Material

Contracts has exercised any termination rights with respect thereto, and no party has given notice of any significant dispute with respect to any Buyer Material Contract. Seller has been given access to a true and correct copy of all written Buyer Material Contracts, together with all amendments, waivers or other changes thereto, and Buyer has provided Seller with written summaries of all oral Buyer Material Contracts.

Section 4.13 Litigation.

4.13.1 Section 4.13.1 of the Buyer Disclosure Schedule sets forth a list of all Litigation as of the date of this Agreement (A) to which Buyer or any Buyer Subsidiary is a party and (B) involves a claim against Buyer or a Buyer Subsidiary for damages in excess of $1,000,000 or for injunctive or other similar equitable relief. Section 4.13.1 of the Buyer Disclosure Schedule sets forth a list of all outstanding judgments, orders, writs, injunctions or decrees as of the date of this Agreement to which Buyer or any Buyer Subsidiary or any of their Assets is subject.

4.13.2 As of the date of this Agreement, to the knowledge of Buyer, there is no Litigation threatened, nor, to the knowledge of Buyer, is there any investigation pending, in each case, against Buyer or any Buyer Subsidiary.

Section 4.14 Environmental Matters.

4.14.1 Each of Buyer and each Buyer Subsidiary is and, since December 31, 2013, has been in compliance with applicable Environmental Laws and hold all Environmental Permits necessary to conduct their current operations.

4.14.2 None of Buyer or any Buyer Subsidiary has entered into or agreed to any consent decree or order or is subject to any judgment, decree or judicial order relating to compliance with or Liability under Environmental Laws, Environmental Permits or the investigation, sampling, monitoring, treatment, remediation, removal or cleanup of or exposure to Hazardous Materials and no investigation, Litigation or other proceeding is pending or, to the knowledge of Buyer, threatened in writing with respect thereto.

4.14.3 To the knowledge of Buyer, there is currently no contamination from Hazardous Materials on any real property currently or previously owned, leased or operated by Buyer or any Buyer Subsidiary, including any real property that Buyer or any Buyer Subsidiary is the beneficial owner of as trustee, that requires cleanup, remediation or any other type of response action by Buyer or any Buyer Subsidiary pursuant to any Environmental Law or contractual obligation.

Section 4.15 Intellectual Property.

4.15.1 (A) each of Buyer and the Buyer Subsidiaries owns or possesses valid rights to use all Intellectual Property necessary to conduct the business of Buyer and the Buyer Subsidiaries as is currently conducted, and (B) (i) during the past four years, Buyer has not received any written complaint, demand or notice

alleging that Buyer or any Buyer Subsidiary has infringed upon or misappropriated any Intellectual Property right of any third party in connection with the operation of their business, there is no suit, claim, action or proceeding pending or, to the knowledge of Buyer, threatened alleging that Buyer or any Buyer Subsidiary has infringed upon or misappropriated any Intellectual Property right of any third party in connection with the operation of their business, and (ii) to Buyer’s knowledge, no third party is currently infringing or misappropriating Intellectual Property owned by Buyer or any Buyer Subsidiary. None of the Buyer Owned IP is the subject of any order, decree or injunction of any Governmental Authority, and neither Buyer nor any Buyer Subsidiary has been subject to any order, decree or injunction of any Governmental Authority in respect of any other person’s Intellectual Property.

4.15.2 To the knowledge of the Buyer, the operation of the business of the Buyer and Buyer Subsidiaries as currently conducted by Buyer or any part thereof, does not and will not infringe, misappropriate, dilute, violate or otherwise conflict with any Intellectual Property right of any other person.

4.15.3 To the knowledge of Buyer, all data and personal information used or maintained by the Buyer and/or the Buyer Subsidiaries have been collected, maintained, used and transferred in all respects in accordance with the Buyer’s and/or Buyer Subsidiaries’ applicable data protection and privacy principles and policies. All such data protection and privacy principles and policies are designed and administered in all respects in accordance with applicable Laws. Except as set forth in Section 4.15.3 of the Buyer Disclosure Schedule, the Buyer and/or the Buyer Subsidiaries have not within the past three years initiated an investigation for any claim based on the loss of or unauthorized disclosure or transfer of personal data or information, and, to the knowledge of Buyer, no facts or circumstances exist that might give rise to such a claim.

4.15.4 To the knowledge of Buyer, no director, officer, stockholder, employee, consultant, contractor, agent or other representative of Buyer or any Buyer Subsidiary owns or claims any rights in (nor has any of them made application for) any Buyer Owned IP.

4.15.5 Buyer has entered into confidentiality and nondisclosure agreements with all of its directors, officers, employees, consultants, contractors and agents and any other person with access to the confidential Buyer Owned IP, including the trade secrets therein, to protect the confidentiality and value thereof, and, to the knowledge of Buyer, there has not been any breach by any of the foregoing to any such agreement. Buyer and Buyer Subsidiaries have taken commercially reasonable measures at least commensurate with industry standards to maintain the confidentiality thereof and in each such case using not less than a reasonable degree of care under the circumstances.

4.15.6 Buyer owns or has a valid right to access and use all Buyer IT Systems. The Buyer IT Systems (A) are adequate for, and operate and perform in all respects as required in connection with, the operation of the business of Buyer as currently conducted, and (B) do not, to the knowledge of Buyer, contain any viruses,

worms, trojan horses, bugs, faults or other devices, errors, contaminants or effects that are specifically designed to maliciously (i) disrupt or adversely affect the functionality of any Buyer IT Systems, except as disclosed in their documentation, or (ii) enable or assist any person to access without authorization any Buyer IT Systems.

4.15.7 Buyer has taken reasonable steps in accordance with normal industry standards to secure the Buyer IT Systems from unauthorized access or use by any person, and to ensure the continued, uninterrupted, and error-free operation of the Buyer IT Systems, including employing security, maintenance, disaster recovery, redundancy, backup, archiving, and virus or malicious device scanning/protection measures in accordance with normal industry standards. To the knowledge of Buyer, no person has gained unauthorized access to any Buyer IT Systems.

Section 4.16 Assets and Properties.

Each of Buyer and the Buyer Subsidiaries has good (and with respect to real estate, marketable) title to, or a valid leasehold interest in, as applicable, all of its owned or leased real property (including all rights, title, privileges and appurtenances pertaining or relating thereto) free and clear of any and all liens, except for Permitted Liens and for liens, defects or failures to be in full force and effect which do not in the aggregate detract from the value of such property or assets or impair the use thereof in the operation of the business of Buyer or any Buyer Subsidiary. Each of Buyer and the Buyer Subsidiaries has title to, or a valid leasehold interest in, as applicable, all personal property necessary to operate their respective businesses free and clear of any and all liens, except for Permitted Liens and for liens, defects or failures to be in full force and effect which do not detract from the value of such property or assets or impair the use thereof in the operation of the business of Buyer or any Buyer Subsidiary. Such personal property and owned or leased property are in good operating condition and repair, ordinary wear and tear and commercially reasonable deferred maintenance excepted, and except for such failures to be in good operating condition and repair which would not reasonably be expected to impair the use thereof in the operation of the business of Buyer or any Buyer Subsidiary.

Section 4.17 Taxes.

4.17.1 Except as set forth in Section 4.17.1 of the Buyer Disclosure Schedule, (A) all Tax Returns required to be filed with any Taxing Authority by or on behalf of Buyer and each Buyer Subsidiary (including any consolidated, combined, unitary or affiliated Tax group Tax Returns of which Buyer or any Buyer Subsidiary is or has been a member) have been timely filed (taking into account any extension of time within which to file); (B) all such Tax Returns were complete and correct and have been prepared in substantial compliance with applicable Law; and (C) all Taxes due and payable by Buyer and each Buyer Subsidiary have been timely paid (whether or not such Taxes were shown on any Tax Return to be due). Section 4.17.1 of the Buyer Disclosure Schedule sets forth all jurisdictions in which Buyer and/or the Buyer Subsidiaries are currently required to file any Income Tax Returns.

4.17.2 Except as set forth in Section 4.17.2 of the Buyer Disclosure Schedule, (A) no outstanding written claim has been received, and no audit, action, suit, nexus inquiry or proceeding is in progress, against or with respect to the Buyer or any Buyer Subsidiary in respect of any Tax; and (B) all deficiencies, assessments or proposed adjustments asserted against Buyer or any Buyer Subsidiary, directly or by reason of inclusion in a consolidated, combined, unitary or affiliated Tax group, by any Taxing Authority have been paid or fully and finally settled.

4.17.3 Except as set forth in Section 4.17.3 of the Buyer Disclosure Schedule, neither Buyer nor any Buyer Subsidiary has waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect to any Tax assessment or deficiency for any open tax year.

4.17.4 There are no Tax liens upon any property or assets of Buyer or any Buyer Subsidiary, except for Permitted Liens.

4.17.5 Except as set forth in Section 4.17.5 of the Buyer Disclosure Schedule, neither Buyer nor any Buyer Subsidiary (A) has been a member of an affiliated, combined, consolidated or unitary Tax group since January 1, 2009 for purposes of filing any Tax Return, other than a group of which Buyer or any of its Subsidiaries was the common parent (a “Buyer Affiliated Group”), (B) has any liability for Taxes of any person under Treasury Regulations Section 1.1502-6 or any similar provision of state, local or foreign Law (other than any liability arising from membership in a Buyer Affiliated Group) or as a transferee or successor, or (C) is a party to or bound by any Tax sharing, Tax indemnity or Tax allocation agreement (other than commercial agreements the primary purpose of which does not relate to Taxes).

4.17.6 Buyer and each Buyer Subsidiary have complied with all applicable Laws relating to the payment and withholding of any Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 3121 and 3402 of the Code or similar provisions under any Federal, state, local or foreign Laws) and have, within the time and in substantial compliance with the manner prescribed by applicable Law, withheld from employee wages and paid over to the proper Taxing Authority all amounts required to be so withheld and paid over under applicable Law.

4.17.7 Except for the distribution of all of Buyer’s stock by United Online, Inc. to its stockholders effected on November 1, 2013, none of Buyer, the Buyer Subsidiaries, or their respective predecessors has been the “distributing corporation” or “controlled corporation” (as such terms are defined in Section 355 of the Code) with respect to a distribution of stock described in or intended to qualify for tax-free treatment (in whole or in part) under Section 355(a) or 361 of the Code (A) within the two-year period ending as of the date of this Agreement, or (B) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) that includes the transactions contemplated by this Agreement.

4.17.8 Except as set forth in Section 4.17.8 of the Buyer Disclosure Schedule, no written claim or nexus inquiry has been received by Buyer or any Buyer Subsidiary from a Taxing Authority in a jurisdiction where Buyer or such Buyer Subsidiary does not file a Tax Return asserting that Buyer or such Buyer Subsidiary is or may be subject to taxation by that jurisdiction.

4.17.9 Neither Buyer nor any Buyer Subsidiary is or has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code.

4.17.10 Except as set forth in Section 4.17.10 of the Buyer Disclosure Schedule, neither Buyer nor any Buyer Subsidiary will be required to include any material amount of income in taxable income for any Post-Closing Tax Period (A) under Section 481(c) of the Code (or any comparable provision of Law) as a result of a change in method of accounting made prior to the Closing, (B) pursuant to any installment sale or other open transaction disposition occurring prior to the Closing, (C) as a result of an election under Section 108(i) of the Code made prior to the Closing in connection with any indebtedness of Buyer or any Buyer Subsidiary which is discharged, (D) as a result of any prepaid amount received prior to the Closing, or (E) pursuant to the provisions of any agreement entered into prior to the Closing with any Taxing Authority with regard to any Tax liability of Buyer or any Buyer Subsidiary.

4.17.11 Neither Buyer nor any Buyer Subsidiary has participated in any “listed transaction” as defined in Treasury Regulation Section 1.6011-4(b)(2).

4.17.12 Except as set forth in Section 4.17.12 of the Buyer Disclosure Schedule, none of the Buyer Subsidiaries is a “controlled foreign corporation” as defined in Section 957 of the Code.

4.17.13 Neither Buyer nor any Buyer Subsidiary has ever participated in an international boycott within the meaning of Section 999 of the Code.

4.17.14 Section 4.17.14 of the Buyer Disclosure Schedule sets forth each Tax ruling, Tax holiday or abatement and other agreement with any Taxing Authority with respect to Taxes of Buyer or the Buyer Subsidiaries which will (i) remain in effect following the Closing or (ii) terminate as a result of the transactions contemplated by this Agreement with respect to Buyer or any Buyer Subsidiary; Buyer and the Buyer Subsidiaries are in substantial compliance with each such Tax ruling, Tax holiday and other agreement.

4.17.15 The Buyer and its Subsidiaries are and have been in compliance with applicable transfer pricing laws and regulations, including the execution and maintenance of contemporaneous documentation substantiating transfer pricing practices of the Buyer and its Subsidiaries.

4.17.16 Section 4.17.16 of the Buyer Disclosure Schedule contains a true and complete list for the current Tax year and each of the previous three Tax years

of (i) each country (other than the United States) in which Buyer or any Buyer Subsidiary has or had a permanent establishment, as defined in any applicable Tax treaty or convention between the United States and such foreign country; and (ii) each country (other than the United States) within which Buyer or any Buyer Subsidiary is currently or was previously engaged in a trade or business for tax purposes under applicable Law.

4.17.17 The Buyer and the Buyer Subsidiaries have timely filed, or caused to be timely filed, all reports, statements, information returns or declarations required by any abandonment or unclaimed property, escheat and similar Law. All amounts due to any Governmental Authority under any abandonment or unclaimed property, escheat or similar Law have been timely remitted by Buyer or the Buyer Subsidiaries.

4.17.18 Buyer and its Subsidiaries and Affiliates do not have any plan or intention to (A) liquidate the Company for U.S. federal income tax purposes, (B) cause the Company to make an election or take any other action to be classified as a partnership or as a disregarded entity within the meaning of Section 301.7701-3 of the Treasury Regulations for U.S. federal income tax purposes, (C) merge the Company with or into Buyer or any Subsidiary or Affiliate of Buyer, or (D) take any other action following the Closing that would reasonably be expected, if treated as part of the same plan with the Transaction, to cause the Transaction to qualify as a reorganization under Section 368(a) of the Code.

Section 4.18 Vote Required.

The affirmative vote of the holders of a majority of the shares of Buyer Common Stock present in person or represented by proxy at the Buyer Meeting (the “Required Buyer Stockholders”) is necessary to approve the Stock Issuance (the “Buyer Stockholder Approval”).

Section 4.19 Brokers.

No broker, investment banker, financial advisor or other person (other than Moelis & Company) is entitled to any brokerage, finder’s, financial advisor’s or other similar fee or commission from Buyer or any Buyer Subsidiary in connection with the transactions contemplated by this Agreement.

Section 4.20 Investigation by Buyer; Limitation on Warranties.

Buyer has conducted its own independent review and analysis of the business, operations, assets, liabilities, results of operations, financial condition and technology of the Company and acknowledges that Buyer has been provided access to personnel, properties, premises and records of the Company for such purposes. In entering into this Agreement, except as expressly provided herein, Buyer has relied solely upon its independent investigation and analysis of the Company and Buyer acknowledges and agrees that it has not been induced by and has not relied upon any representations,

warranties or statements, whether express or implied, made by Seller, the Company or any of their respective directors, officers, stockholders, employees, affiliates, agents, advisors or representatives that are not expressly set forth in this Agreement, whether or not such representations, warranties or statements were made in writing or orally.

Section 4.21 Board Recommendation.

The Buyer Board has effected by resolution the Buyer Recommendation (as defined below), which recommendation remains in effect.

Section 4.22 Buyer Resolution.

Prior to the date hereof, the Buyer Board has duly adopted a resolution in the form attached hereto as Exhibit A.

Section 4.23 No Takeover Defenses Implemented.

No Stockholder Rights Provision (as defined in the Investor Rights Agreement) is in effect.

Section 4.24 Financing.

4.24.1 Buyer has delivered to Seller true and complete fully executed copies of the commitment letter, dated as of the date hereof, among Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Bank, National Association, and Wells Fargo Securities, LLC, including all exhibits, schedules, annexes and amendments to such agreement in effect as of the date of this Agreement (other than fee letters), and excerpts of those portions of each fee letter associated therewith that contain any conditions to funding or “flex” provisions or other substantive provisions (excluding provisions related solely to fees and economic terms agreed to by the parties) regarding the terms and conditions of the financing to be provided thereby (collectively, the “Commitment Letter”), pursuant to which and subject to the terms and conditions thereof each of the parties thereto (other than Buyer), have severally agreed and committed to provide the debt financing set forth therein (the “Debt Financing”).

4.24.2 The Commitment Letter has not been amended, restated or otherwise modified or waived prior to the date of this Agreement and the respective commitments contained in the Commitment Letter have not been withdrawn, modified or rescinded in any respect prior to the date of this Agreement. As of the date of this Agreement, the Commitment Letter is in full force and effect and constitutes the legal, valid and binding obligation of each of Buyer and, to the knowledge of Buyer, the other parties thereto (except as such enforceability may be limited by bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors and by general principles of equity regardless of whether enforcement is considered in a proceeding in equity or at Law).

4.24.3 There are no conditions precedent, “flex” provisions or other substantive provisions (excluding provisions related solely to fees and economic terms agreed to by the parties) regarding the terms and conditions of the Debt Financing other than as expressly set forth in the Commitment Letter.

4.24.4 Subject to the terms and conditions of the Commitment Letter and assuming the accuracy in all material respects of the representations and warranties in Article 3 of this Agreement, and assuming compliance by Seller and the Company in all material respects with all of their respective covenants contained in this Agreement, after giving effect to the Debt Financing, the financial resources of Buyer including cash on hand and the proceeds of loans under existing revolving credit facilities of Buyer on the Closing Date, will, in the aggregate, be sufficient for the satisfaction of Buyer’s obligations pursuant to Article 1 and Article 2, and of all fees and expenses reasonably expected to be incurred in connection herewith.

4.24.5 As of the date of this Agreement, (A) no event has occurred which would constitute a breach or default (or an event which with notice or lapse of time or both would constitute a default), in each case, on the part of Buyer or, to the knowledge of Buyer, any other party to the Commitment Letter, under the Commitment Letter, and (B) assuming the accuracy in all material respects of the representations and warranties contained in Article 3 hereof, and the compliance by Seller and the Company in all material respects with all of their respective covenants contained in this Agreement, Buyer believes that the conditions to the Debt Financing will be satisfied and that the Debt Financing and any other funds necessary for the satisfaction of all of Buyer’s obligations under this Agreement and of all fees and expenses reasonably expected to be incurred in connection herewith will be available to Buyer on or prior to the Closing Date. Buyer has fully paid all fees required to be paid prior to the date of this Agreement pursuant to the Commitment Letter.

Article 5.

COVENANTS

Section 5.1 Conduct of Business by Seller and the Company Pending the Closing.

5.1.1 Seller and the Company agree that, between the date of this Agreement and the Closing, except as set forth in Section 5.1.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement, including Section 5.20, or as required by applicable Law or Governmental Authority, unless Buyer shall otherwise agree in writing (which shall not unreasonably be conditioned, withheld or delayed), the Company will, and will cause each Company Subsidiary to, and Seller will cause all of the foregoing to:

5.1.1.1 conduct its operations in the Ordinary Course of Business;

5.1.1.2 use its reasonable best efforts to preserve the present business operations, organization (including key employees), goodwill, the present

relationships with persons having business dealings with it (including material customers and material suppliers);

5.1.1.3 maintain, in all material respects, the assets and properties of, or used by, it in their current condition, ordinary wear and tear excepted, and maintain insurance upon all of its properties and assets in such amounts and of such kinds comparable to that in effect on the date of this Agreement; and

5.1.1.4 comply in all material respects with all applicable Laws.

5.1.2 Without limiting the foregoing, except as set forth in Section 5.1.2 of the Company Disclosure Schedule, as required by any other provision of this Agreement, including Section 5.20, or as required by applicable Law or a Governmental Authority, the Company shall not, and shall not permit any Company Subsidiary to, and Seller shall not permit any of the foregoing to, and Seller shall not with respect to the Company or any Company Subsidiary, between the date of this Agreement and the Closing, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Buyer (which consent shall not unreasonably be withheld or delayed): (A) issue or sell any capital stock or other Equity Interests of the Company or any Company Subsidiary; (B) issue or sell any securities convertible into, or options with respect to, warrants to purchase or rights to subscribe for any shares of the Company’s or any Company Subsidiary’s capital stock; (C) effect any recapitalization, reclassification, stock dividend, stock split or like change in the Company’s or any Company Subsidiary’s capitalization; (D) amend the Company’s or any Company Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational document); (E) make any redemption or purchase of any shares of the Company’s or any Company Subsidiary’s capital stock; (F) make any distributions of assets other than cash (whether payable in property or securities) with respect to any shares of the Company’s or any Company Subsidiary’s capital stock; provided, however that notwithstanding anything to the contrary in this Section 5.1.2, the Company and the Company Subsidiaries are permitted to pay cash dividends or otherwise distribute cash to Seller and its Subsidiaries (G) liquidate, wind up or dissolve (or suffer any liquidation or dissolution); (H) increase in any manner the compensation of, or enter into any new or amended compensatory agreement or arrangement with, any of the directors, officers, employees, consultants or independent contractors of the Company or any Company Subsidiary if such increase or new or amended compensatory agreement or arrangement could result in such individual’s annual compensation increasing by more than 1% of such individual’s annual compensation in effect on the date hereof except, in each case, (1) as required by an a Company Benefit Plan as in effect on the date hereof or (2) salary increases consistent with past practice in respect of promotions of employees below the level of “Director” (including after giving effect to such promotion); (I) pay or agree to pay any pension, retirement allowance or other employee benefit to any such individual, whether past or present, except, in each case, as required by a Company Benefit Plan as in effect on the date hereof or as made in the Ordinary Course of Business; (J) enter into any new or amended severance or similar compensation agreement with any such individual; provided, that this clause (J) shall

not restrict severance payments to terminated employees in the Ordinary Course of Business pursuant to any Company Benefit Plan in existence as of the date hereof and subject to the execution of a release; (K) otherwise amend an existing employee benefits plan, or collective bargaining agreement, if such amendment could result in increased costs to the Company or enter into a new employee benefits plan, collective bargaining agreement, or make any commitment or incur any liability to any labor organization if such action could result in increased annual costs to the Company of more than $50,000 (aggregated after taking into account all such actions); (L) other than in the Ordinary Course of Business, or as required by an existing Contract as in effect on the date hereof to which the Company or any Company Subsidiary is a party, (i) hire any individual to be a director, officer, employee, consultant or independent contractor of the Company or any Company Subsidiary or (ii) terminate any director, officer, employee, consultant or independent contractor of the Company or any Subsidiary, other than terminations for cause (as determined by the Company); (M) establish or take any actions to continue any bonus plan or arrangement for a performance period occurring on or after the Closing; (N) sell, lease, transfer or otherwise dispose of any of their material assets outside the Ordinary Course of Business (other than sales of inventory or sales or other dispositions of obsolete assets or assets with no book value); (O) incur or assume any funded Indebtedness, other than short term indebtedness for borrowed money in the Ordinary Course of Business, or create or permit to exist any new Lien on any of their assets except for Permitted Liens and Liens which will be released and Indebtedness to be extinguished prior to or at the Closing; (P) make any capital expenditures, or make any new commitments for capital expenditures, in either case which are not a part of the current annual operating plan furnished to Buyer; (Q) make any operating expenditures, or make any new binding commitments for operating expenditures, in either case (i) in excess of $500,000 in the aggregate and (ii) which are not otherwise a part of the current annual operating plan furnished to Buyer and (iii) which are not required by any Material Contract; (R) fail to pay any material Tax or fail to file any material Tax Return in each case when due (taking into account any applicable extensions), except where the non-payment of any such Tax or non-filing of any such Tax Return is being diligently contested in good faith by appropriate proceedings and for which there has been an adequate accrual according to GAAP; (S) (i) materially change any Tax accounting period or method or make any material change in Tax reporting or accounting principles, practices or policies, including with respect to (a) depreciation or amortization policies or rates or (b) the payment of accounts payable or the collection of accounts receivable, (ii) settle or compromise any material Tax liability, claim or assessment or enter into any closing agreement (other than with respect to any Tax matters related to a Seller Consolidated Tax Return), (iii) make, change or rescind any Tax election that could have a material impact with respect to Taxes, (iv) amend any Tax Return, (v) surrender any right to claim a refund of any material amount of Taxes or (vi) consent to an extension or waiver of an applicable statute of limitations with respect to Tax; (T) permit the Company or any Company Subsidiary to enter into or agree to enter into any merger or consolidation with, any corporation or other entity, or invest in, make a loan, advance or capital contribution to, or otherwise acquire the securities of any other person; (U) enter into any Contract or agreement or commitment which materially restrains, restricts, limits or impedes the

ability of the Company or any Company Subsidiary to compete with or conduct any of its respective businesses in any geographic area; (V) cancel or compromise any debt or claim or waive or release any material right of the Company or any Company Subsidiary; (W) permit the Company or any Company Subsidiary to make any investments in or loans to, or enter into or modify any Contract with Seller or any Affiliate of Seller other than the Company or any Company Subsidiary, except for matters contemplated by Section 5.20; (X) amend or extend any Real Estate Lease; (Y) enter into any Contract if the effect thereof would reasonably be expected to impede or delay the receipt of the Governmental Authorizations required for the consummation of the transactions contemplated by this Agreement; or (Z) agree to do anything prohibited by this Section 5.1.

Section 5.2 Conduct of Business by Buyer Pending the Closing.

Buyer agrees that, between the date of this Agreement and the Closing, except as set forth in Section 5.2 of the Buyer Disclosure Schedule, as permitted or contemplated by any other provision of this Agreement or as required by applicable Law or the regulations or requirements of Nasdaq or other Governmental Authority, unless Seller shall otherwise agree in writing (which shall not unreasonably be withheld or delayed), Buyer will, and will cause each Buyer Subsidiary to, (A) conduct its operations in the Ordinary Course of Business, (B) use its reasonable best efforts to preserve the present business operations, organization (including officers and employees), goodwill, the present relationships with persons having business dealings with it (including material customers, material suppliers and key employees) and (C) comply in all material respects with all applicable Laws. Without limiting the foregoing, except as set forth in Section 5.2 of the Buyer Disclosure Schedule, as permitted or contemplated by any other provision of this Agreement or as required by applicable Law, Buyer shall not, and shall not permit any Buyer Subsidiary to, between the date of this Agreement and the Closing, directly or indirectly, do, or agree to do, any of the following without the prior written consent of the Company (which consent shall not unreasonably be conditioned, withheld or delayed):

5.2.1 amend its certificate of incorporation or bylaws;

5.2.2 issue or authorize the issuance of any shares of any equity securities of the Buyer of any of its Subsidiaries, including Buyer Common Stock or securities convertible or exchangeable or exercisable for any shares of any equity securities or any of its Subsidiaries, including Buyer Common Stock, or any options, warrants or other rights of any kind to acquire any shares of Buyer Common Stock, other than (A) the issuance of Buyer Options under the Buyer Stock Plan to the employees or directors of Buyer or the Buyer Subsidiaries in connection with compensation and benefits arrangements in the Ordinary Course of Business, (B) without limiting the generality of the preceding clause, the issuance of Buyer Common Stock upon the exercise of previously issued Buyer Options and only such options issued in compliance with Section 5.2.2(A), and (C) the authorization or issuance of the Stock Consideration;

5.2.3 sell, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition, transfer, lease, license, guarantee or encumbrance of, any material property or assets of Buyer or any Buyer Subsidiary, except in the Ordinary Course of Business;

5.2.4 declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof), with respect to any of its capital stock;

5.2.5 other than in the case of a wholly owned Buyer Subsidiary, reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly (other than in connection with the cashless exercise of Buyer Options), any of its capital stock, other Equity Interests or other securities;

5.2.6 settle or compromise any pending or threatened suit, action or claim relating to the transactions contemplated hereby;

5.2.7 (A) incur, assume or prepay any long-term or short-term debt or issue any debt securities, except for borrowings or prepayments under existing lines of credit in the Ordinary Course of Business and refinancing of existing indebtedness and except for borrowings solely for the purpose of satisfying Buyer’s obligations under Section 2.1.1.1 and on the terms set forth in the Commitment Letter previously provided to Seller; or (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other person, except for obligations of Buyer or any wholly owned Buyer Subsidiary incurred in compliance with clause (A);

5.2.8 with respect only to Buyer and any material Buyer Subsidiary, liquidate, wind up or dissolve (or suffer any liquidation or dissolution);

5.2.9 enter into any Contract if the effect thereof would reasonably be expected to impede or delay the receipt of the Governmental Authorizations required for the consummation of the transactions contemplated by this Agreement; or

5.2.10 authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing.

Section 5.3 Cooperation.

The Parties shall coordinate and cooperate in connection with (A) the preparation and filing of the Proxy Statement and any Other Filings contemplated hereby, (B) determining whether any actions, consents, approvals or waivers are required to be obtained from parties to any Company Material Contracts or Buyer Material Contracts, in connection with the consummation of the transactions contemplated hereby and (C) seeking to obtain any such actions, consents, approvals or waivers or making any such filings required in connection therewith or any Other Filing; provided, however, that

except as expressly provided in Article 6, no such actions, consents, approvals, waivers or filings shall constitute conditions to the Closing.

Section 5.4 Proxy; Stockholder Approval.

5.4.1 As promptly as reasonably practicable following the date of this Agreement, Buyer will prepare and file the Proxy Statement. Seller and the Company will cooperate with Buyer in connection with the preparation of the foregoing. Without limiting the generality of the foregoing, Seller and the Company will furnish to Buyer the information relating to the Company required by the Exchange Act and the rules and regulations promulgated thereunder to be set forth in the Proxy Statement and any Other Filings required in connection with the transactions contemplated hereby, and shall consent to the inclusion of such information in such filings of Buyer.

5.4.2 Buyer will use its reasonable best efforts to have the Proxy Statement cleared by the SEC as promptly as reasonably practicable after such filing. Buyer will use its reasonable best efforts to cause the Proxy Statement to be mailed to Buyer’s stockholders as promptly as reasonably practicable after the Proxy Statement is cleared by the SEC. Buyer will promptly notify Seller of the receipt of any oral or written comments from the SEC or staff of the SEC and of any request by the SEC or the staff of the SEC for amendments or supplements to the Proxy Statement or for additional information relating to the Proxy Statement. Buyer will cooperate and provide Seller with a reasonable opportunity to review and comment on the draft of the Proxy Statement (including each material amendment or material supplement thereto) and all responses to requests for additional information by and replies to comments of the SEC, prior to filing such with or sending such documents to the SEC, and Buyer and Seller will provide each other with copies of all such filings made and correspondence with the SEC with respect thereto. If at any time prior to the Buyer Meeting, any information should be discovered by any Party which should be set forth in an amendment or supplement to the Proxy Statement, or Other Filing, so that the Proxy Statement, or such Other Filing, would not include any misstatement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Party which discovers such information will as promptly as reasonably practicable notify the other Parties and, to the extent required by applicable Law, an appropriate amendment or supplement describing such information shall be as promptly as reasonably practicable filed by Buyer with the SEC and disseminated by Buyer to Buyer’s stockholders, in the case of the Proxy Statement, or otherwise reasonably addressed, in the case of any Other Filing.

5.4.3 Subject to Section 5.7 hereof, the Proxy Statement shall include the recommendation of the Buyer Board that the approval of the Stock Issuance by the Company’s stockholders pursuant to this Agreement is advisable, fair to and in the best interests of the Company’s stockholders (the “Buyer Recommendation”).

Section 5.5 Buyer Stockholders Meeting.

5.5.1 Buyer shall duly call and hold a meeting of its stockholders (including any postponements or adjournments thereof permitted by the fourth sentence of this Section 5.5, the “Buyer Meeting”) as promptly as reasonably practicable following the mailing of the Proxy Statement for the purpose of obtaining the Buyer Stockholder Approval. Buyer shall, upon the reasonable request of Seller, advise Seller as to the aggregate tally of the proxies received by Buyer with respect to the Buyer Stockholder Approval. Without the prior written consent of Seller, the Buyer Stockholder Approval will be the only matter (other than procedural matters) which Buyer shall propose to be acted upon by the stockholders of Buyer at the Buyer Meeting. Notwithstanding anything to the contrary in the preceding sentence, subject to compliance with Section 5.7, Buyer may only adjourn or postpone the Buyer Meeting on one occasion in the event of a Change Notice (as defined below) resulting from a Buyer Acquisition Proposal or Intervening Event until a date that is up to ten (10) Business Days after the delivery to Seller of a Change Notice; provided, that for avoidance of doubt only one adjournment or postponement may occur with respect to each Buyer Acquisition Proposal or Intervening Event (regardless of any modification, amendment or change, as applicable thereof).

5.5.2 Unless there has been a Buyer Adverse Recommendation Change, Buyer shall take all reasonable lawful action to solicit the Buyer Stockholder Approval. Notwithstanding anything to the contrary in this Section 5.5, Buyer shall not be required to hold the Buyer Meeting if this Agreement is terminated in accordance with the terms of this Agreement before that meeting is held.

Section 5.6 Access to Information; Confidentiality.

5.6.1 Except as otherwise required pursuant to any confidentiality agreement or similar agreement or arrangement to which the Company or any Company Subsidiary is a party, and subject to applicable Law, from the date of this Agreement to the Closing, the Company shall, and shall cause each Company Subsidiary to, and Seller shall cause each of the foregoing to (A) provide to Buyer and its officers, directors, employees, accountants, consultants, legal counsel, advisors, agents and other representatives (collectively, “Buyer Representatives”), upon reasonable prior notice to the Company, reasonable access during normal business hours to the officers of the Company and the Company Subsidiaries and to the books and records thereof and (B) furnish as promptly as reasonably practicable such information concerning the business, properties, Contracts, assets, liabilities, personnel and other aspects of the Company and the Company Subsidiaries as Buyer or the Buyer Representatives may reasonably request; provided, however, that any such access shall be conducted at a reasonable time, upon reasonable advance notice to the Company and in such a manner as not to interfere unreasonably with the operation of any business conducted by the Company or any Company Subsidiary, provided further, that the Company shall not be required to (or to cause any Company Subsidiary to) so afford such access or furnish such information to the extent that doing so would result in the loss of attorney-client privilege or require disclosure of any Seller Consolidated Tax

Return. Seller and the Company shall furnish to Buyer financial and other pertinent information regarding the Company and the Company Subsidiaries, and request the assistance and cooperation of the Company’s independent accountants and obtain the necessary consents of the Company’s auditors, with respect to the financial information required to be provided by Buyer under any Laws, including as part of any Other Filings.

5.6.2 Except as otherwise required pursuant to any confidentiality agreement or similar agreement or arrangement to which Buyer or any Buyer Subsidiary is a party, and subject to applicable Law, from the date of this Agreement to the Closing, Buyer shall, and shall cause each Buyer Subsidiary to (A) provide to Seller and its officers, directors, employees, accountants, consultants, legal counsel, advisors, agents and other representatives (collectively, “Seller Representatives”), upon reasonable prior notice to Buyer, reasonable access during normal business hours to the officers of Buyer and the Buyer Subsidiaries and to the books and records thereof and (B) furnish as promptly as reasonably practicable such information concerning the business, properties, Contracts, assets, liabilities, personnel and other aspects of Buyer and the Buyer Subsidiaries as Seller or the Seller Representatives may reasonably request; provided, however, that any such access shall be conducted at a reasonable time, upon reasonable advance notice to Buyer and in such a manner as not to interfere unreasonably with the operation of any business conducted by Buyer or any Buyer Subsidiary; provided, further, that Buyer shall not be required to (or to cause any Buyer Subsidiary to) so afford such access or furnish such information to the extent that doing so would result in the loss of attorney-client privilege or require disclosure of any Buyer Consolidated Tax Return.

5.6.3 The Company shall provide Buyer with the periodic reports set forth in Section 5.6.3 of the Company Disclosure Schedule.

5.6.4 With respect to the information disclosed pursuant to this Section 5.6, the Parties shall comply with, and cause their respective representatives to comply with, all of their respective obligations under the (i) letter agreement, dated as of February 19, 2014, entered into by Seller and Buyer, (ii) Confidentiality/Antitrust Protocol, dated May 27, 2014, by and among Buyer, the Company and the other parties thereto, (iii) Common Interest, Joint Defense, and Confidentiality Agreement, dated May 27, 2014, by and among Buyer, Seller, the Company and the other parties thereto and (iv) Clean Team Confidentiality Agreement, dated July 3, 2014 between the Company and Buyer (the “Confidentiality Agreements”).

Section 5.7 Acquisition Proposals.

5.7.1 Subject to Sections 5.7.2 and 5.7.4, Buyer agrees that it shall not, nor shall it permit or authorize any Buyer Subsidiaries or any of its or their directors or officers to, and shall not authorize or permit any other Buyer Representative to, and shall use its reasonable best efforts to cause each Buyer Representative not to, directly or indirectly, take any action to (A) solicit, initiate or encourage any Buyer Acquisition Proposal, (B) participate in any way in discussions or negotiations with, or furnish any non-public information to, any person with respect to a Buyer Acquisition Proposal other

than the transactions contemplated hereby, (C) withhold, withdraw (or not continue to make), qualify or modify (or publicly propose or resolve to withhold, withdraw (or not continue to make), qualify or modify) the Buyer Recommendation in a manner adverse to Seller, (D) other than the transactions contemplated hereby, approve, recommend or take any public position (including any position communicated to Buyer’s stockholders or any other person, but not including communications made in internal discussions among Buyer’s management and its advisors) other than “against” any Buyer Acquisition Proposal, or (E) enter into any agreement or letter of intent with respect to any Buyer Acquisition Proposal. Buyer has previously ceased and caused to be terminated any negotiations with any person (other than the Company and Seller) conducted theretofore by Buyer, the Buyer Subsidiaries or any Buyer Representative with respect to any Buyer Acquisition Proposal, and shall as promptly as reasonably practicable request that the other parties thereto, as promptly as reasonably practicable, return or destroy, subject to the terms of any agreement with such parties, any confidential information previously furnished by Buyer, the Buyer Subsidiaries or the Buyer Representatives thereunder.

5.7.2 Notwithstanding anything to the contrary contained in Section 5.7.1, Buyer or the Buyer Board, as applicable, shall be permitted to:

5.7.2.1 take and disclose to Buyer’s stockholders a position with respect to any tender or exchange offer by a third party or amend or withdraw such a position complying with Rule 14d-9 and Rule 14e-2 promulgated under the Exchange Act in a manner consistent with its other obligations under this Section 5.7; provided that this Section 5.7.2.1 shall not be deemed to permit the Buyer Board to make a Buyer Adverse Recommendation Change or take any actions referred to in Section 5.7.4, except to the extent permitted by Section 5.7.4; or

5.7.2.2 at any time prior to obtaining the Buyer Stockholder Approval, negotiate or otherwise engage in discussions with, and furnish nonpublic information to, any person in response to an unsolicited written Buyer Acquisition Proposal by such person, if (A) the Buyer Board determines in good faith after consultation with and advice from its financial advisor, that such proposal is reasonably likely to result in a Buyer Superior Proposal, (B) such person executes a confidentiality agreement no less favorable to Buyer than the letter agreement, dated as of February 19, 2014, entered into by Seller and Buyer (an “Acceptable Confidentiality Agreement”) and (C) the Buyer Board determines in good faith after consultation with Buyer’s outside legal counsel that the failure to engage in such negotiation or discussions or provide such information would violate Buyer Board’s fiduciary duties under applicable Law.

5.7.3 Buyer shall (A) notify Seller orally and in writing of the receipt of any Buyer Acquisition Proposal or any Buyer Acquisition Proposal (including the material terms thereof and the identity of the person making it) as promptly as reasonably practicable (but in no case later than 48 hours after its receipt), (B) as promptly as reasonably practicable (but in no case later than 48 hours after its receipt) inform Seller regarding any material changes to the status, terms and details (including amendments or proposed amendments) of such Buyer Acquisition Proposal, (C) deliver

to Seller concurrently with the delivery to such person or its representatives a copy of any non-public information as permitted by Section 5.7.2 which has not previously been delivered by Buyer to Seller and (D) keep Seller promptly advised of all changes to the material terms of any Buyer Acquisition Proposal. Buyer shall (A) notify Seller in writing of the occurrence of any Intervening Event (including a description thereof) as promptly as reasonably practicable (but in no case later than 48 hours after having knowledge that the relevant event or change in circumstances constitutes an Intervening Event) and (B) as promptly as reasonably practicable (but in no case later than 48 hours after having knowledge thereof) inform Seller regarding any material changes to the status and details of such Intervening Event.

5.7.4 Except as otherwise specifically permitted by this Section 5.7.4, neither the Buyer Board nor any committee thereof shall (A) withdraw or modify, or publicly propose to withdraw or modify, in a manner adverse to Seller, the Buyer Recommendation, or (B) approve, recommend or take a public position with respect to, or publicly propose to approve, recommend or take a public position with respect to, any Buyer Acquisition Proposal. Notwithstanding the foregoing and provided that Buyer has not breached this Section 5.7, prior to the Buyer Stockholder Approval, the Buyer Board shall be permitted to make a Buyer Adverse Recommendation Change, but only if (i) (y) Buyer has received a proposal which the Buyer Board determines in good faith after consultation with its financial advisor constitutes a Buyer Superior Proposal and (z) the Buyer Board determines in good faith after consultation with Buyer’s outside legal counsel that the failure to take such action would violate the Buyer Board’s fiduciary duties under applicable Law (this clause (i), a “Superior Proposal BARC”); or (ii) an event has occurred or is occurring which the Buyer Board determines in good faith (y) after consultation with and advice from its financial advisor constitutes an Intervening Event and (z) after consultation with Buyer’s outside legal counsel that the failure to take such action would violate the Buyer Board’s fiduciary duties under applicable Law (this clause (ii), an “Intervening Event BARC”). Notwithstanding anything in this Section 5.7 to the contrary, Buyer shall not exercise its right to make a Buyer Adverse Recommendation Change under this Section 5.7.4 unless (a) Buyer shall have delivered to Seller a prior written notice (a “Change Notice”), not less than five (5) Business Days prior to the time such action is intended to be taken, advising Seller that the Buyer Board intends to make a Buyer Adverse Recommendation Change, specifying in reasonable detail (A) the material terms of the Buyer Superior Proposal or (B) a description of the Intervening Event, as applicable, (b) Buyer negotiates in good faith with Seller to make such adjustments to the terms and conditions of this Agreement or the transactions contemplated hereby as would enable the Buyer Board to determine that failing to make a Buyer Adverse Recommendation Change would not violate the Buyer Board’s fiduciary duties under applicable Law, and (c) on or before the fifth (5th) Business Day following Seller’s receipt of the Change Notice, and taking into account in good faith any revised proposal made by Seller since receipt of the Change Notice, such Buyer Superior Proposal remains a Buyer Superior Proposal, or such Intervening Event remains in effect, as applicable, and the Buyer Board has again made the determinations referred to above; provided, however, that in the event that any such Buyer Acquisition Proposal is thereafter modified by the person making such Buyer

Acquisition Proposal and the Buyer Board determines to make a Buyer Adverse Recommendation Change due to such Buyer Acquisition Proposal as permitted by this Section 5.7.4, Buyer shall again comply with clauses (a) and (b) of this paragraph except that the five (5) Business Day period shall be reduced to three (3) Business Days. Concurrently with making a Buyer Superior Proposal BARC, Buyer may terminate this Agreement in accordance with Section 7.1.6 and in connection therewith enter into an agreement with respect to such Buyer Superior Proposal.

5.7.5 Notwithstanding anything to the contrary contained in the letter agreement, dated as of February 19, 2014, entered into by Seller and Buyer, upon any Buyer Adverse Recommendation Change, the restrictions and obligations set forth in (A) Section 7 thereof (Standstill), (B) the second and third sentences of Section 2(b) thereof (Agreements with Other Persons) and (C) the proviso in Section 2(d) thereof (Sources of Financing) shall thereafter be inoperative and of no force or effect.

Section 5.8 Appropriate Action; Consents; Filings.

5.8.1 Subject to Section 5.7, the Parties shall use their reasonable best efforts to (A) take, or cause to be taken, all appropriate action, and do, or cause to be done, all things necessary, proper or advisable under any applicable Law to consummate and make effective the transactions contemplated by this Agreement as promptly as reasonably practicable, (B) obtain from Governmental Authorities any Governmental Authorizations required to be obtained or made by any of the Parties or any of their respective Subsidiaries, and avoid any action or proceeding by any Governmental Authority (including those in connection with Antitrust Laws), in connection with the authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated herein, (C) make or cause to be made the applications or filings required to be made by any of the Parties or any of their respective Subsidiaries, including Governmental Authorizations, under or with respect to any Laws in connection with the authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated herein, and to pay any fees due from it in connection with such applications or filings, as promptly as reasonably practicable, and in any event within ten Business Days after the date hereof except as otherwise provided herein, (D) comply at the earliest practicable date with any request under or with respect to any such Laws for additional information, documents or other materials received by any of the Parties or any of their respective Subsidiaries from any Governmental Authority in connection with such applications or filings, including Governmental Authorizations, or the transactions contemplated by this Agreement and (E) coordinate and cooperate with, submit to the other Parties for review and give due consideration to all reasonable additions, deletions or changes suggested by the other Party in connection with, making (i) any filing or application under or with respect to any such Laws, (ii) the filings required by the HSR Act and (iii) any filings, conferences or other submissions related to resolving any investigation or other inquiry by any Governmental Authority. Each of Buyer, Seller and the Company shall, and shall cause their respective affiliates to, furnish to the other Parties all information necessary for any such application or other filings to be made in connection with the transactions

contemplated by this Agreement. Each of the Parties shall as promptly as reasonably practicable inform the other Parties of any communication with, and any proposed understanding, undertaking or agreement with any Governmental Authority regarding any such application or filing. If a Party intends to independently participate in any meeting with any Governmental Authority in respect of any such filings, investigation or other inquiry, then such Party shall give the other Parties reasonable prior notice of, and the opportunity to participate in, such meeting. The Parties shall coordinate and cooperate with one another in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any Party in connection with all meetings, actions and proceedings under or relating to any such application or filing.

5.8.2 The Parties shall give (or shall cause their respective Subsidiaries to give) any notices to third parties, and use, and cause their respective Subsidiaries to use, reasonable best efforts to obtain any third party consents necessary, proper or advisable to consummate the transactions contemplated in this Agreement, provided, however, that the Parties shall coordinate and cooperate in determining whether any actions, consents, approvals or waivers are required to be obtained from parties to any Company Material Contracts or Buyer Material Contracts in connection with consummation of the transactions contemplated hereby and seeking any such actions, consents, approvals or waivers; provided, further, that except as expressly provided in Article 6, no such actions, consents, approvals or waivers shall constitute conditions to the Closing. In the event that any Party shall fail to obtain any third party consent described in the first sentence of this Section 5.8.2, such Party shall use reasonable best efforts, and shall take any such actions reasonably requested by any of the other Parties, to mitigate any adverse effect upon the Parties, their respective Subsidiaries, and their respective businesses resulting, or which could reasonably be expected to result after the Closing, from the failure to obtain such consent; provided, however, with respect to the foregoing, each Party shall be required to only undertake reasonable actions and shall not be required to pay any amounts in connection therewith.

