Exhibit 10.1
 

 
THIRD AMENDMENT TO REVOLVING CREDIT
AND SECURITY AGREEMENT
 

This Third Amendment to Revolving Credit and Security Agreement (the
“Amendment”) is made this 31st day of January, 2014 by and among ValueVision
Media, Inc., a Minnesota corporation (“ValueVision”); ValueVision Interactive,
Inc., a Minnesota corporation; VVI Fulfillment Center, Inc., a Minnesota
corporation; ValueVision Media Acquisitions, Inc., a Delaware corporation;
ValueVision Retail, Inc., a Delaware corporation (each an “Existing Borrower”,
and collectively “Existing Borrowers”), Norwell Television, LLC, a Delaware
limited liability company (“Joining Borrower, together with Existing Borrowers,
the “Borrowers”), the financial institutions which are now or which hereafter
become a party hereto as lenders (the “Lenders”) and PNC Bank, National
Association (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”).
 
 
BACKGROUND
 
A.           On February 9, 2012, Borrowers, Lenders and Agent entered into,
inter alia, that certain Revolving Credit, Term Loan and Security Agreement (as
same has been or may be amended, modified, renewed, extended, replaced or
substituted from time to time, the “Loan Agreement”) to reflect certain
financing arrangements between the parties thereto.  The Loan Agreement and all
other documents executed in connection therewith to the date hereof are
collectively referred to as the “Existing Financing Agreements.”  All
capitalized terms not otherwise defined herein shall have the meaning ascribed
thereto in the Loan Agreement.

B.           The Borrowers have requested and the Agent and the Lenders have
agreed to (i) join Joining Borrower as a joint and several co-Borrower under the
Existing Financing Agreements, and (ii) amend certain terms and provisions
contained in the Loan Agreement, subject to the terms and conditions of this
Amendment.

NOW, THEREFORE, with the foregoing background hereinafter deemed incorporated by
reference herein and made part hereof, the parties hereto, intending to be
legally bound, promise and agree as follows:
 
1.           Joinder.
 
(a)           Upon the effectiveness of this Amendment, Joining Borrower joins
in as, assumes the obligations and liabilities of, adopts the obligations,
liabilities and role of, and becomes, a Borrower under the Existing Financing
Agreements.  All references to Borrower or Borrowers contained in the Existing
Financing Documents are hereby deemed for all purposes to also refer to and
include Joining Borrower as a Borrower and Joining Borrower hereby agrees to
comply with all terms and conditions of the Existing Financing Agreements as if
Joining Borrower were an original signatory thereto.
 
(b)          Without limiting the generality of the provisions of paragraph (a)
above, Joining Borrower hereby becomes liable on a joint and several basis,
along with all other Borrowers, for all Advances made by Lenders under the
Existing Financing Agreements and all Obligations under the Existing Financing
Agreements.
 

 
 

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2.          Amendment. Upon the Effective Date, the Loan Agreement shall be
amended as follows:
 
(a)           Section 1.2 of the Loan Agreement shall be amended by deleting the
following definitions in their entirety and replacing them as follows:

“Advances” shall mean and include the Revolving Advances, Letters of Credit, and
advances under the Term Loan.

“Agreement” shall mean this Revolving Credit, Term Loan and Security Agreement,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.

 “Debt Payments” shall mean and include, without duplication, (a) all cash
actually expended by any Borrower to make interest payments on any Advances
hereunder, plus (b) all cash actually expended by any Borrower to make payments
on Capitalized Lease Obligations, plus (c) scheduled principal payments on the
Term Loan, plus (d) all cash actually expended by any Borrower to make payments
with respect to any other Indebtedness for borrowed money (other than in respect
of Revolving Advances).

