Document:

exv4w4

Exhibit 4.4

 

SUPPLEMENT NO. 2 TO STOCK PURCHASE AGREEMENT

AMONG

FINGERHUT DIRECT MARKETING, INC.

AND

THE SUPPLEMENTAL PURCHASERS NAMED ON

THE SUPPLEMENTAL SCHEDULE I HERETO

Dated as of November 1, 2004

 

 

 

SUPPLEMENT NO.2 TO STOCK PURCHASE AGREEMENT

          This SUPPLEMENT NO.2 TO STOCK PURCHASE AGREEMENT (this “Supplement”) is made
and entered into this 1st day of November, 2004 (the “Purchase Date”)by and
among Fingerhut Direct Marketing, Inc., a Delaware corporation (the “Company”),
Bain Capital Venture Fund, L.P., a Delaware limited partnership (“Bain Capital”),
certain entities related to Bain Capital listed on Supplemental Schedule I
attached hereto, Battery Ventures VI, L.P., a Delaware limited partnership (“Battery
Ventures”), certain Affiliates of Battery Ventures listed on Supplemental
Schedule I, Petters Company, Inc., a Minnesota corporation (“PCI”), CIGPF I. Corp. (the
“WarrantInvestor” or the “Additional Purchaser” in its
capacity as a holder of a Warrant or as a purchaser hereunder, and not its capacity as a lender)
and the other purchasers listed on the Supplemental Schedule I (each such
purchaser is referred to herein as a “Supplemental Purchaser,” and such
purchasers collectively are referred to herein as the “Supplemental Purchasers”).

          This Supplement supplements and amends that certain Stock Purchase Agreement dated as of
February 24, 2004 as supplemented and amended by Supplement No. 1 thereto dated as of October 27,
2004, (the “Purchase Agreement”) by and among the persons and entities named on
Schedule I thereto (the “Existing Purchasers”), which Existing Purchasers
include, but are not limited to, the Supplemental Purchasers other than the Additional Purchaser.
The Existing Purchasers and the Supplemental Purchasers are collectively referred to as the
“Purchasers.” Terms not defined in this Supplement have the meaning given them in
the Purchase Agreement.

WITNESSETH

          WHEREAS, the Company previously sold and issued an aggregate of 597,469,749 shares of Series A
Preferred Stock pursuant to the Purchase Agreement;

          WHEREAS, the Company desires to sell and issue to the Supplemental Purchasers listed on
Supplemental Schedule I attached hereto 126,058,415 shares of Series A
Convertible Preferred Stock;

          WHEREAS, the Company desires to supplement and amend the Purchase Agreement to, among other
things, reflect the aggregate number of shares of Series A Preferred Stock it desires to sell and
issue; and

          WHEREAS, Section 11.1 of the Purchase Agreement provides that the Purchase Agreement may be
amended by a written instrument signed by the Company and holders of 75% of the shares of Series A
Preferred Stock then outstanding;

 

 

          WHEREAS, the Supplemental Purchasers hold more than 75% of the shares of Series A Preferred
Stock currently outstanding;

          NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties
and covenants herein contained, the parties hereto hereby agree as follows:

     1. Authorization of Additional Securities. The Company has authorized the issuance and
sale to the Supplemental Purchasers of up to an additional 126,058,415 shares of its Series A
Convertible Preferred Stock, par value $.00001 per share (the “Series A Preferred Stock”),
which are convertible into shares of the Company’s common stock, par value $.00001 per share (the
“Common Stock”). For purposes of their Supplement, the term “Securities” shall include the
shares of Series A Preferred Stock sold hereunder, as well as the shares of Common Stock into which
such Series A Preferred Stock is convertible (the “Conversion Shares”).

     2. Sale and Purchase; Supplemental Closing.

          2.1. Purchase and Sale. Upon the terms and subject to the conditions herein contained,
the Company agrees to sell to the Supplemental Purchasers, and each Supplemental Purchaser agrees,
severally and not jointly, to purchase from the Company, at the Supplemental Closing (as defined
below), the number of shares of Series A Preferred Stock set forth in the column “Shares Purchased”
opposite such Supplemental Purchaser’s name on Supplemental Schedule I, for a purchase
price per share of $0.10511 (the “Purchase Price”), payable in cash.

          2.2. Supplemental Closing; Payment of Purchase Price. The supplemental closing (the
“Supplemental Closing”) with respect to the transaction contemplated in Section 2.1 hereof
shall take place at the offices of the Company at 10:00 a.m. on November 1, 2004, or at such other
time and place as the Company and Supplemental Purchasers may agree (the “Supplemental Closing
Date”). At the Supplemental Closing, the Company shall deliver to each Supplemental Purchaser a
certificate representing. the Series A Preferred Stock which such Supplemental Purchaser is
purchasing at the Supplemental Closing, registered in the name of such Supplemental Purchaser,
against delivery to the Company by such Supplemental Purchaser of a wire transfer in the amount of
the Purchase Price therefor.

     3. Other Transactional Documents.

          3.1. Investor Rights Agreement. With respect to that certain Investor Rights Agreement
dated as of February 24, 2004 among the Company, the Supplemental Purchasers and the other parties
identified therein (the “Investor Rights Agreement”), the parties hereto acknowledge and
agree that:

          (a) The Series A Preferred Stock issued and sold hereunder shall be deemed to be
“Series A Preferred Stock,” and the Conversion Shares shall also be “Registrable
Securities,” each with the meaning of the Investor Rights Agreement.

          (b) The New Warrants (as defined below) each shall be deemed a

 

 

“Warrant” for purposes of the Investor Rights Agreement.

          (c) Upon consummation of the repurchase of all of Deikel’s shares of Series A
Convertible Preferred Stock pursuant to the Repurchase Agreement (as defined below), Deikel
shall no longer have any rights or obligations under the Investor Rights Agreement.

          3.2. Stockholders Agreement. With respect to that certain Stockholders
Agreement dated as of February 24, 2004 among the Company, the Supplemental Purchasers and the
other parties identified therein (the “Stockholders Agreement”), the Supplemental
Purchasers, including the Warrant Investor, holding more than 75% of the currently outstanding
shares of Series A Preferred Stock, hereby:

          (a) Designate the Securities as Excluded Securities within the meaning
of Section 3.6 of the Stockholders Agreement pursuant to Section 3.6(g) thereof, and
agree and acknowledge that, as a result, the Investors’ Purchase Rights (as defined in
Section 3.1 of the Stockholders Agreement) shall not apply to the issuance of the
Securities, and the parties hereto acknowledge and agree that the Series A Preferred Stock
issued and sold hereunder shall also be “Series A Preferred Stock,” and the Securities shall
also be “Shares,” each with the meaning of the Stockholders Agreement.

          (b) Acknowledge and agree that with respect to 17,672,414 shares of Common Stock of the
Company currently held by FAC Acquisition, LLC, such shares of Common Stock may be
transferred to Theodore Deikel (“Deikel”) and then by him to Nicole
Needham-Faidi, a step-daughter of Deikel, each as a Permitted Transferee within the meaning
of the Stockholder Agreement (subject to her agreement in writing to be bound by the
Stockholders Agreement).

          (c) Consent to the consummation of the transactions contemplated by the Repurchase
Agreement dated as of October 25, 2004 between the Company and Deikel (the
“Repurchase Agreement”).

          (d) Upon consummation of the repurchase of all of Deikel’s shares of Series A
Convertible Preferred Stock pursuant to the Repurchase Agreement, Deikel shall no longer
have any rights or obligations under the Stockholder Agreement, and shall no longer be
deemed a party thereto.

          (e) Consent to the issuance of a warrant to the Warrant Investor in accordance with the
terms of a Letter Agreement dated as of October 27, 2004 among the Company, the Warrant Investor and certain of the Supplemental Investors and to the issuance of a Common Stock
Purchase Warrant to Epsilon Global Equities Limited for 203,052 shares of Common Stock (the
“New Warrants”), and agree and acknowledge that the Investors’ Purchase
Rights (as defined in Section 3.1 of the Stockholders Agreement) shall not apply to the
issuance of the New Warrants or the Common Stock issuable upon exercise thereof. The parties
hereto further consent and agree to the issuance of the New Warrants.

 

 

          3.3. Representations and Warranties of the Supplemental Purchasers Register of Securities;
Restrictions on Transfer. Each Supplemental Purchaser, severally as to itself and not jointly,
represents and warrants to the Company as of the Supplemental Closing that the representations and
warranties in Section 4 of the. Purchase Agreement are true and correct in respect of such
Purchaser as of the date hereof.

     4. Representations and Warranties by the Company. The Company represents and warrants
to each Supplemental Purchaser as of the Supplemental Closing that the representations and
warranties of the Company in Section 4 of the Purchase Agreement, as supplemented and amended by
this Section 4 of this Supplement, are true and correct as of the date hereof, except as set forth
on the Disclosure Schedules attached to the Purchase. Agreement and the Supplemental Disclosure
Schedule attached hereto. To the extent that the following Sections of this Section 4 of this
Supplement expressly provide that certain matters, facts or circumstances need not be disclosed in
the Supplemental Disclosure Schedule, the existence of such matters, facts or circumstances which
do not need to be disclosed shall not be deemed to be a breach of any of the representations and
warranties in Section 4 of the Purchase Agreement, as supplemented and amended hereby. Solely for
purposes of the Supplemental Closing, the representations and warranties of the Company in Section
4 of the Purchase Agreement are supplemented and amended by this Supplement as follows:

          4.1. Material Contracts. With reference to Section 5.9 of the Purchase Agreement, the
Supplemental Disclosure Schedule need not identify any Material Contracts which have been entered
into by the Company or a Subsidiary since February 24, 2004, (i) which have been approved by the
Board of Directors, or (ii) which, by their terms involve, or would reasonably be expected to
involve, aggregate payments by or to the Company or any Subsidiary of less than $1,000,000 (a
Material Contract that meets the requirements of such clauses (i) and (ii), a “Substantial
Contract”).

          4.2. Absence of Certain Changes; Financial Statements. With reference to Section 5.13
of the Purchase Agreement, the “Balance Sheet Date” shall be August 31, 2004 and the “Financial
Statements” shall refer to the Company’s financial statements as of such date. With reference to
Section 5.13(b)(3), the Supplemental Disclosure Schedule need identify only Substantial Contracts
entered into by the Company since February 24, 2004. With reference to Section 5.13(b)(4), the
Supplemental Disclosure Schedule need not identify any matter, fact or circumstance referenced in
Section 5.13(b)(4) that has been approved by the Board of Directors.

          4.3. No Undisclosed Material Liabilities. With reference to Section 5.14(c) of the
Purchase Agreement, the Supplemental Disclosure Schedule need not identify any liability referenced
in Section 5.14(c)(i) which has been approved by the Board of Directors, or (ii) which involves, or
would reasonably be expected to involve, aggregate payments by the Company or any Subsidiary of
less than $1,000,000.

          4.4. Absence of Changes. With reference to Section 5.26 of the Purchase Agreement, the
date referenced in the introductory sentence shall be changed from October 31, 2003 to August 31,
2004. With reference to Section 5.26(1), effects resulting from a delay in consummating the
transactions contemplated hereby shall not be deemed a “Material Adverse

 

 

Effect” and the Supplemental Disclosure Schedule need not identify any such effect. Further,
the representations and warranties made in Section 5.26(2) to (10) are made only to the
knowledge of the Chief Executive Officer and General Counsel, and the Supplemental Disclosure
Schedule need not identify any matter, fact or circumstance otherwise referenced therein which is
not known to them.

          4.5. Late Payments. With reference to Sections 5.8, 5.9, 5,13 and 5.26 of the Purchase
Agreement, to the extent that the failure to pay amounts owing to third parties when due (a “Late
Payment”) would otherwise constitute a breach of the representations or warranties made therein,
the Supplemental Disclosure Schedule need disclose such Late Payments only to the extent (i) such
Late Payments are owed to any senior financial institution lender by the Company, (ii) are in
excess of $1,000,000 owed to any one party, or (iii) are in the aggregate in excess of $2,000,0000
(in which case the Supplemental Disclosure Schedule need identify only the aggregate amount
thereof).

     5. Conditions of Parties’ Obligations.

          5.1. Conditions of the Supplemental Purchasers’ Obligations. The obligations of each
of the Supplemental Purchasers under this Supplement are subject to the fulfillment prior to or on
the Supplemental Closing Date of all of the following conditions, any of which may be waived in
whole or in part by such Supplemental Purchaser.

          (a) Representations and Warranties. The representations and warranties of the
Company contained in this Agreement shall be true and correct in all respects on and as of
the Supplemental Closing Date with the same effect as though such representations and
warranties had been made on and as of the Supplemental Closing Date.

          (b) Performance. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are required to be
performed or complied with it on or before the Supplemental Closing.

          (c) Qualification Under State Securities Laws. All registrations,
qualifications, permits and approvals, if any, required under applicable state securities
laws shall have been obtained for the lawful execution, delivery and performance of this
Agreement , including without limitation the offer and sale of the Securities.

          (d) Consents and Waivers The Company shall have obtained all consents or
waivers necessary to execute and perform its obligations under this Agreement, to issue the
Series A Preferred Stock and the Conversion Shares, and to carry out the transactions
contemplated hereby. All corporate and other action and governmental filings necessary to
effectuate the terms of the Amended Charter, this Agreement, the Series A Preferred Stock
and the Conversion Shares, and other agreements and instruments executed and delivered by
the Company in connection herewith shall have been made or taken.

 

 

          (e) Satisfaction of Obligations. Each of the other Supplemental Purchasers
shall have simultaneously complied with their obligations under Section 2 hereof.

          (f) Supporting Documents. The Purchasers at the Supplemental Closing shall have
received the following:

     (1) an opinion or opinions from counsel to the Company dated as of the
Supplemental Closing Date;

     (2) Copies of resolutions of the Board of Directors of the Company, certified
by the Secretary of the Company, authorizing and approving the filing of the Amended
Charter, the execution, delivery and performance of this Agreement and all other
documents and instruments to be delivered pursuant hereto and thereto;

     (3) Copies of resolutions of the stockholders of the Company, certified by the
Secretary of the Company, authorizing and approving the filing of the Amended
Charter and the transactions contemplated hereby; and

     (4) A certificate of incumbency executed by the Secretary of the Company (A)
certifying the names, titles and signatures of the officers authorized to execute
the documents referred to in subparagraphs (2) and (3) above and (B) further
certifying that the Amended Charter at the time of the execution of this Agreement
has been validly adopted and has not been amended or modified.

          (g) Purchaser Expenses. The Company shall have paid the expenses of Bain
Capital and Battery Ventures, and the fees, expenses and disbursements of Ropes & Gray LLP,
as counsel to Bain Capital and Battery Ventures, incurred in connection with the
transactions contemplated hereby up to a maximum of $ ________.

          (h) Compliance Certificates. The Company shall have delivered to the
Supplemental Purchasers a Compliance Certificate, executed by the President of the Company,
dated as of the Supplemental Closing Date to the effect that the conditions specified in
subsections (a) through (e) and (h) of this Section 5.1 have been satisfied

          (i) Material Adverse Change., Market Conditions. (i) The Company shall not have
suffered any Material Adverse Effect with respect to its business, financial condition,
results of operations, assets, liabilities or prospects (excluding any Material Adverse
Effect that does not need to be disclosed in the Supplemental Disclosure Schedule); and (ii)
there shall have been no material adverse change in general market conditions as determined
in the reasonable discretion of Bain Capital and Battery Ventures.

          (j) Repurchase Agreement. The Supplemental Purchasers shall have determined to
their satisfaction that the repurchase of shares of Series A Preferred Stock from Deikel,
and the resignation of Deikel as an officer and director of the Company, as

 

 

contemplated by the Repurchase Agreement shall be consummated as of or immediately
after consummation of the transactions contemplated by this Agreement.

          (k) Purchaser. In the case of each Supplemental Purchaser, each other
Supplemental Purchaser shall have delivered to the Company by wire transfer its respective
Purchase Price pursuant to Section 2.2 hereunder (it being understood that if any
Supplemental Purchaser does not so deliver its respective Purchase Price in anticipation of
the Supplemental Closing, then each Supplemental Purchaser that has delivered its Purchase
Price shall be entitled to an immediate return of such Purchase Price by wire transfer from
the Company).

          5.2. Conditions of the Company’s Obligations. The obligations of the Company under
Section 2 hereof are subject to the fulfillment prior to or on the Supplemental Closing
Date of all of the following conditions, any of which may be waived in whole or in part by the
Company.

          (a) Covenants; Representations and Warranties. (i) Each of the Supplemental
Purchasers at the Supplemental Closing Date shall have performed in all material respects
all of its obligations hereunder required to be performed by it at or prior to the
Supplemental Closing Date and (ii) the representations and warranties of each of the
Supplemental Purchasers at the Supplemental Closing Date contained in this Agreement shall
be true and correct in all material respects at and as of the Supplemental Closing Date as
if made at and as of the Supplemental Closing Date (except to the extent expressly made as
of an earlier date, in which case as of such earlier date).

          5.3. Conditions of Each Party’s Obligations. The respective obligations of each party
to consummate the transactions contemplated hereunder are subject to the parties being reasonably
satisfied as to the absence of (a) litigation challenging or seeking damages in connection with the
transactions contemplated by this Supplement and (b) any statute, rule, regulation, injunction,
order or decree, enacted, enforced, promulgated, entered, issued or deemed applicable to this
Agreement or the transactions contemplated hereby (or in the case of any statute, rule or
regulation, awaiting signature or reasonably expected to become law), by any court, government or
governmental authority or agency or legislative body, domestic, foreign or supranational, that
would, or would reasonably be expected to, prohibit or enjoin the transactions contemplated by this
Supplement.

6. Miscellaneous. Except as supplemented and amended hereby, the Purchase
Agreement shall continue in full force and effect.

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be duly executed as of
the day and year first above written.

	 	 	 	 	 
	 	THE COMPANY

FINGERHUT DIRECT MARKETING, INC.

 	 
	 	By:  	/s/ Brian Smith
 	 
	 	 	Name:  	Brian Smith 	 
	 	 	Title:  	President, CEO 	 

 

 

	 	 	 	 	 
	 	THE SUPPLEMENTAL PURCHASERS (cont’d)

CIGPF I CORP.