5.8.3 From the date of this Agreement until the Closing, each of the Parties shall as promptly as reasonably practicable notify the other Parties in writing of any pending or, to the knowledge of such Party, threatened Litigation (A) challenging or seeking material damages in connection with the transactions contemplated by this Agreement or (B) seeking to restrain or prohibit the consummation of the transactions contemplated hereby. The Parties shall use reasonable best efforts to resolve such objections, if any, as may be asserted by any Governmental Authority with respect to the transactions contemplated by this Agreement under Antitrust Laws. In connection therewith, if any Litigation is instituted (or threatened to be instituted) challenging any transactions contemplated by this Agreement as in violation of any Law, the Parties shall use reasonable best efforts, and shall cooperate, to contest and resist any such Litigation, and to have vacated, lifted, reversed, or overturned any decree, judgment, injunction or other order whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents, or restricts consummation of the transactions contemplated

by this Agreement, including by pursuing all available avenues of administrative and judicial appeal unless, by mutual agreement, the Parties decide that litigation is not in their respective best interests.

5.8.4 Notwithstanding anything to the contrary in this Agreement relating to Antitrust Laws, neither Buyer, nor any of its Affiliates (which for purposes of this sentence shall include the Company) shall be required, in connection with the matters covered by this Section 5.8, (A) to pay any amounts (other than the payment of filing fees and expenses and fees of counsel), (B) to hold separate (including by trust or otherwise) or divest any of their respective businesses, product lines or assets, (C) to agree to any limitation on the operation or conduct of Buyer’s or the Company’s or any of their respective Subsidiaries’ businesses or (D) to waive any of the conditions set forth in Article 7 of this Agreement.

5.8.5 Notwithstanding anything to the contrary in this Agreement relating to Antitrust Laws, neither Seller, nor any of its Affiliates (which for purposes of this sentence shall include the Company for pre-Closing periods) shall be required, in connection with the matters covered by this Section 5.8, (A) to pay any amounts (other than the payment of filing fees and expenses and fees of counsel), (B) to hold separate (including by trust or otherwise) or divest any of their respective businesses, product lines or assets, (C) to agree to any limitation on the operation or conduct of Seller’s or the Company’s (for pre-Closing periods) or any of their respective Subsidiaries’ businesses or (D) to waive any of the conditions set forth in Article 7 of this Agreement.

5.8.6 Each Party shall use reasonable best efforts to take such action as may be required to cause the expiration of the notice periods under the HSR Act or other Antitrust Laws with respect to such transactions as promptly as reasonably practicable after the execution of this Agreement.

5.8.7 No Party will take any action that would cause the transactions contemplated by this Agreement to be subject to requirements imposed by any Takeover Law and each of them will take all necessary steps within its control to exempt (or ensure the continued exemption of) those transactions from any applicable Takeover Law, as now or hereafter in effect.

Section 5.9 Certain Notices.

From and after the date of this Agreement until the Closing, each Party shall as promptly as reasonably practicable notify the other Parties of the occurrence, or non-occurrence, of any event that would reasonably be expected to result in any condition to the obligations of any Party to effect the transactions contemplated by this Agreement not to be satisfied; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the Parties (or remedies with respect thereto) or the conditions to the obligations of the Parties under this Agreement; provided, further, however, that a breach of this Section 5.9 shall not be considered for purposes of determining the satisfaction of the closing conditions set forth in Article 6 or give rise to a right of termination under Article 7 if the underlying breach or breaches

with respect to which the other Party failed to give notice would not result in the failure of the closing conditions set forth in Article 6 or would not result in the ability of such non-breaching Party to terminate this Agreement.

Section 5.10 Public Announcements.

Buyer and Seller shall, as promptly as reasonably practicable, but no later than the first Business Day following the date of this Agreement, with respect to the transactions contemplated by this Agreement, issue a mutually agreed upon press release. In connection with press releases or public statements with respect to the transactions contemplated by this Agreement, Buyer and Seller shall coordinate and consult with each other before issuing, and give each other the opportunity to review and comment upon, giving due consideration to all reasonable additions, deletions or changes suggested in connection therewith, such press releases or public statements. Buyer and Seller shall not issue any such press release (other than any press release by Buyer to announce action taken by such person as permitted by, Section 5.7) or make any such public statement prior to such consultation, except as may be required by applicable Law, court process, listing agreement or Nasdaq marketplace rule; provided that Buyer and Seller shall coordinate and consult with respect to the timing, basis and scope of such disclosure requirement.

Section 5.11 Employee Benefit Matters.

5.11.1 Buyer shall or shall cause the Company to, for a period of 12 months immediately following the Closing Date, (A) provide each employee of the Company and any Company Subsidiary employed immediately prior to the Closing (“Continuing Employees”) with employee benefit plans, programs, Contracts, and arrangements (including, but not limited to, any profit sharing and/or bonus programs) that are at least as favorable, in the aggregate, as the employee benefit plans provided to other similarly situated employees of Buyer, and (B) not reduce the base salary of such Continuing Employees as in effect on the date hereof or that has been increased in accordance with Section 5.1; provided, however, that, effective as of the Closing, Buyer may establish new annual bonus policies to replace the Company’s bonus policies set forth on Section 5.11.1 of the Company Disclosure Schedules or the successor bonus policy established by the Company in accordance with the terms of Section 5.1. The Company shall pay annual bonuses for calendar year 2014 to the Continuing Employees in a manner consistent with the terms of the Company’s bonus policy set forth on Section 5.11.1 of the Company Disclosure Schedules in effect as of the date hereof (including with respect to the timing of such bonus payments) to the extent such Continuing Employees are covered by such bonus policy on the date hereof.

5.11.2 Buyer shall cause the Company to (A) waive, or cause its insurance carriers to waive, all limitations as to pre-existing and at-work conditions, if any, with respect to participation and coverage requirements applicable to Continuing Employees under any welfare benefit plan (as defined in Section 3(1) of ERISA) which is made available to Continuing Employees during the plan year including the Closing

Date by Buyer or one of its Affiliates to the extent such limitations or conditions would have been satisfied or waived under the terms of the comparable Company Benefit Plan prior to Closing, and (B) provide credit to Continuing Employees for any co-payments, deductibles and out-of-pocket expenses paid by such employees under the corresponding Company Benefit Plans during the portion of the relevant plan year including the Closing Date. Buyer’s obligation under clause (B) of this Section 5.11.2 shall be contingent on Seller providing Buyer with information needed by Buyer to fulfill its obligation under Clause (B).

5.11.3 Buyer shall cause the Company to honor all accrued but unused vacation and compensatory time off of each Continuing Employee as of the Closing Date; provided, however, that the aggregate amount of vacation and compensatory time off honored by Buyer pursuant to this Section 5.11.3 shall not exceed the amount accrued in respect thereof on the Closing Balance Sheet.

5.11.4 Prior to the Closing, Seller shall cause the Company to take all actions necessary to terminate the Company’s 2012 SAR Plan (the “SAR Plan”) and all outstanding stock appreciation rights granted under the SAR Plan (each, a “Company SAR”) on or prior to the Closing in accordance with Section 4(e)(i) of the SAR Plan. Seller shall or shall cause the Company to satisfy any outstanding obligations or liabilities under the SAR Plan, including, but not limited to, paying the amount due, if any, to the holders of each Company SAR under the termination provisions of the SAR Plan. Buyer agrees that at all times from and after the Closing, the Committee (as defined in the SAR Plan) will consist only of designees of Seller.

5.11.5 Prior to the Closing, Seller shall (A) cause the Company to take all actions necessary under the Provide Commerce, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”) to appoint individuals designated by the Buyer (the “Appointed Members”) to the Committee (as defined under the Deferred Compensation Plan) and Appeals Committee (as defined under the Deferred Compensation Plan) so that the Committee and Appeals Committee are comprised solely of the Appointed Members immediately after the Closing, (B) cause the Company to take all actions necessary to transfer, prior to the Closing, to the Deferred Compensation Plan trust the amount that is required to be transferred to such trust pursuant to the Provide Commerce, Inc. Deferred Compensation Plan Amended and Restated Rabbi Trust Agreement in connection with the Closing or, if greater, such other amount to ensure that such trust holds sufficient assets to pay each participant or beneficiary the benefits to which they are entitled under the terms of the Deferred Compensation Plan as of the Closing Date, and (C) cause the Company to take all actions necessary under the Deferred Compensation Plan to cease all participant and Company contributions to the Deferred Compensation Plan, effective as of the later of the Closing or the first date such cessation is permissible under Section 409A of the Code.

5.11.6 Notwithstanding any other provision contained herein, Buyer shall recognize the service of Continuing Employees with Seller and the Company prior to the Closing Date as service with Buyer and its Affiliates in connection with any

employee benefit plans, programs, Contracts and arrangements (including 401(k) plans, deferred compensation plans, severance, vacation, sick leave and holiday policies) maintained by Buyer and its Affiliates which is made available following the Closing Date by Buyer and its Affiliates for purposes of any waiting period, vesting, eligibility and benefit entitlement (but excluding benefit accruals) to the extent such service was recognized under a comparable Company Benefit Plan and to the extent such crediting of service would not result in the duplication of benefits.

5.11.7 As of the Closing Date, Buyer shall cause to be accepted by the trustee of a tax qualified retirement plan maintained by Buyer or one of its Affiliates in which a Continuing Employee is eligible to participate (the “Buyer Retirement Plan”) a “direct rollover” pursuant to Section 401(a)(31) of the Code of all or a portion of any eligible rollover distribution (within the meaning of Section 402(c) of the Code) of each Continuing Employee’s account balance (including participant loans) under the tax qualified retirement plan maintained by Seller or one of its Affiliates (the “Seller Retirement Plan”), provided that Seller causes the Seller Retirement Plan to provide to Buyer or one of its Affiliates the promissory notes and other loan documentation, if any, of the Continuing Employees who have elected such a direct rollover. The Buyer Retirement Plan shall accept the direct rollover of electing Continuing Employees’ benefits in cash and, if applicable, promissory notes from the Seller Retirement Plan; provided that any such direct rollover shall be subject to the terms and conditions of the Seller Retirement Plan and the Buyer Retirement Plan, in each case, as in effect from time to time applicable to rollover contributions and participant loans.

5.11.8 Notwithstanding the foregoing, nothing contained herein, whether express or implied, shall be treated as an amendment or other modification of any employee benefit plan or arrangement, or shall limit the right of Buyer, the Company or any of their Affiliates to amend, terminate or otherwise modify any employee benefit plan or arrangement sponsored by Buyer, the Company or any of their Affiliates following the Closing Date. In the event that (A) a Party makes a claim or takes other action to enforce any provision in this Agreement as an amendment to any employee benefit plan or arrangement sponsored by Buyer, the Company or any of their Affiliates, and (B) such provision is deemed to be an amendment to such plan or arrangement even though not explicitly designated as such in this Agreement, then such provision shall lapse retroactively and shall have no amendatory effect. All provisions contained in this Section 5.11.8 with respect to the Continuing Employees are included for the sole benefit of Seller, and that nothing in this Agreement, whether express or implied, shall create any third party beneficiary or other rights (i) in any other person, including any employees, former employees, any participant in any employee benefit plan, or any dependent or beneficiary thereof, or (ii) to continued employment with Buyer, the Company or any of their respective Affiliates.

Section 5.12 Certain Tax Matters.

5.12.1 All Tax sharing agreements (other than commercial agreements the primary purpose of which does not relate to Taxes) to which any of the Company or the Company Subsidiaries is a party or may be subject shall be terminated

prior to the Closing with respect to the Company and/or the Company Subsidiaries, and neither the Company nor any of the Company Subsidiaries shall have any further liability or rights thereunder.

5.12.2 Except for those powers of attorney set forth on Section 5.12.2 of the Company Disclosure Schedule, any power of attorney with respect to Taxes or Tax Returns of the Company and Company Subsidiaries in effect prior to the Closing shall be terminated on or before the Closing Date.

5.12.3 Tax Returns.

5.12.3.1 (A) Seller shall prepare and timely file, or cause to be prepared and timely filed, all Tax Returns in respect of the Company and Company Subsidiaries (or any consolidated, combined, unitary or affiliated group of which the Company or any Company Subsidiary is a member) that are required to be filed on or before the Closing Date (taking into account any applicable extensions), or that are required to be filed after the Closing Date and are a Seller Consolidated Tax Return; (B) Buyer shall prepare, or cause to be prepared, all Tax Returns in respect of the Company and Company Subsidiaries that relate to Tax periods ending on or before the Closing Date but that are required to be filed after the Closing Date (taking into account any applicable extensions) and are not a Seller Consolidated Tax Return; and (C) Buyer shall prepare and timely file, or cause to be prepared and timely filed, any Tax Return required to be filed by the Company or any Company Subsidiary for any Straddle Period (the Tax Returns described in clauses (B) and (C) of this sentence, the “Buyer Prepared Tax Returns”).

5.12.3.2 With respect to any Buyer Prepared Tax Returns that are Income Tax Returns (“Buyer Prepared Income Tax Returns”), Buyer shall deliver to Seller at least 15 days prior to the due date for filing such Tax Return (taking into account any applicable extensions), copies of such Tax Return and related work-papers and a statement setting forth the amount of Income Tax, if any, that Seller owes pursuant to clause (A) of Section 8.2.1.3. Seller shall have the right to review such Buyer Prepared Tax Return and related work-papers and any liability for Income Taxes and to suggest to Buyer any reasonable changes to such Tax Return no later than 10 days prior to the date for the filing of such Tax Return. Seller and Buyer agree to consult and to attempt to resolve in good faith any issue arising as a result of the review of such Buyer Prepared Income Tax Return and related work-papers and allocation of liability for Income Taxes and mutually to consent to the filing as promptly as possible of such Tax Return. Not later than five days before the due date for the payment of Taxes pursuant to any Buyer Prepared Income Tax Return (taking into account any applicable extensions), Seller shall pay to Buyer an amount equal to the Income Taxes as agreed to by Buyer and Seller as being owed by Seller pursuant to clause (A) of Section 8.2.1.3 with respect to such Tax Return.

5.12.3.3 With respect to any Buyer Prepared Tax Returns that are not Income Tax Returns (“Buyer Prepared Other Tax Returns”), Buyer shall deliver to Seller as soon as practicable copies of such Buyer Prepared Other Tax Return and

related work-papers and a statement setting forth the amount of non-Income Tax, if any, that Seller owes pursuant to clause (A) of Section 8.2.1.3. If Buyer cannot reasonably provide a draft of such Buyer Prepared Other Tax Return to Seller prior to the due date for filing such Tax Return, a copy of such Buyer Prepared Other Tax Return, as filed, shall be provided to Seller as soon as practicable following the filing date. Seller shall have the right to review all Buyer Prepared Other Tax Returns and related work-papers and any liability for non-Income Taxes and to suggest to Buyer any reasonable changes to such Tax Returns within five days of Seller’s receipt of each such Buyer Prepared Other Tax Return. Seller and Buyer agree to consult and to attempt to resolve in good faith any issue arising as a result of the review of such Buyer Prepared Other Tax Returns and related work-papers and allocation of liability for non-Income Taxes and mutually to consent to the filing as promptly as possible of such Tax Return (or, if a copy of such Buyer Prepared Other Tax Return could not be provided to Seller prior to the filing of such Tax Return, and Seller and Buyer agree upon any changes, to mutually consent to the filing as promptly as possible of an amended Tax Return). Seller shall pay to Buyer an amount equal to the non-Income Taxes as agreed to by Buyer and Seller as being owed by Seller pursuant to clause (A) of Section 8.2.1.3 with respect to such Buyer Prepared Other Tax Return not later than the later of (i) ten days after receiving from Buyer such Buyer Prepared Other Tax Return, and (ii) five days before the due date for the payment of non-Income Taxes pursuant to any Buyer Prepared Other Tax Return (taking into account any applicable extensions).

5.12.3.4 If Buyer and Seller cannot agree on the amount of Taxes owed by Seller with respect to any Buyer Prepared Tax Return, Seller shall pay to Buyer the amount of Taxes reasonably determined using the mid-point of Buyer’s and Seller’s determination of the amount of Taxes to be owed by Seller in respect of such Buyer Prepared Tax Return pursuant to clause (A) of Section 8.2.1.3. Within 10 days after such payment, Seller and Buyer shall refer the matter to an independent nationally recognized accounting firm agreed to by Buyer and Seller to arbitrate the dispute. Seller and Buyer shall equally share the fees and expenses of such accounting firm and its determination as to the amount owed by Seller pursuant to clause (A) of Section 8.2.1.3 with respect to a Buyer Prepared Tax Return shall be binding on both parties. Within five days after the determination by such accounting firm, if necessary, the appropriate Parent Party shall pay the other Parent Party any amount which is determined by such accounting firm to be owed.

5.12.4 Use of Consistent Tax Practices. To the extent that the items reported on any Tax Return of or with respect to the Company or any Company Subsidiary that is prepared by a Parent Party or its Affiliates is likely to increase, by more than a de minimis amount, any Tax liability of the other Parent Party or its Affiliates or any Tax indemnity obligation under this Agreement of the other Parent Party or its Affiliates, such Tax Return shall be prepared in accordance with Tax accounting and other practices used by the Company or such Company Subsidiary or Seller with respect to the relevant Tax Returns filed prior to the date hereof (unless such past practices are not permissible under applicable Law or Buyer concludes in good faith, after consultation with Tax counsel, that such position cannot satisfy a more likely than

not standard), and to the extent any items are not covered by past practices (or in the event such past practices are not permissible under applicable Law or Buyer concludes in good faith, after consultation with Tax counsel, that such position cannot satisfy a more likely than not standard), in accordance with reasonable practices selected by the Parent Party (or its Affiliate) responsible for filing such Tax Return hereunder with the consent, not to be unreasonably withheld, conditioned or delayed, of the other Parent Party; provided, however, that if the Parties cannot agree on such practices, the arbitration mechanism set forth in Section 5.12.3 shall apply. Unless otherwise required by applicable Law, neither Parent Party nor any of their respective Affiliates will make, change or revoke (or cause to be made, changed, or revoked) any Tax election with respect to the Company or any Company Subsidiary that is likely to increase any Tax liability (or Tax indemnity obligation under this Agreement) of the other Parent Party or its Affiliates without the consent, not to be unreasonably withheld, conditioned or delayed, of the other Parent Party.

5.12.5 Amendment of Tax Returns. Buyer shall not amend any Tax Return of the Company or any Company Subsidiary that relates to a Tax period (or portion thereof) ending on or before the Closing Date without the prior written consent of the Seller (which consent shall not be unreasonably withheld, conditioned or delayed) unless required by applicable Law.

5.12.6 Transfer Taxes. Any transfer, stamp, documentary, sales, use, registration, value-added and other similar Taxes (including all applicable real estate transfer Taxes) incurred in connection with this Agreement and the transactions contemplated hereby (“Transfer Taxes”), shall be paid one-half by Seller and one-half by Buyer. For the avoidance of doubt, Transfer Taxes shall not include any Tax imposed on or measured by income or gains, including any business activity Taxes. The Seller and Buyer and their respective Affiliates shall cooperate in minimizing any Transfer Taxes.

5.12.7 Tax Refunds. Buyer shall pay, or cause to be paid, to Seller Tax refunds of the Company or Company Subsidiaries actually received from a Governmental Authority with respect to a Pre-Closing Tax Period; provided, however, such refunds will not include any reduction of Taxes for a Post-Closing Tax Period due to the carryforward of attributes attributable to a Pre-Closing Tax Period. Buyer is entitled to retain any Tax refunds of the Company or Company Subsidiaries with respect to any Post-Closing Tax Period or attributable to a Tax attribute that is attributable to a Post-Closing Tax Period. Buyer and Seller will equitably apportion any Tax refund for a Straddle Period in a manner consistent with the principles set forth in Section 8.2.2. For the avoidance of doubt, Seller shall not be entitled to any refunds that are attributable to any carryback of net operating losses, capital losses or other Tax attributes relating to a Post-Closing Tax Period.

5.12.8 Buyer Covenants.

5.12.8.1 Neither Buyer nor any of its Affiliates shall effect or engage in any transactions or other actions relating to the Company or any Company Subsidiary

outside the Ordinary Course of Business after the Closing on the Closing Date that would reasonably be expected to increase any Tax liability of Seller or its Affiliates or any indemnification obligations of Seller under Article 8 by more than a de minimis amount.

5.12.8.2 Buyer and its Subsidiaries and Affiliates shall not, during the one year period beginning on the Closing Date or otherwise as part of a plan with the Transaction, (A) cause the Company to be liquidated for U.S. federal income tax purposes, (B) cause the Company to make an election or take any other action to be classified as a partnership or as a disregarded entity within the meaning of Section 301.7701-3 of the Treasury Regulations for U.S. federal income tax purposes, (C) cause the Company to be merged with or into Buyer or any Subsidiary or Affiliate of Buyer, or (D) take any other action that would reasonably be expected, if treated as part of the same plan with the Transaction, to cause the Transaction to qualify as a reorganization under Section 368(a) of the Code.

5.12.8.3 Buyer and its Subsidiaries and Affiliates shall not, and following the Closing Buyer shall cause the Company and the Company Subsidiaries not to, (A) report the Transaction as a reorganization under Section 368(a) of the Code (or any similar provision of state, local or foreign law), or (B) take any other position for Tax purposes that the Transaction qualifies as a reorganization within the meaning of Section 368(a) of the Code (or any similar provision of state, local or foreign law).

5.12.9 Cooperation. Buyer, Seller, the Company and the Company Subsidiaries shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns pursuant to Section 5.12.3 and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other Party’s request) the provision of records and information that are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Further, after the Closing, Buyer shall cause the Company and the Company Subsidiaries to furnish Tax information to Seller as reasonably requested in order to permit Seller to prepare and timely file the Tax Returns described in clause (A) of the first sentence of Section 5.12.3.1. The Parties further agree, upon request, to use their best efforts to obtain any certificate or other document from any Governmental Authority or any other person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited to, with respect to the transactions contemplated hereby).

5.12.10 Tax Claims. With respect to any inquiries, audits or similar proceedings by any Taxing Authority relating to Taxes with respect to the Company or Company Subsidiaries (a “Tax Claim”) and attributable to a taxable period ending on or before the Closing Date or otherwise relating to, or affecting, a Seller Consolidated Tax Return, Seller shall control at its own expense all Tax Claims and may make all decisions taken in connection with such Tax Claims (including selection of counsel and settlement of such Tax Claims), provided that Buyer will be entitled to participate in any Tax Claims at its own expense (except to the extent such Tax Claim relates to a Seller

Consolidated Tax Return); provided, further, that with respect to any Tax Claim relating to a Tax Return other than a Seller Consolidated Tax Return that could reasonably be expected to increase any Tax liability of Buyer or any of its Affiliates (including, after the Closing, the Company and the Company Subsidiaries) by more than a de minimis amount for a Straddle Period or Post-Closing Tax Period, (x) Buyer will be entitled to participate in such Tax Claims at its own expense, (y) Seller shall provide Buyer copies of all material written correspondence and other material documents relevant to such Tax Claims, and (z) Seller will not settle, compromise or abandon any such Tax Claim without the written consent of Buyer, which consent shall not be unreasonably withheld, conditioned or delayed. Buyer shall control at its own expense all proceedings attributable to any Tax Claim relating to a Straddle Period or Post-Closing Tax Period and may make all decisions taken in connection with such Tax Claims (including selection of counsel and settlement of such Tax Claims); provided, however, that with respect to any Tax Claims for which Seller would have an obligation to indemnify under this Agreement or that could reasonably be expected to increase any Tax liability of Seller or any of its Affiliates (including, prior to the Closing, the Company and the Company Subsidiaries) by more than a de minimis amount, (x) Seller will be entitled to participate in such Tax Claims at its own expense, (y) Buyer shall provide Seller copies of all material written correspondence and other material documents relevant to such Tax Claims, and (z) solely with respect to any Tax Claims for which Seller would have an obligation to indemnify under this Agreement and Buyer has not waived such Seller obligation, Buyer shall not settle such Tax Claim without the written consent of Seller, which consent shall not be unreasonably withheld, conditioned or delayed.

Section 5.13 Legal Representation and Attorney-Client Privilege.

Recognizing that Baker Botts L.L.P., Cooley LLP, and the legal departments of Seller and the Company (together, the “Legal Advisors”) have each provided legal advice to Seller, L LLC or the Company prior to the Closing, and that the Legal Advisors (other than the legal department of the Company) intend to act as legal counsel to Seller and L LLC after the Closing, after the Closing Buyer hereby agrees (A) to cause the Company to waive any conflicts that may arise in connection with the Legal Advisors (other than the legal department of the Company) representing Seller or L LLC after the Closing, and (B) that attorney-client communications and privileges arising therefrom between the Legal Advisors and Seller, L LLC and/or the Company regarding the transactions contemplated by this Agreement, shall be the property of Seller and L LLC.

Section 5.14 Financing.

5.14.1 Buyer shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and obtain the Debt Financing on the terms and conditions described in the Commitment Letter, including using reasonable best efforts to (A) maintain in effect the Commitment Letter and, if entered into prior to the Closing, the definitive documentation with respect to the Debt Financing contemplated by the Commitment Letter (such definitive documentation entered into prior to the Closing, if any, the “Definitive Debt Agreements”), (B) negotiate and execute the Definitive Debt

Agreements on terms and conditions contemplated by the Commitment Letter (including any “flex” provisions thereof) and, upon execution thereof, deliver a copy thereof to Seller, (C) satisfy on a timely basis all conditions applicable Buyer and its Subsidiaries in the Commitment Letter and Definitive Debt Agreements that are within its control and comply with its obligations thereunder and not take or fail to take any action that would be reasonably expected to prevent or impede or delay the availability of the Debt Financing, (D) take each of the actions required of the Company and its Subsidiaries in Sections 5.15.1(A)-(D) below with respect to itself and its Subsidiaries, and (E) enforce its rights under the Commitment Letter and Definitive Debt Agreements in the event of a breach or other failure to fund by the Lenders that impedes or delays the Closing, including by seeking specific performance of the parties thereunder.

5.14.2 In the event that all conditions to the Debt Financing have been satisfied, Buyer shall use its reasonable best efforts to cause the Lenders and the other persons providing such Debt Financing to fund such Debt Financing on the Closing Date (including by taking enforcement action to cause such Lenders to fund such Debt Financing).

5.14.3 Buyer shall have the right from time to time to amend, replace, supplement or otherwise modify, or waive any of its rights under, the Commitment Letter or the Definitive Debt Agreements, and/or substitute other debt (but not equity financing) for all or any portion of the Debt Financing from the same and/or alternative financing sources, provided that any such amendment, replacement, supplement or other modification to or waiver of any provision of the Commitment Letter or Definitive Debt Agreements that amends the Debt Financing and/or substitution of all or any portion of the Debt Financing shall not (i) expand upon the conditions precedent to the Debt Financing as set forth in the Commitment Letter, (ii) prevent or impede or delay the consummation of the transactions contemplated by this Agreement or (iii) provide for terms and conditions (including any “flex” provisions) that are, in the aggregate, less favorable to Buyer, Seller and the Company than those in the Commitment Letter. Buyer shall be permitted to reduce the amount of Financing under the Commitment Letter or Definitive Debt Agreements in its reasonable discretion, provided, that Buyer shall not reduce the Debt Financing to an amount committed below the amount that is required, together with the financial resources of Buyer, including cash on hand and the proceeds of loans under existing revolving credit facilities of Buyer, to consummate the transactions contemplated by this Agreement, and provided further that such reduction shall not (a) expand upon the conditions precedent to the Debt Financing as set forth in the Commitment Letter, (b) prevent or impede or delay the consummation of the transactions contemplated by this Agreement, or (c) provide for other terms and conditions (including any “flex” provisions) that are, in the aggregate, less favorable to Buyer, Seller and the Company than those in the Commitment Letter.

5.14.4 If any portion of the Debt Financing becomes unavailable or Buyer becomes aware of any event or circumstance that makes any portion of the Debt Financing unavailable, in each case, on the terms and conditions contemplated in the Commitment Letter or the Definitive Debt Agreements, as applicable, and such portion

is reasonably required to consummate the transactions contemplated by this Agreement, Buyer shall use its reasonable best efforts to arrange and obtain as promptly as practicable following the occurrence of such event alternative financing from alternative financing sources in an amount sufficient to consummate the transactions contemplated by this Agreement, provided, that without the prior written consent of Seller (not to be unreasonably withheld, delayed or conditioned), no such alternative financing (x) shall be equity financing or (y) shall be on terms and conditions (including any “flex” provisions and conditions to funding) that are not, in the aggregate, materially less favorable to Buyer, Seller and the Company as those in the Commitment Letter. Buyer shall give Seller prompt oral and written notice (but in any event not later than 48 hours after the occurrence or discovery thereof) of any material breach by any party to the Commitment Letter or Definitive Debt Agreements or of any condition not likely to be satisfied, in each case, of which Buyer becomes aware or any termination or waiver, amendment or other modification of the Commitment Letter or Definitive Debt Agreements. Buyer shall keep Seller reasonably informed on a reasonably current basis and in reasonable detail of the status of its effort to arrange the Debt Financing and shall provide to Seller copies of all documents related to the Debt Financing (excluding fee letters and engagement letters, except to the extent that such documents contain any conditions to funding, “flex” provisions or other substantive provisions (excluding provisions related solely to fees and economic terms agreed to by the parties) regarding the terms and conditions of the Debt Financing). In the event that Buyer commences an enforcement action to enforce its rights under the Commitment Letter or the Definitive Debt Agreements and/or cause the Lenders to fund the Debt Financing (any such action, a “Financing Action”), Buyer shall (x) keep Seller reasonably informed of the status of the Debt Financing Action and (y) at the request of Seller, shall make Buyer’s employees and other representatives (other than any of its investment bankers, financial advisors or Lenders) reasonably available to discuss the status of, and material developments with respect to, the Financing Action.

Section 5.15 Financing Cooperation.

5.15.1 In order to assist Buyer with obtaining the Debt Financing, Seller and the Company shall use their respective reasonable best efforts to provide such assistance and cooperation as Buyer and Buyer Representatives may reasonably request, including using reasonable best efforts to (A) provide Buyer and Buyer Representatives with information as reasonably requested for Buyer’s preparation of any marketing material, (B) make senior management (with appropriate seniority and expertise) of the Company reasonably available for a reasonable number of customary syndication, presentations and lender meetings, (C) cooperate with current or prospective lenders and their respective advisors in performing their due diligence and (D) help procure reasonably requested certificates or documents with respect to the Debt Financing, including pledge and security documents, customary certificates (including a certificate with respect to solvency matters), legal opinions and real estate and other collateral documentation.

5.15.2 Notwithstanding anything in this Section 5.15 to the contrary, in no event shall Seller, the Company or any Affiliate of Seller or the Company, be required to pay any commitment or other fee or incur any other liability in connection with the Debt Financing or have any liability or obligation with respect thereto. Buyer shall promptly, upon request by Seller, reimburse Seller for all reasonable and documented out-of-pocket costs and expenses incurred by Seller or the Company in connection with the Debt Financing or their cooperation contemplated by this Section 5.15.

5.15.3 Without affecting Buyer’s rights under this Agreement, Buyer shall indemnify and hold harmless Seller Indemnified Parties (as defined in Section 8.3) from and against any and all Losses (as defined in Section 8.2) suffered or incurred by any of them in connection with the arrangement of the Debt Financing and any information utilized in connection therewith; provided, however, that Buyer shall not be required to indemnify and hold harmless Seller Indemnified Parties to the extent that such Losses arise from or are related to information provided by any Seller Indemnified Party to Buyer in writing specifically for use in the Debt Financing that is inaccurate in any material respect or that omitted to include information that was necessary to make the information provided not misleading in any material respect, in light of the circumstances under which it was made.

5.15.4 In the event that the Commitment Letter or Definitive Debt Agreements are amended, replaced, supplemented or otherwise modified, including as a result of obtaining alternative financing in accordance with Section 5.14, or if Buyer substitutes other financing for all or a portion of the Debt Financing in accordance with Section 5.14, each of Buyer, Seller and the Company shall comply with its covenants in this Agreement with respect to the Commitment Letter or Definitive Debt Agreements, as applicable, as so amended, replaced, supplemented or otherwise modified and with respect to such other financing to the same extent that Buyer, Seller and the Company would have been obligated to comply with respect to the Debt Financing.

5.15.5 Notwithstanding anything to the contrary contained in this Agreement, each of the Parties: (A) agrees that all claims, whether in law or in equity, whether in contract or in tort or otherwise, against any lender party with respect to the Debt Financing (the “Lenders”) (which defined term shall include the Lenders and their respective Affiliates, equityholders, members, partners, officers, directors, employees, agents, advisors and representatives involved in the Debt Financing) in any way relating to this Agreement or transactions contemplated thereby, including any dispute arising out of or relating in any way to the Commitment Letter, the Debt Financing, the Definitive Debt Agreements or the performance thereof, shall be brought only in the forum set forth in Section 9.13; (B) agrees that all claims or causes of action (whether at law, in equity, in contract, in tort or otherwise) against any of the Lenders in any way relating to the Debt Financing or the performance thereof, shall be governed by, and construed in accordance with, the Laws of the State of New York, without regard to Laws that may be applicable under conflicts of Laws principles (whether of the State of New York or any other jurisdiction) that would cause the application of the Law of any

jurisdiction other than the State of New York; and (C) HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE DEBT FINANCING OR THE PERFORMANCE THEREOF. Notwithstanding anything to the contrary contained in this Agreement, (x) neither the Company nor Seller, in their respective capacities as parties to this Agreement, or their respective Affiliates, directors, officers, employees, agents, partners, managers, members or shareholders shall have any rights or claims against any Lender, relating to this Agreement, the Commitment Letter, the Definitive Debt Agreements, or any of the transactions contemplated hereby or thereby or the performance hereof or thereof, whether at law or equity, in contract, in tort or otherwise and (y) no Lender shall have any liability to any of the Company, any Company Subsidiaries, the Seller or their respective Affiliates, directors, officers, employees, agents, partners, managers, members or shareholders relating to this Agreement, the Commitment Letter, the Definitive Debt Agreements, or any of the transactions contemplated hereby or thereby or the performance hereof or thereof, whether at law or equity, in contract, in tort or otherwise ; provided, however, that the Parties hereto agree and acknowledge that in no event shall Seller have the right to specifically enforce the Commitment Letter in connection with the Debt Financing or to cause Buyer to enforce the Commitment Letter to cause the Lender to consummate the Debt Financing. Notwithstanding anything to the contrary contained in this Agreement, the Lenders are intended third party beneficiaries of, and shall be entitled to the protections of, this Section 5.15.5, and this Section 5.15.5 may not be amended, supplemented, waived or otherwise modified in a manner adverse to the Lenders without the prior written consent of the Lenders.

Section 5.16 Financial Statements; Auditor Matters.

5.16.1 The Company shall deliver to Buyer for inclusion in the Proxy Statement as soon as reasonably practicable after the date hereof, but in no event later than October 31, 2014, annual audited financial statements of the Company for the three fiscal years ended December 31, 2013, including a balance sheet as of December 31, 2013 and 2012, and the related statements of operations, comprehensive income (as applicable), stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2013, which statements shall be prepared in accordance with GAAP and accompanied by the signed auditor report and auditor consent of KPMG LLP (the “Current Auditors”) collectively as required by the rules and regulations of the SEC so that Buyer may file such statements with the SEC.

5.16.2 The Company shall deliver to Buyer for inclusion in the Proxy Statement as soon as reasonably practicable after the date hereof, but in no event later than October 31, 2014, unaudited financial statements of the Company through each of the six-month periods ended June 30, 2013 and June 30, 2014, or such other interim period nearest the date on which Buyer files the Proxy Statement (and comparable prior-year period) to the extent required by the rules and regulations of the SEC, including a balance sheet and related statements of operations, comprehensive income (as applicable), stockholders’ equity and cash flows, which statements shall be

prepared in accordance with GAAP and reviewed by the Current Auditors in accordance with appropriate interim review standards so that Buyer may file such statements with the SEC.

5.16.3 Prior to the Closing, the Company shall deliver, or, following the Closing, the Seller shall cooperate and use its reasonable best efforts to cause to be delivered, to Buyer (i) updated audited consolidated balance sheets and statements of operations, comprehensive income (as applicable), stockholders’ equity and cash flows for the fiscal year ended December 31, 2014, which statements shall be prepared in accordance with GAAP and accompanied by the signed auditor report and auditor consent of the Current Auditors so Buyer may file such statements with the SEC, and (ii) updated unaudited consolidated balance sheets and statements of operations, comprehensive income (as applicable), stockholders’ equity and cash flows of the Company for the most recently completed calendar quarter ended prior to the proposed filing date of the applicable filings referenced in clause (A) or (B) below, which interim statements (x) are required to be included in such filing, (y) shall be prepared in accordance with GAAP and (z) shall be reviewed by the Current Auditors in accordance with appropriate interim review standards, in each case, within three (3) Business Days of the proposed filing date such that Buyer has a reasonable period to review and timely file such statements with the SEC, in connection with (A) any amendments to the Proxy Statement including the definitive Proxy Statement or (B) the Current Report on Form 8-K required by items 2.01 and 9.01 thereof to be filed by Buyer after the Closing (including any amendment to such report, the “Closing 8-K”), in each case, to the extent required by the rules and regulations of the SEC.

5.16.4 Seller, at Buyer’s cost, will cooperate and use reasonable best efforts to cause the Current Auditors to provide Buyer with such signed auditor reports, auditor consents and customary comfort letters as Buyer may reasonably require after the Closing for as long as the Company’s annual audited or unaudited interim financial statements that include periods prior to the Closing (as updated pursuant to Section 5.16.3 and also including the Company’s annual audited financial statements as of and for the year ending December 31, 2014 or unaudited interim financial statements for the nine month periods ended September 30, 2014 and September 30, 2013, respectively, and the quarter ended December 31, 2014 (or any shorter period from the end of the applicable quarterly period to the Closing Date)) are reasonably required by Buyer for inclusion or incorporation by reference (i) into a Buyer registration statement, information statement, prospectus, form, report, definitive proxy statement, schedule or other document required to be filed with the SEC by it under the Securities Act or the Exchange Act, as the case may be, including any related prospectus or prospectus supplement for an offering of securities by Buyer (which may include securities of Buyer held by Seller as contemplated by the Investor Rights Agreement) or (ii) to the extent customary in connection with an offering memorandum or similar offering document for a private placement of securities of Buyer during such period or otherwise customarily provided in connection with any such private placement.

5.16.5 Seller, at Buyer’s cost, will cooperate and use reasonable best efforts to cause the Current Auditors to cooperate with Buyer to provide information reasonably necessary for Buyer to prepare such pro forma financial statements as are required by Buyer in connection with the transactions contemplated by this Agreement.

Section 5.17 Investor Directors.

At the Closing, Buyer will cause four (4) designees of Seller to be appointed to the Buyer Board as Investor Directors (as defined in the Investor Rights Agreement). Such appointments shall be subject in all respects to the terms and conditions contained in Section 3.5 of the Investor Rights Agreement; provided, however, Buyer acknowledges and agrees that Seller’s two designees to be Investor Directors identified to Buyer prior to the date hereof (the “Pre-Signing Investor Director Designees”) meet Buyer’s standard qualifications for directors and, provided, further, that Buyer will take all necessary actions to approve the two additional designees of Seller to be Investor Directors prior to the Closing (the “Pre-Closing Investor Director Designees”); provided, that, Seller shall notify Buyer of the designation of the Pre-Closing Investor Director Designees no later than September 30, 2014; provided, further, that, if either such Pre-Closing Investor Director Designee does not meet Buyer’s standard qualifications for directors, Buyer will, within 15 Business Days of Seller’s notice to Buyer of such designations, notify Seller in writing of, and specify the reasons why, such standard qualifications have been deemed not to have been met. Buyer will take all necessary actions to approve, or, in the event that any Pre-Closing Investor Director Designee does not meet Buyer’s standard qualifications for directors, to provide Seller with an opportunity to substitute a replacement Pre-Closing Investor Designee or Designees (which replacement or replacements shall be designated within 15 Business Days of Buyer’s written notice to Seller of the prior designee’s failure to meet Buyer’s standard qualifications), such that four designees of Seller will be appointed as Investor Directors at the Closing. At or prior to the Closing, Buyer shall take all necessary actions (including increasing the number of persons constituting the entire Buyer Board) as are necessary to cause there to be sufficient vacancies or newly-created directorships on the Buyer Board to permit the appointment of the Investor Directors to the Buyer Board at the Closing in accordance with the preceding sentence. With respect to the Pre-Signing Investor Director Designees, one shall be appointed to the class of directors the terms of whom expire at the 2017 annual meeting of Buyer’s Stockholders and one shall be appointed to the class of directors the terms of whom expire at the 2016 annual meeting of Buyer’s Stockholders. With respect to the Pre-Closing Investor Director Designees, one shall be appointed to the class of directors the terms of whom expire at the 2016 annual meeting of Buyer’s Stockholders, and the second shall be appointed to the class of directors the terms of whom expire at the 2015 annual meeting of Buyer’s Stockholders.

Section 5.18 Buyer Board Committees.

At the Closing, Buyer and the Buyer Board will cause the appointment at the Closing of an Investor Director (as defined in the Investor Rights Agreement) designated by Seller to each of the Nominating and Corporate Governance Committee,

the Audit Committee and the Compensation Committee of Buyer. Such appointments shall be subject in all respects to the terms and conditions contained in Sections 3.5 and 3.6(a) and (b) of the Investor Rights Agreement.

Section 5.19 Payoff Letters; Transaction Expenses.

Prior to the Closing Date and in no event later than would be required to afford Buyer a reasonable amount of time to review and comment thereon, Seller shall provide Buyer with (A) drafts of appropriate payoff letters and forms of Lien releases with respect to all Indebtedness of the Company and the Company Subsidiaries and (B) a schedule setting forth a good faith estimate of all Transaction Expenses accrued but unpaid as of the Closing Date and all Transaction Expenses that will accrue on the Closing Date, and of all the outstanding principal amount, together with all accrued and unpaid interest through the Closing Date and prepayment or other penalties or premiums, if any, owed with respect to the Indebtedness of the Company and the Company Subsidiaries outstanding immediately prior to the Closing.

Section 5.20 RedEnvelope.

The Company will, and Seller shall cause the Company to, prior to the Closing, distribute all shares of RedEnvelope to Seller or any of Seller’s Subsidiaries (other than the Company or any of the Company Subsidiaries) and otherwise take the actions set forth on Section 5.20 of the Company Disclosure Schedule. Seller and Buyer will negotiate in good faith the schedules setting forth the services, and the cost and terms and conditions of such services, to be provided to RedEnvelope by the Company pursuant to a Services Agreement substantially in the form attached hereto as Exhibit C (the “Services Agreement”), provided that agreement on such matters and the execution and delivery of the Services Agreement shall not be conditions of the Parties to Closing. Buyer agrees that any representation or warranty of Seller or the Company that would be inaccurate as of the date hereof, except, in each case, with respect to (A) the last sentence of Section 3.1, (B) clauses (B) and (C) of Section 3.6 and (C) Sections 3.12.1.2, 3.12.1.5 and 3.13 due to the Company’s ownership or distribution of RedEnvelope at such time shall not be a breach of this Agreement.

Section 5.21 Insurance Policies.

Seller shall keep, or cause to be kept, all of the Policies, or suitable replacements therefor, in full force and effect until the Closing. As of the Closing, Seller shall assign to Buyer and/or to the Company any and all rights which are permitted to be assigned under the terms of such Policies which Seller may have under such Policies covering claims relating to the period prior to the Closing Date. Seller shall cooperate with and assist the Buyer in the making of any valid claims relating to the periods prior to the Closing by the Company and the Company Subsidiaries under the Policies. Any such reimbursement obtained by Seller shall be promptly remitted to the Company or the applicable Company Subsidiary.

Section 5.22 Intercompany Matters.

All intercompany accounts between Seller or any of its Affiliates (other than the Company and the Company Subsidiaries), on the one hand, and the Company and/or any of the Company Subsidiaries, on the other hand, shall be settled prior to the Closing (irrespective of the terms of payment of such intercompany accounts). Prior to the Closing Date and in no event later than would be required to afford Buyer a reasonable amount of time to review and comment thereon, Seller shall prepare and deliver to Buyer a statement setting out in reasonable detail the calculation of all such intercompany account balances based upon the latest available financial information as of such date and, to the extent reasonably requested by Buyer, provide Buyer with supporting documentation to verify the underlying intercompany charges and transactions.

Article 6.
CLOSING CONDITIONS

Section 6.1 Conditions to Obligations of Each Party Under This Agreement.

The respective obligations of each Party to effect the Closing shall be subject to the satisfaction at or prior to the Closing of the following conditions, any or all of which may be waived, in whole or in part, to the extent permitted by Section 9.9 and applicable Law:

6.1.1 Stockholder Approval. The Stock Issuance shall have been approved by the Required Buyer Stockholders.

6.1.2 No Order. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any order, decree, judgment, injunction or other ruling (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits consummation of the transactions contemplated hereby; and there shall not be any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the transactions contemplated hereby, which makes the consummation of the transactions contemplated hereby illegal.

6.1.3 Regulatory Approvals. All applicable waiting or notice periods in connection with any Antitrust Law shall have expired or been terminated.

Section 6.2 Additional Conditions to Obligations of Buyer.

The obligations of Buyer to effect the Closing are also subject to the satisfaction at or prior to the Closing of the following conditions, any or all of which may be waived, in whole or in part, to the extent permitted by Section 9.9 and applicable Law:

6.2.1 Representations and Warranties. Each of (A) the representations and warranties of Seller and the Company contained in this Agreement (other than the representations and warranties contained in Sections 3.1, 3.2, 3.3 and 3.4) shall be true and correct as of the Closing as though made on and as of the Closing (provided that those representations and warranties which address matters only as of a particular date need only be true and correct as of such date and further provided that, for purposes of determining whether the representations and warranties of the Company are true and correct, qualifications as to materiality, “Company Material Adverse Effect” and words of similar import set forth therein shall be disregarded); provided, however, that the condition in this Section 6.2.1(A) shall be deemed to be satisfied so long as any failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect and (B) the representations and warranties of Seller and the Company contained in Sections 3.1, 3.2, 3.3 and 3.4 shall be true and correct in all respects (except for inaccuracies that are de minimis in nature), in each case, as of the Closing as though made on and as of the Closing (provided that, with respect to each of the foregoing clauses, those representations and warranties which address matters only as of a particular date need only be so true and correct as of such date). Buyer shall have received a certificate of a duly authorized officer of Seller to that effect.

6.2.2 Agreements and Covenants. Seller and the Company shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by them on or prior to the Closing. Buyer shall have received a certificate of a duly authorized officer of Seller to that effect.

6.2.3 Material Developments. There shall not have occurred after the date of this Agreement any event or development with relation to the Company or its Subsidiaries that, individually or in the aggregate, has had a Company Material Adverse Effect.

6.2.4 Closing Deliveries. Buyer shall have received the closing deliveries to be delivered to Buyer by Seller under Section 2.1.

Section 6.3 Additional Conditions to Obligations of Seller and the Company.

