June 21, 2007
Exhibit 10.18
EXECUTION COPY
June 21, 2007
Fingerhut Direct Marketing, Inc.
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attn: Chief Financial Officer
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attn: Chief Financial Officer
Ladies and Gentlemen:
Reference is made to that certain Securities Purchase Agreement, dated as of March 23, 2006 (the
“Purchase Agreement”), between Fingerhut Direct Marketing, Inc., a Delaware corporation (the
“Company”), and the purchasers named on the
Purchaser Schedule attached thereto (the “Purchasers”).
Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Purchase Agreement.
In order to provide financing for, among other things, the working capital needs of the Company and
its Subsidiaries in the ordinary course of business and to refinance certain existing Indebtedness,
the Company is about to enter into the Credit Agreement, dated as of the date hereof (the “New
Credit Agreement”), among the Company, the lenders from time to time party thereto (the “Lenders”)
and JPMorgan Chase Bank, N.A., as administrative agent for the Lenders (the “Agent”), pursuant to
which the Lenders will provide a revolving loan to the Company in the original principal amount of
$40,000,000.
The Company has requested that the Purchasers agree to certain modifications to the Purchase
Agreement. Subject to the terms and conditions hereof, and effective upon the satisfaction of the
conditions set forth herein, and provided that the Company agrees to the modifications of the
Purchase Agreement set forth below, the Purchasers are willing to agree to such request.
Accordingly, and in accordance with the provisions of paragraph 12C of the Purchase Agreement, the
parties hereto agree as follows:
SECTION 1. Amendments to the Purchase Agreement. Upon the Effective Date (as defined in
Section 3 hereof), each Purchaser and the Company agree that, the Purchase Agreement and the
Subordinated Notes shall be amended as follows:
1.1 Clauses (iv), (v) and (vi) of Paragraph 3A of the Purchase Agreement are hereby amended and
restated in their entirety as follows:
(iv) [Intentionally Omitted];
(v) [Intentionally Omitted];
(vi) [Intentionally Omitted];
1.2 Paragraph 5A of the Purchase Agreement is amended and restated in its entirety as follows:
5A. Financial Statements and Other Information. The Company covenants that it will deliver to the
Subordinated Collateral Agent (and, to the extent requested by the Subordinated Collateral Agent,
to any designee of the Subordinated Collateral
Agent):
(i) within 120 days after the end of each fiscal year of the Company, its audited consolidated
balance sheet and related statements of operations, stockholders’ equity and cash flows as of the
end of and for such year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by independent public accountants acceptable to the
Subordinated Collateral Agent (without a “going concern” or like qualification or exception and
without any qualification or exception as to the scope of such audit) to the effect that such
consolidated financial statements present fairly in all material respects the financial condition
and results of operations of the Company and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied, accompanied by any management letter prepared by said
accountants;
(ii) within 45 days after the end of each of the first three fiscal quarters of the Company, its
consolidated and consolidating balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of
the fiscal year, setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal
year, all certified by one of its Responsible Officers as presenting fairly in all material
respects the financial condition and results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(iii) within 20 days after the end of each fiscal month of the Company, its consolidated and
consolidating balance sheet and related statements of operations, stockholders’ equity and cash
flows as of the end of and for such fiscal month and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding period or periods
of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified
by one of its Responsible Officers as presenting fairly in all material respects the financial
condition and results of operations of the Company and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;
(iv) concurrently with any delivery of financial statements under clause (i) or (ii) or (iii)
above, a certificate of a Responsible Officer of the Company in substantially the form of Exhibit P
(a) certifying, in the case of the financial statements delivered under clause (ii)
or (iii), as presenting fairly in all material respects the financial condition and results of
operations of the Company and its consolidated Subsidiaries on a
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consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes, (b) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (c) setting forth reasonably detailed calculations demonstrating
compliance with paragraph 6J and (d) stating whether any change in GAAP or in the application
thereof has occurred since the date of the audited financial statements referred to in Section 3.04
and, if any such change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(v) concurrently with any delivery of financial statements under clause (i) above, a certificate of
the accounting firm that reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial statements of any Event of
Default (which certificate may be limited to the extent required by accounting rules or
guidelines);
(vi) as soon as available, but in any event not more than 30 days prior to the end of each fiscal
year of the Company and not later than the last day of such fiscal year, a copy of the plan and
forecast (including a projected consolidated and consolidating balance sheet, income statement and
funds flow statement) of the Company for each fiscal month of the upcoming fiscal year (the
“Projections”) in form reasonably satisfactory to the Subordinated Collateral Agent;
(vii) as soon as possible and in any event within 30 days of filing thereof; copies of all tax
returns filed by any Obligor with the U.S. Internal Revenue Service;
(viii) within 10 days of the first Business Day of each March and September, a certificate of good
standing for each Obligor from the appropriate governmental officer in its jurisdiction of
incorporation, formation, or organization;
(ix) promptly after the same become publicly available, copies of all periodic and other reports,
proxy statements and other materials filed by the Company or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, as the case may be; and
(x) promptly following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Company or any Subsidiary, or compliance with the
terms of this Agreement, as the Subordinated Collateral Agent or any holder of the Subordinated
Notes may reasonably request.
1.3 Paragraph 5L through Paragraph 5P of the Purchase Agreement are amended and restated in their
entirety as follows:
5L. Payment Obligations. Each Obligor will, and will cause each Subsidiary to, pay or discharge all
Material Indebtedness (excluding the Senior Debt) and all other material liabilities and
obligations (excluding the Senior Debt), including Taxes, before
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the same shall become delinquent or in default, except where (i) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (ii) such Obligor or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with GAAP and (iii)
such liabilities would not result in aggregate liabilities in excess of $2,500,000 and none of the
Collateral becomes subject to forfeiture or loss as a result of the contest.
5M. Additional Collateral; Further Assurances. (i) Subject to applicable law, the Company and each
Subsidiary that is an Obligor shall cause (a) each of its domestic Subsidiaries formed or acquired
after the First Amendment Effective Date in accordance with the terms of this Agreement and (b)
each other Person which guarantees the Senior Debt, to execute and deliver to the Subordinated
Collateral Agent (1) either (y) the Subsidiary Guaranty or (z) a Joinder Agreement to the
Subsidiary Guaranty, as applicable, upon which such Person shall automatically become a Subsidiary
Guarantor thereunder and thereupon shall have all of the rights, benefits, duties, and obligations
in such capacity under the Transaction Documents and (2) either (y) the Subsidiary Security
Agreement or (z) a Joinder Agreement to the Subsidiary Security Agreement, as applicable, upon
which such Person will grant Liens to the Subordinated Collateral Agent, for the benefit of the
Subordinated Collateral Agent and the holders of the Subordinated Notes, in any property of such
Person which constitutes Collateral;
(ii) the Company and each Subsidiary that is an Obligor will cause (i) 100% of the issued and
outstanding Equity Interests of each of its domestic Subsidiaries, including Equity Interests in
the Securitization SPE and (ii) 65% of the issued and outstanding Equity Interests entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) or such greater percentage that, due to
a change in applicable law after the date hereof, (1) could not reasonably be expected to cause the
undistributed earnings of such foreign Subsidiary as determined for U.S. federal income tax
purposes to be treated as a deemed dividend to such foreign Subsidiary’s U.S. parent and (2) could
not reasonably be expected to cause any material adverse tax consequences and 100% of the issued
and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1
..956-2(c)(2)) in each foreign Subsidiary directly owned by the Company or any domestic Subsidiary
to be subject at all times to a perfected Lien in favor of the Subordinated Collateral Agent
pursuant to the terms and conditions of the Security Documents or other security documents as the
Subordinated Collateral Agent shall reasonably request; and
(iii) without limiting the foregoing, each Obligor will, and will cause each Subsidiary to, execute
and deliver, or cause to be executed and delivered, to the Subordinated Collateral Agent such
documents, agreements and instruments, and will take or cause to be taken such further actions
(including the filing and recording of financing statements, fixture filings, mortgages, deeds of
trust and other documents and such other actions or deliveries of the type required by paragraph
3A, as applicable), which may be required by law or which the Subordinated Collateral Agent may,
from time to time, reasonably request to carry out the terms and conditions of this Agreement and
the other Transaction Documents and to ensure perfection and priority of the Liens
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created or intended to be created by the Security Documents, all at the expense of the Obligors.
5N. [Intentionally Omitted.]
5O. Amendments to Credit Agreement. Upon entering into any amendment or other modification of the
Credit Agreement (or any other agreement relating to the Senior Debt) the effect of which is to add
or make more restrictive any event of default or any covenant contained in the Credit Agreement (or
any other agreement relating to the Senior Debt) or make any change to any event of default or any
covenant that would have the effect of making such event of default or covenant more restrictive,
the Company shall (1) promptly, and in any event within 3 Business Days provide written notice
thereof to each holder of Subordinated Notes describing such amendment in reasonable detail and (2)
offer to enter into an amendment of this Agreement within 10 Business Days of consummating such
amendment or modification to make corresponding changes or additions herein in respect of such
covenants and events of default; provided, that, as to covenants or events of default which set
forth any requisite ratio or compliance amounts such ratios and compliance amounts may, if so
required by the terms of the Credit Agreement or the Intercreditor Agreement, be less restrictive
on the Company to the same extent as the applicable covenant or event of default is prior to the
time of such change.
5P. Notices of Material Events. The Company will furnish to the Subordinated Collateral Agent and
each holder of the Subordinated Notes prompt written notice of the following:
(i) the occurrence of any Default or Event of Default;
(ii) receipt of any notice of any governmental investigation or any litigation or proceeding
commenced or threatened against any Obligor that (a) seeks damages in excess of $2,500,000, (b)
seeks injunctive relief, (c) is asserted or instituted against any Plan, its fiduciaries or its
assets, (d) alleges criminal misconduct by any Obligor, (e) alleges the violation of any law
regarding, or seeks remedies in connection with, any Environmental Laws, (f) contests any tax, fee,
assessment, or other governmental charge in excess of $2,500,000, or (g) involves any product
recall;
(iii) any Lien (other than Permitted Liens or Liens permitted under paragraph 6A) or claim made or
asserted against any of the Collateral;
(iv) any loss, damage, or destruction to the Collateral in the amount of $2,500,000 or more,
whether or not covered by insurance;
(v) any and all default notices received under or with respect to any leased location or public
warehouse where Collateral is located (which shall be delivered within two Business Days after
receipt thereof);
(vi) [Intentionally Omitted];
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(vii) the fact that an Obligor has entered into a Swap Agreement or an amendment to a Swap
Agreement with a Person other than a Bank or the Bank Agent, together with copies of all agreements
evidencing such Swap Agreement or amendments thereto (which shall be delivered within two Business
Days);
(viii) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that
have occurred, could reasonably be expected to result in liability of the Company and its
Subsidiaries in an aggregate amount exceeding $2,500,000;
(ix) any other development that results in, or could reasonably be expected to result in, a
Material Adverse Effect;
(x) promptly upon, and in any event not later than the next Business Day after, receipt thereof, a
copy of any notice received from the Bank Agent or any holder of Senior Debt that any default or
event of default under the Credit Agreement has occurred or any notice of any acceleration of any
Senior Debt;
(xi) simultaneously with the transmission thereof, copies of all notices, reports, financial
statements or other communications given to the Bank Agent or any holder of Senior Debt under the
Credit Agreement, excluding routine borrowing requests; and
(xii) with reasonable promptness, such other information as the Subordinated Collateral Agent may
reasonably request.
