1 EXHIBIT 10.3 SECURITY AGREEMENT DATED AS OF NOVEMBER 20, 1997

1
EXHIBIT 10.3

SECURITY AGREEMENT
DATED AS OF NOVEMBER 20, 1997

between

FLORISTS' TRANSWORLD DELIVERY, INC.

AND

THE FIRST NATIONAL BANK OF CHICAGO,
as Agent

TABLE OF CONTENTS

SECTION 1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 2. Grant of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 3. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

SECTION 4. Grantor Remains Liable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

SECTION 5. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

SECTION 6. Perfection and Maintenance of Security Interest and Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

SECTION 7. Financing Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

SECTION 8. Filing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

SECTION 9. Schedule of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

SECTION 10. Equipment and Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

SECTION 11. Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

SECTION 12. Leased Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

SECTION 13. General Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

SECTION 14. Agent Appointed Attorney-in-Fact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

SECTION 15. Agent May Perform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

SECTION 16. Agent's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

SECTION 17. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

SECTION 18. Exercise of Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

SECTION 19. License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

SECTION 20. Injunctive Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

SECTION 21. Interpretation and Inconsistencies; Merger; No Strict Construction . . . . . . . . . . . . . . . . . . . . . . 11

SECTION 22. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

SECTION 23. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

SECTION 24. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

SECTION 25. Continuing Security Interest; Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

SECTION 26. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

SECTION 27. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(A) EXCLUSIVE JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(B) OTHER JURISDICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(C) SERVICE OF PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(D) WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(E) WAIVER OF BOND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(F) ADVICE OF COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

EXHIBITS AND SCHEDULES

EXHIBITS

EXHIBIT A-1 -- Form of Landlord Agreement

EXHIBIT A-2 -- Form of Mortgagee Agreement

EXHIBIT B -- Form of Bailee Letter
4

SCHEDULES

Schedule 1 -- Pledged Debt

Schedule 2 -- Locations of Collateral

Schedule 2-A -- Third Party Locations

Schedule 2-B -- Financing Statement Filing Locations

Schedule 3 -- Trade Names
5

SECURITY AGREEMENT

This SECURITY AGREEMENT ("Agreement"), dated as of November 20, 1997
is made by FLORISTS' TRANSWORLD DELIVERY, INC., a Michigan corporation
("Grantor"), in favor of THE FIRST NATIONAL BANK OF CHICAGO (the "Agent"), for
its benefit and for the benefit of the "Holders of Secured Obligations" (as
defined below) who are, or may hereafter become, parties to the Credit Agreement
referred to below.

PRELIMINARY STATEMENT

Grantor has entered into a certain Credit Agreement of even date
herewith among Grantor, FTD Corporation, a Delaware corporation, the financial
institutions from time to time party thereto (the "Lenders") and the Agent, as
the contractual representative for the Lenders (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), providing for the making of loans, advances and other financial
accommodations (including, without limitation issuing letters of credit) (all
such loans, advances and other financial accommodations being hereinafter
referred to collectively as the "Loans") to or for the benefit of Grantor. It
is a condition precedent to the making of the Loans under the Credit Agreement
that Grantor shall have granted the security interest contemplated by this
Agreement.

NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms
defined in the Credit Agreement are used herein as therein defined, and the
following terms shall have the following meanings (such meanings being equally
applicable to both the singular and the plural forms of the terms defined):

"Agreement" shall mean this Security Agreement, as the same may from
time to time be amended, restated, modified or supplemented, and shall refer to
this Agreement as the same may be in effect at the time such reference becomes
operative.

"UCC" shall mean the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of Illinois; provided, however, in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the Agent's and the Holders of Secured
Obligations' security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of Illinois,
the term "UCC" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions related to such
provisions.

SECTION 2. Grant of Security. To secure the prompt and complete
payment, observance and performance of the Secured Obligations, Grantor hereby
assigns and pledges to Agent, for the benefit of itself and the Holders of
Secured Obligations, and hereby grants to Agent, for the benefit of itself and
the Holders of Secured Obligations, a security interest in all of Grantor's
right, title and interest in and
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to the following, whether now owned or existing or hereafter arising or acquired
and wheresoever located:

ACCOUNTS: All "accounts" as such term is defined in Section 9-106 of
the UCC, whether now owned or hereafter acquired or arising; Grantor intends
that the term "accounts", as used herein, be construed in its broadest sense,
and such term shall include, without limitation, all present and future
accounts, accounts receivable and other rights of Grantor to payment for goods
sold or leased or for services rendered (except those evidenced by instruments
or chattel paper), whether now existing or hereafter arising and wherever
arising, and whether or not they have been earned by performance (collectively,
"Accounts");

INVENTORY: All "inventory" as defined in Section 9-109(4) of the UCC,
whether now owned or hereafter acquired or arising; Grantor intends that the
term "inventory", as used herein, be construed in its broadest sense, and such
term shall include, without limitation, all goods now owned or hereafter
acquired by Grantor (wherever located, whether in the possession of Grantor or
of a bailee or other person for sale, storage, transit, processing, use or
otherwise and whether consisting of whole goods, spare parts, components,
supplies, materials, or consigned, returned or repossessed goods) which are held
for sale or lease, which are to be furnished (or have been furnished) under any
contract of service or which are raw materials, work in process or materials
used or consumed in Grantor's business (collectively, "Inventory");

EQUIPMENT: All "equipment" as such term is defined in Section
9-109(2) of the UCC, whether now owned or hereafter acquired or arising; Grantor
intends that the term "equipment", as used herein, be construed in its broadest
sense, and such term shall include, without limitation, all machinery, all
manufacturing, distribution, selling, data processing and office equipment, all
furniture, furnishings, appliances, fixtures and trade fixtures, tools, tooling,
molds, dies, vehicles, vessels, trucks, buses, motor vehicles and all other
goods of every type and description (other than Inventory), in each instance
whether now owned or hereafter acquired by Grantor and wherever located
(collectively, "Equipment");