The obligations of Seller and the Company to effect the Closing are subject to satisfaction at or prior to the Closing of the following conditions, any or all of which may be waived, in whole or in part, to the extent permitted by applicable Law and in accordance with Section 9.9:

6.3.1 Representations and Warranties. Each of (A) the representations and warranties of Buyer contained in this Agreement (other than the representations and warranties contained in Sections 4.1, 4.2, 4.3, 4.4, 4.21 and 4.22) shall be true and correct as of the Closing as though made on and as of the Closing

(provided that those representations and warranties which address matters only as of a particular date need only be true and correct as of such date and further provided that, for purposes of determining whether the representations and warranties of Buyer are true and correct, qualifications as to materiality, “Buyer Material Adverse Effect” and words of similar import set forth therein shall be disregarded); provided, however, that the condition in this Section 6.3.1(A) shall be deemed to be satisfied so long as any failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Buyer Material Adverse Effect and (B) the representations and warranties contained in Sections 4.1, 4.2, 4.3, 4.4, 4.21 and 4.22 shall be true and correct in all respects (except for inaccuracies that are de minimis in nature), in each case, as of the Closing as though made on and as of the Closing (provided that, with respect to each of the foregoing clauses, those representations and warranties which address matters only as of a particular date need only be so true and correct as of such date). Seller shall have received a certificate of a duly authorized officer of Buyer to that effect.

6.3.2 Agreements and Covenants. Buyer shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by them on or prior to the Closing; and Buyer shall have performed or complied in all respects with the covenants set forth in Sections 5.17 and 5.18 on or prior to the Closing. Seller shall have received a certificate of a duly authorized officer of Buyer to that effect.

6.3.3 Material Developments. There shall not have occurred after the date of this Agreement any event or development with relation to Buyer or the Buyer Subsidiaries that, individually or in the aggregate, has had a Buyer Material Adverse Effect.

6.3.4 Resolution of the Board of Directors. The resolution of the Buyer Board contemplated by Section 4.22 is in full force and effect and has not been withdrawn, modified or rescinded in any respect.

6.3.5 Closing Deliveries. Seller shall have received the closing deliveries to be delivered to Seller by Buyer under Section 2.1.

Article 7.
TERMINATION

Section 7.1 Termination.

This Agreement may be terminated, and the transactions contemplated hereby may be abandoned, at any time prior to the Closing:

7.1.1 By mutual written consent of Buyer and Seller (on behalf of itself and the Company), by action of Buyer’s Board of Directors and a duly authorized officer of Seller;

7.1.2 By either Buyer or Seller (on behalf of itself and the Company) if the Closing shall not have been consummated prior to January 31, 2015; provided that (A) if, on such date, all conditions to effect the Closing other than those set forth in Section 6.1.2 (No Order) (to the extent that the order, judgment, decree, injunction or ruling relates to a violation or alleged violation of Antitrust Laws) or Section 6.1.3 (Regulatory Approvals) (collectively, the “Regulatory Conditions”) have been or are capable of being satisfied, then such date shall, without any action on the part of the Parties hereto, be extended day-by-day for each day during which any of the Regulatory Conditions remain unfulfilled until April 30, 2015 and (B) if, on such date, Buyer has mailed the Proxy Statement but the Buyer Meeting has not been held, then such date shall, without any action on the part of the Parties hereto, be extended day-by-day for each day during which the Buyer Meeting has not yet been held until February 28, 2015 (the later of such applicable dates pursuant to this sentence shall be referred to herein as the “Outside Date”); provided, further, that the right to terminate this Agreement under this Section 7.1.2 shall not be available to any Party whose breach of this Agreement has been the primary cause of, or primarily resulted in, the failure of the Closing to occur on or before such date;

7.1.3 By either Buyer or Seller (on behalf of itself and the Company) if (A) any Governmental Authority shall have issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated hereby, and such order, decree, ruling or other action shall have become final and non-appealable or (B) a Law shall be in effect that makes consummation of the transactions contemplated hereby illegal or otherwise prohibits or prevents consummation of the transactions contemplated hereby; or

7.1.4 By either Buyer or Seller (on behalf of itself and the Company), if the Buyer Stockholder Approval shall not have been obtained at the Buyer Meeting at which a vote on the Stock Issuance is, or was to be, taken.

7.1.5 By Seller (on behalf of itself and the Company), if prior to receipt of the Buyer Stockholder Approval, Buyer or the Buyer Board (or any committee thereof) has (A) made a Buyer Adverse Recommendation Change, (B) failed to make a statement in opposition and recommend rejection to the Buyer’s stockholders of a tender or exchange offer of Buyer’s securities initiated by a third party pursuant to Rule 14e-2 promulgated under the Securities Act within ten (10) Business Days after such tender or exchange offer has been published, sent or given by such third party, (C) breached the terms of Sections 5.5 or 5.7, other than breaches that are de minimis and inconsequential in nature or (D) materially breached its obligations under Section 5.5 by failing to call, give notice of, convene and hold the Buyer Meeting.

7.1.6 By Buyer, in connection with a Superior Proposal BARC in accordance with Section 5.7.4.

7.1.7 By Buyer, if (A) any representation or warranty of Seller or the Company set forth in this Agreement shall have become untrue or either Seller or the Company has breached any of its respective covenants or agreements set forth in this

Agreement, (B) such breach or misrepresentation has not been cured and is not capable of being cured prior to the Outside Date and (C) such breach or misrepresentation would cause the conditions set forth in Section 6.2.1 or Section 6.2.2 not to be satisfied.

7.1.8 By Seller (on behalf of itself and the Company), if (A) any representation or warranty of Buyer set forth in this Agreement shall have become untrue or Buyer breached any of its respective covenants or agreements set forth in this Agreement, (B) such breach or misrepresentation has not been cured and is not capable of being cured prior to the Outside Date and (C) such breach or misrepresentation would cause the conditions set forth in Section 6.3.1 or Section 6.3.2 not to be satisfied.

7.1.9 By Buyer, if the Company has breached its obligations in Sections 5.16.1 or 5.16.2.

Section 7.2 Effect of Termination.

7.2.1 In the event of termination of this Agreement by any Party as provided in Section 7.1, this Agreement shall forthwith become void and of no effect and there shall be no liability or obligation on the part of any Party or their respective Subsidiaries, officers or directors except with respect to Section 5.6.4 (Confidentiality Agreements), Section 5.10 (Public Announcement), this Section 7.2 and Article 9 (General Provisions). Notwithstanding any termination or any contrary provision contained in this Agreement, no Party shall be relieved or released from liability for damages arising out of, any Willful Breach of any representation, warranty, covenant or agreement in this Agreement. No Party claiming that such breach occurred will have any duty or otherwise be obligated to mitigate any such damages.

7.2.2 The payment of damages by a Party pursuant to Section 7.2.1 is not exclusive of, and is addition to, the other remedies provided to a non-breaching Party pursuant to Section 7.2.3 through Section 7.2.7 hereof. For the avoidance of doubt, any dispute regarding whether a breach of this Agreement has occurred pursuant to Section 7.2.1 shall not affect the payment, or timing of payment, of damages set forth in Section 7.2.3 through Section 7.2.7 hereof.

7.2.3 In the event that (A) this Agreement is terminated by Buyer or Seller pursuant to Section 7.1.2 or Section 7.1.4, (B) a Buyer Acquisition Proposal has been publicly announced prior to the occurrence of the events giving rise to such termination (or as of the termination date, in the case of a termination pursuant to Section 7.1.2) and (C) within 12 months of such termination Buyer executes a definitive agreement to consummate a transaction described in the definition of Buyer Acquisition Proposal, then Buyer shall pay Seller concurrently with the execution of such definitive agreement an amount equal to the Standard Termination Fee.

7.2.4 In the event that this Agreement is terminated by Buyer pursuant to Section 7.1.6, then Buyer shall pay to Seller, within five Business Days following such termination, an amount equal to the Superior Proposal Termination Fee.

7.2.5 In the event that this Agreement is terminated by Seller pursuant to Section 7.1.5 (other than as set forth in Section 7.2.6), then Buyer shall pay to Seller, within five Business Days following such termination, an amount equal to the Standard Termination Fee.

7.2.6 In the event that this Agreement is terminated by Seller pursuant to Section 7.1.5(A) following an Intervening Event BARC, then Buyer shall pay to Seller, within five Business Days following such termination, an amount equal to the Intervening Event Termination Fee.

7.2.7 For purposes of this Section 7.2, (A) the term “Buyer Acquisition Proposal” shall have the meaning ascribed to it in Section 9.3, except that references to “15%” shall be replaced by “50%”, (B) “Standard Termination Fee” means an amount equal to $10,750,000, (C) “Superior Proposal Termination Fee” means an amount equal to $12,900,000, and (D) “Intervening Event Termination Fee” means an amount equal to $17,200,000. For the avoidance of doubt, in the event that multiple termination fees may be applicable to a termination, Buyer shall be required to pay only the fee resulting in the largest payment to Seller.

7.2.8 In the event that this Agreement is terminated by Buyer pursuant to Section 7.1.9, then Seller shall pay to Buyer, within five Business Days following such termination, an amount equal to $6,000,000.

Article 8.
INDEMNIFICATION

Section 8.1 Survival of Representations and Warranties.

The representations and warranties of Buyer, Seller and the Company contained in this Agreement or any certificate (which it being understood, do not include representations and warranties in the Investor Rights Agreement) delivered pursuant hereto shall survive the Closing through and including the 18-month anniversary of the Closing Date; provided, however, that the representations and warranties (A) of Seller, the Company and Buyer set forth in Sections 3.1, 3.2, 3.3 and 3.4 and Sections 4.1, 4.2, 4.3 and 4.4 shall survive the Closing indefinitely and (B) of Seller and the Company set forth in Sections 3.10 (Employee Benefit Plans), 3.14 (Environmental Matters) and 3.17 (Taxes) shall survive the Closing until 90 days following the expiration of the applicable statute of limitations with respect to the particular matter that is the subject matter thereof (in each case, the “Survival Period”); provided, however, that any obligations under Section 8.2.1.1 and Section 8.3.1.1 shall not terminate with respect to any Losses as to which the person to be indemnified shall have given notice (stating in reasonable detail the basis of the claim for indemnification) to Seller in accordance with Section 8.4

before the termination of the applicable Survival Period. The covenants and agreements made by each Party in this Agreement shall survive the Closing.

Section 8.2 Indemnification by Seller.

8.2.1 In the event the Closing occurs, then subject to Sections 8.1 and 8.5, Seller hereby agrees to indemnify and hold Buyer and its Affiliates and their respective directors, officers, employees, Affiliates, stockholders, agents, attorneys, representatives, successors and assigns, including, after the Closing, the Company (collectively, the “Buyer Indemnified Parties”) harmless from and against, and pay to the applicable Buyer Indemnified Parties the amount of, any and all losses, liabilities, claims, obligations, deficiencies, demands, judgments, damages, interest, fines, penalties, claims, suits, actions, causes of action, assessments, awards, costs and expenses (including costs of investigation and defense and attorneys’ and other professionals’ fees), whether or not involving a third party claim (individually, a “Loss” and, collectively, “Losses”):

8.2.1.1 based upon, attributable to or resulting from the failure of any of the representations or warranties made by Seller or the Company in this Agreement or any certificate or ancillary document (other than the Investor Rights Agreement) delivered pursuant hereto to be true and correct in all respects at and as of the date hereof and at and as of the Closing Date (unless made as of another date, in which case, as of such date);

8.2.1.2 based upon, attributable to or resulting from the breach of any covenant or other agreement on the part of Seller or (prior to the Closing) the Company under this Agreement or any certificate or ancillary document (other than the Investor Rights Agreement) delivered pursuant hereto;

8.2.1.3 based upon, attributable to or resulting from (A) any Taxes imposed on the Company or any Company Subsidiary attributable to any taxable period or portion thereof ending on or before the Closing Date (taking into account the provisions of Section 8.2.2); (B) liabilities of the Company or any Company Subsidiary for Taxes of any person (other than the Company or any Company Subsidiary) arising as a result of the Company or any Company Subsidiary having been a member of any consolidated, combined, unitary or affiliated Tax group prior to the Closing pursuant to Treasury Regulations Section 1.1502-6 or any other provision of federal, state, local or foreign Law; and (C) any Taxes of any person (other than the Company or any Company Subsidiary) imposed on the Company or any Company Subsidiary as a transferee or successor, by contract or pursuant to any law, rule or regulation, which Taxes relate to an event or transaction occurring before the Closing ((A), (B) and (C) collectively, the “Pre-Closing Tax Liabilities”); provided, however, that in the case of clauses (A), (B), and (C) above, (w) Seller shall not be liable for the portion of any Transfer Taxes required to be paid by Buyer pursuant to Section 5.12.6, (x) Seller shall be liable only to the extent that such Taxes and liabilities exceed the amount of accrued liabilities for Taxes reflected on the Closing Balance Sheet, (y) Seller shall not be liable for any Pre-Closing Tax Liabilities based upon, attributable to or resulting from the

breach of any covenant or other agreement on the part of Buyer or (following the Closing) the Company under this Agreement, and (z) Seller shall have no obligation to indemnify any Buyer Indemnified Party for any Taxes or liabilities resulting from an election under Section 338 of the Code with respect to the purchase of the stock of the Company pursuant to this Agreement;

8.2.1.4 any Indebtedness (for this purpose using clauses (i) and (ii) of such definition) of the Company or any Company Subsidiary not set forth on Section 2.1.1.1 of the Company Disclosure Schedule;

8.2.1.5 any Transaction Expenses not taken into account in Closing Working Capital or the Closing Cash Consideration;

8.2.1.6 other than the obligations and liabilities of the Company under the Services Agreement, based upon, attributable to or resulting from the Company’s ownership of RedEnvelope, or otherwise relating to the business, operations and/or winding-down thereof;

8.2.1.7 based upon, attributable to or resulting from the SAR Plan, the Company’s Supplemental Executive Retirement Plan, the Company’s Stock Option/Stock Issuance Plan, or the Company’s Stock Incentive Plan (other than any Losses that have been accounted for as a Transaction Expense for purposes of Section 2.1.1.1(E));

8.2.1.8 (A) based upon, attributable to or resulting from any payments made to the individuals (the “Sincerely Payees”) set forth on Section 8.2.1.8 of the Company Disclosure Schedule pursuant to Section 9.12 of the Agreement and Plan of Merger, dated as of October 15, 2013, by and among the Company, Sincerely Incorporated, and the other parties thereto (the “Sincerely Agreement”) or (B) any payments made pursuant to Section 9.1(b) of such Agreement and Plan of Merger; and

8.2.1.9 based upon, attributable to, or resulting from any payments made pursuant to one of the arrangements set forth on Section 8.2.1.9 of the Company Disclosure Schedule (each, a “Change in Control Severance Agreement”) as a result of the termination of the employment of any employee covered by such Change in Control Severance Agreement in connection with a claim of material diminution in the employee’s title, authority, duties or responsibilities within the Company that constitutes “Good Reason” (as such term is defined in the applicable Change in Control Severance Agreement); provided that, if an employee covered by a Change in Control Severance Agreement is also a party to a written employment agreement with the Company on the date hereof, the Losses with respect to each such employee pursuant to this Section 8.2.1.9 shall be no greater than the amount by which the payments made to such employee pursuant to a Change in Control Severance Agreement exceed the payments that would have been made to the employee as a result of the employee’s termination by the Company without “cause” pursuant to the written employment agreement between the employee and the Company as in effect on the date hereof; and

8.2.2 In the case of any Taxable period that includes but does not end on the Closing Date (a “Straddle Period”), the (i) amount of Pre-Closing Tax Liabilities based on or measured by income, gain, payroll or receipts or relating to any sales or use Tax will be determined based on an interim closing of the books as of the close of business on the Closing Date, and (ii) the amount of any Pre-Closing Tax Liabilities with respect to all other Taxes for a Straddle Period will be deemed to be the amount of such Tax for the entire period multiplied by a fraction, the numerator of which is the number of days in the portion of the Straddle Period ending on the day that is the Closing Date and the denominator of which is the number of days in such Straddle Period. For purposes of this Section 8.2.2, any exemption, deduction, credit or other item related to a Straddle Period that is calculated on an annual basis shall be allocated in the same manner as that set forth in clause (ii) of the preceding sentence. Notwithstanding the foregoing provisions of this Section 8.2.2 or Treasury Regulations Section 1.1502-76(b)(1)(ii)(B), Taxes attributable to any transaction or action taken by or with respect to the Company or any Company Subsidiary out of the Ordinary Course of Business before the Closing on the Closing Date shall be allocated to the Pre-Closing Tax Period, and Taxes attributable to any transaction or action taken by or with respect to the Company or any Company Subsidiary out of the Ordinary Course of Business after the Closing on the Closing Date shall be allocated to the Post-Closing Tax Period.

Section 8.3 Indemnification by Buyer.

8.3.1 Subject to Sections 8.1 and 8.5, in the event the Closing occurs, Buyer hereby agrees to indemnify and hold Seller and its respective directors, officers, employees, Affiliates, stockholders, agents, attorneys, representatives, successors and assigns, other than, after the Closing, the Company (collectively, the “Seller Indemnified Parties” and together with the Buyer Indemnified Parties, the “Indemnified Parties” or each, an “Indemnified Party”) harmless from and against, and pay, pursuant to the calculation set forth in Section 8.3.2, to the applicable Seller Indemnified Parties the amount of any and all Losses, including any Indirect Losses in the form of a diminution in value of Seller’s interest in Buyer, in each case:

8.3.1.1 based upon, attributable to or resulting from the failure of any of the representations or warranties made by Buyer in Sections 4.1, 4.2, 4.3, 4.4 and 4.7, or any certificate or ancillary document (other than the Investor Rights Agreement) delivered pursuant hereto to the extent such certificate or ancillary document speaks as to the representations and warranties made by Buyer in Sections 4.1, 4.2, 4.3, 4.4 and 4.7, to be true and correct in all respects at and as of the date hereof and at and as of the Closing Date (unless made as of another date, in which case, as of such date); and

8.3.1.2 based upon, attributable to or resulting from the breach of any covenant or other agreement on the part of Buyer or (following the Closing) the Company under this Agreement or any certificate or ancillary document (other than the Investor Rights Agreement) delivered pursuant hereto.

8.3.2 The amount for which Buyer shall pay Seller in respect of Losses pursuant to Section 8.3.1 shall equal the sum of:

8.3.2.1 all Losses incurred by a Seller Indemnified Party other than any Indirect Loss, computed by multiplying all Losses pursuant to Section 8.3.1 by (i) one, plus (ii) a fraction, (y) the numerator of which is the Loss Percentage (expressed as a decimal) and (z) the denominator of which is one minus the Loss Percentage (expressed as a decimal); plus

8.3.2.2 all indirect Losses in the form of a diminution in value of Seller’s interest in Buyer (“Indirect Losses”), computed by multiplying (A) a fraction, (x) the numerator of which is the Loss Percentage (expressed as a decimal) and (y) the denominator of which is one minus the Loss Percentage (expressed as a decimal), and (B) the difference, if positive, between the fair market value of Buyer, determined as if such representation, warranty, covenant or agreement which is the subject of such Loss was true and correct or had been performed in all respects, and the fair market value of Buyer, determined after giving effect to the breach, nonperformance or violation of such representation, warranty, covenant or agreement (but without giving effect to any indemnification obligation of Buyer pursuant to this Agreement). For purposes of this Agreement, the term “Loss Percentage” means 35%.

Section 8.4 Indemnification Procedures.

8.4.1 A claim for indemnification under this Agreement for any matter not involving a third party claim shall be given by the Indemnified Party to the Indemnifying Party (as defined below) by written notice as promptly as reasonably practicable after having knowledge of such claim (but in any case within 15 Business Days after the Indemnified Party has knowledge of such claim, or within such reasonably shorter period of time as may be necessary to give the Indemnifying Party a reasonable opportunity to respond to such claim), and include a statement specifying the basis for such claim; provided, however, that failure to give reasonably practicable notice shall not release, waive or otherwise affect the Indemnifying Party’s obligations with respect thereto except to the extent that the Indemnifying Party has suffered actual loss and prejudice as a result of such failure.

8.4.2 In the event that any Litigation shall be instituted or that any claim or demand shall be asserted by any third party in respect of which indemnification may be sought under Sections 8.2 or 8.3 (regardless of the limitations set forth in Section 8.5) (a “Third Party Claim”), the Indemnified Party shall as promptly as reasonably practicable after having knowledge of such Third Party Claim (but in any case within 15 Business Days after having knowledge of such Third Party Claim, or within such reasonably shorter period of time as may be necessary to give the Indemnifying Party a reasonable opportunity to respond to such claim), cause written notice of the assertion of any Third Party Claim of which it has knowledge which is covered by this indemnity to be forwarded to the applicable indemnifying Party under Sections 8.2 or 8.3 (such Party, the “Indemnifying Party”), and include a statement specifying the basis for such claim. The failure of the Indemnified Party to give

reasonably prompt notice of any Third Party Claim shall not release, waive or otherwise affect the Indemnifying Party’s obligations with respect thereto except to the extent that the Indemnifying Party has suffered actual loss and prejudice as a result of such failure. Subject to the provisions of this Section 8.4.2, the Indemnifying Party shall have the right, at its sole expense, to be represented by counsel of its choice, which must be reasonably satisfactory to the Indemnified Party, and to defend against, negotiate, settle or otherwise deal with any Third Party Claim which relates to any Losses indemnified against hereunder; provided that the Indemnifying Party shall, within a reasonable time after receiving the Indemnified Party’s written notice of the assertion of such Third Party Claim, (A) notify the Indemnified Party in writing of its intent to do so; provided that the Indemnifying Party must conduct the defense of the Third Party Claim actively and diligently thereafter in order to preserve its rights in this regard and (B) deliver a written confirmation to such Indemnified Party that, based on the facts presented being true, the indemnification provisions of Sections 8.2 or 8.3, as applicable, are applicable to such Third Party Claim and that the Indemnifying Party will indemnify such Indemnified Party in respect of such claim pursuant and subject to the terms of this Article 8. If the Indemnifying Party assumes such defense and, in the course of defending such Third Party Claim or otherwise, discovers that (i) the facts presented at the time the Indemnifying Party confirmed the application of the indemnification provisions hereof were not true and (ii) such untruth provides a reasonable basis for asserting that the Indemnifying Party does not have any indemnification obligation in respect of such Third Party Claim, then the Indemnifying Party shall not be bound by such confirmation. If the Indemnifying Party elects not to defend against, negotiate, settle or otherwise deal with any Third Party Claim which relates to any Losses indemnified against hereunder, fails to notify the Indemnified Party of its election as herein provided or contests its obligation to indemnify the Indemnified Party for such Losses under this Agreement, the Indemnified Party may defend against, negotiate, settle or otherwise deal with such Third Party Claim. If the Indemnified Party defends any Third Party Claim and the Indemnifying Party is not contesting its obligation to indemnify the Indemnified Party for such Losses under this Agreement, then the Indemnifying Party shall reimburse the Indemnified Party for the reasonable expenses of defending such Third Party Claim upon submission of periodic bills. If the Indemnifying Party assumes the defense of any Third Party Claim, the Indemnified Party may participate, at his or its own expense, in the defense of such Third Party Claim; provided, however, that such Indemnified Party shall be entitled to participate in any such defense with separate counsel at the expense of the Indemnifying Party if (a) so requested by the Indemnifying Party to participate or (b) in the reasonable opinion of counsel to the Indemnified Party, a conflict or potential conflict exists between the Indemnified Party and the Indemnifying Party that would make such separate representation advisable; and provided, further, that the Indemnifying Party shall not be required to pay for more than the reasonable fees and expenses of more than one such counsel for all Indemnified Parties in connection with any Third Party Claim.

Subject to the Parties taking necessary steps to preserve the attorney-client or other privileges, the Parties agree to cooperate and provide reasonable access to the other to such documents and information as may be reasonably requested in

connection with the defense, negotiation or settlement of any such Third Party Claim. No Indemnified Party shall settle or compromise or consent to entry of any judgment with respect to any such action for which it is entitled to indemnification hereunder without the prior consent of the Indemnifying Party, which shall not be unreasonably withheld or delayed, unless the Indemnifying Party shall have failed, after reasonable notice thereof, to undertake control of such action in the manner provided above in this Section 8.4.2 to the extent the Indemnifying Party was entitled to do so pursuant to this Section 8.4.2. The Indemnifying Party shall not, without the consent of such Indemnified Party, settle or compromise or consent to entry of any judgment with respect to any such claim (x) in which any relief other than the payment of money damages is or may be sought against such Indemnified Party or (y) that does not include as an unconditional term thereof the giving to such Indemnified Party by the claimant or claimants, release from all liability in respect of such Third Party Claim.

8.4.3 Sections 8.4.1 and 8.4.2 shall not apply to any Tax Claims to which the provisions of Section 5.12.10 apply.

Section 8.5 Limitations on Indemnification for Breaches of Representations and Warranties.

8.5.1 Seller shall not have any liability under Section 8.2.1.1 and Buyer shall not have any liability under Section 8.3.1.1, unless, in each case, the aggregate amount of Losses incurred and indemnifiable by the Seller Indemnified Parties or the Buyer Indemnified Parties, respectively, thereunder exceeds $4,300,000 (the “Basket”) and, in such event, Buyer or Seller, as applicable shall be required to pay the amount of all such Losses in excess of the Basket; provided that the Basket limitation shall not apply to Losses related to the failure to be true and correct of any of the representations and warranties contained in Sections 3.1, 3.2, 3.3, 3.4, 4.1, 4.2, 4.3 or 4.4.

8.5.2 Seller shall not be required to indemnify any Buyer Indemnified Party under Section 8.2.1.1 and Buyer shall not be required to indemnify any Seller Indemnified Party under Section 8.3.1.1, in each case, for an aggregate amount of Losses greater than $86,000,000 (the “Cap”); provided that there shall be no Cap with respect to Losses related to the failure to be true and correct of any of the representations and warranties contained in Sections 3.1, 3.2, 3.3, 3.4, 4.1, 4.2, 4.3 or 4.4.

8.5.3 For purposes of calculating Losses hereunder, any materiality or Company Material Adverse Effect qualifications in the representations and warranties shall be disregarded.

8.5.4 Seller shall have no right of contribution or other recourse against the Company or the Company Subsidiaries or their respective directors, officers, employees, affiliates, agents, attorneys, representatives, assigns or successors for any Third Party Claims asserted by any Buyer Indemnified Party, except as set forth in Section 8.3.

8.5.5 The right to indemnification or any other remedy based on representations, warranties, covenants and agreements in this Agreement, or any certificate or ancillary document (other than the Investor Rights Agreement) delivered pursuant hereto, shall not be affected by any investigation conducted at any time, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing, with respect to the accuracy or inaccuracy of, or compliance with, any such representation, warranty, covenant or agreement. The waiver of any condition based on the accuracy of any such representation or warranty, or on the performance of or compliance with any such covenant or agreements, will not affect the right to indemnification or any other remedy based on such representations, warranties, covenants and agreements.

8.5.6 In the event of any Loss in respect of which an Indemnified Party asserts an indemnification claim, the Indemnified Party shall use reasonable best efforts to mitigate the consequences of such Loss; provided that if the underlying event is determined to give rise to Losses that are indemnifiable or recoverable hereunder, any reasonable out-of-pocket costs or expenses incurred in connection with such mitigation shall be deemed to be Losses.

8.5.7 No Indemnified Party shall be entitled to any indemnification to the extent that the cost or benefit related to such Loss was reflected in or taken into account in the calculation of the Closing Working Capital Amount or in any amounts that have reduced the Closing Cash Consideration pursuant to clauses (D) and (E) of Section 2.1.1.1.

8.5.8 Any indemnity payment due and payable by an Indemnifying Party to the Indemnified Party under this Agreement shall be (A) net of (and, for the avoidance of doubt, reduced, whether retroactively or otherwise by) any and all third party insurance proceeds and recoveries in respect of third party indemnification obligations actually received by the Indemnified Party thereof in respect of such Loss, whether such proceeds are received before or after indemnity payments are made; provided that such proceeds and recovery will be determined net of the reasonable, out-of-pocket costs and expenses incurred in connection with or otherwise related to prosecuting the claims necessary to obtain such proceeds and recovery and (B) reduced to take account of any net Tax benefit actually taken into account (calculated on a “with and without” basis) with respect to a Tax year ending on or before the last day of the third (3rd) full Tax year following the Closing Date or, if later, in the Tax year in which such Loss is incurred for Tax purposes and in the next succeeding year.

8.5.9 In no event shall any Party’s indemnification obligation hereunder cover or include punitive, exemplary or similar damages, or lost profits (if and to the extent not reasonably foreseeable) suffered by any other party entitled to indemnification under this Agreement except to the extent such damages are paid by an Indemnified Party to a third party.

8.5.10 All indemnification payments made pursuant to this Article 8 shall be treated by the Parties as adjustments to the Purchase Price unless otherwise required by applicable Law.

Section 8.6 Exclusivity.

8.6.1 Following the Closing, except in the case of (A) fraud and (B) with respect to matters for which the remedy of specific performance, injunctive relief or other non-monetary equitable remedies are available (and in such cases, this exception shall apply only with respect to such remedies), the sole and exclusive remedy of the Parties with respect to any and all claims arising from any breach of this Agreement shall be pursuant to the indemnification provisions set forth in this Article 8.

8.6.2 Notwithstanding anything to the contrary in this Agreement, including with respect to Sections 3.20, 4.20 and 8.6.1, the Parties acknowledge and agree that (A) no Party waives any claim for fraud (which claim, to the extent successful, shall include and be limited to entitlement to reasonable attorney’s fees) and (B) nothing set forth in this Agreement shall be deemed to waive such a claim or acknowledge that any element of such a claim cannot be established.

Article 9.
GENERAL PROVISIONS

Section 9.1 Fees and Expenses.

All expenses incurred by the Parties shall be borne solely and entirely by (A) Seller, with respect to expenses incurred by Seller or the Company and (B) Buyer, with respect to expenses incurred by Buyer.

Section 9.2 Notices.

Any notices or other communications required or permitted under, or otherwise in connection with this Agreement, shall be in writing and shall be deemed to have been duly given (A) when delivered in person, (B) upon transmission by electronic mail or facsimile transmission as evidenced by confirmation of transmission to the sender (but only if followed by transmittal of a copy thereof by (x) national overnight courier or (y) hand delivery with receipt, in each case, for delivery by the second (2nd) Business Day following such electronic mail or facsimile transmission), (C) on receipt after dispatch by registered or certified mail, postage prepaid and addressed, or (D) on the next Business Day if transmitted by national overnight courier, in each case as follows:

If to Buyer (or the Company following the Closing), addressed to it at:

FTD Companies, Inc.

3113 Woodcreek Drive

Downers Grove, Illinois 60515

Facsimile:

Attention: Scott D. Levin

E-Mail:

with a copy to (which shall not constitute notice):

Jones Day

901 Lakeside Avenue

Cleveland, Ohio 44114

Facsimile:

Attention: Lyle G. Ganske

James P. Dougherty

E-Mail:

If to the Company (prior to the Closing) or Seller, addressed to it at:

Liberty Interactive Corporation

12300 Liberty Boulevard

Englewood, Colorado 80112

Facsimile:

Attention: Richard N. Baer

E-Mail:

with a copy to (which shall not constitute notice):

Baker Botts L.L.P.

30 Rockefeller Plaza

New York, New York 10112-4498

Facsimile:

Attention: Frederick H. McGrath

Jonathan Gordon

Email:

Section 9.3 Certain Definitions.

For purposes of this Agreement, the term:

“Acceptable Confidentiality Agreement” has the meaning set forth in Section 5.7.2.

“Acquired Company IP” means all Intellectual Property in which any of the Company or any Company Subsidiary has an ownership interest (in whole or in part) or right, including all Company Owned IP and Company Licensed IP.

“Affiliate” of a person has the meaning set forth in Rule 12b-2 under the Exchange Act; provided that following the Closing, neither Buyer nor the Company shall be an Affiliate of Seller or any of its Affiliates.

“Agreement” has the meaning set forth in the Preamble.

“Antitrust Laws” means the Sherman Antitrust Act of 1890, as amended, the Clayton Antitrust Act of 1914, as amended, the HSR Act, the Federal Trade Commission Act of 1914, as amended, and all other applicable competition, merger control, antitrust, trade regulation or similar transnational, national, federal or state, domestic or foreign Laws, and other Laws and administrative and judicial doctrines that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.

“Appointed Members” has the meaning set forth in Section 5.11.5.

“Arbiter” has the meaning set forth in Section 2.2.3.

“Arbiter’s Costs” has the meaning set forth in Section 2.2.3.

“Audited Financials” has the meaning set forth in Section 3.7.1.

“Basket” has the meaning set forth in Section 8.5.1.

“beneficial ownership” (and related terms such as “beneficially owned” or “beneficial owner”) has the meaning set forth in Rule 13d-3 under the Exchange Act.

“Blue Sky Laws” means state securities or “blue sky” laws.

“Business Day” shall mean any day other than a day on which the SEC shall be closed.

“Buyer” has the meaning set forth in the Preamble.

“Buyer Acquisition Proposal” means (A) any inquiry, proposal or offer for or with respect to a merger, consolidation, business combination, recapitalization, binding share exchange, liquidation, dissolution, joint venture or other similar transaction involving Buyer; (B) any inquiry, proposal or offer (including tender or exchange offers) to acquire in any manner, directly or indirectly, more than 15% of the outstanding Buyer Common Stock or Equity Interests of Buyer representing more than 15% of the voting power of Buyer; or (C) any inquiry, proposal or offer to acquire in any manner (including the acquisition of stock in any Buyer Subsidiary), directly or indirectly, assets or businesses of Buyer or the Buyer Subsidiaries, including pursuant to a joint venture, representing more than 15% of the consolidated assets, revenues or net income of Buyer, in each case, other than the transactions contemplated by this Agreement.

“Buyer Adverse Recommendation Change” means the withdrawal or failure to make (or modification in a manner adverse to Seller), or public proposal to withdraw (or modify in a manner adverse to Seller), the Buyer Recommendation.

“Buyer Affiliated Group” has the meaning set forth in Section 4.17.5

“Buyer Benefit Plan” has the meaning set forth in Section 4.10.1.

“Buyer Board” means the Board of Directors of Buyer.

“Buyer Bylaws” has the meaning set forth in Section 4.2.

“Buyer Charter” has the meaning set forth in Section 4.2.

“Buyer Common Stock” means the shares of common stock, par value $0.0001, of Buyer.

“Buyer Consolidated Tax Return” means any Tax Return with respect to any federal, state, provincial, local or foreign Income Taxes that are paid on an affiliated, consolidated, combined, unitary or similar basis and that include any entities other than Buyer or Buyer Subsidiaries.

“Buyer Disclosure Schedule” means the disclosure schedule delivered by Buyer to Seller and the Company prior to the execution of this Agreement.

“Buyer Indemnified Parties” has the meaning set forth in Section 8.2.1.

“Buyer IT Systems” means all computer systems, networks, hardware, Software, databases, websites, and equipment used to process, store, maintain and operate data, information, and functions used in connection with the business of Buyer.

“Buyer Material Adverse Effect” means any change, effect, event, occurrence, state of facts or development that (A) is or would reasonably be expected to be material and adverse to the business, assets, properties, condition (financial or otherwise) or results of operations of Buyer and the Buyer Subsidiaries, taken as a whole; provided, however, that none of the following shall be deemed in themselves, either alone or in combination, to constitute, and that none of the following shall be taken into account in determining whether there has been or will be, a Buyer Material Adverse Effect: (i) any adverse change, effect, event, occurrence, state of facts or development demonstrably resulting from the announcement, pendency of the transactions contemplated hereby; (ii) any adverse change, effect, event, occurrence, state of facts or development after the date hereof, attributable to conditions generally affecting any of the industries in which Buyer participates, the U.S. economy or financial or credit markets (including changes in prevailing interest rates, credit availability, liquidity and quality, currency exchange rates, price levels or trading volumes in the United States or foreign securities markets); (iii) changes in Laws after the date hereof; (iv) changes in GAAP after the date hereof; (v) any outbreak or escalation of hostilities, declared or undeclared acts of

war or terrorism; or (vi) a decline in the price of the Buyer Common Stock on Nasdaq or any other trading market (it being understood that the facts and circumstances giving rise to such events specified this clause (vi) may be deemed to constitute, and may be taken into account in determining whether there has been, a Buyer Material Adverse Effect to the extent such facts and circumstances are not otherwise included in clauses (i)-(v) of this definition), except, with respect to clauses (ii), (iii), (iv) and (v), to the extent that the effects of such change are disproportionately adverse to the business, assets, properties, condition (financial or otherwise) or results of Buyer and the Buyer Subsidiaries, taken as a whole, as compared to other companies in the industries in which Buyer and the Buyer Subsidiaries operate; or (B) prevents or materially impairs or delays the ability of Buyer to perform its obligations under this Agreement or to consummate the transactions contemplated hereby or would reasonably expect to do so.

“Buyer Material Contract” has the meaning set forth in Section 4.12.1.

“Buyer Meeting” has the meaning set forth in Section 5.5.

“Buyer Options” has the meaning set forth in Section 4.3.1.

“Buyer Owned IP” means any Intellectual Property owned by either Buyer or any Buyer Subsidiary in whole or in part.

“Buyer Permits” has the meaning set forth in Section 4.6.

“Buyer Preferred Stock” has the meaning set forth in Section 4.3.1.

“Buyer Prepared Income Tax Returns” has the meaning set forth in Section 5.12.3.2.

“Buyer Prepared Other Tax Returns” has the meaning set forth in Section 5.12.3.3.

“Buyer Prepared Tax Returns” has the meaning set forth in Section 5.12.3.1.

“Buyer Recommendation” has the meaning set forth in Section 5.4.3

“Buyer Representatives” has the meaning set forth in Section 5.6.1.

“Buyer Retirement Plan” has the meaning set forth in Section 5.11.7.

“Buyer SEC Filings” has the meaning set forth in Section 4.7.1.

“Buyer Stock Award” has the meaning set forth in Section 4.3.1.

“Buyer Stock Plan” has the meaning set forth in Section 4.3.1.

“Buyer Stockholder Approval” has the meaning set forth in Section 4.18.

“Buyer Subsidiary” has the meaning set forth in Section 4.1.

“Buyer Superior Proposal” means a bona fide, unsolicited written Buyer Acquisition Proposal not obtained in breach of Section 5.7 of this Agreement (A) that if consummated would result in a third party (or in the case of a direct merger between such third party and Buyer, the stockholders of such third party) acquiring, directly or indirectly, more than 80% of the outstanding Buyer Common Stock or all or substantially all the assets of Buyer and the Buyer Subsidiaries, taken as a whole; (B) that the Buyer Board determines in good faith, after consultation with its outside legal counsel and its outside financial advisor, is reasonably capable of being completed, taking into account all financial, legal, regulatory, timing, the likelihood of completing such Buyer Acquisition Proposal as compared to the transactions contemplated hereby and other aspects of such proposal, including all conditions contained therein and the person making such Buyer Acquisition Proposal; (C) that the Buyer Board determines in good faith, after consultation with its outside legal counsel and its outside financial advisor (taking into account any changes to this Agreement proposed by Seller in response to such Buyer Acquisition Proposal, and all financial, legal, regulatory, timing, the likelihood of completing such Buyer Acquisition Proposal as compared to the transactions contemplated hereby and other aspects of such Buyer Acquisition Proposal, including all conditions contained therein and the person making such proposal, and this Agreement), is more favorable to the stockholders of Buyer from a financial point of view than the transactions contemplated hereby; and (D) the definitive documentation in respect of which does not contain any due diligence or financing condition.

“Cap” has the meaning set forth in Section 8.5.2.

“Cash” means the sum of cash and cash equivalents of the Company and the Company Subsidiaries, as determined in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Audited Financials.

“Change in Control Severance Agreement” has the meaning set forth in Section 8.2.1.9.

“Change Notice” has the meaning set forth in Section 5.7.4.

“Closing” has the meaning set forth in Section 1.2.

“Closing 8-K” has the meaning set forth in Section 5.16.3.

“Closing Balance Sheet” has the meaning set forth in Section 2.2.2.

“Closing Cash Consideration” has the meaning set forth in Section 2.1.1.1.

“Closing Cash Statement” has the meaning set forth in Section 2.2.2.

“Closing Date” has the meaning set forth in Section 1.2.

“Closing Working Capital” means (A) Current Assets, less (B) Current Liabilities.

“Closing Working Capital Statement” has the meaning set forth in Section 2.2.2.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in the Preamble.

“Company Benefit Plan” has the meaning set forth in Section 3.10.1.

“Company Bylaws” has the meaning set forth in Section 3.2.

“Company Charter” has the meaning set forth in Section 3.2.

“Company Common Stock” has the meaning set forth in the Recitals.

“Company Disclosure Schedule” means the disclosure schedule delivered by Seller and the Company to Buyer at or prior to the execution of this Agreement.

“Company IT Systems” means all computer systems, networks, hardware, Software, databases, websites, and equipment used to process, store, maintain and operate data, information, and functions used in connection with the business of Company.

“Company Licensed IP” means any Intellectual Property licensed to the Company or any Company Subsidiary pursuant to a Company Material Contract listed or required to be listed in Section 3.12 of the Company Disclosure Schedule.

“Company Material Adverse Effect” means any change, effect, event, occurrence, state of facts or development that (A) is or would reasonably be expected to be material and adverse to the business, assets, properties, condition (financial or otherwise) or results of operations of the Company and the Company Subsidiaries, taken as a whole; provided, however, that none of the following shall be deemed in themselves, either alone or in combination, to constitute, and that none of the following shall be taken into account in determining whether there has been or will be, a Company Material Adverse Effect: (i) any adverse change, effect, event, occurrence, state of facts or development demonstrably resulting from the announcement, pendency or consummation of the transactions contemplated hereby; (ii) any adverse change, effect, event, occurrence, state of facts or development after the date hereof, attributable to conditions generally affecting any of the industries in which the Company participates, the U.S. economy or financial or credit markets (including changes in prevailing interest rates, credit availability, liquidity and quality, currency exchange rates, price levels or trading volumes in the United States or foreign securities markets); (iii) changes in Laws after the date hereof; (iv) changes in GAAP after the date hereof; (v) any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism or (vi) any adverse change, effect, event, occurrence, state of facts or

development with respect to the RedEnvelope business, except, with respect to clauses (ii), (iii), (iv) and (v), to the extent that the effects of such change are disproportionately adverse to the business, assets, properties, condition (financial or otherwise) or results of the Company and the Company Subsidiaries, taken as a whole, as compared to other companies in the industries in which the Company and the Company Subsidiaries operate; or (B) prevents or materially impairs or delays the ability of the Company or Seller to perform its obligations under this Agreement or to consummate the transactions contemplated hereby or would reasonably be expected to do so.

“Company Material Contract” has the meaning set forth in Section 3.12.2.

“Company Owned IP” means any Intellectual Property owned by either the Company or any Company Subsidiary, in whole or in part.

“Company Permits” has the meaning set forth in Section 3.6.

“Company SAR” has the meaning set forth in Section 5.11.4.

“Company Subsidiary” has the meaning set forth in Section 3.1.

“Confidentiality Agreements” has the meaning set forth in Section 5.6.4.

“Continuing Employees” has the meaning set forth in Section 5.11.1.

“Contract” means any written or oral agreement, contract, indenture, instrument, lease, license, or undertaking or other legally binding commitment or obligation.

“Copyrights” means all copyrights, whether in published or unpublished works, rights in databases and data collections, mask work rights, rights in Software and web site content, rights to compilations and collective works, rights to derivative works of any of the foregoing, registrations and applications for registration for any of the foregoing and renewals or extensions thereof, and moral rights and economic rights in the foregoing.

“Current Assets” means the current assets of the Company on a consolidated basis, as determined in accordance with the current assets set forth on the Example Statement, excluding Cash, current deferred Tax assets and any current assets of RedEnvelope (including any current assets transferred thereto pursuant to Section 5.20). For the avoidance of doubt, “Current Assets” shall be determined after giving effect to all audit adjustments on a monthly basis.

“Current Auditors” has the meaning set forth in Section 5.16.1.

“Current Liabilities” means the current liabilities of the Company on a consolidated basis, as determined in accordance with the current liabilities set forth on the Example Statement, excluding (i) current deferred Tax liabilities, (ii) the current portion of long term Indebtedness (including for the avoidance of doubt, any Indebtedness under the Company’s revolving credit facility), (iii) any and all

Indebtedness that would be considered a current liability that have reduced the Closing Cash Consideration pursuant to clause (D) of Section 2.1.1.1, (iv) Transaction Expenses that have reduced the Closing Cash Consideration pursuant to clause (E) of Section 2.1.1.1, (v) any amounts payable pursuant to the terms of the arrangements identified on Sections 3.9(A)(1) - (8) and 3.11.2(II)(3) of the Company Disclosure Schedule, (vi) any current liabilities of RedEnvelope (including any current liabilities transferred thereto pursuant to Section 5.20), (vii) payables to directors, officers, employees that relate to the SAR Plan, (viii) accrued interest and (ix) any payables (x) related to the Indemnification Holdback in the Sincerely Agreement or (y) to the Sincerely Payees pursuant to Section 9.12 of the Sincerely Agreement. For the avoidance of doubt, “Current Liabilities” shall be determined after giving effect to all audit adjustments on a monthly basis.

“Debt Financing” has the meaning set forth in Section 4.24.1.

“Deferred Compensation Plan” has the meaning set forth in Section 5.11.5.

“Definitive Debt Agreements” has the meaning set forth in Section 5.14.1.

“Delaware Courts” has the meaning set forth in Section 9.13.1.

“Disclosure Schedules” means the Buyer Disclosure Schedule and the Company Disclosure Schedule.

“Domain Names” means Internet electronic addresses, uniform resource locators and alphanumeric designations associated therewith registered with or assigned by any domain name registrar, domain name registry or other domain name registration authority as part of an electronic address on the Internet and all applications for any of the foregoing.

“Environmental Laws” means any Law relating to the pollution, protection, investigation or restoration of the environment, including, without limitation, those relating to the use, handling, presence, transportation, treatment, storage, disposal, release, threatened release or discharge, or the exposure of persons to, of Hazardous Materials.

“Environmental Permits” means any permit, approval, license or other authorization required under any applicable Environmental Law.

“Equity Interest” means any capital stock, partnership, membership or similar interest in any entity, and any option, warrant, right or security convertible, exchangeable or exercisable therefor.

“ERISA” has the meaning set forth in Section 3.10.1.

“Estimated Cash” has the meaning set forth in Section 2.1.1.1.

“Estimated Closing Balance Sheet” has the meaning set forth in Section 2.2.1.

“Estimated Closing Working Capital” has the meaning set forth in Section 2.2.1.

“Estimated Closing Working Capital Excess” has the meaning set forth in Section 2.1.1.1.

“Estimated Closing Working Capital Shortfall” has the meaning set forth in Section 2.1.1.1.

“Example Statement” has the meaning set forth in Section 2.2.1.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Financing Action” has the meaning set forth in Section 5.14.4.

“Financial Statements” has the meaning set forth in Section 3.7.1.

“GAAP” means generally accepted accounting principles as applied in the United States.

“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administration functions of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of the United States, any foreign government, any State of the United States or any political subdivision thereof (including the Banking Authorities and the United States Department of Justice), and any court, tribunal or arbitrator(s) of competent jurisdiction.