Each notice delivered under this paragraph shall be accompanied by a statement of a Responsible
Officer or other executive officer of the Company setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken with respect
thereto.
1.4 Paragraphs 5R and 5S are hereby deleted in their entirety.
1.5 Paragraph 6 of the Purchase Agreement and all Schedules referenced therein are amended and
restated in their entirety as set forth in Exhibit 1 hereto.
1.6 Paragraph 7A of the Purchase Agreement is amended and restated in its entirety as set forth in
Exhibit 2 hereto.
1.7 Paragraph 8Q of the Purchase Agreement is amended and restated in its entirety as follows:
8Q. Establishment of Security Interest. Schedule 8Q hereto sets forth as of the First Amendment
Effective Date a complete and accurate list of (i) the location of the chief executive office of the
Company and each of its Subsidiaries, (ii) all real property owned or leased by the Company or any
of its Subsidiaries, (iii) all locations at which any property of the Company or any of its
Subsidiaries is located (or at any time within the last 6 months has been located) or at which the
Company or any of its Subsidiaries
maintains a place of business or keeps any records (or at any time within the last 6 months has
maintained a place of business or kept records), (iv) all patents, trademarks,
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trade names, service marks, services names or copyrights owned or licensed by the Company or any of
its Subsidiaries, (v) the organizational identification number of the Company and each of its
Subsidiaries, and (vi) any name under which the Company or any Subsidiary has conducted business at
any time during the last 5 years. As of the First Amendment Effective Date, all filings,
assignments, pledges and deposits of documents or instruments have been made, and all other actions
have been taken, that are necessary or advisable under applicable law and are required to be made
or taken on or prior to the First Amendment Effective Date under the provisions of this Agreement
and the other Transaction Documents to create and perfect a security interest in the Collateral in
favor of the Subordinated Collateral Agent to secure the Subordinated Notes, and each Subsidiary
Guarantor’s obligations under its Subsidiary Guaranty, subject to no Liens other than Liens
permitted under clause (i) of paragraph 6A. The Collateral and the Subordinated Collateral Agent’s
rights with respect to the Collateral are not subject to any setoff, claims, withholdings or other
defenses (except any such setoff, claim or defense which could not, individually or in the
aggregate, materially impair the rights of the Subordinated Collateral Agent with respect to the
Collateral). The Company or a Subsidiary is the owner of the Collateral described in the Security
Documents free from any Lien, security interest, encumbrance and any other claim or demand, except
for Liens permitted under paragraph 6A.
1.8 Paragraph 8T of the Purchase Agreement is amended and restated in its entirety as follows:
8T. Inventory Locations; Etc. Except for inventory drop shipped directly from a supplier or vendor
directly to a customer, all of the Company’s inventory is located at one of the locations
identified on Schedule 8T. Except to the extent such requirement has been expressly waived by the
Subordinated Collateral Agent in writing, the landlord with respect to each inventory location has
executed and delivered to the Subordinated Collateral Agent a landlord lien waiver in a form
approved by the Subordinated Collateral Agent.
1.9 Paragraph 8 of the Purchase Agreement is amended by adding a new Paragraph
8U thereto as follows:
8U. Affiliate Transactions. Except as set forth on Schedule 6K, as of the First Amendment Effective
Date, there are no existing or proposed agreements, arrangements, understandings, or transactions
between any Obligor and any of the officers, directors, Control Parties or Affiliates (other than
Subsidiaries) of any Obligor.
1.10 Paragraph 11B of the Purchase Agreement is amended and restated in its entirety as set forth
in Exhibit 4 hereto.
1.11 Paragraph 11C of the Purchase Agreement is amended and restated in its entirety as follows:
11C. Accounting and Legal Principles, Terms and Determinations. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all
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determinations with respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters required to be furnished
hereunder shall be prepared, in accordance with GAAP, applied on a basis consistent with the most
recent audited consolidated financial statements of the Company and its Subsidiaries delivered
pursuant to clause (i) of paragraph 5A or, if no such statements have been so delivered, the most
recent audited financial statements referred to in clause (i) of paragraph 8B. Any reference herein
to any specific citation, section or form of law, statute, rule or regulation shall refer to such
new, replacement or analogous citation, section or form should citation, section or form be
modified, amended or replaced.
1.12 Exhibit G to the Purchase Agreement is amended and restated in its entirety to read as set
forth on Exhibit G attached to this letter agreement.
1.13 The Purchase Agreement is amended to add the following new Exhibits P and Q to read as set
forth on Exhibits P and Q attached to this letter agreement.
SECTION 2. Representations and Warranties. The Company represents and warrants to the
Purchasers that, after giving effect hereto (a) each representation and warranty set forth in
paragraph 8 of the Purchase Agreement is true and correct as of the date of the execution and
delivery of this letter by the Company with the same effect as if made on such date (except to the
extent such representations and warranties expressly refer to an earlier date, in which case they
were true and correct as of such earlier date) and (b) no Event of Default or Default exists.
SECTION 3. Effectiveness. The amendments described in Section 1 above shall become
effective upon the date (the “Effective Date”) that each of the following conditions has been
satisfied in a manner satisfactory in form and substance to the Required Holder(s):
(a) the Required Holder(s) have received the following documents:
(i) a counterpart of this letter agreement duly executed by the Company;
(ii) certified copies of the New Credit Agreement duly executed by the Company, the Bank Agent and
the Banks, and all agreements, instruments and other documents executed in connection therewith or
delivered pursuant thereto, in form and substance satisfactory to the Required Holder(s), and all
conditions precedent to the effectiveness of the New Credit Agreement shall have been satisfied and
the Company shall have applied the proceeds thereof in accordance with the terms of the New Credit
Agreement;
(iii) a counterpart of the Security Agreement duly executed by the Company;
(iv) a counterpart of the grant of security interest (trademarks) duly executed by the Company;
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(v) counterparts of the landlord waivers with respect to the Company’s following leased locations:
(1) 0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxxx and (2) 0000 Xxxxxxxxx Xxxx, Xx. Xxxxx,
Xxxxxxxxx duly executed by all parties thereto;
(vi) counterparts of the JPMorgan Chase Bank, N.A. account control agreement duly executed by all
parties thereto;
(vii) counterparts of the lntercreditor Agreement duly executed by all parties thereto;
(viii) counterparts of the Securitization Intercreditor Agreement duly executed by all parties
thereto;
(ix) payoff letter evidencing the payoff of the senior debt owing to CIGPF I Corp. and the
termination of all liens securing such debt and the subordination agreement related thereto;
(x) certified copies of all agreements evidencing the Securitization Facility;
(xi) certified copies of the CIT Documents (as defined in the Security Agreement);
(xii) legal opinions of the Company’s in-house counsel and special counsel, in form and substance
satisfactory to the Required Holder(s);
(xiii) a Secretary’s Certificate of the Company certifying, among other things (1) as to the name,
titles and true signatures of the officers of the Company authorized to sign this letter agreement
and the other documents to be delivered in connection with this letter agreement, (2) that attached
thereto is a true, accurate and complete copy of the certificate of incorporation or other
formation document of the Company, certified by the Secretary of State of the state of organization
of the Company as of a recent date, (3) that attached thereto is a true, accurate and complete copy
of the by-laws, operating agreement or other organizational document of the Company, (4) that
attached thereto is a true, accurate and complete copy of the resolutions of the board of directors
or other managing body of the Company, duly adopted at a meeting or by unanimous written consent of
such board of directors or other managing body, authorizing the execution, delivery and performance
of this letter’ agreement and the other documents to be delivered by the Company in connection with
this letter agreement, and that such resolutions have not been amended, modified, revoked or
rescinded, are in full force and effect and are the only resolutions of the shareholders, partners
or members of the Company or of such board of directors or other managing body or any committee
thereof relating to the subject matter thereof; and
(xiv) a certificate of good standing for the Company from the Secretary of State of the state of
organization of the Company dated as of a recent date;
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(b) all corporate and other proceedings in connection with the transactions contemplated by this
letter agreement shall be satisfactory to the Required Holder(s) and its counsel, and the Required
Holder(s) shall have received all such counterpart originals or certified or other copies of such
documents as they may reasonably request;
(c) the Purchasers have received payment of all costs and expenses of the Purchasers (including
reasonable fees and disbursements of special counsel to the Purchasers) in connection with this
letter agreement and the transactions contemplated hereby;
(d) as of the date hereof and after giving effect to this letter agreement, no Default or Event of
Default has occurred which is continuing; and
(e) all the representations and warranties contained in Paragraph 8 of the Purchase Agreement are
true and correct in all material respects with the same force and effect as if made by the Company
on and as of the date hereof, except to the extent such representation and warranties, by their
terms, specifically are made as of a certain date prior to the date hereof.
SECTION 4. Reference to and Effect on Purchase Agreement. Upon the effectiveness of this
letter agreement, each reference in the Purchase Agreement or any other document, instrument or
agreement to the “Purchase Agreement” shall mean and be a reference to the Purchase Agreement as
modified by this letter agreement. Except as specifically set forth in Section 1 hereof, the
Purchase Agreement shall remain in full force and effect and is hereby ratified and confirmed in
all respects.
SECTION 5. Expenses. The Company hereby confirms its obligations under the Purchase
Agreement, whether or not the transactions hereby contemplated are consummated, to pay, promptly
after request by the Purchasers, all reasonable out-of-pocket costs and expenses, including
attorneys’ fees and expenses, incurred by the Purchasers in connection with this letter agreement
or the transactions contemplated hereby, in enforcing any rights under this letter agreement, or in
responding to any subpoena or other legal process or informal investigative demand issued in
connection with this letter agreement or the transactions contemplated hereby. The obligations of
the Company under this Section 5 shall survive transfer by the Purchasers of any Subordinated Note
and payment of any Subordinated Note.
SECTION 6. Governing Law. THIS LETTER AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS OF SUCH STATE WHICH WOULD OTHERWISE CAUSE THIS LETTER AGREEMENT TO BE CONSTRUED OR
ENFORCED OTHER THAN IN ACCORDANCE WITH TI-IE LAWS OF THE STATE OF ILLINOIS.
SECTION 7. Counterparts; Section Titles. This letter agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed to be an original and all of
which taken together shall constitute but one and the same instrument. The section titles contained
in this
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letter agreement are and shall be without substance, meaning or content of any kind whatsoever and
are not a part of the agreement between the parties hereto.