GENERAL INTANGIBLES: All "general intangibles" as defined in Section
9-106 of the UCC, whether now owned or hereafter acquired or arising; Grantor
intends that the term "general intangibles", as used herein, be construed in its
broadest sense, and such term shall include, without limitation, all rights,
interests, choses in action, causes of actions, claims and all other intangible
property of Grantor of every kind and nature (other than Accounts), in each
instance whether now owned or hereafter acquired by Grantor and however and
whenever arising, including, without limitation, all corporate and other
business records; all loans, royalties, and other obligations receivable;
customer lists, credit files, correspondence, and advertising materials; firm
sale orders, other contracts and contract rights; all interests in partnerships
and joint ventures; all tax refunds and tax refund claims; all right, title and
interest under leases, subleases, licenses and concessions and other agreements
relating to real or personal property; all payments due or made to Grantor in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of any property by any person or governmental authority; all deposit
accounts (general or special) with any bank or other financial institution,
including, without limitation, any deposits or other sums at any time credited
by or due to Grantor from any of the Holders of Secured Obligations or any of
their respective Affiliates with the same rights therein as if the deposits or
other sums were credited by or due from such Holder of Secured Obligations; all
credits with and other claims against carriers and shippers; all rights to
indemnification; all patents, and patent applications (including all reissues,
divisions, continuations and extensions); all service marks and service ▇▇▇▇
applications;

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all trade secrets and inventions; all copyrights and copyright applications
(including all computer software and related documentation); all rights and
interests in and to trademarks, trademark registrations and applications
therefor, trade names, corporate names, brand names, slogans, all goodwill
associated with the foregoing; all license agreements and franchise agreements,
all reversionary interests in pension and profit sharing plans and
reversionary, beneficial and residual interest in trusts; all proceeds of
insurance of which Grantor is beneficiary; and all letters of credit,
guaranties, liens, security interests and other security held by or granted to
Grantor; and all other intangible property, whether or not similar to the
foregoing;

CONTRACT RIGHTS: All rights and interests in and to any pending or
executory contracts, requests for quotations, invitations for bid, agreements,
leases and arrangements of which Grantor is a party to or in which Grantor has
an interest.

CHATTEL PAPER, INSTRUMENTS AND DOCUMENTS: All chattel paper, leases,
all instruments, including, without limitation, the notes and debt instruments
described in Schedule 1 (the "Pledged Debt"), and all payments thereunder and
instruments and other property from time to time delivered in respect thereof or
in exchange therefor, and all bills of sale, bills of lading, warehouse receipts
and other documents of title, in each instance whether now owned or hereafter
acquired by Grantor;

INTEREST AND CURRENCY CONTRACTS: Any and all interest rate, commodity
or currency exchange agreements or derivative agreements, including without
limitation, cap, collar, floor, forward or similar agreements or other rate,
currency or price protection arrangements;

INVESTMENT PROPERTY: Any and all investment property of the Grantor,
including any instruments, certificates of deposit, equity interests or
investments of any kind; and

OTHER PROPERTY: All property or interests in property now owned or
hereafter acquired by Grantor which now may be owned or hereafter may come into
the possession, custody or control of Agent or any of the Holders of Secured
Obligations or any agent or Affiliate of any of them in any way and for any
purpose (whether for safekeeping, deposit, custody, pledge, transmission,
collection or otherwise); and all rights and interests of Grantor, now existing
or hereafter arising and however and wherever arising, in respect of any and all
(i) notes, drafts, letters of credit, stocks, bonds, and debt and equity
securities, whether or not certificated, investment property (as defined in
Section 9-115(1)(f) of the UCC) and warrants, options, puts and calls and other
rights to acquire or otherwise relating to the same; (ii) money; (iii) proceeds
of loans, including, without limitation, loans made under the Credit Agreement;
and (iv) insurance proceeds and books and records relating to any of the
property covered by this Agreement; together, in each instance, with all
accessions and additions thereto, substitutions therefor, and replacements,
proceeds and products thereof. Notwithstanding the foregoing or anything herein
or in any other Loan Document to the contrary, nothing hereunder or thereunder
constitutes or shall be deemed to constitute the grant of a security interest in
favor of Agent or any Lender with respect to Grantor's interest in any contract
right, any license agreement or any other general intangible (each such contract
right, license agreement and other general intangible being hereinafter referred
to as "Excluded Property"), if the granting of a security interest therein by
Grantor to Agent or any Lender is prohibited by the terms and provisions of the
written agreement, document, or instrument creating, evidencing or granting a
security interest in such Excluded Property or rights related thereto, provided,
however, that if and when the prohibition which prevents the granting by Grantor
to Agent of a security

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interest in any Excluded Property is removed or otherwise terminated, Agent will
be deemed to have, and at all times to have had, a security interest in such
Excluded Property.

SECTION 3. Authorization. Grantor hereby authorizes Agent to retain
and each Holder of Secured Obligations, and each Affiliate of Agent and of each
Holder of Secured Obligations, to pay or deliver to Agent, for the benefit of
the Holders of Secured Obligations, without any necessity on any Holder of
Secured Obligation's part to resort to other security or sources of
reimbursement for the Secured Obligations, at any time following the occurrence
and during the continuance of any Default, and without further notice to Grantor
(such notice being expressly waived), any of the deposits referred to in Section
2 (whether general or special, time or demand, provisional or final) or other
sums or property held by such Person, for application against any portion of the
Secured Obligations, irrespective of whether any demand has been made or whether
such portion of the Secured Obligations is mature. Agent will promptly notify
Grantor of Agent's receipt of such funds or other property for application
against the Secured Obligations, but failure to do so will not affect the
validity or enforceability thereof. Agent may give notice of the above grant of
security interest and assignment of the aforesaid deposits and other sums, and
authorization, to, and make any suitable arrangements with, any such Holder of
Secured Obligations for effectuation thereof, and Grantor hereby irrevocably
appoints Agent as its attorney to collect, following the occurrence and during
the continuance of a Default, any and all such deposits or other sums to the
extent any such payment is not made to Agent by such Holder of Secured
Obligations or Affiliate thereof.

SECTION 4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) Grantor shall remain solely liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by Agent of any of its rights
hereunder shall not release Grantor from any of its duties or obligations under
the contracts and agreements included in the Collateral, and (c) neither Agent
nor the Holders of Secured Obligations shall have any responsibility, obligation
or liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall Agent or the Holders of Secured Obligations
be required or obligated, in any manner, to (i) perform or fulfill any of the
obligations or duties of Grantor thereunder, (ii) make any payment, or make any
inquiry as to the nature or sufficiency of any payment received by Grantor or
the sufficiency of any performance by any party under any such contract or
agreement or (iii) present or file any claim, or take any action to collect or
enforce any claim for payment assigned hereunder.