“EBITDA” shall mean for any period the sum of (i) Earnings Before Interest and
Taxes for such period, plus (ii) without duplication and to the extent such
amounts reduced net income of the Borrowers on a Consolidated Basis for such
period (a) depreciation expenses for such period, plus (b) amortization expenses
for such period, plus (c) noncash equity based compensation expenses incurred by
Borrowers for such period, plus (d) expenses related to shareholder response
costs, fees, charges and legal expenses incurred and paid for by Borrowers not
to exceed $4,000,000 in the aggregate plus (e) non-cash losses incurred by
Borrowers during such period in connection with the sale of Norwell’s premises
located at 2 Bert Drive, #4, West Bridgewater, Massachusetts and the MA Personal
Property plus (f) non-cash impairment charges and non-cash write-downs for such
period.

“Maximum Loan Amount” shall mean $75,000,000.

“Maximum Revolving Advance Amount” shall mean $60,000,000.

“Revolving Advances” shall mean Advances made other than Letters of Credit, and
the Term Loan.

 
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 “Undrawn Availability” at a particular date shall mean an amount equal to (a)
the lesser of (i) the Formula Amount or (ii) the Maximum Revolving Advance
Amount minus the Maximum Undrawn Amount of all outstanding Letters of Credit,
minus (b) the sum of (i) the outstanding amount of Advances (other than advances
under the Term Loan) plus (ii) all amounts due and owing to any Borrower’s trade
creditors which are outstanding sixty (60) days past their due date, plus
(c) the aggregate amount of unrestricted cash held by Borrowers in Blocked
Accounts or Depository Accounts established at the Agent.

(b)          Section 1.2 of the Loan Agreement shall be amended by adding the
following defined terms in their appropriate alphabetical order:
 
“Applicable Margin” shall mean (a) prior to the Adjustment Date (as defined
below) an amount equal to five percent (5%) for Advances under the Term Loan
consisting of Domestic Rate Loans and an amount equal to six percent (6%) for
Advances under the Term Loan consisting of Eurodollar Rate Loans, and (b) on and
after the first Adjustment Date, upon receipt by Agent of the annual financial
statements of Borrowers on a Consolidated Basis and related Compliance
Certificate for the fiscal year ending on or about January 31, 2015 required
under Section 9.7, and thereafter upon receipt of the annual financial
statements of Borrowers on a Consolidated Basis and related Compliance
Certificate required under Section 9.7 for the most recently ended fiscal year
(such first day of the applicable fiscal year, an “Adjustment Date”), the
Applicable Margin for each type of Advance under the Term Loan shall be
adjusted, if necessary, to the applicable percent per annum set forth in the
pricing table below corresponding to the TTM Leverage Ratio for the trailing
four quarter period ending on the last day of the most recently completed fiscal
quarter prior to the applicable Adjustment Date:
 
TTM Leverage Ratio
APPLICABLE MARGINS FOR
DOMESTIC RATE LOANS
APPLICABLE MARGINS FOR
EURODOLLAR RATE LOANS
 
Term Loan
Term Loan
Less than 3.00
4.0%
5.0%
Greater than or equal to 3.00 but less than 4.00
4.5%
5.5%
Greater than or equal to 4.00
5.0%
6.0%

If Borrowers shall fail to deliver the financial statements, certificates and/or
other information required under Sections 9.7
 

 
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by the dates required pursuant to such sections, each Applicable Margin shall be
conclusively presumed to equal the highest Applicable Margin specified in the
pricing table set forth above until the date of delivery of such financial
statements, certificates and/or other information, at which time the rate will
be adjusted based upon the TTM Leverage Ratio reflected in such statements.
Notwithstanding anything to the contrary contained herein, immediately and
automatically upon the occurrence of any Event of Default and during the
continuance thereof, each Applicable Margin shall increase to and equal the
highest Applicable Margin specified in the pricing table set forth above and
shall continue at such highest Applicable Margin until the date (if any) on
which such Event of Default shall be cured or waived in accordance with the
provisions of this Agreement, at which time the rate will be adjusted based upon
the TTM Leverage Ratio reflected on the most recently delivered financial
statements and Compliance Certificate delivered by Borrowers to Agent pursuant
to Section 9.7. Any increase in interest rates payable by Borrowers under this
Agreement and the Other Documents pursuant to the provisions of the foregoing
sentence shall be in addition to and independent of any increase in such
interest rates resulting from the occurrence of any Event of Default (including,
if applicable, any Event of Default arising from a breach of Sections 9.7)
and/or the effectiveness of the Default Rate provisions of Section 3.1 hereof.
 