“Governmental Authorizations” has the meaning set forth in Section 3.5.2.

“Hazardous Materials” means any chemical, material, waste or other substance defined as “toxic” or “hazardous” or otherwise regulated under any applicable Environmental Law, including petroleum and petroleum-containing materials, asbestos and asbestos-containing materials, radiation and radioactive materials and polychlorinated biphenyls.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder.

“Income Tax” means any and all U.S. federal, state, local and foreign income and franchise taxes and any similar taxes primarily based upon or calculated with respect to gross income, net income, gross receipts, net receipts, capital or profits, and in each case including any interest, penalties, additions to tax and additional amounts imposed with respect thereto; provided, however, that for the avoidance of doubt, “Income Tax” shall not include any sales, use, withholding or payroll taxes and other similar taxes (including interest, penalties, additions to tax and additional amounts imposed with respect thereto).

“Income Tax Returns” means any Tax Returns filed with respect to Income Taxes.

“Indebtedness” means, as to any person, without duplication, (i) the principal, accreted value, accrued and unpaid interest, prepayment and redemption premiums or penalties (if any), unpaid fees or expenses and other monetary obligations in respect of (A) indebtedness for borrowed money and (B) obligations evidenced by bonds, debentures, notes or other similar instruments for the payment of which such person is responsible of liable, (ii) obligations or liabilities of such person under or in connection with letters of credit or bankers’ acceptances or similar items; provided, however, that undrawn amounts shall not be included in this definition of Indebtedness, (iii) that portion of obligations with respect to capital leases that is properly classified as a long term liability on a balance sheet in conformity with GAAP, (iv) all obligations of such person under interest rate or currency swap transactions, (v) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above and (vi) all obligations of the type referred to in clauses (i) through (v) of other persons secured by (or for which the holder of such obligations has an existing right, contingent or otherwise, to be secured by) any Lien on any property or asset of such person (whether or not such obligation is assumed by such person).

“Indemnified Parties” has the meaning set forth in Section 8.3.1.

“Indemnifying Party” has the meaning set forth in Section 8.4.2.

“Indirect Losses” has the meaning set forth in Section 8.3.2.2.

“Initial Cash Consideration” means $121,460,980.

“Intellectual Property” means Copyrights, Domain Names, Patents, Software, trademarks and trade secrets, all tangible embodiments of the foregoing, and all rights to enforce rights in and to collect damages for past, present and future violations of the foregoing.

“Interim Balance Sheet” has the meaning set forth in Section 3.7.1.

“Intervening Event” means a material event or material change in circumstances occurring or arising after the date hereof with respect to Buyer that (A) is materially and disproportionately more favorable to the recurring financial condition and results of operations of Buyer and the Buyer Subsidiaries, taken as a whole, relative to the other businesses operating in the same industry (including the Company’s business) and (B) was neither known to the Buyer Board or the Chief Executive Officer or Chief Financial Officer of Buyer nor reasonably foreseeable as of or prior to the date hereof (and not relating to any Buyer Acquisition Proposal, any development or change relating to the Seller or the Company (including any decline in the trading price of the capital stock of the Seller), clearance of the transactions contemplated by this Agreement under the

HSR Act, or any introduction into the marketplace of new or modified products or services by the Seller or the Subsidiaries of the Seller).

“Intervening Event BARC” has the meaning set forth in Section 5.7.4.

“Intervening Event Termination Fee” has the meaning set forth in Section 7.2.7.

“Investor Rights Agreement” has the meaning set forth in Section 2.1.2.1.

“IRS” means the United States Internal Revenue Service.

“knowledge” will be deemed to be present when the matter in question was actually known after due inquiry to Robert Apatoff, Becky Sheehan or Jandy Tomy (in the case of Buyer) or to Christopher Shean, Chris Shimojima, Rick Sliter, Adam Fischer or Rex Bosen (in the case of the Seller or the Company, as applicable, pursuant to the terms of this Agreement) on or prior to the date of this Agreement.

“Law” means any foreign or domestic law, statute, code, ordinance, rule, regulation, agency requirement, common law, order, judgment, writ, stipulation, award, injunction or decree.

“Legal Advisors” has the meaning set forth in Section 5.13.

“Lenders” has the meaning set forth in Section 5.15.5.

“Liens” means any lien, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any stockholder or similar agreement, encumbrance or any other restriction or limitation whatsoever.

“Litigation” means any (A) action, arbitration or lawsuit or (B) criminal prosecution, examination, or investigation by or before any Governmental Authority.

“L LLC” has the meaning set forth in Section 2.1.1.2.

“Loss” or “Losses” has the meaning set forth in Section 8.2.1.

“Loss Percentage” has the meaning set forth in Section 8.3.2.2.

“Nasdaq” means The Nasdaq Stock Market.

“Open Source Materials” shall mean all Software that is licensed or distributed under an Open Source License.

“Open Source License” means any version of the GNU General Public License (GPL), Lesser/Library General Public License (LGPL), Mozilla Public License (MPL), Common Public License (CPL) or any other license for Software where the license includes terms providing that (a) a licensee of the Software is authorized to make

modifications to, or derivative works of, the Source Code for the Software, and (b) the licensee is authorized to distribute such modifications or derivative works for the Software only if subsequent licensees are authorized to further modify or make derivative works of licensee’s works.

“Ordinary Course of Business” means the ordinary and usual course of day-to-day operations of the business of the relevant person or persons through the date hereof consistent with past practice.

“Other Filings” means all filings made by, or required to be made by, Seller or Buyer with the SEC, other than the Proxy Statement.

“Outside Date” has the meaning set forth in Section 7.1.2.

“Parent Party” or “Parent Parties” means each of Buyer and Seller, or both of them collectively.

“Party” or “Parties” means each of Buyer, Seller and the Company, or all of them collectively.

“Patents” means all patents, industrial and utility models, industrial designs, petty patents, patents of importation, patents of addition, certificates of invention, and any other indicia of invention ownership issued or granted by any Governmental Authority, including all provisional applications, priority and other applications, divisionals, continuations (in whole or in part), extensions, reissues, reexaminations or equivalents or counterparts of any of the foregoing; and moral and economic rights of inventors in any of the foregoing.

“Permitted Liens” means (A) statutory liens for current Taxes or other governmental charges not yet due and payable or the amount or validity of which is being diligently contested in good faith by appropriate proceedings by the Company and the Company Subsidiaries and for which appropriate reserves have been established in accordance with GAAP; (B) mechanics’, carriers’, workers’, repairers’, warehousemen’s, materialmen’s and similar statutory liens arising or incurred in the Ordinary Course of Business or the amount or validity of which is being contested in good faith by appropriate proceedings by the Company and the Company Subsidiaries and for which appropriate reserves have been established in accordance with GAAP, in each case that are not material to the business, operations and financial condition of the property so encumbered and that are not resulting from a breach, default or violation by the Company or any Company Subsidiary of any Contract or Law; (C) Laws, including, but not limited to, zoning, entitlement, building and other land use regulations imposed by any Governmental Authority having jurisdiction over leased real property or owned real property which are not violated by the current use and operation of the applicable leased real property or the violation of which do not materially impair the occupancy or use of the leased real property or owned real property for the purposes for which it is currently used in connection with the business of the Company and the Company Subsidiaries; (D) covenants, conditions, restrictions, easements, encumbrances, rights

of way, licenses, and other matters of record affecting title to the leased real property or owned real property which do not materially impair the occupancy or use of the leased real property or owned real property for the purposes for which it is currently used in connection with the business of the Company and the Company Subsidiaries; (E) liens arising under worker’s compensation, unemployment insurance, social security, retirement and similar legislation, in each case arising in the Ordinary Course of Business and not resulting from a breach, default or violation by the Company or any Company Subsidiary of any Contract or Law; and (F) liens on goods in transit incurred pursuant to documentary letters of credit.

“person” means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization or other entity or group.

“Policies” has the meaning set forth in Section 3.19.

“Post-Closing Tax Period” means any Tax period (or portion thereof) beginning the day after the Closing Date.

“Pre-Closing Investor Director Designees” has the meaning set forth in Section 5.17.

“Pre-Closing Tax Liabilities” has the meaning set forth in Section 8.2.1.3.

“Pre-Closing Tax Period” means any Tax period (or portion thereof) ending on or before the Closing Date.

“Pre-Signing Investor Director Designees” has the meaning set forth in Section 5.17.

“Proxy Statement” means, collectively, the letter to stockholders, notice of meeting, proxy statement and forms of proxy to be distributed to stockholders and to be filed with the SEC in connection with seeking Buyer Stockholder Approval.

“Purchase Price” means the Closing Cash Consideration, as adjusted pursuant to Section 2.2, together with the Stock Consideration delivered pursuant to Section 2.1.

“Real Estate Lease” has the meaning set forth in Section 3.16.

“RedEnvelope” means Provide Gifts, Inc. (d/b/a “RedEnvelope”), a wholly owned subsidiary of the Company.

“Regulatory Conditions” has the meaning set forth in Section 7.1.2.

“Required Buyer Stockholders” has the meaning set forth in Section 4.18.

“Restricted Stock” means shares of Buyer Common Stock subject to the Investor Rights Agreement.

“SAR Plan” has the meaning set forth in Section 5.11.4.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Seller” has the meaning set forth in the Preamble.

“Seller Affiliated Group” has the meaning set forth in Section 3.17.5.

“Seller Consolidated Tax Return” means any Tax Return with respect to any federal, state, provincial, local or foreign Taxes that are paid on an affiliated, consolidated, combined, unitary or similar basis and that include Company or any Company Subsidiary on the one hand, and Seller or any Affiliate of Seller (other than the Company or the Company Subsidiaries) on the other hand.

“Seller Indemnified Parties” has the meaning set forth in Section 8.3.1.

“Seller Representatives” has the meaning set forth in Section 5.6.2.

“Seller Retirement Plan” has the meaning set forth in Section 5.11.7.

“Seller SEC Filings” means all registration statements, prospectuses, forms, reports, definitive proxy statements, schedules and other documents required to be filed with the SEC by Seller under the Securities Act or the Exchange Act, as the case may be, from and after January 1, 2013.

“Services Agreement” has the meaning set forth in Section 2.1.2.8.

“Shares” has the meaning set forth in the Recitals.

“Sincerely Agreement” has the meaning set forth in Section 8.2.1.8.

“Sincerely Payees” has the meaning set forth in Section 8.2.1.8.

“Software” means computer software in any form, including object code, source code and code development tools, and regardless of the method stored or the media upon which it resides.

“Standard Termination Fee” has the meaning set forth in Section 7.2.7.

“Stock Consideration” means 10,203,010 shares of Restricted Stock.

“Stock Consideration Valuation” means $308,539,020.

“Stock Issuance” has the meaning set forth in Section 2.1.1.2.

“Straddle Period” has the meaning set forth in Section 8.2.2.

“Subsidiary” or “Subsidiaries” of Buyer, the Company or any other person means any corporation, partnership, joint venture or other legal entity of which Buyer, the Company or such other person, as the case may be (either alone or through or together with any other Subsidiary), owns, directly or indirectly, a majority of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity.

“Survival Period” has the meaning set forth in Section 8.1.

“Superior Proposal BARC” has the meaning set forth in Section 5.7.4.

“Superior Proposal Termination Fee” has the meaning set forth in Section 7.2.7.

“Takeover Law” means any “moratorium”, “fair price”, “affiliate transaction”, “business combination”, “control share acquisition” or other similar provision of any state Law.

“Target Working Capital” means an amount equal to the average of the prior twelve months’ month-end Current Assets minus month-end Current Liabilities (in each case, as calculated on a monthly basis) for the period ending July 31, 2014.

“Tax Claim” has the meaning set forth in Section 5.12.10.

“Tax Returns” means any report, return, form, claim for refund, election, estimated tax filing, declaration or similar statement or document required to be supplied to, or filed with, any Taxing Authority with respect to Taxes, including any schedule or attachment thereto, and including any amendments thereof.

“Taxes” means any and all (A) taxes, fees, levies, duties, tariffs, imposts and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Taxing Authority, including, without limitation, income, franchise, windfall or other profits, gross receipts, premiums, property, sales, use, net worth, capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation, excise, withholding, escheat, ad valorem, stamp, transfer, value-added, gains tax and license, registration and documentation fees; (B) liability for the payment of any amounts of the type described in clause (A) as a result of being a member of an affiliated, consolidated, combined, unitary or aggregate group or a transferee or successor; and (C) liability for the payment of any amounts as a result of an express or implied obligation to indemnify any other person with respect to the payment of any amounts of the type described in clause (A) or (B).

“Taxing Authority” means any Governmental Authority exercising any authority to impose any Tax or that is responsible for the imposition, assessment or collection of any Tax.

“Third Party Claim” has the meaning set forth in Section 8.4.2.

“Transaction” means the purchase of the Shares of the Company and the performance of the transactions contemplated by this Agreement.

“Transaction Expenses” means, without duplication, except as otherwise expressly set forth in this Agreement, the aggregate amount of any direct out-of-pocket fees and expenses that the Company or any Company Subsidiary is obligated to pay in connection with the Transaction or otherwise relating to the negotiation, preparation or execution of this Agreement or any documents or agreements contemplated hereby or the performance or consummation of the transactions contemplated hereby, in each case, (i) including (A) any fees payable to Governmental Authorities and expenses associated with obtaining necessary or appropriate waivers, consents or approvals of any Governmental Authority or third parties on behalf of the Company or any Company Subsidiary prior to the Closing, (B) any fees or expenses associated with obtaining the release and termination of any Liens on the Company or its Subsidiaries’ assets other than Permitted Liens; (C) all brokers’ or finders’ fees payable under any Contract entered into by Seller or any of its Subsidiaries prior to the Closing; (D) fees and expenses of counsel, advisors, consultants, investment bankers, accountants, and auditors incurred prior to the Closing, (E) an amount equal to the amount that is required to be transferred to the trust established by the Provide Commerce, Inc. Deferred Compensation Plan Amended and Restated Rabbi Trust Agreement in connection with the Closing, if any, in accordance with Section 5.11.5; (F) any sale, “stay-around,” retention, or similar bonuses or payments to current or former directors, officers, employees and consultants paid or promised to be paid by Seller or the Company prior to the Closing as a result of or in connection with the Transaction and all amounts owed under the SAR Plan, if any, to the extent not already paid; and (G) the employer portion of any payroll, Social Security, unemployment or similar Taxes in connection with the payments described in the preceding clause (F) after giving effect to clause (ii); and (ii) excluding payments pursuant to the terms of the arrangements identified on identified on Sections 3.9(A)(1) - (8) and 3.11.2(II)(3) of the Company Disclosure Schedule.

“Transfer Taxes” has the meaning set forth in Section 5.12.6.

“Treasury Regulations” means the regulations promulgated under the Code in effect on the date hereof and the corresponding sections of any regulations subsequently issued that amend or supersede such regulations.

“Willful Breach” means (i) with respect to any breach of a representation or warranty contained in this Agreement, a material breach of such representation or warranty that has been made with the knowledge of the breaching Party and (ii) with respect to any breaches or failures to perform any of the covenants or other agreements contained in this Agreement, a material breach, or failure to perform, that is a consequence of an act or omission undertaken by the breaching Party with the knowledge that the taking of, or failure to take, such act would, or would be reasonably expected to, cause a material breach of this Agreement.

Section 9.4 Interpretation; Terms Defined Elsewhere.

When a reference is made in this Agreement to Articles, Sections, Schedules or Exhibits, such reference shall be to an Article of, Section of, Schedule to or Exhibit to this Agreement unless otherwise indicated. The words “include”, “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” The words “close of business” shall be deemed to mean 5:00 P.M., New York City time, on the date specified. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words “date hereof” shall refer to the date of this Agreement. The term “or” is not exclusive and means “and/or” unless the context in which such phrase is used shall dictate otherwise. Terms defined in the singular in this Agreement shall also include the plural and vice versa. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if” unless the context in which such phrase is used shall dictate otherwise. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. Any reference in this Agreement to a person shall be deemed to be a reference to such person and any successor (by merger, consolidation, transfer or otherwise) to all or substantially all its assets.

Section 9.5 Headings.

The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning, construction or interpretation of this Agreement.

Section 9.6 Severability.

If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

Section 9.7 Entire Agreement.

This Agreement (together with the Exhibits, the Disclosure Schedules and the other documents delivered pursuant hereto) constitute the entire agreement of the Parties and supersede all prior agreements and undertakings, both written and oral, between the Parties, or any of them, with respect to the subject matter hereof, other than the Confidentiality Agreements.

Section 9.8 Amendment.

This Agreement may not be amended except by an instrument in writing signed by each of the Parties.

Section 9.9 Waiver.

At any time prior to the Closing, Buyer or Seller (on behalf of itself and the Company) may, to the extent permitted by applicable Law, extend the timeframe of, or waive any requirement of, the performance of the other Party contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party making such waiver, but such extension or waiver or failure to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure or for any other period not specifically provided in the waiver.

Section 9.10 Assignment.

This Agreement shall not be assigned by operation of Law or otherwise without the prior written consent of the other Parties hereto and any purported assignment hereof shall be null and void, except that (A) Buyer may assign its rights under this Agreement solely to purchase and receive the Shares from Seller pursuant to Section 1.1 to a wholly owned Subsidiary of Buyer and (B) following the Closing, Buyer may assign its rights under this Agreement to a lender of Buyer in connection with the pledge of all of the assets of Buyer to a financial institution as collateral in connection with a bone fide financing transaction; provided, that, in each case, such assignment will not relieve Buyer of its indemnification obligations or any other obligations set forth in this Agreement.

Section 9.11 Parties in Interest.

This Agreement shall be binding upon and inure solely to the benefit of each Party and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement; provided, however, that the Lenders are intended third party beneficiaries of Sections 5.15.5 and 9.13. The representations and warranties in this Agreement are the product of negotiations among the Parties and are for the sole benefit of the Parties. The representations and warranties in this Agreement may represent an allocation among the Parties of risks associated with particular matters regardless of the knowledge of any of the Parties. Accordingly, persons other than the Parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.

Section 9.12 Mutual Drafting.

Each Party has participated in the drafting of this Agreement, which each Party acknowledges is the result of extensive negotiations between the Parties and this Agreement shall not be construed against any Party as the principal draftsperson hereof.

Section 9.13 Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury.

9.13.1 This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without regard to Laws that may be applicable under conflicts of Laws principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware. The Parties hereby irrevocably and unconditionally submit to the sole and exclusive jurisdiction of the Delaware Court of Chancery or, in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, of any other State Court of the State of Delaware or any Federal Court of the United States of America sitting in the State of Delaware (collectively, the “Delaware Courts”), in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in the Delaware Courts, or that this Agreement or any such document may not be enforced in or by such courts, and the Parties irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in the Delaware Courts. The Parties hereby consent to and grant the Delaware Courts jurisdiction over the person of such parties and, to the extent permitted by Law, over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 9.2 or in such other manner as may be permitted by Law shall be valid and sufficient service thereof.

9.13.2 Notwithstanding anything contrary in this Agreement, each of the Parties hereto agrees that it will not bring or support, nor will it permit any of its Affiliates, equityholders, members, partners, officers, directors, employees, agents, advisors and representatives to bring or support, any action, cause of action, claim, cross-claim or third party claim of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against the Lenders in any way relating to this Agreement or any of the transactions contemplated by this Agreement, including any dispute arising out of or relating in any way to the Commitment Letter, the Definitive Debt Agreements or the performance thereof, in any forum other than the Supreme Court of the State of New York, County of New York, or, if under applicable Law exclusive jurisdiction is vested in the federal courts, the United States District Court for the Southern District of New York (and appellate courts thereof). The Parties hereto further agree that all of the provisions of Section 9.13.3 relating to waiver of jury trial

shall apply to any action, cause of action, claim, cross-claim or third party-claim referenced in this Section 9.13.2. Notwithstanding anything to the contrary contained in this Agreement, the Lenders are intended third party beneficiaries of, and shall be entitled to the protections of, this Section 9.13.2, and this Section 9.13.2 may not be amended, supplemented, waived or otherwise modified in a manner adverse to the Lenders without the prior written consent of the Lenders.

9.13.3 EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (INCLUDING BUT NOT LIMITED TO ANY DISPUTE ARISING OUT OF OR RELATING TO THE COMMITMENT LETTER OR THE PERFORMANCE THEREOF OR THE DEBT FINANCING). EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.13. Notwithstanding anything to the contrary contained in this Agreement, the Lenders are intended third party beneficiaries of, and shall be entitled to the protections of, this Section 9.13.3, and this Section 9.13.3 may not be amended, supplemented, waived or otherwise modified in a manner adverse to the Lenders without the prior written consent of the Lenders.

Section 9.14 Disclosure.

Each Party has or may have set forth information in its respective Disclosure Schedule in a section thereof that corresponds to the section of this Agreement to which it relates. Any event or condition specifically disclosed in reasonable detail in one section of a Party’s Disclosure Schedule shall be deemed disclosed or incorporated into any other section of such Party’s Disclosure Schedule with the same degree of specification where it is apparent on the face of such disclosure that such disclosure would be appropriate and relevant to such other section of such Party’s Disclosure Schedule. The fact that any item of information is disclosed in a Disclosure Schedule to this Agreement shall not be construed to mean that such information is required to be disclosed by this Agreement. Such information and the dollar thresholds set forth herein shall not be used as a basis for interpreting the terms “material”, “Company Material Adverse Effect” or “Seller Material Adverse Effect” or other similar terms in this Agreement.

100

Section 9.15 Counterparts.

This Agreement may be executed in two or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

Section 9.16 Specific Performance.

The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in addition to any other remedy to which they are entitled at Law or in equity.

Section 9.17 Further Assurance.

Each Party shall cooperate and take such action as may be reasonably requested by the other Parties in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby; provided, however, that no Party shall be obligated to take any actions or omit to take any actions that would be inconsistent with applicable Law.

[SIGNATURE PAGE FOLLOWS]

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

		BUYER:
		FTD COMPANIES, INC.


		By:	/s/ Robert S. Apatoff
			Name: Robert S. Apatoff
			Its: President & CEO


		SELLER:
		LIBERTY INTERACTIVE CORPORATION


		By:	/s/ Christopher W. Shean
			Name: Christopher W. Shean
			Its: Senior Vice President & Chief Financial Officer


		THE COMPANY:
		PROVIDE COMMERCE, INC.


		By:	/s/ Chris Shimojima
			Name: Chris Shimojima
			Its: CEO

[Signature Page to Stock Purchase Agreement]

EXHIBIT A
RESOLUTION

Resolutions Adopted at a Special Meeting
of the Board of Directors
July 28, 2014

The Acquisition; Issuance of Restricted Company Common Stock

RESOLVED, that the form, terms and provisions of the Stock Purchase Agreement (the “Stock Purchase Agreement”) to be entered into by and among FTD Companies, Inc., a Delaware corporation (the “Company”), Liberty Interactive Corporation, a Delaware corporation (“LIC”) and Provide Commerce, Inc., a Delaware corporation (“Target”), including any exhibits, annexes and schedules thereto, in substantially the form presented to the Board of Directors of the Company (the “Board”), with such changes therein and additions thereto as shall be made in accordance with the following resolution, providing, among other things, for the acquisition by the Company of 100% of the stock of Target (the “Acquisition”), and the payment of consideration therefor by the Company consisting of (A) $121,460,980 in cash and (B) the issuance by the Company of 10,203,010 shares of Common Stock of the Company (the “Restricted Stock Issuance”), and the other transactions, actions and instruments contemplated by or incident to the Stock Purchase Agreement be and hereby are authorized, adopted and approved for all purposes;

FURTHER RESOLVED, that each executive officer of the Company (collectively, the “Authorized Officers”) be, and each of them hereby is, authorized for and on behalf of the Company to execute and deliver the Stock Purchase Agreement with such additions, deletions, changes or modifications as such Authorized Officer executing the same shall approve, such execution and delivery to conclusively evidence the authorization and approval thereof by the Company, and are each hereby empowered to take any other action and make any such filings as such Authorized Officer deems necessary or desirable in connection with the execution, delivery and performance of the Stock Purchase Agreement and the consummation of the transactions contemplated thereby, including the Acquisition;

FURTHER RESOLVED, that the Restricted Stock Issuance be, and it hereby is, authorized and approved, and that when issued under the Stock Purchase Agreement, such Company Common Stock will be validly

issued, fully paid and nonassessable shares of common stock of the Company; and

FURTHER RESOLVED, that, in connection with the Acquisition and the Restricted Stock Issuance, the Company reserves for issuance 10,203,010 shares of Company Common Stock required to be issued to LIC when and as provided in the Stock Purchase Agreement.

Approval of Investor Rights Agreement

RESOLVED, that the form, terms and provisions of the Investor Rights Agreement (the “Investor Rights Agreement”) to be entered into by the Company and LIC upon the consummation of the transactions anticipated by the Stock Purchase Agreement, including any exhibits, annexes and schedules thereto, in substantially the same form presented to the Board, with such changes therein and additions thereto as shall be made in accordance with the following resolution, and the other transactions, actions and instruments contemplated by or incident to the Investor Rights Agreement be and hereby are authorized, adopted and approved for all purposes; and

FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is, authorized for and on behalf of the Company to execute and deliver the Investor Rights Agreement upon the consummation of the transaction with such additions, deletions, changes or modifications as such Authorized Officer executing the same shall approve, such execution and delivery to conclusively evidence the authorization and approval thereof by the Company, and are each hereby empowered to take any other action and make any such filings as such Authorized Officer deems necessary or desirable in connection with the execution, delivery and performance of the Investor Rights Agreement and the consummation of the transactions contemplated thereby.

DGCL 203 Waiver

RESOLVED, that each of the Investor Affiliates (as defined in the Investor Rights Agreement) and any “affiliates” or “associates” thereof (for purposes of this resolution, as defined in and contemplated by Section 203(c)(1) and Section 203(c)(2) of the General Corporation Law of the State of Delaware (“DGCL”)), including persons who become “affiliates” or “associates” of the Investor Affiliates after the date hereof, any group composed solely of Investor Affiliates and any “affiliates” or “associates” thereof, and any Qualified Distribution Transferee (as defined in the Investor Rights Agreement) that receives Issuer Common Stock (as defined in the Investor Rights Agreement) in a Distribution Transaction (as defined in the Investor Rights Agreement) and any “affiliates” or “associates” thereof (collectively, the “Exempt Persons”), are approved

as an “interested stockholder” within the meaning of Section 203 of the DGCL and that any acquisition of “ownership” of “voting stock” (as defined in and contemplated by Section 203(c)(8) and Section 203(c)(9) of the DGCL) of the Company (or any successor thereto) by any of the Exempt Persons, either individually or as a group, as any such acquisition may occur from time to time (including in circumstances where an Investor Affiliate, or “affiliate” or “associate” thereof ceases to be an “affiliate” of the Investor (as defined in the Investor Rights Agreement) and continues to own voting stock of the Company, so long as such person meets the requirements of a Qualified Distribution Transferee (as defined in the Investor Rights Agreement) or an “affiliate” thereof), be and hereby are approved for purposes of Section 203 of the DGCL, and the restrictions on “business combinations” contained in Section 203 of the DGCL shall not apply to any of the Exempt Persons.

EXHIBIT B
Investor Rights Agreement

EXHIBIT C
Services Agreement

AGREED FORM

SERVICES AGREEMENT

between

LIBERTY INTERACTIVE CORPORATION

and

PROVIDE COMMERCE, INC.

SERVICES AGREEMENT

This SERVICES AGREEMENT, dated as of [·], 201[•] (this “Services Agreement”), is entered into between Liberty Interactive Corporation, a Delaware corporation (“Liberty”) and Provide Commerce, Inc., a Delaware corporation (“Provide” and, Provide together with Liberty, the “Parties” and each a “Party”).

WHEREAS, pursuant to the Stock Purchase Agreement, dated as of July 30, 2014 (the “Stock Purchase Agreement”), by and among FTD Companies, Inc., a Delaware corporation (“FTD”), Liberty and Provide, FTD will acquire 100% of the issued and outstanding shares of common stock of Provide from Liberty for the consideration set forth in the Stock Purchase Agreement (the “Transactions”);

WHEREAS, in connection with the consummation of the Transactions, and pursuant to the terms of the Stock Purchase Agreement, prior to the closing of the Transactions (the “Closing”); Provide will transfer (x) the shares of common stock of its Subsidiary conducting the business known as RedEnvelope, Provide Gifts, Inc. (“RedEnvelope”), by way of a distribution to a wholly-owned Subsidiary of Liberty and (y) certain employees and assets of Provide and the Company Subsidiaries primarily used in the business of RedEnvelope, as mutually agreed by FTD and Liberty pursuant to the terms of the Stock Purchase Agreement;

WHEREAS, in connection with the Transactions, Liberty and its Subsidiaries, including RedEnvelope, desire to procure certain services from Provide for a period of time, and Provide is willing to provide such services during a transition period commencing on the Effective Date (as defined in Section 6.01), on the terms and conditions set forth in this Services Agreement.

NOW THEREFORE, in consideration of the mutual agreements, covenants and other provisions set forth in this Services Agreement, the Parties hereby agree as follows:

ARTICLE I

Definitions

1.01. All terms used herein and not defined herein shall have the meanings assigned to them in the Stock Purchase Agreement.

ARTICLE II

Agreement To Provide and Accept Services

2.01. Provision of Services.

(a) On the terms and subject to the conditions contained herein, Provide agrees with Liberty that it shall provide, or, at its discretion, shall cause its Subsidiaries and their respective employees designated by Provide (such designated Subsidiaries and employees, together with Provide, being herein collectively referred to as the “Service Providers”) to provide, to

RedEnvelope (or another Subsidiary of Liberty as determined by Liberty, RedEnvelope and such other Subsidiaries, together with Liberty, each being referred to herein as a “Receiving Party” or, collectively, the “Receiving Parties”) the services (“Services”) listed on the Schedule of Services attached hereto as Exhibit A (the “Services Schedule”). Each Service shall be provided in exchange for the consideration set forth with respect to such Service on the Services Schedule or as the Parties may otherwise agree in writing. Each Service shall be provided and accepted in accordance with the terms, limitations and conditions set forth herein and on the Services Schedule.

2.02. Books and Records; Availability of Information. Each of the Service Providers shall create and maintain accurate books and records in connection with the provision of the Services performed or caused to be performed by them. Upon reasonable notice from a Receiving Party, the Service Providers shall make available for inspection and copying by such Receiving Party’s agents such books and records to the extent relating to the Services provided to such Receiving Party hereunder during reasonable business hours. Such inspection shall be conducted by such Receiving Party or its agents in a manner that will not unreasonably interfere with the normal business operations of the Service Providers. The Receiving Party shall make available on a timely basis to the Service Provider all information and materials reasonably requested by the Service Provider to enable it to provide the Services. The Receiving Party shall provide to the Service Provider reasonable access to the Receiving Party’s premises to the extent necessary for the purpose of providing the applicable Services.

ARTICLE III

Services; Payment; Independent Contractors

3.01. Services To Be Provided. Unless otherwise agreed between the Parties (including to the extent specified in the applicable entry on the Services Schedule), the Service Providers shall be required to perform the Services only in a manner, scope, nature and quality as provided by or within Provide that is similar in all material respects to the manner in which such Services were performed immediately prior to the Effective Date. The Service Providers shall act under this Services Agreement solely as an independent contractor and not as an agent or employee of any Receiving Party or any of such Receiving Party’s Affiliates. [As an independent contractor, all overhead and personnel necessary to the Services required of the Service Provider hereunder shall be the Service Provider’s sole responsibility and shall be at the Service Provider’s sole cost and expense.](1) The Service Provider shall not have the authority to bind a Receiving Party by contract or otherwise. The Parties will use good faith efforts to reasonably cooperate with each other in all matters relating to the provision and receipt of Services, including, without limitation, providing, subject to Section 3.02, any necessary licenses with respect to Intellectual Property of a Party in connection with the provision of Services.

3.02. Third Party Consents. The Receiving Parties understand, acknowledge and agree that certain Services to be provided by the Service Providers may be provided by or through the use of unaffiliated third parties on behalf of a Service Provider pursuant to contracts, including

licenses of Intellectual Property, to which the Receiving Parties are not a party (collectively, “Third Party Contracts”). The Receiving Parties also understand, acknowledge and agree that the continued participation in such Third Party Contracts by such third parties in providing Services may require the Service Providers to obtain additional consents, approvals, permissions or licenses (collectively, “Authorizations”), and that obtaining such Authorizations may involve additional costs, expenses, fees, charges or commissions (“Authorization Expenses”). The Service Providers agree to use reasonable best efforts to seek and obtain any Authorizations necessary pursuant to such Third Party Contracts to provide Services to the Receiving Parties; provided, however, that the Service Providers shall not be required to obtain any Authorizations (i) if such Authorizations would require the Service Providers to modify, amend or otherwise alter a Third Party Contract in a manner that, in the Service Provider’s good faith judgment, is not commercially reasonable or (ii) to the extent that the Receiving Parties do not agree to be fully responsible for any Authorization Expenses related thereto. On termination or expiration of any Third Party Contract during the term of this Services Agreement, the Service Provider shall not be obligated to continue to provide, or cause the provision of, the Services to which the relevant Third Party Contract relates, but at the Receiving Party’s request, the Service Provider shall use reasonable best efforts to cooperate with the Receiving Party and reasonably assist it to enter into its own agreements with third parties (including identifying and approaching the applicable vendor (or another third party vendor) with whom the Receiving Party shall enter into its own third party contract at a price and upon terms that are mutually agreeable to the Receiving Party and such vendor relating to such Service).

3.03. Additional Services.

(a) From time to time during the term applicable to any Service being provided by a Service Provider, Liberty may request, in writing, for Provide (i) to provide additional or different services which Provide is not expressly obligated to provide under this Services Agreement if such services are of the type and scope provided by Provide or its Subsidiaries (other than RedEnvelope) to RedEnvelope during fiscal year 2014 or (ii) expand the scope of any Service (such additional or expanded services, the “Additional Services”).

(b) Promptly after Liberty has requested Additional Services pursuant to Section 3.03(a), a representative of each of Liberty and Provide shall in good faith negotiate the terms of a supplement to the Services Schedule which will describe in detail the service, term and price to be charged for the Additional Services. Once agreed to in writing, the supplement to the Services Schedule (a “Services Agreement Supplement”) shall be deemed part of this Services Agreement as of such date and the Additional Services shall be deemed “Services” provided by such Service Provider to such Receiving Party hereunder, in each case subject to the terms and conditions of this Services Agreement. The foregoing provision shall not be construed as imposing any obligation on the part of Service Provider to enter into any agreement with the Receiving Party or to continue to negotiate with the Receiving Party in the event that Service Provider determines in good faith not to provide the requested additional service.

3.04. Payments. [Except as set forth on the Services Schedule], statements will be delivered to the Receiving Party within fifteen (15) days after the end of each month by the Service Provider, and each such statement shall set forth a brief description of such Services, the

amounts charged therefor, and, except as the Parties may agree or as set forth on the Services Schedule, such undisputed amounts shall be due and payable by the Receiving Party within thirty (30) days after the date of such statement. Interest shall be payable on any amounts that are not paid by the due date for payment. Interest shall accrue and be calculated on a daily basis at an annual rate equal to the prime rate (which shall mean the “prime rate” published in the “Money Rates” section of The Wall Street Journal) plus 2.0% or, if less, the maximum rate allowed by Law. Receiving Parties shall not be entitled to set off or reduce payments owed to Service Providers hereunder by any amounts that it claims are owed to it by Service Providers under any other agreement.

3.05. Disclaimer of Warranty. THE SERVICES TO BE PURCHASED UNDER THIS SERVICES AGREEMENT ARE FURNISHED AS IS, WHERE IS, WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY, SATISFACTORY QUALITY OR FITNESS FOR ANY PARTICULAR PURPOSE. In the event that the provision of any Service for the account of the Receiving Party by a Service Provider conflicts with the Service Provider’s provision of such Service for its own account, priority for the provision of such Service shall be allocated in an equitable manner on an aggregate basis, and in a manner consistent with the Receiving Party’s level of use of such Service during fiscal year 2014 up to the Effective Date (or as described in the applicable entry on the Services Schedule).

3.06. Taxes. Without limiting any provision of this Services Agreement, the Receiving Party shall be responsible for and shall pay any and all sales, use, service, value added, and other similar taxes or charges (together with any related interest and penalties) imposed on, or payable with respect to, any service fees or charges payable pursuant to this Services Agreement.

3.07. Use of Services. The Receiving Party, agrees with the Service Provider that it shall not, and shall cause its Subsidiaries not to, resell any Services to any Person whatsoever or permit the use of the Services by any person other than in connection with the conduct of the Receiving Party’s operations as conducted immediately prior to the Effective Date.

ARTICLE IV

Term of Services

4.01. Subject to Section 6.01, the provision of each Service shall commence on the date hereof and shall terminate on April 30, 2015 or as of the date indicated for each such Service in the applicable entry on the Services Schedule; provided, however, that subject to the applicable entry on the Services Schedule, any Service may be cancelled or reduced in amount or any portion thereof by the Receiving Party upon ten (10) days written notice thereof [(or such other notice period if one is set forth for such Service in the applicable entry on the Services Schedule)].

ARTICLE V

Liabilities

5.01. Limitation of Liability. Subject to Section 5.02 hereof, the liability of the Service Provider with respect to this Services Agreement to the Receiving Party or in respect of any Services provided to the Receiving Party or any act or failure to act in connection herewith, or from the sale, delivery, provision or use of any Service provided under or covered by this Services Agreement, shall not exceed the aggregate fees paid to the Service Provider by the Receiving Party pursuant to the terms of this Services Agreement and the Service Provider shall not be liable for any special, indirect, incidental, consequential or punitive damages of any kind whatsoever (except, in each case, to the extent such damages are paid pursuant to an award in a legal proceeding (or settlement thereof) to third parties by such Party or its Affiliates); provided, that in the case of an intentional breach of this Services Agreement by a Service Provider or the willful misconduct of a Service Provider, this Section 5.01 shall not apply.

5.02. Obligation to Re-perform. In the event of any breach of this Services Agreement by the Service Provider resulting from any error or defect in the performance of any Service (which breach such Service Provider can reasonably be expected to cure by re-performance in a commercially reasonable manner), the Service Provider shall use its reasonable best efforts to correct in all material respects such error, defect or breach or re-perform in all material respects such Service upon receipt of the written request of the Receiving Party.

5.03. Indemnity. Except as otherwise provided in this Services Agreement, each Party shall indemnify, defend and hold harmless the other Party, its Affiliates, employees, representatives and agents from and against any Losses arising out of the intentional breach of this Services Agreement or the willful misconduct of the indemnifying party or its Affiliates, employees, agents, or contractors with respect to the performance or nonperformance of Services hereunder in accordance herewith. The procedures set forth in Sections 8.4 of the Stock Purchase Agreement shall apply to any claim for indemnification hereunder.

ARTICLE VI

Effectiveness; Certain Deemed References; Termination

6.01. Effectiveness; Certain Substitutions. The provision of Services hereunder to RedEnvelope, Liberty and its other Subsidiaries shall commence as of the Closing Date (the time of commencement of the provision of such Services being referred to as the “Effective Date”).

6.02 Termination. Notwithstanding anything herein to the contrary, the rights and obligations of each Party under this Services Agreement shall terminate, and the obligation of the Service Provider to provide or cause to be provided any Service shall cease, on the earliest to occur of (i) the last date indicated for the termination of any Service as indicated on the Services Schedule, (ii) the date on which the provision of all Services has been cancelled pursuant to Article IV hereof, (iii) the date on which this Services Agreement is terminated by either Party,

as the case may be, in accordance with the terms of Section 6.03 hereof or (iv) April 30, 2015; provided that, in each case, no such termination shall relieve any Party of any liability for any breach of any provision of this Services Agreement prior to the date of such termination.

6.03. Breach of Services Agreement. If a Party shall cause or suffer to exist any material breach of any of its obligations to any other Party (the “Nonbreaching Party”) under this Services Agreement, and such breaching Party does not cure such default in all material respects within thirty (30) days after receiving written notice thereof from the Nonbreaching Party, the Nonbreaching Party shall have the right to terminate this Services Agreement to the extent of the rights and obligations of such Nonbreaching Party and breaching Party to each other hereunder immediately thereafter.

6.04. Effect of Termination. Sections 2.02 and 3.04 (with respect to Services provided through termination) hereof and Articles V, VI and VII hereof shall survive any termination or partial termination of this Services Agreement.

ARTICLE VII

Miscellaneous

7.01. No-Third Party Beneficiaries. Other than as provided in Section 5.03 and Section 7.03, this Services Agreement is not intended to and shall not confer any rights or remedies upon any Person other than the Parties hereto.

7.02. Amendments; Waivers.

(a) Any provision of this Services Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each Party, or in the case of a waiver, by the Party against whom the waiver is to be effective.

(b) No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as otherwise provided herein, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by applicable law.

(c) Any consent provided under this Services Agreement must be in writing, signed by the Party against whom enforcement of such consent is sought.

7.03. Successors and Assigns. The provisions of this Services Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors (by merger,

consolidation, transfer or otherwise) and permitted assigns. Neither Party shall be permitted to assign its rights under this Services Agreement to any Person without the prior written consent of the other Party.

7.04. Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury.

(a) This Services Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without regard to Laws that may be applicable under conflicts of Laws principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware. The Parties hereby irrevocably and unconditionally submit to the sole and exclusive jurisdiction of the Delaware Court of Chancery or, in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, of any other State Court of the State of Delaware or any Federal Court of the United States of America sitting in the State of Delaware (collectively, the “Delaware Courts”), in respect of the interpretation and enforcement of the provisions of this Services Agreement and of the documents referred to in this Services Agreement, and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in the Delaware Courts, or that this Services Agreement or any such document may not be enforced in or by such courts, and the Parties irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in the Delaware Courts. The Parties hereby consent to and grant the Delaware Courts jurisdiction over the person of such parties and, to the extent permitted by Law, over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 7.05 hereof or in such other manner as may be permitted by Law shall be valid and sufficient service thereof.

(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS SERVICES AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SERVICES AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO

ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.04(b).

7.05. Notices. Any notices or other communications required or permitted under, or otherwise in connection with this Services Agreement, shall be in writing and shall be deemed to have been duly given (A) when delivered in person, (B) upon transmission by electronic mail or facsimile transmission as evidenced by confirmation of transmission to the sender (but only if followed by transmittal of a copy thereof by (x) national overnight courier or (y) hand delivery with receipt, in each case, for delivery by the second (2nd) Business Day following such electronic mail or facsimile transmission), (C) on receipt after dispatch by registered or certified mail, postage prepaid and addressed, or (D) on the next Business Day if transmitted by national overnight courier, in each case as follows:

If to Liberty, addressed to it at:

Liberty Interactive Corporation

12300 Liberty Boulevard

Englewood, Colorado 80112

Facsimile:

Attention: Richard N. Baer

E-Mail:

with a copy to (which shall not constitute notice):

Baker Botts L.L.P.

30 Rockefeller Plaza

New York, New York 10112-4498

Facsimile:

	Attention:	Frederick H. McGrath
		Jonathan Gordon

E-Mail:

If to Provide, addressed to it at:

Provide Commerce, Inc.

c/o FTD Companies, Inc.

3113 Woodcreek Drive

Downers Grove, Illinois 60515

Facsimile:

Attention: Scott D. Levin

E-Mail:

with a copy to (which shall not constitute notice):

Jones Day

901 Lakeside Avenue

Cleveland, Ohio 44114

Facsimile:

Attention: Lyle G. Ganske

James P. Dougherty

Email:

7.06. Specific Performance. The Parties agree that irreparable damage would occur if any provision of this Services Agreement were not performed in accordance with the terms hereof and that Provide, on the one hand, or Liberty, on the other hand, whichever is not in breach of this Services Agreement, will be entitled to an injunction or injunctions to prevent breaches of this Services Agreement or to enforce specifically the performance of the terms and provisions hereof, in addition to any other remedy to which it may be entitled at law or in equity, without the necessity of posting or securing any bond with respect thereto.

7.07. Counterparts; Effectiveness. This Services Agreement may be executed in two or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. This Services Agreement shall become effective when each Party hereto shall have received counterparts hereof signed by the other Party hereto.

7.08. Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

7.09. Severability. If any term, provision, covenant or restriction of this Services Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Services Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination, the Parties shall negotiate in good faith to modify this Services Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible; provided, however, that in the absence of an agreement as to how to modify this Services Agreement, the remainder of this Services Agreement will continue in full force and effect and the application of such provision to other Persons or circumstances will be interpreted so as reasonably to effect the intent of the Parties hereto, and such invalid, void or unenforceable provision of this Services Agreement shall be replaced with a valid and enforceable provision that will achieve, to the fullest extent possible, the economic, business and other purposes of such severed provision.

7.10. No Strict Construction. The Parties each acknowledge that this Services Agreement has been prepared jointly by the Parties hereto and shall not be strictly construed against any Party hereto.

7.11. Ownership of Work Product. The Service Provider acknowledges and agrees that it will acquire no right, title or interest (including any license rights or rights of use) to any work

product resulting from the provision of Services hereunder for the Receiving Party’s exclusive use and such work product shall remain the exclusive property of the Receiving Party. Each Receiving Party acknowledges and agrees that it will acquire no right, title or interest (other than a non-exclusive, worldwide right of use) to any work product resulting from the provision of Services hereunder that is not for the Receiving Party’s exclusive use and such work product shall remain the exclusive property, subject to license, of the Service Provider.

7.12. Confidentiality. Each of Liberty and Provide (and their Subsidiaries) shall hold, and shall use commercially reasonable efforts to cause each of its respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, all confidential information and documents obtained from the other in connection with the provision of the Services, provided that any and all such Persons and entities to whom any such disclosure is made agree to be bound by the provisions of this Section. The foregoing obligations shall apply unless disclosure is compelled by judicial or administrative process or by other requirements of law. Information and documents of one Party (the “Disclosing Party”) shall not be deemed to be confidential for purposes of this Section 7.12 to the extent such information or document (i) is previously known to or in the possession of the other Party (the “Recipient”) and is not otherwise subject to a requirement to keep confidential, (ii) becomes publicly available by means other than a breach by Recipient of the confidentiality obligations of this Services Agreement or (iii) is received from a third party without, to the knowledge of the Recipient after reasonable diligence, a duty of confidentiality owed to the Disclosing Party.

7.13. Force Majeure. No Party shall be liable for any failure or delay in performing any of its obligations under this Service Agreement so long as and to the extent such failure or delay is due to any cause beyond its reasonable control, including any act of God or a public enemy or terrorist, act of any military, civil or regulatory authority, change in any Law or regulation, fire, flood, earthquake, storm or other like event, disruption or outage of communications (including the Internet or other networked environment), power or other utility, labor problem, unavailability of supplies or extraordinary market conditions or any other cause beyond its reasonable control, whether similar or dissimilar to any of the foregoing. Each Service Provider will promptly notify the Receiving Party, in writing, upon determining that the occurrence of such event of force majeure will cause any material interruption of Service or other material delay or failure to perform. Upon the cessation of the force majeure event, such Service Provider will use reasonable best efforts to resume, or to cause any other relevant Service Provider to resume, its performance with the least practicable delay (provided that, at the election of the applicable Receiving Party, the applicable term for such suspended Service shall be extended by the length the force majeure event caused an interruption or delay of Service). If the provision of any Services is suspended pursuant to this Section 7.13, then the obligations of the Receiving Party with respect to such suspended Services shall likewise be suspended.