SECTION 5. Representations and Warranties. Grantor represents and
warrants, as of the date of this Agreement and as of the date of each Advance
(except for changes permitted or contemplated by this Agreement and except as
any representation and warranty expressly relates to a specific date) until
termination of this Agreement pursuant to Section 25:

(a) The correct corporate name of Grantor is set forth in the first
paragraph of this Agreement. The locations listed on Schedule 2 constitute all
locations at which any material Inventory and/or Equipment is located and
Grantor has exclusive possession and control of such Equipment and Inventory,
except in each case for such Inventory and Equipment which is (i) in transit
between such locations, or (ii) stored with third parties or held by third
parties for storage, processing, manufacturing, engineering, evaluation, or
repair, the corporate names of such third parties (which Grantor in good faith

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believes are correct), the location of such Inventory and/or Equipment, and the
nature of the relationship between Grantor and such third parties is set forth
in Schedule 2-A. Schedule 2-A may be amended to reflect additional locations.
The chief place of business and chief executive office of Grantor are located
at the address of Grantor set forth below the Grantor's signature on the Credit
Agreement. All records concerning any Accounts and all originals of all
chattel paper which evidence any Account are located at the addresses listed on
Schedule 2 and none of the Accounts is evidenced by a promissory note or other
instrument in excess of $100,000 in the aggregate except for such notes and
other instruments delivered to Agent as Pledged Debt listed on Schedule 1.

(b) Grantor is the legal and beneficial owner of the Collateral free
and clear of all Liens except for Liens permitted by the Credit Agreement.
Grantor currently conducts business under the trade names listed on Schedule 3.
As of the date hereof, the Grantor uses no trade names or fictitious names,
except as set forth on Schedule 3.

(c) This Agreement creates in favor of Agent a legal, valid and
enforceable security interest in the Collateral. When financing statements have
been filed in the appropriate offices against Grantor in the locations listed on
Schedule 2-B, Agent will have a fully perfected first priority lien on, and
security interest in, the Collateral in which a security interest may be
perfected by such filing, subject only to Liens permitted by the Credit
Agreement (except as enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer or similar laws affecting the enforcement of creditors'
rights generally and by principles of equity in effect from time to time).

(d) No authorization, approval or other action by, and no notice to
or filing with, any Governmental Authority that has not already been taken or
made and which is in full force and effect, is required (i) for the grant by
Grantor of the security interest in the Collateral granted hereby; (ii) for the
execution, delivery or performance of this Agreement by Grantor; or (iii) for
the exercise by Agent of any of its rights or remedies hereunder, except the
filing under the Uniform Commercial Code as in effect in the applicable
jurisdiction of the financing statements in the locations described in Schedule
2-B and any filings made in connection with the Patent Security Agreement and
the Trademark Security Agreement of even date herewith between the parties
hereto.

(e) The Pledged Debt issued by any Affiliate of Grantor, and to
Grantor's knowledge, all other Pledged Debt, has been duly authorized, issued
and delivered, and is the legal, valid, binding and enforceable obligation of
the respective issuer thereof.

SECTION 6. Perfection and Maintenance of Security Interest and Lien.
Grantor agrees that until all of the Secured Obligations (other than contingent
Obligations) have been fully satisfied and the Credit Agreement has been
terminated, Agent's security interests in and Liens on and against the
Collateral and all proceeds and products thereof, shall continue in full force
and effect. Prior to such time, Grantor shall perform any and all steps
reasonably requested by Agent to perfect, maintain and protect Agent's security
interests in and Liens on and against the Collateral granted or purported to be
granted hereby or to enable Agent to exercise its rights and remedies hereunder
with respect to any Collateral, including, without limitation, (i) executing and
filing financing or continuation statements, or amendments thereof, in form and
substance reasonably satisfactory to Agent, (ii) delivering to Agent upon
request all certificates, notes and other instruments (including, without
limitation, all letters of credit on which Grantor is named as a beneficiary)
representing or evidencing Collateral, which certificates, notes and other
instruments have been duly endorsed and are accompanied by duly executed

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instruments of transfer or assignment, including, but not limited to, note
powers, all in form and substance satisfactory to Agent, (iii) delivering to
Agent warehouse receipts covering that portion of the Collateral, if any,
located in warehouses and for which warehouse receipts are issued, (iv) after
the occurrence and during the continuance of a Default, taking such steps as
are reasonably deemed necessary by Agent to maintain Agent's control of the
Inventory and Equipment, (v) use commercially reasonable efforts to obtain,
upon the occurrence and during the continuance of a Default, upon the written
request of Agent,

(a) waivers of Liens and access agreements in substantially the form
of Exhibit A-1 hereto (or such other form as may be agreed to by Agent) from
landlords with respect to Grantor's leased premises where the Agent reasonably
determines that the value of the leasehold in respect of the premises leased by
Grantor from such landlord is material to the operations of Grantor or deem such
leased premises to be integral to the Grantor's day-to-day operations, (b)
mortgagee agreements in substantially the form of Exhibit A-2 hereto (or such
other form as may be agreed to by Agent) from mortgagees with respect to all
leases executed after the Closing Date where the Agent reasonably determines
such leasehold to be material based on the value of the leasehold or such leased
premises is integral to Grantor's day-to-day operations, (c) waivers of Liens
and access agreements in substantially the form of Exhibit B hereto (or such
other form as may be agreed to by Agent) from the appropriate Person with
respect to all arrangements pursuant to which Inventory will be temporarily held
by third parties for storage, processing, engineering, evaluation, or repair
after the Closing Date (in connection with which Grantor shall be permitted to
and hereby required to update Schedule 2-A ) where: (1) the Equipment located at
any one premises owned or operated by any such Person has a value in the
aggregate of $500,000 or greater or (2) the aggregate value of the Equipment
located at all premises owned or operated by any such Person is $2,500,000 or
greater, and (d) waivers of Liens and access agreements in substantially the
form of Exhibit B hereto (or such other form as may be agreed to by Agent) from
the appropriate Person with respect to all arrangements pursuant to which
Inventory will be temporarily held by third parties for storage, processing,
engineering, evaluation, or repair or otherwise in the ordinary course of
business after the Closing Date (in connection with which Grantor shall be
permitted to and hereby required to update Schedule 2-A) where: (1) the
Inventory and Equipment located at any one premises owned or operated by any
such Person has a value in the aggregate of $500,000 or greater or (2) the
aggregate value of the Equipment located at all premises owned or operated by
any such Person is $2,500,000 or greater, and (vi) executing and delivering all
further instruments and documents, and taking all further action, as Agent may
reasonably request.