SECTION 8. Release. On the Effective Date, Fingerhut Fulfillment, Inc., a Delaware
corporation (“FFI”), shall be released from its obligations under the Subsidiary Guaranty,
Subsidiary Security Agreement and IP Security Agreement (other than those obligations which
expressly by their terms survive termination or release of such agreements) and all Liens granted
by FFI on its assets pursuant to the foregoing agreements shall be released.
[signature page follows]
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Very truly yours, PRUDENTIAL CAPITAL PARTNERS II, L.P. |
|||||
By: | Stetson Street Partners, L.P., its general partner | ||||
By: | /s/ [ILLEGIBLE] | ||||
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/ [ILLEGIBLE] | ||||
Vice President | |||||
PRUDENTIAL CAPITAL PARTNERS (PARALLEL FUND) II, L.P. |
|||||
By: | Stetson Street Partners, L.P., its general partner | ||||
By: | /s/ [ILLEGIBLE] | ||||
Vice President | |||||
AGREED AND ACCEPTED: FINGERHUT DIRECT MARKETING, INC. |
||||
By: | ||||
Title: | ||||
Signature Page
Letter Agreement to Securities Purchase Agreement
Letter Agreement to Securities Purchase Agreement
Very truly yours, PRUDENTIAL CAPITAL PARTNERS II, L.P. |
|||||
By: | Stetson Street Partners, L.P., its general partner | ||||
By: | |||||
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: | |||||
Vice President | |||||
PRUDENTIAL CAPITAL PARTNERS (PARALLEL FUND) II, L.P. |
|||||
By: | Stetson Street Partners, L.P., its general partner | ||||
By: | |||||
Vice President | |||||
AGREED AND ACCEPTED: FINGERHUT DIRECT MARKETING, INC. |
|||||
By: | /s/ [ILLEGIBLE] | ||||
Title: | Executive Vice President and Chief Financial Officer |
||||
Signature Page
Letter Agreement to Securities Purchase Agreement
Letter Agreement to Securities Purchase Agreement
EXHIBIT 1
6. NEGATIVE COVENANTS. The Company covenants that so long as any Subordinated Note is outstanding
the Company will not undertake or suffer to exist any of the following, unless the Subordinated
Collateral Agent, as agent for the Purchasers, otherwise consents in writing:
6A. Liens and Other Interests. The Company will not, nor will it permit any Subsidiary to, create,
incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired
by it, or assign or sell any income or revenues (including accounts receivable) or rights in
respect of any thereof, except:
(i) Liens on the Bank Collateral securing payment of the Senior Debt;
(ii) Permitted Liens;
(iii) any Lien on any property or asset of the Company or any Subsidiary existing on the First
Amendment Effective Date and set forth in Schedule 6A; provided that (a) such Lien shall
not apply to any other property or asset of the Company or Subsidiary and (b) such Lien shall
secure only those obligations which it secures on the date hereof and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount thereof;
(iv) Liens on fixed or capital assets acquired, constructed or improved by the Company or any
Subsidiary; provided that (a) such security interests secure Indebtedness permitted by
clause (v) of paragraph 6B, (b) such security interests and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition or the completion of such construction
or improvement, (c) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (d) such security interests shall not
apply to any other property or assets of the Company or Subsidiary;
(v) any Lien existing on any property or asset (other than Accounts and Inventory) prior to
the acquisition thereof by the Company or any Subsidiary or existing on any property or asset
(other than Accounts and Inventory) of any Person that becomes an Obligor after the date hereof
prior to the time such Person becomes an Obligor; provided that (i) such Lien is not
created in contemplation of or in connection with such acquisition or such Person becoming an
Obligor, as the case may be, (ii) such Lien shall not apply to any other property or assets of such
Obligor and (iii) such Lien shall secure only those obligations which it secures on the date of
such acquisition or the date such Person becomes an Obligor, as the case may be, and extensions,
renewals and replacements thereof that do not increase the outstanding principal amount thereof;
(vi) Liens of a collecting bank arising in the ordinary course of business under Section 4-208
of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being
collected upon;
(vii) Liens arising out of sale and leaseback transactions permitted by
E1-1
paragraph 6P;
(viii) Liens granted by a Subsidiary that is not an Obligor in favor of the Company or another
Obligor in respect of Indebtedness owed by such Subsidiary;
(ix) Liens on Securitization Receivables and other Purchased Assets (as defined in the
Securitization Documents) transferred by an Obligor to, and any property and assets of, the
Securitization SPE; and
(x) Liens securing payment of the Subordinated Notes and the other Obligations.
Notwithstanding the foregoing, none of the Liens permitted pursuant to this paragraph 6A may at any
time attach to any Obligor’s Inventory, other than those permitted under clauses (i), (ii) and
(vii) of the definition of “Permitted Lien” and clauses (i) and (x) above.
6B. Indebtedness. The Company will not, nor will it permit any Subsidiary to, create, incur or
suffer to exist any Indebtedness, except:
(i) Indebtedness under the Subordinated Notes and the other Obligations;
(ii) Indebtedness existing on the First Amendment Effective Date and set forth in Schedule 6B
and extensions, renewals and replacements of any such Indebtedness in accordance with clause (vi)
hereof;
(iii) Indebtedness of the Company to any Subsidiary and Indebtedness of any Subsidiary to the
Company or any other Subsidiary, provided that (a) Indebtedness of any Subsidiary that is not an
Obligor to the Company or to any Subsidiary that is an Obligor shall be subject to paragraph 6C and
(b) Indebtedness of the Company to any Subsidiary and Indebtedness of any Subsidiary that is an
Obligor to any Subsidiary that is not an Obligor shall be subordinated to the Obligations on terms
reasonably satisfactory to the Subordinated Collateral Agent;
(iv) Guarantees by the Company of Indebtedness of any Subsidiary and by any Subsidiary of
Indebtedness of the Company or any other Subsidiary, provided that (a) the Indebtedness so
Guaranteed is permitted by this paragraph 6B, (b) Guarantees by the Company or any Subsidiary that
is an Obligor of Indebtedness of any Subsidiary that is not an Obligor shall be subject to
paragraph 6C and (c) Guarantees permitted under this clause (iv) shall be subordinated to the
Obligations of the applicable Subsidiary on the same terms as the Indebtedness so Guaranteed is
subordinated to the Obligations;
(v) Indebtedness of the Company or any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets (whether or not constituting purchase
money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets prior to the
acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in
accordance with clause (vi) hereof; provided that (a) such Indebtedness is incurred prior
to or within 90 days after such acquisition or
E1-2
the completion of such construction or improvement and (b) the aggregate principal amount of
Indebtedness permitted by this clause (v) shall not exceed $10,000,000 at any time outstanding plus
up to $25,000,000 to finance the acquisition of the warehouse the Company currently leases in St.
Cloud, Minnesota;
(vi) Indebtedness which represents an extension, refinancing, or renewal of any of the
Indebtedness described in clauses (ii) and (v) and not clause (xii) hereof; provided that, (a) the
principal amount of such Indebtedness is not increased, (b) any Liens securing such Indebtedness
are not extended to any additional property of any Obligor, (c) no Obligor that is not originally
obligated with respect to repayment of such Indebtedness is required to become obligated with
respect thereto, (d) such extension, refinancing or renewal does not result in a shortening of the
average weighted maturity of the Indebtedness so extended, refinanced or renewed, (e) the terms of
any such extension, refinancing, or renewal are not materially less favorable to the obligor
thereunder than the original terms of such Indebtedness and (f) if the Indebtedness that is
refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the
terms and conditions of the refinancing, renewal, or extension Indebtedness must include
subordination terms and conditions that are at least as favorable to the Subordinated Collateral
Agent and the holders of the Subordinated Notes as those that were applicable to the refinanced,
renewed, or extended Indebtedness;
(vii) Indebtedness owed to any person providing workers’ compensation, health, disability or
other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or
indemnification obligations to such person, in each case incurred in the ordinary course of
business;
(viii) Indebtedness of the Company or any Subsidiary in respect of performance bonds, bid
bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary
course of business;
(ix) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that (a) such Indebtedness exists at the time such Person becomes a Subsidiary and
is not created in contemplation of or in connection with such Person becoming a Subsidiary and (b)
the aggregate principal amount of Indebtedness permitted by this clause (ix) shall not exceed
$2,500,000 at any time outstanding;
(x) Senior Debt;
(xi) other unsecured Indebtedness in an aggregate principal amount not exceeding $10,000,000
at any time outstanding; provided that the aggregate principal amount of Indebtedness of
the Company’s Subsidiaries permitted by this clause (xi) shall not exceed $2,500,000 at any time
outstanding; and
(xii) any Indebtedness in respect of any Securitization Facility.
6C. Investments, Loans, Advances, Guarantees and Acquisitions. The Company will not, nor will
it permit any Subsidiary to, purchase, hold or acquire (including pursuant to any merger with any
Person that was not an Obligor and a Wholly-Owned Subsidiary prior to
E1-3
such merger) any capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or
any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business unit (whether
through purchase of assets, merger or otherwise), except:
(i) Permitted Investments, subject to control agreements in favor of the
Subordinated Collateral Agent for the benefit of the holders of the Subordinated Notes or
otherwise subject to a perfected security interest in favor of the Subordinated Collateral
Agent for the benefit of the holders of the Subordinated Notes unless prohibited under the
Securitization Facility;
(ii) investments in existence on the First Amendment Effective Date and described in
Schedule 6C;
(iii) investments by the Company and the Subsidiaries in Equity Interests in their
respective Subsidiaries, provided that (a) any such Equity Interests held by an
Obligor shall be pledged pursuant to the Security Agreement or the Subsidiary Security
Agreement (subject to the limitations applicable to common stock of a foreign Subsidiary
referred to in paragraph 5M(ii)) and (b) the aggregate amount of investments by Obligors in
Subsidiaries that are not Obligors and are not Securitization SPEs (together with
outstanding intercompany loans permitted under clause (b) to the proviso to paragraph
6C(iv) and outstanding Guarantees permitted under the proviso to paragraph 6C(v)) shall not
exceed $2,500,000 at any time outstanding (in each case determined without regard to any
write-downs or write-offs);
(iv) loans or advances made by the Company to any Subsidiary and made by any
Subsidiary to the Company or any other Subsidiary, provided that (a) any such loans
and advances by an Obligor shall not be evidenced by a promissory note and (b) the amount
of such loans and advances made by Obligors to Subsidiaries that are not Obligors and are
not Securitization SPEs (together with outstanding investments permitted under clause (b)
to the proviso to paragraph 6C(iii) and outstanding Guarantees permitted under the proviso
to paragraph 6C(v)) shall not exceed $2,500,000 at any time outstanding (in each case
determined without regard to any write-downs or write-offs);
(v) Guarantees constituting Indebtedness permitted by paragraph 6B, provided
that the aggregate principal amount of Indebtedness of Subsidiaries that are not Obligors
that is Guaranteed by any Obligor shall (together with outstanding investments permitted
under clause (b) to the proviso to paragraph 6C(iii) and outstanding intercompany loans
permitted under clause (b) to the proviso to paragraph 6C(iv)) shall not exceed $2,500,000
at any time outstanding (in each case determined without regard to any write-downs or
write-offs);
(vi) loans or advances made by an Obligor to its employees on an arms-length basis in
the ordinary course of business consistent with past practices for travel and entertainment
expenses, relocation costs and similar purposes up to a maximum of
E1-4
$100,000 to any employee and up to a maximum of $1,000,000 in the aggregate at any one time
outstanding;
(vii) subject to Sections 4.2(a) and 4.4 of the Security Agreement and Sections 5.1
and 5.2 of the Subsidiary Security Agreement, notes payable, or stock or other securities
issued by Account Debtors to an Obligor pursuant to negotiated agreements with respect to
settlement of such Account Debtor’s Accounts in the ordinary course of business, consistent
with past practices;
(viii) investments in the form of Swap Agreements permitted by paragraph 6Q;
(ix) investments of any Person existing at the time such Person becomes a Subsidiary
of the Company or consolidates or merges with the Company or any of the Subsidiaries
(including in connection with a permitted acquisition) so long as such investments were not
made in contemplation of such Person becoming a Subsidiary or of such merger;
(x) investments received in connection with the dispositions of assets permitted by
paragraph 6E; and
(xi) investments constituting deposits described in clauses (iii) and (iv) of the
definition of “Permitted Liens.”
