Document:

exv4w6

Exhibit 4.6

AMENDED AND RESTATED STOCKHOLDERS AGREEMENT

     This Agreement (the “Agreement”) is made and entered into as of May 15, 2008 by and among
Fingerhut Direct Marketing, Inc., a Delaware corporation (the “Company”), the parties listed as
Investors on Exhibit A hereto (the “Investors”), and the other stockholders listed on Exhibit B
hereto (such stockholders collectively, the “Common Stockholders”).

RECITALS

     WHEREAS, pursuant to a Preferred Stock Purchase Agreement dated as of February 24, 2004, as
supplemented by Supplement No. 1 dated October 27, 2004 and Supplement No. 2 dated November 1, 2004
(the “Series A Purchase Agreement”), among the Company and certain of the investors, the Company
issued and sold to certain of the investors shares of Series A Preferred Stock (as defined below);

     WHEREAS, in connection with a Securities Purchase Agreement dated as of March 23, 2006, the
Company and PCP Investor (as defined below), under which the PCP Investor was issued warrants to
purchase Series A Preferred Stock, the Company and certain parties entered into an Amended and
Restated Stockholders Agreement dated as of March 24, 2006 (the “Prior Agreement”).

     WHEREAS, pursuant to a Preferred Stock Purchase Agreement dated as of the date hereof, among
the Company and certain of the Investors (the “Purchase Agreement”), the Company is issuing and
selling to certain of the Investors shares of Series B Preferred Stock (as defined below);

     WHEREAS, the Company, the Common Stockholders and certain of the Investors are parties to the
Amended and Restated Stockholders Agreement, dated as of March 24, 2006 (the “Prior Agreement”),
which they now desire to amend and restate in its entirety; and

     WHEREAS, it is a condition to the closing of the sale of the Series B Preferred Stock under
the Purchase Agreement that the Company and the Investors enter into this Agreement.

     NOW, THEREFORE, in consideration of the mutual promises and obligations contained herein, the
parties hereto agree to amend and restate the Prior Agreement in its entirety as follows:

ARTICLE I

DEFINITIONS

     “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act, and shall include, with respect to any Investor, any
managed account, investment fund or other vehicle for which such Investor or any Affiliate or such
Investor acts as an investment advisor or portfolio manager; provided, that with respect
to Bain Capital, the term Affiliate shall be deemed to include any Person under common
management with Bain Capital.

 

 

     “As-Converted Basis” shall mean, for the purpose of determining the number of shares of Common
Stock outstanding, a basis of calculation which takes into account (a) the number of shares of
Common Stock actually issued and outstanding at the time of such determination, and (b) the number
of shares of Common Stock that is then issuable upon the exercise or conversion of all outstanding
securities or rights convertible into or exercisable for Common Stock, including without
limitation, the Series A Preferred Stock, Series B Preferred Stock and the Warrants and the number
of shares of Common Stock that would be issuable upon the conversion of the Series A Preferred
Stock then issuable upon exercise of the Warrants, but excluding stock options and any other
warrants for the purchase of any shares of Common Stock, Series A Preferred Stock or Series B
Preferred Stock.

     “Bain Capital” means Bain Capital Venture Fund 2007, L.P. “Battery Ventures” means Battery
Ventures VI, L.P.

     “Common Stock” shall mean the Company’s Common Stock, par value $0.00001 per share.

     “Common Stockholders” has the meaning assigned to it in the introductory paragraph of this
Agreement.

     “Competitor” shall mean any consumer retail business and those Persons listed on Exhibit C
hereto.

     “Equity Securities” means (i) any Common Stock, preferred stock or other security of the
Company, (ii) any security convertible, with or without consideration, into any Common Stock,
preferred stock or other equity security (including any option to purchase such a convertible
security), (iii) any security carrying any warrant or right to subscribe to or purchase any Common
Stock, preferred stock or other equity security, or (iv) any such warrant or right.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Excluded Investor” means any of Goldman Sachs Specialty Lending Group, LP, Fortress Capital
Corp., any of their respective Affiliates or their permitted assigns and transferees.

     “Investor Rights Agreement” means the Amended and Restated Investor Rights Agreement, dated as
of the date hereof, by and among the Company and the Investors.

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

     “PCP Investor” means Prudential Capital Partners, II, L.P., Prudential Capital Partners
Management Fund II, L.P. or Prudential Capital Partners (Parallel Fund) II, L.P.

     “Permitted Transferee” means any of the following Persons to whom or to which a Stockholder
Transfers any Shares: (a) an Affiliate of the Transferring Stockholder; (b) a family
member of the Transferring Stockholder or a trust established for the benefit thereof; (c) a
transferee of the Transferring Stockholder by will or the laws of intestate succession; (d) the

 

 

Company with respect to any (i) Preferred Stock or (ii) Warrant held by CIGPF I Corp. or any PCP
Investor, being redeemed pursuant to a Redemption Request (as defined in the Amended and Restated
Certificate of Incorporation); and (e) in the case of Petters Group Worldwide, LLC or its
Affiliates, together with transfers made during the term of the Prior Agreement, up to twenty-five
(25) Persons who are employees of any Affiliates of Petters Group Worldwide, LLC for an aggregate
maximum number of Shares equal to fifteen (15) percent of the shares of Common Stock owned by
Petters Group Worldwide, LLC or its Affiliates on an As-Converted Basis; provided, however, that in
order to be deemed a Permitted Transferee, (A) each such employee receiving Shares shall be
required to execute (1) an irrevocable proxy coupled with an interest in favor of Thomas J. Petters
to vote his, her or its Shares and a limited irrevocable power-of-attorney coupled with an interest
in favor of Thomas J. Petters to execute in the name of such transferee a written consent in lieu
of a meeting of the Stockholders (such proxy and power-of-attorney, the “Voting Documents”) , and
(2) an agreement to condition any subsequent transfer of such Shares on the proposed transferee
executing the Voting Documents prior to such transfer, and (B) each certificate representing the
Shares transferred to any such employee must be endorsed with a legend containing the foregoing
transfer restrictions.

     “Person” shall be construed broadly and shall include without limitation an individual, a
partnership, a corporation, an association, a joint stock corporation, a limited liability
corporation, a trust, a joint venture, an unincorporated organization and a governmental authority.

     “Preferred Stock” means the Series A Preferred Stock and the Series B Preferred Stock.

     “Pro Rata Share” means, in the case of each Investor, the ratio of (a) the number of shares of
Common Stock owned by such Investor on an As-Converted Basis immediately prior to the issuance of
any Equity Securities subject to Purchase Rights (as defined in Section 3.1 hereof) to (b) the
total number of shares of the Company’s Common Stock outstanding on an As-Converted Basis
immediately prior to the issuance of such Equity Securities.

     “Prospective Buyer” shall mean any Person proposing to purchase Shares from a Prospective
Selling Investor.

     “Qualified Public Offering” means an underwritten public offering of shares of Common Stock in
which the aggregate net proceeds to the Company equal or exceed $75 million and the public offering
price per share is not less than $0.2235 (as adjusted appropriately in the event of any
subdivision, combination, reorganization, recapitalization, reclassification, stock dividend or
similar event affecting the Common Stock) and after which the Common Stock is listed on the New
York Stock Exchange or the Nasdaq National Market.

     “Required Holders” means, at any time, the holders of at least 66% of the then outstanding
shares of Series B Preferred Stock.

     “Sale of the Company” means (i) a sale of all or substantially all of the assets of the
Company, (ii) an acquisition of the Company by one or more persons or entities by means of any
transaction or series of related transactions (including any reorganization, merger, consolidation)

 

 

     where the voting securities of the Company outstanding immediately preceding such transaction
or the voting securities issued with respect to the voting securities of the Company outstanding
immediately preceding such transaction represent less than 50% of the voting securities of the
Company or surviving entity, as the case may be, following such transaction, or (iii) a transaction
or series of related transactions resulting in the transfer of shares representing more than 50% of
the voting securities of the Company. A sale (or multiple related sales) of one or more
subsidiaries of the Company (whether by way of merger, consolidation, reorganization or sale of all
or substantially all assets or securities) which constitutes all or substantially all of the
consolidated assets of the Company shall be deemed a sale of substantially all the assets of the
Company for purposes of the foregoing definition.

     “Series A Preferred Stock” means the Series A Convertible Preferred Stock, par value $0,00001
per share, of the Company.

     “Series B Preferred Stock” means the Series B Convertible Preferred Stock, par value $0.00001
per share, of the Company.

     “Shares” shall mean shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock
and warrants for the purchase of any shares of Common Stock, Series A Preferred Stock and Series B
Preferred Stock.

     “Stockholder” shall mean an Investor or Common Stockholder.

     “Transfer” shall mean any sale, assignment, encumbrance, hypothecation, pledge, conveyance in
trust, gift, transfer by bequest, devise or descent, or other transfer or disposition of any kind,
including, but not limited to, transfers to receivers, levying creditors, trustees or receivers in
bankruptcy proceedings or general assignees for the benefit of creditors, whether voluntary or by
operation of law, directly or indirectly, of any Shares.

     “Warrants” shall mean warrants to purchase Common Stock issued to CIGPF I Corp., Piper Jaffray
& Co., Cherry Tree Companies, LLC, Gorman Charitable Trust, Goldman Sachs Specialty Lending Group,
LP and Fortress Capital Corp., and any warrants to purchase Series A Preferred Stock issued to a
PCP Investor.

ARTICLE II

VOTING AGREEMENT

2.1 Election of Directors.

          (a) The Stockholders agree to vote all shares of Common Stock, Series A Preferred Stock,
Series B Preferred Stock and any other shares of voting securities of the Company now owned or
hereafter acquired or controlled by them (collectively, the “Voting Securities”), attend all
meetings whether in person or by proxy, and otherwise to use their respective best efforts as
stockholders or directors of the Company, to cause and maintain the size of the Board of Directors
to be eight (8) (except as provided below), and to cause and maintain the election to the Board of
Directors of the Company of:

          (i) three (3) individuals designated by the holders of a majority of the outstanding
shares of Series B Preferred Stock held by Bain Capital, Battery Ventures

 

 

and their Affiliates (collectively, the “Preferred Directors”); provided, that
(A) for so long as Bain Capital and its Affiliates own at least 2% of the Common Stock on an
As-Converted Basis, Bain Capital shall be entitled to designate one Preferred Director (the
“Bain Director”), (B) for so long as Battery Ventures and its Affiliates own at least 2% of
the Common Stock on an As-Converted Basis, Battery Ventures shall be entitled to designate
one Preferred Director (the “Battery Director”), and (C) for so long as Bain Capital is
entitled to designate the Bain Director and/or Battery Ventures is entitled to designate the
Battery Director, the director or directors designated pursuant to the preceding clauses (A)
and (B) shall mutually designate the remaining Preferred Director;

          (ii) for so long as Thomas J. Petters or any of his Affiliates owns at least 2% of the
Common Stock on an As-Converted Basis, one (1) individual designated by Thomas J. Petters
(the “Petters Director”);

          (iii) the Chief Executive Officer of the Company, who shall initially be Brian Smith;
and

          (iv) three (3) independent directors mutually agreed by the Chief Executive Officer and
the Required Holders,

The directors designated pursuant to Section 2.1(a)(i) shall be the “Series B Directors” as defined
in the Amended and Restated Certificate of Incorporation (as defined in the Purchase Agreement).

          (b) No party hereto shall vote to remove any member of the Board of Directors designated in
accordance with the procedures set forth in Section 2.1(a); provided, however, that (i) if
the parties originally designating a director as provided in Section 2.1(a)(i), (ii) or (iii) elect
to remove such director, the parties hereto agree to vote to remove such director from the Board of
Directors of the Company and (ii) if the Chief Executive Officer or the Required Holders elect to
remove a director designated as provided by the terms of Section 2.1(a)(iv), the parties hereto
agree to vote to remove such director from the Board of Directors of the Company.

          (c) Any vacancy on the Board of Directors created by the resignation, removal, incapacity or
death of any director designated under Section 2.1(a) shall be filled by another person designated
by the parties originally designating such director, so long as such originally designating parties
are entitled to make such designation pursuant to Section 2.1(a).

          (d) The Company shall promptly take any and all actions in its power necessary to cause the
election, appointment or removal of any person designated to the Board of Directors in accordance
with this Section 2.1.

2.2 Committees; Subsidiaries.

          (a) Each Stockholder shall use all reasonable efforts to cause each director of the Company
originally nominated by such Stockholder to take, and the Company shall take, such corporate
actions as may be reasonably required to ensure that (i) the Board of Directors has at all times a
compensation committee and an audit committee, (ii) both the Bain Director and the Battery Director
shall be appointed to each such committee and to any committee of the Board of Directors existing
on the date hereof or created in the future, (iii) the approval of the

 

 

compensation committee shall be required for all increases in executive compensation,
executive bonuses and all option grants (including the vesting schedules with respect to such
option grants), (iv) the approval of the audit committee shall be required for the engagement of
the Company’s auditors and prior to the issuance of the audit each year, and (v) no committee of
the Board of Directors of the Company shall have more than three members without the consent of the
Required Holders.

          (b) The Company and each Stockholder shall take, and each Stockholder shall use all reasonable
efforts to cause each director of the Company originally nominated by such Stockholder to take,
such corporate actions as may be reasonably required to ensure that the composition of the board of
directors of all direct and indirect subsidiaries of the Company is identical to the composition of
the Board of Directors to the extent practicable.

2.3 Grant of Proxy.

     (a) Each Stockholder hereby grants to a Person designated from time to time by the Required
Holders, an irrevocable proxy coupled with an interest to vote his, her or its Voting Securities,
and limited irrevocable power-of-attorney, coupled with an interest, to execute in the name of such
Stockholder a written consent in lieu a meeting of the Stockholders which proxy and
power-of-attorney shall be valid and remain in effect until the provisions of this Article II
expire pursuant to Section 7.4, for the sole purpose of electing or removing directors in
accordance with the rights granted under Section 2.1(a)(i), (iii) and (iv) and 2.1(b).

     (b) Each Stockholder hereby grants to a Person designated from time to time by Thomas J.
Petters, an irrevocable proxy coupled with an interest to vote his, her or its Voting Securities,
and limited irrevocable power-of-attorney, coupled with an interest, to execute in the name of such
Stockholder a written consent in lieu a meeting of the Stockholders, which proxy and
power-of-attorney shall be valid and remain in effect until the provisions of this Article II
expire pursuant to Section 7.4, for the sole purpose of electing or removing a Petters Director in
accordance with the rights granted under Section 2.1(a)(ii) or 2.1(b).

2.4 Prohibited Actions. To the extent permitted by law, the Company agrees not to give
effect to any action by any Stockholder or any other Person which is in contravention of this
Article II.

2.5 Significant Transactions. Each Common Stockholder agrees to vote all of his Equity
Securities, whether at any annual or special meeting, by written consent or otherwise, in the same
proportion as Equity Securities held by the Investors are voted by the Investors to approve any
sale, recapitalization, merger, consolidation, reorganization or any other transaction or series of
transactions involving the Company or its subsidiaries (or all or any portion of their respective
assets) in connection with, or in furtherance of, the exercise by the Required Holders of their
rights under Article VI.