7.14 Stock Purchase Agreement. Nothing contained in this Services Agreement is intended or shall be construed to amend, modify, augment or decrease in any respect, or constitute a waiver of, any of the rights and obligations of the parties under the Stock Purchase Agreement.

7.15 Limitation on Scope. NEITHER PARTY ASSUMES ANY RESPONSIBILITY OR OBLIGATIONS WHATSOEVER IN CONNECTION HEREWITH, OTHER THAN THE RESPONSIBILITIES AND OBLIGATIONS EXPRESSLY SET FORTH IN THIS

AGREEMENT.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the Parties have caused this Services Agreement to be executed by their duly authorized representatives.

	LIBERTY INTERACTIVE CORPORATION


	By:
		Name:
		Title:


	PROVIDE COMMERCE, INC.


	By:
		Name:
		Title:

EX-10.1 3 a14-17851_5ex10d1.htm EX-10.1

Exhibit 10.1

AGREED FORM

INVESTOR RIGHTS AGREEMENT

BY AND BETWEEN

LIBERTY INTERACTIVE CORPORATION

AND

FTD COMPANIES, INC.

DATED [·]

INVESTOR RIGHTS AGREEMENT

This INVESTOR RIGHTS AGREEMENT, dated [•] (this “Agreement”), is by and between Liberty Interactive Corporation, a Delaware corporation (“Investor”; which term will be deemed to refer to a Qualified Distribution Transferee or Qualifying Transferee, as the case may be, upon and after the effectiveness of the applicable assignment referred to in Section 1.3 of this Agreement), and FTD Companies, Inc., a Delaware corporation (“Issuer”). Investor and Issuer are each referred to herein as a “Party” and together as the “Parties.”

RECITALS

WHEREAS, pursuant to that certain Stock Purchase Agreement (the “Purchase Agreement”), dated July 30, 2014, by and among Issuer, Investor and Provide Commerce, Inc., a Delaware corporation (“Provide Commerce”), Investor has agreed to sell all of its outstanding interests in Provide Commerce to Issuer in exchange for consideration consisting of $121,460,980 and ten million two hundred three thousand ten (10,203,010) shares (such shares issued as consideration in connection with the transactions contemplated by the Purchase Agreement, the “Shares”, which term will include any shares of Issuer Common Stock issued in respect of such shares) of the Issuer’s common stock, par value $0.0001 per share;

WHEREAS, the Parties are entering into this Agreement to set forth certain rights and restrictions with respect to the shares of Issuer Common Stock Beneficially Owned by the Investor;

WHEREAS, this Agreement is the Investor Rights Agreement described in Section 2.1.2.1 of the Purchase Agreement; and

WHEREAS, capitalized terms used but not defined herein have the meanings set forth in the Purchase Agreement.

ARTICLE 1.
STANDSTILL AND TRANSFER RESTRICTIONS

1.1 STANDSTILL

(a) From and after the date hereof, the Investor will not, and will cause each Investor Affiliate not to, directly or indirectly, acquire Beneficial Ownership of shares of Issuer Common Stock, including for purposes of this Section 1.1(a), rights, options or other derivative securities or contracts or instruments to acquire such ownership that derive their value (in whole or in part) from such Issuer Common Stock, if, after giving

effect to such acquisition, the Investor’s Investor Percentage Interest would exceed the Cap; provided, however, that such restriction on acquisitions will not be applicable with respect to the acquisition by the Investor Affiliates of Beneficial Ownership of Issuer Common Stock (i) pursuant to the Purchase Agreement (unless, for the avoidance of doubt, the representation of the Investor in Section 4.2(d) hereof is not true and correct), (ii) as a result of any stock splits, stock dividends or other distributions or recapitalizations or similar offerings made generally available by the Issuer or any Subsidiary thereof to holders of Issuer Common Stock (or other equity securities of the Issuer), including rights offerings and distributions made generally to holders of Issuer Common Stock (or other equity securities of the Issuer) as a result of their ownership of Issuer Common Stock (or other equity securities of the Issuer) including pursuant to a shareholder rights plan or similar plan or agreement, (iii) as a result of the exercise (or exchange) of any rights distributed by the Issuer pursuant to clause (ii) above, (iv) in accordance with a Permitted Offer or (v) which has been approved by a majority of the Non-Investor Directors.

(b) Notwithstanding the provisions of Section 1.1(a), at any time following the earlier of (x) ten (10) days following the date any Third Party commences (within the meaning of Section 14(d) of the Exchange Act) a tender or exchange offer which, if consummated, would result in such Person becoming the Beneficial Owner of Issuer Common Stock (or other equity securities) having Majority Voting Power (such offer, a “Third Party Offer”), unless during such ten (10) day period, the Issuer Board takes such actions as are reasonably necessary to prevent, delay, or restrict the purchase of Issuer Common Stock (or other equity securities) pursuant to such Third Party Offer, including implementation of a shareholder rights plan and other customary defensive actions, (y) the date Issuer publicly recommends a Third Party Offer or takes any action inconsistent with actions previously taken pursuant to clause (x) (including granting an exception in respect of such Third Party Offer under any shareholder rights plan or granting approval of such offeror for purposes of DGCL Section 203), and (z) at any time following December 31, 2016, so long as, in the case of an action pursuant to this clause (z), Investor has, subsequent to such date, negotiated in good faith with the Issuer Board for a period of at least thirty (30) days as to the terms of such proposed offer, then in each case, the Investor Affiliates will be entitled to commence and accept for purchase and purchase shares of Issuer Common Stock pursuant to a tender or exchange offer so long as such tender or exchange offer (such tender or exchange offer meeting the requirements set forth in this Section 1.1(b), a “Permitted Offer”):

(i) is commenced and made in accordance with the applicable rules and regulations under the Exchange Act applicable to tender or exchange offers, including, if applicable, Section 13(e)-3 of the Exchange Act and the related rules and regulations applicable thereto;

(ii) is made to all holders of Issuer Common Stock;

(iii) will expire no earlier than midnight, New York City time, on the twentieth (20th) business day following the commencement thereof (as determined using Rule 14d-1(g)(3) under the Exchange Act);

(iv) is subject to customary conditions to the obligation of the Investor Affiliates to purchase Issuer Common Stock; provided, that, (A) in the event a Permitted Offer is made pursuant to clause (z) of Section 1.1(b) and no Third Party Offer is commenced or made during the period such Permitted Offer is outstanding, it will be a condition to closing of such Permitted Offer that the number of shares of Issuer Common Stock tendered and not withdrawn, when purchased by the Investor Affiliates, constitute no less than a majority of the outstanding shares of Issuer Common Stock outstanding at the time of commencement that are not Beneficially Owned by the Investor Affiliates as of the date such Permitted Offer is commenced, disregarding for purposes of calculating the number of outstanding shares of Issuer Common Stock any such shares issued pursuant to Section 1.5(e) (such condition, the “Minimum Condition”) and (B) any conditions to the consummation of such offer may be waived by the Investor in its sole discretion, other than, in the event no Third Party Offer is outstanding or is made, in each case, during the pendency of such Permitted Offer, the Minimum Condition; and

(v) provides for consideration payable in cash, common stock or other securities of the Investor or a Subsidiary thereof, or a combination thereof; provided, that, such consideration offered has, on a per share of Issuer Common Stock basis, a fair market value (as determined in good faith by the Investor’s board of directors) equal to or greater than the closing price of the Issuer Common Stock on Nasdaq on the Trading Day immediately prior to the earlier of (x) the public announcement of such Permitted Offer and (y) commencement of such Permitted Offer.

(c) In the event the Investor Affiliates make a Permitted Offer, the Issuer will furnish the Investor Affiliates with all information concerning the Issuer required by the Exchange Act to be included in the applicable offering document for such Permitted Offer.

(d) Except as provided in or permitted by Sections 1.1(b), (e), (f), (g) and (h) unless specifically approved in writing by Issuer, the Investor will not, and will cause each Investor Affiliate and its and their respective Representatives acting on behalf of Investor or any Investor Affiliate not to, in any manner, directly or indirectly:

(i) enter into or agree, effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or cause or participate in or in any way assist, facilitate or encourage any other Person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in: (A) except to the extent otherwise specifically permitted by this Agreement, any acquisition of any Issuer Common Stock (or Beneficial Ownership thereof) or any material portion of the assets of Issuer and its Subsidiaries (taken together); (B) any tender or exchange offer, merger or other business combination involving Issuer or any of its Subsidiaries

(provided, that, this clause does not restrict any Investor Affiliate from (x) opposing publicly or privately any tender or exchange offer, merger or other business combination involving the Issuer or any Subsidiary thereof or (y) Transferring any shares of Issuer Common Stock pursuant to such tender or exchange offer, merger or other business combination); or (C) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to Issuer or any of its Subsidiaries;

(ii) except as provided in Article 3, make or participate in, directly or indirectly, any “solicitation” of “proxies” (as such terms are defined under Regulation 14A under the Exchange Act) to vote, or seek to advise or influence any Person or entity with respect to the voting of, any Issuer Common Stock or any demand for a copy of Issuer’s stock ledger, list of stockholders or any other books and records of Issuer (other than with respect to matters related to the Investor’s exercise or enforcement of rights under the Purchase Agreement), except that this subsection does not restrict (A) the Investor Directors from participating as members of the Issuer Board and any committees thereof in their capacity as such or (B) the Investor Affiliates from opposing publicly or privately, or voting against or encouraging others to vote against, (x) any proposal of a third party regarding a merger or other business combination involving the Issuer or any Subsidiary thereof or (y) other similar corporate transaction on which a vote of the Issuer’s stockholders is required under Delaware Law or Nasdaq rules;

(iii) call or seek to call a meeting of Issuer’s stockholders or initiate any stockholder proposal for action by Issuer’s stockholders, form, join or in any way participate in a 13D Group or otherwise act in concert with any Person, in each case, with respect to the Issuer Common Stock, or seek, propose or otherwise act alone or in concert with others, to influence or control Issuer’s management, the Issuer Board or policies, except that this subsection does not restrict (x) the Investor Directors from participating as members of the Issuer Board and any committees thereof in their capacity as such and (y) the Investor from joining or in any way participating in a 13D Group or otherwise acting in concert with any Person, in each case, to exercise its rights under Section 1.1(d)(ii)(B);

(iv) take any action which would or would reasonably be expected to force Issuer to make a public announcement regarding any of the types of matters set forth in clause (i) above;

(v) bring any action, or otherwise act, to contest the validity of this Section 1.1(d); or

(vi) enter into any discussions or arrangements with any third party with respect to any of the foregoing (except as otherwise expressly provided herein).

(e) Unless earlier terminated or made inapplicable pursuant to Section 1.1(f), the provisions of Section 1.1(d) (other than the provisions of Section 1.1(d)(i)) will terminate upon the expiration of the Restricted Period. For the avoidance of doubt,

any tolling of such restrictions pursuant to Section 1.1(f) will not result in any extension of the period referred to in the previous sentence.

(f) The restrictions set forth in Section 1.1(d) (other than the provisions of Section 1.1(d)(i)) shall not apply (and the Investor will be permitted to take the actions otherwise prohibited thereunder) if any of the following occurs (provided, that, in the event any matter described in clauses (i) or (ii) of this Section 1.1(f) has occurred and resulted in the restrictions imposed under Section 1.1(d) (other than the provisions of Section 1.1(d)(i)) ceasing to apply to the Investor, then, in the event the transaction related to such matter has not occurred within six (6) months of the date on which the Investor was released from such restrictions, then so long as such transaction is not being actively pursued at such time, the restrictions set forth in Section 1.1(d) shall thereafter resume and continue to apply in accordance with their terms, until terminated pursuant to Section 1.1(e) or subsequently made inapplicable pursuant to this Section 1.1(f)):

(i) in the event that a tender offer or exchange offer for at least thirty-five percent (35%) of the Issuer Common Stock is commenced (within the meaning of Section 14(d) of the Exchange Act) by a third Person which, for the avoidance of doubt, is not an Investor Affiliate (and not involving any breach of Section 1.1(d)) which tender offer or exchange offer, if consummated, would result in such third party (or any 13D Group of which such third party is a member) becoming the Beneficial Owner of securities representing greater than either thirty-five percent (35%) of the outstanding shares of Issuer Common Stock or thirty-five percent (35%) of the voting power of the Issuer, and either (1) the Issuer Board recommends that the stockholders of the Issuer tender their shares in response to such offer or does not recommend against the tender offer or exchange offer within ten (10) days after the commencement thereof or such longer period as shall then be permitted under U.S. federal securities laws or (2) the Issuer Board later publicly recommends that the stockholders of the Issuer tender their shares in response to such offer;

(ii) the Issuer solicits from one or more Persons, or enters into substantive discussions with one or more Persons regarding, a proposal with respect to a Change of Control Transaction, or the Issuer makes a public announcement that it is seeking to sell itself and, in such event, such announcement is made with the approval of the Issuer Board;

(iii) subject to the obligations of the Investor under Section 3.2, in the event that the Persons designated by the Investor to be elected or appointed to the Issuer Board as Investor Directors pursuant to Article 3 hereof are either (x) not appointed to the Issuer Board as contemplated herein or nominated for inclusion on management’s slate of nominees for election to the Issuer Board at any Election Meeting or (y) if so nominated are not so elected to the Issuer Board, or the Issuer otherwise breaches its obligations under Article 3;

(iv) the Investor Percentage Interest is less than ten percent (10%);

(v) the Investor Percentage Interest is greater than fifty percent (50%);

(vi) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (x) liquidation, reorganization or other relief in respect of the Issuer or any material Subsidiary or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, receivership or similar Law now or hereafter in effect or (y) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Issuer or any material Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; or

(vii) the Issuer or any material Subsidiary shall (A) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, receivership or similar Law now or hereafter in effect, (B) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (A) above, (C) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Issuer or any material Subsidiary or for a substantial part of its assets, (D) file an answer admitting the material allegations of a petition filed against it in any such proceeding, or (E) make a general assignment for the benefit of creditors.

(g) So long as the Investor Percentage Interest is equal to or greater than fifteen percent (15%), the Issuer agrees not to enter into any agreement regarding a (i) merger, (ii) consolidation, (iii) Change of Control Transaction, or (iv) other business combination transaction unless, in each case, at least ten (10) days prior to the execution of such agreement, the Issuer has given Investor written notice of its intention to enter into such agreement.

(h) Notwithstanding the provisions of Section 1.1(d), and so long as the Investor Percentage Interest is equal to or greater than fifteen percent (15%), in the event (i) the Issuer solicits from one or more Persons or enters into substantive discussions with one or more Persons regarding a proposal with respect to (x) a Change of Control Transaction or (y) a sale of a material portion of the Issuer’s assets outside the ordinary course of business or (ii) the Issuer provides any notice to Investor pursuant to Section 1.1(g), in each case, Investor will be entitled to engage in private discussions with, and make private proposals to, the Issuer Board or management of the Issuer with respect to such proposed transaction or a competing proposal by the Investor.

1.2 TRANSFER RESTRICTIONS

(a) Except as otherwise expressly permitted in this Agreement, (i) from the date of the Closing (the “Closing Date”) until the date which is eighteen (18) months following the Closing Date (the “Restricted Period”), Investor will not Transfer any

Shares and (ii) from the Closing Date until the date which is the third (3rd) anniversary of the Closing Date, Investor will not effect a Qualifying Transfer.

(b) Notwithstanding the prohibition set forth in Section 1.2(a), the following Transfers of all or any portion of the Shares by Investor are permitted, both during the Restricted Period and thereafter, so long as such Transfer also complies with the provisions of this Agreement:

(i) Transfers to any Investor Affiliate;

(ii) Transfers to a Qualified Distribution Transferee in connection with a Distribution Transaction;

(iii) Transfers pursuant to any Change of Control Transaction or as part of any tender or exchange offer which, if consummated, would constitute a Change of Control Transaction; and

(iv) Transfers made in accordance with Section 1.2(d).

(c) In connection with any Transfer of Shares, Investor may only effect such Transfer if each of the following conditions is satisfied with respect to such Transfer:

(i) such Transfer is permitted by Law;

(ii) the Transferee is not a Prohibited Transferee, provided that this subsection shall not be applicable in the event such Shares are being Transferred (x) in a Public Offering, (y) pursuant to a Market Sale or (z) pursuant to Section 1.2(b)(iii); and

(iii) prior to a Transfer, the Transferee provides a representation to Investor and to Issuer, in form and substance reasonably acceptable to each of them, that such Transfer would not result in such Transferee, together with its Affiliates or with any 13D Group of which such Transferee is a member, having Beneficial Ownership of fifteen percent (15%) or more of the outstanding shares of Issuer Common Stock, including in such calculation, for the avoidance of doubt, on an as-converted basis Issuer Securities Beneficially Owned by such Transferee and its Affiliates or 13D Group that are convertible into Issuer Common Stock, provided that this subsection shall not be applicable in the event such Shares are being Transferred in a Public Offering, a Market Sale, a Qualifying Transfer or pursuant to Section 1.2(b).

(d) Notwithstanding anything to the contrary set forth in this Agreement, Section 1.2 (excluding Section 1.2(c)(i)) shall not prohibit:

(i) any Transfer to the extent relating to a pledge of shares of Issuer Common Stock or creation of a security interest in such shares and any Transfer of shares of Issuer Common Stock following a default or event of default or as a result of any foreclosure under such pledge or security agreement if (A) the pledge or security interest is entered into in connection with a bona fide financing transaction or (after

expiration of the Restricted Period) a Hedging Transaction, (B) the pledgee or the secured party is a financial institution or an Affiliate of a financial institution, in either case, that holds pledged shares in the normal course of its business, (C) during the Restricted Period, the maximum number of shares of Issuer Common Stock Beneficially Owned by the Investor Affiliates that may be pledged or subject to a security interest shall not exceed three million four hundred one thousand four (3,401,004)(1) shares of Issuer Common Stock and (D) after the Restricted Period, the maximum number of shares of Issuer Common Stock Beneficially Owned by the Investor Affiliates that may be pledged or subject to a security interest shall not exceed five million one hundred one thousand five hundred five (5,101,505)(2) shares of Issuer Common Stock;

(ii) Stock Lending Transactions effected by the Investor Affiliates if (A) during the Restricted Period, the maximum number of shares of Issuer Common Stock Beneficially Owned by the Investor Affiliates subject to Stock Lending Transactions at any one time shall not exceed three million four hundred one thousand four (3,401,004)(3) shares of Issuer Common Stock, (B) after the Restricted Period, the maximum number of shares of Issuer Common Stock Beneficially Owned by the Investor Affiliates subject to Stock Lending Transactions at any one time shall not exceed five million one hundred one thousand five hundred five (5,101,505)(4) shares of Issuer Common Stock, (C) the terms pursuant to which Shares are made subject to Stock Lending Transactions (the “Lent Shares”) include provisions that provide the Investor Affiliates with the right to vote such Lent Shares (or a number of shares of Issuer Common Stock equal to the number of Lent Shares) at all meetings of Issuer’s stockholders, whether by “recalling” such Lent Shares, terminating the applicable Stock Lending Transaction, borrowing a number of shares of Issuer Common Stock equal to the number of Lent Shares, or otherwise, provided, that, the limitation set forth in this clause (C) will remain applicable only so long as (1) the provisions of Section 1.6 remain in effect or (2) Investor is required to vote for management’s slate of nominees to the Issuer Board pursuant to Section 3.2(b), and (D) the counterparty to such transaction is a financial institution or an Affiliate of a financial institution, in either case, in the business of engaging in such transactions for financial purposes and such Investor Affiliate does not know or have reason to know that such counterparty is engaging in such transaction for any purpose other than to engage in short sales in the ordinary course of business or to return shares of Issuer Common Stock to other stock lenders; or

(iii) Hedging Transactions effected by the Investor Affiliates, including the Transfer of shares of Issuer Common Stock in connection therewith through the delivery of shares of Issuer Common Stock to a third party in connection with the

(1) Subject to adjustment as provided in Section 2.1.1.3 of the Purchase Agreement.

(2) Subject to adjustment as provided in Section 2.1.1.3 of the Purchase Agreement.

(3) Subject to adjustment as provided in Section 2.1.1.3 of the Purchase Agreement.

(4) Subject to adjustment as provided in Section 2.1.1.3 of the Purchase Agreement.

settlement, early termination or satisfaction of a Hedging Transaction; provided, that, for purposes of this clause (iii), the Investor Affiliates shall not, directly or indirectly engage, in any Hedging Transactions during the Restricted Period and thereafter (A) the maximum number of shares of Issuer Common Stock Beneficially Owned by the Investor Affiliates subject to Hedging Transactions at any one time shall not exceed five million one hundred one thousand five hundred five (5,101,505)(5) shares of Issuer Common Stock; (B) no Hedging Transaction shall impair the right of the Investor Affiliates to vote any shares of Issuer Common Stock subject to such Hedging Transaction prior to the settlement, early termination or satisfaction thereof (it being understood that a settlement, early termination or satisfaction, including as a result of a default or an event of default, may result in a disposition of the shares of Issuer Common Stock subject to such Hedging Transaction); (C) if pursuant to a Hedging Transaction, a number of shares of Issuer Common Stock representing ten percent (10%) or more of the outstanding shares of such class (determined as of the date the Hedging Transaction is entered into) (such ten percent (10%) amount, the “Settlement Threshold”), could be Transferred by the Investor Affiliates to the counterparty in connection with the settlement, early termination or satisfaction of such Hedging Transaction, then the Investor Affiliates shall settle or satisfy the obligations with respect to such Hedging Transaction in such a manner so that the number of shares of Issuer Common Stock delivered to such counterparty in connection with the settlement, early termination or satisfaction of such Hedging Transaction does not exceed the Settlement Threshold unless (1) the counterparty has indicated to the Investor Affiliates that it will utilize such shares of Issuer Common Stock solely to fill a preexisting short position in the shares of Issuer Common Stock (either directly or by means of a double print) or (2) the counterparty agrees to dispose of such shares of Issuer Common Stock in a manner reasonably calculated to result in no single Person acquiring greater than two percent (2%) of the outstanding shares of Issuer Common Stock as a result of such settlement, early termination or satisfaction; and (D) the Investor Affiliates shall not engage in any Hedging Transaction unless the counterparty to such transaction is a financial institution or an Affiliate of a financial institution, in either case, in the business of engaging in such transactions and such Investor Affiliate does not know or have reason to know that such counterparty is engaging in such transaction other than as part of its normal course of business.

(e) Following the expiration of the Restricted Period, prior to any Investor Affiliate effecting any Transfer of Shares (x) pursuant to a sale directly into the market or a sale by a broker pursuant to a Shelf Registration or (y) in a sale on a securities exchange pursuant to the requirements of Rule 144 (either of clause (x) or (y), a “Market Sale”):

(5) Subject to adjustment as provided in Section 2.1.1.3 of the Purchase Agreement.

(i) Investor will give prior written notice of such intention (a “Market Sale Notice”) to Issuer, specifying the number of Shares proposed to be the subject of such sale.

(ii) Thereafter, Issuer may, by written notice (the “Exercise Notice”) to the Investor, delivered not later than the fifth (5th) Business Day following delivery of a Market Sale Notice, elect to purchase all, but not less than all, of the Shares specified in such Market Sale Notice for cash at the Volume Weighted Average Price of the Issuer Common Stock during the period of five (5) consecutive Trading Days ending on the second Trading Day preceding the date of delivery of the Market Sale Notice.

(iii) If Issuer exercises its right of first refusal under this Section 1.2(e), the closing of the purchase of any Shares with respect to which such right has been exercised will take place prior to the close of business on the third (3rd) Business Day following the delivery of the Exercise Notice.

(iv) If Issuer does not exercise its right of first refusal under this Section 1.2(e) within the time specified for such exercise in Section 1.2(e)(ii), Investor (or the applicable other Investor Affiliate) may, during the ninety (90)-day period following the expiration of such time for exercise, sell the Shares specified in the Market Sale Notice on a securities exchange, in one or a series of transactions, at the market prices in effect at the time of each such sale.

(v) Upon exercise of a right of first refusal under this Section 1.2(e), Issuer and Investor will be legally obligated to consummate the purchase and sale contemplated thereby.

(vi) The right of first refusal set forth in this Section 1.2(e) will not be assigned or transferred by the Issuer.

(f) Right of First Offer in Connection with a Qualifying Transfer.

(i) Prior to the Investor Transferring Issuer Common Stock in a Qualifying Transfer, it will provide written notice to the Issuer (a “ROFO Notice”) of its intention to engage in a Qualifying Transfer. Such ROFO Notice will specify (A) the number of shares of Issuer Common Stock proposed to be Transferred in the Qualifying Transfer (the “Subject Shares”), (B) the price per share, denominated as a dollar amount per share (the “Target Price”), at which Investor is willing to sell the Subject Shares to the Issuer, (C) whether the Investor intends to effect the Qualifying Transfer in a taxable or tax-free transaction and (D) if the Investor intends to effect the Qualifying Transfer in a tax-free transaction, the aggregate tax basis of the Subject Shares. The ROFO Notice will constitute a binding, irrevocable offer to sell the Subject Shares to the Issuer at a price per share equal to the Target Price (as adjusted as described below).

(ii) In order to accept the offer to purchase the Subject Shares, the Issuer must deliver to the Investor a written notice of acceptance (an “Issuer

Acceptance Notice”) agreeing to purchase all, but not less than all, of the Subject Shares (A) if the ROFO Notice recites that the Investor intends to effect a Qualifying Transfer in a taxable transaction, at a cash price per share equal to the Target Price, or (B) if the ROFO Notice recites that the Investor intends to effect a Qualifying Transfer by means of a non-taxable transaction then, at the option of the Issuer, (1) a cash price per share such that, after deductions for any taxes (calculated at the highest combined marginal rate of federal, state, local and foreign tax) applicable to the income or gain recognized by Investor on the acquisition of the Subject Shares by Issuer, the net proceeds to Investor would be equal to the Target Price or (2) by means of assigning the Issuer’s right to purchase the Subject Shares to a third party (a “ROFO Purchaser”; provided, that if such ROFO Purchaser is a subsidiary of another corporation whose publicly traded common stock will be delivered to Investor as described below, then such parent corporation will agree to be a co-obligor under the ROFO Purchase Agreement (as defined below)), that has agreed to acquire the Subject Shares at the Target Price in a non-taxable transaction.

(iii) In order to be effective, an Issuer Acceptance Notice must (A) in the case of an Issuer Acceptance Notice described in clause (f)(ii)(A) or (f)(ii)(B)(1) above, (1) have attached thereto (x) a certificate of the Issuer’s Chief Financial Officer certifying as to the aggregate amount of cash the Issuer has on hand to use for the purchase of the Subject Shares and that the Issuer has segregated such funds for use in making such purchase and (y) to the extent that the aggregate purchase price payable for the Subject Shares calculated in accordance with clause (f)(ii) (the “Aggregate Purchase Price”) exceeds the amount of available cash set forth in such certificate from the Issuer’s Chief Financial Officer, commitment letters, in form and substance reasonably acceptable to the Investor, from financial institutions committing to provide the Issuer with debt financing with respect to the balance of the Aggregate Purchase Price, (2) not be conditioned upon the receipt of financing or other conditions to closing (other than as described below) and (3) be delivered to Investor no later than 5:00 p.m. Denver, Colorado time on the thirtieth (30th) day following the date the ROFO Notice was given, in the case of a ROFO Notice specifying that the Investor intends to effect a Qualifying Transfer in a taxable transaction, or the fortieth (40th) day following the date the ROFO Notice was given, in the case of a ROFO Notice specifying that the Investor intends to effect a Qualifying Transfer in a tax-free transaction, and (B) in the case of an Issuer Acceptance Notice described in clause (f)(ii)(B)(2) above, (1) have attached thereto an acquisition agreement (the “ROFO Purchase Agreement”), in form and substance reasonably acceptable to the Investor and containing the terms described below, signed by the ROFO Purchaser, committing to acquire the Subject Shares at the Target Price in a transaction not subject to taxation and meeting the requirements of clause (iv) below and (2) be delivered to Investor no later than 5:00 p.m. Denver, Colorado time on the fortieth (40th) day following the date the ROFO Notice was given.

(iv) The consideration to be received by the Investor pursuant to a ROFO Purchase Agreement must consist solely of shares of common stock of the

ROFO Purchaser (or, as applicable, the parent corporation of the ROFO Purchaser), that (x) are to be delivered free and clear of all liens and restrictions (other than applicable securities laws), (y) are actively traded on a national securities exchange and (z) in the aggregate, constitute less than ten percent (10%) of the issued and outstanding shares of common stock of the ROFO Purchaser (or, as applicable, the parent corporation of the ROFO Purchaser), after giving effect to the transaction. The shares of common stock of the ROFO Purchaser (or its parent corporation) to be delivered will be valued on a per share basis at the volume-weighted average price of the Rule 10b-18 eligible trades of such shares (without regard to pre-open or after hours trading outside of regular trading sessions) for the period of five (5) consecutive Trading Days ending on the second Trading Day preceding the date of delivery of the Issuer Acceptance Notice. The ROFO Purchase Agreement will contain (A) no representations and warranties by the Investor other than relating to due organization, existence and good standing of the Investor, due authorization and execution of the ROFO Purchase Agreement and ownership of and good title to the Subject Shares free and clear of all liens or restrictions (other than applicable securities laws or those created by this Agreement), (B) no covenants by the Investor other than covenants to deliver the Subject Shares in exchange for the consideration recited therein and execution of documents assigning this Agreement, (C) no conditions on the obligation of the ROFO Purchaser to acquire the Subject Shares other than the receipt of required regulatory approvals, (D) provision of customary registration rights, no less favorable to the Investor than those set forth in this Agreement (without regard to any Restricted Period or other lock-up provision), with respect to the shares of ROFO Purchaser (or the parent corporation thereof) common stock to be received by the Investor and (E) an outside date for the closing of the transaction no later than one hundred eighty (180) days following the execution of the ROFO Purchase Agreement.

(v) A duly completed and delivered Issuer Acceptance Notice shall constitute a binding irrevocable agreement by the Issuer (or the ROFO Purchaser) to purchase the Subject Shares at the Target Price as provided in this Section 1.2(f). If an Issuer Acceptance Notice meeting the requirements specified above is not delivered within the specified period, then the Issuer will be deemed to have rejected the offer of the Subject Shares.

(vi) Upon delivery of an Issuer Acceptance Notice described in clauses (f)(ii)(A) or (f)(ii)(B)(1) above meeting the requirements specified above within the specified period, Investor will be obligated to sell, and the Issuer will be obligated to buy, all of the Subject Shares at the Target Price, payable in cash by wire transfer of immediately available funds. The closing of such purchase and sale shall occur at such time and place as the parties thereto may agree, but in any event no later than the ninetieth (90th) day after the ROFO Notice is given. The purchase and sale will be without representation or warranty, except that each party to the transaction will represent and warrant that it has all requisite power and authority to enter into the transactions, and Investor will represent and warrant that it is transferring valid title to the Subject Shares and the Subject Shares are being transferred free and clear of any

lien or restriction other than applicable securities laws or those created by this Agreement. Upon the closing of such purchase and sale Investor’s obligations under this Agreement will be terminated in accordance with Section 5.1 and Section 5.2 hereof.

(vii) If the Issuer rejects or is deemed to reject the offer of the Subject Shares set forth in the ROFO Notice, then Investor will be free to enter into an agreement with a Qualifying Transferee during the period of ninety (90) days following the date of the rejection or deemed rejection of the offer represented by the ROFO Notice, so long as the price per share to be paid by such Qualifying Transferee in the Qualifying Transfer (determined by reference to the cash payable by, or the fair market value of any non-cash consideration (as determined as of the execution date of the agreement between such Qualifying Transferee and the Investor or pursuant to such agreement) to be delivered by, the Qualifying Transferee) is equal to or greater than the Target Price.

(viii) The Issuer’s rights under this Section 1.2(f) will not be assignable without the prior written consent of Investor, except to a ROFO Purchaser as set forth herein.

1.3 DISTRIBUTION TRANSACTIONS AND QUALIFYING TRANSFERS; ANTI-TAKEOVER PROVISIONS

(a) In the event the Investor desires to effect a Distribution Transaction in which it will transfer Issuer Common Stock to a Qualified Distribution Transferee (which transfer, for the avoidance of doubt, will be deemed to occur on the date such Qualified Distribution Transferee ceases to be an Affiliate of the Investor), the Issuer, the Investor and the Qualified Distribution Transferee will enter into an amendment to this Agreement on or prior to the date of consummation of such Distribution Transaction reasonably satisfactory to each such party to: (i) effective immediately prior to such Distribution Transaction (but subject to the consummation of the Distribution Transaction) assign all rights and obligations of the Investor (other than Sections 1.2(e) and 1.2(f)) under this Agreement to the Qualified Distribution Transferee, (ii) have such Qualified Distribution Transferee agree to accept, as of immediately prior to the effective time of such Distribution Transaction (but subject to the consummation of the Distribution Transaction), such assignment of rights (other than Sections 1.2(e) and 1.2(f)) and agree to assume and perform all obligations of the Investor hereunder to be performed following the effective time of such Distribution Transaction, (iii) effective immediately prior to such Distribution Transaction (but subject to the consummation of the Distribution Transaction) substitute such Qualified Distribution Transferee for the Investor for all purposes under this Agreement and (iv) provide for (w) a representation from the Investor that such amendment is being entered into in connection with a Distribution Transaction involving the Qualified Distribution Transferee pursuant to Section 1.2 and Section 1.3 of this Agreement, (x) the Investor’s (as such term is used prior to the Distribution Transaction) acknowledgement that it shall not be entitled to any benefits under this Agreement

following such Distribution Transaction (including, for the avoidance of doubt, any benefits to the Investor prior to such Distribution Transaction arising from the 203 Approval or from Section 1.3(b)), (y) the Investor’s (as such term is used prior to the Distribution Transaction) acknowledgement that the Issuer shall not be subject to any liability to the Investor (as such term is used prior to the Distribution Transaction) under this Agreement following such Distribution Transaction (except for any liability arising from any breach of this Agreement by the Issuer or relating to any actions or events occurring, in each case, on or prior to the date of the Distribution Transaction) and (z) the Issuer’s acknowledgement that the Investor (as such term is used prior to the Distribution Transaction) (I) will have no further obligations under this Agreement following such Distribution Transaction and (II) will not be subject to any liability to the Issuer under this Agreement following the Distribution Transaction (except for any liability arising from any breach of this Agreement by the Investor or relating to any actions or events occurring, in each case, on or prior to the date of the Distribution Transaction). For the avoidance of doubt, in no event can more than one Qualified Distribution Transferee be an Investor at any one time.

(b) From and after the date hereof, the Issuer agrees not to (i) amend, modify or rescind the resolution constituting the 203 Approval or (ii) adopt any Stockholder Rights Provision unless such Stockholder Rights Provision by its terms exempts, or at the time of adoption of such Stockholder Rights Provision the Issuer takes action to exempt, any acquisition of Issuer Common Stock by (A) any Investor Affiliate (other than a Qualified Distribution Transferee) (so long as Investor remains obligated to cause such Person to comply with the Investor’s obligations hereunder) (x) so long as the Investor Percentage Interest does not exceed the Cap or (y) pursuant to a Permitted Offer or (B) a Qualified Distribution Transferee pursuant to a Distribution Transaction in compliance with Section 1.3(a), (x) so long as the Investor Percentage Interest does not exceed the Cap or (y) a Permitted Offer.

(c) Prior to any Qualifying Transfer, (i) to the extent necessary, the Issuer will amend any Stockholder Rights Provision applicable to the Qualifying Transferee’s and its Affiliates’ acquisition and continued ownership of Issuer Common Stock in the Qualifying Transfer, such that the acquisition and continued ownership by the proposed Qualifying Transferee of Issuer Common Stock in such Qualifying Transfer or thereafter to the extent otherwise permitted hereunder will not result in the imposition of any such restriction, limitation, economic detriment or cost (including through disproportionate dilution, relative to other holders of Issuer Common Stock, of such Person’s equity or voting power or through a requirement to purchase or otherwise acquire, or offer to acquire, additional equity securities of the Issuer in the form of a mandatory offer requirement, “fair price,” or similar provision) under any such Stockholder Rights Provision; (ii) prior to the Qualifying Transferee becoming an “interested stockholder” (as such term is defined in Section 203(c)(5) of the DGCL) with respect to the Issuer, the Issuer Board will approve (x) the transaction by which the Qualifying Transferee becomes an “interested stockholder” within the meaning of Section 203(c)(5) of the DGCL and (y) the Transfer of Issuer Common Stock by the

Investor to the Qualifying Transferee pursuant to the Qualifying Transfer for purposes of Section 203(a)(1) of the DGCL by adopting a resolution in the form attached hereto as Exhibit A, mutatis mutandis; and (iii) the Issuer, the Investor and the Qualifying Transferee will enter into an amendment to this Agreement (a “Qualifying Amendment”) on or prior to the date of consummation of such Qualifying Transfer reasonably satisfactory to each such party to: (A) effective immediately prior to such Qualifying Transfer (but subject to the consummation of the Qualifying Transfer) assign all rights and obligations of the Investor (other than Sections 1.2(e) and 1.2(f), and except to the extent modified pursuant to Section 1.3(d)) under this Agreement to the Qualifying Transferee, which amendment will provide that the Qualifying Transferee will thereafter be deemed to be the “Investor”, and the Qualifying Transferee’s Affiliates the “Investor Affiliates”, for all purposes hereunder for periods following the consummation of the Qualifying Transfer, (B) have such Qualifying Transferee agree to accept, as of immediately prior to the effective time of such Qualifying Transfer (but subject to the consummation of the Qualifying Transfer), such assignment of rights and agree to assume and perform all obligations of the Investor hereunder to be performed following the effective time of such Qualifying Transfer (in each case, other than Sections 1.2(e) and 1.2(f)), (C) effective immediately prior to such Qualifying Transfer (but subject to the consummation of the Qualifying Transfer) substitute such Qualifying Transferee for the Investor for all purposes under this Agreement (other than Sections 1.2(e) and 1.2(f)) and (D) provide for (w) a representation from the Investor that such amendment is being entered into in connection with a Qualifying Transfer involving the Qualifying Transferee pursuant to Section 1.2 and Section 1.3 of this Agreement, (x) the Investor’s (without giving effect to the substitution of the Qualifying Transferee as the “Investor” hereunder) acknowledgement that it shall not be entitled to any benefits under this Agreement following such Qualifying Transfer (including, for the avoidance of doubt, any benefits to the Investor prior to such Qualifying Transfer arising from the 203 Approval or from Section 1.3(b)), (y) the Investor’s (without giving effect to the substitution of the Qualifying Transferee as the “Investor” hereunder) acknowledgement that the Issuer shall not be subject to any liability to the Investor (as such term is used prior to the Distribution Transaction) under this Agreement following such Qualifying Transfer (except for any liability arising from any breach of this Agreement by the Issuer or relating to any actions or events occurring, in each case, on or prior to the date of the Qualifying Transfer) and (z) the Issuer’s acknowledgement that the Investor (without giving effect to the substitution of the Qualifying Transferee as the “Investor” hereunder) (I) will have no further obligations under this Agreement following such Qualifying Transfer and (II) will not be subject to any liability to the Issuer under this Agreement following the Qualifying Transfer (except for any liability arising from any breach of this Agreement by the Investor or relating to any actions or events occurring, in each case, on or prior to the date of the Qualifying Transfer).

(d) In the event the Issuer so elects in connection with a Qualifying Transfer, the Qualifying Amendment entered into pursuant to Section 1.3(c) may provide that the number of Investor Directors to which the Qualifying Transferee will become

entitled pursuant to Section 3.1(a) following the consummation of the Qualifying Transfer will be reduced to that number of Directors to which the Qualifying Transferee would otherwise be entitled based upon its Investor Voting Interest in accordance with the provisions of Section 3.1, (without regard to such Qualifying Amendment) less one (1) Investor Director.

1.4 LEGEND

(a) All certificates or other instruments representing the Shares will bear a legend substantially to the following effect:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER, OWNERSHIP AND OTHER RESTRICTIONS SET FORTH IN THE INVESTOR RIGHTS AGREEMENT, DATED JULY 30, 2014, BY AND BETWEEN FTD COMPANIES, INC. AND LIBERTY INTERACTIVE CORPORATION, AS MAY BE AMENDED FROM TIME TO TIME, COPIES OF WHICH ARE ON FILE WITH AND AVAILABLE FROM THE SECRETARY OF THE ISSUER, WITHOUT COST.

(b) At Investor’s request, upon receipt of a written opinion of Investor’s counsel reasonably satisfactory to Issuer to the effect that such legend is no longer required under the Securities Act and applicable state laws, Issuer will promptly cause such legend to be removed from any certificate or other instrument representing any Shares to be Transferred in accordance with the terms of this Agreement or following the termination hereof.

1.5 PARTICIPATION RIGHT

From and after the Closing, if the Issuer shall issue or sell New Securities (including, in connection with any acquisition of any assets or businesses by the Issuer or its Subsidiaries) pursuant to which the Issuer receives in the aggregate (or would receive upon the exercise of any New Security), in any one or a series of related transactions, greater than $1,000,000 in gross proceeds, in cash, property (including assets acquired) or other consideration, the Investor shall have the right (on the terms and subject to the conditions set forth in this Section 1.5) to purchase from the Issuer up to the amount of New Securities specified herein. This participation right shall be subject to the following provisions:

(a) In the event that the Issuer at any time issues or sells New Securities with respect to which the Investor’s rights under this Section 1.5 apply, it will give the Investor written notice (each, a “New Issuance Notice”) of such issuance or sale and documentation relating to such issuance or sale not more than five (5) Business Days after the consummation of such issuance or sale. The New Issuance Notice shall describe (i) the terms and conditions of the New Securities giving rise to the participation right, (ii) the amount of New Securities issued or sold by the Issuer, (iii) the price (which, in the case where such New Securities are issued or sold other than for cash, will be deemed to be the fair market value, as determined by the Issuer Board in good faith, of the consideration received by the Issuer in respect of such issuance or sale of New Securities) and the general terms upon which the Issuer issued or sold such New Securities and (iv) the Maximum Amount (as defined below). In order to exercise its participation right, Investor will give the Issuer written notice (which notice shall be irrevocable when given) of the amount of New Securities it will purchase (which amount will not exceed its Maximum Amount) within ten (10) days after its receipt of the applicable New Issuance Notice. The failure to respond during such ten (10) day period shall constitute a waiver of the Investor’s rights under this Section 1.5 in respect of such issuance; provided, however, that in the event the Investor has sold shares of Issuer Common Stock in the six (6) month period preceding the date the New Issuance Notice is delivered to it and such sale was not otherwise an exempt sale for purposes of Section 16(b) under the Exchange Act, then Investor’s period to give notice of its agreement to purchase New Securities pursuant to this Section 1.5 will be extended until the date which is six-months and one day from the date of Investor’s last matchable sale (for purposes of Section 16(b) under the Exchange Act) of Issuer Common Stock, and all other periods referred to in Section 1.5(a) through (d) will be adjusted accordingly.

(b) The maximum amount of New Securities which Investor may purchase pursuant to its participation right under this Section 1.5, in connection with an issuance of New Securities (the “Maximum Amount”), shall equal the difference between:

(i) the quotient of (x) the number of New Securities and (y) one (1) minus the Investor Voting Interest (expressed as a decimal); and

(ii) the amount of New Securities sold or issued by the Issuer in the transaction giving rise to such participation right, as set forth in the applicable New Issuance Notice.

(c) The participation right set forth in this Section 1.5 with respect to any issuance of New Securities may be assigned or transferred (in whole, but not in part) by Investor to any Investor Affiliate and, in connection with any Distribution Transaction and Qualifying Transfer will be assigned (in whole, but not in part) to the Qualified Distribution Transferee or Qualifying Transferee, as the case may be, to which shares of Issuer Common Stock are Transferred pursuant to Section 1.2 or Section 1.3.

(d) As used in this Section 1.5, “New Securities” means Issuer Common Stock or other equity securities of the Issuer, whether authorized now or in the future, and rights, options or warrants to purchase such Issuer Common Stock or other equity securities of the Issuer; provided, however, that the term “New Securities” does not include any of the following: (i) securities (including options or warrants) issued to employees, consultants, officers or directors of the Issuer or any of its Subsidiaries pursuant to any stock option, stock purchase or stock bonus plan or other award, agreement or arrangement; provided that the same are approved by the Issuer Board or the Compensation Committee of the Issuer Board; (ii) securities issued in a public offering pursuant to a registration under the Securities Act; (iii) securities issued pursuant to any stock split, stock dividend or recapitalization of the Issuer; (iv) securities issued pursuant to the conversion, exercise or exchange of securities outstanding on the date of this Agreement; (v) securities issued to Investor upon exercise of its participation rights under this Section 1.5; and (vi) in the case of any right, option, warrant or other securities convertible into, or exercisable or exchangeable for, any other securities that are excluded from the definition of New Securities pursuant to clauses (i) through (v) above, any other securities issued upon the exercise, exchange or conversion of any such right, option, warrant or other convertible, exchangeable or exercisable security.

(e) So long as Issuer has complied with Section 1.1(g) of this Agreement, Issuer may issue or sell Issuer Common Stock in an amount of up to 19.9% of the outstanding Issuer Common Stock (before giving effect to such issuance) to a single third Person concurrently with the entry by Issuer and such third Person into a definitive agreement for a Change of Control Transaction and the Investor shall not have any participation right under this Agreement in respect of such issuance; provided, that:

(i) the consideration to be received by Issuer in such issuance will be an amount (equal to the fair market value (as determined in good faith by the Issuer Board) of the consideration to be paid per share of Issuer Common Stock by such third Person pursuant to such definitive agreement for a Change of Control Transaction multiplied by the number of shares of Issuer Common Stock to be issued and sold to such Person pursuant to this Section 1.5(e), and will be payable either in cash (in immediately available funds) in the amount of such aggregate purchase price or by delivery of a Qualifying Note having a principal amount equal to such aggregate purchase price;

(ii) the agreements and arrangements with such third Person do not include any (A) obligation of the Issuer to repurchase such shares of Issuer Common Stock or exchange such shares of Issuer Common Stock for any assets, businesses or securities of the Issuer or its Subsidiaries, or provide for any minimum price, “make well” or form of consideration restrictions on any acquisition of such shares of Issuer Common Stock in any merger or other business combination, (B) rights of such third Person to designate for appointment or election a number of Directors on the Issuer Board greater than such Person’s proportional ownership of Issuer Common Stock,

(C) any consent or approval rights with respect to any merger, business combination or other extraordinary transaction, other than (1) the right to vote on the same basis as other holders of Issuer Common Stock and (2) matching rights and related provisions customarily contained in merger or transaction agreements for similar transactions; provided, that the foregoing will not include any payment or other consideration to such third Person in the event the transaction contemplated by any such agreement for a Change of Control Transaction is not approved by the Issuer’s stockholders, unless such payment or other consideration is made in connection with the Issuer’s entry, within one (1) year of the date of the failure to obtain such approval of the Issuer’s stockholders, of an alternative transaction which is a Change of Control Transaction, or (D) any registration rights more favorable to such third Person than those set forth in this Agreement (without regard to any Restricted Period or other lock-up provision);

(iii) such issuance will not materially delay, restrict or limit the Investor Affiliates’ right to make a Permitted Offer or purchase shares of Issuer Common Stock thereunder; and

(iv) this Section 1.5(e) may only be used on a single occasion and following an issuance of shares of Issuer Common Stock pursuant to this Section 1.5(e), the Issuer’s rights under Section 1.5(e) will be terminated.