6D. Fundamental Changes. (i) The Company will not, nor will it permit any Subsidiary to, merge into
or consolidate with any other Person, or permit any other Person to merge into or consolidate with
it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Event of Default shall have occurred and be continuing (a) any Subsidiary of the
Company may merge into the Company in a transaction in which the Company is the surviving
corporation, (b) any Obligor (other than the Company) may merge into any other Obligor in a
transaction in which the surviving entity is an Obligor and (c) any Subsidiary that is not an
Obligor may liquidate or dissolve if the Company determines in good faith that such liquidation or
dissolution is in the best interests of the Company and is not materially disadvantageous to the
holders of the Subordinated Notes; provided that any such merger involving a Person that is
not a Wholly-Owned Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by paragraph 6C.
(ii) The Company will not, nor will it permit any of its Subsidiaries to, engage to any
material extent in any business other than businesses of the type conducted by the Company and its
Subsidiaries on the First Amendment Effective Date and businesses reasonably related thereto.
6E. Asset Sales. The Company will not, nor will it permit any Subsidiary to, sell, transfer,
lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will the
Company permit any Subsidiary to issue any additional Equity Interest in such Subsidiary (other
than to the Company or another Subsidiary in compliance with paragraph 6C), except:
E1-5
(i) sales, transfers and dispositions of (a) inventory in the ordinary course of
business and (b) used, obsolete, worn out or surplus equipment or property in the ordinary
course of business;
(ii) sales of Securitization Receivables and other Purchased Assets (as defined in the
Securitization Documents) to the Securitization SPE;
(iii) sales, transfers and dispositions to the Company or any Subsidiary, provided
that any such sales, transfers or dispositions involving a Subsidiary that is not an
Obligor shall be made in compliance with paragraph 6K;
(iv) sales, transfers and dispositions of accounts receivable in connection with the
compromise, settlement or collection thereof;
(v) sales, transfers and dispositions of investments permitted by clauses (ix) and
(xi) of paragraph 6C;
(vi) sale and leaseback transactions permitted by paragraph 6P;
(vii) dispositions resulting from any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or similar proceeding of, any
property or asset of the Company or any Subsidiary; and
(viii) sales, transfers and other dispositions of assets (other than Equity Interests
in a Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not
permitted by any other clause of this paragraph, provided that the aggregate fair
market value of all assets sold, transferred or otherwise disposed of in reliance upon this
clause (viii) shall not exceed $2,500,000 during any fiscal year of the Company;
provided that all sales, transfers, leases and other dispositions permitted hereby (other
than those permitted by clauses (ii) and (vi) above) shall be made for fair value and for at least
75% cash consideration.
6F. Restricted Payments; Certain Payments of Indebtedness. (i) The Company will not, nor will
it permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except (a) the
Company may declare and pay dividends with respect to its common stock payable solely in additional
shares of its common stock, and, with respect to its preferred stock, payable solely in additional
shares of such preferred stock or in shares of its common stock, (b) Subsidiaries may declare and
pay dividends ratably with respect to their Equity Interests, (c) the Company may make Restricted
Payments, of up to $5,000,000 per fiscal year pursuant to and in accordance with equity incentive
plans of the Company and its Subsidiaries, or (d) the Company may pay cash dividends on its
Preferred Stock with proceeds of an initial public offering of its Common Stock upon the conversion
of such Preferred Stock to Common Stock, pursuant to Section 4.2.1 of the Company’s certificate of
incorporation.
(ii) The Company will not, nor will it permit any Subsidiary to, make or agree to pay or make,
directly or indirectly, any payment or other distribution (whether in cash, securities or
E1-6
other property) of or in respect of principal of or interest on any Indebtedness, or any payment or
other distribution (whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Indebtedness, except:
(a) payment of Indebtedness created under the Transaction Documents;
(b) payment of the Senior Debt;
(c) payment of regularly scheduled interest and principal payments as and when due in
respect of any Indebtedness, other than payments in respect of the Subordinated
Indebtedness prohibited by the subordination provisions thereof;
(d) refinancings of Indebtedness to the extent permitted by paragraph 6B; and
(e) payment of secured Indebtedness that becomes due as a result of the voluntary sale
or transfer of the property or assets securing such Indebtedness.
6G. Restrictive Agreements. The Company will not, nor will it permit any Subsidiary to, directly or
indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (i) the ability of such Obligor or any of its Subsidiaries
to create, incur or permit to exist any Lien upon any of its property or assets, or (ii) the
ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its
capital stock or to make or repay loans or advances to the Company or any other Subsidiary or to
Guarantee Indebtedness of the Company or any other Subsidiary; provided that (a) the
foregoing shall not apply to restrictions and conditions imposed by law or by this Agreement, any
Transaction Document or the Credit Agreement, (b) the foregoing shall not apply to restrictions and
conditions existing on the First Amendment Effective Date identified on Schedule 6K (but shall
apply to any extension or renewal of, or any amendment or modification expanding the scope of, any
such restriction or condition), (c) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (d) clause (i) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such Indebtedness and (e)
clause (i) of the foregoing shall not apply to customary provisions in leases and other contracts
restricting the assignment thereof
6H. Amendment of Material Documents. The Company will not, nor will it permit any Subsidiary to,
amend, modify or waive any of its rights under its certificate of incorporation, by-laws,
operating, management or partnership agreement or other organizational documents except after
reasonable prior notice to the Subordinated Collateral Agent.
E1-7
6I. Accounting Changes. The Company shall not suffer or permit any of its Subsidiaries to make any
significant change in accounting treatment or reporting practices, except as required by GAAP, or
change the fiscal year or method for determining fiscal quarters of any Obligor or any of its
Subsidiaries.
6J. Financial Covenants.
(i)
Fixed Charge Coverage Ratio. The Company will not permit the Fixed Charge Coverage Ratio,
determined for any period of four consecutive fiscal quarters ending on any date during any period
set forth below, to be less than 1 .0 to 1.0.
(ii) Minimum EBITDA. The Company shall not permit EBITDA for any fiscal year set forth below
to be less than the amount set forth below for such fiscal year:
Fiscal Year | Amount | |
2008 | $33,250,000 | |
2009 | $38,000,000 | |
2010 | $47,500,000 | |
2011 | $52,250,000 | |
2012 and each fiscal year thereafter | $57,000,000 |
6K. Transactions with Affiliates. The Company will not, nor will it permit any Subsidiary to,
sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (i) transactions that (a) are in the ordinary course of business and (b) are at
prices and on terms and conditions not less favorable to the Company or such Subsidiary than could
be obtained on an arm’s-length basis from unrelated third parties, (ii) transactions between or
among the Company and any Subsidiary that is an Obligor not involving any other Affiliate, (iii)
any investment permitted by paragraph 6C(iii) or 6C(iv), (iv) any Indebtedness permitted under
paragraph 6C(iii), (v) any Restricted Payment permitted by xxxxxxxxx 0X, (xx) loans or advances to
employees permitted under xxxxxxxxx 0X, (xxx) the payment of reasonable fees to directors of the
Company or any Subsidiary who are not employees of the Company or any Subsidiary, and compensation
and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors,
officers or employees of the Company or its Subsidiaries in the ordinary course of business,
including without limitation those paid pursuant to matters described in Schedule 6K, (viii)
transactions involving the transfer of Securitization Receivables and other Purchased Assets (as
defined in the Securitization Documents) to and by a Securitization SPE in connection with a
Securitization Facility, and (ix) any issuances of securities or other payments, awards or grants
in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock
options and stock ownership plans approved by the Company’s board of directors.
X0-0
0X. Xxxxxxxx xx Xxxxx by Subsidiaries. The Company covenants that it will not permit any
Subsidiary to issue, sell or otherwise dispose of any shares of any class of its stock (either
directly or indirectly by the issuance of rights or options for, or securities convertible into,
such shares) except to the Company or another Wholly-Owned Subsidiary.
6M. Limitation on Issuance of Other Subordinated Indebtedness Senior to the Subordinated Notes. The
Company shall not create, incur, assume, permit or exist, Guarantee, or in any other manner become
liable with respect to any Indebtedness, other than the Subordinated Notes, that is contractually
subordinate in right of payment to any Senior Debt unless such Indebtedness is otherwise permitted
by the terms hereof and is Indebtedness that is pari passu with, or subordinate pursuant to
provisions substantially similar to those contained in the Intercreditor Agreement in right of
payment to, the Subordinated Notes.
6N. Payment Limitations. The Company covenants that it will not enter into or become subject to any
restriction on the payment of any Obligations which payment is required pursuant to the terms of
this Agreement other than the provisions of the Intercreditor Agreement.
6O. Terrorism Sanctions Regulations. The Company covenants that it will not and will not permit any
Subsidiary to (i) become a Person described or designated in the Specially Designated Nationals and
Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism
Order or (ii) engage in any dealings or transactions with any such Person.
6P. Sale and Leaseback Transactions. The Company will not, nor will it permit any Subsidiary to,
enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property,
real or personal, used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property that it intends to use for substantially
the same purpose or purposes as the property sold or transferred, except for any such sale of any
fixed or capital assets by the Company or any Subsidiary that is made for cash consideration in an
amount not less than the fair value of such fixed or capital asset and is consummated within 90
days after the Company or such Subsidiary acquires or completes the construction of such fixed or
capital asset.
6Q. Swap Agreements. The Company will not, nor will it permit any Subsidiary to, enter into any
Swap Agreement, except (i) Swap Agreements entered into to hedge or mitigate risks to which the
Company or any Subsidiary has actual exposure (other than those in respect of Equity Interests of
the Company or any of its Subsidiaries), and (ii) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating
rate to another floating rate or otherwise) with respect to any interest-bearing liability or
investment of the Company or any Subsidiary.