ARTICLE III

PURCHASE RIGHTS

3.1 Subsequent Offerings. Each Investor shall have a right of first refusal (the “Purchase
Rights”) to purchase its Pro Rata Share of all Equity Securities, that the Company may, from

 

 

time to time, propose to sell and issue after the date of this Agreement, other than the Equity
Securities excluded by Section 3.6 hereof.

3.2 Exercise of Rights.

          (a) If the Company proposes to issue any Equity Securities, it shall first give each Investor
written notice of its intention, describing the Equity Securities, the price and the terms and
conditions upon which the Company proposes to issue the same. Each Investor shall have thirty (30)
days from the giving of such notice to agree to purchase up to its Pro Rata Share of the Equity
Securities for the price and upon the terms and conditions specified in the notice by giving
written notice to the Company (the “Company Notice”) and stating therein the quantity of Equity
Securities to be purchased. Notwithstanding the foregoing, the Company shall not be required to
offer or sell such Equity Securities to any Investor who would cause the Company to be in violation
of applicable federal securities laws by virtue of such offer or sale or to not qualify for an
exemption from the registration requirements of such securities laws on which the Company wishes to
rely.

          (b) If not all of the Investors elect to purchase their Pro Rata Share of the Equity
Securities, then the Company shall promptly notify in writing the Investors who do so elect and
shall offer such Investors (the “Purchasing Investors”) the right to acquire such unsubscribed
shares. Each Purchasing Investor shall have fifteen (15) days after receipt of such notice to
notify the Company (the “Purchasing Investor Notice”) of its election to purchase all or a portion
thereof of the unsubscribed shares. If the Purchasing Investors have, in the aggregate, elected to
purchase more than the number of unsubscribed shares being offered in such notice, then the
unsubscribed shares shall be allocated according to each Purchasing Investor’s Pro Rata Share up to
the number of unsubscribed shares set forth in the notice to the Purchasing Investors, provided
that for purposes of this Section 3.2(b), the denominator in clause (b) of the defined term “Pro
Rata Share” shall be the total number of shares of Common Stock owned by all the Purchasing
Investors on an As-Converted Basis. The Purchasing Investors shall then effect the purchase of the
Equity Securities at the closing of the issuance of Equity Securities described in the notice
delivered by the Company pursuant to Section 3.2(a). On the date of such closing, the Company shall
deliver to the Purchasing Investors the certificates representing the Equity Securities to be
purchased by the Purchasing Investors, each certificate to be properly endorsed for transfer, and
at such time, the Purchasing Investors shall pay the purchase price for the Equity Securities.

3.3 Issuance of Equity Securities to Other Persons. If the Investors fail to exercise in
full their Purchase Rights, the Company shall have sixty (60) days thereafter to sell the Equity
Securities in respect of which the Investors’ rights were not exercised, at a price and upon
general terms and conditions no more favorable to the purchasers thereof than specified in the
Company’s notice to the Investors pursuant to Section 3.2 hereof. If the Company has not sold such
Equity Securities within sixty (60) days of the notice provided pursuant to Section 3.2, the
Company shall not thereafter issue or sell any Equity Securities without first again complying with
this Article III.

3.4 Termination and Waiver of Purchase Rights. The Purchase Rights established by this
Article III shall terminate immediately following the closing of a Qualified Public Offering. The
Purchase Rights established by this Article III may be amended, or any provision waived, with the
written consent (i) of the Required Holders; provided, that if any Required Holder
participates in an issuance of Equity Securities with respect to which the Purchase Rights have

 

 

been waived pursuant to this clause (i), then each non-waiving Investor shall be entitled to
purchase up to its Pro Rata Share of Equity Securities in such issuance at the same time and on the
same terms and conditions; provided, further, that each non-waiving Investor receiving less
than 5 days notice of any such issuance shall be entitled to make such purchase within five (5)
days following such issuance; and (ii) the Investor holding the Warrant issued to CIGPF I Corp.
(the “Warrant Investor”), as long as such Warrant is held by CIGPF I Corp. or its Permitted
Transferee, and is exercisable for at least seventy five percent (75%) of the Common Stock
originally issuable upon exercise of the Warrant, provided, however, that consent of the
Warrant Investor shall not be required for any amendment or waiver of any provision of Article III
unless such amendment or waiver affects the Warrant Investor or the Warrant Investor’s Shares in a
manner different than the Investors that were originally issued Series A Preferred Stock or the
Series A Preferred Stock and in a manner adverse to the interests of the Warrant Investor as an
equity investor in the Company, it being understood that no such consent shall be required for an
amendment or waiver that adversely affects the Warrant Investor and the Investors that were
originally issued Series A Preferred Stock in a similar manner given their relative and different
equity interests in the Company; and (iii) the PCP Investor, if required under Section 8.13.

3.5 Transfer of Purchase Rights. The Purchase Rights of each Investor under this Article
III may be transferred to any Affiliate of such Investor or in connection with a Transfer of Shares
made in compliance with the provisions of Article IV hereof; provided, that any such
Affiliate transferee shall furnish the Company and the Investors with a written agreement,
reasonably satisfactory to the Investors, to be bound by and comply with all provisions of this
Agreement as if such Affiliate transferee were an Investor or an Excluded Investor, as the case may
be.

3.6 Excluded Securities. The Purchase Rights established by this Article III shall have no
application to any of the following Equity Securities (collectively, the “Excluded Securities”):

          (a) shares of Common Stock issued in connection with any stock split, stock dividend or
recapitalization by the Company;

          (b) up to 152,312,347 shares of Common Stock (and/or options, warrants or other Common Stock
purchase rights issued pursuant to such options, warrants or other rights) issued to employees,
officers or directors of, or consultants or advisors to the Company or any subsidiary, pursuant to
stock purchase or stock option plans or other arrangements that are approved by the Board of
Directors;

          (c) any Equity Securities issued pursuant to any rights or agreements outstanding as of the
date of this Agreement; options and warrants outstanding as of the date of this Agreement; and
stock issued pursuant to any such rights or agreements sold or granted after the date of this
Agreement, provided, however, that the Purchase Rights established by this Article III
shall apply with respect to the initial sale or grant by the Company of such rights or agreements;

          (d) any Equity Securities issued in connection with business acquisitions, mergers or
strategic partnerships of, into or with a Person that is not an Affiliate approved by the Board of
Directors and the Required Holders;

          (e) any Common Stock issued upon conversion of the Series A Preferred Stock or Series B
Preferred Stock;

 

 

          (f) any Common Stock issued pursuant to an initial public offering (“IPO Common Stock”);
provided, however, that IPO Common Stock shall not be deemed to be Excluded Securities with
respect to the availability of the Investors’ Purchase Rights in this Article III unless the
Investors and their Affiliates are offered the right to purchase their pro rata share of up to five
percent (5%) of the shares of Common Stock offered in such offering at the offering price per share
net of underwriters’ commissions or discounts; or

          (g) any other Equity Securities designated as Excluded Securities (i) by the Required Holders;
provided, that if any Required Holder participates in an issuance of Equity Securities
designated as Excluded Securities pursuant to this clause (i), then each non-waiving Investor shall
be entitled to purchase up to its Pro Rata Share of Equity Securities in such issuance at the same
time and on the same terms and conditions; provided, further, that each non-waiving
Investor receiving less than 5 days notice of any such issuance shall be entitled to make such
purchase within five (5) days following such issuance and (ii) the Warrant Investor, as long as
such Warrant is held by CIGPF I Corp. or its Permitted Transferee, and is exercisable for at least
seventy five percent (75%) of the Common Stock originally issuable upon exercise of the Warrant,
provided, however, that consent of the Warrant Investor shall not be required for the
designation of Excluded Securities unless such designation affects the Warrant Investor or the
Warrant Investor’s Shares in a manner different than the Investors that were originally issued
Series A Preferred Stock or the Series A Preferred Stock and in a manner adverse to the interests
of the Warrant Investor as an equity investor in the Company, it being understood that no such
consent shall be required for a designation of Excluded Securities that adversely affects the
Warrant Investor and the Investors that were originally issued Series A Preferred Stock in a
similar manner given their relative and different equity interests in the Company; and (iii) the
PCP Investor, if required under Section 8.13.

ARTICLE IV

RIGHTS OF FIRST REFUSAL AND CO-SALE RIGHTS

4.1 Notice of Transfer. No Stockholder (a “Selling Stockholder”) other than an Excluded
Investor may Transfer any Shares other than as set forth in Section 5.1 hereof or in connection
with a Sale of the Company (including pursuant to Section 6.1 hereof) unless (i) such Selling
Stockholder shall have received a bona-fide arm’s length offer (an “Offer”) to purchase such Shares
from a third party who has agreed to become party to this Agreement and to be bound by all the
terms and conditions hereof and who the Selling Stockholder reasonably believes has the financial
capacity to fund such purchase, (ii) such Selling Stockholder gives written notice (the “Notice”)
to each of the Investors and the Company at least thirty (30) days prior to the closing of such
proposed Transfer as described below, and (iii) such Selling Stockholder otherwise complies with
this Article IV. The Notice shall describe in reasonable detail the proposed transfer including,
without limitation, the number and class or series of Shares to be transferred (the “Offered
Shares”), the nature of such Transfer, the consideration to be paid, and the name and address of
each prospective purchaser or transferee. For the avoidance of doubt, Transfers of Shares by any
Excluded Investor shall not be subject to the Company Refusal Right or the Right of First Refusal
or Co-Sale Right of any other Investor, and the term “Selling Stockholder” as used in this Article
IV shall exclude any Excluded Investor; provided, that (A) any Excluded Investor
Transferring Shares shall inform the Company and the Investors of such Transfer prior

 

 

to effecting it, and (B) the transferee shall furnish the Company with a written agreement,
reasonably satisfactory to the Company, to be bound by and comply with all provisions of this
Agreement as if such transferee were an Excluded Investor.

4.2 Right of First Refusal and Co-Sale Rights. For a period of ten (10) days following
receipt of any Notice, the Company shall have the right (the “Company Refusal Right”) upon written
notice to the Selling Stockholder to elect to purchase all or any part of the Offered Shares on the
same terms and conditions set forth in the Notice, and for a period of twenty (20) days following
the receipt of the Notice, each Investor shall have, upon written notice to the Selling
Stockholder, either (a) the right (the “Right of First Refusal”), subject to the Company Refusal
Right, to elect to purchase all or any part of the Offered Shares on the same terms and conditions
as set forth in the Notice, or (b) except with respect to a PCP Investor, CIGPF I Corp. or any
Permitted Transferee thereof that is the Selling Stockholder and that holds less than 5% of the
Common Stock on an As-Converted Basis, the right (the “Co-Sale Right”) to elect to sell on such
terms all or any part of that number of Shares then owned by such Investor (the “Co-Sale Shares”)
equal to the product obtained by multiplying (i) the aggregate number of Offered Shares by (ii) a
fraction the numerator of which is the number of shares of Common Stock owned by all of the
Investors (on an As-Converted Basis) and the denominator of which is the total number of shares of
Common Stock owned by the Selling Stockholder and all of the Investors (on an As-Converted Basis).
Notwithstanding the foregoing, if the Selling Shareholder is a PCP Investor, CIGPF I Corp. or a
Permitted Transferee thereof and such Selling Shareholder holds less than 5% of the Common Stock on
an As-Converted Basis, the Company Refusal Right and the Right of First Refusal shall be applicable
to all, but not less than all, of the Offered Shares.

          (a) If the Company does not elect to purchase all of the Offered Shares within the ten (10)
day period specified above, the Selling Stockholders shall promptly give written notice to the
Investors setting forth the number of Offered Shares not purchased by the Company (the “Remaining
Shares”). The Remaining Shares shall be allocated among the Investors who have exercised the Right
of First Refusal (the “Participating Investors”) as follows: there shall first be allocated to each
Participating Investor a number of Remaining Shares equal to the lesser of (i) the number of
Remaining Shares which the Participating Investor has elected to purchase and (ii) such
Participating Investor’s Refusal Right Pro Rata Share (as defined below) of the Remaining Shares.
The balance of the Remaining Shares which the Participating Investors have elected to purchase
shall be allocated to the Participating Investors who have elected to purchase more than their
Refusal Right Pro Rata Share of the Remaining Shares pro rata based on the number of Remaining
Shares which each Participating Investor has elected to purchase in excess of such Participating
Investor’s Refusal Right Pro Rata Share of the Remaining Shares. Each Participating Investor’s
“Refusal Right Pro Rata Share” shall be equal to the fraction (i) the numerator of which is the
number of shares of Common Stock owned by such Participating Investor (on an As-Converted Basis)
and (ii) the denominator of which is the total number of shares of Common Stock owned by all of the
Participating Investors (on an As-Converted Basis). In the event the Company or the Participating
Investors do not elect to purchase all of the Offered Shares of a Selling Shareholder that is a PCP
Investor, CIGPF I Corp. or a Permitted Transferee thereof and who holds less than 5% of the Common
Stock on an As-Converted Basis, then none of the Offered Shares shall be subject to any purchase
rights of the Company or any Investor.

 

 

          (b) Except with respect to a Selling Shareholder that is a PCP Investor, CIGPF I Corp. or a
Permitted Transferee thereof and that holds less than 5% of the Common Stock on an As-Converted
Basis, each Investor who has exercised the Co-Sale Right (a “Co-Sale Participant”) shall be
entitled to sell a number of Co-Sale Shares equal to the lesser of (a) the number of Offered Shares
which the Co-Sale Participant has elected to sell and (b) such Co-Sale Participant’s Co-Sale Pro
Rata Share of the Offered Shares which are not purchased by the Company pursuant to the Company
Refusal Right or by the Participating Investors pursuant to the Right of First Refusal (the
“Co-Sale Remaining Shares”). Each Participant’s “Co-Sale Pro Rata Share” shall be equal to the
fraction (i) the numerator of which is the number of shares of Common Stock owned by such Co-Sale
Participant (on an As-Converted Basis) and (ii) the denominator of which is the total number of
shares of Common Stock owned by the Selling Stockholder and all of the Investors (on As-Converted
Basis). Notwithstanding anything herein to the contrary, no Co-Sale Participant shall be entitled
to sell any shares of (x) Series A Preferred Stock or Common Stock in a proposed Transfer of Series
B Preferred Stock subject to this Article IV, or (y) Common Stock in a proposed transfer of Series
A Preferred Stock subject to this Article IV.

          (c) Any proposed Transfer at a different price or on terms and conditions more favorable to
the transferee(s) than specified in the Notice, or not completed within the time specified in this
Section 4.2, as well as any subsequent proposed Transfer of any Shares by a Stockholder, shall
again be subject to the Company Refusal Right and the Right of First Refusal and Co-Sale Rights of
the Investors, and shall require compliance by the Selling Stockholder with the procedures
described in this Article IV.

          (d) The exercise or non-exercise of the Right of First Refusal or the Co-Sale Rights by the
Investors in respect of one or more Transfers of Shares made by any Selling Stockholder shall not
adversely affect their rights to participate in subsequent Transfers of Shares subject to this
Article IV.