THE SUPPLEMENTAL PURCHASERS

 	 
	 	/s/ Brian Smith
 	 
	 	Brian Smith 	 
	 	 	 	 
	 
	 	PETTERS COMPANY, INC.

 	 
	 	/s/
[ILLEGIBLE] 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 
	 	BATTERY VENTURES VI, L.P

 	 
	 	By:  	Battery Partners VI, LLC 
General Partner
 	 
	 	 	 	 
	 	                   /s/ Oliver D. Curme
 	 
	 	Name:  Oliver D. Curme 	 
	 	Title:  
 Member Manager 	 
	 
	 	BATTERY INVESTMENT PARTNERS VI, LLC

 	 
	 	/s/ Oliver D. Curme
 	 
	 	Name:  
Oliver D. Curme 	 
	 	Title:  
Member Manager 	 
	 
	 	BAIN CAPITAL VENTURE FUND, L.P.

 	 
	 	By:  	Bain Capital Venture Partners, L.P. 
its general partner
 	 
	 	 	 
	 	By:  	
Bain Capital Investors, LLC 
its general partner
 	 
	 	 	 
	 	By:  	
/s/ Michael Krupka
 	 
	 	 	Name:  	Michael Krupka 	 
	 	 	Title:  	Authorized Person 	 

 

 

	 	 	 	 	 
	 	BCIP ASSOCIATES III, LLC

 	 
	 	By:  	BCIP Associates III, 
its manager
 	 
	 
	 	BCIP ASSOCIATES III-B, LLC

 	 
	 	By:  	BCIP Associates III-B, its manager
 	 
	 	 	 
	 	By:  	             Bain Capital Investors, LLC 
their Managing Partner
 	 
	 	 	 
	 	By:  	             /s/ Michael Krupka
 	 
	 	 	Name:  	Michael Krupka 	 
	 	 	Title:  	Authorized Person 	 
	 
	 	Brookside Capital Partners Fund, L.P.

 	 
	 	By:  	/s/  Dom Ferrante
 	 
	 	 	Name:  	Dom Ferrante 	 
	 	 	Title:  	 	 
	 
	 	RGIP, LLC

 	 
	 	By:  	/s/ [ILLEGIBLE] 	 
	 	 	Name:  	 	 
	 	 	Title:  	Managing Member 	 
	 
	 	CIGPF I Corp.

 	 
	 	By:  	/s/ Ari Rosenberg
 	 
	 	 	Name:  	Ari Rosenberg 	 
	 	 	Title:  	Vice President 	 

Signature Page to Supplement No. 2

 

	 	 	 	 	 

SUPPLEMENTAL SCHEDULE I

	 	 	 	 	 	 	 	 	 
	Supplemental Purchaser	 	Shares Purchased	 	 	Purchase Pr ice	 
	 
	Bain Capital Venture Fund, L.P.
	 	 	13,825,405	 	 	 	       $1,453,188..32	 
	BCIP Associates III, LLC
	 	 	2,463,123 	 	 	 	        $258,898..86	 
	BCIP Associates III-B, LLC
	 	 	171,752	 	 	 	           $18,052.85	 
	RGIP, LLC
	 	 	166,265 	 	 	 	         $17,476..11	 
	Brookside Capital Partners
	 	 	16,626,544	 	 	 	       $1,747,616..04	 
	Fund, L.P.
	 	 	 	 	 	 	 	 
	Battery Ventures VI, L.P.
	 	 	31,922,965 	 	 	 	        $3,355,42285	 
	Battery Investment Partners VI,
	 	 	1,330,124	 	 	 	          $139,809.33	 
	LLC
	 	 	 	 	 	 	 	 
	Petters Company, Inc.
	 	 	56,274,458	 	 	 	       $5,915,008..28	 
	Brian Smith
	 	 	613,903	 	 	 	             64,52734	 
	CIGPF I Corp.
	 	 	2,663,876	 	 	 	         $280,000..00	 
	TOTAL
	 	 	126,058,415	 	 	 	       $13,249,999.98	 

 

 

     

Schedule 5.211

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Mark has been abandoned.	 	Mark has been renewed.	 	Mark has been reserved.	 	6-mth. grace period filed.	 	 	 	 
	Trademark / Servicemark	 	 	 	Serial No./	 	Reg. No./	 	Rolling	 	Current	 	Action Pending/	 	Notification
	Name	 	Goods / Services	 	Filing Date	 	Reg. Date	 	History	 	Status	 	Date Due	 	Date
	FEEL THE POWER

	 	Class: 35,42, 100, 101, 102
	 	74/522942
	 	 	2146923	 	 	3/1/04 — Abandonded.
	 	Abandoned	 	3/31/04, Affidavit of Use
 	 	 
	 

	 	 	 	4/29/1994
	 	 	3/31/1998	 	 	 	 	 	 	 	 	 
	COUNTRY BEAR

	 	Class: 7, 8, 9, 14, 20, 21	 	74/24728l

	 	 	1847171	 	 	7/1/05 Filed 6-mth.

[ILLEGIBLE]
	 	Registered
	 	7/26/04, Next Renewal
	 	1/1/05
	 

	 	 	 	2/14/1992
	 	 	7/26/1994	 	 	 	 	 	 	 	 	 
	INSTANT FIT

	 	Class: 24,42,50
	 	74/679114
	 	 	2084514	 	 	7/28/04 Filed 6-mth.	 	Abandoned	 	7/29/03, Affidavit of Use 	 	 
	 

	 	 	 	 	 	 	7/29/1997	 	 	Ext. Final-DOU due 1/29/04. 1/16/04 — Abandoned.	 	 	 	 	 	 
	ACCOLADE

	 	Audio amplifiers, microphones (Class 9)
	 	75/225,624
	 	 	2,186,721	 	 	8/23/04, Notified
	 	Abandoned
	 	9/1/04, Affidavit of Use	 	 
	 

	 	Electric guitars, acoustical guitars, guitar bags,
guitar cases, keyboards, keyboard stands, keyboard
benches, keyboard carrying cases, guitar tuners,
drum sets, music stands, violins, wind instruments
(Class 15)
	 	8/15/1997
	 	 	9/1/1998	 	 	M&G to cancel.
	 	 	 	9/1/08, Next Renewal	 	 
	FASHION ELEMENTS

	 	Class: 25
	 	75/121616
	 	 	2192586	 	 	8/30/04, Notified
	 	Abandoned
	 	9/29/04, Affidavit of Use
	 	8/18/2004
	 

	 	 	 	6/14/1996
	 	 	9/29/1998	 	 	M&G to cancel.	 	 	 	9/29/08, Next Renewal 	 	 
	FINGERHUT

	 	Class: 35; Mexico
	 	 	 	 	502337 10/17/1994	 	 	10/12/04, Notified M&G to reserve.
	 	Registered
	 	10/17/04, Next Renewal
	 	9/6/2004
	 

	 	 	 	10/17/1994	 	 	 	 	 	 	 	 	 	 	 	 
	FINGERHUT

	 	Class: 7,9,12,14,16
	 	72/465973
	 	 	999881	 	 	 	 	Registered
	 	12/17/04, Next Renewal
	 	11/5/2004
	 

	 	 	 	8/20/1973
	 	 	12/17/1974	 	 	 	 	 	 	 	 	 
	USA DIRECT

	 	Class: 38 	 	73/405158
	 	 	1284622	 	 	7/1/04 — Filed 6-mth.
	 	Registered
	 	1/3/05, Late Renewal Date	 	1/1/2005 
	 

	 	 	 	12/8/1982
	 	 	7/3/1984	 	 	grace period (1/05) 	 	 	 	 	 	 
	ACCOLADE AND DESIGN

	 	Class: 9, 15
	 	75/341841
	 	 	2232979	 	 	9/20/04, Notified
	 	Abandoned
	 	3/16/05, Affidavit of Use
	 	2/2/2005
	 

	 	 	 	8/15/1997
	 	 	3/16/1999	 	 	M&G to cancel.
	 	 	 	3/16/09, Next Renewal	 	 
	MIRACLE FIT

	 	Class: 20, 24
	 	75/152771
	 	 	2247997	 	 	 	 	Registered
	 	5/25/05, Affidavit of Use
	 	4/13/2005
	 

	 	 	 	8/19/1996
	 	 	5/25/1999	 	 	 	 	 	 	5/25/09, Next Renewal	 	 

 

			
	1	 	Schedules attached to this Section are intended to supplement the disclosures made to the Stock
Purchase Agreement dated February 24, 2004, and reflect only those additional disclosures
herein required occurring from February 24, 2004 to the present.

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	Mark has been abandoned.	 	Mark has been renewed.	 	Mark has been reserved.	 	 	6-mth grace period field	 	 	 	 
	Trademark / Servicemark	 	 	 	Serial No./	 	 	Reg. No./	 	 	Rolling	 	Current	 	Action Pending/	 	 
	Name	 	Goods / Services	 	Filing Date	 	 	Reg. Date	 	 	History	 	Status	 	Date Due	 	Notification Date
	COLOR FOCUS

	 	Class: 24
	 	74/709674
	 	 	2253887	 	 	 	 	Registered
	 	6/15/05, Affidavit of Use
	 	5/4/2005
	 

	 	 	 	7/31/1995
	 	 	6/15/1999	 	 	 	 	 	 	6/15/09, Next Renewal	 	 
	BACKYARD LIVING

	 	Class: 35
	 	75/406940
	 	 	2274991	 	 	 	 	Registered
	 	8/31/05, Affidavit of Use
	 	7/20/2005
	 

	 	 	 	12/17/1997
	 	 	8/31/1999	 	 	 	 	 	 	8/31/09, Next Renewal	 	 
	SPORTS CENTRAL

	 	Class: 35
	 	75/457034
	 	 	2279009	 	 	10/5/04, Notified
	 	Abandoned
	 	9/21/05, Affidavit of Use
	 	8/10/2005
	 

	 	 	 	3/25/1998
	 	 	9/21/1999	 	 	M&G to cancel.
	 	 	 	9/21/09, Next-Renewal	 	 
	QUALITY ASSURED & DESIGN

	 	Class: 42
	 	74/414587
	 	 	1931994	 	 	 	 	Registered
	 	10/31/05, Next Renewal
	 	9/19/2005
	 

	 	 	 	7/16/1993
	 	 	10/31/1995	 	 	 	 	 	 	 	 	 
	SUPER CHEF

	 	Class: 11
	 	74/376304
	 	 	1933548	 	 	 	 	Registered
	 	11/7/05, Next Renewal
	 	9/26/2005
	 

	 	 	 	4/5/1993
	 	 	11/7/1995	 	 	 	 	 	 	 	 	 
	LIFE MAX

	 	Class: 9, 10
	 	75/978794
	 	 	2312598	 	 	 	 	Registered
	 	1/25/06, Affidavit of Use
	 	12/14/2005
	 

	 	 	 	6/17/1999
	 	 	1/25/2000	 	 	 	 	 	 	1/25/2010, Next Renewal	 	 
	THE ACCENTS ON

	 	Class: 35
	 	75/541585
	 	 	2315853	 	 	 	 	Registered
	 	2/8/06, Affidavit of Use
	 	12/26/2005
	OUTERWEAR

	 	 	 	8/24/1998
	 	 	2/8/2000	 	 	 	 	 	 	2/8/2010, Next Renewal	 	 
	TAKE TIME FOR KIDS

	 	Class: 35
	 	75/651672
	 	 	2329075	 	 	 	 	Registered
	 	3/14/06, Affidavit of Use
	 	1/31/2006
	 

	 	 	 	3/2/1999
	 	 	3/14/2000	 	 	 	 	 	 	3/14/2010, Next Renewal	 	 
	INSTANT FIT

	 	Class: 20
	 	75/251786
	 	 	2333507	 	 	 	 	Registered
	 	3/21/06, Affidavit of Use
	 	2/7/2006
	 

	 	 	 	3/4/1997
	 	 	3/21/2000	 	 	 	 	 	 	3/21/2010, Next Renewal	 	 
	BULL’S HEAD & CHEF’S

	 	Class: 8
	 	73/565985
	 	 	1393812	 	 	 	 	Registered
	 	5/20/06, Next Renewal
	 	4/7/2006
	HAT LOGO

	 	 	 	10/31/1985
	 	 	5/20/1986	 	 	 	 	 	 	 	 	 
	FASHION JEWELRY BAZAAR

	 	Class: 35
	 	75/499505
	 	 	2352633	 	 	 	 	Registered
	 	5/23/06, Affidavit of Use
	 	4/10/2006
	 

	 	 	 	6/10/1998
	 	 	5/23/2000	 	 	 	 	 	 	5/23/2010, Next Renewal	 	 
	THE COOK’S BOOK

	 	Class: 35
	 	75/529059
	 	 	2363151	 	 	 	 	Registered
	 	6/27/06, Affidavit of Use
	 	5/16/2006
	 

	 	 	 	7/28/1998
	 	 	6/27/2000	 	 	 	 	 	 	6/27/2010, Next Renewal	 	 
	THE COOK’S BOOK

	 	Class: 35
	 	75/526973
	 	 	2363143	 	 	 	 	Registered
	 	6/27/06, Affidavit of Use
	 	5/16/2006
	(STYLIZED)

	 	 	 	7/28/1998
	 	 	6/27/2000	 	 	 	 	 	 	6/27/2010, Next Renewal	 	 
	CORNER SHOP

	 	Class: 42
	 	73/571696
	 	 	1401719	 	 	 	 	Registered
	 	7/15/06, Next Renewal
	 	6/2/2006
	 

	 	 	 	12/5/1985
	 	 	7/15/1986	 	 	 	 	 	 	 	 	 
	GOLD KEY

	 	Class: 35
	 	75/719834
	 	 	2368354	 	 	 	 	Registered
	 	7/18/06, Affidavit of Use
	 	6/6/2006
	 

	 	 	 	6/3/1999
	 	 	7/18/2000	 	 	 	 	 	 	7/18/2010, Next Renewal	 	 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	Mark has been abandoned.	 	Mark has been renewed.	 	Mark has been reserved.	 	 	6-mth grace period field	 	 	 	 
	Trademark / Servicemark	 	 	 	Serial No./	 	 	Reg. No./	 	 	Rolling	 	Current	 	Action Pending/	 	 
	Name	 	Goods
/ Services	 	Filing Date	 	 	Reg. Date	 	 	History	 	Status	 	Date Due	 	Notification Date
	HOLIDAY BIG BOOK

	 	Class: 35
	 	75/498298
	 	 	2386204	 	 	 	 	Registered
	 	9/12/06, Affidavit of Use
	 	8/1/2006
	 

	 	 	 	6/8/1998
	 	 	9/12/2000	 	 	 	 	 	 	9/12/2010, Next Renewal 	 	 
	DIGITAL ZONE

	 	Class: 35
	 	75/638137
	 	 	2398630	 	 	Abandonded
	 	 	 	10/24/06, Affidavit of  Use 

	 	9/12/2006
	 

	 	 	 	2/10/1999
	 	 	10/24/2000	 	 	 	 	 	 	 	 	 
	LIFE MAX

	 	Class: 11, 25
	 	75/979831
	 	 	2411462	 	 	 	 	Registered
	 	12/5/06, Affidavit of Use
	 	10/24/2006
	 

	 	 	 	8/15/1997
	 	 	12/5/2000	 	 	 	 	 	 	12/05/2010. Next Renewal	 	 
	TREASURE CREEK

	 	Class: 35
	 	75/731771
	 	 	2435895	 	 	 	 	Registered
	 	3/13/07, Affidavit of Use
	 	1/30/2007
	 

	 	 	 	6/18/1999
	 	 	3/13/2001	 	 	 	 	 	 	3/13/2011, Next Renewal	 	 
	AL AND DESIGN

	 	Class: 35
	 	76/040531
	 	 	2453125	 	 	 	 	Registered
	 	5/22/07, Affidavit of Use
	 	4/10/2007
	 

	 	 	 	5/4/2000
	 	 	5/22/2001	 	 	 	 	 	 	5/22/2011, Next Renewal	 	 
	SPRING BIG BOOK

	 	Class: 35
	 	75/659741
	 	 	2476310	 	 	 	 	Registered
	 	8/7/07, Affidavit of Use
	 	6/19/2007
	 

	 	 	 	3/12/1999
	 	 	8/7/2001	 	 	 	 	 	 	8/7/2011, Next Renewal	 	 
	CHEF’S MARK

	 	Class: 7, 11
	 	75/980599
	 	 	2489361	 	 	 	 	Registered
	 	9/11/07, Affidavit of Use
	 	7/24/2007
	 

	 	 	 	8/15/1997
	 	 	9/11/2001	 	 	 	 	 	 	9/11/2011, Next Renewal	 	 
	LIFE MAX

	 	Class: 28
	 	74/709163
	 	 	2099973	 	 	 	 	Registered
	 	9/23/07, Next Renewal
	 	8/13/2007
	 

	 	 	 	7/31/1995
	 	 	9/23/1997	 	 	 	 	 	 	 	 	 
	CHEF’S MARK PREFERRED

	 	Class: 7, 11
	 	75/980739
	 	 	2497159	 	 	 	 	Registered
	 	10/9/07. Affidavit of Use
	 	8/28/2007
	QUALITY & DESIGN

	 	 	 	8/15/1997
	 	 	10/9/2001	 	 	 	 	 	 	10/9/2011, Next Renewal	 	 
	SUITE LUXURIES

	 	Class: 35
	 	75/668055
	 	 	2496775	 	 	 	 	Registered
	 	10/9/07, Affidavit of Use
	 	8/28/2007
	 

	 	 	 	3/25/1999
	 	 	10/9/2001	 	 	 	 	 	 	10/9/2011, Next Renewal	 	 
	FINGERHUT HOME

	 	Class: 35
	 	76/010637
	 	 	2523477	 	 	 	 	Registered
	 	12/25/07, Affidavit of Use
	 	11/13/2007
	 

	 	 	 	3/27/2000
	 	 	12/25/2001	 	 	 	 	 	 	12/25/2011, Next Renewal	 	 
	ST. CROIX COLORS AND

	 	Class: 7, 9, 11, 21, 24
	 	75/981028
	 	 	2530650	 	 	 	 	Registered
	 	1/15/08, Affidavit of Use
	 	12/4/2007
	DESIGN