(f) Notwithstanding anything to the contrary in this Agreement, if the Investor Voting Interest is less than ten percent (10%) at any time, then the participation right under this Agreement shall terminate from and after such time.

1.6 QUORUM

So long as the Investor Affiliates collectively Beneficially Own at least five percent (5%) of the outstanding shares of Issuer Common Stock, the Investor will, and will cause any other Investor Affiliates that hold such shares to, be present, in person or by proxy, at all meetings of Issuer’s stockholders so that all shares of Issuer Common Stock held by them may be counted for purposes of determining a quorum at such meetings.

ARTICLE 2.
REGISTRATION RIGHTS

2.1 SHELF REGISTRATION

(a) Subject to Section 1.2 and except as otherwise contemplated in Section 2.12, at any time following the expiration of the Restricted Period when a Registration Statement registering Registrable Securities for resale is not then effective (subject to any applicable Suspension Period), upon Investor’s written request and subject to Investor’s compliance with Section 2.10, Issuer will use its reasonable best efforts to register, under the Securities Act on Form S-3 (or, if Form S-3 is not then available to the Issuer, such other form that is so available) for an offering on a delayed or

continuous basis pursuant to Rule 415 promulgated under the Securities Act (a “Shelf Registration”), the offer and sale of all or a portion of the Registrable Securities. If the Issuer then meets or is deemed to meet the eligibility requirements to file an “automatic shelf registration statement” (as defined in Rule 405 promulgated under the Securities Act) (“ASRS”) set forth in General Instruction I.D. to Form S-3, the Issuer will cause the Shelf Registration to be an ASRS. The “Plan of Distribution” section of such Shelf Registration will permit all lawful means of disposition of Registrable Securities, including firm-commitment underwritten public offerings, block trades, agented transactions, sales directly into the market, purchases or sales by brokers and sales not involving a public offering and any dispositions effected in connection with Hedging Transactions, Stock Lending Transactions or Permitted Pledges. With respect to each Shelf Registration requested in compliance with this Section 2.1, Issuer will, subject to any Suspension Period, (i) as promptly as practicable after Investor’s written request (and in the case of a Shelf Registration on Form S-3, in no event other than as a result of a Suspension Period, later than twenty (20) Business Days following the receipt of such request, and in the case of a Shelf Registration on Form S-1, in no event other than as a result of a Suspension Period, later than forty (40) Business Days following the receipt of such request), file a Registration Statement and (ii) use its reasonable best efforts to cause such Registration Statement to be declared effective as promptly as practicable, and remain effective until such time as there are no Registrable Securities remaining for offer and sale thereunder.

(b) From and after the date hereof, the Issuer shall use its reasonable best efforts to qualify under the provisions of the Securities Act, and thereafter, to continue to qualify at all times, for registration on Form S-3 or any successor thereto. In the event the Issuer fails to so qualify, the Issuer shall be required to use its reasonable best efforts to effect registrations pursuant to this Section 2.1 on Form S-1 or any successor form thereto to the same extent as the Issuer would be required to effect registrations on Form S-3.

(c) Upon Investor’s written request specifying the amount of Registrable Securities to be sold (such request, a “Shelf Public Offering Request” and such securities, the “Requested Shelf Registered Securities”), Issuer will (subject to any Suspension Period) perform its obligations hereunder with respect to the sale of such Requested Shelf Registered Securities in the manner of sale specified by Investor in such written request, which may include the form of a firm commitment underwritten public offering (a “Shelf Public Offering”); provided, that, the Issuer shall not be required to perform such obligations if the aggregate offering price, as such amount is determined on the cover page of the Registration Statement, for the sale of the Requested Shelf Registered Securities does not equal or exceed the lesser of (i) $50,000,000 and (ii) ten percent (10%) of Issuer’s market capitalization determined in good faith as of the date Issuer receives the Shelf Public Offering Request. Investor will not be entitled to include any of its Registrable Securities in a Shelf Public Offering unless it has complied with Section 2.10. Investor may, after consultation with Issuer,

select the lead managing underwriter or underwriters for any Shelf Public Offering subject to the prior written consent of Issuer (which such consent may not be unreasonably withheld, delayed or conditioned).

(d) In a Shelf Public Offering, if the lead managing underwriter advises Issuer and Investor that, in its view, the number of shares of Registrable Securities requested to be included in such Shelf Public Offering (including any securities that Issuer proposes to be included that are not Registrable Securities and any securities held for the account of any other Person which Investor has agreed to include in such Shelf Public Offering) exceeds the largest number of shares that can be sold without having an adverse effect on such offering, including the price at which the Requested Shelf Registered Securities can be sold (the “Maximum Offering Size”), Issuer will include in such Shelf Public Offering, in the priority listed below, up to the Maximum Offering Size:

(i) first, all Requested Shelf Registered Securities Investor requested to be included in the Shelf Public Offering;

(ii) second, any securities Issuer proposed to be included in the Shelf Public Offering; and

(iii) third, any securities proposed to be included in the Shelf Public Offering for the account of any other Persons, with such priorities among them as Issuer may determine.

(e) Without limiting the generality of Section 2.12, Issuer will use its reasonable best efforts to cooperate in a timely manner with any request by Investor in respect of any block trade, hedging transaction or other transaction that is registered pursuant to a Shelf Registration that is not a firm commitment underwritten offering (each, an “Alternative Transaction”), including entering into customary agreements with respect to such Alternative Transactions (and providing customary representations, warranties, covenants and indemnities in such agreements) as well as providing other reasonable assistance in respect of such Alternative Transactions of the type applicable to a Public Offering subject to Section 2.5, to the extent customary for such transactions.

(f) Issuer may suspend its obligation to file (but not the preparation of) any Registration Statement in connection with any Shelf Registration (including any Shelf Public Offering), file any amendment to such a Registration Statement, file or furnish any supplement or amendment to a prospectus included in such a Registration Statement, make any other filing with the SEC, cause such a Registration Statement or other filing with the SEC to become or remain effective or take any similar action (collectively, “Registration Actions”) upon (i) the issuance by the SEC of a stop order suspending the effectiveness of any such Registration Statement or the initiation of proceedings with respect to such a Registration Statement under Section 8(d) or 8(e) of the Securities Act or (ii) the Issuer Board’s determination, in its good faith judgment,

that any such Registration Action would materially interfere with, or would require the public disclosure of any material non-public information the disclosure of which would materially interfere with, any material corporate transaction or negotiation, including as to any material financing plans, acquisitions, dispositions, mergers or other material business activities involving the Issuer and its Subsidiaries, taken as a whole. Upon the occurrence of any of the conditions described in (i) or (ii) above in connection with undertaking or suspending to undertake a Registration Action, Issuer will give Investor prompt notice (which shall be delivered within one (1) Business Day of the applicable determination) of such suspension (and whether such action is being taken or failing to be taken pursuant to (i) or (ii) above) (a “Suspension Notice”). Upon the termination of such condition, Issuer will give Investor prompt notice (which shall be delivered within one (1) Business Day of the applicable determination) thereof and will promptly proceed with all Registration Actions that were suspended pursuant to this paragraph. Notwithstanding the foregoing, Issuer may only suspend Registration Actions pursuant to Section 2.1(f) for a reasonable period of time not to exceed sixty (60) consecutive days or 120 days in the aggregate in any 12-month period (each such occasion, a “Suspension Period”). Each Suspension Period will begin on the date the relevant Suspension Notice is received by Issuer and will end on the earlier to occur of (y) the date on which Issuer notifies Investor that the Suspension Period has terminated and (z) the sixtieth (60th) day of such Suspension Period. If filing of any Shelf Registration is suspended pursuant to this Section 2.1(f), once the Suspension Period ends, Investor may request a new Shelf Registration. Issuer will not be required to amend a Shelf Registration (or the related prospectus) to add or change the disclosure regarding selling security holders during any Suspension Period. The Issuer agrees that it will terminate any such Suspension Period as promptly as reasonably practicable. If at the time of receipt of a Suspension Notice, the Investor shall have sold Registrable Securities (or have signed a firm commitment underwriting agreement with respect to the purchase of such shares) and the reason for the Suspension Period is not of a nature that would require a post-effective amendment to the Registration Statement, then the Issuer shall use its reasonable best efforts to take such action as to eliminate any restriction imposed by federal securities laws upon the timely delivery of such shares. Immediately upon receipt of any Suspension Notice, the Investor shall discontinue the disposition of Registrable Securities under the applicable Registration Statement and prospectus relating thereto until the applicable Suspension Period is terminated. After the expiration of any Suspension Period and without any further request from Investor, the Issuer shall as promptly as reasonably practicable prepare a post-effective amendment or supplement to the Registration Statement or the prospectus, or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. If a Suspension Period occurs while a Registration Statement is effective, the Issuer shall cause such amended or replacement Registration Statement to remain effective for a number of days equal to the total number of days during which

the distribution of Registrable Securities was suspended thereunder pursuant to this Section 2.1(f).

(g) Notwithstanding anything to the contrary in this Agreement, Issuer will not be in breach of, or have failed to comply with, any obligation under this Agreement where it acts or omits to take any action in order to comply with Law, any written interpretation of the staff of the SEC or any order or decree of any court or governmental agency.

2.2 PIGGYBACK REGISTRATION

(a) Subject to Section 1.2, if Issuer proposes to register any Issuer Common Stock under the Securities Act at any time following the expiration of the Restricted Period (other than (x) a registration on Form S-8 or Form S-4 or any similar or successor form under the Securities Act, relating to Issuer Common Stock or any other class of Issuer Securities issuable upon exercise of employee stock options or in connection with any employee benefit or similar plan or in connection with a direct or indirect acquisition by Issuer of another Person or (y) in connection with a rights offering), Issuer will give notice to Investor at least twenty (20) Business Days prior to the anticipated filing date of the registration statement relating to such registration and offer Issuer the opportunity to include in such registration statement the number of Registrable Securities as Investor may request (a “Piggyback Registration”), subject to Section 2.2(b). Upon Investor’s request made within ten (10) days after the receipt of such notice from Issuer specifying the number of Registrable Securities intended to be registered by Investor, Issuer will use its reasonable best efforts to effect the registration under the Securities Act of all Registrable Securities that Investor has so requested to include in such registration statement, to the extent required to permit the disposition of the Registrable Securities to be registered in accordance with the plan of distribution intended by Issuer for such registration statement, except that (i) if such registration involves a Public Offering, and if Investor has requested to be included in the applicable registration statement, Investor must sell its Registrable Securities to the underwriters selected by Issuer on the same terms and conditions as apply to the Persons on whose behalf the registration statement was initially undertaken and (ii) if, at any time after giving notice of its intention to register any shares of Issuer Common Stock pursuant to this Section 2.2(a) and prior to the effective date of the registration statement filed in connection with such registration, Issuer determines for any reason not to register such securities, Issuer will give Investor notice thereof and will be relieved of its obligation to register any Registrable Securities in connection with such registration.

(b) If a Piggyback Registration involves a Public Offering and the lead managing underwriter advises Issuer that, in its view, the number of shares of Issuer Common Stock that Issuer and such registering stockholders intend to include in such registration exceeds the Maximum Offering Size, Issuer will include in such registration, in the following priority, up to the Maximum Offering Size:

(i) first, so many of the number of shares of Issuer Common Stock proposed to be registered for the account of Issuer as would not cause the offering to exceed the Maximum Offering Size; and

(ii) second, any securities proposed to be registered for the account of any other Persons, including the Investor, pro rata based on the number of shares of Issuer Common Stock Beneficially Owned by Investor and each such other Person.

2.3 EXPENSES

Issuer will bear all expenses (other than Selling Expenses) incurred by Issuer in complying with its obligations pursuant to this Article 2 and in connection with the registration, qualification and disposition of Registrable Securities, including all registration and filing fees, underwriting expenses (other than fees, commissions or discounts), expenses of any audits incident to or required by any such registration, fees and expenses of complying with securities and Blue Sky Laws, printing expenses, fees and expenses of Issuer’s counsel and accountants, except that if Investor revokes its request with respect to a Shelf Public Offering, then Investor will reimburse Issuer for or will pay directly all expenses incurred by Issuer relating to such Shelf Public Offering unless (i) the revocation is based upon material adverse information concerning the Issuer that has not been previously considered at or disclosed in connection with a meeting of the Issuer Board or that the Issuer had not specifically publicly disclosed in a report filed with or furnished to the SEC, in each case, at least forty-eight (48) hours prior to the request or (ii) the revocation is based on Issuer notifying the Investor of a Suspension Period with respect to a Shelf Public Offering that has not yet been declared effective. All Selling Expenses relating to Registrable Securities registered pursuant to this Agreement will be borne and paid by Investor.

2.4 LOCK-UP AGREEMENTS

Investor will not effect any public sale or distribution (including sales pursuant to Rule 144) of Registrable Securities (or other securities of the Issuer convertible into Registrable Securities) held by the Investor for a period specified by the Representatives of the Issuer’s managing underwriters or co-managing underwriters during the ten (10) days prior to and the ninety (90) days following the effective date of the Registration Statement relating to a Public Offering of shares of Issuer Common Stock by the Issuer with respect to which the Issuer gave the Investor an opportunity to participate in accordance with Section 2.2, including as may be determined pursuant to Rule 430B under the Securities Act (which period following the effective date may, in each case, be extended to the extent required by Law); provided, that, (i) executive officers and Directors of the Issuer and other holders of the Issuer Common Stock participating in such Public Offering as selling stockholders enter into similar agreements for an equivalent duration of time and (ii) the Investor’s obligations under this Section 2.4, and under any agreement executed in accordance herewith, shall apply only as long as and to the extent such executive officers and Directors remain subject to such agreements. Investor agrees to execute a lock-up agreement in favor of

the underwriters in form and substance reasonably acceptable to Investor and the underwriters to such effect and, in any event, that the underwriters in any relevant offering will be third party beneficiaries of this Section 2.4.

2.5 REGISTRATION PROCEDURES

Whenever Investor requests that any Registrable Securities be registered pursuant to Section 2.1 or Section 2.2, subject to the provisions of those Sections, Issuer will use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof as soon as reasonably practicable, and, in connection with any such request:

(a) Issuer will as expeditiously as possible prepare and file with the SEC a Registration Statement on any form for which Issuer then qualifies, subject to the priority of form set forth in Section 2.1(a), and which form will be available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its reasonable best efforts to cause such filed Registration Statement to become and remain effective for a period of (A) not less than one hundred eighty (180) days (or, if sooner, until all Registrable Securities have been sold under such Registration Statement), or (B) in the case of a Shelf Registration, until the earlier of the date (x) on which all of the securities covered by such Shelf Registration are no longer Registrable Securities and (y) on which Issuer cannot extend the effectiveness of such Shelf Registration if such Registration Statement was filed on a Form S-3 because it is no longer eligible for use of Form S-3; subject in each case to any Suspension Period (provided, that, in the case of clause (y), Issuer shall be obligated to file a new Registration Statement on an available form with respect to the Registrable Securities that were left unsold on such Form S-3).

(b) Prior to filing a Registration Statement or related prospectus or any amendment or supplement thereto (including any documents incorporated by reference therein), or before using any Free Writing Prospectus, Issuer will provide to Investor and each underwriter, if any, with an adequate and appropriate opportunity to review and comment on such Registration Statement, each Prospectus included therein (and each amendment or supplement thereto) and each Free Writing Prospectus proposed to be filed with the SEC, and thereafter Issuer will furnish to Investor and underwriter, if any, such number of copies of such Registration Statement, each amendment and supplement thereto filed with the SEC (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such Registration Statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424, Rule 430A, Rule 430B or Rule 430C under the Securities Act and such other documents as Investor or such underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by Investor, except that Issuer will not be required to provide to any Person any materials, information or document required to be filed by Issuer pursuant to the Exchange Act prior to its filing other than in connection with a Public Offering. Investor or its legal counsel may

request that Issuer modify any information contained in such Registration Statement, amendment and supplement thereto and Issuer will use its reasonable best efforts to comply with such request, except that Issuer will not have any obligation to so modify any information if Issuer reasonably believes that so doing would cause the prospectus to contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.

(c) After filing a Registration Statement, Issuer will (A) cause the related prospectus to be supplemented by any required prospectus supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act, (B) comply with the provisions of the Securities Act applicable to Issuer with respect to the disposition of all Registrable Securities covered by such Registration Statement during the applicable period in accordance with the intended methods of disposition by Investor thereof set forth in such Registration Statement or supplement to such prospectus and (C) promptly notify Investor of any stop order issued or threatened by the SEC or any state securities commission with respect thereto and take all reasonable best actions required to prevent the entry of such stop order or to remove it if entered.

(d) Issuer will use its reasonable best efforts to (A) register or qualify the Registrable Securities covered by such Registration Statement under such securities or Blue Sky Laws of such jurisdictions in the United States as Investor reasonably (in light of Investor’s intended plan of distribution) or, in the case of an underwritten Public Offering, the managing underwriter reasonably, requests, and continue such registration or qualification in effect in such jurisdiction for the shortest of (1) as long as permissible pursuant to the Laws of such jurisdiction, (2) as long as Investor requests or (3) until all such Registrable Securities are sold and (B) cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of Issuer’s business and operations and do any and all other acts and things that may be reasonably necessary in accordance with Investor’s plan of distribution or advisable to enable Investor to consummate the disposition of Investor’s Registrable Securities, except that Issuer will not be required to (x) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 2.5(d), (y) subject itself to income taxation in any such jurisdiction or (z) consent to general service of process in any such jurisdiction.

(e) Issuer will promptly notify Investor (A) at any time when a prospectus relating to Investor’s Registrable Securities is required to be delivered under the Securities Act, upon the discovery that, or upon the occurrence of an event as a result of which, the preparation of a supplement or amendment to such prospectus is required so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements in the light of the circumstances under which they were made not misleading and Issuer will

promptly (subject to any applicable Suspension Period) prepare and make available to Investor and file with the SEC any such supplement or amendment, (B) as soon as Issuer becomes aware of any request by the SEC or any federal or state governmental authority for amendments or supplements to a Registration Statement or related prospectus covering Registrable Securities or for additional information relating thereto, (C) as soon as Issuer becomes aware of the issuance or threatened issuance by the SEC of any stop order suspending or threatening to suspend the effectiveness of a Registration Statement covering the Registrable Securities or (D) of Issuer’s receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose.

(f) In connection with any Public Offering, (A) Issuer will enter into customary agreements (including an underwriting agreement in customary form) and take all other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities in any such Public Offering, including, if required, the engagement of a “qualified independent underwriter” in connection with the qualification of the underwriting arrangements with FINRA and (B) at the request of the Investor, Issuer will use reasonable best efforts to furnish on the date that Registrable Securities are delivered to the underwriters for sale pursuant to such registration a letter dated such date from the independent public accountants retained by the Issuer, addressed to the underwriters, stating that they are independent public accountants within the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements of the Issuer included in the registration statement or the prospectus, or any amendment or supplement thereof, comply as to form in all material respects with the applicable accounting requirements of the Securities Act, and such letter shall additionally cover such other financial matters (including information as to the period ending no more than five (5) Business Days prior to the date of such letter) with respect to such registration as such underwriters may reasonably request.

(g) Upon execution of confidentiality agreements in form and substance reasonably satisfactory to Issuer, Issuer will make available for inspection by Investor and any underwriter participating in any disposition pursuant to a Registration Statement being filed by Issuer pursuant to this Section 2.5 and any attorney, accountant or other professional retained by Investor or underwriter (collectively, the “Inspectors”), Issuer’s financial and other records, pertinent corporate documents and properties (collectively, the “Records”) as may be reasonably necessary to enable them to exercise their due diligence responsibility, and cause Issuer’s officers, directors and employees to supply all information reasonably requested by any Inspectors in connection with such Registration Statement. Records that Issuer determines, in good faith, to be confidential and that it notifies the Inspectors are confidential will not be disclosed by the Inspectors unless (A) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such Registration Statement, (B) the release of such Records is ordered pursuant to a

subpoena or other order from a court of competent jurisdiction, (C) disclosure of such Records is necessary to comply with federal or state securities Laws or the rules of any securities exchange or trading market on which the Issuer Common Stock is listed or traded or is otherwise required by Law or (D) the information in such Records is or becomes available to the public other than as a result of disclosure by any Inspector in violation the confidentiality agreements. Investor agrees that information obtained by it as a result of such inspections will be deemed confidential and may not be used by it or any of its Affiliates for any other purpose, including as the basis for any market transactions in any of Issuer’s securities, unless and until such information is made generally available to the public. Investor further agrees that, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, it may, to the extent permitted by applicable Law, give notice to Issuer and allow Issuer, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential.

(h) Issuer will otherwise comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement or such other document that will satisfy the provisions of Section 11(a) of the Securities Act and the requirements of Rule 158 thereunder.

(i) Issuer may require Investor promptly to furnish in writing to Issuer such information regarding the distribution of the Registrable Securities as Issuer may from time to time reasonably request and such other information as may be reasonably required in connection with such registration.

(j) Investor agrees that, upon receipt of any notice from Issuer of the happening of any event of the kind described in Section 2.5(e), Investor will promptly discontinue disposition of Registrable Securities pursuant to the Registration Statement (including any Shelf Registration) covering such Registrable Securities until Investor’s receipt of (A) copies of the supplemented or amended prospectus from Issuer or (B) further notice from Issuer that distribution can proceed without an amended or supplemented prospectus, and, in the circumstances described in clause (A), if so directed by Issuer, Investor will deliver to Issuer all copies, other than any permanent file copies and electronic copies then in Investor’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. If Issuer gives such notice, Issuer will extend the period during which such Registration Statement is maintained effective (including the period referred to in Section 2.5(a)) by the number of days during the period from and including the date of the giving of notice pursuant to Section 2.5(e) to the date when Issuer (x) makes available to Investor a prospectus supplemented or amended to conform with the requirements of Section 2.5(e) or (y) delivers to Investor the notice described in clause (B).

(k) Issuer will use its reasonable best efforts to list all Registrable Securities of any class or series covered by such Registration Statement on any national

securities exchange on which any of the Registrable Securities of such class or series are then listed or traded.

(l) Issuer will as soon as reasonably practicable following its actual knowledge thereof, notify Investor: (A) when a prospectus, any prospectus supplement, a Registration Statement or a post-effective amendment to a Registration Statement has been filed with the SEC, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective; (B) of any request by the SEC or any other federal or state governmental authority for amendments or supplements to a Registration Statement, a related prospectus (including a Free Writing Prospectus) or for any other additional information; or (C) of Issuer’s receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceedings for such purpose.

(m) Issuer will reasonably cooperate with Investor and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made by FINRA.

(n) Issuer will take all other steps reasonably necessary to effect the registration of such Registrable Securities and reasonably cooperate with the holders of such Registrable Securities to facilitate the disposition of such Registrable Securities. Such cooperation shall include the endorsement and transfer of any certificates representing Registrable Securities (or a book-entry Transfer to similar effect) Transferred in accordance with this Agreement.

(o) Issuer will, within the deadlines specified by the Securities Act, make all required filings of all prospectuses (including any Free Writing Prospectus) with the SEC and make all required filing fee payments in respect of any Registration Statement or related prospectus used under this Agreement (and any offering covered hereby).

(p) For purposes of Section 2.1(f), Section 2.5(a), and Section 2.5(c), the period of distribution of Registrable Securities in a firm commitment underwritten Public Offering shall be deemed to extend until each underwriter has completed the distribution of all securities purchased by it, and the period of distribution of Registrable Securities in any other registration shall be deemed to extend until the earlier of the sale of all Registrable Securities covered thereby and ninety (90) days after the effective date thereof. In connection with each registration hereunder, the Investor will timely furnish to the Issuer in writing such information with respect to itself and the proposed distribution by it as shall be reasonably necessary in order to assure compliance with federal and applicable state securities Laws. In connection with each registration pursuant to Section 2.1 or Section 2.2 covering an underwritten Public Offering, a Hedging Transaction, a Stock Lending Transaction or a Permitted Pledge, the Issuer and the Investor agree to enter into customary agreements (including an underwriting or similar agreement) with the managing underwriter or co-managing

underwriters selected in the manner herein provided or the counterparty to such Hedging Transaction, Stock Lending Transaction or Permitted Pledge, as the case may be, in such form and containing such provisions as are customary in the securities business for such an arrangement between such underwriter or counterparty and companies of the Issuer’s size and investment stature.

2.6 INDEMNIFICATION

(a) Notwithstanding any termination of this Agreement, Issuer will indemnify and hold harmless (including the advancement of expenses (subject to customary reimbursement agreements)) the Investor and its Affiliates, stockholders, members, officers, directors, employees and agents, and each Person, if any, who controls Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, “Investor Parties”) from and against any and all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses) (“Damages”) arising out of, directly or indirectly resulting from, or relating to any untrue statement or allegedly untrue statement of a material fact contained or incorporated by reference in any Registration Statement or any preliminary or final prospectus relating to the Registrable Securities (as amended or supplemented if the Issuer furnishes any amendments or supplements thereto) or any preliminary prospectus or Free Writing Prospectus relating to the Registrable Securities (including any information that has been deemed to be a part of any prospectus under Rule 159 under the Securities Act), or arising out of, directly or indirectly resulting from or relating to any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except that Issuer shall not be liable to any Investor Party for any Damages that arise out of, directly or indirectly result from or relate to any such untrue statement or omission or alleged untrue statement or omission so made based upon information furnished in writing to Issuer by or on behalf of Investor expressly for use therein. Issuer also agrees to indemnify and hold harmless any underwriters of the Registrable Securities, their respective officers and directors and each Person who controls any underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of Investor provided in this Section 2.6(a).

(b) Notwithstanding any termination of this Agreement, Investor will indemnify and hold harmless Issuer and its Affiliates, stockholders, members, officers, directors, employees and agents, and each Person, if any, who controls Issuer within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against all Damages to the same extent as the foregoing indemnity from Issuer to Investor, but only with respect to information furnished in writing by or on behalf of Investor expressly for use in any Registration Statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus or Free Writing Prospectus relating to the Registrable Securities (including any information that has been deemed to be a part of any

prospectus under Rule 159 under the Securities Act). Investor will also indemnify and hold harmless any underwriters of the Registrable Securities, their respective officers and directors and each Person who controls any underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of Issuer provided in this Section 2.6(b). As a condition to including Registrable Securities in any Registration Statement filed in accordance with Article 2, Issuer may require that it has received an undertaking reasonably satisfactory to it from any underwriter to indemnify and hold it harmless to the extent customarily provided by underwriters with respect to similar securities and offerings. Investor will not be liable under this Section 2.6(b) for any Damages in excess of the net proceeds realized by it in the sale of Registrable Securities to which such Damages relate.

(c) If any proceeding (including any investigation by any governmental authority) is instituted involving any Person in respect of which indemnity may be sought pursuant to Section 2.6(a) or Section 2.6(b), such Person (an “Indemnified Party”) must promptly notify the Person against whom such indemnity may be sought (the “Indemnifying Party”) in writing and the Indemnifying Party will be entitled to participate in, and to the extent that it shall elect, to assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and will assume the payment of all reasonable fees and expenses, except that the failure of any Indemnified Party so to notify the Indemnifying Party will not relieve the Indemnifying Party of its obligations hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure to notify. Reimbursements payable pursuant to the indemnification contemplated by this Section 2.6 will be made by periodic payments during the course of any investigation or defense, as and when bills are received or expenses incurred. In any such proceeding, any Indemnified Party will have the right to retain its own counsel, but the fees and expenses of such counsel will be paid by such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party have mutually agreed to the retention of such counsel, (ii) the Indemnifying Party shall have failed promptly to assume the defense of such proceeding and to employ counsel (in accordance with this Section 2.6(c)) reasonably satisfactory to such Indemnified Party in any such proceeding or (iii) in the reasonable judgment of such Indemnified Party after receipt of written advice of counsel, representation of both Parties by the same counsel would be inappropriate due to actual or potential conflicting interests between them. It is understood that, in connection with any proceeding or related proceedings in the same jurisdiction, the Indemnifying Party will not be liable for the fees and expenses of more than one (1) separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties. If there is any such separate firm for the Indemnified Parties, such firm will be designated in writing by the Indemnified Parties. Notwithstanding the foregoing, the Parties acknowledge and agree that to the extent a claim is made against any Investor Party which may be indemnifiable pursuant to Section 2.6(a), such Investor Party will be entitled to retain its regular outside counsel to review and produce documents, electronic files and other materials in response to document

requests in connection with any claim for which an Investor Party may be entitled to indemnification pursuant to Section 2.6(a), and make determinations with respect to and prosecute issues related to confidential information of any Investor Party. The Issuer will pay directly the reasonable fees and expenses of such counsel in connection with any such claim. The Indemnifying Party will not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party will indemnify and hold harmless each Indemnified Party from and against any Damages (to the extent obligated herein) by reason of such settlement or judgment. Without the prior written consent of each affected Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed so long as the Indemnifying Party has complied, and continues to comply, with its covenants and obligations under this Agreement), no Indemnifying Party will effect any settlement of any pending or threatened proceeding in respect of which such Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement (x) includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding and (y) does not result in any limitation or restriction upon the ability of any Investor Affiliate to exercise all rights, privileges and preferences applicable to it as a holder of Issuer Common Stock and its rights under this Agreement.

(d) If the indemnification provided for in Section 2.6(a) or Section 2.6(b) is unavailable to the Indemnified Parties or insufficient in respect of any Damages, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, will contribute to the amount paid or payable by such Indemnified Party as a result of such Damages in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and the applicable Indemnified Party, on the other hand, in connection with such actions which resulted in such Damages, as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party, on the one hand, and the Indemnified Party, on the other hand, will be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party and the Parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action. The Parties agree that it would not necessarily be just and equitable if contribution pursuant to this Section 2.6(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in this paragraph. The amount paid or payable by a party as a result of the Damages referred to in this paragraph will include, subject to the limitations set forth in Sections 2.6(a) and Section 2.6(b), any legal or other expenses reasonably incurred by a party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 2.6(d), Investor will not be required to contribute any amount in excess of the net proceeds (after deducting the underwriters’

discounts and commissions) received by Investor in the offering. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

2.7 PARTICIPATION IN PUBLIC OFFERING

Investor may not participate in any Public Offering hereunder unless it has (i) agreed to sell its Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements and the provisions of this Agreement in respect of registration rights.

2.8 TRANSFER OF REGISTRATION RIGHTS

Investor shall have the right to transfer, by written agreement, any or all of its rights and obligations granted under this Article 2 (other than to the extent related to Section 2.6(b) with respect to any Registration Statement filed prior to such transfer) to any direct or indirect transferee of its Registrable Securities (each Person to whom such rights and obligations shall have been so transferred hereunder, a “Permitted Transferee”); provided, (i) such transferee is, at the time of such transfer, an Investor Affiliate or (ii) such transferee is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act, and in either case (x) such transferee agrees, in writing in form and substance reasonably satisfactory to the Issuer, to be bound by the terms and provisions of this Article 2 being assigned to such Permitted Transferee and (y) such transfer of Registrable Securities shall be effected in compliance with this Agreement. Following any transfer or assignment made pursuant to this Section 2.8 in connection with the transfer by the Investor of a portion of its Registrable Securities, the Investor shall retain all rights under this Agreement with respect to the remaining portion of its Registrable Securities.

2.9 FREE WRITING PROSPECTUSES

Except for a prospectus relating to Registrable Securities included in a Registration Statement, an “issuer free writing prospectus” (as defined in Rule 433 under the Securities Act) prepared by the Issuer or other materials prepared by Issuer, Investor represents and agrees that it (a) will not make any offer relating to the Registrable Securities that would constitute an issuer free writing prospectus or that would otherwise constitute a Free Writing Prospectus and (b) will not distribute any written materials in connection with the offer or sale pursuant to a Registration Statement of Registrable Securities, in each case, without the prior written consent of Issuer and, in connection with any Public Offering, the underwriters.

2.10 INFORMATION FROM AND OBLIGATIONS OF INVESTOR

Issuer’s obligation to include Investor’s Registrable Securities in any Registration Statement or related prospectus is contingent upon Investor:

(a) furnishing to Issuer in writing its information with respect to its ownership of Registrable Securities and the intended method of disposition of its Registrable Securities as Issuer may reasonably request or as may be required by Law for use in connection with any related Registration Statement or prospectus (or amendment or supplement thereto) and all information required to be disclosed in order to make the information Investor previously furnished to Issuer not contain a material misstatement of fact or necessary to cause such Registration Statement or prospectus (or amendment or supplement thereto) not to omit a material fact with respect to Investor necessary in order to make the statements therein not misleading;

(b) complying with (i) the Securities Act and the Exchange Act, (ii) all applicable state securities Laws, (iii) the rules of any securities exchange or trading market on which the Issuer Common Stock is listed or traded and (iv) all other applicable regulations, in each case, in connection with the registration and the disposition of Registrable Securities;

(c) following its actual knowledge thereof, notifying Issuer of the occurrence of any event that makes any statement made in a Registration Statement, prospectus, issuer free writing prospectus or other Free Writing Prospectus regarding Investor untrue in any material respect or that requires the making of any changes in a Registration Statement, Prospectus or Free Writing Prospectus so that, in such regard, it will not contain any untrue statement of a material fact or omit any material fact required to be stated therein or necessary to make the statements not misleading;

(d) providing Issuer with such information as may be required to enable Issuer to prepare a supplement or post-effective amendment to any such Registration Statement or a supplement to such prospectus or Free Writing Prospectus;

(e) using reasonable best efforts to cooperate with Issuer in preparing the applicable Registration Statement and any related prospectus;

(f) furnishing Issuer with all information required to be included in such Registration Statement by applicable securities Laws in connection with the disposition of such Registrable Securities as Issuer reasonably requests; and

(g) complying with the provisions of Section 5.16 of the Purchase Agreement during such period as the financial statements of Provide Commerce contemplated by such Section 5.16 are reasonably required by Issuer for inclusion or incorporation by reference into such Registration Statement and any related prospectus or prospectus supplement.

2.11 RULE 144 REPORTING

With a view to making available to the Investor the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, the Issuer agrees to use its reasonable best efforts to: (i) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act or any similar or analogous rule promulgated under the Securities Act, at all times from and after the date of this Agreement, (ii) file with the SEC, in a timely manner, all reports and other documents required of the Issuer under the Exchange Act and (iii) so long as the Investor owns any Registrable Securities, furnish to the Investor forthwith upon request: a written statement by the Issuer as to its compliance with the reporting requirements of Rule 144 under the Securities Act and of the Exchange Act; a copy of the most recent annual or quarterly report of the Issuer; and such other reports and documents as the Investor may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any Registrable Securities without registration.

2.12 REGISTRATION IN CONNECTION WITH A HEDGING TRANSACTION, STOCK LENDING TRANSACTION OR PERMITTED PLEDGE

(a) Subject to Section 1.2(d) and this Article 2, the Issuer acknowledges that from time to time (including during the Restricted Period), the Investor may seek to enter into one or more Hedging Transactions, Stock Lending Transactions or a Permitted Pledge with a counterparty. The Issuer agrees that, in connection with any proposed Hedging Transaction, Stock Lending Transaction or Permitted Pledge, if, in the reasonable judgment of counsel to the Investor (after good faith consultation with counsel to the Issuer), it is necessary or desirable to register under the Securities Act sales or Transfers (whether short or long and whether by the Investor or the counterparty to such Hedging Transaction, Stock Lending Transaction or Permitted Pledge) of Registrable Securities or (by the counterparty) other shares of Issuer Common Stock in connection therewith, then a registration statement covering Registrable Securities or such other shares of Issuer Common Stock may be used in a manner otherwise in accordance with the terms and conditions of this Agreement to register such sales or Transfers under the Securities Act.

(b) Subject to Section 1.2(d) and this Article 2, if, in the circumstances contemplated by Section 2.12(a), the Investor seeks to register sales or Transfers of Registrable Securities (or the sale or Transfer by a counterparty of other shares of Issuer Common Stock) in connection with a Hedging Transaction, Stock Lending Transaction or Permitted Pledge at a time when a Registration Statement is effective, upon receipt of written notice thereof from the Investor, the Issuer shall use reasonable best efforts to take such actions as may reasonably be required to permit such sales or Transfers in connection with such Hedging Transaction, Stock Lending Transaction or Permitted Pledge to be covered by such effective Registration Statement in a manner otherwise in accordance with the terms and conditions of this Agreement, which may include, among other things, the filing of a prospectus

supplement or post-effective amendment including a description of such Hedging Transaction, Stock Lending Transaction or Permitted Pledge, the name of the counterparty, identification of the counterparty or its Affiliates as underwriters or potential underwriters, if applicable, and any change to the plan of distribution contained in the prospectus. Any information regarding a Hedging Transaction, a Stock Lending Transaction or a Permitted Pledge contained in a Registration Statement shall be deemed to be information furnished in writing expressly for use therein by the Investor for purposes of Section 2.6.

2.13 TERMINATION OF REGISTRATION RIGHTS

Notwithstanding anything to the contrary contained herein, the registration rights granted under this Article 2 terminate and are of no further force and effect (other than Sections 2.3, 2.6 and 2.11), on the date on which there cease to be any Registrable Securities.

ARTICLE 3.
BOARD OF DIRECTORS

3.1 INVESTOR DIRECTORS

From and after the Closing, the manner of selecting nominees for election to the Issuer Board will be as follows:

(a) In connection with each annual or special meeting of shareholders of the Issuer at which Directors are to be elected (each such annual or special meeting, an “Election Meeting”), the Investor shall have the right to designate for nomination for election as an Investor Director such number of Investor nominees so that the total number of Investor Directors on the Issuer Board after giving effect to the election of the Investor nominees is equal to the product of the Investor Voting Interest multiplied by the Total Number of Directors, in each case rounded up to the next whole number; provided, that, if the Investor Voting Interest is less than ten percent (10%), then the Investor shall not be entitled to nominate any Person as an Investor Director.

(b) The Investor shall give written notice to the Nominating and Corporate Governance Committee of each such nominee for Investor Director not less than ninety (90) days nor more than one hundred twenty (120) days prior to the anniversary date of the immediately preceding annual Election Meeting; provided, that, if such Election Meeting is called for a date that is not within thirty (30) days before or after such anniversary date, the Investor shall give such notice not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the immediately preceding annual Election Meeting was mailed or public disclosure of the date of such Election Meeting was made, whichever first occurred; provided, further, however, that if the Investor fails to give such notice in a timely manner, then the Investor shall be deemed to have nominated the incumbent Investor Director or Investor Directors, as applicable, in a timely manner; provided, further, that if the

number of incumbent Investor Directors is less than the number of Investor Directors the Investor is entitled to designate pursuant to Section 3.1(a), then the Issuer and the Investor shall use their respective reasonable best efforts to mutually agree on a Director or Directors to satisfy the requirements of Section 3.1(a).

(c) In the event the Investor Beneficially Owns a number of shares of Issuer Common Stock which would entitle the Investor to nominate a number of Persons for election as a Director to the Issuer Board pursuant to Section 3.1(a) that is less than the number of Investor Directors on the Issuer Board at the time of determination, then the Investor will (x) designate in Investor’s sole discretion the Investor Director or Investor Directors who are to resign from the Issuer Board so that the number of Investor Directors on the Issuer Board is equal to the number of Persons the Investor is entitled to nominate for election as a Director to the Issuer Board at such time pursuant to Section 3.1(a) and (y) use its reasonable best efforts to cause such Investor Director(s) to resign or otherwise be removed from the Issuer Board.

(d) In the event the Investor Beneficially Owns a number of shares of Issuer Common Stock which would entitle the Investor to nominate a number of Persons for election as a Director to the Issuer Board pursuant to Section 3.1(a) that is greater than the number of Investor Directors on the Issuer Board at the time of determination, then the Issuer will promptly take such actions (including increasing the number of Persons constituting the entire Issuer Board) as are necessary to create the appropriate number of vacancies or newly-created directorships on the Issuer Board and will cause those Persons designated by the Investor to fill such vacancies or newly-created directorships so that the number of Investor Directors on the Issuer Board is equal to the number of Persons the Investor is entitled to nominate for election as a Director to the Issuer Board at such time pursuant to Section 3.1(a). Such Persons designated by Investor to fill such vacancies shall be appointed to the class in which the vacancy occurs, and, in the event the number of Persons constituting the Issuer Board is increased, such Persons designated to fill such newly-created directorships shall first (with respect to the first such Person) be appointed to the class of Directors on the Issuer Board that stood for election at the most recent Election Meeting prior to such appointment, and then (with respect to each subsequent such Person) to the class of Directors on the Issuer Board that stood for election at the next-most recent Election Meeting prior to such appointment.

3.2 SLATE OF DIRECTORS

(a) Subject to Section 3.5, the Issuer and the Issuer Board, including the Nominating and Corporate Governance Committee, shall cause each Investor Director designated in accordance with Section 3.1 to be included in management’s slate of nominees for election as a Director at each Election Meeting.

(b) Until the earliest of (w) (A) five (5) years following the date of this Agreement and (B) if during the five (5) year period specified in clause (A), the Issuer Board ceases to be classified or the Issuer implements majority voting for the election

of Directors, an additional one (1) year, for an aggregate of six (6) years following the date of this Agreement, (x) the date on which the Issuer and the Issuer Board fail to comply with the obligations set forth in Section 3.2(a), (y) the date the Investor Percentage Interest exceeds fifty percent (50%) and (z) the date the Investor Percentage Interest is less than ten percent (10%), if at least one (1) Investor Director serves on the Issuer Board, then the Investor will cause all shares of Issuer Common Stock Beneficially Owned by the Investor Affiliates to be voted (i) in favor of all Director nominees nominated by the Nominating and Corporate Governance Committee, (ii) against any other nominees and (iii) against the removal of any Director (including any Non-Investor Director) if the Nominating and Corporate Governance Committee so recommends.

3.3 PROXY OR INFORMATION STATEMENT

Within a reasonable time prior to the filing with the SEC of its proxy statement or information statement with respect to each Election Meeting, the Issuer shall, to the extent the Investor is entitled to representation on the Issuer Board in accordance with this Agreement, provide the Investor with the opportunity to review and comment on the information contained in such proxy or information statement applicable to the Investor Directors or Investor nominees.

3.4 RECOMMENDATION AND VOTE

The Issuer agrees to use reasonable best efforts to, and to use reasonable best efforts to cause the Issuer Board and the Nominating and Corporate Governance Committee to, cause the election of each Investor Director nominee to the Issuer Board at each Election Meeting (including recommending that the Issuer’s stockholders vote in favor of the election of each Investor Director nominee and otherwise supporting the Investor Director nominees for election in a manner no less rigorous and favorable than the manner in which the Issuer supports its other nominees).

3.5 QUALIFICATION AND REPLACEMENTS

(a) Each Person designated by Investor for appointment or election as an Investor Director will meet Issuer’s standard qualifications for Directors. If any Investor Director or Person designated by Investor as its nominee for election or appointment as an Investor Director (i) is unable to serve as a nominee for election or appointment as a Director or to serve as a Director, for any reason (including, for the avoidance of doubt, to the extent the Issuer Board or the Nominating and Corporate Governance Committee determines that such Investor Director or Person is not acceptable pursuant to this Section 3.5), (ii) is removed (upon death, resignation or otherwise) or fails to be elected at an Election Meeting solely as a result of such Investor Director failing to receive a plurality of the votes of the shares present in person or represented by proxy at the Election Meeting and entitled to vote on the election of Directors, or (iii) is to be substituted by the Investor (with the relevant Investor nominee’s consent and resignation) for election at an Election Meeting, the

Investor shall have the right to submit the name of a replacement for each such Investor Director (each a “Replacement”) to the Issuer for its approval (such Replacement to meet Issuer’s standard qualifications for Directors) and who shall, if so approved, serve as the nominee for election or appointment as a Director or serve as Director in accordance with the terms of this Article 3 in the same class of Directors on the Issuer Board as the Director for which such Person serves as a Replacement. For each proposed Replacement that is not approved by the Issuer, the Investor shall have the right to submit another proposed Replacement to the Issuer for its approval on the same basis as set forth in the immediately preceding sentence. The Investor shall have the right to continue submitting the name of a proposed Replacement to the Issuer for its approval until the Issuer approves that a Replacement may serve as a nominee for election or appointment as a Director or to serve as a Director whereupon such Person is appointed as the Replacement. An Investor Director shall, at the time of nomination and at all times thereafter until such individual’s service on the Issuer Board ceases, meet any applicable requirements or qualifications under applicable Law or applicable stock exchange rules. The Issuer acknowledges that, as of the date hereof, the Investor Directors who have joined or been appointed to join the Issuer Board at the Closing pursuant to the Purchase Agreement meet the standards set forth in this Section 3.5. No Investor nominated Person (or Investor Director, as the case may be) will be permitted to serve on the Issuer Board unless such Person has agreed in writing, in a form reasonably acceptable to both the Investor and Issuer, subject to applicable Law, to immediately resign from the Issuer Board in the event that the conditions specified in Section 3.1(c) shall have occurred.

(b) Neither the Nominating and Corporate Governance Committee, the Issuer nor the Issuer Board shall be under any obligation to nominate and recommend a proposed Investor Director (other than as provided below) if, as determined in good faith by the majority of the Non-Investor Directors, service by such nominee as a Director would reasonably be expected to fail to meet the independence standard of any stock exchange on which the Issuer Common Stock is listed or traded (including, for the avoidance of doubt, taking into account the position discussed in the first paragraph of IM-5605. Definition of Independence - Rule 5605(a)(2) of the Listing Rules of Nasdaq with respect to stock ownership by itself not precluding a finding of independence) or otherwise violate applicable Law, stock exchange rules or the Corporate Governance Guidelines of the Issuer (consistently applied); provided, that, notwithstanding this Section 3.5(b), the Investor will be entitled to designate as an Investor Director, at a minimum, two (2) Persons, and, at a maximum, no more than fifty percent (50%) of the proposed Investor Directors that do not meet the qualifications of this Section 3.5(b).

3.6 COMMITTEES

(a) In connection with each Election Meeting subject to Section 3.1, the Issuer and the Issuer Board agree to cause the appointment of an Investor Director designated by the Investor to each of the Nominating and Corporate Governance Committee, the Audit Committee and the Compensation Committee, provided that (x)

such Investor Director meets the independence and other requirements under applicable Law, such committee’s charter and applicable stock exchange rules for such committee and (y) no Investor Director will be permitted to serve as chairperson of the Issuer Board or of any committee thereof; provided, that, the limitation set forth in clause (y) shall cease to apply if and when the Investor Percentage Interest exceeds fifty percent (50%). In the event the inability of an Investor Director to serve on the Issuer Board as described in Section 3.5 results in a vacancy on one of such committees, the Investor shall have the right to submit that the Replacement proposed pursuant to Section 3.5 be appointed to fill such committee vacancy, subject to the provisions of this Article 3. In the event an Investor Director is removed by the Issuer Board from the committee on which such Investor Director serves, the Investor shall have the right to submit the name of another Investor Director to fill the committee vacancy as a result of such removal, subject to the provisions of this Article 3.