4.3 Transfer Mechanics.

          (a) If (i) the Company and/or the Participating Investors elect to purchase all of the Offered
Shares subject to the Notice or (ii) the Company and/or the Participating Investors elect to
purchase less than all the Offered Shares and the prospective purchaser identified in the Notice
does not agree to purchase any of the Offered Shares not so purchased, the following provisions
shall apply: The Company and/or Participating Investors shall effect the purchase of the Offered
Shares and/or Remaining Shares on a date specified by the Selling Stockholder by notice to the
Company and/or the Participating Investors not earlier than the later of (x) ten (10) days after
such notice or (y) thirty (30) days after the receipt of the Notice by the Investors. On the date
of such purchase, the Selling Stockholder shall deliver to the Company and/or the Participating
Investors, as applicable, the certificates representing the Shares to be purchased by the Company
and/or the Participating Investors, each certificate to be properly endorsed for transfer, in
exchange for payment by the Company and/or the Participating Investors, as applicable, of the
purchase price for the Shares.

          (b) If (i) the Company and the Participating Investors do not elect to purchase any of the
Offered Shares or (ii) the Company and/or the Participating Investors elect to purchase less than
all of the Offered Shares and the prospective purchaser agrees to purchase less than all

 

 

of the Offered Shares, the following provisions shall apply: The Selling Stockholder may, not
later than forty (40) days following delivery to the Company and each of the Investors of the
Notice, enter into an agreement providing for the closing of the Transfer to the third party
purchaser(s) identified in the Notice of any Offered Shares with respect to which neither the
Company Refusal Right nor the Right of First Refusal has been exercised, together with the closing
of the purchase of any Shares to be sold by any Co-Sale Participant, such purchase to occur within
thirty (30) days of such agreement at a price and on terms and conditions no more favorable to the
transferee(s) thereof than specified in the Notice. Simultaneously with such purchase there shall
occur the purchase of any Shares with respect to which the Company Refusal Right or the Right of
First Refusal has been exercised. On the date of such purchase, each Co-Sale Participant shall be
paid that portion of the sale proceeds to which such Co-Sale Participant is entitled by reason of
its participation in such sale and the Company and/or each Participating Investor, as applicable,
shall pay the Selling Stockholder the purchase price to be paid by such Person for the Offered
Shares purchased by them. Upon receipt of such payment, each Co-Sale Participant shall promptly
deliver to the Selling Stockholder for Transfer to the prospective purchaser(s) and, if applicable,
the Selling Stockholder shall deliver to the Company and/or the Participating Investors, one or
more certificates properly endorsed for transfer which represent the Shares to be sold by each such
Person pursuant to this Article IV. To the extent that any prospective purchaser or purchasers
prohibits such assignment or otherwise refuses to purchase Shares from a Co-Sale Participant
exercising its Co-Sale Rights hereunder, such Selling Stockholder shall not sell to such
prospective purchaser or purchasers any Shares unless and until, simultaneously with such sale,
such Selling Stockholder shall purchase such Shares from such Co-Sale Participant on the same terms
and conditions specified in the Notice.

          (c) If the consideration to be paid for the Shares by the third party purchaser shall be other
than cash, the Company or the Participating Investors, as applicable, exercising the Company
Refusal Right or the Right of First Refusal may in lieu of such consideration pay cash equal to the
fair market value of such consideration as mutually agreed between the Selling Stockholder and the
holders of a majority of the Shares as to which the Right of First Refusal and Company Refusal
Right have been exercised. If such mutual agreement cannot be reached, the Appraisal Procedure set
forth in the Company’s Amended and Restated Certificate of Incorporation shall be followed
mutatis mutandis and the time periods in Article 4.2 shall be extended by the time needed
to determine such fair value.

ARTICLE V

GENERAL PROVISIONS CONCERNING TRANSFERS

5.1 Exempt Transfers.

          (a) A Stockholder may Transfer Shares without complying with the provisions of Article IV if
such Transfer is to any Permitted Transferee; provided that in the event of any Transfer
made pursuant to this Section 5.1, (A) the Transferring Stockholder shall inform the Company and
the Investors of such Transfer prior to effecting it, and (B) the transferee shall furnish the
Company with a written agreement, reasonably satisfactory to the Company, to be bound by and comply
with all provisions of this Agreement as if such transferee

 

 

were a Common Stockholder, Investor or Excluded Investor, as the case may be, based on the
status of the Transferring Stockholder. Such Transferred Shares shall remain Shares hereunder.

          (b) Notwithstanding the foregoing, the provisions of Article IV hereof shall not apply to the
sale of any Shares to the public pursuant to a registration statement filed with, and declared
effective by, the Securities and Exchange Commission under Securities Act of 1933, as amended (the
“Securities Act”).

5.2 [Reserved]

5.3 [Reserved]

5.4 Transfers to Competitors. Any other provision of this Agreement to the contrary
notwithstanding, other than in connection with a Sale of the Company, prior to a Qualified Public
Offering, no Transfer of Shares may be made by any Stockholder to a Competitor.

5.5 Stockholder Lockup Agreements in Connection with Initial Public Offering. Each
Stockholder agrees that, subject to any early release provisions that apply generally to
stockholders of the Company, it will not, if reasonably requested by the managing underwriter, for
a period of up to 180 days following the effective date of the registration statement for an
initial public offering directly or indirectly sell, offer to sell, grant any option for the sale
of, or otherwise dispose of any Common Stock or securities convertible into Common Stock, except
for (i) Registrable Securities (as defined in the Investor Rights Agreement) sold pursuant to such
registration statement, (ii) transactions relating to Common Stock or other securities acquired in
open market transactions after the completion of the initial public offering, and (iii) Transfers
to Affiliates, partners, members and stockholders of such Stockholder (each of whom shall have
furnished to the Company and the managing underwriter their written consent to be bound by this
Agreement and the Investor Rights Agreement), provided that the Company’s officers, directors and
all holders of more than 1% of the shares of Common Stock (calculated for this purpose as if all
securities convertible into or exercisable for Common Stock, directly or indirectly, are so
converted or exercised) of the Company enter such lockup agreements for the same period and on the
same terms, and provided further that any waiver or termination of the prohibitions contained in
this Section 5.5 by the Company or any underwriter shall apply to each Stockholder.

5.6 Consequences of Prohibited Transfer. Any attempt by a Stockholder to Transfer Shares in
violation of the terms of this Agreement shall be void, and the Company agrees that it will not
effect such a Transfer nor will it treat any alleged transferee as the holder of such Shares.

ARTICLE VI

DRAG ALONG RIGHTS

6.1 Drag Along Rights.

          (a) In the event that the Required Holders (the “Proposing Stockholders”) agree to and accept
an offer from a third party or third parties not Affiliated with any Proposing Stockholder (a
“Buyer”) to consummate a transaction or series of related transactions with such Buyer pursuant to
which such Buyer would acquire all of the Shares held by such Proposing Stockholders for a
specified price payable in cash, securities or other consideration and on

 

 

specified terms and conditions, the remaining Stockholders (the “Non Proposing Stockholders”)
shall be required, if so demanded by the Proposing Stockholders (a “Drag Along Notice”), to sell
all of their Shares to such Buyer in such transaction(s) and to participate in such transaction(s)
(a “Drag Along Sale”), notwithstanding any other rights of co-sale, rights of first refusal or
other rights in this Agreement or otherwise.

          (b) The provisions of this Article VI shall apply regardless of the form of consideration
received in the Drag Along Sale, and each Non Proposing Stockholder shall (i) if the Drag Along
Sale is structured as a merger or consolidation, waive any dissenters’ rights, appraisal rights or
similar rights in connection with such merger or consolidation, or (ii) if the Drag Along Sale is
structured as a sale, agree to sell all of its Shares on the terms and conditions approved by the
Proposing Stockholders. Each participating Stockholder in any Drag Along Sale (a) shall be subject
to the same terms and conditions, and (b) shall execute such documents and take such actions as may
be reasonably required by the Company and the Proposing Stockholders.

          (c) Upon the consummation of the Drag Along Sale, each holder of any class or series of Shares
(i) shall receive the same form of consideration and the same amount of consideration per share of
Common Stock (on an As-Converted Basis) as every other holder of any class or series of Shares,
except to the extent otherwise approved in connection with Section 2 of the Amended and Restated
Certificate of Incorporation of the Company, as amended from time to time, and (ii) shall be given
the same option, if any, as any other holders of any other class or series of Shares as to the form
of consideration to be received.

6.2 Transfer Mechanics; Further Assurances.

          (a) At least five (5) days prior to the date of consummation of a Drag Along Sale (which date
and the place and time of such consummation shall be designated by the Proposing Stockholders and
provided to each Non Proposing Stockholder in the Drag Along Notice), each Non Proposing
Stockholder shall deliver for transfer to the Buyer one or more certificates, properly endorsed for
transfer in form satisfactory to the Proposing Stockholders, which represent all of the Equity
Securities of the Company held by such Non Proposing Stockholder, duly executed and free and clear
of any liens. The certificate(s) delivered by each Other Stockholder shall be transferred to the
Buyer identified in the Drag Along Notice as part of the consummation of the Drag Along Sale. Upon
receipt of the proceeds of the Drag Along Sale, the Proposing Stockholders shall promptly remit to
each Non Proposing Stockholder that portion of such proceeds to which such Non Proposing
Stockholder is entitled by reason of such Non Proposing Stockholder’s participation in such sale.

          (b) In connection with a Drag Along Sale, each participating Stockholder agrees to execute and
deliver such agreements as may be reasonably specified by the Proposing Stockholders to which such
Proposing Stockholders will also be party, on the same terms, including, without limitation,
agreements to (a) (i) make individual representations, warranties, covenants and other agreements
as to the unencumbered title to its Shares and the power, authority and legal right to Transfer
such Shares and to enter into the agreements relating thereto and the absence of any adverse claim
with respect to such Shares (but shall not be required to make individual representations or
warranties with respect to any of the Company’s operations, activities, financial condition or
other characteristics) and (ii) be liable without limitation as to

 

 

such individual representations, warranties, covenants and other agreements and (b) be liable
(whether by purchase price adjustment, indemnity payments or otherwise) in respect of
representations, warranties, covenants and agreements in respect of the Company; provided,
however, that the aggregate amount of liability described in this clause (b) in connection with
any sale of Shares shall not exceed the lesser of (i) such participating Stockholder’s pro rata
portion of any such liability, to be determined in accordance with such participating Stockholder’s
portion of the total number of Shares included in such Drag Along Sale (on an As-Converted Basis)
or (ii) the proceeds to such participating Stockholder in connection with such Drag Along Sale.

ARTICLE VII

LEGEND

7.1 Each certificate representing the Shares subject to the terms of this Agreement shall be
endorsed with the following legend or legend(s) containing substantially similar information (in
addition to any legend required under applicable securities laws or otherwise):

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 RIGHT TO
VOTE AND THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN STOCKHOLDERS AGREEMENT DATED MAY
15, 2008 BY AND AMONG THE HOLDER HEREOF AND OTHER STOCKHOLDERS OF THE COMPANY.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF
THE COMPANY.

     This legend shall be removed upon termination of this Agreement. Each party to this Agreement
consents to the Company making a notation on its records and giving instructions to any transfer
agent of the Company’s securities and capital stock in order to implement the restrictions on
transfer established in this Agreement.

7.2 The Stockholders agree that the Company may instruct its transfer agent to impose transfer
restrictions on Shares represented by certificates bearing the legend referred to in Section 6.1
above to enforce the provisions of this Agreement and the Company agrees to promptly do so. The
legend shall be removed upon termination of this Agreement.

ARTICLE VIII

MISCELLANEOUS

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

 

 

8.2 Amendment.

          (a) Except as otherwise expressly provided, any provision of this Agreement may be amended and
the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only by the written consent given (i) as to the Company, only by
the Company; (ii) as to the Investors, only by (x) Required Holders; provided, that without
the consent of any Investor, no such amendment may treat any right or obligation of such Investor
dissimilarly from the same right or obligation of other Investors, and (y) the Warrant Investor, as
long as such Warrant is held by CIGPF I Corp. or its Permitted Transferee and is exercisable for at
least seventy five percent (75%) of the Common Stock originally issuable upon exercise of the
Warrant; provided, however, that consent of the Warrant Investor shall not be required for
any amendment or waiver of any provision of this Agreement unless such amendment or waiver affects
the Warrant Investor or the Warrant Investor’s Shares in a manner different than the Investors that
were originally issued Series A Preferred Stock or the Series A Preferred Stock and in a manner
adverse to the interests of the Warrant Investor as an equity investor in the Company, it being
understood that no such consent shall be required for an amendment or waiver that adversely affects
the Warrant Investor and the Investors that were originally issued Series A Preferred Stock in a
similar manner given their relative and different equity interests in the Company and
notwithstanding the right of the Warrant Investor to consent to adverse amendments, modifications
and waivers as more specifically set forth herein, the Company shall be entitled to authorize and
issue additional series of equity securities that are either (x) pari passu in preference and right
(y) senior in preference and right to the Series A Preferred Stock (with the Company to deliver
copies of such written consent to any Investors who did not execute the same) or (z) the PCP
Investor, if required under Section 8.13; provided, however, that no consent from the
Common Stockholders shall be required for any amendment or waiver of any provision of this
Agreement unless such amendment or waiver creates additional obligations for or materially
diminishes the rights of the Common Stockholders under this Agreement; and provided further,
however, that no consent of any Investor or Common Stockholder shall be necessary for any
amendment and/or restatement which is solely for the purpose of including holders of Common Stock
of the Company as “Common Stockholders” and parties hereto.

          (b) Notwithstanding Section 8.2(a) above, no consent of any Common Stockholder shall be
necessary for any amendment and/or restatement which is solely for the purpose of including holders
of Series B Preferred Stock or other preferred stock of the Company as “Investors” and parties
hereto.

          (c) The rights of each of Bain Capital and Battery Ventures to designate the Preferred
Directors pursuant to Section 2.1(a)(i) and to have a designated director on each committee of the
Board of Directors pursuant to Section 2.2 may not be amended, modified or waived in any manner
without the prior written consent of such designating Investor.

          (d) The right of Thomas J. Petters to designate a director pursuant to Section 2.1(a)(ii) may
not be amended, modified or waived in any manner without the prior written consent of Thomas J.
Petters.

 

 

          (e) Any amendment or waiver effected in accordance with this Section 8.2 shall be binding upon
each Investor, its successors and assigns, the Company and the Common Stockholders.

8.3 Assignment of Rights. This Agreement and the rights and obligations of the parties
hereunder shall inure to the benefit of, and be binding upon, their respective successors, assigns
and legal representatives.

8.4 Term. This Agreement shall continue in full force and effect from the date hereof
through the earliest of the following dates, on which date it shall terminate in its entirety:

          (a) the date of the closing of a Qualified Public Offering; and

          (b) the date of the consummation of a Sale of the Company.

8.5 Ownership. Each Common Stockholder represents and warrants that he is the sole legal
and beneficial owner of those Shares he currently holds subject to this Agreement and that no other
person has any interest in such Shares.