SECTION 7. Financing Statements. To the extent permitted by
applicable law, Grantor hereby authorizes Agent to file one or more financing or
continuation statements and amendments thereto, disclosing the security interest
granted to Agent under this Agreement without Grantor's signature appearing
thereon and Agent agrees to notify Grantor when such a filing has been made.
Grantor agrees that a carbon, photographic, photostatic, or other reproduction
of this Agreement or of a financing statement is sufficient as a financing
statement. If any Inventory or Equipment is in the possession or control of any
warehouseman or Grantor's agents or processors, Grantor shall, upon Agent's
written request, notify such warehouseman, agent or processor of Agent's
security interest in such Inventory and Equipment and, upon Agent's request,
instruct them to hold all such Inventory or Equipment for Agent's account and
subject to Agent's instructions.

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SECTION 8. Filing Costs. Grantor shall pay the costs of, or
incidental to, all recordings or filings of all financing statements, including,
without limitation, any filing expenses incurred by Agent pursuant to Section 7.

SECTION 9. Schedule of Collateral. Grantor shall, at the written
request of the Agent, furnish to Agent from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Agent may reasonably request, all
in reasonable detail, provided, however, Agent shall not make such request more
than one time per calendar quarter as long as no Default has occurred and is
continuing.

SECTION 10. Equipment and Inventory. Grantor covenants and agrees
with Agent that from the date of this Agreement and until termination of this
Agreement, including pursuant to Section 25, Grantor shall:

(a) Keep the Equipment and Inventory (other than Equipment or
Inventory sold or disposed of as permitted by the Credit Agreement or in the
ordinary course of business) at the places specified in Section 5(a), except for
Equipment and Inventory (i) in transit between such locations or (ii) held by
third parties for storage, processing, engineering, manufacturing, evaluation,
or repair and set forth on Schedule 2- A and in connection with which the
Grantor has complied with the requirements set forth in Section 6, to the extent
applicable, and, to the extent practicable, deliver written notice to Agent at
least thirty (30) days (or such shorter period, if not practicable) prior to
establishing any other location at which or third party with which it reasonably
expects to maintain Inventory and/or Equipment in which location or with which
third party all action required by this Agreement shall have been taken with
respect to all such Equipment and Inventory;

(b) Comply with the terms of the Credit Agreement with respect to
such Equipment and Inventory, including, without limitation, the maintenance and
insurance provisions set forth in Section 7.2(E), and (H) of the Credit
Agreement.

SECTION 11. Accounts. Grantor covenants and agrees with Agent that
from and after the date of this Agreement and until termination of this
Agreement, including pursuant to Section 25, Grantor shall:

(a) Keep its chief place of business and chief executive office and
the office where it keeps its records concerning the Accounts at its address set
forth below the Grantor's signature on the Credit Agreement, and keep the
offices where it keeps all originals of all chattel paper which evidence
Accounts at the locations therefor specified in Section 5(a) or, upon thirty
(30) days' (or any shorter period to the extent not practicable) prior written
notice to Agent, at such other locations within the United States in a
jurisdiction where all actions required by Section 6 shall have been taken with
respect to the Accounts. Grantor will hold and preserve such records (in
accordance with Grantor's usual document retention practices) and chattel paper
and will permit representatives of Agent, during normal business hours and on
reasonable notice, to inspect and make abstracts from such records and chattel
paper in accordance with the provisions of Section 6.3(F) of the Credit
Agreement; and

(b) In any suit, proceeding or action brought by Agent under any
Account comprising part of the Collateral during the continuance of a Default,
Grantor will save, indemnify and keep each of the Holders of Secured Obligations
harmless from and against all reasonable and documented expenses, loss or damage
suffered by reason of any defense, setoff, counterclaim, recoupment or reduction
of liability

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12

whatsoever of the obligor thereunder, arising out of a breach by Grantor of any
obligation or arising out of any other agreement, indebtedness or liability at
any time owing to or in favor of such Holder of Secured Obligations from
Grantor, and all such obligations of Grantor shall be and shall remain
enforceable against and only against Grantor and shall not be enforceable
against any of the Holders of Secured Obligations, unless such expense, loss or
damage is caused by either wilful misconduct or gross negligence on the part of
the indemnified party.

SECTION 12. Leased Real Property. Grantor covenants and agrees with
Agent that from and after the date of this Agreement and until termination of
this Agreement, including pursuant to Section 25, that:

(a) Promptly following, but not later than ninety (90) days after
entering into any leases meeting the criteria set forth in Section 6(v), Grantor
will furnish to Agent a report certified to be true and correct by Grantor
setting forth a description of the leased premises related thereto; the name or
names of all owners; rentals being paid; and whether Grantor has obtained
waivers of Liens and access agreements from landlords and mortgagees with
respect to such premises in accordance with Section 6 to the extent required to
do so thereunder;

(b) Grantor agrees that, from and after the occurrence and during
continuance of a Default, Agent may, but need not, make any payment or perform
any act hereinbefore required of Grantor with respect to the Grantor's leased
premises in any form and manner deemed expedient. All money paid for any of the
purposes herein authorized and all other moneys advanced by Agent as herein
permitted to protect the lien hereof shall be additional Secured Obligations
secured hereby and shall become immediately due and payable without notice and
shall bear interest thereon at the then applicable default interest rate with
respect to Floating Rate Loans as provided in Section 2.11 of the Credit
Agreement until paid to Agent in full; and

(c) Grantor agrees that it will not amend any lease in a manner that
is reasonable likely to result in a Material Adverse Effect without the Agent's
prior written consent (such consent not to be unreasonably withheld).