(b) The Investor shall promptly take all appropriate action to use its reasonable best efforts to cause to resign from any committee set forth in Section 3.6(a) any Investor Director if, as determined in good faith by a majority of the Non-Investor Directors, service by such Investor Director on such committee would reasonably be expected to violate applicable Law or applicable stock exchange rules.

ARTICLE 4.
REPRESENTATIONS AND WARRANTIES

4.1 REPRESENTATIONS AND WARRANTIES OF THE ISSUER

The Issuer hereby represents and warrants to the Investor that:

(a) The Issuer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

(b) The Issuer has requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement by the Issuer has been duly and validly authorized by all necessary corporate action and no other corporate proceeding on the part of the Issuer is necessary to authorize this Agreement. This Agreement has been duly executed and delivered by the Issuer and, assuming due authorization, execution and delivery by the Investor, constitutes a legally valid and binding obligation of the Issuer, enforceable against Issuer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors and by general principles of equity regardless of whether enforcement is considered in a proceeding in equity or at Law.

(c) The execution and delivery of this Agreement by the Issuer does not, and the performance of the Issuer’s obligations hereunder will not, (i) conflict with or violate any provision of the Issuer’s Amended and Restated Certificate of

Incorporation or Second Amended and Restated Bylaws or (ii) conflict with or violate any Law applicable to the Issuer.

4.2 REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

The Investor hereby represents and warrants to the Issuer that:

(a) The Investor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

(b) The Investor has requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement by the Investor has been duly and validly authorized by all necessary corporate action, and no other corporate proceeding on the part of the Investor is necessary to authorize this Agreement. This Agreement has been duly executed and delivered by the Investor and, assuming due authorization, execution and delivery by the Issuer, constitutes a legally valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors and by general principles of equity regardless of whether enforcement is considered in a proceeding in equity or at Law.

(c) The execution and delivery of this Agreement by the Investor does not, and the performance of the Investor’s obligations hereunder will not, (i) conflict with or violate any provision of the Investor’s Restated Certificate of Incorporation or Amended and Restated Bylaws or (ii) conflict with or violate any Law applicable to the Investor.

(d) As of the date of this Agreement, none of the Investor Affiliates Beneficially Own any Issuer Securities, other than the Shares.

ARTICLE 5.
TERMINATION

5.1 TERMINATION

Subject to Section 5.2 and other than the termination provisions applicable to particular Sections of this Agreement that are specifically provided elsewhere in this Agreement, this Agreement may only be terminated upon the occurrence of any of the following:

(a) upon the mutual written agreement of the Issuer and the Investor;

(b) by the Investor upon a material breach by the Issuer of any of the Issuer’s representations, warranties, covenants or agreements contained herein and

such breach shall not have been cured with ten (10) days after written notice thereof shall have been received by the Issuer;

(c) by the Issuer upon a material breach by the Investor of any of the Investor’s representations, warranties, covenants or agreements contained herein and such breach shall not have been cured with ten (10) days after written notice thereof shall have been received by the Investor;

(d) in the event of any transaction permitted hereunder resulting in the Investor’s acquisition of Majority Voting Power; or

(e) by either the Issuer or the Investor, in the event that the Investor Affiliates, at any time after the date hereof, hold an Investor Voting Interest of less than ten percent (10%) (after giving effect, for the avoidance of doubt, in the case of a Qualifying Transfer, to the substitution of any Qualifying Transferee as the “Investor” hereunder).

5.2 EFFECT OF TERMINATION; SURVIVAL

In the event of any termination of this Agreement pursuant to Section 5.1, this Agreement shall be terminated, and there shall be no further liability or obligation hereunder on the part of any Party hereto; provided, however, that nothing contained in this Agreement (including this Section 5.2) shall relieve either Party from liability for any breach of any of its representations, warranties, covenants or agreements set forth in this Agreement or occurring prior to such termination. Upon the termination of this Agreement in accordance with Section 5.1, this Agreement shall thereafter be null and void, except that, in the event that such termination occurs in accordance with:

(a) Section 5.1(b), then Section 1.1(a), Section 1.1(b), Section 1.1(c), Section 1.1(g), Section 1.3 (other than Section 1.3(d)), Section 1.4(b), Section 1.5 and Section 1.6 and Article 2, Article 3 (other than Section 3.2(b))and Article 6 shall survive any such termination in accordance with their respective terms;

(b) Section 5.1(c), then Section 1.1(a), Section 1.1(d), Section 1.1(e), Section 1.1(f), Section 1.2, Section 1.3(a), Section 1.3(b), Section 1.4(b) and Section 1.6 and Article 2 and Article 6 shall survive any such termination in accordance with their respective terms;

(c) Section 5.1(d), then Section 1.3 (other than Section 1.3(d)) and Section 1.4(b) and Article 2, Article 3 (other than Section 3.1(c), Section 3.2(b) and clause (y) of Section 3.6(a)) and Article 6 shall survive any such termination in accordance with their respective terms; or

(d) Section 5.1(e), then Article 2 and Article 6 shall survive any such termination in accordance with their respective terms.

ARTICLE 6.
GENERAL PROVISIONS

6.1 CONFIDENTIAL INFORMATION

Investor will hold, and will cause its Affiliates and their Representatives to hold, in strict confidence, and will not disclose to any Person, unless and to the extent disclosure is required by judicial or administrative process or, in the written opinion of its counsel, by other requirement of Law or the applicable requirements of any regulatory agency or relevant stock exchange, all non-public records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning Issuer and its Subsidiaries furnished to it by Issuer or its Representatives pursuant to this Agreement (except to the extent (x) such Information can be shown to have been (a) previously known by Investor on a non-confidential basis, (b) in the public domain through no fault of Investor or (c) later lawfully acquired from other sources by the party to which it was furnished and (y) such Information constitutes Issuer financial Information which is required by the Exchange Act to be set forth in any of the Investor’s SEC filings).

6.2 FEES AND EXPENSES

Except as otherwise expressly provided herein, all expenses incurred by the Parties in connection with the negotiation, execution and delivery of this Agreement will be borne solely and entirely by the Party incurring such expenses.

6.3 NOTICES

Any notices or other communications required or permitted under, or otherwise in connection with this Agreement, shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) upon transmission by electronic mail or facsimile transmission as evidenced by confirmation of transmission to the sender (but only if followed by transmittal of a copy thereof by (x) national overnight courier or (y) hand delivery with receipt, in each case, for delivery by the second (2nd) Business Day following such electronic mail or facsimile transmission), (iii) on receipt after dispatch by registered or certified mail, postage prepaid and addressed, or (iv) on the next Business Day if transmitted by national overnight courier, in each case as follows:

If to the Issuer, addressed to it at:

FTD Companies, Inc.

3113 Woodcreek Drive

Downers Grove, Illinois 60515

Facsimile:

Attention: Scott D. Levin

E-Mail:

with a copy to:

Jones Day

901 Lakeside Avenue

Cleveland, Ohio 44114

Facsimile:

Attention: Lyle G. Ganske

James P. Dougherty

Email:

If to the Investor, addressed to it at:

Liberty Interactive Corporation

12300 Liberty Boulevard

Englewood, CO 80112

Facsimile:

Attention: Richard N. Baer

E-Mail:

with a copy to:

Baker Botts L.L.P.

30 Rockefeller Plaza

New York, New York 10112

Facsimile:

Attention: Frederick H. McGrath

Jonathan Gordon

E-mail:

6.4 DEFINITIONS

For purposes of this Agreement, the term:

“13D Group” is defined as in Rule 13d-5(b) promulgated under the Exchange Act, except where the context otherwise requires; provided, that a group comprised solely of Investor Affiliates will not constitute a 13D Group for purposes of this Agreement.

“203 Approval” means the resolution adopted by the Issuer Board prior to the date of the Purchase Agreement in the form attached hereto as Exhibit A.

“Affiliate” of a Person has the meaning set forth in Rule 12b-2 under the Exchange Act. Notwithstanding anything to the contrary set forth in this Agreement, the Issuer and its Affiliates (other than the Investor Affiliates) shall not be deemed to be Affiliates of the Investor Affiliates for purposes of this Agreement.

“Aggregate Purchase Price” has the meaning set forth in Section 1.2(f)(iii).

“Agreement” has the meaning set forth in the preamble to this Agreement.

“Alternative Transaction” has the meaning set forth in Section 2.1(e).

“ASRS” has the meaning set forth in Section 2.1(a).

“Beneficial Ownership” and related terms such as “Beneficially Owned” or “Beneficial Owner” with respect to any securities mean having “beneficial ownership” of such securities (as determined pursuant to Rule 13d-3 under the Exchange Act).

“Blue Sky Laws” means state securities or “blue sky” laws.

“Business Day” means any day other than a day on which the SEC is closed.

“Cap” means 37.5%; provided, however, that the Cap shall increase to 40.0% on December 31, 2016.

“Change of Control Transaction” means the existence or occurrence of any of the following: (a) the sale, conveyance or disposition of all or substantially all of the assets of the Issuer; (b) the consolidation, merger or other business combination of the Issuer with or into any other entity, immediately following which the then current stockholders of the Issuer fail to own, directly or indirectly, at least Majority Voting Power; (c) a transaction or series of transactions in which any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) acquires Majority Voting Power (other than (i) a reincorporation or similar corporate transaction in which the Issuer’s stockholders own, immediately thereafter, interests in the new parent company in essentially the same percentage as they owned in the Issuer immediately prior to such transaction, or (ii) a transaction described in clause (b) (such as a triangular merger) in which the threshold in clause (b) is not passed); (d) the replacement of a majority of the Issuer Board with individuals who were not nominated by the Nominating and Corporate Governance Committee of the Issuer Board or appointed to fill vacancies by at least a majority of the Directors at the time of such replacement; or (e) entry by the Issuer into a definitive agreement approved by the Issuer Board with respect to a transaction involving any of the events described in clauses (a) through (d) of this definition.

“Closing” means the closing of the transactions contemplated by the Purchase Agreement.

“Closing Date” has the meaning set forth in Section 1.2(a).

“Damages” has the meaning set forth in Section 2.6(a).

“Delaware Courts” has the meaning set forth in Section 6.13.

“DGCL” means the General Corporation Law of the State of Delaware.

“Director” means a director of the Issuer.

“Distribution Transaction” involving any Person that Beneficially Owns all or substantially all of the Issuer Common Stock owned by the Investor Affiliates (for purposes of this defined term excluding clause (ii) of the definition of Investor Affiliate) immediately prior to the Distribution Transaction means any transaction pursuant to which the equity interests of (i) such Person or (ii) any Person that directly or indirectly owns a majority of the equity interests of such Person are distributed (whether by redemption, dividend, share distribution, merger or otherwise) to all the Parent Company Holders, which classes or series of common stock are registered under Section 12(b) or 12(g) of the Exchange Act, on a pro rata basis with respect to each such class or series, or such equity interests of such Person are made available to be acquired by Parent Company Holders (including through any rights offering, exchange offer, exercise of subscription rights or other offer made available to Parent Company Holders), on a pro rata basis with respect to each such class or series, whether voluntary or involuntary.

“Election Meeting” has the meaning set forth Section 3.1(a).

“Exercise Notice” has the meaning set forth in Section 1.2(e)(ii).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“FINRA” means the Financial Industry Regulatory Authority, Inc.

“Free Writing Prospectus” means any “free writing prospectus” as defined in Rule 405 promulgated under the Securities Act relating to the Registrable Securities included in the applicable Registration Statement.

“Hedging Transaction” means any transaction involving an Investor Affiliate pursuant to which (i) a counterparty may engage in short sales, (ii) a counterparty may purchase and/or sell a swap or option (including a put or call option), (iii) the Investor Affiliate enters into a forward sale transaction (whether for a fixed or variable number of shares or at a fixed or variable price and whether pre-paid or post-paid), (iv) the Investor Affiliate issues a security that derives any significant part of its value from Issuer Common Stock (including a security exchangeable into Issuer Common Stock), and (v) the Investor Affiliate enters into a margin loan, in each case of or with respect to any Issuer Common Stock, and, if applicable to a particular transaction, such term includes (a) a pledge by an Investor Affiliate of any Issuer Common Stock in connection with any of the foregoing to secure the obligations of the pledgor under the Hedging Transaction and (b) the pledge of a Hedging Transaction itself to secure any extension of credit to a party based, in whole or part, on the value thereof.

“Indemnified Party” has the meaning set forth in Section 2.6(c).

“Indemnifying Party” has the meaning set forth in Section 2.6(c).

“Information” has the meaning set forth in Section 6.1.

“Inspectors” has the meaning set forth in Section 2.5(g).

“Investor” has the meaning set forth in the preamble to this Agreement.

“Investor Affiliate” means (i) the Investor, (ii) any Qualified Distribution Transferee, and (iii) each Affiliate of any of the foregoing, until such time as such Person is not an Affiliate of the Investor and/or any Qualified Distribution Transferee.

“Investor Director” means any Person designated by the Investor (x) to become a member of the Issuer Board at the Closing pursuant to the Purchase Agreement and (y) pursuant to Article 3, in each case who is elected or appointed to the Issuer Board.

“Investor Parties” has the meaning set forth in Section 2.6(a).

“Investor Percentage Interest” means, as of any date of determination, the percentage represented by the quotient of (i) the number of shares of Issuer Common Stock that are Beneficially Owned by the Investor Affiliates and (ii) the sum of (x) the number of all outstanding shares of Issuer Common Stock and (y) any shares of Issuer Common Stock included in clause (i) that are issuable upon conversion, exchange or exercise of any equity security of the Issuer and not included in clause (x); provided, that, to the extent the Issuer has different classes or series of capital stock outstanding which have different voting rights than the Issuer Common Stock outstanding as of the date of this Agreement, then Investor Percentage Interest means, as of any date of determination, the percentage voting power represented by the shares of Issuer Common Stock Beneficially Owned by the Investor Affiliates.

“Investor Voting Interest” means, as of any date of determination, the percentage represented by the quotient of (x) the number of shares of Issuer Common Stock Beneficially Owned by Investor Affiliates and entitled to vote at an Election Meeting (if such Election Meeting was called as of the date of determination, or at such applicable Election Meeting provided for in Article 3) divided by (y) the total number of shares of Issuer Common Stock entitled to vote at such Election Meeting, disregarding for purposes of calculating such number of shares entitled to vote at such Election Meeting any shares of Issuer Common Stock issued pursuant to Section 1.5(e).

“Issuer” has the meaning set forth in the preamble to this Agreement.

“Issuer Acceptance Notice” has the meaning set forth in Section 1.2(f)(ii).

“Issuer Board” means the Issuer’s Board of Directors.

“Issuer Common Stock” means the Issuer’s issued and outstanding common stock, par value $0.0001 per share, and any other common equity security entitled to vote generally for the election of Directors.

“Issuer Securities” means any securities of the Issuer or bank debt or obligations for borrowed money of Issuer or any of its Subsidiaries (or any rights, options or other securities convertible into or exercisable or exchangeable for such securities, bank debt or obligations for borrowed money), including any swaps or other derivative arrangements, in each case, whether or not any of the foregoing may be acquired or obtained immediately or only after the passage of time or upon the satisfaction of one or more conditions pursuant to any agreement, arrangement or understanding or otherwise.

“Law” means any foreign or domestic law, statute, code, ordinance, rule, regulation, agency requirement, common law, order, judgment, writ, stipulation, award, injunction or decree.

“Lent Shares” has the meaning set forth in Section 1.2(d)(ii).

“Majority Voting Power” means the ownership of shares of (x) Issuer Common Stock and (y) other equity securities of the Issuer having the right to vote generally (and not just in special circumstances) in the election of Directors, which represent in the aggregate a majority of the outstanding voting power of the Issuer in any election of Directors.

“Market Sale” has the meaning set forth in Section 1.2(e).

“Market Sale Notice” has the meaning set forth in Section 1.2(e)(i).

“Maximum Amount” has the meaning set forth in Section 1.5(b).

“Maximum Offering Size” has the meaning set forth in Section 2.1(d).

“Minimum Condition” has the meaning set forth in Section 1.1(b)(iv).

“Nasdaq” means The Nasdaq Stock Market, and references thereto shall be deemed to include any other public stock market on which Issuer may be listed (including, as applicable, for purposes of reference to the rules and regulations thereof).

“New Issuance Notice” has the meaning set forth in Section 1.5(a).

“New Securities” has the meaning set forth in Section 1.5(d).

“Non-Investor Directors” means those members of the Issuer Board that were not designated by Investor.

“Parent Company” means the publicly traded Person that Beneficially Owns, through an unbroken chain of majority-owned subsidiaries, the Person having record ownership of the Issuer Common Stock. For purposes of this definition, the term “publicly traded” means that the Person in question (x) has a class or series of equity securities registered under Section 12(b) or 12(g) of the Exchange Act or (y) is required to file reports pursuant to Section 15(d) of the Exchange Act.

“Parent Company Holders” means all the holders of one or more classes or series of common stock of the applicable Parent Company.

“Permitted Offer” has the meaning set forth in Section 1.1(b).

“Permitted Pledge” means a pledge of Registrable Securities or creation of a security interest in the Registrable Securities and any Transfer of Registrable Securities as a result of any default, event of default or foreclosure under such pledge or security agreement if (i) the pledgee or the secured party is a financial institution and (ii) the pledge or security interest is created in connection with a bona fide financing transaction or a Hedging Transaction.

“Permitted Transferee” has the meaning set forth in Section 2.8.

“Person” means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization or other entity or group.

“Piggyback Registration” has the meaning set forth in Section 2.2(a).

“Prohibited Transferee” means any Person who, directly or indirectly, including through one or more Subsidiaries, is engaged in the business of providing floral products and services to consumers, retail florists or other retail locations offering floral products anywhere in the world and such floral products and services account for greater than twenty percent (20%) of such Person’s consolidated revenues.

“Provide Commerce” has the meaning set forth in the recitals to this Agreement.

“Public Offering” means an underwritten public offering of Issuer Common Stock pursuant to an effective registration statement under the Securities Act, other than (a) pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form under the Securities Act or (b) in connection with a rights offering.

“Purchase Agreement” has the meaning set forth in the recitals to this Agreement.

“Qualified Distribution Transferee” means any Person that meets the following conditions: (i) at the time of any Transfer to it of Issuer Common Stock, it is an Investor Affiliate (for purposes of this defined term excluding clause (ii) of the definition of Investor Affiliate), (ii) thereafter, by reason of a Distribution Transaction, it ceases to be an Investor Affiliate, and (iii) prior to such Transfer, it executes and delivers to the Issuer

a written agreement reasonably satisfactory to the Issuer to be bound by, and entitled to the benefits of, this Agreement, prospectively, as contemplated by Section 1.3(a) of this Agreement.

“Qualifying Amendment” has the meaning set forth in Section 1.3(c).

“Qualifying Note” means a promissory note or other debt instrument delivered pursuant to Section 1.5(e) made by the Person entering into a definitive agreement for a Change of Control Transaction, which note or other debt instrument (i) is made or guaranteed by a Person which the Issuer Board, in the exercise of its good faith judgment, has determined has the financial capacity to satisfy its obligations on such note on maturity, (ii) is fully recourse to such maker (and any guarantor), (iii) pays interest at an interest rate, and having other terms, which the Issuer Board, in good faith, has determined are consistent with market terms for obligations of such type, (iv) has a maturity date of the first (1st) anniversary of the execution of such note.

“Qualifying Transfer” shall mean a Transfer, in a single transaction, or in a series of related transactions, (a) to a Person (in each case, other than a Transfer to a Qualified Distribution Transferee, and other than to an Affiliate of Investor), who, following such Transfer, will Beneficially Own greater than fifteen percent (15%) of the outstanding Issuer Common Stock, but whose ownership percentage (calculated in the same manner as Investor Percentage Interest) upon, and giving effect to such Transfer, does not exceed the Cap and (b) following which, the Investor Affiliates will Beneficially Own less than five percent (5%) of the outstanding Issuer Common Stock.

“Qualifying Transferee” means a Person acquiring shares of Issuer Common Stock in a Qualifying Transfer.

“Records” has the meaning set forth in Section 2.5(g).

“Registrable Securities” means, at any time, the Shares, together with (x) any securities distributed thereon or acquired upon exercise of any securities distributed thereon and (y) any shares of Issuer Common Stock with respect to which the Investor acquires Beneficial Ownership following the Closing; provided, such Shares will cease to be Registrable Securities at such time as (i) a Registration Statement covering such shares of Issuer Common Stock or other securities has been declared effective by the SEC and such shares of Issuer Common Stock or other securities have been disposed of pursuant to such effective registration statement, (ii) such shares of Issuer Common Stock or other securities are sold pursuant to Rule 144 (or any similar provisions then in force) or may be sold during any three-month period in a single transaction or series of transactions without volume or manner of sale limitations under Rule 144 (or any similar provisions then in force) or (iii) such shares of Issuer Common Stock or other securities are otherwise Transferred, assigned, sold, conveyed or otherwise disposed of and thereafter such securities may be resold without subsequent registration under the Securities Act; provided, however, that, with respect to this clause (iii), Registrable Securities held by an Investor Affiliate will not cease to be Registrable Securities by

reason of the fact that such securities shall have been Transferred, for so long as such Registrable Securities continue to be held by any Investor Affiliate.

“Registration Actions” has the meaning set forth in Section 2.1(f).

“Registration Statement” means any registration statement of Issuer under the Securities Act that covers any of the Registrable Securities pursuant to the provisions of this Agreement.

“Replacement” has the meaning set forth in Section 3.5.

“Representatives” means, with respect to a Person, such Person’s officers, managers, directors, general partner and employees, and, to the extent authorized to act on behalf of such Person, such Person’s outside counsel, accountants, consultants or financial advisors or other Persons so acting.

“Requested Shelf Registered Securities” has the meaning set forth in Section 2.1(c).

“Restricted Period” has the meaning set forth in Section 1.2(a).

“ROFO Notice” has the meaning set forth in Section 1.2(f)(i).

“ROFO Purchase Agreement” has the meaning set forth in Section 1.2(f)(iii).

“ROFO Purchaser” has the meaning set forth in Section 1.2(f)(ii).

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Selling Expenses” means all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for Investor.

“Settlement Threshold” has the meaning set forth in Section 1.2(d)(iii).

“Shares” has the meaning set forth in the recitals to this Agreement.

“Shelf Public Offering” has the meaning set forth in Section 2.1(c).

“Shelf Public Offering Request” has the meaning set forth in Section 2.1(c).

“Shelf Registration” has the meaning set forth in Section 2.1(a).

“Stockholder Rights Provision” means any stockholder rights plan or similar plan or agreement or any charter or bylaw provision (x) the purpose or reasonably evident

effect of which is to restrict or limit the Investor’s ability to acquire shares of Issuer Common Stock up to the Cap (or any amount in excess thereafter as provided in this Agreement) or to Transfer Issuer Common Stock among the Issuer Affiliates or in a Distribution Transaction, or to engage in a Qualifying Transfer or (y) the reasonably evident effect of which is to impose on the Investor Affiliate, Qualified Distribution Transferee or Qualifying Transferee, or to cause such Person to incur or suffer, any restriction, limitation, economic detriment or cost (including through disproportionate dilution, relative to other holders of Issuer Common Stock, of such Person’s equity or voting power or through a requirement to purchase or otherwise acquire, or offer to acquire, additional equity securities of the Issuer in the form of a mandatory offer requirement, “fair price” or similar provision) as a result of such Person’s and/or its Affiliates’ acquisition or continued ownership of Issuer Common Stock.

“Stock Lending Transaction” shall mean a transaction whereby an Investor Affiliate lends shares of Issuer Common Stock to a third party or permits a third party to sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose of, or otherwise use in its business, such shares of Issuer Common Stock.

“Subject Shares” has the meaning set forth in Section 1.2(f)(i).

“Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture or other legal entity of which such Person (either alone or through or together with any other Subsidiary), owns, directly or indirectly, a majority of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity.

“Suspension Notice” has the meaning set forth in Section 2.1(f).

“Suspension Period” has the meaning set forth in Section 2.1(f).

“Target Price” has the meaning set forth in Section 1.2(f)(i).

“Third Party” means any Person who, in the reasonable good faith judgment of the Non-Investor Directors, is not, directly, or indirectly through one or more intermediaries, acting in concert with the Investor Affiliates.

“Third Party Offer” has the meaning set forth in Section 1.1(b).

“Total Number of Directors” means the total number of Persons constituting the entire Issuer Board (as specified in the charter or bylaws of the Issuer or any resolution of the Issuer Board).

“Trading Day” means (x) with respect to the Issuer Common Stock, any day (i) other than a Saturday, a Sunday, a day on which Nasdaq is not open for business, or a day on which Nasdaq is scheduled, as of the date hereof, to close prior to its normal

weekday scheduled closing time and (ii) during which trading of the Issuer Common Stock on Nasdaq has not been suspended for more than ninety (90) minutes, and (y) with respect to any other security, any day (i) other than a Saturday, a Sunday, a day on which the public stock market on which such security is traded is not open for business, or a day on which such public stock market is scheduled, as of the date hereof, to close prior to its normal weekday scheduled closing time and (ii) during which trading of such security on such public stock market has not been suspended for more than ninety (90) minutes.

“Transfer” by any Person means directly or indirectly, to sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any Issuer Common Stock Beneficially Owned by such Person or of any interest (including any voting interest) in any Issuer Common Stock Beneficially Owned by such Person. Notwithstanding the foregoing, any sale or transfer of the Parent Company (or any equity interests therein), or any change of control of the Parent Company, will not constitute a Transfer of the Issuer Common Stock Beneficially Owned by such Parent Company.

“Transferee” means any Person that is the recipient or beneficiary of any Transfer.

“Volume Weighted Average Price” means, a price per share of Issuer Common Stock equal to the volume-weighted average price of the Rule 10b-18 eligible trades in the shares of Issuer Common Stock for the specified period of Trading Days as determined by reference to the screen entitled “FTD <EQUITY> AQR SEC” as reported by Bloomberg L.P. (without regard to pre-open or after hours trading outside of any regular trading session for such Trading Day).

6.5 INTERPRETATION

When a reference is made in this Agreement to Articles, Sections or Exhibits, such reference is to an Article of, Section of or Exhibit to this Agreement unless otherwise indicated. The words “include”, “includes” and “including” when used herein are deemed in each case to be followed by the words “without limitation.” The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement refers to this Agreement as a whole and not to any particular provision of this Agreement. The words “date hereof” shall refer to the date of this Agreement. Any reference to “days” means calendar days unless Business Days are expressly specified. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period will be excluded and if the last day of such period is not a Business Day, the period shall end at 5:00 p.m. Denver, Colorado time on the next succeeding Business Day. The term “or” is not exclusive and means “and/or” unless the context in which such phrase is used shall dictate otherwise. Terms defined in the

singular in this Agreement also include the plural and vice versa. The word “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase does not mean simply “if” unless the context in which such phrase is used dictates otherwise. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. Any reference in this Agreement to a person shall be deemed to be a reference to such Person and any successor (by merger, consolidation, transfer or otherwise) to all or substantially all of its assets.

6.6 HEADINGS

The headings contained in this Agreement are for reference purposes only and do not affect in any way the meaning, construction or interpretation of this Agreement.

6.7 SEVERABILITY

If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this Agreement will nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties will negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

6.8 ENTIRE AGREEMENT

This Agreement (together with the letter agreement, dated as of February 19, 2014, entered into by Investor and Issuer and the Purchase Agreement and the other documents delivered pursuant thereto) constitutes the entire agreement of the Parties and supersede all prior agreements and undertakings, both written and oral, between the Parties with respect to the subject matter hereof.

6.9 ASSIGNMENT

Except as expressly provided in this Agreement, neither this Agreement nor any of the rights, interests or obligations under this Agreement will be assigned, in whole or in part, by either Party without the prior written consent of the other Party. Any purported assignment without such prior written consent will be void.

6.10 FURTHER ASSURANCES

Each Party shall cooperate and take such action as may be reasonably requested by the other Party in order to carry out the provisions and purposes of this

Agreement and the transactions contemplated hereby; provided, however, that no Party shall be obligated to take any actions or omit to take any actions that would be inconsistent with applicable Law.

6.11 PARTIES IN INTEREST

This Agreement will be binding upon and inure solely to the benefit of each Party and their respective successors and assigns, and nothing in this Agreement, express or implied, is intended to or will confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement; provided, that, any Indemnified Party will be deemed a third party beneficiary of the Indemnifying Party’s obligations under Section 2.6 hereof and will be entitled to enforce its rights thereunder directly against such Indemnifying Party. The representations and warranties in this Agreement are the product of negotiations between the Parties and are for the sole benefit of the Parties. The representations and warranties in this Agreement may represent an allocation between the Parties of risks associated with particular matters regardless of the knowledge of either Party. Accordingly, Persons other than the Parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.

6.12 MUTUAL DRAFTING

6.13 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF TRIAL BY JURY

This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without regard to Laws that may be applicable under conflicts of Laws principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware. The Parties hereby irrevocably and unconditionally submit to the sole and exclusive jurisdiction of the Delaware Court of Chancery or, in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, of any other State Court of the State of Delaware or any Federal Court of the United States of America sitting in the State of Delaware (collectively, the “Delaware Courts”), in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in the Delaware Courts, or that

this Agreement or any such document may not be enforced in or by such courts, and the Parties irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in the Delaware Courts. The Parties hereby consent to and grant the Delaware Courts jurisdiction over the person of such parties and, to the extent permitted by Law, over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 6.3 or in such other manner as may be permitted by Law shall be valid and sufficient service thereof.

EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.13.

6.14 COUNTERPARTS

This Agreement may be executed via facsimile or .pdf and in two (2) or more counterparts, and by the different Parties in separate counterparts, each of which when executed will be deemed to be an original but all of which taken together will constitute one and the same agreement.

6.15 SPECIFIC PERFORMANCE

The Parties agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties will be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions hereof in addition to any other remedy to which they are entitled at Law or in equity and it is agreed by the Parties that the remedy at Law, including monetary damages, for breach of any such provision will be inadequate compensation for any loss and that any defense or objection in any action for specific performance or injunctive relief for which a remedy at Law would be adequate is waived.

6.16 AMENDMENT

This Agreement may not be amended except by an instrument in writing signed by each of the Parties.

6.17 WAIVER

At any time, either Party may, to the extent permitted by applicable Law, (a) extend the time for the performance of any of the obligations or other acts of the other, (b) waive any inaccuracies in the representations and warranties of the other contained herein or in any document delivered pursuant hereto and (c) waive compliance by the other with any of the agreements or conditions contained herein. Any such extension or waiver will be valid only if set forth in an instrument in writing signed by the Party making such waiver, but such extension or waiver or failure to insist on strict compliance with an obligation, covenant, agreement or condition will not operate as a waiver of, or estoppel with respect to, any subsequent or other failure or for any other period not specifically provided in the waiver.

6.18 ADJUSTMENT OF SHARE NUMBERS AND PRICES

If, after the effective time of this Agreement, there is a subdivision, split, stock dividend, combination, reclassification or similar event with respect to any of the shares of Issuer Common Stock referred to in this Agreement, then, in any such event, the numbers and types of shares of such Issuer Common Stock referred to in this Agreement and, if applicable, the prices of such shares, shall be adjusted to the number and types of shares of such Issuer Common Stock that a holder of such number of shares of such Issuer Common Stock would own or be entitled to receive as a result of such event if such holder had held such number of shares immediately prior to the record date for, or effectiveness of, such event, and the prices for such shares shall be similarly adjusted.

[SIGNATURE PAGE FOLLOWS]

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

	INVESTOR


	LIBERTY INTERACTIVE CORPORATION


	By:
		Name:
		Title:


	ISSUER


	FTD COMPANIES, INC.


	By:
		Name:
		Title:

[Signature Page to Investor Rights Agreement]

EXHIBIT A

Resolutions Adopted at a Special Meeting

of the Board of Directors

July 28, 2014

The Acquisition; Issuance of Restricted Company Common Stock

Approval of Investor Rights Agreement

DGCL 203 Waiver

DGCL) of the Company (or any successor thereto) by any of the Exempt Persons, either individually or as a group, as any such acquisition may occur from time to time (including in circumstances where an Investor Affiliate, or “affiliate” or “associate” thereof ceases to be an “affiliate” of the Investor (as defined in the Investor Rights Agreement) and continues to own voting stock of the Company, so long as such person meets the requirements of a Qualified Distribution Transferee (as defined in the Investor Rights Agreement) or an “affiliate” thereof), be and hereby are approved for purposes of Section 203 of the DGCL, and the restrictions on “business combinations” contained in Section 203 of the DGCL shall not apply to any of the Exempt Persons.

EX-10.2 4 a14-17851_5ex10d2.htm EX-10.2

Exhibit 10.2

July 30, 2014

FTD Companies, Inc.
3113 Woodcreek Drive

Downers Grove, IL 60515

Attention: Becky A. Sheehan, Executive Vice President and Chief Financial Officer

Project Bloom Commitment Letter

Ladies and Gentlemen:

FTD Companies, Inc., a Delaware corporation (“you” or the “Borrower”) has advised Bank of America, N.A. (“Bank of America”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any of its designated affiliates, “MLPFS”), Wells Fargo Bank, National Association (“Wells Fargo”) and Wells Fargo Securities, LLC (“WFS”) that you intend to acquire (the “Bloom Acquisition”) all of the outstanding capital stock of Provide Commerce, Inc., a Delaware corporation (individually and collectively with its subsidiaries, the “Target”) pursuant to that certain Stock Purchase Agreement, dated as of July 30, 2014, by and among the Borrower, as the buyer, Liberty Interactive Corporation, a Delaware corporation (“Liberty”), as the seller, and Provide Commerce, Inc. (the “Transaction Agreement”). Capitalized terms used but not defined herein have the meanings assigned to them in the Summary of Terms (as defined below).

In connection with the foregoing, you have also advised the Commitment Parties (as defined below) that you intend to:

(a) effect an amendment (the “Proposed Amendment”) to the Credit Agreement, dated as of July 17, 2013, among the Borrower, Interflora British Unit, the guarantors party thereto, the lenders party thereto and Bank of America, as administrative agent (as amended through the date hereof, the “Existing Credit Agreement”, and as to be amended by the Proposed Amendment, the “Amended Credit Agreement”) in respect of revolving credit facilities of $350 million (the “Existing Credit Facilities”), on the terms specified in the Summary of Terms and Conditions attached hereto as Exhibit A (the “Summary of Terms”; this commitment letter, the Summary of Terms, including the Summary of Additional Conditions attached thereto as Annex I and the Summary of Additional Conditions to Bloom Acquisition Advance attached thereto as Annex II, collectively, the “Commitment Letter”);

(b) if the consent of the Required Lenders (under and as defined in the Existing Credit Agreement) to the Proposed Amendment (the “Required Consent”) is not obtained, obtain new senior secured credit facilities (the “Backstop Bank Facility”) comprised of revolving credit facilities in an aggregate principal amount of up to $350 million with terms identical to those applicable to the Existing Credit Facilities, except for changes to such terms as are proposed by the Proposed Amendment, which Backstop Bank Facility shall refinance and replace the Existing Credit Facilities in their entirety; and

(c) obtain a new $130 million term loan under the Amended Credit Agreement or the documentation for the Backstop Bank Facility, as applicable (the “Term Loan”).

The Existing Credit Facilities under the Amended Credit Agreement or the Backstop Bank Facility, as applicable, and, including in either case, the Term Loan are collectively referred to herein as the “Senior Credit Facility”. As used herein, “Credit Documentation” means the Proposed Amendment and all related documentation or the credit agreement and all related documentation for the Backstop Bank Facility, as applicable, and including, in either case, the Term Loan.

The Bloom Acquisition, the entering into of the Proposed Amendment or the Backstop Bank Facility, as applicable, the documentation and funding of the Term Loan, the pay-off and termination of certain existing indebtedness of the Target and all related transactions are hereinafter collectively referred to as the “Transaction”.

1. Commitments. In connection with the foregoing:

(a) (i) Bank of America is pleased to offer to be the sole administrative agent (in such capacity, the “Administrative Agent”) for the Senior Credit Facility, (ii) Bank of America is pleased to provide its several and not joint commitment to lend and commit $65 million of the Term Loan, (iii) Wells Fargo is pleased to provide its several and not joint commitment to lend and commit $65 million of the Term Loan, and (iv) MLPFS and WFS are pleased to advise you of their willingness, as joint lead arrangers and co-book runners (in such capacities, the “Lead Arrangers”; collectively, Bank of America, Wells Fargo and the Lead Arrangers may be referred to as the “Commitment Parties”, “we” or “us”) for the Senior Credit Facility to solicit the Required Consent and to form a syndicate of financial institutions and institutional lenders for the Term Loan and, if the Required Consent is not obtained, the Backstop Bank Facility (such financial institutions and institutional lenders, together with Bank of America, Wells Fargo and any existing lenders under the Existing Credit Agreement that consent to the Proposed Amendment, the “Lenders”);

(b) if the Required Consent is not obtained, (i) Bank of America is pleased to provide its several and not joint commitment to lend and commit $290 million of the Backstop Bank Facility and (ii) Wells Fargo is pleased to provide its several and not joint commitment to lend and commit $60 million of the Backstop Bank Facility; provided that if, subsequent to the date of your acceptance of this Commitment Letter and prior to its expiration in accordance with its terms, you obtain the Required Consent and the Proposed Amendment is effective, the commitments under this clause (b) shall automatically terminate; and

(c) (i) Bank of America hereby agrees that, prior to the expiration of this Commitment Letter in accordance with its terms, (A) it will continue to hold revolving loan commitments of at least $80 million under the Existing Credit Agreement, and (B) in its capacity as a lender and administrative agent under the Existing Credit Agreement, will consent to the Proposed Amendment, and (ii) Wells Fargo hereby agrees that, prior to the termination of this Commitment Letter in accordance with its terms, (A) it will continue to hold revolving loan commitments of at least $60 million under the Existing Credit Agreement, and (B) in its capacity as a lender under the Existing Credit Agreement, will consent to the Proposed Amendment; provided that nothing in this clause (c) shall restrict the ability of Bank of America from making an assignment of all or any portion of its revolving loan commitments to Wells Fargo or the ability of Wells Fargo to make an assignment of all or any portion of its revolving loan commitments to Bank of America, in each case, under the Existing Credit Agreement (in which case, the commitments of Bank of America and Wells Fargo under this clause (c) shall automatically adjust to reflect any such assignments); provided, further that the amounts set forth in this clause (c) shall be deemed to be automatically adjusted (in accordance with the Existing Credit Agreement) to reflect any reduction or termination of revolving loan commitments of all lenders under the Existing Credit Agreement after the date of your acceptance of this Commitment Letter,

in each case described in the foregoing clauses (a), (b) and (c) (all of the commitments and other agreements of the Commitment Parties described in the foregoing clauses (a), (b) and (c) being hereinafter collectively referred to as the “Commitments”), upon and subject only to the terms and conditions set forth in Section 2 of this Commitment Letter.

MLPFS shall have the role of sole “left-side” Lead Arranger and shall retain sole “left” placement in all marketing materials or other documents relating to the Senior Credit Facility. Bank of America will act as sole Administrative Agent for the Senior Credit Facility. Wells Fargo will act as sole syndication agent for the Senior Credit Facility. MLPFS and WFS will act as joint Lead Arrangers for the Senior Credit Facility. No additional agents, co-agents or arrangers will be appointed and no other titles will be awarded without the prior written approval of the Lead Arrangers and the Borrower.

2. Conditions Precedent. The Commitments of Bank of America and Wells Fargo hereunder and the undertaking of the Lead Arrangers to provide the services described herein are subject only to the satisfaction of the following conditions precedent: (a) with respect to the closing of the Proposed Amendment (or, if Required Consent is not obtained, the closing of the Backstop Bank Facility) the conditions set forth in the Summary of Terms under the heading “Conditions Precedent to Closing” (and, if the Bloom Acquisition is being consummated on the same date as the closing of the Proposed Amendment or the Backstop Bank Facility, the other conditions set forth in the Summary of Terms under the heading “Conditions Precedent to Bloom Acquisition Advance”); and (b) the negotiation, execution and delivery of the definitive Credit Documentation consistent with the Summary of Terms. There shall be no conditions to closing of the Proposed Amendment (or, if the Required Consent is not obtained, the closing of the Backstop Bank Facility) and the funding of the Term Loan other than those expressly referred to in this paragraph. Notwithstanding anything in this Commitment Letter, the Fee Letters (as defined below), the Credit Documentation or any other letter agreement or other undertaking concerning the financing of the Transaction to the contrary, the only representations and warranties the accuracy of which shall be a condition to (i) the funding of the Term Loan and the closing of the Proposed Amendment (or, if the Required Consent is not obtained, the closing of the Backstop Bank Facility) on the Closing Date and (ii) the Bloom Acquisition Advance (as defined in Annex II to the Summary of Terms) shall be the Specified Representations (as defined in Annex I to the Summary of Terms) and the Transaction Agreement Representations (as defined in Annex II to the Summary of Terms); provided that the accuracy of the Transaction Agreement Representations shall not be a condition to the borrowings described in clause (i) of this sentence if the Bloom Acquisition is not consummated concurrently with the borrowing of the Term Loan on the Closing Date.

3. Syndication. The Lead Arrangers reserve the right, prior to or after the Closing Date (as defined below) to syndicate all or a portion of Bank of America’s and Wells Fargo’s commitments hereunder; provided that notwithstanding the Lead Arrangers’ right to syndicate the Senior Credit Facility and receive commitments with respect thereto, (i) neither Bank of America nor Wells Fargo shall be relieved, released or novated from its obligations under this Commitment Letter in connection with any syndication, assignment or participation of the Senior Credit Facility, including its Commitments in respect thereof, until after the initial funding under the Term Loan on the Closing Date has occurred (and, if the Required Consent is not obtained, after the initial funding under the Backstop Bank Facility on the Closing Date has occurred), (ii) no assignment or novation shall become effective (as between the Borrower and either Bank of America or Wells Fargo) with respect to (A) all or any portion of Bank of America’s or Wells Fargo’s commitments in respect of the Term Loan until the initial funding of the Term Loan has occurred on the Closing Date and (B) all or any portion of Bank of America’s or Wells Fargo’s commitments in respect of the Backstop Bank Facility until the initial funding of the Backstop Bank Facility has occurred on the Closing Date, and (iii) unless you otherwise agree in writing, each of Bank of America and Wells Fargo shall retain exclusive control over all rights and obligations with respect to its commitments in respect of the Term Loan and the Backstop Bank Facility, including all rights with respect to consents, modifications, supplements, waivers and amendments, until the initial funding under the Term Loan on the Closing Date has occurred (and, if the Required Consent is not obtained, after the initial funding under the Backstop Bank Facility on the Closing Date has occurred).

The Lead Arrangers intend to commence syndication of the Senior Credit Facility (including solicitation of the Required Consent) promptly upon your acceptance of this Commitment Letter and the Fee Letters. Until the earlier of (x) the date that a Successful Syndication (as defined in the Joint Fee Letter) is achieved and (y) the date that is 60 days after the Closing Date (such earlier date, the “Syndication Date”), you agree to take reasonable actions to actively assist the Lead Arrangers in obtaining the Required Consent and achieving a syndication of the Senior Credit Facility that is reasonably satisfactory

to the Lead Arrangers and you; it being understood that the respective commitments of Bank of America and Wells Fargo hereunder in respect of the Senior Credit Facility are not conditioned upon the syndication of, or receipt of commitments in respect of, the Senior Credit Facility or the obtaining of the Required Consent, and in no event shall the commencement or successful completion of syndication of the Term Loan (or, in the event the Required Consent is not obtained, the Backstop Bank Facility) constitute a condition to the availability of the Senior Credit Facility on the Closing Date. Such assistance shall include, without limitation, your (a) providing and causing your advisors to provide (and using your commercially reasonable efforts to cause the Target and its advisors to provide) us upon request with all information concerning you or the Target reasonably deemed necessary by us to complete syndication, including, but not limited to, information and evaluations prepared by you, the Target and your and its advisors, or on your or its behalf, relating to the Transaction (including the Projections (as hereinafter defined), the “Information”), (b) assisting in the preparation of an information memorandum (the “Information Memorandum”) and other materials to be used in connection with the syndication of the Senior Credit Facility (collectively with the Summary of Terms, the “Information Materials”), (c) using your commercially reasonable efforts to cause the syndication efforts of the Lead Arrangers to benefit from your existing banking and lending relationships and, to the extent applicable and appropriate, in your discretion, the banking and lending relationships of the Target, (d) using commercially reasonable efforts to ensure that prior to the Syndication Date (as defined below), there shall be no competing offering, placement or arrangement of any debt securities or bank financing by or on behalf of the Borrower or any of your affiliates or the Target or any of its subsidiaries; and (e) otherwise assisting the Lead Arrangers in their syndications efforts, including by making your officers and advisors available (and your using commercially reasonable efforts to make the officers and advisors of the Target available) from time to time during business hours and upon reasonable notice to attend and make presentations regarding the business and prospects of the Borrower and its subsidiaries, the Target or the Transaction, as appropriate, at one or more meetings of prospective Lenders at mutually convenient times and locations.

It is understood and agreed that the Lead Arrangers will manage and control all aspects of the syndication in consultation with you, including decisions as to the selection of prospective Lenders and any titles offered to proposed Lenders, when commitments will be accepted and the final allocations of the commitments among the Lenders. It is understood that no Lender participating in the Senior Credit Facility will receive compensation from you in order to obtain its commitment, except on the terms contained herein, in the Fee Letters and in the Summary of Terms. It is also understood that the amount and distribution of the fees among the Lenders will be at the sole discretion of the Lead Arrangers. In connection with the syndication of the Senior Credit Facility, the Lead Arrangers agree to first seek commitments from lenders under the Existing Credit Agreement.

4. Information Requirements. You represent and warrant that (subject, however, to the best of your knowledge with respect to information and Projections relating to the Target) (a) all financial projections concerning the Borrower and its subsidiaries and the Target that have been or are hereafter made available to us by you, the Target or any of your or its representatives (or on your, its or their behalf), including, without limitation, forecasts prepared by management of the Borrower of balance sheets, income statements and cash flow statements on a quarterly basis for the first year following the Closing Date and on an annual basis for each year thereafter during the term of the Term Loan (the “Projections”) have been or will be prepared in good faith based upon assumptions believed by you to be reasonable at the time made, it being understood and agreed that the Projections are subject to significant contingencies and uncertainties many of which are beyond your control, that no assurance can be given that any Projections will be realized and that actual results may differ materially from the Projections and (b) all written Information (other than Projections, industry or general economic data or information and other forward-looking information) which has been or is hereafter made available to us by you, the Target or any of your or its representatives (or on your, its or their behalf) in connection with any aspect of the transactions contemplated hereby is and will be, when taken as a whole (after giving effect to all supplements and updates), complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not materially misleading (after giving effect to all supplements and updates). You agree to promptly furnish us with further and supplemental information from time to time until the later of (x) the date of the initial borrowing of the Term Loan (the “Closing Date”) and (y) the

Syndication Date so that the representation and warranty in the immediately preceding sentence are correct on such date as if the Information were being furnished, and such representation and warranty were being made, on such date. In issuing this commitment and in arranging and syndicating the Senior Credit Facility, we are and will be using and relying on the Information without independent verification thereof.