	 	 	 	8/15/1997
	 	 	1/15/2002	 	 	 	 	 	 	1/15/2012, Next Renewal	 	 
	ST. CROIX COLORS AND

	 	Class: 20
	 	75/341622
	 	 	2552910	 	 	 	 	Registered
	 	3/26/08. Affidavit of Use
	 	2/13/2008
	DESIGN

	 	 	 	8/15/1997
	 	 	3/26/2002	 	 	 	 	 	 	3/26/2012, Next Renewal	 	 
	ST. CROIX COLORS

	 	Class: 7, 11, 21, 24, 27
	 	75/981566
	 	 	2579749	 	 	 	 	Registered
	 	6/11/08, Affidavit of Use
	 	4/30/2008
	 

	 	 	 	8/15/1997
	 	 	6/11/2002	 	 	 	 	 	 	6/11/2012, Next Renewal	 	 
	SENSOMA

	 	Class: 20, 24
	 	75/397546
	 	 	2601356	 	 	 	 	Registered
	 	7/30/08, Affidavit of Use
	 	6/18/2008
	 

	 	 	 	12/1/2007
	 	 	7/30/2002	 	 	 	 	 	 	7/30/2012, Next Renewal	 	 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	Mark has been abandoned.	 	Mark has been renewed.	 	Mark has been reserved.	 	 	6-mth grace period field	 	 	 	 
	Trademark / Servicemark	 	 	 	Serial No./	 	 	Reg. No./	 	 	Rolling	 	Current	 	Action Pending/	 	 
	Name	 	Goods / Services	 	Filing Date	 	 	Reg. Date	 	 	History	 	Status	 	Date Due	 	Notification Date
	CAREFREE LIVING

	 	Class: 35
	 	73/701228
	 	 	1505333	 	 	 	 	Registered
	 	9/20/08, Next Renewal
	 	8/8/2008
	 

	 	 	 	12/14/1997
	 	 	9/20/1988	 	 	 	 	 	 	 	 	 
	CHEF’S MARK

	 	Class: 8, 21, 24
	 	75/341842
	 	 	2645988	 	 	 	 	Registered
	 	11/5/08, Affidavit of Use
	 	9/24/2008
	 

	 	 	 	8/15/1997
	 	 	11/5/2002	 	 	 	 	 	 	11/05/2012, Next Renewal	 	 
	FALL BIG BOOK

	 	Class: 35
	 	76/239983
	 	 	2655853	 	 	 	 	Registered
	 	12/3/08, Affidavit of Use
	 	10/22/2008
	 

	 	 	 	4/12/2001
	 	 	12/3/2002	 	 	 	 	 	 	12/3/2012, Next Renewal	 	 
	CHEF’S MARK PREFERRED

	 	Class: 8, 21, 24
	 	75/341494
	 	 	2659758	 	 	 	 	Registered
	 	12/10/08, Affidavit of Use
	 	10/29/2008
	QUALITY & DESIGN

	 	 	 	8/15/1997
	 	 	12/10/2002	 	 	 	 	 	 	12/10/2012, Next Renewal	 	 
	 
	ST. CROIX COLORS

	 	Class: 20
	 	75/341826
	 	 	2681467	 	 	 	 	Registered
	 	1/28/09, Affidavit of Use
	 	12/17/2008
	 

	 	 	 	8/15/1997
	 	 	1/28/2003	 	 	 	 	 	 	1/28/2013, Next Renewal	 	 
	COUNTRY BEAR

	 	Class: 7, 11, 24
	 	76/172068
	 	 	2782394	 	 	 	 	Registered
	 	11/11/09, Affidavit of Use
	 	9/30/2009
	 

	 	 	 	11/28/2000
	 	 	11/11/2003	 	 	 	 	 	 	11/11/2013, Next Renewal	 	 
	GOOD DEALS, GREAT BUYS

	 	Class: 35
	 	75/699395
	 	 	2503225	 	 	 	 	Registered
	 	10/30/2011, Next Renewal
	 	9/19/2011
	 

	 	 	 	5/7/1999
	 	 	10/30/2001	 	 	 	 	 	 	 	 	 
	ROOMS FOR LIVING

	 	Class: 42
	 	74/138822
	 	 	1693689	 	 	 	 	Registered
	 	6/9/2012, Next Renewal
	 	4/27/2012
	 

	 	 	 	2/13/1991
	 	 	6/9/1992	 	 	 	 	 	 	 	 	 
	GATE ONE LUGGAGE (AND

	 	Class: 18
	 	74/147438
	 	 	1722969	 	 	 	 	Registered
	 	10/6/2012, Next Renewal
	 	8/24/2012
	DESIGN)

	 	 	 	3/13/1991
	 	 	10/6/1992	 	 	 	 	 	 	 	 	 
	 
	GATE ONE (AND DESIGN)

	 	Class: 18
	 	74/147437
	 	 	1724645	 	 	 	 	Registered
	 	10/13/2012, Next Renewal
	 	8/31/2012
	 

	 	 	 	3/13/1991
	 	 	10/13/1992	 	 	 	 	 	 	 	 	 
	FINGERHUT

	 	Class: 35
	 	72/428394
	 	 	973080	 	 	 	 	Registered
	 	11/13/2013, Next Renewal
	 	10/2/2013
	 

	 	 	 	6/26/1972
	 	 	11/13/1973	 	 	 	 	 	 	 	 	 
	HOME DEALS

	 	Class: 35
	 	75/838,383
	 	 	N/A	 	 	Pending — Filed 4th
	 	Registered
	 	1/9/05, Next Renewal	 	 
	 

	 	 	 	11/2/1999
	 	 	 	 	 	Ext. on 8/6/04	 	 	 	 	 	 

 

 

Schedule 5.221

i’DM Agreements with Related Parties

	 	 	 	 	 
	 	 	COMPANY	 	 
	 	 	FDM, FFI or	 	 
	TITLE	 	FAC	 	NOTES / KEYWORDS
	uBid.com

	 	FFI
	 	Letter of Intent dated 7/2/04
	 
	 	 	 	 
	Fulfillment Services Agreement

	 	FDM
	 	 Between FDM & Petters Group Worldwide, LLC; Schwans Project — Agreement in Final Stages — waiting for signature

 

			
	1	 	Schedules attached to this Section are intended to supplement the disclosures made to the Stock
Purchase Agreement dated February 24, 2004, and reflect only those additional disclosures herein required
occurring from February 24, 2004 to the present.

 

 

Schedule 5.171

None.

 

			
	1	 	Schedules attached to this Section are intended to supplement the
disclosures made to the Stock Purchase Agreement dated February 24, 2004, and reflect only
those additional disclosures herein required occurring from February 24, 2004 to the present.

 

 

Schedule 5.91

None.

 

			
	1	 	Schedules attached to this Section are intended to supplement the
disclosures made to the Stock Purchase Agreement dated February 24, 2004, and reflect only
those additional disclosures herein required occurring from February 24, 2004 to the present.

 

 

Schedule 5.131

5.13(b)(3) See List of Material Contracts entered after February 2004 listed in Schedule
5.9.

 

			
	1	 	Schedules attached to this Section are intended to supplement the
disclosures made to the Stock Purchase Agreement dated February 24, 2004, and reflect only
those additional disclosures herein required occurring from February 24, 2004 to the
present..

 

 

Schedule 5.191

Pursuant to February 10, 2004 Engagement as Financial Advisor, upon the closing of this
financing, Piper Jaffray is owed a one time fee of $250,000.

 

			
	1	 	Schedules attached to this Section are intended to supplement the
disclosures made to the Stock Purchase Agreement dated February 24, 2004, and reflect only
those additional disclosures herein required occurring from February 24, 2004 to the
present..

 

 

Schedule 5.1(a)

Capitalization Table after giving effect to the Amended and Restated Certificate of Incorporation
and Closing.

 

 

Schedule 5.10’ 

Schedule 5.10 of the February 24, 2004 Stock Purchase Agreement is supplemented by including
the rights granted to investors under the related documents to the February 24, 2004 Stock Purchase
Agreement, including:

	 	•	 	Investor Rights Agreement by and among FDM, Bain, Battery, PCI, FAC, psilon,
CIGPF, Piper Jaffray and Cherry Tree, dated February 24, 2004;

	 	•	 	Stockholders Agreement by FDM, PCI, FAC, RTB Holdings, Bain, Battery, Epsilon,
CIGPF, Piper Jaffray, Cherry Tree and Deikel, dated February 24, 2004;

	 	•	 	Management Rights Letter among FDM, Battery and Bain, dated February 24, 2004;

	 	•	 	CIGPF Warrant to Subscribe for and Purchase Common Stock of FDM, dated February 24,
2004;

	 	•	 	Second Amendment to Stafford Loan Agreement, dated February 24, 2004; Epsilon
Warrant to Subscribe for and Purchase Common Stock of FDM, dated February 24, 2004;

	 	•	 	Fingerhut Direct Marketing, Inc. 2003 Equity Incentive Plan ;

	 	•	 	Letter Agreement with Piper Jaffray, dated February 10, 2004;

	 	•	 	Letter Agreement with Cherry Tree, dated February 10, 2004;

	 	•	 	Piper Jaffray Warrant to Subscribe for and Purchase Common Stock of FDIVI, dated
February 18, 2004;

	 	•	 	Cherry Tree Warrant to Subscribe for and Purchase Common Stock of FDM, dated
February 18, 2004;

	 	•	 	Financing Agreement with CIT Group/ Business Credit, Inc. dated April 9, 2003

Subordinated Loan Agreement among Stafford Towne, Ltd, Various Lenders and

 

			
	1	 	Schedules attached to this Section are intended to supplement the
disclosures made to the Stock Purchase Agreement dated February 24, 2004, and reflect only
those additional disclosures

 

 

herein required occurring from February 24, 2004 to the present..

 

 

Schedule 5.141 

See Schedule 5.9

 

			
	1	 	Schedules attached to this Section are intended to supplement the
disclosures made to the Stock Purchase Agreement dated February 24, 2004, and reflect only
those additional disclosures herein required occurring from February 24, 2004 to the
present..

 

 

Schedule 5.151 

Litigation:

	 	1)	 	The Company has received notice of a claim for a house fire caused by a fan
that was allegedly purchased from Fingerhut. No formal litigation has been initiated.
Claimant has not provided details as to the extent (dollar amount) of the claimed
damage. The claim has been turned over to our general liability insurance carrier for
investigation. To date, claimant has not provided any proof of purchase or any
information regarding the date of the purchase of the fan. Fingerhut Direct Marketing,
Inc. does not have any record of any sale to the claimant or any purchase to the
claimant’s address. Claimant does not show up in Fingerhut Direct Marketing, Inc.’s
records as a customer.

	 	2)	 	The Company is aware of potential litigation that may be brought in the future
by Megan Kavanaugh in connection with the termination of her employment.

 

			
	1	 	Schedules attached to this Section are intended to supplement the disclosures made to the Stock
Purchase Agreement dated February 24, 2004, and reflect only those additional disclosures
herein required occurring from February 24, 2004 to the present..

 

 

Schedule 5.261 

5.26(7) In October 2004, the Company incurred and paid a Minnesota State tax debt in the amount of
$150,000 that was not anticipated or included in the budget

 

			
	1	 	Schedules attached to this Section are intended to supplement the
disclosures made to the Stock Purchase Agreement dated February 24, 2004, and reflect only
those additional disclosures herein required occurring from February 24, 2004 to the
present..

 

 

Schedule 5.51 

Consent is required for the redemption of stock by:

	 	1)	 	CIT Group Business Credit, Inc. in accordance with Section 7.9 (f) of the
Financing Agreement dated April 9, 2003. The Company has obtained CIT GroupBusiness
Credit, Inc.’s written consent;

	 	2)	 	Stafford Towne, Ltd (Epsilon) in accordance with Section 5.10(f) of the
Subordinated Loan Agreement dated April 9, 2003. The Company has obtained Epsilon’s
written consent.

Consent is also required for the conveyance of any interest in Company for the following:

	 	1)	 	Building One Lease for property located at 11 McLeland Road, St. Cloud, MN
dated November 26, 2003 by and between Fingerhut Direct Marketing, Inc. and FAC
Acquisition, LLC. The Company has obtained Landlord’s (FAC Acquisition, LLC) written
consent.

	 	2)	 	Office Lease for property located at 4400 Baker Road, Minnetonka, MN dated
May 1, 2003 by and between Fingerhut Direct Marketing, Inc. and FAC Acquisition, LLC.
The Company has obtained Landlord’s (FAC Acquisition, LLC) written consent.

	 	3)	 	Building Lease for property located at 6250 Ridgewood Road, St. Cloud, MN
dated November 26, 2003 by and between Fingerhut Direct Marketing, Inc. and FAC
Acquisitions, LLC. The Company has obtained Landlord’s (FAC Acquisition, LLC) written
consent.

 

			
	1	 	Schedules attached to this Section are intended to supplement the
disclosures made to the Stock Purchase Agreement dated February 24, 2004, and reflect only
those additional disclosures herein required occurring from February 24, 2004 to the
present..

 

 

Schedule 5.8

The Company is past due on various inventory and expense payables. The aggregate amount of
past due amounts as of October 29, 2004, was $865,860.95. The Company intends to satisfy its
obligations following closing of this Agreement and other related transactions.

 

 

Schedule 5.41 

Subsidiaries to the Company:

FDM AR-1, Inc. was dissolved on March 23, 2004

Fingerhut Fulfillment, Inc. remains as the only subsidiary to the Company.

 

			
	1	 	Schedules attached to this Section are intended to supplement the
disclosures made to the Stock Purchase Agreement dated February 24, 2004, and reflect only
those additional disclosures herein required occurring from February 24, 2004 to the
present..

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Current	 	 	Series A First Closing	 	 	Pro Forma Series A Second Closing & Redemption	 
	Fingerhut Direct Marketing, Inc.	 	 	 	 	 	 	 	 	 	Fully	 	 	 	 	 	 		 	 	 	 	 	 	Add'	 	 	Additional	 	 	 	 	 	 	Fully	 	 	 	 	 	 		 	 	 	 	 	 	Add'I	 	 	Additional	 	 	 	 	 	 	Fully	 	 	 	 	 	 	 
	Cap Table 10-27-04	 	Series A	 	 	Fully Diluted	 	 	Diluted Series A	 	 	Outstanding	 	 	Addtl Equity	 	 	Equity	 	 	Series A	 	 	Fully Diluted	 	 	Diluted	 	 	Pfd	 	 	Outstanding	 	 	Addtl Equity	 	 	Equity	 	 	Series A	 	 	Fully Diluted	 	 	Diluted	 	 	Pfd	 	 	Outstanding	 
	Series A	 	Investment	 	 	Shares	 	 	%	 	 	%	 	 	%	 	 	Investment	 	 	%	 	 	Shares	 	 	Shares	 	 	%	 	 	%	 	 	%	 	 	Investment	 	 	%	 	 	Shares	 	 	Shares	 	 	%	 	 	%	 	 	%	 
	 	 	 	 	 	 	 
	Series A ITwo Closinos)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Bain/Battery Investors
	 	$	32,500,000	 	 	 	309,200,109	 	 	 	39.0	%	 	 	51.8	%	 	 	462	%	 	$	2,587,065	 	 	 	51.7	%	 	 	24,612,926	 	 	 	333,813,035	 	 	 	39.7	%	 	 	51.8	%	 	 	46.6	%	 	$	6,990,464	 	 	 	52.8	%	 	 	66,506,178	 	 	 	400,319,213	 	 	 	42.4	%	 	 	53.6	%	 	 	48.9	%
	Petters
	 	$	27,500,000	 	 	 	261,630,861	 	 	 	33.0	%	 	 	43.8	%	 	 	39.1	%	 	$	2,189,055	 	 	 	43.8	%	 	 	20,826,322	 	 	 	282,457,183	 	 	 	33.6	%	 	 	43.8	%	 	 	39.4	%	 	$	5,915,008	 	 	 	44.6	%	 	 	56,274,458	 	 	 	338,731,641	 	 	 	35.9	%	 	 	45.3	%	 	 	41.4	%
	Smith
	 	$	300,000	 	 	 	2,854,155	 	 	 	0.4	%	 	 	0.5	%	 	 	0.4	%	 	$	23,881	 	 	 	0.5	%	 	 	227,196	 	 	 	3,081,351	 	 	 	0.4	%	 	 	0.5	%	 	 	0.4	%	 	$	64,527	 	 	 	0.5	%	 	 	613,903	 	 	 	3,695,254	 	 	 	0.4	%	 	 	0.5	%	 	 	0.5	%
	Deikel
	 	$	2,500,000	 	 	 	23,784,624	 	 	 	3.0	%	 	 	4.0	%	 	 	3.6	%	 	$	 	 	 	 	0.0	%	 	 	 	 	 	 	23,784,624	 	 	 	2.8	%	 	 	3.7	%	 	 	3.3	%	 	$	 	 	 	 	0.0	%	 	 	 	 	 	 	—	 	 	 	0.0	%	 	 	0.0	%	 	 	0.0	%
	 	 	 	 	 	 	 
	Subtotal
	 	$	62,800,000	 	 	 	597,469,749	 	 	 	75.4	%	 	 	100.0	%	 	 	89.3	%	 	$	4,800,000	 	 	 	96.0	%	 	 	45,666,444	 	 	 	643,136,193	 	 	 	76.6	%	 	 	99.7	%	 	 	89.7	%	 	$	12,970,000	 	 	 	97.9	%	 	 	123,394,539	 	 	 	742,746,108	 	 	 	78.7	%	 	 	99.4	%	 	 	90.7	%
	Citigroup (1)
	 	$	 	 	 	 	 	 	 	 	0.0	%	 	 	0.0	%	 	 	0.0	%	 	$	200,000	 	 	 	4.0	%	 	 	1,902,769	 	 	 	1,902,769	 	 	 	02	%	 	 	0.3	%	 	 	0.3	%	 	$	280,000	 	 	 	2.1	%	 	 	2,663,876	 	 	 	4,566,645	 	 	 	0.5	%	 	 	0.6	%	 	 	0.6	%
	 	 	 	 	 	 	 