If, as a result of any restatement of, or other adjustment to, the financial
statements of Borrowers on a Consolidated Basis or for any other reason, Agent
determines that (a) the TTM Leverage Ratio as previously calculated as of any
applicable date for any applicable period was inaccurate, and (b) a proper
calculation of the TTM Leverage Ratio for any such period would have resulted in
different pricing for such period, then (i) if the proper calculation of the TTM
Leverage Ratio would have resulted in a higher interest rate for such period,
automatically and immediately without the necessity of any demand or notice by
Agent or any other affirmative act of any party, the interest accrued on the
applicable outstanding Advances under the Term Loan for such period under the
provisions of this Agreement and the Other Documents shall be deemed to be
retroactively increased by, and Borrowers shall be obligated to immediately pay
to Agent for the ratable benefit of Lenders an amount equal to the excess of the
amount of interest that should have been paid for such period over the amount of
interest actually paid for such period; and (ii) if the proper calculation of
the TTM Leverage Ratio would have resulted in a lower interest rate for such
period, then the interest accrued on the applicable outstanding Advances
 

 
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for such period under the provisions of this Agreement and the Other Documents
shall be deemed to be retroactively decreased by, and Agent and Lenders shall
apply a credit to Borrowers’ account in an amount equal to the excess of the
amount of interest that was actually paid for such period over the amount of
interest that should have been paid for such period; provided, that, if as a
result of any restatement or other event or other determination by Agent a
proper calculation of the TTM Leverage Ratio would have resulted in a higher
interest rate for one or more periods and a lower interest rate for one or more
other periods (due to the shifting of income or expenses from one period to
another period or any other reason), then the amount payable by Borrowers
pursuant to clause (i) above shall be based upon the excess, if any, of the
amount of interest that should have been paid for all applicable periods over
the amounts of interest actually paid for such periods.
 
“Contract Rate” shall have the meaning set forth in Section 3.1 hereof.
 
“Excess Cash Flow” shall mean, for any fiscal year period, in each case for
Borrowers on a Consolidated Basis, EBITDA for such fiscal year, minus each of
the following, to the extent actually paid in cash during such fiscal year
period, (i) Unfunded Capital Expenditures, (ii) other non-recurring fees,
charges and expenses by Borrowers in connection with the transactions
contemplated by the third Amendment to this Agreement, (iii) taxes and (iv) Debt
Payments.
 
“Funded Debt” shall mean, with respect to any Person, without duplication, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness that by its terms matures more than one year
from, or is directly or indirectly renewable or extendible at such Person’s
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capitalized Lease Obligations,
current maturities of long-term debt, revolving credit and short term debt
extendible beyond one year at the option of the debtor, and also including, in
the case of Borrowers, the Obligations and, without duplication, Indebtedness
consisting of guaranties of Funded Debt of other Persons.

“Maximum Term Loan Amount” shall mean the lesser of (a) $15,000,000 or (b) the
sum of (i) 70% of the fair market value (as determined by an appraisal conducted
by a third party appraiser completed on December 11, 2013) of the Eden Prairie,
Minnesota property reflecting an appraised value of $10,400,000 plus (ii)

 
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70% of the fair market value (as determined by an appraisal conducted by a third
party appraiser completed on December 11, 2013) of the Bowling Green, Kentucky
property without regard to improvements currently being performed on the
premises reflecting an appraised value of $6,960,000 plus (iii) 70% of the fair
market value of any additional value added to the Bowling Green, Kentucky
property by the construction of the Bowling Green, Kentucky building, such fair
market value as determined by an appraisal conducted by a third party appraiser
and in form and scope satisfactory to Agent in its Permitted Discretion, such
appraisal to be conducted  near substantial completion of the improvements as
determined by the Agent (the “Final Bowling Green Appraisal”).