6R. Fingerhut Fulfillment, Inc. The Company will not permit Fingerhut Fulfillment, Inc. at any time
to own or have any Inventory or material assets.
E1-9
SCHEDULE 6A
EXISTING LIENS
[To be provided by the Company]
6A-1
SCHEDULE 6B
EXISTING INDEBTEDNESS
[To be provided by the Company]
6B-1
SCHEDULE 6C
EXISTING INVESTMENTS
[To be provided by the Company]
6C-1
SCHEDULE 6K
AFFILIATE TRANSACTIONS
[To be provided by the Company]
6K-1
SCHEDULE 8T
INVENTORY LOCATIONS
[To be provided by the Company]
8T-1
EXHIBIT 2
7A. Acceleration. If any of the following events shall occur and be continuing for any reason
whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or otherwise):
(i) the Company defaults in the payment of any principal of or Prepayment Amount or Specified Event
Prepayment Amount payable with respect to any Subordinated Note when the same shall become due,
either by the terms thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest on any Subordinated Note for more than 5
days after the date due; or
(iii) (a) the Company or any Subsidiary defaults in the payment or performance of any term
contained in the Credit Agreement (or if any other event thereunder shall occur and be continuing)
and the effect of such default or other event is to cause (or the Banks cause) the loans under the
Credit Agreement to become due prior to stated maturity, (b) any Obligor or any Subsidiary shall
fail to make any payment (whether of principal or interest and regardless of amount) in respect of
any Material Indebtedness (other than Indebtedness referred to in clause (a) above), when and as
the same shall become due and payable, which failure continues beyond any period of grace therein
provided or (c) any event or condition occurs that results in any Material Indebtedness (other than
Indebtedness referred to in clause (a) above) becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of time or both) the holder or
holders of any Material Indebtedness (other than Indebtedness referred to in clause (a) above) or
any trustee or agent on its or their behalf to cause any Material Indebtedness (other than
Indebtedness referred to in clause (a) above) to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this
clause (c) shall not apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Indebtedness; or
(iv) any representation or warranty made by the Company or any Subsidiary herein or in any other
Transaction Document or by the Company, any Subsidiary or any of their respective officers in any
writing furnished in connection with or pursuant to this Agreement or any other Transaction
Document shall be false or misleading in any material respect on the date as of which made; or
(v) the Company (a) fails to perform or observe any agreement contained in paragraph 5I or
paragraph 6 or (b) fails to give notice of a Default or Event of Default as required by clause (i)
of paragraph 5P; or
E2-1
(vi) any Obligor shall fail to observe or perform any covenant, condition or agreement contained in
this Agreement (other than those which constitute a default under another clause of this paragraph
7A), and such failure shall continue unremedied for a period of (a) 5 Business Days after the
earlier of knowledge of such breach or notice thereof from the Subordinated Collateral Agent (which
notice will be given at the request of any holder of the Subordinated Notes) if such breach relates
to terms or provisions of paragraph 5A, 5C, 5E, 5F, 5G, 5H, 5I, 5J, 5L or 5Q (other than paragraph
5Q(i)) of this Agreement or (b) 20 days after the earlier of knowledge of such breach or notice
thereof from the Subordinated Collateral Agent (which notice will be given at the request of any
holder of the Subordinated Notes) if such breach relates to terms or provisions of any other
paragraph of this Agreement; or
(vii) the Company or any Subsidiary makes an assignment for the benefit of creditors or is
generally not paying its debts as such debts become due; or
(viii) any decree or order for relief in respect of the Company or any Subsidiary is entered under
any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law, whether now or hereafter in effect (herein called the
“Bankruptcy Law”), of any jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any tribunal for, or consents to, the
appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar
official of the Company or any Subsidiary, or of any substantial part of the assets of the Company
or any Subsidiary, or commences a voluntary case under the Bankruptcy Law of the United States or
any proceedings (other than proceedings for the voluntary liquidation and dissolution of a
Subsidiary) relating to the Company or any Subsidiary under the Bankruptcy Law of any other
jurisdiction; or
(x) any such petition or application described in clause (ix) of this paragraph 7A is filed, or any
such case or proceedings described in clause (ix) of this paragraph 7A are commenced, against the
Company or any Subsidiary and the Company or such Subsidiary by any act indicates its approval
thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered
appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the
petition in any such proceedings, and such order, judgment or decree remains unstayed and in effect
for more than 60 days; or
(xi) any order, judgment or decree is entered in any proceedings against the Company decreeing the
dissolution of the Company and such order, judgment or decree remains unstayed and in effect for
more than 60 days; or
(xii) any order, judgment or decree is entered in any proceedings against the Company or any
Subsidiary decreeing a split-up of the Company or
E2-2
such Subsidiary which requires the divestiture of assets representing a substantial part, or the
divestiture of the stock of a Subsidiary whose assets represent a substantial part, of the
consolidated assets of the Company and its Subsidiaries (determined in accordance with GAAP) or
which requires the divestiture of assets, or stock of a Subsidiary, which shall have contributed a
substantial part of the consolidated net income of the Company and its Subsidiaries (determined in
accordance with GAAP) for any of the three fiscal years then most recently ended, and such order,
judgment or decree remains unstayed and in effect for more than 60 days; or
(xiii) one or more judgments for the payment of money in an aggregate amount in excess of
$2,500,000 shall be rendered against any Obligor, any Subsidiary of any Obligor or any combination
thereof and the same shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of any Obligor or any Subsidiary of any Obligor to
enforce any such judgment or any Obligor or any Subsidiary of any Obligor shall fail within 30 days
to discharge one or more non-monetary judgments or orders which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any
such case, are not stayed on appeal or otherwise being appropriately contested in good faith by
proper proceedings diligently pursued; or
(xiv) an ERISA Event shall have occurred that, in the opinion of the Required Holder(s), when taken
together with all other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Company and its Subsidiaries in an aggregate amount exceeding $2,500,000 in any
year; or
(xv) any Change of Control shall occur; or
(xvi) the Subsidiary Guaranty or any Security Document shall cease to be in full force and effect,
or the Company or any Subsidiary Guarantor shall contest or deny the validity or enforceability of,
or deny that it has any liability or obligations under, the Subsidiary Guaranty or any Security
Document, or the Subordinated Collateral Agent does not have or ceases to have a valid perfected
security interest (subject only to Liens permitted by clause (i) of paragraph 6A) in any Collateral
for the benefit of the holders of the Subordinated Notes; or
(xvii) if the Securitization Facility is terminated and is not replaced by a securitization
facility reasonably satisfactory to the Subordinated Collateral Agent within 30 days after
termination;
then (a) if such event is an Event of Default specified in clause (i) or (ii) of this paragraph 7A,
any holder of any Subordinated Note (other than the Company or any of its Subsidiaries or
Affiliates) may at its option, by notice in writing to the Company, declare all of the Subordinated
Notes held by such holder to be, and all of the Subordinated Notes held by such holder shall
thereupon be and become, immediately due and payable at par together with interest accrued
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thereon, without presentment, demand, protest or other notice of any kind, all of which are hereby
waived by the Company, (b) if such event is an Event of Default specified in clause (viii), (ix) or
(x) of this paragraph 7A with respect to the Company, all of the Subordinated Notes at the time
outstanding shall automatically become immediately due and payable together with interest accrued
thereon and together with the Prepayment Amount, if any, (or, if less, the Yield- Maintenance
Amount) with respect to each Subordinated Note, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Company, and (c) if such event is not an Event of
Default specified in clause (viii), (ix) or (x) of this paragraph 7A with respect to the Company,
the Required Holder(s) may at its or their option, by notice in writing to the Company, declare all
of the Subordinated Notes to be, and all of the Subordinated Notes shall thereupon be and become,
immediately due and payable together with interest accrued thereon and together with (1) the
Prepayment Amount (or, if less, the Yield-Maintenance Amount) or (2) if such event is an Event of
Default specified in clause (xv) which also constitutes a Specified Event, the Specified Event
Prepayment Amount (or, if less, the Yield-Maintenance Amount) with respect to each Subordinated
Note, without presentment, demand, protest or other notice of any kind, all of which are hereby
waived by the Company. The Company acknowledges, and the parties hereto agree, that each holder of
a Subordinated Note has the right to maintain its investment in the Subordinated Notes free from
repayment by the Company (except as herein specifically provided for) and without the occurrence of
an Event of Default and that the provision for payment of Yield-Maintenance Amount, Prepayment
Amount or Specified Event Prepayment Amount, as applicable, by the Company in the event the
Subordinated Notes are prepaid or are accelerated as a result of an Event of Default is intended to
provide compensation for the deprivation of such right under such circumstances.
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EXHIBIT 4
11B. Other Terms.
“Account” shall have the meaning assigned to such term in the Security Agreement.
“Account Debtor” shall mean any Person obligated on an Account.
“Affiliate” shall mean, with respect to a specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.
“Agreement” shall have the meaning given in paragraph 12C hereof.
“Agreement to Subordinate” shall have the meaning given in paragraph 3A(xi) hereof.
“Anti-Terrorism Order” shall mean Executive Order No. 13,224 of September 24, 2001, Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.
“Bank Agent” shall mean JPMorgan Chase Bank, N.A., in its capacity as administrative agent
under the Credit Agreement, and its successors and assigns in that capacity.
“Bank Collateral” shall mean the “Collateral” as such term is defined in the Intercreditor
Agreement (as in effect on the First Amendment Effective Date).
“Banks” shall mean JPMorgan Chase Bank, N.A. and the other lending parties to the Credit
Agreement, other holders of the Senior Debt from time to time and their respective successors and
assigns.
“Bankruptcy Law” shall have the meaning given in clause (viii) of paragraph 7A.
“Business Day” shall mean any day other than a Saturday, a Sunday or a day on which commercial
banks in New York City are required or authorized by law to remain closed.
“Capital Expenditures” shall mean, without duplication, any expenditure or commitment to
expend money for any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a consolidated balance sheet of the Company and its Subsidiaries prepared
in accordance with GAAP.
“Capitalized Lease Obligation” of any Person shall mean the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement
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conveying the right to use) real or personal property, or a combination thereof, which obligations
are required to be classified and accounted for as capital leases on a balance sheet of such Person
under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined
in accordance with GAAP.
“Change of Control” shall mean (a) the Control Parties shall cease to own, free and clear of
all Liens or other encumbrances, at least 51% of the outstanding voting Equity Interests of the
Company on a fully diluted basis; (b) occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Company by Persons who were neither (i) appointed by the
board of directors of the Company nor (ii) appointed pursuant to the Company’s certificate of
incorporation or other organizational documents or agreements in effect on the date hereof; (c) the
acquisition of direct or indirect Control of the Company by any Person or group other than the
Control Parties; or (d) the occurrence of a “Change in Control” (or similar event) under the Credit
Agreement (or any replacement thereto) which has not been cured or waived pursuant to the terms
thereof. Notwithstanding the foregoing, an initial public offering of the Company’s Equity
Interests shall not constitute a change in control even if the offering results in the Control
Parties’ owning less than 51% of the outstanding voting Equity Interests.