	Series A Subtotal
	 	$	62,800,000	 	 	 	597,469,749	 	 	 	75.4	%	 	 	100.0	%	 	 	89.3	%	 	$	5,000,000	 	 	 	100.0	%	 	 	47,569,213	 	 	 	645,038,962	 	 	 	76.8	%	 	 	100.0	%	 	 	90.0	%	 	$	13,250,000	 	 	 	100.0	%	 	 	126,058,415	 	 	 	747,312,753	 	 	 	79.2	%	 	 	100.0	%	 	 	91.2	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Common Shares
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Petters
	 	 	 	 	 	 	32,758,621	 	 	 	4.1	%	 	 	 	 	 	 	4.9	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	32,758,621	 	 	 	3.9	%	 	 	 	 	 	 	4.6	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	32,758,621	 	 	 	3.5	%	 	 	 	 	 	 	4.0	%
	FAC/Deikel (2)
	 	 	 	 	 	 	28,850,862	 	 	 	3.6	%	 	 	 	 	 	 	4.3	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	28,850,862	 	 	 	3.4	%	 	 	 	 	 	 	4.0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	28,850,862	 	 	 	3.1	%	 	 	 	 	 	 	3.5	%
	RTB (3)
	 	 	 	 	 	 	1,321,552	 	 	 	02	%	 	 	 	 	 	 	02	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,321,552	 	 	 	0.2	%	 	 	 	 	 	 	0.2	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,321,552	 	 	 	0.1	%	 	 	 	 	 	 	0.2	%
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Outstanding Common
	 	 	 	 	 	 	62,931,035	 	 	 	7.9	%	 	 	 	 	 	 	9.4	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	62,931,035	 	 	 	7.5	%	 	 	 	 	 	 	8.8	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	62,931,035	 	 	 	6.7	%	 	 	 	 	 	 	7.7	%
	Existing Deikel Option
	 	 	 	 	 	 	3,983,333	 	 	 	0.5	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3,983,333	 	 	 	0.5	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3,983,333	 	 	 	0.4	%	 	 	 	 	 	 	 	 
	New Deikel Option
	 	 	 	 	 	 	16,103,658	 	 	 	2.0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	16,103,658	 	 	 	1.9	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	16,103,658	 	 	 	1.7	%	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Subtotal
	 	 	 	 	 	 	20,086,991	 	 	 	2.5	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	20,086,991	 	 	 	2.4	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	20,086,991	 	 	 	2.1	%	 	 	 	 	 	 	 	 
	Management Option Pool (4)
	 	 	 	 	 	 	63,378,157	 	 	 	8.0	%	 	 	 	 	 	 	1.3	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	63,378,157	 	 	 	7.5	%	 	 	 	 	 	 	12	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	63,378,157	 	 	 	6.7	%	 	 	 	 	 	 	1.1	%
	CifiGroup Warrant
	 	 	 	 	 	 	31,689,078	 	 	 	4.0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	31,689,078	 	 	 	3.8	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	31,689,078	 	 	 	3.4	%	 	 	 	 	 	 	 	 
	Additional CitiGroup Warrant
	 	 	 	 	 	 	 	 	 	 	0.0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0.0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,427,076	 	 	 	0.2	%	 	 	 	 	 	 	 	 
	Epsilon Warrant
	 	 	 	 	 	 	4,779,640	 	 	 	0.6	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4,779,640	 	 	 	0.6	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4,779,640	 	 	 	0.5	%	 	 	 	 	 	 	 	 
	CherryTree Warrant
	 	 	 	 	 	 	7,135,387	 	 	 	0.9	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	7,135,387	 	 	 	0.8	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	7,135,387	 	 	 	0.8	%	 	 	 	 	 	 	 	 
	Piper Warrant
	 	 	 	 	 	 	4,756,925	 	 	 	0.6	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4,756,925	 	 	 	0.6	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4,756,925	 	 	 	0.5	%	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Subtotal
	 	 	 	 	 	 	48,361,030	 	 	 	6.1	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	48,361,030	 	 	 	5.8	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	49,788,106	 	 	 	5.3	%	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Common Subtotal
	 	 	 	 	 	 	194,757,213	 	 	 	24.6	%	 	 	 	 	 	 	10.7	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	194,757,213	 	 	 	23.2	%	 	 	 	 	 	 	10.0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	196,184,289	 	 	 	20.8	%	 	 	 	 	 	 	8.8	%
	 
	 	Per Share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Per Share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Per Share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Total
	 	$	0.105110.1	 	 	 	792,226,962	 	 	 	100.0	%	 	 	 	 	 	 	100.0	%	 	$	0.105110I	 	 	 	 	 	 	 	 	 	 	 	839,796,175	 	 	 	100.0	%	 	 	 	 	 	 	100.0	%	 	$	0.105110 I	 	 	 	 	 	 	 	 	 	 	 	943,497,042	 	 	 	100.0	%	 	 	 	 	 	 	100.0	%
	 	 	 	 	 	 	 
	Total Bain/Battery Ownership
	 	 	 	 	 	 	 	 	 	 	39.0	%	 	 	 	 	 	 	462	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	39.7	%	 	 	 	 	 	 	46.6	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	42.4	%	 	 	 	 	 	 	48.9	%
	Total Petters Ownership
	 	 	 	 	 	 	 	 	 	 	38.6	%	 	 	 	 	 	 	45.7	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	38.9	%	 	 	 	 	 	 	45.6	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	40.6	%	 	 	 	 	 	 	46.8	%
	Total Deikel Ownership
	 	 	 	 	 	 	 	 	 	 	7.8	%	 	 	 	 	 	 	62	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	7.3	%	 	 	 	 	 	 	5.8	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4.0	%	 	 	 	 	 	 	2.2	%
	Total Citigroup Ownership
	 	 	 	 	 	 	 	 	 	 	4.0	%	 	 	 	 	 	 	0.0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4.0	%	 	 	 	 	 	 	0.3	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4.0	%	 	 	 	 	 	 	0.6	%

 

			
	(1)	 	Actually held by CIGPF I Corp.
	 
	(2)	 	Of FAC’s common ownership, 11,178,448 is allocable to Petters and 17,672,414 is
allocable to Deikel; Deikel’s common share to be transferred to family member.
	 
	(3)	 	Of RTB’s ownership, 226,000 is allocable to Petters
	 
	(4)	 	Subject to confirmation, approximately 8.7 million restricted shares have been issued under the 2003 Equity
Incentive Plan.

 

 

Attachment A

to

Schedule 5.9

Of the Stock Purchase Agreement

	1.	 	Office Lease, 4400 Baker Road, Minnetonka, MN, as disclosed in Schedule 5.5 (3);
	 
	2.	 	Building Lease, (Building No. 1) 11 McLeland Road, St. Cloud, as disclosed in Schedule 5.5
(5);
	 
	3.	 	Building Lease, (St. Cloud West Campus) 6250 Ridgewood Road, St. Cloud, MN, as disclosed in
Schedule 5.5 (4);
	 
	4.	 	Lease, (Photo Studio) 14005 13th Avenue North, Plymouth, MN, by and between The
Trustees Under the Will and of The Estate of James Campbell, Deceased and Fingerhut Direct
Marketing, Inc., dated November 14, 2003;
	 
	5.	 	Office Lease, 1250 Industrial Park Road, Eveleth Industrial Park, Eveleth, MN, by and between
Jon D. and Donna Tini and Fingerhut Direct Marketing, dated August 15, 2003;
	 
	6.	 	Equipment Lease Agreement (St Cloud Equipment) , by and between FAC Acquisition, LLC and
Fingerhut Direct Marketing, Inc., dated November 1, 2002;
	 
	7.	 	Rental Agreement (Photo Studio Equipment), by and between FAC Acquisition, LLC and Fingerhut
Direct Marketing, Inc., dated December 1, 2002.
	 
	8.	 	Financing Agreement, by and between CIT Group/Business Credit, Inc, Certain Financial
Institutions and Fingerhut Direct Marketing, Inc. dated April 9, 2003 and all Amendments (1-5)
thereto;
	 
	9.	 	All Loan Documents (as defined in the Financing Agreement) to the Financing Agreement dated
April 9, 2003;
	 
	10.	 	The Assignment and Transfer Agreement (Textron), by and between CIT Group/Business Credit,
Inc., Textron Financial Corporation and Fingerhut Direct Marketing, Inc. dated September 9,
2003;
	 
	11.	 	Subordinated Loan Agreement, by and Between Stafford Towne, Ltd and Bennington International
Holdings, Ltd. and Westford Special Situations Fun, Ltd. and Fingerhut Direct Marketing, dated
April 9, 2003;
	 
	12.	 	All Loan Documents (as defined in the Subordinated Loan Agreement) to the

 

 

	 	 	Subordinated Loan Agreement dated April 9, 2003;

	13.	 	NonQualified Stock Option Agreement Fingerhut Direct Marketing, Inc. 2003 Equity Incentive
Plan, as disclosed in Schedule 5.1(a) (1);
	 
	14.	 	NonQualified Stock Option Agreement Fingerhut Direct Marketing, Inc. 2003 Equity Incentive
Plan (Executive Team), as disclosed in Schedule 5.1(a) Attachment B;
	 
	15.	 	Incentive Stock Option Agreement Fingerhut Direct Marketing, Inc. 2003 Equity Incentive Plan,
as disclosed in Schedule 5.1(a) Attachment CB; ted April 9, 2003, by and between Fingerhut
Direct Marketing, Inc. and the following Fingerhut Direct Marketing, Inc. employees:
	 
	16.	 	2004 Supplemental Short Term Incentive Plan Fingerhut Direct Marketing, Inc., by and between
Fingerhut Direct Marketing, Inc. and Megan Kavanaugh, dated May 7, 2003;
	 
	17.	 	2004 Supplemental Short Term Incentive Plan Fingerhut Direct Marketing, Inc., by and between
Fingerhut Direct Marketing, Inc. Don Lynch, dated May 5, 2003;
	 
	18.	 	Shared Resources Agreement , by and between Petters Group Worldwide, LLC and Fingerhut Direct
Marketing, Inc. January 1, 2003;
	 
	19.	 	Trademark Sale and Assignment Agreement (Master Craft), by and between Fingerhut Direct
Marketing, Inc. and Petters Group Worldwide, LLC, dated November 1, 2003;
	 
	20.	 	Licensing Agreement (Master Craft), by and between Fingerhut Direct Marketing, Inc. and
Petters Group Worldwide, LLC, dated November 1, 2003;
	 
	21.	 	List Exchange/Rental Agreement (Figis), by and between Figs, Inc. and Fingerhut Direct
Marketing, Inc., dated May 1, 2003;
	 
	22.	 	Consumer Merchandise Continuity Program Agreement (Holsted), by and between Holsted
Marketing, Inc. and Fingerhut Direct Marketing, Inc., dated June 24, 2003;
	 
	23.	 	Release of Liability, by and between Holsted Marketing, Inc. and Fingerhut Direct Marketing,
Inc., dated April 7, 2003;
	 
	24.	 	Account Servicing Agreement (NCO), by and between Fingerhut Direct Marketing, Inc. and NCO
Financial Systems, Inc., dated August 1, 2003;

 

 

 

	25.	 	Letter agreement (Innovative Processing, Inc.), by and between Fingerhut Direct Marketing,
Inc. and Innovative Processing, Inc., dated August 12, 2003;
	 
	26.	 	Telecheck Checks by Phone Service Agreement (Verification Program), by and between Fingerhut
Direct Marketing, Inc. and TeleCheck Services, Inc., January 31, 2003;
	 
	27.	 	Clear Commerce Transactions Processing Services Agreement, by and between Fingerhut Direct
Marketing, Inc. and ClearCommerce Corporation, dated June 4, 2003;
	 
	28.	 	Outsourcing Services Agreement (TRIAdvantage), by and between TRIAdvantage Credit Services,
Inc. and Fingerhut Direct Marketing, Inc., dated January 7, 2003;
	 
	29.	 	Software License Agreement (CoreCard), by and between Fingerhut Direct Marketing, Inc. and
CoreCard Software, Inc., dated June 12, 2003;
	 
	30.	 	Agreement Between Equifax Information Services LLC and Fingerhut Direct Marketing, Inc.,
dated November 6, 2002;
	 
	31.	 	First Amendment To the Agreement by and Among Fingerhut Direct Marketing, Inc.. and Equifax
Information Services, LLC, dated December 31, 2002;
	 
	32.	 	Second Amendment to the Agreement by and Among Fingerhut Direct Marketing, Inc. and Equifax
Information Services, LLC, dated February 28, 2003;
	 
	33.	 	Equifax Information Services LLC Agreement for Service, by and between Fingerhut Direct
Marketing, Inc. and Equifax Information Services, LLC, dated April 1, 2003;
	 
	34.	 	Letter Agreement Data Processing Agreement , by and between Fingerhut Direct Marketing, Inc.
and Equifax Information Services, LLC, dated April 4, 2003;
	 
	35.	 	Exhibit C Project Addendum 2 to Letter Agreement for Data Processing Services Between Equifax
Information Services LLC (“Equifax”) and Fingerhut, Inc. (“Fingerhut”), by and between
Fingerhut Direct Marketing, Inc. and Equifax Information Services, LLC, dated May 27, 2003;
	 
	36.	 	Addendum to Master Servcies Agreement for Service Accurint Services Terms and Conditions, by
and between Equifax Information Services, LLC and Fingerhut Direct Marketing, Inc., dated June
30, 2003;
	 
	37.	 	Referral Agreement, by and between Equifax Consumer Services, Inc. and Fingerhut Direct
Marketing, Inc., dated July 15, 2003;

 

 

	38.	 	Amendment (Pricing Amendment — Equifax), by and between Equifax Information Services LLC and
Fingerhut Direct Marketing, Inc., dated October 2, 2003;
	 
	39.	 	Remittance Processing Services Agreement (REMITCO), by and between Remitco LLC and Fingerhut
Direct Marketing, Inc., effective March 1, 2003;
	 
	40.	 	Avaya Assignment Agreement, by and between Fingerhut Direct Marketing, Inc. and Avaya, Inc.
dated May 13, 2003;
	 
	41.	 	Avaya Channel Service Agreement, by and between Avaya, Inc. and Fingerhut Direct Marketing,
Inc., dated June 20, 2003;
	 
	42.	 	Amendment to Channel Service Agreement, by and between Fingerhut Direct Marketing, Inc. and
Avaya, Inc., dated August 8, 2003;
	 
	43.	 	Letter of Intent Fingerhut Inbound Sales & Customer Service (VCustomer, LOT expired,
agreement being negotiated), by and between Fingerhut Direct Marketing, Inc. and VCustomer
Corporation, dated February 4, 2003;

(CIT Bank Agreements 44-50)

	44.	 	Pledge of Collateral, by Fingerhut Direct Marketing, dated October 1, 2003;
	 
	45.	 	Assignment Agreement, by CIT Group/Business Credit, Inc., Fingerhut Direct Marketing, Inc.,
CIT Bank, and Fingerhut Fulfillment, Inc. dated October 1, 2003;
	 
	46.	 	Side Letter Agreement, dated October 1, 2003, by and between CIT Group/Business Credit, Inc.,
Fingerhut Direct Marketing, Inc., CIT Bank, and Fingerhut Fulfillment, Inc.;
	 
	47.	 	CIT Bank and Fingerhut Direct Marketing, Inc. Revolving Loan Product Program by and between
CIT Bank and Fingerhut Direct Marketing, dated July 22, 2003;
	 
	48.	 	First Amendment to Receivables Sale Agreement, by and between CIT Bank, Fingerhut Direct
Marketing, Inc., dated November 24, 2003;
	 
	49.	 	CIT Bank and Fingerhut Direct Marketing, Inc. Receivable Sales Agreement, by and between CIT
Bank and Fingerhut Direct Marketing, dated July 22, 2003;
	 
	50.	 	Amended and Restated Revolving Loan Product Program Agreement, by and between CIT Bank,
Fingerhut Direct Marketing, Inc. and FDM AR-1, Inc., dated November 24, 2003;

 

 

	51.	 	List Management Agreement, by and between Adrea Rubin Management, Inc. and Fingerhut Direct
Marketing, Inc., dated July 1, 2003;
	 
	52.	 	Letter Agreement, by and between Singer Direct, Inc. and Fingerhut Direct Marketing, Inc.,
dated August 6, 2003;
	 
	53.	 	Dealer Agreement, by and between Warranty Corporation of America, Inc. (WaCA) and Fingerhut
Direct Marketing, Inc., dated November 6, 2003;
	 
	54.	 	Sony Electronics Inc. Diversified Markets Direct Mail Sales Agreement, by and between Sony
Electronics, Inc. and Fingerhut Direct Marketing, Inc., dated December 1, 2002;
	 
	55.	 	Sony Electronics Inc. Diversified Markets Direct Mail Sales Agreement Direct Mail Sales
Agreement Amendment, by and between Sony Electronics, Inc. and Fingerhut Direct Marketing,
Inc., dated April 1, 2003;
	 
	56.	 	JVC Company of America Dealer Agreement, by and between JVC Company of America and Fingerhut
Direct Marketing, Inc., dated April 1, 2003;
	 
	57.	 	Toshiba America Consumer Products, Inc. Authorized Dealer Agreement for Special Market;
Accounts, by and between Toshiba America Consumer Products, Inc. and Fingerhut Direct
Marketing, Inc., dated March 3, 2003;
	 
	58.	 	Dealer Agreement, by and between Sharp Electronics Corporation and Fingerhut Direct
Marketing, Inc, dated February 12, 2003;
	 
	59.	 	Agreement (Prako), by and between Prako, Inc. and Fingerhut Direct Marketing, Inc., effective
March 1, 2003;
	 
	60.	 	DS Retail Technologies, Inc. Services Agreement for Online Publishing by and between DS
Retail Technologies, Inc. and Fingerhut Direct Marketing, Inc., dated July 22, 2003;
	 
	61.	 	Retainer/Project Agreement for Photographic Serivces (GEM), by and between GEM Group, Inc.
and Fingerhut Direct Marketing, Inc., effective January 1, 2003;
	 
	62.	 	Retainer/Project Agreement for Creative Services (GEM), by and between GEM Group, Inc. and
Fingerhut Direct Marketing, Inc., effective January 1, 2003;
	 