“Term Loan” shall mean all amounts advanced under Section 2.3 hereof.

 “Term Loan Commitment” shall mean, as to any Lender, the obligation of such
Lender (if applicable), to fund a portion of the Term Loan in an aggregate
principal equal to the Term Loan Commitment Amount (if any) of such Lender.
 
 “Term Loan Commitment Percentage” shall mean, as to any Lender, the Term Loan
Commitment Percentage (if any) set forth below such Lender’s name on the
signature page hereof (or, in the case of any Lender that became party to this
Agreement after the Closing Date pursuant to Section 16.3(c) or (d) hereof, the
Term Loan Commitment Percentage (if any) of such Lender as set forth in the
applicable Commitment Transfer Supplement), as the same may be adjusted upon any
assignment by or to such Lender pursuant to Section 16.3(c) or (d) hereof.
 
“Term Loan Funding Date” shall mean each date on which Agent has funded a
Request (as defined herein) provided that: (a) Agent has received, no less than
three (3) Business Days prior to the date any Term Loan is requested to be
funded, a written request duly executed by Borrowing Agent, specifying the
amount of the Term Loan requested, the date on which the Term Loan is requested
to be funded and whether such Term Loan (or a portion thereof) is requested to
be made as a Eurodollar Rate Loan (in the absence of which the Term Loan shall
initially be made as a Domestic Rate Loan) (each, a “Request”) and (b) in each
case, each of the conditions in Section 8.2 and Section 8.3 have been satisfied;
provided further that (i) Borrowers may not make more than five (5) Requests,
(ii) each Request must be for an amount no less than $3,000,000, (iii) the total
funded Requests may not exceed an aggregate amount equal to the sum of the
amounts set forth in
 

 
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subsections (b)(i) and (ii) of the definition of Maximum Term Loan Amount, and
(iv) the initial Request must occur before June 30, 2014. Notwithstanding
anything set forth herein to the contrary, a final advance shall automatically
be made by Agent in an amount equal to the difference between all amounts
previously funded by Agent and the lesser of $15,000,000 and the sum of
subsection (b)(i), (ii), and (iii) set forth in the definition of Maximum Term
Loan Amount (but in no event more the $2,848,000), such amount to be funded upon
receipt of a final appraisal acceptable to Agent of the Final Bowling Green
Appraisal (the “Automatic Final Funding”).
 
“Term Loan Rate” shall mean an interest rate per annum equal to the (a) sum of
the Base Rate plus the Applicable Margin with respect to Term Loans that are
Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus the Applicable
Margin with respect to Term Loans that are Eurodollar Rate Loans.
 
“Term Note” shall mean the promissory note described in Section 2.3 hereof.
 
“TTM Leverage Ratio” shall mean as of the date of any determination, the ratio
of Borrowers’ Funded Debt to EBITDA for the trailing twelve month period.
 
(c)             A new Section 2.3 shall be added to the Loan Agreement as
follows:
 
2.3           Term Loan.
 
Subject to the terms and conditions of this Agreement, each Lender, severally
and not jointly, will fund a Request of a Term Loan, up to the Maximum Term Loan
Amount, to Borrowers in the amount equal to the Lender’s Term Loan Commitment
Percentage in accordance with this Section 2.3. The Term Loan shall be advanced
in draws, each on a Term Loan Funding Date (including the Automatic Final
Funding) and shall be, with respect to principal, payable as follows, subject to
acceleration upon the occurrence of an Event of Default under this Agreement or
termination of this Agreement: (a) consecutive monthly installments each in an
amount equal to an amount calculated on a 84 month amortization basis commencing
six months after the initial request of the Term Loan (it being understood that
the amortization shall be increased by the amount of the Automatic Final Funding
when made based on an 84 month amortization schedule) and continuing on the
first day of each month thereafter followed by a final payment of all unpaid
principal, accrued and unpaid interest and all unpaid fees and expenses.  The
Term Loan
 

 
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shall be evidenced by one or more secured promissory notes (collectively, the
“Term Note”) in substantially the form attached hereto as Exhibit 2.3. The Term
Loan may consist of Domestic Rate Loans or Eurodollar Rate Loans, or a
combination thereof, as Borrowing Agent may request; and in the event that
Borrowers desire to obtain or extend any portion of the Term Loan as a
Eurodollar Rate Loan or to convert any portion of the Term Loan from a Domestic
Rate Loan to a Eurodollar Rate Loan, Borrowing Agent shall comply with the
notification requirements set forth in Sections 2.2(b) and/or (e) and the
provisions of Sections 2.2(b) through (h) shall apply.