“closing” or “date of closing” shall have the meaning given in paragraph 2 hereof.
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Collateral” shall mean all property and assets upon which Liens have been created or are
purported to have been created under or pursuant to any Security Document.
“Collateral Agency Agreement” shall have the meaning given in paragraph 3A(xiii) hereof.
“Common Stock” shall mean the Company’s Common Stock, par value $0.00001 per share.
“Company” shall have the meaning given in the introductory paragraph hereof.
“Company Sale” shall mean (i) the sale of all or substantially all of the Common Stock and
Preferred Stock to a Person or Persons (other than any Related Party) in the same transaction or
series of related transactions, or (ii) the sale of all or substantially all of the assets of the
Company and its Subsidiaries to a Person or Persons (other than any Related Party) in the same
transaction or series of related transactions, in each case on terms and conditions reasonably
acceptable to the Required Holder(s).
“Control” shall mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative
thereto.
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“Control Parties” shall mean one or more of: (i) Petters Group, Inc. or any
Person(s) Controlled by or Controlling Petters Group, Inc., (ii) Xxxx Capital Venture
Fund, L.P. or any Person(s) Controlled by or Controlling Xxxx Capital Venture Fund,
L.P., and (iii) Battery Ventures VI L.P. or any Person(s) Controlled by or Controlling
Battery Ventures VI L.P.
“Credit Agreement” shall mean the Credit Agreement dated as of June 21, 2007, among the
Company, the Bank Agent and the Banks, as amended, restated, supplemented or otherwise modified or
replaced from time to time in accordance with the terms of the Intercreditor Agreement.
“Default” shall mean any of the events specified in paragraph 7A, whether or not any
requirement for such event to become an Event of Default has been satisfied.
“Default Rate” shall mean a rate per annum from time to time equal to the greater of (i)
23.00%, or (ii) 10% over the rate of interest publicly announced by JPMorgan Chase Bank from time
to time in New York City as its Prime Rate; provided, that in no event shall the Default Rate
exceed the maximum rate of interest allowed under applicable law.
“EBITDA”
shall mean, for any period, Net Income for such period
plus (a) without duplication and to
the extent deducted in determining Net Income for such period, the sum of (i) Interest Expense for
such period, (ii) income tax expense for such period net of tax refunds, (iii) all amounts
attributable to depreciation and amortization expense for such period, (iv) any extraordinary
non-cash charges for such period and (v) any other non-cash charges for such period (but excluding
any non-cash charge in respect of an item that was included in Net Income in a prior period and any
non-cash charge that relates to the write-down or write-off of
inventory), minus (b) without
duplication and to the extent included in Net Income, (i) any cash payments made during such period
in respect of non-cash charges described in clause (a)(v) taken in a prior period and (ii) any
extraordinary gains and any non-cash items of income for such period, all calculated for the
Company and its Subsidiaries on a consolidated basis in accordance with GAAP.
“Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, release or threatened release of any Hazardous Material or
to health and safety matters.
“Equity Interests” shall mean shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest, but shall not include any such interest in the
Securitization Trust held by the Securitization SPE.
“Equityholder Agreement” shall have the meaning given in paragraph 3A(viii) hereof.
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“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that,
together with the Company, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the
Company or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate from the PBGC or a
plan administrator of any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (f) the incurrence by the Company or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Company or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Company or any ERISA Affiliate of any notice, concerning
the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
“Event of Default” shall mean any of the events specified in paragraph 7A, provided that there
has been satisfied any requirement in connection with such event for the giving of notice, or the
lapse of time, or the happening of any further condition, event or act.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“FAC” shall mean FAC Acquisition, LLC, a Delaware limited liability company.
“First Amendment Effective Date” shall mean June 21, 2007.
“Fixed Charge Coverage Ratio” shall mean, the ratio, determined as of the end of each of
fiscal quarter of the Company for the most-recently ended four fiscal quarters, of (a) EBITDA minus
the unfinanced portion of Capital Expenditures to (b) Fixed Charges, all calculated for the Company
and its Subsidiaries on a consolidated basis in accordance with GAAP.
“Fixed Charges” shall mean, with reference to any period, without duplication, cash Interest
Expense, plus scheduled principal payments on Indebtedness made during such period (not including
principal payments on the Securitization Facility or under the Credit Agreement), plus expense for
income and franchise taxes paid in cash, plus
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dividends or distributions paid in cash, all calculated for the Company and its Subsidiaries on a
consolidated basis.
“GAAP” shall mean generally accepted accounting principles in the United States of America.
“Governmental Authority” shall mean the government of the United States of America, any other
nation or any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government.
“Guarantee”
of or by any Person (the “guarantor”) shall mean any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the
“primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase of) any security
for the payment thereof, (b) to purchase or lease property, securities or services for the purpose
of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary course of business.
“Hazardous Materials” shall mean all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.
“including” shall mean, unless the context clearly requires otherwise, “including without
limitation”, whether or not so stated.
“Indebtedness” of any Person shall mean, without duplication, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of
such Person upon which interest charges are customarily paid, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property acquired by such
Person, (e) all obligations of such Person in respect of the deferred purchase price of property or
services (excluding current accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g) all
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Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect
of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances, (k) obligations under any liquidated earn-out and (l)
any other Off-Balance Sheet Liability. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
“Indenture Trustee” shall mean U.S. Bank National Association and any other trustee under a
Securitization Facility.
“Institutional Investor” shall mean any insurance company, commercial, investment or merchant
bank, finance company, mutual fund, registered money or asset manager, savings and loan
association, credit union, registered investment advisor, pension fund, investment company,
licensed broker or dealer, “qualified institutional buyer” (as such term is defined under Rule 144A
promulgated under the Securities Act) or “accredited investor” (as such term is defined in
Regulation D promulgated under the Securities Act).
“Intercreditor Agreement” shall mean the Subordination and Intercreditor Agreement, dated as
of June 21, 2007, among the Bank Agent and the Purchasers, as amended, restated or otherwise
modified from time to time in accordance with its terms.
“Interest Expense” shall mean, with reference to any period, total interest expense (including
that attributable to Capital Lease Obligations) of the Company and its Subsidiaries for such period
with respect to all outstanding Indebtedness of the Company and its Subsidiaries (including all
commissions, discounts and other fees and charges owed with respect to letters of credit and
bankers’ acceptance financing and net costs under Swap Agreements in respect of interest rates to
the extent such net costs are allocable to such period in accordance with GAAP), calculated on a
consolidated basis for the Company and its Subsidiaries for such period in accordance with GAAP.
“Inventory” shall have the meaning assigned to such term in the Security Agreement.
“Investor Rights Agreement” shall have the meaning given in paragraph 3A(iii) hereof.
“IP Security Agreement” shall have the meaning given in paragraph 3A(vii) hereof.
“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest
of a vendor or a lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same
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economic effect as any of the foregoing) relating to such asset and (c) in the case of securities,
any purchase option, call or similar right of a third party with respect to such securities.
“Material Adverse Effect” shall mean any event, development or circumstance that has or would
reasonably be expected to have a material adverse effect on (a) the business, assets, operations,
prospects or condition, financial or otherwise, of the Company and its Subsidiaries taken as a
whole (provided that if the event, development or circumstance is not unique to the Company, its
effect on the Company is materially more adverse than on the other entities or comparable lines of
business), (b) the ability of any Obligor to perform any of its obligations under the Transaction
Documents to which it is a party, (c) the Collateral, or the Subordinated Collateral Agent’s Liens
(on behalf of itself and the holders of the Subordinated Notes) on the Collateral or the priority
of such Liens or (d) the rights of or benefits available to the Subordinated Collateral Agent or
the holders of any of the Subordinated Notes or the Warrants under this Agreement.
“Material Indebtedness” shall mean Indebtedness (other than the Obligations), or obligations
in respect of one or more Swap Agreements, of any one or more of the Company and its Subsidiaries
in an aggregate principal amount exceeding $5,000,000. For purposes of determining Material
Indebtedness, the “obligations” of the Company or any Subsidiary in respect of any Swap Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that
the Company or such Subsidiary would be required to pay if such Swap Agreement were terminated at
such time.
“Moody’s” shall mean Xxxxx’x Investors Service, Inc., and its successors.
“Multiemployer Plan” shall mean a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.
“Net Income” shall mean, for any period, the consolidated net income (or loss) of the Company
and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that
there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary or is merged into or consolidated with the Company or any of its Subsidiaries,
(b) the income (or deficit) of any Person (other than a Subsidiary) in which the Company or any of
its Subsidiaries has an ownership interest, except to the extent that any such income is actually
received by the Company or such Subsidiary in the form of dividends or similar distributions and
(c) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of
any contractual obligation (other than under the Credit Agreement) or Requirement of Law applicable
to such Subsidiary.
“Obligations” shall mean (i) the unpaid principal and interest (including interest accruing at
the then-applicable Default Rate and interest accruing at the then-applicable rate provided in the Subordinated Notes after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or similar proceeding, relating to
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Company whether or not a claim for post-filing or post-petition interest is allowed in such
proceeding) on the Subordinated Notes, when and as due, whether at maturity, by acceleration, upon
one or more dates set for prepayment or otherwise, and (ii) all other obligations and liabilities
of every nature of the Company from time to time owing to the Subordinated Collateral Agent or the
holders of Subordinated Notes, in each case whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), which may arise under, out of, or
in connection with, this Agreement or any other Security Document or under any other document made,
delivered or given in connection with any of the foregoing (excluding the Warrants, the Investor
Rights Agreement, the Stockholders Agreement, the Equityholder Agreement and the VCOC Letter), in
each case whether on account of principal, premium, if any, interest, fees, indemnities, costs,
expenses or otherwise (including all fees and disbursements of counsel to such Persons) that are
required to be paid by the Company pursuant to the terms of this Agreement or any other Security
Document, including, without limitation, any contingent or unliquidated Obligations related to
unresolved claims, causes of action or liabilities which have been asserted or threatened against
the Subordinated Collateral Agent or any holder of a Subordinated Note or which otherwise can be
reasonably identified by the Subordinated Collateral Agent or any holder of a Subordinated Note
based on then known facts and circumstances.
“Obligors” shall mean the Company, the Company’s domestic Subsidiaries other than the
Securitization SPE and any other Person that now or hereafter guarantees or grants a Lien in any of
its assets to secure any of the Obligations and their successors and assigns, provided further that
the Securitization Trust shall not be deemed an Obligor.
“Off-Balance Sheet Liability” of a Person shall mean (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any
indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered
into by such Person or (c) any indebtedness, liability or obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of borrowing but which
does not constitute a liability on the balance sheets of such Person (other than operating leases).
“Officer’s Certificate” shall mean a certificate signed in the name of the Company by its
President, one of its Vice Presidents or its Treasurer.