	63.	 	Letter Agreement (Unisourse- 2004 Proposal, Revision 1 and attached Mail Plan), by and
between Fingerhut Direct Marketing, Inc. and Unisource, dated December 12, 2003;

 

 

	64.	 	Marketforce Services Agreement (Coremetrics), by and between Fingerhut Direct Marketing, Inc.
and Coremetrics, Inc., dated June 30, 2003;
	 
	65.	 	Master Services Agreement (Wipro), by and between Wipro Spectramind Services Private Ltd. and
Fingerhut Direct Marketing, Inc., effective August 5, 2003;

(Microsoft Business Solutions Software Solutions 66-70):

	66.	 	Software Solution Purchase Agreement; by and between Great Plains Software O.C., Inc. and
Petters Company, Inc., dated October 25, 2002;
	 
	67.	 	License Agreement, by and between Great Plains Software O.C., Inc. and Petters Company, Inc.,
dated October 25, 2002;
	 
	68.	 	Addendum to License Agreement, by and between Great Plains Software O.C., Inc. and Petters
Company, Inc., dated October 25, 2002;
	 
	69.	 	Microsoft Services Agreement, by and between Fingerhut Direct Marketing, Inc. and Microsoft,
dated July 1, 2002;
	 
	70.	 	Microsoft Premier Support Services Description, by and between Fingerhut Direct Marketing,
Inc. and Microsoft, dated July 1, 2002;

(Premier Financial Solutions 71-72)

	71.	 	Acceptance Certificate by and between Fingerhut Direct Marketing, Inc. and Premier Financial
Corporation, dated August 1, 2003;
	 
	72.	 	Master Lease and Schedules No. 1 and No. 2 and Attachments, by and between Fignerhut Direct
Marketing, Inc. and Premier Financial Corporation, dated June 30, 2003;
	 
	73.	 	Group 1 Software Master License Agreement (9/02); by and between Group 1 Software, Inc. and
Fingerhut Direct Marketing, Inc., dated July 30, 2003;
	 
	74.	 	FedEx Custom Pricing Program Agreement (Agreement No. 108503), by and between FedEx Express
and Fingerhut Direct Marketing, Inc., dated August 26, 2003;
	 
	75.	 	Master Service Agreement, by and between Vestcom St. Louis, Inc. and Fingerhut Direct
Marketing, Inc., dated March 1, 2003;
	 
	76.	 	Agreement between Fingerhut Direct Marketing, Inc. and Cheetahmail, Inc., by and

 

 

	 	 	between Fingerhut Direct Marketing, Inc. and Cheetahmail, Inc, dated December 31, 2003;

 

 

	77.	 	Agency Collection Services Agreement, by and between Fingerhut Direct Marketing, Inc.
and Alliance One Receivables Management, Inc., dated January 15, 2004;
	 
	78.	 	Agency Collection Services Agreement, by and between Fingerhut Direct Marketing, Inc. and
J.C. Christensen and Associates, Inc., dated January 22, 2004;
	 
	79.	 	Postfuture Master Services Agreement, by and between Postfuture, Inc. and Fingerhut Direct
Marketing, Inc., dated February 3, 2003;
	 
	80.	 	Fair Isaac Master License and Service Agreement, by and between Fair Isaac Corporation and
Fingerhut Direct Marketing, Inc., dated April 21, 2003;
	 
	81.	 	Indemnity Agreement, by and between Federated Department Stores, Inc. and Fingerhut Direct
Marketing, Inc., dated May 21, 2003;
	 
	82.	 	Release of Liability, by and between Hoisted Marketing, Inc. and Fingerhut Direct Marketing,
Inc., dated April 7, 2003;
	 
	83.	 	General Indemnity Agreement, by and between Hartford Fire Insurance Company and Fingerhut
Direct Marketing, Inc., dated January 29, 2003;
	 
	84.	 	Agreement Regarding Customer List, by and between FAC Acquisition, LLC, Fingerhut Direct
Marketing, Inc. and CompuCredit Corporation, dated October 25, 2003;
	 
	85.	 	Amendment to Agreement Regarding Customer List, by and between FAC Acquisition, LLC,
Fingerhut Direct Marketing, Inc. and CompuCredit Corporation, dated May 8, 2003;
	 
	86.	 	Servicing Agreement, by and between Fingerhut Direct Marketing, Inc. and FDM-AR-1, Inc. and
Acorn Capital Group, LLC, dated November 24, 2003.
	 
	87.	 	Trademark Sale and Assignment Agreement (Master Craft) , by and between Fingerhut Direct
Marketing, Inc. and Petters Group Worldwide, LLC, dated November 1, 2003;
	 
	88.	 	Licensing Agreement (Master Craft), by and between Fingerhut Direct Marketing, Inc. and
Petters Group Worldwide, LLC, dated November 1, 2003;
	 
	89.	 	Trademark Agreement (St. Croix Colors), by and between Fingerhut Direct Marketing, Inc. and
St. Croix Park Falls, Ltd., dated December 8, 2003;

 

 

	90.	 	Cherry Tree / Fingerhut Engagement Letter, as disclosed in Schedule 5.1(b)(i) (4)(a);
	 
	91.	 	Engagement as Financial Advisor, as disclosed in Schedule 5.1(b)(1)(4)(b);
	 
	92.	 	Amendment to Engagement Agreement Dated September 19, 2003, as disclosed in Schedule
5.1(b)(1)(4)(c);
	 
	93.	 	Engagement as Financial Advisor, as disclosed in Schedule 5.1(b)(1)(4)(d);
	 
	94.	 	Consulting Agreement (with Attachment No. 1, Non-Disclosure Agreement), by and between
Fingerhut Direct Marketing, Inc. and Jackie Wells, dated September 9, 2003;
	 
	95.	 	Consulting Agreement (with Attachment No. 1, Non-Disclosure Agreement), by and between
Fingerhut Direct Marketing, Inc. and David Adams, dated September 17, 2003;
	 
	96.	 	Insurance Policies, by and between Fingerhut Direct Marketing, Inc. and General Casualty
Insurance Company:

	 	(a)	 	Comprehensive General Liability Insurance, effective date October 1, 2003;

	 	(b)	 	Commercial Umbrella Policy, effective date October 1, 2003;

	 	(c)	 	Commercial Automobile Policy, effective date October 1, 2003; (a) Business
Personal Property, effective date October 1, 2003;

	 	(e)	 	Contractor’s Equipment, effective date October 1, 2003;

	 	(f)	 	Comprehensive Transit Policy, effective date October 1, 2003;

	 	(g)	 	Employee Benefit Liability Coverage, effective date October 1, 2003;

	 	(h)	 	Workers Compensation, effective date October 1, 2003;

	 	(i)	 	Employers Liability, effective date October 1, 2003;

	 	(j)	 	Directors and Officers Liability Policy, effective date December 23, 2003

(Sweepstakes Giveaway Bonds 97-106)

 

 

	97.	 	Florida Game Surety Bond, Hartford Insurance Company, for 2003-2004
Fingerhut Sweepstakes, Bond#41BSBCB7580, effective April 4, 2003; State of New York —
Department of State Games of Chance Surety Bond, for 2003-2004 Fingerhut Sweepstakes; Bond
No.#41BSBCB8782,_ dated February 27, 2003;
	 
	98.	 	Florida Game Surety Bond, Hartford Insurance Company for 2003-2004 Fingerhut Sweepstakes,
Bond#41BSBCB7564, effective April 4, 2003;
	 
	99.	 	State of New York — Department of State Games of Chance Surety Bond for 2003-2004 Fingerhut
Sweepstakes, Bond #41BSBCB7510, dated February 27,
2003;
	 
	100.	 	Florida Game Surety Bond, for 2003-2004 Fingerhut Sweepstakes, bond #41BSBCB7549, effective
April 4, 2003;

	101.	 	State of New York — Department of State Games of Chance Surety Bond, for
2003-2004 Sweepstakes, Bond # 41BSBCB8338, dated February 27, 2003;
	 
	102.	 	Florida Game Surety Bond, for 2003-2004 Fingerhut Sweepstakes, Bond # 41BSBCB8344, effective
April 4, 2003;
	 
	103.	 	State of New York — Department of State Games of Chance Surety Bond#41BSBCB7436, dated
February 27, 2003;
	 
	104.	 	Florida Game Surety Bond, for 2003-2004 Fingerhut Sweepstakes, Bond#41BSBCB7538, effective
April 4, 2003;
	 
	105.	 	State of New York — Department of State Games of Chance Surety Bond, Bond # 41BSBCB7393,
dated February 27, 2003;

FFI, Inc. 

	102.	 	HighJump Service Agreement, by and between HighJump Software, Inc. and Petters Company, Inc.,
dated September 5, 2002;
	 
	103.	 	Addendum to Schedule A of HighJump Software End User Agreement and Software License
Agreement, by and between Highjump Software and Fingerhut Fulfillment, Inc., dated April 14,
2003;
	 
	104.	 	Consolidation and Distribution Services Agreement Between RR Donnelley Logistics and
Fingerhut Fulfillment, Inc., by and between RR Donnelley Logistics and
Fingerhut Fulfillment, Inc., dated January 21, 2003;
	 
	105.	 	Collective Bargaining Agreement Between Fingerhut Fulfillment, Inc. Located in St. Cloud in
the State of Minnesota and The Midwest Regional

 

 

Joint Board Union of Needletrades, Industrial and Textile Employees, dated 9-30-03; and
related agreements:

	 	(a)	 	Memorandum of Understanding, by and between Fingerhut Fulfillment, Inc. and
Union Of Needletrades, Industrial and Textile Employees;

	 	(b)	 	Contract Language for Participation in National Plan of Unite Textile Workers
Pension Fund, by and between Fingerhut Fulfillment, Inc. and Unite, dated 9-30-03;

	 	(c)	 	Supplemental Agreement (to the Collective Bargaining Agreement), by and between
Fingerhut Fulfillment, Inc. and Midwest Regional Joint Board of the Union of
Needletrades, Industrial and Textile Employees, dated October 22, 2003;

	 	(d)	 	March 24, 2003 Letter Agreement, by and between Fingerhut Direct Marketing,
Inc., UNITE Textile Pension Fund and Union of Needletrades, Industrial and Textile
Employees, dated 4-23-03.;

	105.	 	UNITE Local 978 Grievance Form, by and between Local 978 Pickers and Fingerhut Fulfillment,
Inc., dated November 11, 2003 and Resolution. ;

FDM AR-I, Inc.

	106.	 	Financing Agreement between FDM AR-1, Inc. and Acorn Capital Group, effective November 24,
2003;
	 
	107.	 	All ancillary Loan Documents (as defined in the Financing Agreement of November 24, 2003);
	 
	108.	 	Letter Agreement, by and between Acorn Capital Group and Fingerhut Direct Marketing, Inc.,
dated January 12, 2004
	 
	109.	 	Lease Schedule Number 1 (Attached Equipment Lease Agreement dated November 1, 2002), by and
between FAC Acquisition, LLC and Fingerhut Direct Marketing, dated February  , 2004;
	 
	110.	 	Lease Schedule Number 2 (Attached Equipment Lease Agreement dated November 1, 2002), by and
between FAC Acquisition, LLC and Fingerhut Direct Marketing, dated February  , 2004;-Rental
Agreement (Photo Studio Equipment), by and between FAC Acquisition, LLC and Fingerhut Direct
Marketing, Inc., dated December 1, 2002.

 

 

	111.	 	Change of Control Consent for Office Lease dated May 1, 2003 by and between FAC Acquisition,
LLC and Fingerhut Direct Marketing, Inc. , by FAC

Acquisitions LLC in favor of Fingerhut Direct Marketing, Inc., dated February 10, 2004;

	112.	 	Change of Control Consent for Building No. 1 Lease dated November 26, 2003 by and between FAC
Acquisition, LLC and Fingerhut Direct Marketing, Inc. , by FAC Acquisitions LLC in favor of
Fingerhut Direct Marketing, Inc., dated February 10, 2004;
	 
	113.	 	Change of Control Consent Building Lease for St. Cloud West Campus Facility dated November
26, 2003 by and between FAC Acquisition, LLC and Fingerhut Direct Marketing, Inc. , by FAC

Acquisitions LLC in favor of Fingerhut Direct Marketing, Inc., dated February 10, 2004;

	114.	 	Letter Engagement as Financial Advisor Agreement(Piper Jaffray), by and between Pipar Jaffray
and Fingerhut Direct Marketing, Inc. and Thomas J. Petters, dated February 10, 2004;
	 
	115.	 	Engagement as Financial Advisor Agreement (Piper Jaffray), by and between Pipar Jaffray and
Fingerhut Direct Marketing, Inc. and Thomas J. Petters, dated February 10, 2004;
	 
	116.	 	Letter Engagement as Financial Advisor Agreement (Cherry Tree), by and between Cherry Tree
Securities, LLC and Fingerhut Direct Marketing, Inc., dated February 10, 2004.

Contracts under negotiations:

	1.	 	Fulfillment Services Agreement, by and between Petters Company, Inc. and Fingerhut
Fulfillment, Inc.;
	 
	2.	 	Fulfillment Services Agreement, by and between ubid.com and Fingerhut Fulfillment,
Inc.;
	 
	4.	 	Fulfillment Services Agreement, by and between Petters Group Worldwide, LLC; Agreement of
Lease for Storage Space, by and between Fingerhut Fulfillment, Inc. and Thermo King;
	 
	5.	 	Transportation Agreement, by and between CH Robinson Worldwide, Inc. and Fingerhut
Fulfillment, Inc.;

 

 

	6.	 	Letter of Intent, by and between Visionary Systems, Inc. and Fingerhut Direct Marketing,
Inc.;
	 
	7.	 	Letter of Intent, by and between GEM Group and Fingerhut Direct Marketing, Inc.exv4w5

Exhibit 4.5

 

STOCK PURCHASE AGREEMENT

AMONG

FINGERHUT DIRECT MARKETING, INC.,

BAIN CAPITAL VENTURE FUND 2007, L.P.,

BATTERY VENTURES VI, L.P.,

PRUDENTIAL CAPITAL PARTNERS II, L.P.

AND

THE OTHER PURCHASERS NAMED ON SCHEDULE I HERETO

Dated as of May 15, 2008

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 

	1. Authorization of Securities
	 	 	1	 
	2. Sale and Purchase of the Securities
	 	 	1	 
	3. Closing; Payment of Purchase Price
	 	 	1	 
	4. Representations and Warranties of the Purchasers; Register of Securities;
Restrictions on Transfer
	 	 	2	 
	4.1. Organization
	 	 	2	 
	4.2. Validity
	 	 	2	 
	4.3. Brokers
	 	 	2	 
	4.4. Investment Representations and Warranties
	 	 	2	 
	4.5. Acquisition for Own Account
	 	 	2	 
	4.6. Ability to Protect Its Own Interests and Bear Economic Risks
	 	 	2	 
	4.7. Accredited Investor
	 	 	3	 
	4.8. Access to Information
	 	 	3	 
	4.9. Restricted Securities
	 	 	3	 
	4.10. No Public Market
	 	 	3	 
	5. Representations and Warranties by the Company
	 	 	3	 
	5.1. Capitalization
	 	 	3	 
	5.2. Due Issuance and Authorization of Capital Stock
	 	 	4	 
	5.3. Organization
	 	 	4	 
	5.4. Consents
	 	 	5	 
	5.5. Authorization; Enforcement
	 	 	5	 
	5.6. Issuance of Shares
	 	 	5	 
	5.7. No Conflicts
	 	 	5	 
	5.8. Material Contracts
	 	 	6	 
	5.9. Right of First Refusal; Stockholders Agreement; Voting and Registration
Rights
	 	 	6	 
	5.10. Previous Issuances Exempt
	 	 	6	 
	5.11. No Integrated Offering
	 	 	6	 
	5.12. Taxes
	 	 	7	 
	5.13. Compliance with Laws
	 	 	7	 
	5.14. Brokers
	 	 	7	 
	5.15. Related-Party Transactions
	 	 	7	 
	5.16. Disclosure
	 	 	8	 
	5.17. Absence of Changes
	 	 	8	 
	5.18. Historical Financial Statements
	 	 	9	 
	5.19. Title to Assets
	 	 	9	 
	5.20. Material Adverse Effect
	 	 	9	 
	5.21. No Proceedings
	 	 	10	 
	5.22. No Defaults
	 	 	10	 
	6. Conditions of Parties’ Obligations
	 	 	10	 
	6.1. Conditions of the Purchasers’ Obligations
	 	 	10	 
	6.2. Conditions of the Company’s Obligations
	 	 	12	 
	6.3. Conditions of Each Party’s Obligations
	 	 	12	 
	7 Transfer Restrictions; Restrictive Legend
	 	 	13	 

 

 

	 	 	 	 	 

	8. Registration, Transfer and Substitution of Certificates for Shares
	 	 	13	 
	8.1. Stock Register; Ownership of Securities
	 	 	13	 
	8.2. Replacement of Certificates
	 	 	14	 
	9. Definitions
	 	 	14	 
	10. Enforcement
	 	 	16	 
	10.1. Cumulative Remedies
	 	 	16	 
	10.2. No Implied Waiver
	 	 	16	 
	11. Miscellaneous
	 	 	16	 
	11.1. Waivers and Amendments
	 	 	16	 
	11.2. Notices
	 	 	17	 
	11.3. Indemnification
	 	 	18	 
	11.4. No Waivers
	 	 	18	 
	11.5. Successors and Assigns
	 	 	18	 
	11.6. Form D
	 	 	19	 
	11.7. Headings
	 	 	19	 
	11.8. Governing Law
	 	 	19	 
	11.9. Expenses
	 	 	19	 
	11.10. Jurisdiction
	 	 	20	 
	11.11. Waiver of Jury Trial
	 	 	20	 
	11.12. Exhibits and Schedules
	 	 	20	 
	11.13. Counterparts; Effectiveness
	 	 	20	 
	11.14. Entire Agreement
	 	 	21	 
	11.15. Severability
	 	 	21	 
	11.16. Exculpation Among Purchasers
	 	 	21	 
	11.17. Non-Disclosure
	 	 	21	 

 

 

LIST OF EXHIBITS

	 	 	 	 	 

	EXHIBIT

	 	A
	 	Form of Amended and Restated Certificate of Incorporation Historical
	EXHIBIT

	 	B
	 	Financial Statements
	EXHIBIT

	 	C
	 	Form of Opinion of Counsel
	EXHIBIT

	 	D
	 	Form of Investor Rights Agreement
	EXHIBIT

	 	E
	 	Form of Stockholders Agreement

 

 

STOCK PURCHASE AGREEMENT

          This STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into this 15th
day of May, 2008 (the “Purchase Date”) by and among Fingerhut Direct Marketing, Inc., a Delaware
corporation (the “Company”), Bain Capital Venture Fund 2007, L.P., a Delaware limited partnership
(“Bain Capital”), certain entities related to Bain Capital as listed on Schedule I attached
hereto, Battery Ventures VI, L.P., a Delaware limited partnership (“Battery Ventures”), certain
Affiliates of Battery Ventures listed on Schedule I attached hereto, certain entities
related to Prudential Capital Partners II, L.P., a Delaware limited partnership (“Prudential”), as
listed on Schedule I attached hereto, and the other purchasers listed on Schedule I
(each such purchaser, including Bain Capital, Battery Ventures and Prudential, is referred to
herein as a “Purchaser,” and such purchasers collectively are referred to herein as the
“Purchasers”). Certain terms used and not otherwise defined in the text of this Agreement are
defined in Section 9 hereof.