(d)          Section 2.6(a) of the Loan Agreement shall be deleted in its
entirety and replaced as follows:
 
2.6           Repayment of Advances.
 
(a)           The Advances shall be due and payable in full on the last day of
the Term subject to earlier prepayment as herein provided. Each payment
(including each prepayment) by any Borrower on account of the principal of and
interest on the Term Loan shall be applied to the Term Loan pro rata according
to the Term Loan Commitment Percentages of Lenders in the inverse order of
maturities thereof.
 
(e)          Section 2.21 of the Loan Agreement shall be amended and restated in
its entirety as follows:
 
2.21     Mandatory Prepayments.
 
(a)           Subject to Section 4.3 hereof, when any Borrower sells or
otherwise disposes of any Collateral other than Inventory in the Ordinary Course
of Business or licenses of Intellectual Property granted in the Ordinary Course
of Business, Borrowers shall cause (i) other than as required by Section
2.21(a)(ii) below, the net cash proceeds (i.e., gross cash proceeds less the
reasonable costs of such sales or other dispositions) received in connection
with such sale or disposition to be remitted to the Depository Account and (ii)
fifty percent (50%) of the net proceeds of the sale of the Borrowers’ MA
Personal Property to be applied to the outstanding principal installments of the
Term Loan in the inverse order of the maturities thereof. The foregoing shall
not be deemed to be implied consent to any such sale otherwise prohibited by the
terms and conditions hereof.
 

 
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(b)           Borrowers shall prepay the outstanding amount of the Advances in
an amount equal to fifty percent (50%) of Excess Cash Flow (with any such
payment not to exceed $3,750,000) for each fiscal year commencing with the
fiscal year ending January 31, 2016, payable within thirty days after delivery
of the financial statements to Agent referred to in and required by Section 9.7
for such fiscal year but in any event not later than one hundred and fifty (150)
days after the end of each such fiscal year, which amount shall be applied to
the outstanding principal installments of the Term Loan in the inverse order of
the maturities thereof.  In the event that the financial statements are not so
delivered, then a calculation based upon estimated amounts shall be made by
Agent upon which calculation Borrowers shall make the prepayment required by
this Section 2.21(b), subject to adjustment when the financial statements are
delivered to Agent as required hereby.  The calculation made by Agent shall not
be deemed a waiver of any rights Agent or Lenders may have as a result of the
failure by Borrowers to deliver such financial statements.
 
(c)           Borrowers may, from time to time, voluntarily prepay the Term Loan
without premium or penalty; provided that the aggregate amount of any such
voluntary prepayments shall not exceed $2,000,000 in any fiscal year.

(f)          Section 2.22(a) of the Loan Agreement shall be deleted in its
entirety and replaced as follows:
 
(a)           Borrowers shall apply the proceeds of Advances to (i) pay fees and
expenses relating to this transaction, (ii) provide for its working capital
needs and general corporate purposes and reimburse drawings under Letters of
Credit and (iii) pay for any Capital Expenditure, including any improvement to
the Bowling Green Kentucky property. Borrowers shall not use the proceeds of any
Revolving Advance to prepay the Term Loan.