8.6 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 to the Company at:

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

to each Investor at its address set forth on Exhibit A hereto with a copy to:

Ropes & Gray LLP

One International Place

Boston, Massachusetts 02110 Attention: Joel F. Freedman, Esq. Facsimile No.: (617)

951-7050

to each Common Stockholder at its address set forth on Exhibit B hereto, or at such other address
as the Company or the Stockholders each may specify by written notice to the other parties hereto.
Any 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. All
communications shall be sent to the party to be notified at the address as set forth on the

 

 

signature page hereof or at such other address as such party may designate by ten (10) days advance
written notice to the other parties hereto.

8.7 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.

8.8 Entire Agreement. This Agreement constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof, and no party shall be
liable or bound to any other in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein and therein.

8.9 Counterparts; Facsimile Signatures. 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.

8.10 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 and Common Stockholders
acknowledge that they have been informed by the Investors that the provisions of this Section 8.10
constitute a material inducement upon which the Investors are relying and will rely in entering
into this Agreement. Any Investor, Common Stockholder or the Company may file an original
counterpart or a copy of this Section 7.10 with any court as written evidence of the consent of the
Investors, Common Stockholders and the Company to the waiver of its right to trial by jury.

8.11 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, Borough of Manhattan, 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 7.6 shall be deemed effective service of process on such party.

8.12 Additional Stockholders. Unless otherwise directed by the Required Holders, the
Company shall require any Person who acquires any shares of capital stock of the Company from the
Company to become a party to this Agreement as a Common Stockholder by executing and delivering a
counterpart of this Agreement, except for any officer, director or employee of, or consultant to,
the Company or any Subsidiary who receives restricted stock or other stock-based awards or
exercises any stock options, provided that the terms of such award or option have been approved by
the Required Holders (including, without limitation, based on such award or option or other
agreement containing provisions regarding rights of first refusal and co-sale with respect to the
shares subject thereto).

8.13 PCP Investor Consent. Notwithstanding any provision of this Agreement, the Investor
Rights Agreement or the Amended and Restated Certificate of Incorporation (collectively, the
“Investor Documents”), the Company and each Stockholder agree that, excluding any actions under
ARTICLE II of this Agreement, each amendment, modification or supplement to, restatement of, or
waiver, approval, consent, determination, direction, election, acceptance or other agreement under
any Investor Document (each an “Investor Approval”) which is required to be given or made by the
Required Holders (the “Approving Investors”) to be effective shall not be effective unless
consented to in writing by the PCP Investor or its Permitted Transferees, so long as the PCP
Investor or its Permitted Transferees hold (pursuant to the PCP Warrant, the Series A Preferred
Stock issuable upon exercise thereof or the Common Stock issuable upon conversion of the Preferred
Stock) at least 75% of the shares of Common Stock, on an As-Converted Basis, originally issuable
upon exercise of the PCP Warrant, if either (a) such Investor Approval relates to or is given in
connection with any transaction in which any Approving Investor or any Affiliate of any such
Approving Investor (excluding an arms’ length transaction with a portfolio company of Bain or
Battery Ventures which is consented to by the PCP Investor or its Permitted Transferee, which
consent shall not be unreasonably withheld) is participating, other than supporting or approving
such transaction as a holder of Shares of the Company or as an officer or director of the Company,
and other than participation as a Stockholder under this Agreement or as an “Investor” under the
Investor Rights Agreement, provided, however, no consent of the PCP Investor shall be required if
the PCP Investor has been provided the opportunity to participate in such transaction in a
proportionate and otherwise similar manner to such Investor or (b) such Investor Approval does not
have a like effect upon all holders of each class of the Company’s capital stock, as compared to
each other holder of such class of capital stock, on a proportionate basis in accordance with the
number of shares of such class of capital stock held by each and for the purposes of the foregoing,
the PCP Warrants shall be deemed to be part of the class of the Series A Preferred Stock.
Notwithstanding and in addition to the foregoing, the Certificate of the Company (i) may be amended
to decrease the annual dividend rate on the Series A Preferred Stock provided for in Section 1.2
thereof without the consent of the PCP Investor, and (ii) may not be amended to increase such
annual dividend rate without the consent of the PCP Investor.

     [The remainder of this page has been intentionally left blank]

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year
first above written.

	 	 	 	 	 
	 	FINGERHUT DIRECT MARKETING, INC.

 	 
	 	By:  	/s/ Brian Smith
 	 
	 	 	Name:  	Brian Smith 	 
	 	 	Title:  	Chairman and Chief Executive Officer 	 

 

 

	 	 	 	 	 
	 	THE INVESTORS

 	 
	 	/s/ Brian Smith
 	 
	 	Name:  	Brian Smith 	 
	 	 	 
	 	                          /s/ John Giuliani
 	 
	 	Name:  	John Giuliani 	 
	 	 	 
	 	                           /s/ John Damrow
 	 
	 	Name:  	John Damrow 	 
	 	 	 
	 	                           /s/ Bill Dunlap
 	 
	 	Name:  	Bill Dunlap 	 
	 	 	 
	 	                          /s/ Alice Richter
 	 
	 	Name:  	Alice Richter 	 
	 	 	 
	 	                          /s/ Kermit Stofer
 	 
	 	Name:  	Kermit Stofer 	 

 

 

	 	 	 	 	 
	 	BAIN CAPITAL VENTURE FUND 2001, L.P.

 	 
	 	By:  	Bain Capital Venture Partners, L.P.
 	 
	 	 	its general partner 	 
	 	By:  	          Bain Capital Venture Investors, LLC
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	          /s/ Michael Krupka
 	 
	 	 	Name:  	Michael Krupka 	 
	 	 	Title:  	Authorized Person 	 
	 
	 	BCIP ASSOCIATES III, LLC
 	 
	 
	 	By:                	BCIP Associations III, 	 
	 	 	its sole member and manager 
	 
	 
	 	BCIP ASSOCIATES III-B, LLC

 	 
	 	By:  	BCIP Associates III-B,
 	 
	 	 	its sole member and 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:  	Brookside Capital Investors, L.P.
 	 
	 	 	its general partner 	 
	 	By:  	           Brookside Capital Management, LLC
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	           /s/ William E. Pappendick .
 	 
	 	 	Name:  	William E. Pappendick 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	 	RGIP, LLC

 	 
	 	By:  	/s/  [ILLEGIBLE]	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 
	 	BAIN CAPITAL VENTURE FUND 2007, L.P.

 	 
	 	By:  	Bain Capital Venture Partners 2007, L.P.
 	 
	 	 	its general partner 	 
	 	By:  	        Bain Capital Venture Investors, LLC
 	 
	 	 	its general partner 	 
	 	 	 
	 	By:  	        /s/ Michael Krupka
 	 
	 	 	Name:  	Michael Krupka 	 
	 	 	Title:  	Managing Director 	 
	 
	 	BCIP VENTURE ASSOCIATES

 	 
	 	By:  	Bain Capital Investors, LLC
 	 
	 	 	its managing partner 	 
	 	By:  	             Bain Capital Venture Investors, LLC
 	 
	 	 	its Attorney-in-fact 	 
	 	 	 
	 	By:  	             /s/ Michael Krupka
 	 
	 	 	Name:  	Michael Krupka 	 
	 	 	Title:  	Managing Director 	 
	 
	 	BCIP VENTURE ASSOCIATES B

 	 
	 	By:  	Bain Capital Investors, LLC
 	 
	 	 	its managing partner 	 
	 	By:  	             Bain Capital Venture Investors, LLC
 	 
	 	 	its Attorney-in-fact 	 
	 	 	 
	 	By:  	             /s/ Michael Krupka
 	 
	 	 	Name:  	Michael Krupka 	 
	 	 	Title:  	Managing Director 	 
	 
	 	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 	 

 

 

	 	 	 	 	 
	 	PETTERS GROUP WORLDWIDE, LLC

 	 
	 	By:  	/s/ [ILLEGIBLE]	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	RTB HOLDINGS, INC.

 	 
	 	By:  	/s/ [ILLEGIBLE]	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	EBP SELECT HOLDINGS, LLC

 	 
	 	By:  	/s/ [ILLEGIBLE]	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CIGPF I CORP

 	 
	 	By:  	/s/  Ari Rosenberg
 	 
	 	 	Name:  	Ari Rosenberg 	 
	 	 	Title:  	Treasurer/Vice President 	 
	 
	 	GOLDMAN, SACHS & CO.

 	 
	 	By:  	/s/ [ILLEGIBLE]	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	FORTRESS CAPITAL CORP.

 	 
	 	By:  	/s/  Constantine M. Dakolias
 	 
	 	 	Name:  	Constantine M. Dakolias 	 
	 	 	Title:  	President 	 

 

 

	 	 	 	 	 

Exhibit A

NAMES AND ADDRESSES OF INVESTORS

BAIN CAPITAL VENTURE FUND 2001, L.P.

BAIN CAPITAL VENTURE FUND 2007, L.P.

BCIP ASSOCIATES III, LLC

BCIP ASSOCIATES I1I-B, LLC

BCIP VENTURE ASSOCIATES

BCIP VENTURE ASSOCIATES B

c/o Bain Capital, LLC

111 Huntington Avenue

Boston, MA 02199

Phone: 617-516-2000

Fax: 617-516-2010

Attention: Michael Krupka

BROOKSIDE CAPITAL PARTNERS FUND, L.P.

c/o Bain Capital, LLC

111 Huntington Avenue

Boston, MA 02199

Phone: 617-516-2000

Fax: 617-516-2010

Attention: Dom Ferrante

RGIP, LLC

c/o Ropes & Gray LLP

One International Place

Boston, MA 02116

Phone: 617-951-7000

Fax: 617-951-7050

Attention: R. Bradford Malt

BATTERY VENTURES VI, L.P.

BATTERY INVESTMENT PARTNERS VI, LLC

c/o Battery Ventures

20 William Street, Suite 200

Wellesley, MA 02481

Phone: 781-577-1000

Fax: 781-478-6601

Attention: Michael Brown

 

 

PETTERS GROUP WORLDWIDE, LLC

RTB HOLDINGS, LLC

4400 Baker Road

Minnetonka, MN 55343

Phone: 952-932-3100

Fax: 952-975-4047

Attention: Stuart Romenesko

Brian Smith

c/o Fingerhut Direct Marketing, Inc.

6509 Flying Cloud Drive

Eden Prairie, MN 55344

11036459_14.DOC

Kermit L. Stofer

c/o Strategic Partners

10 Post Office Sq., Suite 600

Boston, MA 02109

Phone: 617-

Fax: 617-

CIGPF I CORP.

c/o Citigroup Global Markets, Inc.

390 Greenwich Street

4th Floor

New York, NY 10013

PRUDENTIAL CAPITAL PARTNERS, II, L.P.

PRUDENTIAL CAPITAL PARTNERS MANAGEMENT FUND II, L.P.

PRUDENTIAL CAPITAL PARTNERS (PARALLEL FUND) II, L.P.

c/o Prudential Capital Group

Two Prudential Plaza, Suite 5600

180 N. Stetson Avenue

Chicago, IL 60601

GOLDMAN, SACHS & CO.

85 Broad Street

New York, New York 10004

Attention: Gaurav Seth

Facsimile No.: (212) 428-9842

FORTRESS CAPITAL CORP.

1345 Avenue of the Americas, 46th Floor

New York, New York 10105

 

 

Attention: Dean Dakolias

Facsimile No.: (212) 798-6099

John Giuliani

[   ]

John Damrow

[   ]

Bill Dunlap

[   ]

Alice Richter

[   ]

CHERRY TREE COMPANIES, LLC

301 Carlson Parkway

Suite 103

Minnetonka, MN 55305

Phone: 952-893-9012

Fax: 952-893-9036

Attn: Gordon F. Stofer

GORMAN CHARITABLE TRUST

[   ]

PIPER JAFFRA Y & CO.

800 Nicollet Mall

Minneapolis, MN 55402-7020

Phone: 612-303-6000

Fax: 612-303-1354

Attn: Paul Jevnick

Theodore Deikek

[   ]

 

 

Exhibit C

COMPETITORS

Peach Direct

Swiss Colony

Blue Hippo

Bill Me Later

Montgomery Ward

Spiegel

Newport Newsexv4w7

Exhibit 4.7

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

     This Agreement (the “Agreement”) is made as of May 15, 2008 by and among Fingerhut Direct
Marketing, Inc., a Delaware corporation (the “Company”), and the parties listed as Investors on
Exhibit A hereto (the “Investors”).

     WHEREAS, pursuant to a Preferred Stock Purchase Agreement dated as of February 24, 2004, as
supplemented by Supplement No. 1 dated October 27, 2004 and Supplement No. 2 dated
November 1, 2004 (the “Series A Purchase Agreement”), among the Company and certain of the
investors, the Company issued and sold to certain of the investors shares of Series A Preferred
Stock (as defined below); and

     WHEREAS, pursuant to a Preferred Stock Purchase Agreement dated as of the date hereof, among
the Company and certain of the Investors (the “Purchase Agreement”), the Company is issuing and
selling to certain of the Investors shares of Series B Preferred Stock (as defined below); and

     WHEREAS, the Company and the Investors are party to the Amended and Restated Investor Rights
Agreement, dated as of May 24, 2006 (the “Prior Agreement”), which they now desire to amend and
restate in its entirety;

     WHEREAS, it is a condition to the closing of the sale of the Series B Preferred Stock under
the Purchase Agreement that the Company and the Investors enter into this Agreement.

     NOW, THEREFORE, in consideration of the mutual promises and obligations contained herein, the
parties hereto agree to amend and restate the Prior Agreement in its entirety as follows:

1. Definitions.

     1.1. “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act, and shall include, with respect to any Investor, any
managed account, investment fund or other vehicle for which such Investor or any Affiliate or such
Investor acts as an investment advisor or portfolio manager; provided, that with respect to
Bain Capital, the term Affiliate shall be deemed to include any Person under common management with
Bain Capital.

     1.2. “Bain Capital” means Bain Capital Venture Fund 2007, L.P.

     1.3. “Battery Ventures” means Battery Ventures VI, L.P.

     1.4. “Commission” means the Securities and Exchange Commission or any other federal agency at
the time administering the Securities Act or the Exchange Act.1.6. “Exchange Act” shall mean the
Securities Exchange Act of 1934 and the rules and regulations of the Commission thereunder, and
any successor to such statute or such rules and regulations.

     1.5. “Common Stock” means the Common Stock, par value $0.00001 per share, of the Company.

 

 

     1.6. “Exchange Act” shall mean the Securities Exchange Act of 1934 and the rules and
regulations of the Commission thereunder, and any successor to such statute or such rules and
regulations.

     1.7. “Excluded Investor” means each of Goldman, Sachs & Co. and its Affiliates, Fortress
Capital Corp. and its Affiliates, and, in each case, their permitted assigns and transferees.

     1.8. “Form 5-1”, “Form S-3”, “Form S-4” and “Form S-8” mean respective forms under the
Securities Act and any successor registration forms to the form in question.