WITNESSETH

          WHEREAS, the Company desires to issue and to sell to the Purchasers, and the Purchasers desire
to purchase from the Company, the shares of Series B Preferred Stock (as hereinafter defined), all
in accordance with the terms and provisions of this Agreement;

          NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties
and covenants herein contained, the parties hereto hereby agree as follows:

     1. Authorization of Securities. The Company has authorized the issuance and sale
of up to 750,839,038 shares of its Series B Convertible Preferred Stock, par value $.00001 per
share (“Series B Preferred Stock”), which will be convertible into shares of the Company’s common
stock, par value $.00001 per share (the “Common Stock”), and which will have the rights,
preferences and privileges set forth in the form of Fourth Amended and Restated Certificate of
Incorporation attached hereto as Exhibit A (the “Amended and Restated Certificate of
Incorporation”). The shares of Common Stock into which the Series B Preferred Stock is convertible
are sometimes referred to herein as the “Conversion Shares” and the shares of Series B Preferred
Stock and the Conversion Shares are sometimes referred to herein collectively as the “Securities”.

     2. Sale and Purchase of the Securities. Upon the terms and subject to the
conditions herein contained, the Company agrees to sell to the Purchasers, and each Purchaser
agrees, severally and not jointly, to purchase from the Company, at the Closing (as defined below),
the number of shares of Series B Preferred Stock set forth in the column Shares Purchased opposite
such Purchaser’s name on Schedule I, for a purchase price per share of $.0745 (the
“Purchase Price”), payable in cash.

     3. Closing; Payment of Purchase Price. The closing (the “Closing”) with respect to
the transaction contemplated in Section 2 hereof shall take place at the offices of Ropes & Gray
LLP, One International Place, Boston, Massachusetts at 10:00 a.m. on May 15, 2008, or at such other
time and place as the Company and Purchasers may agree (the “Closing Date”). At the Closing, the
Company shall deliver to each Purchaser a certificate representing the Series B Preferred Stock
which such Purchaser is purchasing at the Closing, registered in the name of

 

 

such Purchaser, against delivery to the Company by such Purchaser of a wire transfer in the
amount of the Purchase Price therefor.

     4. Representations and Warranties of the Purchasers; Register of Securities:,
Restrictions on Transfer. Each Purchaser, severally as to itself and not jointly, represents
and warrants to the Company as of the Closing as follows:

          4.1. Organization. In the case of a Purchaser that is an entity, such Purchaser is
validly existing and in good standing under the laws of its jurisdiction of organization, and has
all corporate, limited liability company, or partnership power (as the case may be) and authority
to enter into this Agreement and the other Transaction Documents and instruments referred to herein
to which it is a party and to consummate the transactions contemplated hereby and thereby.

          4.2. Validity. The execution, delivery and performance of this Agreement, and the
other Transaction Documents and instruments referred to herein, in each case to which such
Purchaser is a party, and the consummation by such Purchaser of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary action on the part of such
Purchaser. This Agreement has been duly executed and delivered by such Purchaser, and the other
Transaction Documents and instruments referred to herein to which it is a party will be duly
executed and delivered by such Purchaser, and each such agreement constitutes or will constitute a
valid and binding obligation of such Purchaser enforceable against it in accordance with its terms.

          4.3. Brokers. There is no broker, investment banker, financial advisor, finder or
other person which has been retained by or is authorized to act on behalf of such Purchaser who
might be entitled to any fee or commission for which the Company will be liable in connection with
the execution of this Agreement and the consummation of the transactions contemplated hereby. Such
Purchaser has not become aware of the sale of Securities from any source other than the Company.

          4.4. Investment Representations and Warranties. Such Purchaser understands that
the issuance of the Securities to the Purchasers has not been, and will not be, registered under
the Securities Act.

          4.5. Acquisition for Own Account. Such Purchaser is acquiring the Securities for
its own account for investment and not with a view toward distribution in a manner which would
violate the Securities Act.

          4.6. Ability to Protect Its Own Interests and Bear Economic Risks. Such Purchaser,
by reason of the business and financial experience of its management, has the capacity to protect
its own interests in connection with the transactions contemplated by this Agreement. Such
Purchaser is able to bear the economic risk of an investment in the Securities and is able to
sustain a loss of all of its investment in the Securities without economic hardship if such a loss
should occur.

          4.7. Accredited Investor. Such Purchaser is an “accredited investor” as that term
is defined in Regulation D promulgated under the Securities Act.

 

 

          4.8. Access to Information. Such Purchaser has been given access to all Company
documents, records, and other information, and has had adequate opportunity to ask questions of,
and receive answers from, the Company’s officers, employees, agents, accountants, and
representatives concerning the Company’s business, operations, financial condition, assets,
liabilities, and all other matters relevant to its investment in the Securities. The
representations of Purchasers contained in this Section 4.8 shall not effect the ability of the
Purchasers to rely on the representations and warranties made by the Company pursuant to Section 5
of this Agreement.

          4.9. Restricted Securities.

          (a) Such Purchaser understands that the Securities will be characterized as
“restricted securities” under the federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering and that under
such laws and applicable regulations such Securities may be resold without registration
under the Securities Act only in certain limited circumstances.

          (b) Such Purchaser acknowledges that the Securities must be held indefinitely
unless subsequently registered under the Securities Act and under applicable state
securities laws or an exemption from such registration is available.

          (c) Such Purchaser is aware of the provisions of Rule 144 under the Securities Act
which permit limited resale of securities purchased in a private placement.

          4.10. No Public Market. Such Purchaser understands that no public market now
exists for any of the securities issued by the Company, that the Company has made no assurances
that a public market will ever exist for the Securities.

     5. Representations and Warranties by the Company. The Company represents and
warrants to each Purchaser as of the Closing as follows:

          5.1. Capitalization.

          (a) As of the date hereof, and after giving effect to the filing of the Amended and
Restated Certificate of Incorporation and the Closing, the authorized capital stock of the
Company consists of 2,592,550,586 shares of Common Stock, par value $0.00001 per share, and
1,542,577,050 shares of preferred stock (“Preferred Stock”), of which 791,738,012 shares are
designated Series A Convertible Preferred Stock, par value $0.00001 per share (“Series A
Preferred Stock”) and 750,839,038 shares will be designated Series B Preferred Stock. As of
the date hereof, and after giving effect to the filing of the Amended and Restated
Certificate of Incorporation and the Closing, there are outstanding 749,995,554 shares of
Series A Preferred Stock, 750,839,038 shares of Series B Preferred Stock and 162,245,335
shares of Common Stock. The Company has no other shares of capital stock authorized, issued
or outstanding. A capitalization table presenting the capitalization of the Company after
giving effect to the filing of the Amended and Restated Certificate of Incorporation and the
Closing is set forth on Schedule 5.1(a) hereto.

          (b) As of the date hereof, after giving effect to the transactions contemplated
hereby, (i) other than (A) outstanding warrants exercisable for 261,054,348

 

 

shares of Common Stock, (B) outstanding warrants exercisable for 41,742,458 shares of
Series A Preferred Stock and (C) outstanding options to purchase 33,866,783 shares of Common
Stock and, except as set forth in Schedule 5.1(a), there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exercisable or exchangeable for,
any shares of capital stock of the Company, or arrangements by which the Company is or may
become bound to issue additional shares of capital stock, nor are any such issuances or
arrangements contemplated other than pursuant to the Company’s stock option plan in
existence on the date hereof, the details of which are set forth on Schedule 5.1(a)
hereto; (ii) there are no agreements or arrangements under which the Company is or may
become obligated to register the sale of any of its securities under the Securities Act;
(iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any of its equity securities or any interests therein or to pay any
dividend or make any distribution in respect thereof, except as required by the Amended and
Restated Certificate of Incorporation; and (iv) except for 8,402,959 shares of Common Stock
reserved for issuance under the Company’s 2003 and 2005 Option Plans and 152,312,347
additional supplemental shares of Common Stock reserved for issuance under these or other
incentive plans, the Company has not reserved any shares of capital stock for issuance
pursuant to any stock option plan or similar arrangement.

          5.2. Due Issuance and Authorization of Capital Stock. All of the outstanding
shares of capital stock of the Company have been validly issued and are fully paid and
non-assessable. The sale and delivery of the shares of Series B Preferred Stock to each Purchaser
pursuant to the terms hereof and the issuance of the Conversion Shares upon conversion of the
shares of Series B Preferred Stock will vest in the holder thereof legal and valid title to such
Securities, free and clear of any lien, claim, judgment, charge, mortgage, security interest,
pledge, escrow, equity or other encumbrance (collectively, “Encumbrances”) other than any
Encumbrances created by such Purchaser.

          5.3. Organization. The Company (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, (b) is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction where the nature of
the property owned or leased by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified would not have a Material
Adverse Effect on the Company, (c) has its principal place of business and chief executive office
in the State of Minnesota and (d) has all requisite corporate power and authority to own or lease
and operate its assets and carry on its business as presently being conducted and proposed to be
conducted.

          5.4. Consents. Neither the execution, delivery or performance of the Amended and
Restated Certificate of Incorporation, this Agreement or the other Transaction Documents by the
Company, nor the consummation by it of the obligations and transactions contemplated hereby or
thereby (including, without limitation, the issuance, the reservation for issuance and the delivery
of the Securities) requires any consent of, authorization by, exemption from, filing with or notice
to any Governmental Entity or any other Person, other than (a) existing security holders of the
Company which shall have been obtained; (b) the filings required to comply with the Company’s
registration obligations under the Investor Rights Agreement, and (c) the filing of the Amended and
Restated Certificate of Incorporation with the Secretary of State of Delaware.

 

 

          5.5. Authorization; Enforcement. The Company has all requisite corporate power and
has taken all necessary corporate action required for the due authorization, execution, delivery
and performance by the Company of this Agreement and the other Transaction Documents and the
consummation of the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Securities). The execution, delivery and performance by the Company of each of
the Transaction Documents, the execution and filing of the Amended and Restated Certificate of
Incorporation, and the consummation by the Company of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary corporate action on the part of the Company.
The Company has taken all actions under its certificate of incorporation and its By-laws (the
“Charter Documents”) as may be necessary or advisable to provide the Purchasers with the rights
hereby contemplated.

          5.6. Issuance of Shares. The Securities have been duly authorized and a sufficient
number of shares of authorized but unissued shares of Common Stock have been reserved for issuance
upon conversion of the Series B Preferred Stock, and upon such issuance or conversion in accordance
with the terms of this Agreement or the Amended and Restated Certificate of Incorporation, as the
case may be, all such Securities will be duly authorized, validly issued, fully paid and
non-assessable, and free from all taxes and Encumbrances, and will not be subject to preemptive
rights or other similar rights of stockholders of the Company that have not been waived, and will
not impose personal liability upon the holder thereof.

          5.7. No Conflicts. The execution, delivery and performance of each of the
Transaction Documents, the execution and filing of the Amended and Restated Certificate of
Incorporation, and the consummation of the transactions contemplated hereby and thereby (including,
without limitation, the issuance and reservation for issuance, as applicable, of the Series B
Preferred Shares and the Conversion Shares) will not (a) result in a violation of the Charter
Documents, (b) conflict with or result in the breach of the terms, conditions or provisions of or
constitute a default (or an event which with notice or lapse of time or both would become a
default) under, or give rise to any right of termination, acceleration or cancellation under, any
agreement, lease, mortgage, license, indenture, instrument or other contract to which the Company
or any Subsidiary is a party, (c) result in a violation of any law, rule, regulation, order,
judgment or decree (including, without limitation, U.S. federal and state securities laws and
regulations) applicable to the Company or any Subsidiary or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (d) result in the creation of any Encumbrance
upon any of their assets. The Company is not in violation of its Charter Documents, and neither the
Company nor any of its Subsidiaries is in default (and no event has occurred which, with notice or
lapse of time or both, would cause the Company to be in default) under, nor has there occurred any
event giving others (with notice or lapse of time or both) any rights of termination, amendment,
acceleration or cancellation of, any material agreement, indenture or instrument to which the
Company or any Subsidiary is a party. The business of the Company is not being conducted in
violation in any material respect of any law, ordinance or regulation of any Governmental Entity.

          5.8. Material Contracts. Schedule 5.8 contains a true, correct and complete list
of all the Material Contracts in effect on the Closing Date. All such Material Contracts are in
full force and effect and no defaults currently exist thereunder (other than as described in
Schedule 5.8).

 

 

          5.9. Right of First Refusal; Stockholders Agreement; Voting and Registration
Rights. Except with respect to any rights granted to the Purchasers pursuant to the terms of
the Amended and Restated Certificate of Incorporation, this Agreement or the other Transaction
Documents or the transactions contemplated hereby or thereby, no party has any right of first
refusal, right of first offer, right of co-sale, preemptive right or other similar right regarding
the Company’s securities. There are no provisions of the Charter Documents, no agreements to which
the Company is a party and no agreements by which the Company is bound other than the Amended and
Restated Certificate of Incorporation, this Agreement or the other Transaction Documents, which (a)
may affect or restrict the voting rights of the Purchasers with respect to the Securities in their
capacity as stockholders of the Company, (b) restrict the ability of the Purchasers, or any
successor thereto or assignee or transferee thereof, to transfer the Securities, (c) would
adversely affect the Company’s or any Purchaser’s right or ability to consummate the transactions
contemplated by this Agreement or comply with the terms of the other Transaction Documents or the
Amended and Restated Certificate of Incorporation and the transactions contemplated hereby or
thereby, (d) require the vote of more than a majority of the Company’s issued and outstanding
Common Stock, voting together as a single class, to take or prevent any corporate action, other
than those matters requiring a class vote under Delaware law, or (e) entitle any party to nominate
or elect any director of the Company or require any of the Company’s stockholders to vote for any
such nominee or other person as a director of the Company in each case.

          5.10. Previous Issuances Exempt. All shares of capital stock and other securities
issued by the Company prior to the Closing Date have been issued in transactions exempt from the
registration requirements under the Securities Act and all applicable state securities or “blue
sky” laws, and in compliance with all applicable corporate laws. The Company has not violated the
Securities Act or any applicable state securities or “blue sky” laws in connection with the
issuance of any shares of capital stock or other securities prior to the Closing Date. The Company
has not offered any of its capital stock, or any other securities, for sale to, or solicited any
offers to buy any of the foregoing from the Company, or otherwise approached or negotiated with any
other person in respect thereof, in such a manner as to require registration under the Securities
Act.

          5.11. No Integrated Offering. Neither the Company, nor any of its Affiliates or
any other person acting on the Company’s behalf, has directly or indirectly engaged in any form of
general solicitation or general advertising with respect to the Securities nor have any of such
persons made any offers or sales of any security or solicited any offers to buy any security under
circumstances that would require registration of the Securities under the Securities Act or cause
this offering of Securities to be integrated with any prior offering of securities of the Company
for purposes of the Securities Act. The Company has only offered the Securities to a limited number
of Persons that it reasonably believes to be “accredited investors” as that term is defined in
Regulation D promulgated under the Securities Act.

          5.12. Taxes. The Company and each of its Subsidiaries have properly filed all
federal, foreign, state, local, and other tax returns and reports which are required to be filed,
which returns and reports were properly completed and are true and correct in all material
respects, and all taxes, interest, and penalties due and owing have been timely paid, except where
any failure with respect thereto would not have a Material Adverse Effect. Except as would not be
material in relation to the business, operations, properties, assets, condition (financial or

 

 

otherwise) or prospects of the Company and its Subsidiaries taken as a whole, there are no
outstanding waivers or extensions of time with respect to the assessment or audit of any tax or tax
return of the Company or any Subsidiary, or claims now pending or matters under discussion with any
taxing authority in respect of any tax of the Company or any Subsidiary.

          5.13. Compliance with Laws. The Company and each of its Subsidiaries have, and are
in material compliance with the terms of, all franchises, permits, licenses and other rights and
privileges necessary to conduct the Company’s present and proposed business and are in compliance
with and have not violated, in any material respect, any applicable provisions of any laws,
statutes, ordinances or regulations or the terms of any judgments, orders, decrees, injunctions or
writs.

          5.14. Brokers. The Company has not dealt with any broker, finder, commission
agent, placement agent or arranger in connection with the sale of the Securities and the
transactions contemplated by this Agreement, and the Company is not under any obligation to pay any
broker’s fee or commission in connection with such transactions. Neither the Company nor any of its
affiliates nor any other person acting on its behalf (other than its officers acting in such
capacity) has solicited offers for, or offered or sold, the Securities.