(g)          Section 3.1 of the Loan Agreement shall be deleted in its entirety
and replaced as follows:
 
3.1           Interest.  Interest on Advances shall be payable in arrears on the
first Business Day of each month with respect to Domestic Rate Loans and, with
respect to Eurodollar Rate Loans, at the end of each Interest Period or, for
Eurodollar Rate Loans with an Interest Period in excess of three months, at the
earlier of (a) each three months from the commencement of such Eurodollar Rate
Loan or (b) the end of the Interest Period. Interest charges shall be computed
on the actual principal amount of Advances outstanding during the month at a
rate per annum equal to, (i) with respect to

 
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Revolving Advances, the applicable Revolving Interest Rate and (ii) with respect
to the Term Loan, the applicable Term Loan Rate (as applicable, the “Contract
Rate”). Whenever, subsequent to the date of this Agreement, the Alternate Base
Rate is increased or decreased, the Revolving Interest Rate and applicable
Contract Rate for Domestic Rate Loans shall be similarly changed without notice
or demand of any kind by an amount equal to the amount of such change in the
Alternate Base Rate during the time such change or changes remain in effect. The
Eurodollar Rate shall be adjusted with respect to Eurodollar Rate Loans without
notice or demand of any kind on the effective date of any change in the Reserve
Percentage as of such effective date. Upon and after the occurrence of an Event
of Default and notice by the Agent to the Borrowers, and during the continuation
thereof, at the option of Agent or at the direction of Required Lenders, (i) the
Obligations in respect of principal of Advances (and any past due amounts) other
than Eurodollar Rate Loans shall bear interest at the applicable Contract Rate
or Revolving Interest Rate for Domestic Rate Loans plus two percent (2%) per
annum and (ii) Eurodollar Rate Loans shall bear interest at the Revolving
Interest Rate for Eurodollar Rate Loans plus two percent (2%) per annum (as
applicable, the "Default Rate").

(h)          Section 4.3(c) of the Loan Agreement shall be deleted in its
entirety and replaced as follows:

(c)           the sale of any or all of the MA Personal Property in a single or
multiple transactions to the extent that fifty percent (50%) of the net cash
proceeds of any such sale or lease are remitted to Agent to be applied pursuant
to Section 2.21(a).

(i)          Section 6.5 of the Loan Agreement shall be deleted in its entirety
and replaced as follows:

(a)           Fixed Charge Coverage Ratio. If at any time during any fiscal
quarter commencing with the fiscal quarter ending on or about January 31, 2014
or during any fiscal quarter thereafter, (i) an Event of Default is continuing
or (ii) Borrowers' Undrawn Availability shall be equal to or less than
$16,000,000, cause to be maintained as of the end of such fiscal quarter and as
of the end of each fiscal quarter thereafter until such Event of Default is
waived or Undrawn Availability for such fiscal quarter is not less than
$16,000,000, a Fixed Charge Coverage Ratio of not less than 1.1 to 1.0, measured
on a trailing four (4) quarter basis.

(b)          Minimum EBITDA.  If at any time during any fiscal quarter
commencing with the fiscal quarter ending on or about
 

 
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January 31, 2014 or during any fiscal quarter thereafter, (i) an Event of
Default is continuing or (ii) Borrowers’ Undrawn Availability shall be equal to
or less than $16,000,000, cause to be achieved a minimum EBITDA of not less than
the following amounts as of the end of such fiscal quarter and each fiscal
quarter thereafter until such Event of Default is waived or Undrawn Availability
for such fiscal quarter is not less than $16,000,000 (in each case to be tested
for the four quarter period then ending on or about the date specified below):
 

 
Quarters Ending
Amount
   
January 31, 2014, April 30, 2014, July 31, 2014, October 31, 2014
$14,000,000
   
January 31, 2015, April 30, 2014, July 31, 2014, October 31, 2015
$18,000,000
   
January 31, 2016  and each fiscal quarter thereafter
$24,000,000
 

(c) Undrawn Availability. Cause to be maintained at all times Undrawn
Availability of not less than $10,000,000.
 