     1.9. “Fully Diluted Basis” means, for the purposes of determining the number of shares of
Common Stock outstanding, a basis of calculation which takes into account (a) shares of Common
Stock actually issued and outstanding at the time of such determination, and (b) that number of
shares of Common Stock that is then issuable upon conversion of all then outstanding shares of
Series A Preferred Stock and Series B Preferred Stock or upon exercise of any option, warrant or
other right to acquire Common Stock or upon conversion of any Series A Preferred Stock then
issuable upon the exercise of any Warrant.

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

     1.11. “Holder” means any person party to this Agreement owning the Registrable Securities
or any assignee thereof in accordance with Section 8 hereof.

     1.12. “Initial Public Offering” means the first registered offering of securities of the
Company under the Securities Act.

     1.13. “Investors” has the meaning assigned to it in the introductory paragraph of this
Agreement.

     1.14. “Majority Participating Holders” means, with respect to any registration of
Registrable Securities, the Holder or Holders at the relevant time of at least a majority of the
shares of Series B Preferred Stock (or Common Stock issued on conversion thereof), or, if no such
shares are to be included in the registration statement in question, Holders of at least a
majority of the Registrable Securities, in each case, to be included in the registration statement
in question.

     1.15. “PCP Investor” means Prudential Capital Partners, II, L.P., Prudential Capital
Partners Management Fund II, L.P. or Prudential Capital Partners (Parallel Fund) II, L.P.

     1.16. “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.

     1.17. “Petters” means Petters Group Worldwide, LLC and its Affiliates.

     1.18. “Qualified Public Offering” means an underwritten public offering of shares of
Common Stock in which the net aggregate proceeds to the Company equal or exceed $75 million

 

 

and the public offering price per share is not less than $0.2235 (as adjusted appropriately
in the event of any subdivision, combination, reorganization, recapitalization, reclassification,
stock dividend or similar event affecting the Common Stock) and after which the Common Stock is
listed on the New York Stock Exchange or the Nasdaq Global Market.

     1.19. “Register”, “registered”, and “registration” refer to a registration effected by
preparing and filing a registration statement or similar document in compliance with the
Securities Act, and the automatic effectiveness or the declaration or ordering of effectiveness of
such registration statement or document.

     1.20. “Registrable Securities” means (i) any Common Stock issued or issuable upon
conversion of the Series A Preferred Stock or Series B Preferred Stock and held by a Holder, (ii)
any Common Stock issued or issuable upon exercise of any Warrants held by a Holder and any Common
Stock issuable upon conversion of the Series A Preferred Stock issuable upon exercise of any
Warrants held by a Holder, and (iii) any Common Stock or other securities issued or issuable with
respect to any Registrable Securities by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other reorganization or
otherwise, in each case held by any party to this Agreement. Further, for purposes of Sections 2.2
and 3 only, Registrable Securities shall also include all other shares of Common Stock held by a
Holder. The Registrable Securities of any Holder shall cease to be Registrable Securities when (i)
a registration statement with respect to the sale of such securities shall have become effective
under the Securities Act and such securities shall have been disposed of in accordance with such
registration statement; (ii) such securities shall have been distributed to the public pursuant to
Rule 144; or (iii) such securities may be sold by such Holder and all of its Affiliates without
registration under the Securities Act pursuant to Rule 144 (without any limitation or restrictions
under Rule 144) under the Securities Act or (iv) such securities may be sold by such Holder and
all of its Affiliates without registration under the Securities Act pursuant to Rule 144 under the
Securities Act and such Holder and all of its Affiliates collectively own less than 1% of the
Company’s outstanding Common Stock. For purposes of this Agreement, the number of shares of
Registrable Securities outstanding at any time shall be determined by adding the number of shares
of Common Stock or other securities outstanding which are, and the maximum number of shares of
Common Stock or other securities issuable pursuant to then convertible securities which upon
issuance would be, Registrable Securities and the maximum number of shares of Common Stock
issuable upon the conversion of any Series A Preferred Stock issuable upon the exercise of any
then outstanding Warrant, all of which shares of Common Stock shall be considered to be then
outstanding for the purposes hereof.

     1.21. “Registration Expenses” means all expenses incident to performance of or compliance
with Sections 2, 3 and 4 hereof by the Company, including without limitation all registration and
filing fees, all listing fees, all fees and expenses of complying with securities or blue sky
laws, all printing and automated document preparation expenses, all messenger and delivery
expenses, the fees and disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits required by or incident to such
performance and compliance, and the fees and disbursements of one counsel for the Holders on whose
behalf Registrable Securities are being registered, but excluding underwriting discounts

 

 

and commissions and applicable transfer taxes, if any, which shall be borne by the sellers of
the Registrable Securities in all cases.

     1.22. “Required Holders” means, at any time, the Holders of at least 66% of the then
outstanding shares of Series B Preferred Stock (or Common Stock issued on conversion thereof).

     1.23. “Rule 144” means Rule 144 promulgated under the Securities Act, and any successor
rule or regulation thereto, and in the case of any referenced section of such rule, any successor
section thereto, collectively and as from time to time amended and in effect.

     1.24. “Securities Act” means the Securities Act of 1933 or any successor federal statute,
and the rules and regulations of the Commission thereunder, and in the case of any referenced
section of any such statute, rule or regulation, any successor section thereto, collectively and
as from time to time amended and in effect.

     1.25. “Series A Preferred Stock” means the Series A Convertible Preferred Stock, par
value $0.00001 per share, of the Company.

     1.26. “Series B Preferred Stock” means the Series B Convertible Preferred Stock, par
value $0.00001 per share, of the Company.

     1.27. “Stockholders Agreement” means that certain Amended and Restated Stockholders
Agreement, dated as of the date hereof, to which the Company is a party, as the same may be
amended from time to time.

     1.28. “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.

     1.29. “Warrants” means any warrants to purchase Common Stock issued to CIGPF I Corp.,
Piper Jaffray & Co., Cherry Tree Companies, LLC, Gorman Charitable Trust, Goldman Sachs Specialty
Lending Group, LP and Fortress Capital Corp. and any warrants to purchase Series A Preferred Stock
issued to the PCP Investor.

	2.	 	Request for Registration.

     2.1. Registrations on Form S-1. At any time, (1) the Holders of at least seven and
one-half percent (7.5%) of the then outstanding Registrable Securities may, by written notice to
the Company, request that the Company effect the registration on Form S-1 of a number of
Registrable Securities for which the gross aggregate offering price is reasonably expected to be at
least $10,000,000, and (2) Holders of any Registrable Securities may, by written notice to the
Company, request that the Company effect the registration on Form S-1 of a number of Registrable
Securities for which the gross aggregate offering price is reasonably expected to be at least
$30,000,000; provided, that the Company’s obligations to comply with any such request with
respect to the Initial Public Offering shall be subject to the prior written approval of the
Required Holders. If the Holders initiating either such registration intend to distribute the

 

 

Registrable Securities in an underwritten offering, they shall so state in their request.
Promptly after receipt of such notice, the Company will give written notice of such requested
registration to all other Holders of Registrable Securities. The Company will then as provided in
Section 4 use all reasonable commercial efforts to effect the registration under the Securities Act
of the Registrable Securities which the Company has been requested to register by such Holders, and
all other Registrable Securities which the Company has been requested to register by other Holders
of such Registrable Securities by notice delivered to the Company within ten (10) days after the
giving of such notice by the Company.

     2.2 Registration on Form S-3. At any time after the Company becomes eligible to
file a Registration Statement on Form S-3, one or more Holders of Registrable Securities may by
written notice to the Company, request that the Company effect the registration on Form S-3 of a
number of Registrable Shares for which the gross aggregate offering price is reasonably expected to
be at least $5,000,000. If the Holders initiating such registration intend to distribute the
Registrable Securities in an underwritten offering, they shall so state in their request. Promptly
after receipt of such notice, the Company will give written notice of such requested registration
to all other Holders of Registrable Securities. The Company will then as provided in Section 4 use
all reasonable commercial efforts to effect the registration under the Securities Act of the
Registrable Securities which the Company has been requested to register by such Holders, and all
other Registrable Securities which the Company has been requested to register by other Holders of
Registrable Securities by notice delivered to the Company within ten (10) days after the giving of
such notice by the Company.

     2.3. Postponement. The Company may postpone for a period of up to 60 days the
filing of any registration required to be filed pursuant to this Section 2 if the Board of
Directors of the Company in good faith determines that such postponement is necessary in order to
avoid premature disclosure of a financing, acquisition, recapitalization, reorganization or other
material transaction, the disclosure of which would have a materially detrimental effect on the
Company; provided, however, that the Company may not exercise such right of postponement
within any period of 365 days (i) more frequently than twice or (ii) for more than an aggregate of
60 days for all postponements within any such 365-day period. If the Company elects to postpone the
filing of a registration statement pursuant to this Section 2.3, the Majority Participating Holders
may withdraw such request and upon such withdrawal, such request shall be deemed not to have been
made for any purpose of this Agreement.

     2.4. Number of Requests; Form.

     2.4.1. Section 2.1 Registrations. The Company shall not be required to
effect more than two (2) registrations pursuant to Section 2.1. Each registration requested
pursuant to Section 2.1 shall be effected by the filing of a registration statement on Form
S-1 (or any other form which includes substantially the same information as would be
required to be included in a registration statement on such form as currently constituted),
unless the use of a different form has been agreed to in writing by the Majority
Participating Holders. No registration of Registrable Securities under Section 2.1 shall be
deemed to be a registration for any purpose of this Section 2.4.1 (i) which shall not have
become and remained effective in accordance with the provisions of this Agreement, or (ii)
pursuant to which Holders of Registrable Securities are not able to

 

 

include at least 75% of the Registrable Securities which such Holders desired to
include in such registration.

     2.4.2. Section 2.2 Registrations. The Company shall not be required to
effect more than two (2) registrations pursuant to Section 2.2 in any twelve (12) month
period. Each registration requested pursuant to Section 2.2 shall be effected by the filing
of a registration statement on Form S-3 (or any other form which includes substantially the
same information as would be required to be included in a registration statement on such
form as currently constituted), unless the use of a different form has been agreed to in
writing by the Majority Participating Holders, or unless the Form S-3 is not available as a
result of actions of or inaction by the Company in which case such registration shall be on
Form S-1 without regard to the limitation on registrations on Form S-1 set forth on Section
2.4.1. No registration of Registrable Securities under Section 2.2 shall be deemed to be a
registration for any purpose of this Section 2.4.2 (i) which shall not have become and
remained effective in accordance with the provisions of this Agreement, or (ii) pursuant to
which Holders of such Registrable Securities are not able to include at least 75% of the
Registrable Securities which such Holders desired to include in such registration.

     2.5. Payment of Expenses. The Company hereby agrees to pay all Registration
Expenses in connection with all registrations effected pursuant to Sections 2.1 and 2.2;
provided, however, that the Company shall not be required to pay for any expenses of such
registration proceeding if the registration request is withdrawn at any time at the request of the
Majority Participating Holders, and all participating Holders shall bear such expenses, unless the
Majority Participating Holders agree to treat such withdrawn registration as a registration which
was effected pursuant to Section 2.1 or 2.2, as the case may be, which agreement shall bind all
Holders of Registrable Securities. Notwithstanding the foregoing, if the Holders have learned of a
material adverse change in the condition, business, or prospects of the Company from that known to
the Holders at the time the demand for registration was made or if there shall have occurred a
material adverse change in market conditions from those existing as such time in the good faith
judgment of the Majority Participating Holders makes it undesirable to proceed with the proposed
offering, then the Holders shall not be required to pay any of such expenses. The withdrawn
registration shall not count as a registration effected pursuant to Section 2.1 or 2.2, as the case
may be.

3. Piggyback Registration. If the Company at any time proposes to register any of its
equity securities under the Securities Act, for its own account or for the account of any holder
of its securities other than Registrable Securities, on a form which would permit registration of
Registrable Securities for sale to the public under the Securities Act, or proposes to register
any securities in a so-called “unallocated” or “universal” shelf registration statement, the
Company will each such time give notice to all Holders of Registrable Securities of its intention
to do so. Such notice shall describe such securities and specify the form, manner and other
relevant aspects of such proposed registration. Any such Holder may, by written response delivered
to the Company within ten (10) days after the giving of any such notice by the Company, request
that all or a specified part of the Registrable Securities held by such Holder be included in such
registration; provided, that the Company shall only have such obligations with respect to
the Initial Public Offering with the prior written approval of the Required Holders; provided,
further,

 

 

that the Required Holders may not waive such obligations in part or with respect to less than all
requesting Holders. The Company thereupon will use its best efforts as a part of its filing of
such form to cause to be included in such registration under the Securities Act all Registrable
Securities which the Company has been so requested to register by the Holders of Registrable
Securities, to the extent required to permit the disposition (in accordance with the methods to be
used by the Company or other holders of securities in such registration) of the Registrable
Securities to be so registered. The Company shall be under no obligation to complete any offering
of its securities it proposes to make and shall incur no liability to any Holder for its failure
to do so. No registration of Registrable Securities effected under this Section 3 shall relieve
the Company of any of its obligations to effect registrations of Registrable Securities pursuant
to Section 2.1 or 2.2 hereof.

     3.1. Excluded Transactions. The Company shall not be obligated to effect any
registration of Registrable Securities under this Section 3 incidental to the registration of any
of its securities in connection with mergers, acquisitions, exchange offers, dividend reinvestment
plans or stock option or other employee benefit plans.

     3.2. Payment of Expenses. The Company hereby agrees to pay all Registration
Expenses in connection with each registration of Registrable Securities requested pursuant to this
Section 3.

     4. Registration Procedures.

     4.1. Company Obligations. If and whenever the Company is required to use all
reasonable commercial efforts to effect the registration of any Registrable Securities under
the Securities Act as provided in Sections 2 or 3 hereof, the Company will as expeditiously
as reasonably possible:

          4.1.1. Registration Statement. Prepare and (in the case of a registration
pursuant to Section 2 hereof, promptly and in any event within 45 days after a request for
registration is delivered to the Company under Section 2.1 or within 20 days after a
request for registration is delivered to the Company under Section 2.2) file with the
Commission a registration statement with respect to such Registrable Securities and use all
reasonable commercial efforts to cause such registration statement to become effective as
soon as possible thereafter. Such registration statement shall be for an offering to be
made on a continuous or delayed basis (a so-called “shelf registration statement”) if the
Company is eligible for the use thereof and the Majority Participating Holders have
requested a shelf registration statement.

          4.1.2. Amendments and Supplements to Registration Statement. Prepare and
file with the Commission such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities and other securities, if any, covered by such
registration statement until the later of (i) such time as all such Registrable Securities
have been disposed of by the seller or sellers thereof in accordance with the intended
methods of disposition set forth in such registration

 

 

statement (but in no event for a period of more than 180 days after such registration
statement becomes effective) which 180 day period shall be extended by the number of days
that the sale of Registrable Securities is suspended as described in Section 4.4 or (ii) the
expiration of the time when a prospectus relating to such registration is required to be
delivered under the Securities Act.

     4.1.3. Cooperation. Use its best efforts to cooperate as may be reasonably
requested by the seller in the disposition of the Common Stock covered by such registration
statement, including without limitation in the case of an underwritten offering causing key
executives of the Company to participate under the direction of the managing underwriter in
a “road show” scheduled by such managing underwriter in such locations and of such duration
as in the reasonable judgment of such managing underwriter are appropriate for such
underwritten offering.