SECTION 13. General Covenants. Grantor covenants and agrees with
Agent that from and after the date of this Agreement and until termination of
this Agreement, including pursuant to Section 25, Grantor shall:

(a) Keep and maintain at Grantor's own cost and expense reasonably
satisfactory and reasonably complete records of Grantor's Collateral in a manner
consistent with Grantor's business practice from time to time. Grantor shall,
for Agent's further security, deliver and turn over to Agent or Agent's
designated representatives at any time following the occurrence and during the
continuation of a Default, copies of any such books and records (including,
without limitation, any and all computer tapes, programs and source and object
codes relating to such Collateral in which Grantor has an interest or any part
or parts thereof); and

(b) Grantor will not create, permit or suffer to exist, and will
defend the Collateral against, and take such other action as is necessary to
remove, any Lien on such Collateral other than Liens permitted under the Credit
Agreement, and will make commercially reasonable efforts to defend the right,
title and

-8-
13

interest of Agent in and to Grantor's rights to such Collateral, including,
without limitation, the proceeds and products thereof, against the material
claims and demands of all Persons whatsoever.

SECTION 14. Agent Appointed Attorney-in-Fact. Upon the occurrence and
during the continuance of a Default, Grantor hereby irrevocably appoints Agent
as Grantor's attorney-in-fact, with full authority in the place and stead of
Grantor and in the name of Grantor or otherwise, from time to time in Agent's
discretion, to take any action and to execute any instrument which Agent may
reasonably deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation, following the occurrence and during
the continuance of a Default, to:

(i) obtain and adjust insurance required to be paid to the Agent
or any Holders of Secured Obligations pursuant to the Credit
Agreement;

(ii) ask, demand, collect, ▇▇▇ for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;

(iii) receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(i) or (ii) above;

(iv) file any claims or take any action or institute any
proceedings which Agent may deem necessary or desirable for the
collection of any of the Collateral, or otherwise to enforce the
rights of Agent with respect to any of the Collateral;

(v) obtain access to records maintained for Grantor by computer
services companies and other service companies or bureaus;

(vi) to send requests under Grantor's, the Agent's or a
fictitious name to Grantor's customers or account debtors for
verification of Accounts provided that the Agent gives the Grantor
written notice prior to initiating any such verifications; and

(vii) do all other things consistent with the terms of this
Agreement as may be reasonably necessary to carry out the terms
hereof.

SECTION 15. Agent May Perform. If Grantor fails to perform any
agreement contained herein or in the Credit Agreement, Agent may, upon five days
prior written notice to the Grantor, perform, or cause performance of, such
agreement, and the reasonable and documented expenses of Agent incurred in
connection therewith shall be payable by Grantor under Section 22.

SECTION 16. Agent's Duties. The powers conferred on Agent hereunder
are solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder and as otherwise provide by law, Agent shall not have any duty as
to any Collateral. Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which Agent accords
its own property, it being understood that Agent shall be under no obligation to
take any

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14

necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral, but may do so at its option, and all reasonable
expenses incurred in connection therewith shall be for the sole account of
Grantor and shall be added to the Secured Obligations.

SECTION 17. Remedies. (a) If any Default shall have occurred and be
continuing:

(i) Agent shall have, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies of
a secured party upon default under the UCC and further, Agent may, without
notice, demand or legal process of any kind (except as may be required by law),
all of which Grantor waives, at any time or times, (x) enter Grantor's owned or
leased premises and take physical possession of the Collateral and maintain such
possession on Grantor's owned or leased premises, at no cost to Agent or any of
the Holders of Secured Obligations, or remove the Collateral, or any part
thereof, to such other place(s) as Agent may desire, (y) require Grantor to, and
Grantor hereby agrees that it will at its expense and upon request of Agent
forthwith, assemble all or any part of the Collateral as directed by Agent and
make it available to Agent at a place to be designated by Agent which is
reasonably convenient to Agent and (z) without notice except as specified below,
sell, lease, assign, grant an option or options to purchase or otherwise dispose
of the Collateral or any part thereof at public or private sale, at any
exchange, broker's board or at any of the offices of Agent or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as Agent may
deem commercially reasonable. Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten (10) days' notice to Grantor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned;

(ii) Agent shall apply all cash proceeds received by Agent in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral (after payment of any amounts payable to Agent pursuant to
Section 22), for the benefit of the Holders of Secured Obligations, against all
or any part of the Secured Obligations in such order as may be required by the
Credit Agreement or, to the extent not specified therein, as is determined by
the Required Lenders. Any surplus of such cash or cash proceeds held by Agent
and remaining after payment in full of all the Secured Obligations shall be paid
over to Grantor or to whomsoever may be lawfully entitled to receive such
surplus;

(b) Grantor waives all claims, damages and demands against Agent
arising out of the repossession, retention or sale of any of the Collateral or
any part or parts thereof, except any such claims, damages and awards arising
out of the Gross Negligence or willful misconduct of Agent or any of the Holders
of Secured Obligations, as the case may be, as determined in a final
non-appealed judgment of a court of competent jurisdiction; and

(c) The rights and remedies provided under this Agreement are
cumulative and may be exercised singly or concurrently and are not exclusive of
any rights and remedies provided by law or equity.

SECTION 18. Exercise of Remedies. In connection with the exercise
of its remedies pursuant to Section 17, Agent may, (i) exchange, enforce, waive
or release any portion of the Collateral and any other security for the Secured
Obligations; (ii) apply such Collateral or security and direct the order or

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15

manner of sale thereof as Agent may, from time to time, determine; and (iii)
settle, compromise, collect or otherwise liquidate any such Collateral or
security in any manner following the occurrence of a Default, without
affecting or impairing Agent's right to take any other further action with
respect to any Collateral or security or any part thereof.

SECTION 19. License. Solely for the purpose of enabling Agent to
exercise rights and remedies hereunder during the continuance of a Default, and
for no other purpose, Agent is hereby granted a license or other right to use,
following the occurrence and during the continuance of a Default, without
charge, (a) Grantor's labels, patents, copyrights, trade secrets, trade names,
trademarks, service marks, customer lists and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral, provided that
Agent uses quality standards at least substantially equivalent to those of
Grantor for the manufacture, advertising, sale and distribution of Grantor's
products and services and (b) Grantor's rights under all licenses where Grantor
is licensor, except to the extent such licenses by their terms prohibit the
granting of such rights, and all franchise agreements shall inure to Agent's
benefit. Notwithstanding any provision to the contrary contained in this
Agreement or any other Loan Document, license agreements under which Grantor is
licensee shall be excluded from the Collateral.

SECTION 20. Injunctive Relief. Grantor recognizes that in the event
Grantor fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Holders of Secured Obligations; therefore, Grantor agrees that the
Holders of Secured Obligations, if Agent so determines and requests, shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages.