“PBGC” shall mean the Pension Benefit Guaranty Corporation, or any successor or replacement
entity thereto under ERISA.
“Permitted Investments” shall mean, (i) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from
the date of acquisition thereof; (ii) investments in commercial paper maturing
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within 270 days from the date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from Standard & Poor’s or from Xxxxx’x; (iii) investments in
certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the
date of acquisition thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a combined capital and surplus and
undivided profits of not less than $500,000,000; (iv) fully collateralized repurchase agreements
with a term of not more than 30 days for securities described in clause (i) above and entered into
with a financial institution satisfying the criteria described in clause (iii) above; and (v) money
market funds that (a) comply with the criteria set forth in Securities and Exchange Commission Rule
2a-7 under the Investment Company Act of 1940, (b) are rated AAA by Standard & Poor’s and Aaa by
Xxxxx’x and (c) have portfolio assets of at least $5,000,000,000.
“Permitted Liens” shall mean, (i) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with paragraph 5L; (ii) carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of
business and securing obligations that are not overdue by more than 30 days or are being contested
in compliance with paragraph 5L; (iii) pledges and deposits made in the ordinary course of business
in compliance with workers’ compensation, unemployment insurance and other social security laws or
regulations; (iv) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in
each case in the ordinary course of business; (v) judgment Liens in respect of judgments that do
not constitute an Event of Default under clause (xiii) of paragraph 7A; (vi) easements, zoning
restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in
the ordinary course of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary conduct of business
of the Company or any Subsidiary; and (vii) unperfected Liens and reclamation rights of inventory
suppliers.
“Person” shall mean any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other entity.
“Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject
to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Company or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Preferred Stock” shall mean the Company’s Series A Convertible Preferred Stock, par value
0.00001 per share.
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“Property” of a Person shall mean any and all property, whether real, personal, tangible,
intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.
“Projections” shall have the meaning given in paragraph 5A(vi) hereof.
“Purchasers” shall have the meaning given in the introductory paragraph hereof.
“Qualified IPO” shall mean the closing of a firm commitment underwritten initial public
offering pursuant to an effective registration statement filed under the Securities Act covering
the offer and sale of shares of the Company’s Common Stock at a public offering price reasonably
acceptable to the Required Holder(s).
“Related Party” shall mean (i) any officer or director of the Company or any Subsidiary, (ii)
any Person directly or indirectly owning any shares of Equity Interests of the Company or any
Subsidiary, (iii) any Person who is related by blood, adoption or marriage to any Person described
in clause (i) or (ii), or (iv) any Affiliate of the Company or any Affiliate of any Person
described in clause (i), (ii) or (iii); provided, however, that the Company and any Subsidiary of
the Company shall not be Related Parties.
“Required Holder(s)” shall mean the holder or holders of more than 50% of the aggregate
principal amount of the Subordinated Notes from time to time outstanding.
“Requirement of Law” shall mean, as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
“Responsible Officer” shall mean the chief executive officer, chief operating officer, chief
financial officer or chief accounting officer of the Company or any other officer of the Company
involved principally in its financial administration or its controllership function.
“Restated Certificate of Incorporation” shall have the meaning given in paragraph 3J hereof.
“Restricted Payment” shall mean any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the Company or any
Subsidiary, or any payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Equity Interests in the Company or of any option, warrant
or other right to acquire any such Equity Interests in the Company.
“Securities” shall have the meaning given in paragraph 1B hereof.
“Securities Act” shall mean the Securities Act of 1933, as amended.
E4-10
“Securitization Documents” shall have the meaning ascribed thereto in the Security Agreement.
“Securitization Facility” shall mean the securitization facility governed by the
Securitization Documents.
“Securitization Intercreditor Agreement” shall mean the Intercreditor Agreement dated as of
June 21, 2007 among the Subordinated Collateral Agent, the Indenture Trustee on behalf of
noteholders under the Securitization Facility, the Securitization SPE and the Company in the form
of Exhibit Q hereto, as amended, restated or otherwise modified from time to time in accordance
with its terms.
“Securitization Receivables” shall have the meaning assigned to such term in the Security
Agreement.
“Securitization SPE” shall mean Fingerhut Funding, LLC, a Delaware limited liability company,
or any other special purpose entity now or hereafter created to effect a Securitization Facility.
“Securitization Trust” shall mean the Fingerhut Credit Account Master Note Trust created
effective as of June 13, 2007.
“Security Agreement” shall mean that certain Amended and Restated Pledge and Security
Agreement dated as of June 21, 2007 by the Company for the benefit of the holders of the
Subordinated Notes in the form of Exhibit G hereto, as the same may be amended, modified, or
supplemented from time to time in accordance with the provisions thereof.
“Security Documents” shall mean the Security Agreement, the IP Security Agreement, the
Subsidiary Guaranty, the Subsidiary Security Agreement and any other agreement, document or
instrument in effect on the date of closing or executed by the Company or any Subsidiary after the
date of closing under which the Company or such Subsidiary has granted a lien upon or security
interest in any property or assets to the Subordinated Collateral Agent to secure all or any part
of the obligations of the Company under this Agreement or the Subordinated Notes or of any
Subsidiary Guarantor under the Subsidiary Guaranty, and all financing statements, certificates,
documents and instruments relating thereto or executed or provided in connection therewith, each as
amended, restated, supplemented or otherwise modified from time to time.
“Senior Debt” shall mean all Senior Debt under and as defined in the Intercreditor Agreement;
provided that “Senior Debt” shall not include any obligation owed to the Company or any Subsidiary
of the Company.
“Significant Holder” shall mean (i) each Purchaser, so long as such Purchaser or one of its
Affiliates shall hold (or be committed under this Agreement to purchase) any Subordinated Note, or
(ii) any other Person which, together with its Affiliates, is the holder of at least 5% of the aggregate principal amount of the Subordinated Notes from time to
time outstanding.
E4-11
“Specified Event” shall mean the consummation of (i) a Qualified IPO or (ii) a Company Sale.
“Standard & Poor’s” shall mean Standard & Poor’s, a Division of The XxXxxx-Xxxx Companies,
Inc., and its successors.
“Stockholders Agreement” shall have the meaning given in paragraph 3A(iii) hereof
“Subordinated Collateral Agent” shall mean Prudential Capital Partners II, L.P.
“Subordinated Indebtedness” of a Person shall mean any Indebtedness of such Person the payment
of which is subordinated to payment of the Secured Obligations to the written satisfaction of the
Subordinated Collateral Agent.
“Subordinated Notes” shall have the meaning given in paragraph 1A hereof.
“subsidiary” shall mean, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing more than 50% of the equity or more
than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held.
“Subsidiary” shall mean any direct or indirect subsidiary of the Company or an Obligor, as
applicable.
“Subsidiary Guarantors” shall mean each Subsidiary of the Company from time to time required
to enter into the Subsidiary Guaranty pursuant to paragraph 5M.
“Subsidiary Guaranty” shall mean that certain Guarantor Agreement made by each Subsidiary
Guarantor in favor of the Subordinated Collateral Agent for the benefit of the holders of the
Subordinated Notes substantially in the form of Exhibit F hereto, as the same may be amended,
modified, or supplemented from time to time in accordance with the provisions thereof.
“Subsidiary Security Agreement” shall mean that certain Security Agreement made by each
Subsidiary Guarantor in favor of the Subordinated Collateral Agent for the benefit of the holders
of the Subordinated Notes substantially in the form of Exhibit I hereto, as the same may be
amended, modified, or supplemented from time to time in accordance with the provisions thereof.
“Swap Agreement” shall mean any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt
E4-12
instruments or securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination of these
transactions; provided that no phantom stock or similar plan providing for payments only on account
of services provided by current or former directors, officers, employees or consultants of the
Company or the Subsidiaries shall be a Swap Agreement.
“Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.
“Transaction Documents” shall mean this Agreement, the Subordinated Notes, the Warrants, the
Investor Rights Agreement, the Stockholders Agreement, the Equityholder Agreement, the VCOC Letter,
the Security Documents, the Agreement to Subordinate, the Collateral Agency Agreement and the other
agreements, documents, certificates and instruments now or hereafter executed or delivered by the
Company or any Subsidiary or Affiliate in connection with this Agreement.
“Transfer and Servicing Agreement” shall mean the Transfer and Servicing Agreement among
Fingerhut Funding, LLC, the Company and Fingerhut Credit Account Master Note Trust, dated as of
June 21, 2007, as the same may be amended, restated or otherwise supplemented from time to time.
“Transferee” shall mean any direct or indirect transferee of all or any part of any
Subordinated Note purchased by any Purchaser under this Agreement.
“USA Patriot Act” shall mean United States Public Law 107-56, Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT
ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
“VCOC Letter” shall have the meaning given in paragraph 3A(ix) hereof.
“Warrants” shall have the meaning given in paragraph 1B hereof.
“Wholly-Owned Subsidiary” shall mean any Subsidiary of the Company all of the outstanding
Equity Interests of every class of which is owned by the Company or another Wholly-Owned Subsidiary
of the Company, and which has outstanding no options, warrants, rights or other securities
entitling the holder thereof (other than the Company or a Wholly-Owned Subsidiary) to acquire
shares of Equity Interests of such Subsidiary.
“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete
or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle
E of Title IV of ERISA.
E4-13
EXHIBIT G
FORM OF SECURITY AGREEMENT
See Attached.
EXHIBIT P
FORM OF COMPLIANCE CERTIFICATE
See Attached.
EXHIBIT G
FORM OF SECURITIZATION INTERCREDITOR AGREEMENT
See Attached.
SCHEDULE 6A
EXISTING LIENS
Debtor Searched | Clear? | Filing | Through | |||||||||||||
[Debtor Found] | Jurisdiction | (Y/N) | Secured Party | Filing No. | Date | Lien Description | Date | |||||||||
Fingerhut Direct
Marketing, Inc.
|
Delaware Secretary of State | UCC N |
04/24/07 | |||||||||||||
Fingerhut Direct
Marketing, Inc.
|
Prudential Capital Partners II, L.P., as Collateral Agent | 61046655 | 03/26/06 | All assets; liens are subordinated to the liens of the Senior Agent as defined in the Intercreditor Agreement dtd 3/23/06 | ||||||||||||
Amendment 61481829 |
05/02/06 | Amends debtors address | ||||||||||||||
Fingerhut Direct
Marketing, Inc.
|
First American Commercial Bancorp, Inc. | 2007 1028827 | 03/20/07 | All equipment under Master Lease No. 2007145 |
Fingerhut—Schedules to First Amendment to Prudential SPA
6A-1
SCHEDULE 6B
EXISTING INDEBTEDNESS
None
Fingerhut —Schedules to First
Amendment to Prudential SPA
Amendment to Prudential SPA
6B-1
SCHEDULE 6C
EXISTING INVESTMENTS
None, other than “loans/advances” to customers in the form of revolving credit accounts in the
ordinary course of business.