     4.1.4. Furnishing of Copies of Registration Statements and Other Documents.
Furnish to each seller of such Registrable Securities such number of conformed copies of
such registration statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and any summary prospectus),
each in conformity with the requirements of the Securities Act, such documents incorporated
by reference in such registration statement or prospectus and such other documents as such
seller may reasonably request in order to facilitate the disposition of the Registrable
Securities of such seller covered by such registration statement.

     4.1.5. State Securities Laws. Use its best efforts to register or qualify
such Registrable Securities under such securities or “blue sky” laws of such jurisdictions
as the sellers shall reasonably request, and do any and all other acts and things which may
be necessary or advisable to enable each seller to consummate the disposition in
suchjurisdictions of the Registrable Securities of such seller covered by such registration
statement; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation or subject the
Company to taxation in any jurisdiction in which it is not so qualified or would not
otherwise be so subject.

     4.1.6. Opinion of Counsel; Comfort Letter. Use its best efforts to obtain
all legal opinions, auditors consents and comfort letters and experts cooperation as may be
required, including furnishing to each underwriter of Registrable Securities on the date
that the registration statement with respect to such Registrable Securities becomes
effective, (i) an opinion, dated as of such date, of counsel for the Company and (ii) a
“cold comfort” letter, dated as of such date, signed by the independent public accountants
of the Company, in each case in form and substance as is customarily given to underwriters
in an underwritten public offering.

     4.1.7. Notice of Prospectus Defects. Immediately notify each seller of
Registrable Securities covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the

 

 

happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then existing, and at
the request of any such seller prepare and furnish to such seller a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing.

     4.1.8. Stop Orders. In the event of the issuance of any stop order
suspending the effectiveness of such registration statement, or any order suspending or
preventing the use of any related prospectus or suspending the qualification of any
Registrable Securities included in such registration statement for sale in any jurisdiction,
use its best efforts promptly to obtain the withdrawal of such order.

     4.1.9. General Compliance with Federal Securities Laws; Section 11(a) Earning
Statement. Otherwise use its best efforts to comply with the Securities Act, the
Exchange Act and all other applicable rules and regulations of the Commission, and make
available to its securities holders, as soon as reasonably practicable, an earning statement
covering the period of at least twelve (12) months after the effective date of such
registration statement, which earning statement shall satisfy Section 11(a) of the
Securities Act and any applicable regulations thereunder, including Rule 158.

     4.1.10. Underwriting Agreement. In the event of any underwritten offering,
enter into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering.

     4.1.11. Exchange Listing. Use its best efforts to cause such Registrable
Securities to be listed on each securities exchange on which any equity security of the
Company is then listed or, if the Company does not have a class of equity securities listed
on a national securities exchange, apply for qualification and use its best efforts to
qualify such Registrable Securities for listing on the New York Stock Exchange or inclusion
on the Nasdaq National Market or comparable trading system.

     4.1.12. Due Diligence. Make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by any such
seller or underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company’s officers, directors, employees and
independent accountants to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration statement,
in each case subject to the requirement that recipients execute appropriate confidentiality
agreements.

     4.1.13. Transfer Agent. Provide a transfer agent and registrar for all
such Registrable Securities not later than the effective date of such registration
statement.

 

 

     4.1.14. Company Lockup. In the case of an underwritten offering, except as
may otherwise be agreed by the managing underwriter and the Company, the Company will
refrain, for a period from fifteen (15) days before the effective date of the registration
sale until up to 120 days after such effective date, from directly or indirectly selling,
offering to sell, granting any option for the sale of, or otherwise disposing of any Common
Stock or securities convertible into Common Stock other than (i) pursuant to Company
employee equity plans, (ii) in connection with acquisitions, or (iii) in any transaction
involving the issuance of restricted securities if in such case the recipient of such
securities agrees in writing to be bound by the provisions of this Section 4.1.14.

     4.2. Participation by Selling Holders. The Company may require each seller of
Registrable Securities as to which any registration is being effected to furnish the Company such
information regarding such seller and the distribution of such securities as the Company may from
time to time reasonably request in writing and which shall be required by the Securities Act (or
similar state laws) or by the Commission in connection therewith.

     4.3. Conversion only Upon Consummation of Offering. No Holder shall be required
by this Agreement to convert any Registrable Security into Common Stock except at the applicable
closing or closings of an underwritten registered offering and except upon the sale of such
Registrable Security in the case of other registered offerings.

     4.4. Discontinue Selling. Each seller of Registrable Securities agrees that, upon
written notice of the happening of any event as a result of which the Prospectus included in any
registration statement contains an untrue statement of a material fact or omits any material fact
necessary to make the statements therein not misleading, or upon the issuance of a stop order
suspending the effectiveness of any registration statement, such seller will use commercially
reasonable efforts to forthwith discontinue disposition of Registrable Securities until such
seller is advised in writing by the Company that the use of the prospectus may be resumed and if
applicable is furnished with a supplemented or amended prospectus as contemplated by Section 4.1.7
hereof. If the Company shall give any notice to suspend the disposition of Registrable Securities
pursuant to a prospectus, the Company shall extend the period of time during which the Company is
required to maintain the registration statement effective pursuant to this Agreement by the number
of days during the period from and including the date of the giving of such notice to and
including the date such seller either is advised by the Company that the use of the prospectus may
be resumed or if applicable receives the copies of the supplemented or amended prospectus
contemplated by Section 4.1.7.

5. Additional Procedures in Connection with Underwritten Offerings; Holder
Lockups; Cutbacks.

     5.1. Registrations Upon Request Pursuant to Section 2. In the case of a
registration pursuant to Section 2 hereof, whenever the Majority Participating Holders shall
request that such registration shall be effected pursuant to an underwritten offering, such
registration shall be so effected, and only securities which are to be distributed by the
underwriters designated by such Majority Participating Holders may be included in such
registration. If requested by such underwriters, the Company and each participating seller will
enter into an underwriting agreement with such underwriters for such offering containing such
representations and

 

 

warranties by the Company and such participating sellers and such other terms
and provisions as are customarily contained in underwriting agreements with respect to secondary distributions,
including, without limitation, customary indemnity and contribution provisions; provided,
however, that the liability of each Holder in respect of any indemnification, contribution or
other obligation of such Holder arising under such underwriting agreement (i) shall be limited to
losses arising out of or based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement, incorporated document or other such
disclosure document or other document or report, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Holder expressly for inclusion therein
and (ii) shall not in any event exceed an amount equal to the net proceeds to such Holder (after
deduction of all underwriters’ discounts and commissions) from the disposition of the Registrable
Securities disposed of by such Holder pursuant to such registration.

     5.2. Piggyback Registrations Pursuant to Section 3. In connection with the
exercise of any registration rights granted to Holders of Registrable Securities pursuant to
Section 3 hereof, if the registration is to be effected by means of an underwritten offering of
Common Stock on a firm commitment basis, the Company may condition participation in such
registration by such Holders upon inclusion of the Registrable Securities being so registered in
such underwriting. The Holders of Registrable Securities participating in any registration pursuant
to Section 3 shall be parties to the underwriting agreement entered into by the Company and any
other selling stockholders in connection therewith containing such representations and warranties
by the Company and such participating sellers and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary distributions,
including, without limitation, customary indemnity and contribution provisions; provided,
however, that the liability of each Holder in respect of any indemnification, contribution or
other obligation of such Holder arising under such underwriting agreement (i) shall be limited to
losses arising out of or based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement, incorporated document or other such
disclosure document or other document or report, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Holder expressly for inclusion therein
and (ii) shall not in any event exceed an amount equal to the net proceeds to such Holder (after
deduction of all underwriters’ discounts and commissions) from the disposition of the Registrable
Securities disposed of by such Holder pursuant to such registration.

     5.3. Selling Holder Lockups. In each registration pursuant to Section 2 or Section
3 effected on a firm commitment underwritten offering, each Holder agrees that, as a condition to
the inclusion of any of such Holder’s Registrable Securities in such offering, such Holder shall
agree, if reasonably requested by the managing underwriter, subject to any early release provisions
that apply generally to stockholders of the Company, for a period from 15 days prior to the
effective date of the registration statement until up to 120 days after such effective date, not to
directly or indirectly sell, offer to sell, grant any option for the sale of, or otherwise dispose
of any Common Stock or securities convertible into Common Stock except for (i) Registrable
Securities sold pursuant to such registration statement, (ii) transactions relating to Common Stock
or other securities acquired in open market transactions, (iii) transfers to Affiliates, partners,
members and stockholders of such Holder, each of whom shall have

 

 

furnished to the Company and the managing underwriter their written consent to be bound by this
Agreement including this Section 5.3 and (iv) transfers to charitable organizations, each
of which shall have furnished to the Company and the managing underwriter their written consent to
be bound by this Agreement including this Section 5.3, provided that the Company’s officers,
directors and all holders of other securities included in such registration agree to enter into
such lockup agreements for the same period and on the same terms, and provided further that any
waiver or termination of the prohibitions contained in this Section 5.3 by the Company or any
underwriter shall apply to each Holder.

     5.4. Cutbacks.

     5.4.1. Section 2 Cutbacks. If the managing underwriter advises the Company
that the number of shares to be included in a registration pursuant to Section 2 should be
limited due to market conditions or otherwise, (i) all shares other than Registrable
Securities shall first be excluded, and (ii) thereafter, if additional shares must be
excluded from such registration, all Holders of Registrable Securities shall share pro rata
in the number of shares of Registrable Securities to be excluded from such registration
pursuant to this clause (ii), such sharing to be based on the respective numbers of
Registrable Securities owned by such Holders.

     5.4.2. Section 3 Cutbacks. If the managing underwriter advises the Company
that the number of shares to be included in a registration pursuant to Section 3 should be
limited due to market conditions or otherwise,

	 	(a)	 	if the registration was initiated by the Company, (i) all
shares of securities held by shareholders of the Company other than Holders of
Registrable Securities shall first be excluded, (ii) next, if additional
shares must be excluded from such registration, all Holders of Registrable
Securities shall share pro rata in the number of shares of Registrable
Securities to be excluded from such registration pursuant to this clause (ii),
such sharing to be based on the respective numbers of Registrable Securities
owned by such holders and (iii) thereafter, if additional shares must be
excluded from such registration, shares to be issued by the Company shall be
excluded; provided, however,that no exclusion provided for herein
shall reduce the amount of Registrable Securities to be included in such
registration to an amount that is less than twenty five (25) percent of the
total amount of shares to be included in such registration, unless in
connection with the Initial Public Offering;

	 	(b)	 	if the registration was initiated by shareholders of the
Company other than Holders of Registrable Securities, (i) shares to be issued
by the Company shall first be excluded, (ii) next, if additional shares must
be excluded from such registration, all Holders of Registrable Securities
shall share pro rata in the number of shares of Registrable Securities to be
excluded from such registration pursuant to this clause (ii), such sharing to
be based on the respective numbers of Registrable Securities owned by such
holders, and (iii) thereafter, if additional shares must be excluded from

 

 

	 	 	 	such registration, shares to be registered by shareholders of the Company
other than Holders of Registrable Securities shall be excluded pro rata
based on the number of shares to be determined or as agreed by such other
shareholders among themselves.

6. Indemnification and Contribution.

     6.1. Indemnities of the Company. In the event of any registration of any
Registrable Securities under the Securities Act pursuant to Section 2 or 3 hereof, and in
connection with any registration statement or any other disclosure document produced by or on
behalf of the Company or any of its subsidiaries including, without limitation, reports required by
and other documents filed under the Exchange Act, and other documents pursuant to which any debt or
equity securities of the Company or any of its subsidiaries are sold (whether or not for the
account of the Company), the Company will, and hereby does, indemnify and hold harmless each
Investor and each holder or seller of Registrable Securities, their respective direct and indirect
partners, members, stockholders, directors, advisory board members, officers, representatives on
the Board of Directors of the Company, and each other Person, if any, who controls or is alleged to
control any such Investor, holder or seller within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act (each such Person being referred to herein as a “Covered
Person”), against any losses, claims, damages or liabilities (or actions or proceedings in respect
thereof), joint or several, to which such Covered Person may be or become subject under the
Securities Act, the Exchange Act, any other securities or other law of any jurisdiction, common law
or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained or incorporated by reference in any registration statement
under the Securities Act, any preliminary prospectus or final prospectus included therein, or any
related summary prospectus, or any amendment or supplement thereto, or any document incorporated by
reference therein, or any other such disclosure document (including without limitation reports and
other documents filed under the Exchange Act and any document incorporated by reference therein) or
other document or report, or (ii) any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, or (iii)
any violation or alleged violation of any federal, state, foreign or common law rule or regulation
applicable to the Company or any of its subsidiaries and relating to action or inaction in
connection with any such registration, disclosure document or other document or report, and will
reimburse such Covered Person for any legal or any other expenses incurred by it in connection with
investigating or defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that the Company shall not be liable to any Covered Person in any such
case for any such loss, claim, damage, liability, action or proceeding to the extent that it arises
out of or is based upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement, incorporated document or other such disclosure
document or other document or report, in reliance upon and in conformity with written information
furnished to the Company or any of its subsidiaries by or on behalf of such Covered Person relating
to such Covered Person expressly for inclusion therein. The indemnities of the Company contained in
this Section 6.1 shall remain in full force and effect regardless of any investigation made by or
on behalf of such Covered Person and shall survive any transfer of Registrable Securities.

 

 

     6.2. Indemnities to the Company. In the event of any registration of Registrable
Securities pursuant to Section 2 or 3, each selling Holder will, and hereby does, indemnify and
hold harmless the Company, each director of the Company, each officer of the Company who shall sign
such registration statement and each other Person (other than such seller), if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, with respect to any statement in or omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus included therein, or any amendment or supplement
thereto, or any document incorporated by reference therein, or any other such disclosure document
(including without limitation reports and other documents filed under the Exchange Act and any
document incorporated by reference therein) or other document or report, if such statement or
omission was made in reliance upon and in conformity with written information furnished to the
Company by or on behalf of such seller relating to such seller expressly for inclusion therein.
Such indemnity contained in this Section 6.2 shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company or any such director, officer or controlling
Person and shall survive any transfer of Registrable Securities.