SECTION 21. Interpretation and Inconsistencies; Merger; No Strict
Construction.

(a) The rights and duties created by this Agreement shall, in all
cases, be interpreted consistently with, and shall be in addition to (and not in
lieu of), the rights and duties created by the Credit Agreement and the other
Loan Documents. In the event that any provision of this Agreement shall be
inconsistent with any provision of any other Loan Document, such provision of
the other Loan Document shall govern.

(b) Except as provided in subsection (a) above, this Agreement
represents the final agreement of the Grantor and the Agent with respect to the
matters contained herein and may not be contradicted by evidence of prior or
contemporaneous agreements, or subsequent oral agreements, between the Grantor
and the Agent or any other Holder of Secured Obligations.

(c) The parties hereto have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.

SECTION 22. Expenses. Grantor will upon demand pay to Agent and/or
the Holders of Secured Obligations the amount of any and all reasonable and
documented expenses, including the reasonable fees and disbursements of their
counsel and of any experts and agents, as provided in Section 10.7 of the Credit
Agreement.

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16

SECTION 23. Amendments, Etc. No amendment or waiver of any provision
of this Agreement nor consent to any departure by Grantor herefrom shall in any
event be effective unless the same shall be in writing and signed by Agent and
Grantor, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

SECTION 24. Notices. All notices and other communications provided
for hereunder shall be delivered in the manner set forth in Section 14.1 of the
Credit Agreement.

SECTION 25. Continuing Security Interest; Termination. (a) Except as
provided in Section 25(b), this Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect until
the later of the payment or satisfaction in full of the Secured Obligations
(other than contingent indemnity obligations) and the termination of the Credit
Agreement, (ii) be binding upon Grantor, its successors and assigns and (iii)
except to the extent that the rights of any transferor, or assignor are limited
or prohibited by the terms of the Credit Agreement, inure, together with the
rights and remedies of Agent hereunder, to the benefit of Agent and any of the
Holders of Secured Obligations. Nothing set forth herein or in any other Loan
Document is intended or shall be construed to give any other Person any right,
remedy or claim under, to or in respect of this Agreement or any other Loan
Document or any Collateral. Grantor's successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-possession thereof or
therefor.

(b) Upon the payment in full of the Secured Obligations (other than
contingent obligations) and the termination of the Credit Agreement, this
Agreement and the security interest granted hereby shall automatically terminate
and all rights to the Collateral shall revert to Grantor. Upon any such
termination of security interest, Grantor shall be entitled to the return, upon
its request and at its expense, of such of the Collateral held by Agent as shall
not have been sold or otherwise applied pursuant to the terms hereof and Agent
will, at Grantor's expense, promptly execute and deliver to Grantor such other
documents as Grantor shall reasonably request to evidence such termination. In
connection with any sales of assets permitted under the Credit Agreement, the
liens and security interests granted under this Agreement will automatically
release and terminate with respect to such assets and the Agent shall promptly
make all filings necessary to reflect such release and termination.

SECTION 26. Severability. It is the parties' intention that this
Agreement be interpreted in such a way that it is valid and effective under
applicable law. However, if one or more of the provisions of this Agreement
shall for any reason be found to be invalid or unenforceable, the remaining
provisions of this Agreement shall be unimpaired.

SECTION 27. GOVERNING LAW. THE AGENT ACCEPTS THIS AGREEMENT, ON
BEHALF OF ITSELF AND THE LENDERS, AT CHICAGO, ILLINOIS BY ACKNOWLEDGING AND
AGREEING TO IT THERE. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO CONFLICTS OF
LAW PROVISIONS) OF THE STATE OF ILLINOIS. WITHOUT LIMITING THE FOREGOING, ANY
DISPUTE BETWEEN THE GRANTOR AND THE AGENT, ANY LENDER, OR ANY OTHER HOLDER OF
SECURED OBLIGATIONS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT,
AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED
IN ACCORDANCE WITH THE

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17

INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE
OF ILLINOIS.

SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.

(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B),
EACH OF THE PARTIES HERETO AGREES THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT, WHETHER ARISING IN CONTRACT,
TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL
COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
CHICAGO, ILLINOIS.

(B) OTHER JURISDICTIONS. GRANTOR AGREES THAT THE AGENT, ANY LENDER
OR ANY HOLDER OF SECURED OBLIGATIONS SHALL HAVE THE RIGHT TO PROCEED AGAINST
GRANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1)
OBTAIN PERSONAL JURISDICTION OVER THE GRANTOR OR (2) REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. GRANTOR AGREES THAT IT WILL NOT
ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON.

(C) VENUE. GRANTOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH ABOVE AND EACH OF THE OTHER PARTIES HERETO WAIVES
IN ALL DISPUTES BROUGHT PURSUANT TO SUBSECTION (A) ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.

(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH,
RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.

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18

(E) WAIVER OF BOND. GRANTOR WAIVES THE POSTING OF ANY BOND OTHERWISE
REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS OR
PROCEEDING TO REALIZE ON THE COLLATERAL (INCLUDING, WITHOUT LIMITATION, THE REAL
PROPERTY COLLATERAL) OR ANY OTHER SECURITY FOR THE SECURED OBLIGATIONS OR TO
ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PARTY, OR TO
ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER, PRELIMINARY OR
PERMANENT INJUNCTION, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

(F) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER
PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE
PROVISIONS OF THIS SECTION 28, WITH ITS COUNSEL.

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19

IN WITNESS WHEREOF, Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

FLORISTS' TRANSWORLD DELIVERY, INC.

By:_______________________________
Name:
Title:

THE FIRST NATIONAL BANK OF CHICAGO,
as AGENT

By:_______________________________
Name:
Title:

Signature Page to Security Agreement
dated November 20, 1997
20

EXHIBIT A-1
To
Security Agreement

Form of Landlord Agreement

The First National Bank
of Chicago, as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇]
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Ladies and Gentlemen:

FLORISTS' TRANSWORLD DELIVERY, INC., a Michigan corporation
("Borrower"), the lessee under that certain lease dated ___________ between the
Borrower, and the undersigned, covering certain premises owned by the
undersigned and located at _________________ (the "Premises") more fully
described in the lease attached hereto as Exhibit A (the "Lease"). Borrower has
certain of its assets located on the Premises.