          5.15. Related-Party Transactions. Except as set forth on Schedule 5.15 or
as described in the notes to the Historical Financial Statements, no employee, officer, director or
stockholder of the Company or any Subsidiary or member of his or her immediate family is currently
indebted to the Company or any Subsidiary, nor is the Company or any Subsidiary indebted (or
committed to make loans or extend or guarantee credit) to any of such individuals, except for
amounts incurred in the ordinary course of business for expense reimbursement and accrued payroll.
Except as set forth on Schedule 5.15 or as reflected in the notes to the Historical
Financial Statements, as of the date hereof none of such persons has any direct or indirect
ownership interest in any firm or corporation with which the Company or any Subsidiary is
affiliated or with which the Company or any Subsidiary has a business relationship, or any firm or
corporation that competes with the Company except that employees, officers, or directors of the
Company or any Subsidiary and members of their immediate families may own stock in an amount not to
exceed 1% of the outstanding capital stock of publicly traded companies that may compete with the
Company. As of the date hereof, except as set forth on Schedule 5.15 or as described in the
notes to Historical Financial Statements, no employee, director, officer or stockholder of the
Company or any Subsidiary and no member of the immediate family of any such employee, officer,
director or stockholder is directly or indirectly interested in any contract with the Company or
any Subsidiary.

          5.16. Disclosure. (i) No representation or warranty by the Company contained in
this Agreement, (ii) no representation, warranty or statement by the Company contained in any
certificate or schedule furnished at the Closing to the Purchasers pursuant to this Agreement, and
(iii) no other statement made by the Company to the Purchasers in this Agreement, including the
Schedules hereto and any certificates delivered hereunder, contains any untrue statement by the
Company of a material fact or omits to state any material fact necessary to make any statement
herein or therein not misleading. All information relating to or concerning the Company and the
Subsidiaries, set forth in this Agreement, including, without limitation, in the Schedules hereto
and any certificates delivered hereunder, is true and correct in all material respects and the
Company has not omitted to state any material fact necessary in order to make the statements

 

 

made herein or therein, in light of the circumstances under which they were made, not
misleading. Except for those matters that have been disclosed to the Purchasers, to the Company’s
knowledge after reasonable investigation, there are no facts in existence as of the date of this
Agreement related to the Company’s business which have had or are reasonably likely to have a
Material Adverse Effect and which, if learned by the Purchasers, might reasonably be expected to
materially diminish the Purchasers’ evaluation of the worth or profitability of the technology or
the business or which, if learned by the Purchasers, might reasonably be expected to deter the
Purchasers from completing the transactions contemplated by this Agreement on the terms of this
Agreement; provided, however, that the foregoing shall not apply to general economic
conditions and matters generally affecting the markets in which the Company conducts its business.

          5.17. Absence of Changes. Except (i) in each case with respect to events which
have been disclosed to the Purchasers, (ii) transactions in the ordinary course of business, or
(iii) such events occurring on the Closing Date, since February 1, 2008, the Company has operated
its business in the ordinary course of business, and without limiting the generality of the
foregoing, there has not been, to the knowledge of the Chief Executive Officer or General Counsel
of the Company:

          (1) any Material Adverse Effect or any event or events that individually or
in the aggregate would have a Material Adverse Effect;

          (2) any damage, destruction or loss (whether or not covered by insurance)
materially and adversely affecting the properties or assets of the Company or any
Subsidiary;

          (4) any sale, assignment or transfer, or any agreement to sell, assign or
transfer, any material asset, liability, property, obligation or right of the
Company or any Subsidiary to any Person, including, without limitation, the
Purchasers and their respective Affiliates; any obligation or liability incurred, or
any loans or advances made, by the Company or any Subsidiary to any of its
Affiliates, other than expenses allowable in the ordinary course of business of the
Company;

          (5) any purchase or acquisition of, or agreement, plan or arrangement to
purchase or acquire, any material property, rights or assets;

          (6) any assignment, lease or other transfer or disposition, or any other
agreement or arrangement therefor by the Company or any Subsidiary of any property
or equipment having a value in excess of $100,000 except in the ordinary course of
business;

          (7) any waiver of any material rights or claims of the Company or any
Subsidiary;

          (8) any agreement or commitment by the Company or any Subsidiary to do any
of the foregoing or any transaction by the Company or any Subsidiary; or

 

 

          (9) any lien upon, or adversely affecting, any material property or other
assets of the Company or any Subsidiary.

          5.18. Historical Financial Statements. The Company has provided to the Purchasers
the financial statements attached as Exhibit B (the “Historical Financial Statements”). The
Historical Financial Statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position, on a consolidated basis, of the Persons described in
such financial statements as at the respective dates thereof and the results of operations and cash
flows, on a consolidated basis, of the entities described therein for each of the periods then
ended, subject, in the case of any such unaudited financial statements, to changes resulting from
audit and normal year end adjustments. As of the Closing Date, the Company and its Subsidiaries do
not have any contingent liability or liability for taxes, long term lease or unusual forward or
long term commitment that is not reflected in the Historical Financial Statements or the notes
thereto and which in any such case is material in relation to the business, operations, properties,
assets, condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken
as a whole.

          5.19. Title to Assets. The Company had, as of the dates specified therein, good
and valid title to all of its assets reflected in the Historical Financial Statements referred to
in Section 5.18. Schedule 5.19, hereto, correctly sets forth each agreement pursuant to
which the Company has granted a lien on its assets as of the Closing Date (after giving effect to
the execution, amendment, or termination of certain securitization documents and credit documents
at the Closing).

          5.20. Material Adverse Effect. Since April 10, 2008, no event, circumstance or
change has occurred that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect with respect to the Company.

          5.21. No Proceedings. There are no proceedings or investigations pending or, to
the best knowledge of the Company, threatened against the Company before any Governmental Entity
seeking to prevent the consummation of any of the transactions contemplated by this Agreement, the
Amended and Restated Certificate of Incorporation, or the Transaction Documents or seeking any
determination or ruling that would reasonably be expected to have a material and adverse effect on
the performance by the Company of its obligations under this Agreement, the Amended and Restated
Certificate of Incorporation, or the Transaction Documents.

          5.22. No Defaults. The Company and its Subsidiaries are not in default in the
performance, observance or fulfillment of any of the obligations, covenants or conditions contained
in any of its contractual obligations, and no condition exists which, with the giving of notice or
the lapse of time or both, could constitute such a default, except where the consequences, direct
or indirect, of such default or defaults, if any, could not reasonably be expected to have a
Material Adverse Effect with respect to the Company.

     6. Conditions of Parties’ Obligations.

          6.1. Conditions of the Purchasers’ Obligations. The obligations of each of the
Purchasers under Section 2 hereof are subject to the fulfillment prior to or on the Closing Date of

 

 

all of the following conditions, any of which may be waived in whole or in part by such
Purchaser.

          (a) Representations and Warranties. The representations and warranties of
the Company contained in this Agreement and in any certificate, if any, or other writing, if
any, delivered by the Company pursuant hereto shall be true and correct in all respects on
and as of the Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date.

          (b) Performance. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are required to be
performed or complied with it on or before the Closing.

          (c) Amended and Restated Certificate of Incorporation. The Amended and
Restated Certificate of Incorporation shall have been filed with the Secretary of State of
the State of Delaware, and the Purchasers shall have received confirmation from the
Secretary of State of the State of Delaware reasonably satisfactory to them that such filing
has occurred.

          (d) Qualification Under State Securities Laws. All registrations,
qualifications, permits and approvals, if any, required under applicable state securities
laws shall have been obtained for the lawful execution, delivery and performance of this
Agreement or the other Transaction Documents, including without limitation the offer and
sale of the Securities, as such requirements have been certified in the legal opinion
delivered pursuant to Section 6(g)(1) hereof

          (e) Investor Rights Agreement. The Company shall have executed and
delivered the Investor Rights Agreement.

          (f) Stockholders Agreement. The Stockholders Agreement shall have been
executed and delivered by the Company, Investors and the Common Stockholders (as defined in
the Stockholders Agreement).

          (g) Supporting Documents. The Purchasers at the Closing shall have received
the following:

          (1) a favorable opinion from Skadden, Arps, Slate, Meagher & Flom LLP,
counsel to the Company, dated as of the Closing Date (the form of which opinion will
be attached to this Agreement as Exhibit C);

          (2) Copies of resolutions of the Board of Directors of the Company,
certified by the Secretary of the Company, authorizing and approving the filing of
the Amended and Restated Certificate of Incorporation, the execution, delivery and
performance of the Transaction Documents and all other documents and instruments to
be delivered pursuant hereto and thereto;

          (3) Copies of resolutions of the stockholders of the Company, certified by
the Secretary of the Company, authorizing and approving the filing of the Amended
and Restated Certificate of Incorporation and the transactions

 

 

contemplated thereby and by the Transaction Documents that are subject to
stockholder approval; and

          (4) A certificate of incumbency executed by the Secretary of the Company
(A) certifying the names, titles and signatures of the officers authorized to
execute the documents referred to in subparagraphs (2) and (3) above and (B) further
certifying that the Amended and Restated Certificate of Incorporation delivered to
the Purchasers at the time of the execution of this Agreement has been validly
adopted and has not been amended or modified.

          (h) Consents and Waivers. Except as set forth in Schedule 6.1(h),
the Company shall have obtained all consents or waivers necessary to execute and perform its
obligations under the Amended and Restated Certificate of Incorporation, this Agreement and
the other Transaction Documents, to issue the Series B Preferred Stock and the Conversion
Shares, and to carry out the transactions contemplated hereby and thereby. All corporate and
other action and governmental filings necessary to effectuate the terms of the Amended and
Restated Certificate of Incorporation, this Agreement, the other Transaction Documents, the
Series B Preferred Stock and the Conversion Shares, and other agreements and instruments
executed and delivered by the Company in connection herewith shall have been made or taken.

          (i) Satisfaction of Obligations. Each of the other Purchasers shall have
simultaneously complied with their obligations under Section 2 hereof

          (j) Stock Option Plan. The Company has reserved for issuance an aggregate
277,792,731 shares of Common Stock under its equity incentive plans (which includes
152,312,347 supplemental shares that have not yet been ascribed to a specific plan),
including, as of the date hereof, 83,210,642 shares outstanding, 33,866,783 shares subject
to outstanding options that have not yet been exercised and 160,715,306 shares available for
future grants.

          (k) (k) Purchaser Expenses. The Company shall have paid, in accordance
with Section 11.9, the expenses of Bain Capital and Battery Ventures, and the fees, expenses
and disbursements of Ropes & Gray LLP, as counsel to Bain Capital and Battery Ventures.

          (l) Board of Directors. The size of the Board of Directors of the Company
shall have been set at eight (8) directors.

          (m) Material Adverse Change; Market Conditions. (i) The Company shall not
have suffered any Material Adverse Effect with respect to its business, financial condition,
results of operations, assets, liabilities or prospects; and (ii) there shall have been no
material adverse change in general market conditions as determined in the reasonable
discretion of Bain Capital and Battery Ventures.

          (n) On the Closing Date, Fingerhut Receivables I, LLC, shall have entered into the
Revolving Credit Facility as defined in, and on terms and conditions substantially identical
to those set forth in, the Commitment Letter dated April 10, 2008,

 

 

among the Company, Goldman Sachs Specialty Lending Group, L.P. and Fortress Credit
Corp. (the “Credit Facility”).

          (o) Compliance Certificates. The Company shall have delivered to the
Purchasers a Compliance Certificate, executed by the President of the Company, dated as of
the Closing Date to the effect that the conditions specified in subsections (a) through (f),
(h), (j) through (1), (m)(i) and (n) of this Section 6.1 have been satisfied.

     6.2. Conditions of the Company’s Obligations. The obligations of the Company under
Section 2 hereof are subject to the fulfillment prior to or on the Closing Date of all of the
following conditions, any of which may be waived in whole or in part by the Company.

          (a) Covenants; Representations and Warranties. (i) Each of the Purchasers
at the Closing Date shall have performed in all material respects all of its obligations
hereunder required to be performed by it at or prior to the Closing Date and (ii) the
representations and warranties of each of the Purchasers at the Closing Date contained in
this Agreement shall be true and correct in all material respects at and as of the Closing
Date as if made at and as of the Closing Date (except to the extent expressly made as of an
earlier date, in which case as of such earlier date).

          (b) Investor Rights Agreement, Each Purchaser shall have executed and
delivered the Investor Rights Agreement.

          (c) Stockholders Agreement. Each Purchaser shall have executed and
delivered the Stockholders Agreement.

     6.3. Conditions of Each Party’s Obligations. The respective obligations of each
party to consummate the transactions contemplated hereunder are subject to the parties being
reasonably satisfied as to the absence of (a) litigation challenging or seeking damages in
connection with the transactions contemplated by this Agreement, any of the other Transaction
Documents or the Amended and Restated Certificate of Incorporation and (b) any statute, rule,
regulation, injunction, order or decree, enacted, enforced, promulgated, entered, issued or deemed
applicable to this Agreement or the transactions contemplated hereby (or in the case of any
statute, rule or regulation, awaiting signature or reasonably expected to become law), by any
court, government or governmental authority or agency or legislative body, domestic, foreign or
supranational, that would, or would reasonably be expected to, prohibit or enjoin the transactions
contemplated by this Agreement.

     7. Transfer Restrictions; Restrictive Legend. Each Purchaser understands that the
Company may, as a condition to the transfer of any of the Securities, require that the request for
transfer be accompanied by an opinion of counsel reasonably satisfactory to the Company, to the
effect that the proposed transfer does not result in a violation of the Securities Act, unless such
transfer is covered by an effective registration statement or by Rule 144 or Rule 144A under the
Securities Act; provided, however, that no transfer by any Purchaser to any of its
Affiliates shall require an opinion of counsel; provided, further, that such Affiliate in
each case agrees to be subject to the restrictions in this Section 7. It is understood that the
certificates evidencing the Securities may bear substantially the following legends:

 

 

     “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT.”

	 	 	The Company shall be obligated to reissue promptly unlegended certificates at the request of any
holder thereof if the holder shall have obtained an opinion of counsel reasonably acceptable to the
Company to the effect that, or the Company is otherwise satisfied that, the securities proposed to
be disposed of may lawfully be so disposed of without registration, qualification or legend.

     8. Registration, Transfer and Substitution of Certificates for Shares.

          8.1. Stock Register; Ownership of Securities. The Company will keep at its
principal office a register in which the Company will provide for the registration of transfers of
the Securities. The Company may treat the Person in whose name any of the Securities are registered
on such register as the owner thereof and the Company shall not be affected by any notice to the
contrary. All references in this Agreement to a “holder” of any Securities shall mean the Person in
whose name such Securities are at the time registered on such register.

          8.2. Replacement of Certificates. Upon receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of any certificate representing
Securities, and, in the case of any such loss, theft or destruction, upon delivery of an indemnity
agreement reasonably satisfactory to the Company or, in the case of any such mutilation, upon
surrender of such certificate for cancellation at the office of the Company maintained pursuant to
Section 8.1 hereof, the Company at its expense will execute and deliver, in lieu thereof, a new
certificate representing Securities of like tenor.

     9. Definitions. Unless the context otherwise requires, the terms defined in this
Section 9 shall have the meanings specified for all purposes of this Agreement.

Except as otherwise expressly provided, all accounting terms used in this Agreement, whether or not
defined in this Section 9, shall be construed in accordance with GAAP. If and so long as the
Company has one or more Subsidiaries, such accounting terms shall be determined on a consolidated
basis for the Company and each of its Subsidiaries, and the financial statements and other
financial information to be furnished by the Company pursuant to this Agreement shall be
consolidated and presented with consolidating financial statements of the Company and each of its
Subsidiaries.

          “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act; provided, that with respect to Bain Capital, the term
Affiliate shall be deemed to include any Person under common management with Bain Capital.

               “Agreement” means this Agreement.

 

 

          “Amended and Restated Certificate of Incorporation” has the meaning assigned to it in Section
1 hereof.

          “Bain Capital” has the meaning assigned to it in the introductory paragraph of this Agreement.

          “Battery Ventures” has the meaning assigned to it in the introductory paragraph of this
Agreement.

          “Charter Documents” has the meaning assigned to it in Section 5.5 hereof.

          “Closing Date” has the meaning assigned to it in Section 3 hereof. “Common Stock” has the
meaning assigned to it in Section 1 hereof

          “Conversion Shares” means the shares of Common Stock issuable upon conversion of the Series B
Preferred Stock.

          “Encumbrances” has the meaning assigned to it in Section 5.2 hereof “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

          “GAAP” means U.S. generally accepted accounting principles consistently applied.

          “Governmental Entity” means any national, federal, state, municipal, local, territorial,
foreign or other government or any department, commission, board, bureau, agency, regulatory
authority or instrumentality thereof, or any court, judicial, administrative or arbitral body or
public or private tribunal.

          “Investor Rights Agreement” means the Amended and Restated Investor Rights Agreement in the
form attached hereto as Exhibit D.

          “Material Adverse Effect” means any (i) adverse effect on the issuance or validity of the
Securities or the transactions contemplated hereby or on the enforceability or validity of the
Amended and Restated Certificate of Incorporation or on the ability of the Company to perform its
obligations under this Agreement or the other Transaction Documents, or (ii) material adverse
effect on the prospects or condition (financial or otherwise), properties, assets, liabilities,
business or operations of the Company and its Subsidiaries taken as a whole.

          “Material Contract” shall mean any contract or other arrangement to which any member of the
Company or its Subsidiaries is a party (other than the Credit Documents or Related Agreements as
defined in the Credit Facility) for which breach, nonperformance, cancellation or failure to renew
would reasonably be expected to have a Material Adverse Effect.

          “Person” means and includes all natural persons, corporations, business trusts, associations,
companies, partnerships, joint ventures, limited liability companies and other entities and
governments and agencies and political subdivisions.

          “Purchase Price” has the meaning assigned it in Section 2 hereof.

          “Purchaser” and “Purchasers” have the meaning assigned to them in the introductory paragraph
of this Agreement and shall include any Affiliates of the Purchasers.

 

 

          “Schedule” means the Disclosure Schedules of the Company, referred to in, and delivered
pursuant to, this Agreement.

          “SEC” means the Securities and Exchange Commission.

          “Securities” has the meaning assigned to it in Section 1 hereof. “Securities Act” or “Act”
means the Securities Act of 1933, as amended.

          “Series A Preferred Stock” has the meaning assigned to such term in Section 5.1(a).

          “Series B Preferred Stock” has the meaning assigned to such term in Section 1 hereof
“Stockholders Agreement” means the Amended and Restated Stockholders Agreement in the form attached
hereto as Exhibit E.