     6.3. Indemnification Procedures. Promptly after receipt by an indemnified party of
notice of the commencement of any action or proceeding involving a claim of the type referred to in
the foregoing provisions of this Section 6, such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party, give written notice to each such indemnifying
party of the commencement of such action; provided, however, that the failure of any
indemnified party to give notice to such indemnifying party as provided herein shall not relieve
such indemnifying party of its obligations under the foregoing provisions of this Section 6, except
and solely to the extent that such indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party, each indemnifying
party will be entitled to participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to such an indemnifying party), and after notice from an indemnifying party to
such indemnified party of its election so to assume the defense thereof, such indemnifying party
will not be liable to such indemnified party for any legal or other expenses subsequently incurred
by the latter in connection with the defense thereof; provided, however, that (i) if the
indemnified party in good faith determines that there may be a conflict between the positions of
such indemnifying party and the indemnified party in conducting the defense of such action or that
there may be defenses available to such indemnified party different from or in addition to those
available to such indemnifying party, then counsel for the indemnified party shall conduct the
defense to the extent in good faith determined by such counsel to be necessary to protect the
interests of the indemnified party and such indemnifying party shall employ separate counsel for
its own defense, (ii) in any event, the indemnified party shall be entitled to have counsel chosen
by such indemnified party participate in, but not conduct, the defense and (iii) the indemnifying
party shall bear the legal expenses incurred in connection with the conduct of, and the
participation in, the defense as referred to in clauses (i) and (ii) above. If, within a reasonable
time after receipt of the notice, such indemnifying party shall not have elected to assume the
defense of the action, such indemnifying party shall be responsible for any legal or other expenses
incurred by such indemnified party in connection with the defense of the action, suit,
investigation, inquiry or proceeding. No indemnifying party will

 

 

consent to entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or litigation.

     6.4. Contribution. If the indemnification provided for in Sections 6.1 or 6.2
hereof is unavailable to a party that would have been an indemnified party under any such Section
in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to therein, then each party that would have been an indemnifying party thereunder
shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect the relative fault
of such indemnifying party on the one hand and such indemnified party on the other in connection
with the statements or omissions which resulted in such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof). The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by such
indemnifying party or such indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The parties agree
that it would not be just and equitable if contribution pursuant to this Section 6.4 were
determined by pro rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the preceding sentence. The amount paid or payable
by a contributing party as a result of the losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to above in this Section 6.4 shall include any legal or
other expenses reasonably incurred by such indemnified party in connection with investigating or
defending any such action or claim. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

     6.5. Limitation on Liability of Holders of Registrable Securities. The
liability of each Holder in respect of any indemnification or contribution obligation of such
Holder arising under this Section 6 shall not in any event exceed an amount equal to the net
proceeds to such Holder (after deduction of all underwriters’ discounts and commissions) from the
disposition of the Registrable Securities disposed of by such Holder pursuant to such registration
less any other damages paid by such Holder with respect to claims relating to such registration.

7. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144 and any other rule or regulation of the
Commission that may at any time permit a Holder to sell securities of the Company to the public
without registration, and with a view to making it possible for Holders to register the Registrable
Securities pursuant to a registration on Form S-3, the Company agrees to:

     (a) use its best efforts to make and keep public information available, as those
terms are understood and defined in Rule 144, at all times commencing after the effective
date of the registration statement for its Initial Public Offering;

     (b) take such action, including the voluntary registration of its Common Stock
under Section 12 of the Exchange Act, as will permit Holders to use Form S-3 for the sale

 

 

of their Registrable Securities, such action to be taken as soon as practicable (but
not later than 90 days) after the end of the fiscal year in which the registration statement
for the Initial Public Offering is declared effective;

     (c) use its best efforts to file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and the
Exchange Act; and

     (d) furnish to any Holder forthwith upon request (1) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 (at any time more
than 90 days after the effective date of the registration statement for its Initial Public
Offering), the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements), or as to its qualification as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (2) a
copy of the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (3) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of
the Commission which permits the selling of any such securities without registration or
pursuant to such form.

8. Assignment of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to Sections 2 and 3 may be assigned by any Holder to a transferee,
and by such transferee to a subsequent transferee, but only if such rights are transferred (a) to
an Affiliate or other Permitted Transferee (as defined in the Stockholders Agreement) of such
Holder or to any charitable institution, (b) in connection with the sale or other transfer of
Registrable Securities having a value at the time of such transfer of not less than an aggregate
of $1,000,000 or some lesser amount, if such lesser amount represents the value of all the
Registrable Securities then held by such Holder or (c) by an Excluded Investor. Any transferee to
whom rights under this Agreement are transferred shall (i) as a condition to such transfer,
deliver to the Company a written instrument by which such transferee agrees to be bound by the
obligations imposed upon Holders under this Agreement to the same extent as if such transferee
were a Holder under this Agreement and (ii) be deemed to be a Holder hereunder.

9. Limitation on Subsequent Registration Rights. The Company shall not, without the
prior written consent of the Required Holders, enter into any agreement with any holder or
prospective holder of any securities of the Company that would allow such holder or prospective
holder (i) to include securities of the Company in any registration statement, unless under the
terms of such agreement such holder or prospective holder may include such securities in a
registration statement only on terms subordinate to the terms on which Holders of Registrable
Securities may include shares in such registration or (ii) to make a demand registration.

10. Future Changes in Registration Requirements. In the event that the registration
requirements under the Securities Act are amended or eliminated to accommodate a “Company
registration” or similar approach, this Agreement shall be deemed amended to the extent necessary
to reflect such changes and the intent of the parties hereto with respect to the benefits and
obligations of the

 

 

parties, and in such connection, the Company shall use commercially reasonable efforts to provide Holders of Registrable Securities equivalent benefits to those
provided under this Agreement.

11. Covenants of the Company. The Company agrees as follows:

11.1. Information Rights.

     11.1.1. Access to Records. The Company shall, and shall cause
each Subsidiary, if any, to afford to (i) Bain Capital, (ii) Battery Ventures, (iii)
Petters, (iv) each PCP Investor, as long as the PCP Investors or their Permitted Transferees
hold (pursuant to the PCP Warrants, the Series A Preferred Stock issuable upon exercise
thereof and the Common Stock issuable upon conversion of the Series A Preferred Stock) at
least 75% of the shares of Common Stock, on a Fully Diluted Basis, originally issuable upon
exercise of the PCP Warrants, (v) each Investor that, together with its Affiliates, holds at
least five percent (5%) of the Common Stock of the Company on a Fully Diluted Basis, (vi)
CIGPF I Corp., as long as the Warrant it holds is exercisable for or has been exercised for
at least seventy five percent (75%) of the Common Stock of the Company originally issuable
upon exercise of its Warrant, and (vii) each Excluded Investor for so long as the Warrant
held by such Investor is exercisable for at least two and a half percent (2.5%) of the
Common Stock of the Company on a Fully Diluted Basis, and each of their respective officers,
employees, advisors, counsel and other authorized representatives, reasonable access during
normal business hours, upon reasonable advance notice, to all of the books, records and
properties of the Company and its Subsidiaries, if any, and to all officers and employees of
the Company and such Subsidiaries.

     11.1.2. Financial Reports. The Company shall, and shall cause
each Subsidiary, if any, to provide to (i) Bain Capital, (ii) Battery Ventures, (iii)
Petters, (iv) each PCP Investor, as long as the PCP Investors or their Permitted Transferees
hold (pursuant to the PCP Warrants, the Series A Preferred Stock issuable upon exercise
thereof and the Common Stock issuable upon conversion of the Series A Preferred Stock) at
least 75% of the shares of Common Stock, on a Fully Diluted Basis, originally issuable upon
exercise of the PCP Warrants, (v) each Investor that, together with its Affiliates, holds at
least five percent (5%) of the Common Stock of the Company on a Fully Diluted Basis, (vi)
CIGPF I Corp., as long as the Warrant it holds is exercisable for or has been exercised for
at least seventy five percent (75%) of the Common Stock of the Company originally issuable
upon exercise of its Warrant, and (vii) each Excluded Investor for so long as the Warrant
held by such Investor is exercisable for at least two and a half percent (2.5%) of the
Common Stock of the Company on a Fully Diluted Basis, the following:

     11.1.2.1. Monthly Reports. As soon as available, but not
later than 20 days after the end of each fiscal month beginning with the report for the
month of May 2008, a consolidated balance sheet of the Company as of the end of such period
and consolidated statements of income and cash flows of the Company for such period.

     11.1.2.2. Quarterly Reports. As soon as available, but not
later than 20 days after the end of each quarterly accounting period, a consolidated balance
sheet of the Company

 

 

as of the end of such period and consolidated statements of income, cash flows and
changes in stockholders’ equity for such quarterly accounting period and for the period
commencing at the end of the previous fiscal year and ending with the end of such period,
setting forth in each case in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year, and including comparisons to the budget
or business plan, all prepared in accordance with GAAP, subject to normal year-end
adjustments and the absence of footnote disclosure.

     11.1.2.3. Annual Audit. As soon as available, but not later than 180 days
after the end of each fiscal year of the Company commencing with the fiscal year ended
January 31, 2009, audited consolidated financial statements of the Company, which shall
include statements of income, cash flows and changes in stockholders’ equity for such fiscal
year and a balance sheet as of the last day thereof, each prepared in accordance with GAAP,
and accompanied by the report of a firm of independent certified public accountants selected
by the Company’s Board of Directors in accordance with Section 11.4 hereof (the
“Accountants”). The Company and its Subsidiaries, if any, shall maintain a system of
accounting sufficient to enable its Accountants to render the report referred to in this
Section 11.1.2.3.

     11.1.2.4. Annual Budget and Operating Forecast. As soon as available, but
not later than 45 days prior to the beginning of each fiscal year commencing with the fiscal
year ended January 31, 2009, an annual budget and operating plan for such fiscal year
together with management’s written discussion and analysis of such budget. The budget shall
be accepted as the budget for the Company for such fiscal year when it has been approved by
the Board of Directors of the Company. Management shall review the budget monthly and shall
advise each Investor entitled to receive the annual budget at such time and the Board of
Directors of all material changes therein, and all material deviations therefrom.

     11.1.3. Observer’s Rights. To the extent permitted by applicable law, each
of Bain Capital and Battery Ventures, for so long as such Investor, together with its
Affiliates, owns at least thirty percent (30%) of the shares of Series B Preferred Stock
purchased by them (or Common Stock issued on conversion thereof) at the Closing (as defined
in the Purchase Agreement), shall have the right to have one (1) individual (each an
“Observer”) attend any meeting of the Board or any committee thereof at any time during
which such Investor does not have an executive thereof serving on the Board of Directors of
the Company. Petters, for so long as such Investor, together with its Affiliates, owns at
least thirty percent (30%) of the shares of preferred stock purchased by Petters or his
Affiliates (or Common Stock issued on conversion thereof) in connection with the Series A
Purchase Agreement), shall have the right to have one (1) individual (each an “Observer”)
attend any meeting of the Board or any committee thereof at any time during which such
Investor does not have an executive thereof serving on the Board of Directors of the
Company. No Observer shall have the right to vote on any matter presented to the Board or
any committee thereof. To the extent permitted by applicable law, the Company shall give
each Observer written notice of each meeting thereof at the same time and in the same manner
as the members of the Board or such committee receive notice of such meetings, and the
Company shall permit each Observer

 

 

to attend as an observer at all meetings thereof; provided, that in
the case of telephonic meetings, each Observer need receive only actual notice thereof at
the same time and in the same manner as notice is given to the directors; and
provided further, that such Observer may be excluded from that portion of
any meeting reasonably required in order to preserve attorney-client privilege for
communications with the Company’s counsel, and the Company shall not be required to provide
the Observer with access to any information or materials or provide the Observer the right
to attend any meeting of the Board of Directors or any committee thereof if a majority of
the independent members of the Board of Directors of the Company determine, in good faith
and in consultation with counsel, that providing such information, access or attendance
would conflict with the fiduciary duties or obligations of the Board of Directors under the
Delaware General Corporation Law. Each Observer shall be entitled to receive all written
materials and other information given to the directors in connection with such meetings at
the same time such materials and information are given to the directors. If the Company
proposes to take any action by written consent in lieu of a meeting of the Board, the
Company shall give written notice thereof to each Observer prior to the effective date of
such consent describing the nature and substance of such action. The Company shall pay all
reasonable expenses including, without limitation, airfare and hotel expenses in accordance
with the Company’s then applicable travel policies, but shall not pay any other compensation
to an Observer, in connection with such Observer’s attendance at meetings of the Board of
Directors.

     11.1.4. Notice of Sale. The Company shall provide notice to (i)
Bain Capital, (ii) Battery Ventures, (iii) Petters, (iv) each PCP Investor, as long as the
PCP Investors or their Permitted Transferees hold (pursuant to the PCP Warrants, the Series
A Preferred Stock issuable upon exercise thereof and the Common Stock issuable upon
conversion of the Series A Preferred Stock) at least 75% of the shares of Common Stock, on a
Fully Diluted Basis, originally issuable upon exercise of the PCP Warrants, (v) each
Investor that, together with its Affiliates, holds at least five percent (5%) of the Common
Stock of the Company on a Fully Diluted Basis, (vi) CIGPF I Corp., as long as the Warrant it
holds is exercisable for or has been exercised for at least seventy five percent (75%) of
the Common Stock of the Company originally issuable upon exercise of its Warrant, and (vii)
each Excluded Investor for so long as the Warrant held by such Investor is exercisable for
at least two and a half percent (2.5%) of the Common Stock of the Company on a Fully Diluted
Basis, of the receipt by the Company of an offer to buy a controlling interest in the
capital stock of the Company or a significant amount of its assets as soon as possible and
in any event no later than five (5) days following the occurrence of said event.

11.2. [Reserved].

     11.3. Use of Proceeds. The Company will use the proceeds to the Company
from the sale of the shares of Series B Preferred Stock pursuant to the Purchase Agreement to
provide the Company with working capital, to pay for expenses of the Company and for general
corporate purposes unless otherwise determined by the Board of Directors of the Company.

 

 

     11.4. Confidentiality Agreements. The Company will require (i) each
member of the senior management of the Company and each of its Subsidiaries, prior to the
commencement of his or her employment, to sign a confidentiality (in the form attached as
Exhibit E to the Series A Purchase Agreement or in a form substantially
similar thereto), and (ii) all key consultants, prior to the commencement of any work on behalf of
the Company or any Subsidiary, to sign confidentiality agreements.

     11.5. Internal Accounting Controls. The Company will maintain a
system of internal accounting controls similar to those maintained by corporations of
established reputation in the same or similar business.

     11.6. Indemnification of the Board of Directors; Directors and Officers
Insurance Policy.

     11.6.1. The Company will reimburse all directors of the Company for all
reasonable out-of-pocket expenses, including without limitation, airfare and hotel expenses,
in connection with attending meetings of the Company’s Board of Directors and all committees
thereof and all reasonable out-of-pocket expenses otherwise incurred in fulfilling their
duties as directors, subject to compliance with the Company’s then applicable travel and
other expense reimbursement policies. To the extent provided by Delaware law, the
certificate of incorporation and by-laws of the Company shall at all times require (i) the
indemnification and reimbursement of expenses of all of the Company’s directors against
liability for actions and omissions to act in their capacity as directors of the Company to
the maximum extent that such individuals may lawfully be so indemnified by the Company and
(ii) the exculpation of the Company’s directors from liability to the Company and its
stockholders for monetary damages for breach of their fiduciary duties as directors.

     11.6.2. The Company will maintain in full force and effect a directors and
officer liability insurance policy issued by an insurer or insurers of recognized
responsibility, insuring its directors and officers against such losses and risks, and in
such amounts, as determined by the Board of Directors of the Company.