Borrower has entered into certain financing arrangements with a group
of lenders ("Lenders") including The First National Bank of Chicago, as
contractual representative for the Lenders (the "Agent") and the Agent and the
Lenders require, among other things, that Borrower grant liens in favor of the
Agent for the benefit of itself and the Lenders on all of Borrower's property
located on the Premises ("Collateral").

To induce the Agent and the Lenders (together with their respective
agents, successors and assigns) to enter into said financing arrangements, and
for other good and valuable consideration, the undersigned hereby agrees that:

(i) it will not assert against any of Borrower's assets any
statutory or possessory liens, including, without limitation, rights
of levy or distraint for rent, all of which it hereby waives;

(ii) none of the Collateral located on the Premises shall be
deemed to be fixtures;

[(iii) it will allow Agent thirty (30) days from the Agent's
receipt of notice in which to cure or cause Borrower to cure any
defaults on Borrower's lease obligations to the undersigned; provided
if such default cannot reasonably be cured within the thirty (30) day
period, and provided the Agent is diligently pursuing a cure, then
Agent shall have a reasonable period to cure such default;]

[(iv) if, for any reason whatsoever, the undersigned either deems
itself entitled to redeem or to take possession of the Premises during
the term of Borrower's lease or intends to sell or otherwise transfer
all or any part of its interest in the Premises, the undersigned will
notify Agent five (5) days before taking such action;]
21

(v) if Borrower defaults on its obligations to the Agent or any
Lender and, as a result, the Agent undertakes to enforce its security
interest in the Collateral, the undersigned will cooperate with the
Agent in its efforts to assemble all of the Collateral located on the
Premises, will permit Agent to remain on the Premises for ninety (90)
days after the Agent gives the undersigned notice of default, provided
Agent pays the rental payments due under the Lease for the period of
time Agent uses the Premises, or, at Agent's option, to remove the
Collateral from the Premises within a reasonable time, not to exceed
ninety (90) days after the Agent gives the undersigned notice of
default, provided Agent pays the rental payments due under the Lease
for the period of time Agent uses the Premises, and will not hinder
Agent's actions in enforcing its liens on the Collateral;

(vi) the undersigned shall accept performance by the Agent of the
Borrower's obligations under the Lease as though the same had been
performed by the holder of the Borrower's interest therein at the time
of such performance. Upon the cure of any such default, any notice
advising of any default or any action of the undersigned to terminate
the Lease or to interfere with the occupancy, use or enjoyment of the
Premises by reason thereof, which action has not been completed, shall
be deemed rescinded and the Lease shall continue in full force and
effect. The undersigned shall not be required to continue any
possession or continue any action to obtain possession upon the cure
of any such default;

Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.

The agreements contained herein shall continue in force until all of
Borrower's obligations and liabilities to the Agent and the Lenders are paid
and satisfied in full and all financing arrangements among the Agent, the
Lenders and Borrower have been terminated.

The undersigned will use reasonable efforts to notify all successor
owners, transferees, purchasers and mortgagees of the existence of this waiver.
The agreements contained herein may not be modified or terminated orally and
shall be binding upon the successors, assigns and personal representatives of
the undersigned, upon any successor owner or transferee of the Premises, and
upon any purchasers, including any mortgagee, from the undersigned.

The undersigned agrees that nothing contained in this waiver shall be
construed as an assumption by the Agent or any of the other lenders of any
obligations of Borrower contained in the Lease.

Executed and delivered this ____ day of __________, 1997, at
_________________________________.

THIS WAIVER SHALL NOT IMPAIR OR OTHERWISE AFFECT BORROWER'S
OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS PAYABLE BY BORROWER OR TO OTHERWISE
PERFORM ITS OBLIGATIONS TO THE LESSOR PURSUANT TO THE TERMS OF THE LEASE.

[Name of Lessor]

By:___________________________
Title:________________________

Address:

_______________________
_______________________
_______________________
AGREED &ACKNOWLEDGED:

[___________________]

By:_________________
Title:______________

Address: ___________________
___________________
23

[ACKNOWLEDGMENT (CORPORATE)

STATE OF ________________ )
) SS.
COUNTY OF _______________ )

Before me, a Notary Public in and for said County, personally appeared
____________________________________, a ________________ ___________________
corporation, by the _____________________________________ of such corporation,
who acknowledged that (s)he did sign the foregoing instrument on behalf of said
corporation and that said instrument is the voluntary act and deed of said
corporation and his/her voluntary act and deed as such officer of said
corporation.

IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed
my official seal this _____ day of _______________________ ____, 199_ at
_____________________, ____________________________________.

____________________________

Notary Public
My Commission Expires:]

(Notarial Seal)
24

[ACKNOWLEDGMENT (CORPORATE)

STATE OF ____________________ )
) SS.
COUNTY OF ___________________ )

Before me, a Notary Public in and for said County, personally appeared
[____________________________], a Michigan corporation, by the
_____________________________________ of such corporation, who acknowledged that
(s)he did sign the foregoing instrument on behalf of said corporation and that
said instrument is the voluntary act and deed of said corporation and his/her
voluntary act and deed as such officer of said corporation.

_________________________

Notary Public
My Commission Expires:]

(Notarial Seal)
25

EXHIBIT A-2
To
Security Agreement

Form of Mortgagee Agreement

The First National Bank
of Chicago, as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Ladies and Gentlemen:

FLORISTS' TRANSWORLD DELIVERY, INC., a Michigan corporation
("Borrower"), is the lessee under that certain lease dated ___________ between
the Borrower, and ____________________ (the "Landlord[s]"), covering certain
premises located at _________________ (the "Premises") as more fully described
on Exhibit A 1 attached hereto (the "Lease"). The undersigned is the mortgagee
under a mortgage between the Landlord[s] and the undersigned covering the
Premises (the "Mortgage"). The undersigned is the sole mortgagee of the
Premises. Borrower has certain of its assets located on the Premises.