Fingerhut — Schedules to First Amendment to Prudential SPA |
6C–1
SCHEDULE 6K
AFFILIATE TRANSACTIONS
1. | Amended and Restated Investor Rights Agreement, dated as of March 24, 2006, among Company, certain investors and various other investors. | |
2. | Amended and Restated Stockholders Agreement, dated as of March 24, 2006, among the Company and certain investors and stockholders. | |
3. | Stockholders Waiver, Consent and Amendment: Fingerhut Direct Marketing, Inc. dated as of March 23, 2006 | |
4. | Fingerhut Direct Marketing, Inc.: Written Waiver and Consent of Holders of Series A Preferred Stock dated as of April 2, 2007. | |
5. | Employment Agreement with Chief Executive Officer of the Company, effective as of April 25, 2007. | |
6. | Executive Summary/Overview; Executive Life and Disability Benefits for Xxxxx Xxxxx, CEO/President; Prepared by Xxxxxxx X. Xxxx; approved by Board on April 25, 2007 | |
7. | Independent Director — Total Compensation Summary | |
8. | Amended and Restated 2005 Non-Employee Directors Equity Compensation Plan | |
9. | 2003 Equity Incentive Plan | |
10. | 2007 Incentive Plan | |
11. | 2007 Vision of Quality Growth Special Incentive Program | |
12. | Fingerhut Direct Marketing, Inc. conducts occasional sales of excess inventory, returned merchandise, liquidation inventory and samples to related parties. In fiscal 2006 the total amount of sales did not exceed $1 0,000. |
Fingerhut — Schedules to First Amendment to Prudential SPA |
6K–1
SCHEDULE 8Q
1. | Location of the chief executive office of the Company and each of its Subsidiaries 0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxx Xxxxxxx, XX | |
2. | All real property owned or leased by the Company or any of its Subsidiaries and all locations at which any property of the Company or any of its Subsidiaries is located (or at any time within the last 6 months has been located) or at which the Company or any of its Subsidiaries maintains a place of business or keeps any records (or at any time within the last 6 months has maintained a place of business or kept records): |
(a) | Owned Real Property: None | ||
(b) | Leased Real Property: |
(i) | Warehouse. That certain property leased pursuant to the Building Lease dated as of November 26, 2003 by and between FAC Acquisition, LLC, and Fingerhut Direct Marketing, Inc., and related to property located at 0000 Xxxxxxxxx Xxxx, Xx. Xxxxx, XX; and the Assignment and Assumption of Lease dated June 14, 2006 between FAC Acquisition, LLC, as Assignor, and Welsh Fingerhut MN, LLC, as Assignee, recorded in the office of the County Recorder of Xxxxxxx County, MN on June 20, 2006, as Document #1197732. | ||
(ii) | Corporate Headquarters. That certain property leased pursuant to the Lease Agreement dated as of March 6, 2006 by and between Liberty Property Limited Partnership, as Landlord, and Fingerhut Direct Marketing, Inc., as Tenant, and related to property located at 0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxx Xxxxxxx, XX, as amended by a First Amendment to Lease dated March 28, 2006 between Landlord and Tenant. | ||
(iii) | Data Center. That certain Time Warner Telecom Co-Location Equipment Area Agreement effective as of July 15, 2005 by and between Time Warner and FDM, Inc., related to property at 0000 Xxxxx Xxxx, Xxxxxxxxxx, XX. | ||
(iv) | Photo Studio. That certain property leased pursuant to the Lease dated November 14, 2003 by and between The Trustees Under the Will and of The Estate of Xxxxx Xxxxxxxx, Deceased, Landlord, and Fingerhut Direct Marketing, Inc., Tenant, related to property at 00000 00xx Xxxxxx Xxxxx, Xxxxxxxx, XX, as amended by a First Amendment to Lease Agreement, dated as of October 27, 2006, by and between Xxxxx Xxxxxxxx Company LLC and Tenant. |
Fingerhut — Schedules to First Amendment to Prudential SPA |
8T–1
(v) | Call Center. That certain property leased pursuant to the Lease dated February 1, 2005 by and between Sundance III, LLC and FDM, Inc., related to property at 00 XxXxxxxx Xxxx, Xx. Xxxxx, XX. | ||
(vi) | Call Center. That certain property leased pursuant to the Office Lease dated August 15, 2003 by and between Xxxxx X. Tini, Xxxx X. Xxxx and Xxxxx Xxxx, collectively Landlord, and Fingerhut Direct Marketing, Inc., Tenant, related to property at 1250 Industrial Park Road, Eveleth Industrial Park, Eveleth, MN. |
3. | All patents, trademarks, trade names, service marks, services names or copyrights owned or licensed by the Company or any of its Subsidiaries |
A. | Registered Intellectual Property: | ||
See attachment “A” — current Registered Trademarks | |||
See attachment “B” — current Patents | |||
See attachment “C” — current Domain Names | |||
See attachment “D” — current Copyrights |
Fingerhut — Schedules to First Amendment to Prudential SPA |
8T–2
Attachment A
To
Schedule 8Q Registered Intellectual Properties
To
Schedule 8Q Registered Intellectual Properties
Current Registered Trademarks/Service Marks
FINGERHUT DIRECT MARKETING INC. US TRADE/SERVICE MARKS
Trademark / Servicemark | Reg. No. | |||
ACCESS TO BETTER LIVING |
3,020,977 | |||
BACKYARD LIVING |
2,274,991 | |||
CAREFREE LIVING |
1,505,333 | |||
CHEF’S XXXX |
2,489,361 | |||
CHEF’S XXXX |
2,645,988 | |||
CHEF’S XXXX PREFERRED QUALITY & DESIGN |
2,497,159 | |||
CHEF’S XXXX PREFERRED QUALITY & DESIGN |
2,659,758 | |||
COUNTRY BEAR |
2,782,394 | |||
DIGITAL ZONE |
2,398,630 | |||
FALL BIG BOOK |
2,655,853 | |||
FINGERHUT |
999,881 | |||
FINGERHUT |
973,080 | |||
FINGERHUT HOME |
2,523,477 | |||
GATE ONE (AND DESIGN) |
1,724,645 | |||
GATE ONE LUGGAGE (AND DESIGN) |
1,722,969 | |||
GOOD DEALS, GREAT BUYS |
2,503,225 | |||
HOLIDAY BIG BOOK |
2,386,204 | |||
HOME DEALS |
2,967,344 | |||
LIFE MAX |
2,099,973 | |||
OUTDOOR SPIRIT |
2,540,809 | |||
OUTDOOR SPIRIT |
2,358,444 | |||
OUTDOOR SPIRIT |
2,513,010 | |||
OUTDOOR SPIRIT |
2,476,139 | |||
OUTDOOR SPIRIT |
2,366,241 | |||
OUTDOOR SPIRIT |
2,444,758 | |||
ROOMS FOR LIVING |
1,693,689 | |||
SENSOMA |
2,601,356 | |||
SPRING BIG BOOK |
2,476,310 | |||
ST. CROIX COLORS |
2,579,749 | |||
ST. CROIX COLORS |
2,681,467 | |||
ST. CROIX COLORS AND DESIGN |
2,552,910 | |||
SUITE LUXURIES |
2,496,775 | |||
SUPER CHEF |
1,933,548 |
Fingerhut — Schedules to First Amendment to Prudential SPA |
8T–3
Registration | ||
Foreign Trademarks | Number | |
Fingerhut
|
Mexico 884685 | |
Fingerhut
|
UK 2146029 |
Trademark Applications | Serial Number | |
Country Bear
|
78/552727 | |
Fingerhut
|
78/533161 | |
Now You Can
|
77/084311 | |
Yes You Can
|
77/033016 |
B. | Licensed Trademarks — from Petters Group Worldwide, LLC | |
Master Craft | ||
Master Craft Pro |
Fingerhut — Schedules to First Amendment to Prudential SPA |
8T–4
Attachment B
To
Schedule 8Q Registered Intellectual Property
To
Schedule 8Q Registered Intellectual Property
Patents
None
Fingerhut — Schedules to First Amendment to Prudential SPA |
8T–5
Attachment C
To
Schedule 8Q Registered Intellectual Property
To
Schedule 8Q Registered Intellectual Property
Current Domain Names
xxx.xxxxxxxxx.xxx
xxx.xxxxxxxxxxx.xxx
xxx.xxxxxxxxxxxxxxx.xxx
xxx.xxxxxxxx.xxx
xxx.xxxxxxxxxx.xxx
xxx.xxxxxxxxxxxx.xxx
xxx.xxxxxxxxx.xxx
xxx.xxxxxxxxxxx. com
xxx.xxxxxxxx.xxx
xxx.xxxxxxxxxx.xxx
xxx.xxxxxxxxx.xxx
xxx.xxxxxxxx.xxx
xxx.xxxxxxxxxx.xxx
xxx.xxxxxxxxx.xxx
xxx.xxxxxxxxxxxxxxx.xxx
xxx.xxxxxxxxxxx.xxx
xxx.xxxxxxxxxxxxxxx.xxx
xxx.xxxxxxxx.xxx
xxx.xxxxxxxxxx.xxx
xxx.xxxxxxxxxxxx.xxx
xxx.xxxxxxxxx.xxx
xxx.xxxxxxxxxxx. com
xxx.xxxxxxxx.xxx
xxx.xxxxxxxxxx.xxx
xxx.xxxxxxxxx.xxx
xxx.xxxxxxxx.xxx
xxx.xxxxxxxxxx.xxx
xxx.xxxxxxxxx.xxx
xxx.xxxxxxxxxxxxxxx.xxx
Fingerhut — Schedules to First Amendment to Prudential SPA |
8T–6
Attachment D
To
Schedule 8Q Registered Intellectual Property
To
Schedule 8Q Registered Intellectual Property
Current Copyrights
Copyright Title | Registration Number | |||
Br-r-r bear |
VA-294-209 | |||
Cameo floral: [no.] 87582 |
VA-275-850 | |||
Baroque floral: [no.] 87338. |
VA-275-849 | |||
Rose Garden: [no.] 32466/32469 |
VA-275-848 | |||
Unicorn with rainbow |
VA-275-847 | |||
Pastelle |
VA-275-846 | |||
Choloe: [no.[ 90304] |
VA-275-845 | |||
Rainbow clouds |
VA-275-844 |
8T-1
4. | Organizational identification number of the Company and each of its Subsidiaries |
Fingerhut Direct Marketing, Inc. |
3567832 | |||
Fingerhut Fulfillment, Inc. |
3572413 | |||
Fingerhut Funding, LLC |
4350399 |
5. | Any name under which the Company or any Subsidiary has conducted business at any time during the last 5 years | |
Fingerhut Direct Marketing, Inc. | ||
Fingerhut Fulfillment, Inc. | ||
Fingerhut Funding, LLC |
8T-1
SCHEDULE 8T
INVENTORY LOCATIONS
1. | Warehouse. 0000 Xxxxxxxxx Xxxx, Xx. Xxxxx, XX |
X0-0