          “Subsidiary” means any corporation, association trust, limited liability company, partnership,
joint venture or other business association or entity (i) at least 50% of the outstanding voting
securities of which are at the time owned or controlled directly or indirectly by the Company or
(ii) with respect to which the Company possesses, directly or indirectly, the power to direct or
cause the direction of the affairs or management of such person.

          “Transaction Documents” means this Agreement, the Investor Rights Agreement and the
Stockholders Agreement.

     10. Enforcement.

          10.1 Cumulative Remedies. None of the rights, powers or remedies conferred upon
the Purchasers on the one hand or the Company on the other hand shall be mutually exclusive, and
each such right, power or remedy shall be cumulative and in addition to every other right, power or
remedy, whether conferred by this Agreement, any of the other Transaction Documents or the Amended
and Restated Certificate of Incorporation or now or hereafter available at law, in equity, by
statute or otherwise.

          10.2. No Implied Waiver. Except as expressly provided in this Agreement, no course
of dealing between the Company and the Purchasers or any other holder of shares of Series B
Preferred Stock and no delay in exercising any such right, power or remedy conferred hereby or by
the Amended and Restated Certificate of Incorporation, or by any of the other Transaction Documents
or now or hereafter existing at law in equity, by statute or otherwise, shall operate as a waiver
of, or otherwise prejudice, any such right, power or remedy.

     11. Miscellaneous.

          11.1. Waivers and Amendments. Upon the approval of the Company and the written
consent of the Purchasers holding a majority of the then outstanding Series B Preferred Stock (a)
the obligations of the Company and the rights of the Purchasers under this Agreement may be waived
(either generally or in a particular instance, either retroactively or prospectively and either for
a specified period of time or indefinitely), and (b) the Company may enter into a supplementary
agreement for the purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement, or of any supplemental agreement or modifying in any manner
the rights and obligations hereunder or thereunder of the Purchasers and/or the Company.

 

 

          The foregoing notwithstanding, no such waiver or supplemental agreement shall affect any of
the rights of any holder of any Securities created by the Amended and Restated Certificate of
Incorporation or by the Delaware General Corporation Law without compliance with all applicable
provisions of the Amended and Restated Certificate of Incorporation and the Delaware General
Corporation Law.

          Neither this Agreement, nor any provision hereof, may be changed, waived, discharged or
terminated orally or by course of dealing, but only by an instrument in writing.

          11.2. Notices. All notices, requests, consents and other communications required
or permitted hereunder shall be in writing and shall be hand delivered or mailed postage prepaid by
registered or certified mail or by facsimile transmission,

If to Bain Capital:

Bain Capital, LLC

111 Huntington Avenue

Boston, MA 02199

Attention: Michael Krupka Facsimile No.: (617) 516-2010

with a copy to:

Ropes & Gray LLP One International Place Boston, MA 02110

Attention: Joel F. Freedman, Esq.

Facsimile No.: (617) 951-7050

If to Battery Ventures:

Battery Ventures

20 William Street, Suite 200 Wellesley, MA 02481

Attention: Michael Brown Facsimile No.: (781) 577-1001

If to Prudential:

Prudential Capital Partners II, L.P. do Prudential Capital Group

Two Prudential Plaza, Suite 5600 180 N. Stetson Avenue

Chicago, IL 60601

Attention: Managing Director

with a copy to:

Prudential Capital Partners II, L.P.

do Prudential Capital Group Two Prudential Plaza, Suite 5600

180 North Stetson Street Chicago, IL 60601-6716

Attention: Robert Scavone

 

 

If to the Company:

Fingerhut Direct Marketing, Inc. 6509 Flying Cloud Drive

Eden Prairie, MN 55344

Attention: General Counsel Facsimile No.: (952) 933-9308

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square

New York, NY 10036

Attention: Stacy J. Kanter

Facsimile No.: (917) 777-3497

          or at such other address as the Company or the Purchasers each may specify by written notice
to the other parties hereto, and each such notice, request, consent and other communication shall
for all purposes of the Agreement be treated as being effective or having been given when delivered
if delivered personally, upon receipt of facsimile confirmation if transmitted by facsimile, or, if
sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a
regularly maintained receptacle for the deposit of United States mail, addressed and postage
prepaid as aforesaid.

          11.3. Indemnification. The Company shall indemnify, save and hold harmless each
Purchaser, its directors, officers, employees, partners, representatives and agents from and
against (and shall promptly reimburse such indemnified persons for) any and all liability, loss,
cost, damage, reasonable attorneys’ and accountants’ fees and expenses, court costs and all other
out-of-pocket expenses incurred in connection with or arising from claims, actions, suits,
proceedings or similar claims by any person or entity (other than the Purchasers) associated or
relating to the execution, delivery and performance by the Company of this Agreement, any of the
other Transaction Documents or the Amended and Restated Certificate of Incorporation or the
transactions contemplated hereby or thereby. This indemnification provision shall be in addition to
the rights of the Purchaser to bring an action against the Company for breach of any term of this
Agreement, the other Transaction Documents or the Amended and Restated Certificate of
Incorporation.

          11.4. No Waivers. 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. The rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.

          11.5. Successors and Assigns. All the terms and provisions of this Agreement shall
be binding upon and inure to the benefit of and be enforceable by the respective parties hereto,
the successors and permitted assigns of each Purchaser and the successors of the Company, whether
so expressed or not. None of the parties hereto may assign its rights or obligations under Section
2 hereof without the prior written consent of the Company, except that each Purchaser may, without
the prior consent of the Company, assign its rights to purchase the

 

 

shares of Series B Preferred Stock hereunder to any of its Affiliates. This Agreement shall
not inure to the benefit of or be enforceable by any other Person.

          11.6. Form D. The Company will use its reasonable best efforts to file a Form D
with the SEC and any state securities regulator with the time and to the extent necessary to ensure
the Transaction complies with the technical requirements of Regulation D.

          11.7. Headings. The headings of the Sections and paragraphs of this Agreement have
been inserted for convenience of reference only and do not constitute a part of this Agreement.

          11.8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

          11.9. Expenses. Upon consummation of the purchase of shares of Series B Preferred
Stock by the Purchasers pursuant to this Agreement or in the event that the parties hereto elect to
terminate this Agreement, the Company agrees to pay, reimburse and hold each of the Purchasers
harmless from liability for the payment of all fees and expenses incurred by any of them,
respectively, in connection with the preparation and negotiation of the Amended and Restated
Certificate of Incorporation and the Transaction Documents, the consummation of the transactions
contemplated hereby and thereby, and the continued involvement of Bain Capital and Battery Ventures
with the Company. The fees and expenses of Bain Capital and Battery Ventures may include, without
limitation:

          (a) the fees and expenses of counsel and accountants and out of pocket expenses of
Bain Capital and Battery Ventures, arising in connection with the preparation, negotiation
and execution of the Amended and Restated Certificate of Incorporation and the Transaction
Documents and the consummation of the transactions contemplated hereby and thereby (an
estimate of the fees and expenses of such counsel may be paid by check delivered or wire
transfer to such counsel at the Closing by Bain Capital or Battery Ventures, the amount of
such check or wire transfer being deducted from the aggregate amount to be paid by such
Purchaser at the Closing for the shares of Series B Preferred Stock to be purchased by them
hereunder),

          (b) the fees and expenses incurred with respect to any amendments to the Amended
and Restated Certificate of Incorporation or the Transaction Documents proposed by the
Company (whether or not the same become effective),

          (c) the fees and expenses incurred in connection with any requested waiver of the
right of any holder of Securities or the consent of any holder of Securities to contemplated
acts of the Company not otherwise permissible by the terms of the Amended and Restated
Certificate of Incorporation or the Transaction Documents, stamp and other taxes, excluding
income taxes, which may be payable with respect to the execution and delivery of the Amended
and Restated Certificate of Incorporation or the

 

 

Transaction Documents, or the issuance, delivery or acquisition of the shares of Series
B Preferred Stock or upon the conversion of the shares of Series B Preferred Stock, and

          (d) all costs of the Company’s performance and compliance with the Amended and
Restated Certificate of Incorporation or the Transaction Documents.

          11.10. Jurisdiction. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby shall be brought in any federal or state court located in the
State of New York, and each of the parties hereby consents to the jurisdiction of such courts (and
of the appropriate appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding in any such court
or that any such suit, action or proceeding which is brought in any such court has been brought in
an inconvenient forum. Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such court. Without
limiting the foregoing, each party agrees that service of process on such party as provided in
Section 11.2 shall be deemed effective service of process on such party.

          11.11. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, THE INVESTORS AND THE COMPANY HEREBY WAIVE, AND COVENANT THAT NEITHER THE COMPANY
NOR THE INVESTORS WILL ASSERT, ANY RIGHT TO TRIAL BY JURY ON ANY ISSUE IN ANY PROCEEDING, WHETHER
AS PLAINTIFF, DEFENDANT OR OTHERWISE, IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, ANY OTHER AGREEMENT OR THE SUBJECT MATTER
HEREOF OR THEREOF OR IN ANY WAY CONNECTED WITH, RELATED OR INCIDENTAL TO THE DEALINGS OF THE
INVESTORS AND THE COMPANY HEREUNDER OR THEREUNDER, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER IN TORT OR CONTRACT OR OTHERWISE. The Company acknowledges that it has been
informed by the Purchasers that the provisions of this Section 11.11 constitute a material
inducement upon which the Purchasers are relying and will rely in entering into this Agreement. Any
Purchaser or the Company may file an original counterpart or a copy of this Section 11.11 with any
court as written evidence of the consent of the Purchasers and the Company to the waiver of its
right to trial by jury.

          11.12. Exhibits and Schedules. All Exhibits and Schedules attached hereto are
hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any matter
disclosed on any section of the Schedules shall be deemed to be disclosed with respect to any other
section of such document, and with respect to any representation, warranty or covenant in this
Agreement or the Transaction Documents, to which the applicability of such matter is reasonably
apparent based on the information contained in such Schedule.

          11.13. Counterparts; Effectiveness. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, with the same effect as
if all parties had signed the same document. All such counterparts shall be deemed an

 

 

original, shall be construed together and shall constitute one and the same instrument. This
Agreement shall become effective when each party hereto shall have received counterparts hereof
signed by all of the other parties hereto.

          11.14. Entire Agreement. The Amended and Restated Certificate of Incorporation and
the Transaction Documents contain the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof and such agreements supersede and replace all other prior
agreements, written or oral, among the parties hereto with respect to the subject matter hereof and
thereof

          11.15. Severability. If any provision of this Agreement shall be found by any
court of competent jurisdiction to be invalid or unenforceable, the parties hereby waive such
provision to the extent that it is found to be invalid or unenforceable. Such provision shall, to
the maximum extent allowable by law, be modified by such court so that it becomes enforceable, and,
as modified, shall be enforced as any other provision hereof, all the other provisions hereof
continuing in full force and effect.

          11.16. Exculpation Among Purchasers. Each Purchaser acknowledges that it is not
relying upon any person, firm or corporation, other than the Company and its officers and
directors, in making its investment or decision to invest in the Company. Each Purchaser agrees
that no Purchaser nor the respective controlling persons, officers, directors, partners, agents, or
employees of any Purchaser shall be liable to any other Purchaser for any action heretofore or
hereafter taken or omitted to be taken by any of them in connection with the purchase of the
Securities.

          11.17. Non-Disclosure. Each Purchaser (other than Prudential) agrees to use the
same degree of care as such Purchaser uses to protect its own confidential information to keep
confidential any proprietary or other information furnished to such Purchaser that the Company
maintains in confidence (so long as such information is not in the public domain), except that such
Purchaser may disclose such proprietary or confidential information (i) to any partner (limited or
otherwise), subsidiary or parent of such Purchaser for the purpose of evaluating its investment in
the Company as long as such partner, subsidiary or parent is advised of the confidentiality
provisions of this Section 11.16, (ii) at such time as the Company voluntarily discloses such
information to the public or such information otherwise enters the public domain through no fault
of such Purchaser, (iii) that is communicated to it free of any obligation of confidentiality, or
(iv) that is developed by Purchaser or its agents independently of and without reference to any
confidential information communicated by the Company. Prudential agrees to be bound by the
non-disclosure agreements it has made in the Subordinated Note Agreement. Notwithstanding the
foregoing, the parties hereto may disclose to any and all persons, without limitation of any kind,
the tax treatment and the tax structure of this transaction, and all materials of any kind related
to such tax treatment and tax structure.

 

 

          IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase Agreement to be duly
executed as of the day and year first above written.

	 	 	 	 	 
	 	FINGERHUT DIRECT MARKETING, INC.

 	 
	 	By:  	/s/ Brian Smith
 	 
	 	 	Name:  	Brian Smith 	 
	 	 	Title:  	President, CEO 	 

 

 

	 	 	 	 	 
	 	THE PURCHASERS

 	 
	 	/s/ Brian Smith
 	 
	 	Brian Smith       	 
	 	 	 
	 	                        /s/ John Giuliani
 	 
	 	John Giuliani       	 
	 	 	 
	 	                       /s/ John Damrow
 	 
	 	John Damrow       	 
	 	 	 
	 	                        /s/ Bill Dunlap
 	 
	 	Bill Dunlap       	 
	 	 	 
	 	                       /s/ Alice Richter
 	 
	 	Alice Richter 	 
	 	 	 

 

 

	 	 	 	 	 
	 	BAIN CAPITAL VENTURE FUND 2007, L.P.

 	 
	 	By:  	Bain Capital Venture Partners, L.P.
 	 
	 	 	its general partner 	 
	 	By:  	     Bain Capital Investors, LLC
 	 
	 	 	its general partner       	 
	 	 	 
	 	By:  	     /s/ Michael Krupka
 	 
	 	 	Name:  	Michael Krupka 	 
	 	 	Title:  	Authorized Person 	 
	 
	 	BCIP VENTURE ASSOCIATES

 	 
	 	By:  	Bain Capital Investors, LLC
 	 
	 	 	its general partner 	 
	 	By:  	      Bain Capital Venture Investors, LLC
 	 
	 	 	its Attorney-in-fact 	 
	 	 	 
	 	By:  	      /s/ Michael Krupka
 	 
	 	 	Name:  	Michael Krupka 	 
	 	 	Title:  	Authorized Person 	 
	 
	 	BCIP VENTURES ASSOCIATES B

 	 
	 	By:  	Bain Capital Investors, LLC
 	 
	 	 	its general partner 	 
	 	By:  	        Bain Capital Investors, LLC
 	 
	 	 	its Attorney in fact 	 
	 
	 	By:  	        /s/ Michael Krupka
 	 
	 	 	Name:  	Michael Krupka 	 
	 	 	Title:  	Authorized Person 	 
	 
	 	Brookside Capital Partners Fund, L.P.

 	 
	 	By:  	Brookside Capital Investors, L.P.
 	 
	 	 	its general partner 	 
	 	By:  	     Brookside Capital Management, LLC
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	/s/ [ILLEGIBLE]	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Date:  	 	 

 

 

	 	 	 	 	 
	 	RGIP, LLC

 	 
	 	By:	/s/
[ILLEGIBLE]
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	BATTERY VENTURES VI, L.P

 	 
	 	By:  	Battery Partners VI, LLC
 	 
	 	 	General Partner 	 
	 	 	 
	 	By:  	         /s/ Morgan Jones
 	 
	 	 	Name:  	Morgan Jones 	 
	 	 	Title:  	Member Manager 	 
	 
	 	BATTERY INVESTMENT PARTNERS VI, LLC 

 	 
	 	By:  	/s/ Morgan Jones
 	 
	 	 	Name:  	Morgan Jones 	 
	 	 	Title:  	Member Manager 	 
	 
	 	PRUDENTIAL CAPITAL PARTNERS II, L.P.

 	 
	 	By:  	Stetson Street Partners, L.P., its general partner
 	 
	 	 	 
	 	By:  	           /s/ Dianna D. Carr
 	 
	 	 	Name    Dianna D. Carr 	 
	 	 	Title:  	Vice President 	 
	 
	 	PRUDENTIAL CAPITAL PARTNERS 

MANAGEMENT FUND II, L.P.

 	 
	 	By:  	Mulberry Street Holdings, LLC, its general partner
 	 
	 	 	 
	 	By:  	                       Prudential Investment Management, Inc., its managing member
 	 
	 	 	 
	 	By:  	            /s/ Dianna D. Carr
 	 
	 	 	Name    Dianna D. Carr 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 
	 	PRUDENTIAL CAPITAL PARTNERS 

(PARALLEL FUND) II, L.P.

 	 
	 	By:  	Stetson Street Partners, L.P., its general
 	 
	 	 	partner       	 
	 	 	 
	 	By:  	            /s/ Dianna D. Carr
 	 
	 	 	Name    Dianna D. Carr 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

SCHEDULE I

	 	 	 	 	 	 	 	 	 
	Purchaser	 	Shares Purchased	 	 	Purchase Price	 
	Bain Capital Venture Fund 2007, L.P.
	 	 	145,218,255	 	 	 	10,817,307.78	 
	BCIP Venture Associates
	 	 	20,586,298	 	 	 	1,533,473.33	 
	BCIP Venture Associates B
	 	 	325,131	 	 	 	24,219.01	 
	RGIP, LLC
	 	 	1,678,076	 	 	 	124,999.88	 
	Brookside Capital Partners Fund, L.P.
	 	 	167,807,760	 	 	 	12,500,000	 
	Battery Ventures VI, L.P.
	 	 	322,190,898	 	 	 	24,000,000	 
	Battery Investment Partners VI, LLC
	 	 	13,424,620	 	 	 	1,000,000	 
	Prudential Capital Partners II, L.P.
	 	 	57,524,060	 	 	 	4,284,967	 
	Prudential Capital Partners
Management Fund II, L.P.
	 	 	2,683,993	 	 	 	199,931	 
	Prudential Capital Partners
(Parallel Fund) II, L.P.
	 	 	6,915,051	 	 	 	515,102	 
	Brian Smith
	 	 	6,712,310	 	 	 	500,000	 
	John Damrow
	 	 	1,342,462	 	 	 	100,000	 
	Bill Dunlap
	 	 	872,600	 	 	 	65,000	 
	John Giuliani
	 	 	2,684,924	 	 	 	200,000	 
	Alice Richter
	 	 	872,600	 	 	 	65,000	 
	Total
	 	 	750,839,038	 	 	 	55,930,000

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