By its signature below, the undersigned agrees that:

(i) it will not assert against any of the Collateral any
statutory or possessory liens, including, without limitation, rights
of levy or distraint for rent, all of which it hereby waives;

(ii) none of the Collateral located on the Premises shall be
deemed to be fixtures;

[(iii) it will allow Agent thirty (30) days from the Agent's
receipt of notice in which to cure or cause Borrower to cure any such
defaults on its mortgage obligations; provided if such default cannot
reasonably be cured within the thirty (30) day period, and provided
the Agent is diligently pursuing a cure, then Agent shall have a
reasonable period to cure such default;]

[(iv) if, for any reason whatsoever, the undersigned either
deems itself entitled to take possession of the Premises during the
term of the Mortgage or intends to sell or

_____________________

1Please attach legal description of premises for recordation purposes.
26

otherwise transfer all or any part of its interest in the Premises,
the undersigned will notify Agent five (5) days before taking such
action;]

(v) if Borrower defaults on its obligations to the Agent or any
Lender and, as a result, the Agent undertakes to enforce its security
interest in the Collateral, the undersigned will cooperate with the
Agent in its efforts to assemble all of the Collateral located on the
Premises, will permit Agent to remain on the Premises for ninety (90)
days after Agent gives the undersigned notice of default, provided
Agent pays the Lease payments to the Landlord[s] due under the Lease
for the period of time Agent uses the Premises, or, at Agent's option,
to remove the Collateral from the Premises within a reasonable time,
not to exceed ninety (90) days after Agent gives the undersigned
notice of default, provided Agent pays the rental payments to the
Landlord[s] due under the Lease for the period of time Agent uses the
Premises, and will not hinder Agent's actions in enforcing its liens
on the Collateral; and

Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.

The agreements contained herein shall continue in force until all of
Borrower's obligations and liabilities to the Agent and the Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Borrower have been terminated.

The undersigned will notify all successor owners, transferees,
purchasers and mortgagees of the existence of this waiver. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon the successors, assigns and personal representatives of the undersigned,
upon any successor owner or transferee of the Premises, and upon any purchasers,
including any mortgagee, from the undersigned.

[The undersigned consents to the granting of the Leasehold Mortgage to
the Agent and to the liens, security interests and encumbrances created by and
resulting from the Leasehold Mortgage or other documents collateral thereto in
the form attached hereto as Exhibit B.]

The undersigned agrees that nothing contained in this waiver shall be
construed as an assumption by the agent or any of the other lenders of any
obligations of the landlord contained in the mortgage.

Executed and delivered this ____ day of __________, 199_, at
_________________________________.

THIS WAIVER SHALL NOT IMPAIR OR OTHERWISE AFFECT BORROWER'S
OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS PAYABLE BY BORROWER OR TO OTHERWISE
PERFORM ITS OBLIGATIONS TO THE LANDLORD PURSUANT TO THE TERMS OF THE LEASE.
27

[Name of Mortgagee]

By:__________________________
Title:_______________________

Address:

______________________
______________________
______________________

AGREED & ACKNOWLEDGED:

[____________________]

By:__________________
Title:_______________

Address: _______________
_______________
28

[STATE OF ____________ )
) SS
COUNTY OF ___________ )

The foregoing letter agreement was acknowledged before me this ___ day of
_____________, 199_, by _____________________, a _______________ of
__________________, a ____________________, on behalf of such
__________________.

_____________________________
Notary Public
________ County, _____________
My commission expires:_______]
29

EXHIBIT B
TO
SECURITY AGREEMENT

Form of Bailee Letter

The First National Bank
of Chicago, as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Ladies and Gentlemen:

FLORISTS' TRANSWORLD DELIVERY, INC., a Michigan corporation (the
"Borrower"), now does or hereafter may store certain of its merchandise,
inventory, or other of its personal property at premises located at
_______________ (the "Premises") owned or leased by the undersigned.

Borrower has entered into certain financing arrangements with a group of
lenders (the "Lenders") including The First National Bank of Chicago, as
contractual representative for the Lenders (the "Agent") and the Agent and the
Lenders require, among other things, that Borrower grant liens in favor of the
Agent for the benefit of itself and the Lenders on all of Borrower's property
located on the Premises ("Collateral").

To induce the Agent and the Lenders (together with their respective agents,
successors and assigns) to enter into said financing arrangements, and for other
good and valuable consideration, the undersigned hereby agrees that:

(i) it will not assert against any of Borrower's assets any
statutory or possessory liens, including, without limitation, rights
of levy or distraint for rent, all of which it hereby waives;

[(ii) the Collateral shall be identifiable as being owned by
Borrower and kept reasonably separate and distinct from other property
in our possession;]

(iii) if Borrower defaults on its obligations to the Lenders or
the Agent and, as a result, the Agent undertakes to enforce its
security interest in the Collateral, the undersigned will cooperate
with the Agent in its efforts to assemble all of the Collateral
located on the Premises and will permit the Agent to either remain on
the Premises provided that the Agent pay the undersigned rent for such
period at the rate the Borrower is obligated to pay for ninety (90)
days after the Agent gives the undersigned notice of default or, at
the Agent's option, to remove the Collateral from the Premises within
a reasonable time, not to exceed ninety (90) days after the Agent
gives the undersigned notice of default, provided that the Agent
leaves the Premises
30

in the same condition as existed immediately prior to such ninety (90)
day period, and shall indemnify the undersigned for any damages
arising solely out of its occupancy of the Premises, and this will not
hinder the Agent's actions in enforcing its liens on the Collateral.

Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.

The agreements contained herein shall continue in force until all of
Borrower's obligations and liabilities to the Agent and Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and Borrower have been terminated.

The undersigned will notify all successor owners, transferees,
purchasers and mortgagees of the existence of this agreement. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon the successors, assigns and personal representatives of the undersigned,
upon any successor owner or transferee of any of the Premises, and upon any
purchasers, including any mortgagee, from the undersigned.

Executed and delivered this ____ day of __________, 199_, at
_______________________.

[Name and Address of Bailee]

(By)_______________________
31

SCHEDULE 1
TO
SECURITY AGREEMENT

Pledged Debt:
32

SCHEDULE 2
TO
SECURITY AGREEMENT

Locations of Collateral:
33

SCHEDULE 2-A
TO
SECURITY AGREEMENT

Third Party Locations:

Corporate Name of Description Maximum
Third Party Address of Relationship Amount
----------------- ------- --------------- -----------

SCHEDULE 2-B
TO
SECURITY AGREEMENT

Financing Statement Filing Locations:
35

SCHEDULE 3
TO
SECURITY AGREEMENT

Trade Names:

1 EXHIBIT 10.3 SECURITY AGREEMENT DATED AS OF NOVEMBER 20, 1997

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