     11.7. Amended and Restated Certificate of Incorporation. In order to
effect any amendment, modification, restatement or waiver of the Certificate of Incorporation or
By-laws of the Company (whether by amendment to the Certificate of Incorporation or By-laws of the
Corporation or by reclassification, merger, consolidation, reorganization or otherwise) that
alters, changes or repeals the rights, preferences or privileges of the capital stock of the
Company outstanding as of the date of this Agreement, in addition to the approval and consent
rights provided in the Amended and Restated Certificate of Incorporation, (a) the written consent
of the Investor holding the Warrant issued to CIGPF I Corp. (the “Warrant Investor”), as long as
such Warrant is held by CIGPF I Corp. or its Permitted Transferee, and is exercisable for at least
seventy five percent (75%) of the Common Stock originally issuable upon exercise of the Warrant is
required, provided, however, that consent of the Warrant Investor shall not be
required for any amendment, modification, restatement or waiver of the Certificate of Incorporation
or By-laws of the Company, unless such amendment or waiver affects the Warrant

 

 

Investor or the Warrant Investor’s Shares in a manner different than the Investors that were
originally issued Series A Preferred Stock or the Series A Preferred Stock and in a manner adverse
to the interests of the Warrant Investor as an equity investor in the Company, it being understood
that no such consent shall be required for an amendment or waiver that adversely affects the
Warrant Investor and the Investors that were originally issued Series A Preferred Stock in a
similar manner given their relative and different equity interests in the Company and
notwithstanding the right of the Warrant Investor to consent to adverse amendments, modifications
and waivers as more specifically set forth herein, the Company shall be entitled to authorize and
issue additional series of equity securities that are either (i) pari passu in preference and right
or (ii) senior in preference and right to the Series A Preferred Stock, and (b) any consent
required under Section 8.13 of the Stockholders Agreement is obtained.

     11.8. Termination of Rights. The provisions of this Section 11 shall terminate
upon the closing of a Qualified Public Offering.

12. 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 to the Company at:

	 	 	 

	 

	 	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

to each Investor at its address set forth on Exhibit A hereto, with a copy to:

	 	 	 

	 

	 	Ropes & Gray LLP
	 

	 	One International Place
	 

	 	Boston, Massachusetts 02110
	 

	 	Attention: Joel F. Freedman, Esq.
	 

	 	Facsimile No.: (617) 951-7050

or such other address as may be furnished in writing to the other parties hereto. Any notice,
request, consent and other communication shall for all purposes of this 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.

 

 

13. Entire Agreement. This Agreement constitutes the entire understanding of the
parties with respect to the subject matter hereof and supersedes any and all prior communications
or agreements, whether written or oral, with respect to such subject matter, including for
avoidance of doubt, the Prior Agreement.

14. Amendments, Waivers and Consents. Except as otherwise expressly provided, any
provision of this Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or prospectively), only by the
written consent given (i) as to the Company, only by the Company; (ii) as to the Holders, only by
the Required Holders (with the Company to deliver copies of such written consent to any Holders
who did not execute the same); and (iii) as to the Investors, only by (x) the Required Holders;
provided, that without the consent of any Investor, no such amendment may treat any right
or obligation of such Investor dissimilarly from the same right or obligation of other Investors,
and (y) the Warrant Investor, as long as such Warrant is held by CIGPF I Corp. or a Permitted
Transferee and is exercisable for seventy five percent (75%) of the common stock originally
issuable upon exercise of the Warrant, and (z) if any consent required under Section 8.13 of the
Stockholders Agreement by the applicable Investors required to give such consent; provided,
however, that consent of the Warrant Investor shall not be required for any amendment or
waiver of any provision of this Agreement unless such amendment or waiver affects the Warrant
Investor or the Warrant Investor’s Shares in a manner different than the Investors that were
originally issued Series A Preferred Stock or the Series A Preferred Stock and in a manner adverse
to the interests of the Warrant Investor as an equity investor in the Company, it being understood
that no such consent shall be required for an amendment or waiver that adversely affects the
Warrant Investor and the Investors that were originally issued Series A Preferred Stock in a
similar manner given their relative and different equity interests in the Company and
notwithstanding the right of the Warrant Investor to consent to adverse amendments, modifications
and waivers as more specifically set forth herein, the Company shall be entitled to authorize and
issue additional series of equity securities that are either (a) pari passu in preference and
right or (b) senior in preference and right to the Series A Preferred Stock (with the Company to
deliver copies of such written consent to any Investors who did not execute the same);
provided, further, however, that (a) the right of Bain Capital to an Observer pursuant to
Section 11.1.3 may not be amended, modified or waived in any manner without the prior written
consent of Bain Capital, (b) the right of Battery Ventures to an Observer pursuant to Section
11.1.3 may not be amended, modified or waived in any manner without the prior written consent of
Battery Ventures, and (c) the right of Petters to an Observer pursuant to Section 11.1.3 may not
be amended, modified or waived in any manner without the prior written consent of Petters.

15. Binding Effect; Assignment. This Agreement shall be binding upon and inure to the
benefit of the personal representatives, successors and assigns of the respective parties hereto.
Notwithstanding the foregoing sentence, the Company shall not have the right to assign its
obligations hereunder or any interest herein without obtaining the prior written consent of the
Required Holders, provided in accordance with Section 14.

16. General. The headings contained in this Agreement are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement. This Agreement
shall be governed by and construed in accordance with the laws of the State of New York.

 

 

17. 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.

18. Counterparts. This Agreement may be executed in counterparts, all of which
together shall constitute one and the same instrument.

19. Construction. The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word “including” shall mean including
without limitation. The parties hereto intend that each representation, warranty, and covenant
contained herein shall have independent significance.

20. 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 Investors that the provisions of this Section 20 constitute a material inducement
upon which the Investors are relying and will rely in entering into this Agreement and the
Purchase Agreement. Any Investor or the Company may file an original counterpart or a copy of this
Section 20 with any court as written evidence of the consent of the Investors and the Company to
the waiver of its right to trial by jury.

21. 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 12 shall be deemed effective service of process on such party.

22. Non-Disclosure. Each Investor (other than a PCP Investor) agrees to
use the same degree of care as such Investor uses to protect its own confidential information to
keep confidential any proprietary or other information furnished to such Investor that the Company
maintains in confidence (so long as such information is not in the public domain), except that
such Investor may disclose such proprietary or confidential information (i) to any partner
(limited or otherwise), subsidiary or parent of such Investor 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 22, (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 Investor, (iii) that is communicated to it free of any obligation of
confidentiality, (iv) that is developed by Investor or its agents independently of and without
reference to any confidential information communicated by the Company or (v) with respect to any
Excluded Investor, any potential purchaser (other than a purchaser identified as a competitor in
accordance with Section 5.4 of the Stockholders Agreement (as defined in the Purchase Agreement))
of Warrants or Shares into which such Warrants are convertible that has signed a non-disclosure
agreement with confidentiality restrictions on such potential purchaser substantially the same as
those contained in this section. The PCP Investor 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.

[The remainder of this page has been intentionally left blank]

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year
first above written.

	 	 	 	 	 
	 	THE COMPANY

FINGERHUT DIRECT MARKETING, INC.

 	 
	 	By:  	/s/
Brian Smith	 
	 	 	Name:  	Brian Smith	 
	 	 	Title:  	Chairman and Chief Executive	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	BAIN CAPITAL VENTURE FUND 2001, L.P.

By: Bain Capital Venture Partners, L.P.

       its general partner

By: Bain Capital Venture Investors, LLC

       its general partner

 	 
	 	By:  	/s/
Michael Krupka	 
	 	 	Name:  	Michael Krupka 	 
	 	 	Title:  	Authorized Person 	 
	 
	 	BCIP ASSOCIATES III, LLC

By: BCIP Associates III,

       its sole member and manager

BCIP ASSOCIATES III-B, LLC

By: BCIP Associates III-B,

       its sole member and 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: Brookside Capital Investors, L.P.

       its general partner

By: Brookside Capital Management, LLC

       its general partner

 	 
	 	By:  	/s/
William E. Peppendick	 
	 	 	Name: 	William E. Peppendick	 
	 	 	Title: 	Managing Director	 
	 
	 	RGIP, LLC

 	 
	 	By:  	/s/
[ILLEGIBLE]	 
	 	 	Name:  	 	 
	 	 	Title:  	Managing Member 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	BAIN CAPITAL VENTURE FUND 2007, L.P.

By: Bain Capital Venture Partners 2007, L.P.

       its general partner

By: Bain Capital Venture Investors, LLC

       its general partner

 	 
	 	By:  	/s/ Michael Krupka	 
	 	 	Name:  	Michael Krupka	 
	 	 	Title:  	Managing Director 	 
	 
	 	BCIP VENTURE ASSOCIATES

By: Bain Capital Investors, LLC

       its managing partner

By: Bain Capital Venture Investors, LLC

       its Attorney-in-fact

 	 
	 	By:  	/s/ Michael Krupka	 
	 	 	Name:  	Michael Krupka	 
	 	 	Title:  	Managing Director 	 
	 
	 	BCIP VENTURE ASSOCIATES B

By: Bain Capital Investors, LLC

       its managing partner

By:  Bain Capital Venture Investors, LLC

       its Attorney-in-fact

 	 
	 	By:  	/s/ Michael Krupka	 
	 	 	Name:  	Michael Krupka	 
	 	 	Title:  	Managing Director 	 
	 
	 	BATTERY VENTURES VI, L.P.

By: Battery Partners VI, LLC General Partner

 	 
	 	By:  	/s/ Morgan Jones	 
	 	 	Name:  	Morgan Jones	 
	 	 	Title:  	Member Manager 	 
	 
	 	BATTERYINVESTMENT PARTNERS VI, LLC
 	 
	 
	 	By:  	/s/ Morgan Jones	 
	 	 	Name:  	Morgan Jones	 
	 	 	Title:  	Member Manager 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	PETTERS GROUP WORLDWIDE, LLC

 	 
	 	By:  	/s/
[ILLEGIBLE]	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	RTB HOLDINGS, LLC

 	 
	 	By:  	/s/
[ILLEGIBLE]	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CIGPF I CORP.

 	 
	 	By:  	/s/
Ari Rosenberg	 
	 	 	Name:  	Ari Rosenberg	 
	 	 	Title:  	Treasurer/Vice President	 
	 
	 	PRUDENTIAL CAPITAL PARTNERS II, L.P.

By: Stetson Street Partners, L.P.,
its general partner

 	 
	 
	 	EPB Select Holdings, LLC

 	 
	 	By:  	/s/
[ILLEGIBLE]	 
	 	 	Name:  	 	 
	 	 	Title:  	  	 

 

 

	 	 	 	 	 
	 
	 	 	 
	 	By:  	
/s/ Dianna D. Carr	 
	 	 	Dianna D. Carr 	 
	 	 	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	 
	 	 	Dianna D. Carr 	 
	 	 	Vice President 	 
	 	 	 	 
	 
	 
	 	PRUDENTIAL CAPITAL PARTNERS (PARALLEL FUND) II, L.P.

By: Stetson Street Partners, L.P.,

       its general partner

 	 
	 	By:  	/s/ Dianna D. Carr	 
	 	 	Dianna D. Carr 	 
	 	 	Vice President 	 
	 	 	 	 
	 
	 
	 	GOLDMAN, SACHS & CO.
	 	/s/ [ILLEGIBLE]

	 	Name:
	 	Title:
	 
	 	 	 	 
	 	FORTRESS CAPITAL CORP.

 	 
	 	By:  	/s/ Constantine M. Dakolias	 
	 	 	Name:  	Constantine M. Dakolias	 
	 	 	Title:  	President	 
	 
	 

	 

	 	/s/ Kermit L. Stofer
	 

	 	 
	 
	 

	 	Kermit L. Stofer
	 
	 	 	 	 
	 

	 	/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

	 	 

 

 

Exhibit A

 

 

NAMES AND ADDRESSES OF INVESTORS

BAIN CAPITAL VENTURE FUND 2001, L.P.

BAIN CAPITAL VENTURE FUND 2007, L.P. BCIP ASSOCIATES III, LLC

BCIP ASSOCIATES III-B, LLC

BCIP VENTURE ASSOCIATES

BCIP VENTURE ASSOCIATES B

do Bain Capital, LLC

111 Huntington Avenue

Boston, MA 02199

Phone: 617-516-2000

Fax: 617-516-2010

Attention: Michael Krupka

BROOKSIDE CAPITAL PARTNERS FUND, L.P.

do Bain Capital, LLC 111 Huntington Avenue

Boston, MA 02199 Phone: 617-516-2000 Fax: 617-516-2010 Attention: Dom Ferrante

RGIP, LLC

do Ropes & Gray LLP One International Place Boston, MA 02116 Phone: 617-951-7000 Fax: 617-951-7050

Attention: R. Bradford Malt

BATTERY VENTURES VI, L.P.

BATTERY INVESTMENT PARTNERS VI, LLC

do Battery Ventures

20 William Street, Suite 200

Wellesley, MA 02481 Phone: 781-577-1000 Fax: 781-478-6601 Attention: Michael Brown

PETTERS GROUP WORLDWIDE, LLC RTB HOLDINGS, LLC

4400 Baker Road

Minnetonka, MN 55343

Phone: 952-975-4813

Fax:952-975-4094

Theodore
Deikel [       ]

Brian Smith

do Fingerhut Direct Marketing, Inc. 6509 Flying Cloud Drive

Eden Prairie, MN 55344

Phone:

Fax:

Attn: Brian Smith

Kermit L. Stofer

c/o Strategic Partners

10 Post Office Sq., Suite 600 Boston, MA 02109

Phone : 617-

Fax : 617-

 

 

CHERRY TREE COMPANY, LLC 301 Carlson Parkway

Suite 103

Minnetonka, MN 55305

Phone: 952-893-9012

Fax: 952-893-9036

Attn: Gordon F. Stofer

GORMAN CHARITABLE TRUST

[       ]

PIPER JAFFRAY & CO.

800 Nicollet Mall Minneapolis, MN 55402-7020

Phone: 612-303-6000 Fax: 612-303-1354 Attn: Paul Jevnick

CIGPF I CORP.

c/o Citigroup Global Markets, Inc.

390 Greenwich Street 4th Floor

New York, NY 10013 Phone: 212-723-6270 Fax: 212-723-8855 Attn: Ari Rosenberg

PRUDENTIAL CAPITAL PARTNERS, II, L.P.

PRUDENTIAL CAPITAL PARTNERS MANAGEMENT FUND II, L.P. PRUDENTIAL CAPITAL PARTNERS (PARALLEL FUND)

II, L.P.

c/o Prudential Capital Group

Two Prudential Plaza, Suite 5600

180 N. Stetson Avenue

Chicago, IL 60601

Attn:

GOLDMAN, SACHS & CO. 85 Broad Street

New York, New York 10004 Attention: Gaurav Seth

Facsimile No.: (212) 428-9842

FORTRESS CAPITAL CORP.

1345 Avenue of the Americas, 46th Floor New York, New York 10105

Attention: Dean Dakolias Facsimile No.: (212) 798-6099

John Giuliani

[       ]

John Damrow

[       ]

Bill Dunlap

[       ]

Alice Richter

[      ]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}]]