You acknowledge that we, on your behalf, will make available Information Materials to the proposed syndicate of Lenders by posting the Information Materials on SyndTrak, IntraLinks or another similar electronic system. In connection with the syndication of the Senior Credit Facility, unless the parties hereto otherwise agree in writing, you shall be under no obligation to provide Information Materials suitable for distribution to any prospective Lender (each, a “Public Lender”) that has personnel who do not wish to receive material non-public information (within the meaning of the United States federal securities laws, “MNPI”) with respect to the Borrower, the Target or their respective affiliates, or the respective securities of any of the foregoing. You agree, however, that the definitive Credit Documentation will contain provisions concerning Information Materials to be provided to Public Lenders and the absence of MNPI therefrom in the same form contained in the Existing Credit Agreement. Prior to distribution of Information Materials to prospective Lenders, you shall provide us with a customary letter authorizing the dissemination thereof.

5. Expenses and Indemnification. By executing this Commitment Letter, you agree to reimburse us on the earlier of the Closing Date and the date of termination or expiration of this Commitment Letter for all reasonable out-of-pocket fees and expenses (including, but not limited to, (a) the reasonable fees, disbursements and other charges of Moore & Van Allen PLLC, as counsel to the Bank of America and MLPFS, and of one foreign and local counsel in each applicable jurisdiction retained by the Lead Arrangers or the Administrative Agent in appropriate jurisdictions and retained upon prior notice to you and (b) reasonable due diligence expenses) to the extent invoiced in reasonable detail at least one business day in advance of the Closing Date (or other date when due) and incurred in connection with the Senior Credit Facility, the syndication thereof, the preparation of the definitive documentation therefor and the other transactions contemplated hereby. Notwithstanding any other provision of this Commitment Letter, the Fee Letters or the Credit Documentation, the parties hereto agree that you will not be responsible for payment of fees and expenses of separate counsel to any other Person, including, without limitation, Wells Fargo and WFS.

You agree to indemnify and hold harmless Bank of America, Wells Fargo, MLPFS, WFS and each of their affiliates and their respective officers, directors, employees, agents, advisors and other representatives (each, an “Indemnified Party”) from and against (and will reimburse each Indemnified Party as the same are incurred for) any and all claims, damages, losses, liabilities and expenses (including, without limitation, the reasonable fees, charges and disbursements of one counsel to the Indemnified Parties, taken as a whole, and if necessary, one local domestic or foreign counsel in any relevant domestic or foreign jurisdiction, to the Indemnified Parties, taken as a whole, unless the representation of one or more Indemnified Parties by such counsel would be inappropriate due to the existence of an actual conflict of interest, in which case, upon prior written notice to the Borrower, you shall also be required to reimburse the reasonable out of pocket fees, charges and disbursements of one additional counsel to such affected Indemnified Parties in each relevant jurisdiction) that may be incurred by any Indemnified Party or asserted or awarded against any Indemnified Party by any person other than any of its Related Indemnified Parties (as hereinafter defined), in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) (a) any matters contemplated by this Commitment Letter, the transactions contemplated hereby or any related transaction or (b) the Senior Credit Facility and any other financings, or any use made or proposed to be made with the proceeds thereof except to the extent such claim, damage, loss, liability or expense (i) is found in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s (or any of its Related Indemnified Parties’) gross negligence, bad faith or willful misconduct or from a material breach of such Indemnified Party’s obligations under this Commitment Letter or (ii) arises out of any investigation, litigation or proceeding that does not involve an act or omission by you or any of your affiliates and arises solely from a dispute among Indemnified Parties (except when and to the extent that one of the parties to such

dispute was acting in its capacity as an agent, arranger, bookrunner or other similar capacity and, in such case, excepting only such party). In the case of an investigation, litigation or proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by you, your equityholders or creditors or an Indemnified Party, whether or not an Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated. Without otherwise limiting your indemnification obligations hereunder, the parties hereto agree that neither (x) you nor (y) any Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise arising out of, related to or in connection with any aspect of the transactions contemplated hereby) for any special, indirect, consequential or punitive, damages (in the case of clause (y), other than in respect of any such damages incurred or paid by an Indemnified Party to a third party and to which such Indemnified Party is otherwise entitled to indemnification as provided herein). Notwithstanding any other provision of this Commitment Letter, no Indemnified Party shall be liable for any damages arising from the use by others of information or other materials obtained through electronic telecommunications or other information transmission systems, other than for direct or actual damages resulting from such Indemnified Party’s (or any of its Related Indemnified Parties’) gross negligence or willful misconduct or a material breach of such Indemnified Party’s obligations under this Commitment Letter, as determined by a final and nonappealable judgment of a court of competent jurisdiction. For purposes hereof, “Related Indemnified Party” and “Related Indemnified Parties” of an Indemnified Party means (1) any controlling person or controlled affiliate of such Indemnified Party, (2) the respective directors, officers or employees of such Indemnified Party or any of its controlling persons or controlled affiliates, (3) the respective agents and advisors or other representatives of such Indemnified Party or any of its controlling persons or controlled affiliates, in the case of this clause (3), acting on behalf of or at the instructions of such Indemnified Party, controlling person or controlled affiliate; provided, that each reference to a controlled affiliate or controlling person in this sentence pertains to a controlled affiliate or controlling person involved in the negotiation and syndication of the Senior Credit Facility. Notwithstanding the foregoing, each Indemnified Party shall be obligated to refund and return promptly any and all amounts paid by you under this paragraph to such Indemnified Party for any such claims, damages, losses, liabilities and expenses to the extent it has been determined by a final, nonappealable judgment by a court of competent jurisdiction that such Indemnified Person is not entitled to payment of such amounts in accordance with the terms hereof.

6. Confidentiality and Other Obligations. This Commitment Letter, the fee letter among you, Bank of America, MLPFS, Wells Fargo and WFS of even date herewith (the “Joint Fee Letter”) and the fee letter among you, Bank of America and MLPFS of even date herewith (the “BofA Fee Letter”, and together with the Joint Fee Letter, the “Fee Letters”) and the contents hereof and thereof are confidential and, except for disclosure hereof or thereof on a confidential basis to your accountants, attorneys and other professional advisors retained by you in connection with the Transactions or as otherwise required by law or regulations or by any subpoena or similar legal process or in connection with any judicial proceeding relating hereto (in which case you agree to inform us promptly thereof to the extent you are lawfully permitted to do so), may not be disclosed in whole or in part to any person or entity without our prior written consent; provided, however, it is understood and agreed that you may disclose (a) this Commitment Letter (including the Summary of Terms) but not the Fee Letters after your acceptance of this Commitment Letter and the Fee Letters, in filings with the Securities and Exchange Commission and other applicable regulatory authorities and stock exchanges; provided further that the aggregate fees referenced in the Fee Letters or payable on the Closing Date may be disclosed as a part of a general disclosure regarding fees and expenses relating to the Transaction (but without disclosing any specific fees) and (b) this Commitment Letter (including the Summary of Terms) and the Fee Letters (each Fee Letter to be redacted in a manner reasonably acceptable to the Lead Arrangers party thereto) to the Target and its directors, officers, employees, accountants, attorneys and other professional advisors retained by the Target in connection with the Bloom Acquisition and on a confidential basis. Prior to the Closing Date, the Commitment Parties shall have the right to review and approve any public announcement or public filing made by you or the Target or your or their representatives relating to the Senior Credit Facility or to any of the Commitment Parties in connection therewith, before any such announcement or filing is made (such approval not to be unreasonably withheld or delayed). We hereby notify you that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Act”), each of us is required to obtain, verify and record information that

identifies you, which information includes your name and address and other information that will allow us to identify you in accordance with the Act.

You acknowledge that Bank of America, Wells Fargo, MLPFS and WFS or their affiliates may be providing financing or other services to parties whose interests may conflict with yours. Each of us agrees that we will not furnish confidential information obtained from you to any of our other customers and that we will treat confidential information relating to you and your affiliates with the same degree of care as we treat our own confidential information. We further advise you that we will not make available to you confidential information that we have obtained or may obtain from any other customer.

In connection with all aspects of each transaction contemplated by this Commitment Letter, you acknowledge and agree, and acknowledge your affiliates’ understanding, that: (a) (i) the arranging and other services described herein regarding the Senior Credit Facility are arm’s-length commercial transactions between you and your affiliates, on the one hand, and us, on the other hand, (ii) you have consulted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate, and (iii) you are capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated hereby; (b) (i) each of us has been, is, and will be acting solely as a principal and, except as otherwise expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for you, any of your affiliates or any other person or entity and (ii) none of us has any obligation to you or your affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein; and (c) each of us and our respective affiliates may be engaged in a broad range of transactions that involve interests that differ from yours and those of your affiliates, and none of us have any obligation to disclose any of such interests to you or your affiliates. To the fullest extent permitted by law, you hereby waive and release any claims that you may have against us with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated by this Commitment Letter.

7. Survival of Obligations. The provisions of Sections 3, 4, 5, 6 and 9 and this Section 7 shall remain in full force and effect regardless of whether any definitive Credit Documentation shall be executed and delivered, and notwithstanding the termination of this Commitment Letter or any commitment or undertaking of Bank of America, Wells Fargo, MLPFS or WFS hereunder; provided that (i) the provisions of Sections 3 and 4 shall terminate on the Syndication Date and (ii) the provisions of Sections 5 and 6 (other than your obligations as to confidentiality) shall terminate and be superseded by the reimbursement, indemnification and absence of fiduciary relationship provisions in the definitive Credit Documentation upon the execution and delivery thereof.

8. Confidentiality Obligations of the Commitment Parties. Each of Bank of America, Wells Fargo, MLPFS and WFS agrees that it will maintain the confidentiality of all information relating to the Borrower, the Target or any of their subsidiaries obtained from you, the Target, your or their advisors or on your or their behalf, other than any such information that is available to Bank of America, Wells Fargo, MLPFS or WFS on a nonconfidential basis prior to disclosure by you, the Target, your or their advisors or on your or their behalf (other than such information that is obtained from a source that is known by us to be in breach of its confidentiality obligations with the Borrower, the Target or any of their subsidiaries) (collectively, “Confidential Information”) and that it will not furnish Confidential Information to any other person or entity, except that Confidential Information may be disclosed (a) to its affiliates and to its and its affiliates’ respective partners, directors, officers, employees, agents, trustees, advisors, and representatives who need to know such information in connection with the transactions contemplated hereby and who are informed of the confidential nature of such information (and agree to treat such information as confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority), in which case we agree to inform you promptly thereof unless we are prohibited by applicable law from so informing you or unless requested as part of such authority’s regulatory review or oversight, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process (in which case we agree to inform you promptly thereof unless we are prohibited by applicable law from so informing you), (d) to any other party to this Commitment Letter or the definitive Credit Documentation, (e) in connection with the exercise of any

remedies hereunder or any action or proceeding relating to this Commitment Letter or the Fee Letters or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this paragraph or to other confidentiality arrangements satisfactory to you, to any prospective lender under the Senior Credit Facility (it being understood and agreed by you that customary procedures employed by us for providing prospective Lenders access via IntraLinks, Syndtrak or similar system to information and other materials related to the Senior Credit Facility and the confidentiality terms to be accepted by prospective lenders in connection therewith are satisfactory to you for the purposes of this clause (f)), (g) with the consent of the Borrower, (h) for purposes of establishing a “due diligence” defense or (i) to the extent such Confidential Information (x) is or becomes publicly available other than as a result of a breach of this paragraph or (y) becomes available to us or any of our respective affiliates on a non-confidential basis from a source other than you, the Target or any of your or their respective subsidiaries or affiliates and that is not known by us to be in breach of its confidentiality obligations with you or any of your respective subsidiaries or affiliates. “Confidential Information” shall not include information independently developed by us without the use of Confidential Information. Each of Bank of America, Wells Fargo, MLPFS and WFS acknowledges that (i) the Information may include MNPI concerning the Borrower, the Target or any of their subsidiaries, (ii) it has developed compliance procedures regarding the use of MNPI and (iii) it will handle such MNPI in accordance with applicable law, including United States Federal and state securities laws. Our obligations pursuant to this paragraph shall automatically terminate and be superseded by the confidentiality provisions in the definitive loan documentation for the Senior Credit Facility upon the execution and delivery therefore and in any event shall terminate two years from the date hereof.

9. Miscellaneous. This Commitment Letter and the Fee Letters may be executed in counterparts which, taken together, shall constitute an original. Delivery of an executed counterpart of this Commitment Letter or the Fee Letters by telecopier or facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart thereof.

This Commitment Letter (including the Summary of Terms) and the Fee Letters shall be governed by, and construed in accordance with, the laws of the State of New York; provided, however, that (i) the interpretation of the definition of Target Material Adverse Effect (as defined in Annex I to the Summary of Terms) (and whether or not a Target Material Adverse Effect has occurred), (ii) the determination of the accuracy of any Transaction Agreement Representations and (iii) the determination of whether the Bloom Acquisition has been consummated in accordance with the terms of the Transaction Agreement, in each case, shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws. Each party hereto hereby irrevocably waives any and all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Commitment Letter (including the Summary of Terms), the Fee Letters, the transactions contemplated hereby and thereby or the actions of Bank of America, Wells Fargo, MLPFS and WFS in the negotiation, performance or enforcement hereof. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in the Borough of Manhattan in New York City in respect of any suit, action or proceeding arising out of or relating to the provisions of this Commitment Letter and the Fee Letters and irrevocably agrees that all claims in respect of any such suit, action or proceeding may be heard and determined in any such court. Each party hereto waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceedings brought in any such court, and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

This Commitment Letter (including the Summary of Terms) and the Fee Letters embody the entire agreement and understanding among us, you and your affiliates with respect to the matters contemplated hereby, including the Senior Credit Facility, and supersede all prior agreements and understandings relating to the specific matters hereof. However, please note that those matters that are not covered or made clear herein or in the Summary of Terms or the Fee Letters are subject to mutual agreement of the parties. No party has been authorized by us to make any oral or written statements that are inconsistent with this Commitment Letter. This Commitment Letter is not assignable by any party hereto without the prior written consent of the other parties hereto (other than in connection with the syndication of the

Senior Credit Facility as contemplated hereunder and as otherwise provided in Section 3) and is intended to be solely for the benefit of the parties hereto and the Indemnified Parties, it being understood and agreed that the obligations of a Commitment Party may be rendered by one or more of its affiliates without your consent. This Commitment Letter and the Fee Letters may only be amended, modified or superseded by an agreement in writing signed by each of the parties hereto or thereto.

This Commitment Letter and all of our commitments and undertakings hereunder will expire at 5:00 p.m. (Central time) on July 31, 2014 unless you execute this Commitment Letter and the Fee Letters and return them to us prior to that time (which may be by facsimile or electronic transmission), whereupon this Commitment Letter (including the Summary of Terms) and the Fee Letters (each of which may be signed in one or more counterparts) shall become binding agreements. Thereafter, all of our commitments and undertakings hereunder will expire on the earliest of: (a) January 31, 2015 (provided that (A) if, on such date, all conditions to effect the closing of the Acquisition other than those set forth in Section 6.1.2 (No Order) of the Transaction Agreement (as in effect on the date hereof) (to the extent that the order, judgment, decree, injunction or ruling relates to a violation or alleged violation of Antitrust Laws) or Section 6.1.3 (Regulatory Approvals) of the Transaction Agreement (as in effect on the date hereof) (collectively, the “Regulatory Conditions”) have been or are capable of being satisfied, then such date shall, without any action on the part of the parties to the Transaction Agreement, be extended day-by-day for each day during which any of the Regulatory Conditions remain unfulfilled until April 30, 2015 and (B) if, on such date, the Borrower has mailed the Proxy Statement but the Buyer Meeting (as defined in the Transaction Agreement as in effect on the date hereof) has not been held, then such date shall be extended day-by-day for each day during which the Buyer Meeting has not yet been held until February 28, 2015) unless the Credit Documentation for the Senior Credit Facility is executed and delivered and the funding of the Term Loan has occurred on or prior to such date, (b) the closing of the Bloom Acquisition without the use of the Senior Credit Facility or otherwise prior to the funding of the Term Loan, and (c) the termination of the Transaction Agreement prior to closing of the Bloom Acquisition in accordance with its terms. In consideration of the time and resources that we will devote to the Senior Credit Facility, you agree that, until such expiration or any earlier termination hereof, you will not solicit, initiate, permit or enter into any discussions in respect of, any offering, placement or arrangement of any competing senior credit facility or facilities for the Borrower and its subsidiaries.

[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

We are pleased to have the opportunity to work with you in connection with this important financing.

Very truly yours,

BANK OF AMERICA, N.A.

By:	/s/ Erin M. Frey
	Name:	Erin M. Frey
	Title:	SVP


MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

By:	/s/ James Dallas
	Name:	James Dallas
	Title:	Director


WELLS FARGO BANK, NATIONAL ASSOCIATION

By:	/s/ Neel Morey
	Name:	Neel Morey
	Title:	Senior Vice President


WELLS FARGO SECURITIES, LLC

By:	/s/ Westley White
	Name:	Westley White
	Title:	Vice President

Commitment Letter — Project Bloom

ACCEPTED AND AGREED TO
AS OF THE DATE FIRST ABOVE WRITTEN:

FTD COMPANIES, INC.

By:	/s/ Robert Apatoff
	Name:	Robert Apatoff
	Title:	President & CEO

Commitment Letter — Project Bloom

EXHIBIT A

PROJECT BLOOM

SUMMARY OF TERMS AND CONDITIONS

FTD COMPANIES, INC.

AMENDMENT TO EXISTING CREDIT FACILITIES

Capitalized terms not otherwise defined herein have the same meanings

as specified therefor in the commitment letter (the “Commitment Letter”) to which

this Summary of Terms and Conditions is attached.

PROPOSED AMENDMENT:		If the Required Consent is obtained, the Existing Credit Agreement shall be amended on the Closing Date on the terms set forth in this Summary of Terms and Conditions (the “*Proposed Amendment*”). If the Required Consent is not obtained, (a) the Backstop Bank Facility shall be provided on the Closing Date pursuant to a credit agreement with terms identical in all material respects to those applicable to the terms under the Existing Credit Agreement, except for changes to such terms as are proposed by the Proposed Amendment, and shall replace and refinance the Existing Credit Facilities in their entirety, and (b) the letters of credit under the Existing Credit Facilities will be rolled over into (or replaced under) the Backstop Bank Facility.

LEAD ARRANGERS AND BOOK RUNNERS:		Merrill Lynch, Pierce, Fenner & Smith Incorporated (“*MLPFS”) and Wells Fargo Securities, LLC will act as joint lead arrangers and joint book runners (in such capacities, collectively, the “Lead Arrangers*”)

ADDITION OF NEW TERM LOAN:		A new term loan A facility in an aggregate principal amount of $130 million (the “*Term Loan”) will be added to the Existing Credit Agreement (or, if the Required Consent is not obtained, advanced pursuant to the documentation for the Backstop Bank Facility). The Term Loan shall be disbursed in full to FTD Companies, Inc. (the “Borrower*”) on the date of satisfaction of the conditions precedent set forth under the heading “Conditions Precedent to Closing”.

PURPOSE:		The proceeds of the Term Loan shall be used to repay outstanding loans under the Existing Credit Facilities, whether the Term Loan is made under the Amended Credit Agreement or the Backstop Bank Facility, as applicable, and, in either case, to pay fees and expenses in connection therewith. The proceeds of the Bloom Acquisition Advance (as defined in Annex II hereto), whether made under the Amended Credit Agreement or the Backstop Bank Facility, as applicable, shall be used to finance the Bloom Acquisition, including the payoff and termination of certain existing indebtedness of the Target described in Annex II hereto, and to pay fees and expenses in connection therewith.

INTEREST RATES AND FEES:		The pricing grid used to determine interest rates and fees applicable to the Existing Credit Facilities (as amended by the Proposed Amendment) and the Term Loan (or, if applicable, the pricing grid used to determine interest rates and fees applicable to the Backstop Bank Facility) shall be

as set forth below; provided that, in no event shall pricing be less than (i.e. more favorable to the Borrower than), (x) if the Bloom Acquisition Advance is not made on the Closing Date, pricing tier 2 prior to the delivery of the financial statements for the first full fiscal quarter ending after the Closing Date and (y) if the Bloom Acquisition Advance is made on the Closing Date, pricing tier 3 prior to the delivery of the financial statements for the first full fiscal quarter ending after the Closing Date; provided, further, in either case, upon consummation of the Bloom Acquisition, the pricing tier will be reset based on the pro forma Consolidated Net Leverage Ratio.

Pricing Tier	Consolidated Leverage Ratio	Applicable Margin for LIBOR Loans/ Letter of Credit Fees		Applicable Margin for Base Rate Loans		Commitment Fee
5	> 3.75x	2.50	%	1.50	%	0.40	%
4	< 3.75x but > 3.25x	2.25	%	1.25	%	0.35	%
3	< 3.25x but > 2.50x	2.00	%	1.00	%	0.30	%
2	< 2.50x but > 1.75x	1.75	%	0.75	%	0.25	%
1	< 1.75x	1.50	%	0.50	%	0.20	%

MATURITY/SCHEDULED AMORTIZATION:		July 17, 2018.

		The Term Loan shall amortize in equal quarterly installments, commencing with the last day of the first full fiscal quarter ending after the Closing Date, but in no event earlier than March 31, 2015, in aggregate annual amounts as follows:

Year	Annual Amortization Percentage
Year 1	10	%
Year 2	10	%
Year 3	10	%
Year 4	10	%
July 17, 2018	Balance

OPTIONAL PREPAYMENTS OF TERM LOAN:		The Borrower may repay the Term Loan in whole or in part at any time without premium or penalty, subject to reimbursement of the Lenders’ breakage and redeployment costs in the case of prepayment of LIBOR borrowings.

MANDATORY PREPAYMENTS OF TERM LOAN:		In addition to the scheduled amortization, (a) 50% of Excess Cash Flow (to be defined in the Credit Documentation) if the Consolidated Net Leverage Ratio (to be defined in the Credit Documentation) exceeds 3.50x (reducing to 0% if the Consolidated Net Leverage Ratio is less

	than or equal to 3.50x); (b) 100% of all net cash proceeds from any sale, loss, destruction, condemnation or other taking of property and assets of the Borrower and its subsidiaries (excluding sales of inventory in the ordinary course of business, dispositions below a threshold to be agreed and other exceptions and reinvestment provisions to be agreed upon in the Credit Documentation); (c) 100% of all net cash proceeds from the issuance or incurrence after the Closing Date of additional debt of the Borrower or any of its subsidiaries not otherwise permitted under the Credit Documentation; and (d) 100% of all net cash proceeds of Extraordinary Receipts (to be defined in the Credit Documentation and to exclude, without limitation, cash receipts in the ordinary course of business, indemnity payments received in respect of third party claims or losses, insurance proceeds and amounts received in connection with the proceedings received under the litigation issued by Interflora, Inc. with the High Court of Justice of England and Wales against Marks and Spencer plc claiming infringement of U.K. trademark registration number 1329840 and European Community trademark registration number 909838, both for the word “Interflora”) in excess of an amount to be agreed shall be applied to the prepayment of the Term Loan (and to the principal installments thereof (including the final installment due at maturity) on a pro rata basis.

SECURITY:	The Senior Credit Facility shall be secured by the same collateral that secures the Existing Credit Facilities which shall be subject to the same exclusions and limitations as set forth in the Existing Credit Agreement (and the related loan documents) (the “*Collateral*”).

CONDITIONS PRECEDENT TO CLOSING:	The closing of the Proposed Amendment (or, if the Required Consent is not obtained, the closing of the Backstop Bank Facility) and the funding of the Term Loan will be subject only to satisfaction of the conditions precedent set forth in Section 2 of the Commitment Letter and the conditions set forth in Annex I hereto.

CONDITIONS PRECEDENT TO BLOOM ACQUISITION ADVANCE:	The funding of the Bloom Acquisition Advance will be subject only to the occurrence of the Closing Date and the satisfaction of conditions set forth in Annex II hereto.

AMENDMENTS:	The Proposed Amendment shall further amend the Existing Credit Agreement as follows (which amendments shall be effective on the Closing Date):

	(a)	Bloom Acquisition — Section 8.03(e) of the Existing Credit Agreement shall be amended to permit the Bloom Acquisition, subject to the satisfaction of the conditions set forth on Annex II hereto.

	(b)	Financial Covenants — The Proposed Amendment shall amend the Existing Credit Agreement to (i) delete the minimum “Consolidated Interest Coverage Ratio” in Section 8.06(b) of the Existing Credit Agreement and replace it with a minimum consolidated fixed charge coverage ratio ((Consolidated

iii

				Adjusted EBITDA(1) — maintenance capital expenditures — restricted payments — cash taxes) / (interest expense + scheduled amortization payments)) of 1.25x and (ii) reset the maximum Consolidated Net Leverage Ratio to 3.75x with step-downs to be determined.

		(c)		Multicurrency Borrowings — The Proposed Amendment shall prohibit multicurrency credit extensions in affected foreign currencies to the extent that there shall have occurred any material adverse change in national or international financial, political or economic conditions or currency exchange rates or exchange controls that would make it commercially impracticable for such credit extension to be denominated in the relevant currency (and any such credit extensions shall be made in agreed currencies that are not so affected.

		(d)		Minimum Availability. The Proposed Amendment shall restrict credit extensions under the Amended Credit Agreement such that at all times prior to the consummation of the Bloom Acquisition, the aggregate unfunded revolving commitments shall be at least $130 million.

		(e)		Other Amendments — The Proposed Amendment shall amend the Existing Credit Agreement to reflect (a) changes in law or accounting standards, (b) changes in the Administrative Agent’s policies or procedures (including the addition of a FCPA representation) and (c) certain other changes to be agreed, in each case on terms agreed by the Lead Arrangers, the Administrative Agent and the Borrower.

		The Proposed Amendment shall further amend the Existing Credit Agreement as follows (which amendments shall be effective upon consummation of the Bloom Acquisition in accordance with the terms hereof, including Annex II hereto):

		(a)		Change of Control — The definition of “Change of Control” in the Existing Credit Agreement will be amended to permit Liberty Interactive Corporation (“*Liberty*”) and its affiliates to own of 40% in the aggregate of the Borrower and to permit Liberty’s appointment of four members to the board of directors of the Borrower and update the approved members of the board of directors to those in place immediately following the Bloom Acquisition Date (as defined in Annex II hereto).

		(b)		Financial Covenants —

				· The maximum “Consolidated Net Leverage Ratio” in Section 8.06(a) of the Existing Credit Agreement will be amended to provide that in connection with the Bloom

(1) As defined in the Existing Credit Agreement but to include addbacks for one-time fees and expenses (including integration expenses) in connection with the Bloom Acquisition

		Acquisition or any “Permitted Acquisition” (as defined in the Existing Credit Agreement) that, in either case, would cause the aggregate consideration for all such acquisitions consummated on or within twelve months following the Closing Date, to exceed $545 million, if the Borrower’s Consolidated Net Leverage Ratio (calculated on a pro forma basis after giving effect to such acquisition) would be less than, but within 0.25 to 1.0 of, or would equal or exceed, by no more than 0.25 to 1.0, the maximum Consolidated Net Leverage Ratio then-permitted under the Amended Credit Agreement, the otherwise applicable maximum Consolidated Net Leverage Ratio, at the election of the Borrower (with prior notice to the Administrative Agent), shall increase by 0.50 to 1.0 for four consecutive fiscal quarters beginning with the fiscal quarter in which such acquisition occurs (the “Adjustment Period”), so long as the Borrower is in compliance on a pro forma basis with the maximum Consolidated Net Leverage Ratio (as so adjusted for the Adjustment Period) after giving effect to such acquisition. During the Adjustment Period, no restricted payments shall be permitted; provided that upon written notice to the Administrative Agent, so long as the Borrower is then in compliance with the Consolidated Net Leverage Ratio as of the most recent fiscal quarter end, the Borrower can terminate the Adjustment Period prior to the expiration of the applicable four fiscal quarter period relating to the Adjustment Period.

	(c)	Pro Forma Compliance — Upon consummation of the Bloom Acquisition, the Borrower shall deliver to the Administrative Agent a certificate demonstrating that the Consolidated Net Leverage Ratio, calculated on a pro forma basis after giving effect to the Bloom Acquisition and the related transactions, shall be at least 0.25 to 1.00 lower than the maximum then-permitted under the Senior Credit Facility.

	(d)	Other Amendments — The Proposed Amendment shall amend the Existing Credit Agreement to reflect certain other changes requested by the Borrower and subject to the mutual agreement of the Lead Arrangers, the Administrative Agent and the Borrower.

ASSIGNMENTS AND PARTICIPATIONS:	Assignments: Subject to the consents described below (which consents will not be unreasonably withheld or delayed), each Lender will be permitted to make assignments to other financial institutions in respect of the Term Loan in a minimum amount equal to $1 million.

	Consents: The consent of the Borrower will be required for any assignment of the Term Loan unless (i) an Event of Default has occurred and is continuing or (ii) the assignment is to a Lender, an affiliate of a Lender or an Approved Fund (as such term shall be defined in the Credit Documentation); provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten business days after having received written notice thereof. The consent of the Administrative

		Agent will be required for any assignment of the Term Loan to an entity that is not a Lender, an affiliate of such Lender or an Approved Fund in respect of such Lender.

		Assignments Generally: An assignment fee in the amount of $3,500 will be charged with respect to each assignment of the Term Loan unless waived by the Administrative Agent in its sole discretion. Each Lender will also have the right, without consent of the Borrower or the Administrative Agent, to assign as security all or part of its rights under the Credit Documentation to any Federal Reserve Bank.

		Participations: The provisions applicable to participations in the Existing Credit Agreement shall also apply to the Term Loan.

WAIVERS AND AMENDMENTS:		Same as Existing Credit Agreement

GOVERNING LAW:		State of New York.

OTHER:		Each of the parties shall (i) waive its right to a trial by jury and (ii) submit to New York jurisdiction.

ANNEX I

PROJECT BLOOM

SUMMARY OF ADDITIONAL CONDITIONS

Capitalized terms not otherwise defined herein have the same meanings

as specified therefor in the commitment letter (the “Commitment Letter”) to which

this Summary of Additional Conditions is attached.

The closing of the Proposed Amendment (or, if the Required Consent is not obtained, the closing of the Backstop Bank Facility) and the funding of the Term Loan will be subject to satisfaction of the following conditions precedent:

(i) The Specified Representations (as hereinafter defined) shall be true and correct in all material respects (or, with respect to representations already qualified by concepts of materiality, in all respects) at the time of and after giving effect to the extensions of credit under the Term Loan, whether made under the Amended Credit Agreement or the Backstop Bank Facility, on the Closing Date. “Specified Representations” means the representations and warranties set forth in the Credit Documentation with respect to the Borrower and its subsidiaries relating to organization, corporate existence, requisite power and authority; due authorization, execution and delivery and enforceability of the Credit Documentation; no conflict of the Credit Documentation with organizational documents; material compliance with law; solvency; PATRIOT Act; OFAC; FCPA; Investment Company Act status; use of proceeds; perfection of security interests in the Collateral (subject to clause (x) of this Annex I and clause (v) of Annex II hereto, as applicable); and margin stock regulations.

(ii) There shall not have been any amendment, modification, waiver or consent under the Transaction Agreement that is materially adverse to the interests of the Lenders (in their capacities as such) unless such amendment or modification is approved by the Lead Arrangers (which approval shall not be unreasonably withheld or delayed); provided, that any change in purchase price (excluding adjustments to the purchase price contemplated under Sections 2.1.1.1 or 2.2 of the Transaction Agreement (as in effect on the date hereof)) by 10% or more and any change to the definition of “Company Material Adverse Effect” shall be deemed to be materially adverse to the Lenders. The Administrative Agent shall have received a fully-executed copy of the Transaction Agreement (with all schedules and exhibits thereto) certified to be true and complete by a responsible officer of the Borrower.

(iii) The Lenders shall have received (A) reasonably satisfactory and customary opinions of counsel to the Borrower, each other borrower thereunder and any guarantors under the Amended Credit Agreement (collectively, the “Guarantors”) (including any local domestic and foreign counsel reasonably requested by the Lead Arrangers), which opinions shall expressly permit reliance by the successors and permitted assigns of each of the Administrative Agent and the Lenders, and such corporate resolutions, certified organization documents, secretary’s certificates, incumbency certificates and good standing (or equivalent) certificates of the Borrower, each other borrower thereunder and the Guarantors as the Lead Arrangers shall reasonably require and (B) reasonably satisfactory evidence that the Administrative Agent (on behalf of the Lenders) shall have a valid and perfected first priority (subject to certain exceptions to be set forth in the Credit Documentation) lien and security interest in the Collateral (subject to clause (x) of this Annex I and clause (v) of Annex II hereto, as applicable).

(iv) The Lead Arrangers shall have received (a) the annual (or other audited) financial statements of the Borrower and its subsidiaries for the fiscal years ended December 31, 2011, December 31, 2012 and December 31, 2013, (b) the annual audited financial statements of the Target and its subsidiaries for the fiscal year ended December 31, 2013, (c) interim financial statements of the

Borrower and its subsidiaries dated the end of each fiscal quarter (commencing with the fiscal quarter ending March 31, 2014) ending at least 45 days prior to the Closing Date, (d) interim monthly financial statements of the Target dated the end of each fiscal month (commencing with the fiscal month ending March 31, 2014) ending at least 30 days prior to the Closing Date (such financial statements to be consistent with the requirements set forth in Section 5.6.3 of the Transaction Agreement as in effect on the date hereof); (e) a quality of earnings report of the Target and its subsidiaries for the fiscal years ending December 31, 2012 and December 31, 2013 and the fiscal quarter ending March 31, 2014 prepared by Deloitte & Touche LLP (and which shall include Winter Storm Pax 2014 weather-related EBITDA addbacks), and (f) pro forma consolidated financial statements as to the Borrower and its subsidiaries (based on its June 30, 2014 financial statements) giving effect to the Transaction. The Lead Arrangers hereby confirm receipt of the items described in subclauses (a), (c) (with respect to the fiscal quarter ended March 31, 2014), (d) (with respect to the fiscal months ended March, 31, 2014, April 30, 2014 and May 31, 2014) and (e).

(v) The Closing Date shall not occur less than twenty business days after the receipt by the Lead Arrangers of the Information Memorandum (which twenty business-day period, shall exclude (x) November 27 and November 28, 2014 and (y) December 22, 2014 through and including January 2, 2015).

(vi) The Administrative Agent and the Lenders shall have received all documentation and other information required under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act at least three business days prior to the Closing Date.

(vii) All accrued fees and expenses of the Lead Arrangers, the Administrative Agent and the Lenders payable pursuant to the Commitment Letter, the Credit Documentation or the Fee Letters shall have been paid to the extent invoiced in reasonable detail at least one business day in advance of the Closing Date (which amounts may be paid from the proceeds of the initial funding of the Term Loan).

(viii) If the Bloom Acquisition is consummated on the Closing Date, the conditions precedent set forth on Annex II shall be satisfied.

(ix) Solely with respect to the Backstop Bank Facility, if any Default (as defined therein) exists on the Closing Date or if the representations and warranties contained in the Credit Documentation therefore are not true and correct in all material respects (or, with respect to any representation or warranty qualified as to materiality, in all respects) as of the Closing Date, the maximum amount of credit extensions thereunder made on the Closing Date shall not exceed the sum of the outstanding amount of the credit extensions under the Existing Credit Agreement and, if the Bloom Acquisition is consummated on the Closing Date, the Bloom Acquisition Advance.

(x) Solely with respect to the Backstop Facility, arrangements reasonably satisfactory to the Administrative Agent to perfect the Administrative Agent’s lien in the Collateral (other than the Collateral relating to the assets of the Target and its subsidiaries) shall have been duly made (it being understood that, to the extent any security interest in any Collateral is not or cannot be provided and/or perfected on the Closing Date (other than the pledge and perfection of the security interests in equity securities of the Borrower’s domestic subsidiaries and assets with respect to which a lien may be perfected by the filing of a financing statement under the Uniform Commercial Code) after the Borrower’s use of commercially reasonable efforts to do so or without undue burden or expense, then the provision and/or perfection of a security interest in such Collateral shall not constitute a condition precedent to the funding of the Term Loan or, if the Required Consent is not obtained, the availability of the Backstop Bank Facility on the Closing Date, but instead shall be required to be delivered within 60 days after the Closing Date (or such later date as the Administrative Agent may agree in its sole discretion).

(xi) Solely with respect to the Backstop Bank Facility, the Existing Credit Agreement shall have been repaid, all commitments with respect thereto shall have been terminated and all liens and security interests securing the Existing Credit Agreement shall have been released or terminated.

(xii) The Administrative Agent shall have received a customary notice of borrowing.

(xiii) The Lead Arrangers shall have received certification as to the solvency of the Borrower and its subsidiaries (on a consolidated basis, immediately prior to and after giving effect to the borrowing of the Term Loan) from the chief financial officer of the Borrower, in form substantially similar to that attached as Annex III hereto.

iii

ANNEX II

PROJECT BLOOM

SUMMARY OF ADDITIONAL CONDITIONS

TO BLOOM ACQUISITION

Capitalized terms not otherwise defined herein have the same meanings

as specified therefor in the commitment letter (the “Commitment Letter”) to which

this Summary of Additional Conditions to Bloom Acquisition is attached.

For purposes hereof, “Bloom Acquisition Advance” means an advance made to the Borrower in U.S. dollars under the Amended Credit Agreement (or, if the Required Consent is not obtained, under the Backstop Bank Facility) which shall be used to finance the Bloom Acquisition and to pay fees, costs and expenses incurred therewith and shall be in an amount equal to the lesser of (a) the amount necessary to finance (i) the cash portion of the purchase price of the Bloom Acquisition, (ii) the fees, costs and expenses incurred in connection with the Bloom Acquisition and (iii) the amount required to refinance the Refinanced Debt (as defined below) on the Bloom Acquisition Date (as defined below) and (b) the aggregate unutilized commitments under the Amended Credit Agreement (or, if the Required Consent is not obtained, under the Backstop Bank Facility).

The borrowing of the Bloom Acquisition Advance and the consummation of the Bloom Acquisition will be subject to satisfaction of the following conditions precedent:

(i) The representations and warranties made by or on behalf of the Target in the Transaction Agreement and which are material to the interests of the Lenders (in their capacities as such) shall be true and correct all respects as of the date of consummation of the Bloom Acquisition (the “Bloom Acquisition Date”), but only to the extent that the Borrower or any of its affiliates has the right to terminate its obligations under the Transaction Agreement or to decline to consummate the Bloom Acquisition as a result of a breach of such representations and warranties in the Transaction Agreement. Such representations and warranties may be referred to herein as the “Transaction Agreement Representations.”

(ii) The Specified Representations shall be true and correct in all material respects (or, with respect to representations already qualified by concepts of materiality, in all respects) at the time of and after giving effect to the Bloom Acquisition and the Bloom Acquisition Advance.

(iii) The Bloom Acquisition shall have been, or shall concurrently with the funding of the Bloom Acquisition Advance be, consummated in accordance with the terms of the Transaction Agreement, without giving effect to any amendment, modification, waiver or consent thereunder that is materially adverse to the interests of the Lenders (in their capacities as such) unless such amendment or modification is approved by the Lead Arrangers (which approval shall not be unreasonably withheld or delayed); provided, that any change in purchase price (excluding adjustments to the purchase price contemplated under Sections 2.1.1.1 or 2.2 of the Transaction Agreement (as in effect on the date hereof) by 10% or more and any change to the definition of “Company Material Adverse Effect” shall be deemed to be materially adverse to the Lenders. The Administrative Agent shall have received a fully-executed copy of all amendments, modifications, waivers or consents of or pertaining to the Transaction Agreement certified to be true and complete by a responsible officer of the Borrower.

(iv) There shall not have occurred after the date of the Transaction Agreement any event or development with relation to the Target or its subsidiaries that, individually or in the aggregate, has had a Target Material Adverse Effect. “Target Material Adverse Effect” means any change, effect, event, occurrence, state of facts or development that (A) is or would reasonably be expected to be material and adverse to the business, assets, properties, condition (financial or

otherwise) or results of operations of Provide Commerce, Inc., a Delaware corporation (the “Company”) and the Company Subsidiaries (as defined in the Transaction Agreement as in effect on the date hereof), taken as a whole; provided, however, that none of the following shall be deemed in themselves, either alone or in combination, to constitute, and that none of the following shall be taken into account in determining whether there has been or will be, a Target Material Adverse Effect: (i) any adverse change, effect, event, occurrence, state of facts or development demonstrably resulting from the announcement, pendency or consummation of the transactions contemplated hereby; (ii) any adverse change, effect, event, occurrence, state of facts or development after the date hereof, attributable to conditions generally affecting any of the industries in which the Company participates, the U.S. economy or financial or credit markets (including changes in prevailing interest rates, credit availability, liquidity and quality, currency exchange rates, price levels or trading volumes in the United States or foreign securities markets); (iii) changes in Laws (as defined in the Transaction Agreement as in effect on the date hereof) after the date hereof; (iv) changes in GAAP (as defined in the Transaction Agreement as in effect on the date hereof) after the date hereof; (v) any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism or (vi) any adverse change, effect, event, occurrence, state of facts or development with respect to the RedEnvelope (as defined in the Transaction Agreement as in effect on the date hereof) business, except, with respect to clauses (ii), (iii), (iv) and (v), to the extent that the effects of such change are disproportionately adverse to the business, assets, properties, condition (financial or otherwise) or results of the Company and the Company Subsidiaries, taken as a whole, as compared to other companies in the industries in which the Company and the Company Subsidiaries operate; or (B) prevents or materially impairs or delays the ability of the Company or Liberty, to perform its obligations under the Transaction Agreement or to consummate the transactions contemplated hereby or would reasonably be expected to do so.

(v) Arrangements reasonably satisfactory to the Administrative Agent to perfect the Administrative Agent’s lien in the Collateral (to the extent the same relate to assets of the Target and its subsidiaries) shall have been made (it being understood that, to the extent any security interest in any such Collateral is not or cannot be provided and/or perfected on the Bloom Acquisition Date (other than the pledge and perfection of the security interests in equity securities of the Target and the Target’s domestic subsidiaries and assets with respect to which a lien may be perfected by the filing of a financing statement under the Uniform Commercial Code) after the Borrower’s use of commercially reasonable efforts to do so or without undue burden or expense, then the provision and/or perfection of a security interest in any such Collateral shall not constitute a condition precedent to the funding of the Bloom Acquisition Advance on the Bloom Acquisition Date, but instead shall be required to be delivered within 60 days after the Bloom Acquisition Date (or such later date as the Administrative Agent may agree in its sole discretion)).

(vi) The domestic entities acquired pursuant to the Bloom Acquisition shall have become guarantors under the Senior Credit Facility in accordance with and to the extent required under the terms of the Credit Documentation.

(vii) The Lenders shall have received reasonably satisfactory evidence that the Administrative Agent (on behalf of the Lenders) shall have a valid and perfected first priority (subject to certain exceptions to be set forth in the Credit Documentation) lien and security interest in the Collateral (subject to clause (v) of this Annex II and clause (x) of Annex I hereto, as applicable).

(viii) All indebtedness of the Target shall have been repaid (or substantially concurrently with the Bloom Acquisition Advance shall be repaid), all commitments with respect thereto shall have been terminated (or substantially concurrently with the Bloom Acquisition Advance shall be terminated) and all liens and security interests securing such indebtedness shall have been released or terminated (or substantially concurrently with the Bloom Acquisition Advance shall be released or terminated) (the “Refinanced Debt”).

(ix) The Administrative Agent and the Lenders shall have received all documentation and other information required under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act at least three business days prior to the Bloom Acquisition Date.

(x) The Administrative Agent shall have received a customary notice of borrowing.

(xi) The Lead Arrangers shall have received certification as to the solvency of the Borrower and its subsidiaries (on a consolidated basis, immediately prior to and after giving effect to the Bloom Acquisition, the Bloom Acquisition Advance and the related transactions occurring on the date of the Bloom Acquisition) from the chief financial officer of the Borrower, in form substantially similar to that attached as Annex III hereto.

iii

ANNEX III

PROJECT BLOOM

Form of Solvency Certificate

[ ], 201[ ]

This Solvency Certificate (this “Certificate”) is furnished to the Administrative Agent and the Lenders pursuant to Section [·] of the [Credit Agreement], dated as of [ ], 201[ ], among [ ] (the “Credit Agreement”). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings set forth in the Credit Agreement

I, [ ], the Chief Financial Officer of the Borrower (after giving effect to the Transactions), in that capacity only and not in my individual capacity, DO HEREBY CERTIFY on behalf of the Borrower that as of the date hereof, both prior to and after giving effect to the consummation of the Bloom Acquisition (including the consummation of the [Transaction Agreement] and the extensions of credit to be made under the Credit Agreement, the making of the Loans and the use of proceeds of such Loans on the date hereof, collectively, the “Transactions”):

1. The sum of the liabilities (including contingent liabilities) of the Borrower and its subsidiaries, on a consolidated basis, does not exceed the present fair saleable value of the assets of the Borrower and its subsidiaries, on a consolidated basis.

2. The present fair saleable value of the assets of the Borrower and its subsidiaries, on a consolidated basis, is greater than the total amount that will be required to pay the probable liabilities (including contingent liabilities) of the Borrower and its subsidiaries as they become absolute and matured.

3. The capital of the Borrower and its subsidiaries, on a consolidated basis, is not unreasonably small in relation to their business as conducted on the date hereof.

4. The Borrower and its subsidiaries, on a consolidated basis, have not, giving effect to the Transactions, incurred debts or other liabilities, including current obligations, beyond their ability to pay such debts or other liabilities as they become due (whether at maturity or otherwise).

5. For purposes of this Certificate, the amount of any contingent liability has been computed as the amount that, in light of all of the facts and circumstances known to the undersigned as of the date hereof, represents the amount that can reasonably be expected to become an actual or matured liability.

6. In reaching the conclusions set forth in this Certificate, the undersigned has (i) reviewed the Credit Agreement and other Loan Documents referred to therein, (ii) reviewed the financial statements (including the pro forma financial statements) referred to in [Section [·] of the Credit Agreement][Annex I of the Commitment Letter] (the “Financial Statements”) and (iii) made such other investigations and inquiries as the undersigned has deemed appropriate. The undersigned is familiar with the financial performance and prospects of the Borrower and its subsidiaries and hereby confirms that the Financial Statements were prepared in good faith and, to the best knowledge of the undersigned, fairly present, in all material respects, the Borrower’s and its subsidiaries’ consolidated financial condition (including, with respect to the pro forma Financial Statements, the pro forma financial condition giving effect to the Transactions).

7. The undersigned confirms and acknowledges that the Administrative Agent and the Lenders are relying on the truth and accuracy of this Certificate in connection with the Commitments and Loans under the Credit Agreement.

IN WITNESS WHEREOF, the Borrower has caused this certificate to be executed on its behalf by its Chief Financial Officer this day of , 201 .

FTD COMPANIES, INC.

By:
	Name:
	Title: Chief Financial Officer