(d) Capital Expenditures.  Contract for, purchase or make any expenditure or
commitments for Capital Expenditures in any fiscal year in the aggregate amount
for all Borrowers in excess of the amount corresponding to such fiscal year as
shown below:
 

 
Fiscal year ending on or about January 31, 2014
$13,000,000
   
Fiscal year ending on or about January 31, 2015
$40,000,000
   
Fiscal year ending on or about January 31, 2016
$20,000,000
   
Fiscal year ending on or about January 31, 2017
$20,000,000
   
Fiscal year ending on or about January 31, 2018
$25,000,000
 

 

 
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;provided that if any portion of the construction of the Bowling Green, Kentucky
building is not completed within the fiscal year ended January 31, 2015, such
amounts may be carried over to the fiscal year ending January 31, 2016 and such
amounts will be excluded from the Capital Expenditures calculation for such
fiscal year.

(j)          A new Section 8.3 shall be added to the Loan Agreement as follows:
 
8.3              Conditions to Term Loan and Term Loan Funding Dates.  The
agreement of Lenders to fund a Request is subject to the satisfaction, or waiver
by Agent and the Lenders, immediately prior to or concurrently with the making
of such Request, of the following conditions precedent:

 
(a)           Borrowers shall have begun construction on the Bowling Green,
Kentucky building;
 
(b)           For the initial Request only but not any subsequent Request,
Borrowers shall have a minimum Fixed Charge Coverage Ratio of 1.0 to 1.0 for the
immediately preceding trailing twelve month period based on Borrowers’ most
recent financial statements provided to Agent;
 
(c)           Agent shall have received invoices and evidence of payment on the
Bowling Green, Kentucky building together with evidence that all prior work
performed on such premises has been paid for in accordance with the payment
terms between Borrowers and the applicable contractors, in form and substance
acceptable to Agent;
 
(d)           No Material Adverse Effect shall have occurred;
 
(e)           Agent shall have received all fees payable to Agent and Lenders on
or prior to the Term Loan Funding Date hereunder, including under the Fee Letter
and pursuant to Article III, and all costs and expenses required to be paid
pursuant to Section 16.9;
 
(f)           Except with respect to the Automatic Final Funding, no Term Loan
Funding Date shall occur later than 180 days after the first Term Loan Funding
Date; and
 
(g)           No Automatic Final Funding shall occur until Agent’s receipt of
(i) a title bring down search evidencing there are no intervening contracts or
liens and confirming Agent’s first priority perfected position and (ii) the
Final Bowling Green Appraisal.
 

 
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(k)   Section 16.2(b)(i) of the Loan Agreement shall be deleted in its entirety
and replaced as follows:
 
(i)    increase the Commitment Percentage, the maximum dollar commitment of any
Lender, the Maximum Revolving Advance Amount, or Term Loan Commitment Amount;
 
(l)    Section 16.3(c) and (d) of the Loan Agreement shall be deleted in its
entirety and replaced as follows:
 
(c)   Any Lender, with the consent of Agent which shall not be unreasonably
withheld or delayed, may sell, assign or transfer all or any part of its rights
and obligations under or relating to Revolving Advances or Term Loans under this
Agreement and the Other Documents to one or more additional banks or financial
institutions and one or more additional banks or financial institutions may
commit to make Advances hereunder (each a "Purchasing Lender"), in minimum
amounts of not less than $5,000,000, pursuant to a Commitment Transfer
Supplement, executed by a Purchasing Lender, the transferor Lender, and Agent
and delivered to Agent for recording. Upon such execution, delivery, acceptance
and recording, from and after the transfer effective date determined pursuant to
such Commitment Transfer Supplement, (i) Purchasing Lender thereunder shall be a
party hereto and, to the extent provided in such Commitment Transfer Supplement,
have the rights and obligations of a Lender thereunder with a Commitment
Percentage as set forth therein, and (ii) the transferor Lender thereunder
shall, to the extent provided in such Commitment Transfer Supplement, be
released from its obligations under this Agreement, the Commitment Transfer
Supplement creating a novation for that purpose. Such Commitment Transfer
Supplement shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of the Commitment Percentages arising from the purchase by
such Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Other Documents. Each Borrower
hereby consents to the addition of such Purchasing Lender and the resulting
adjustment of the Commitment Percentages arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Other Documents. Borrowers shall
execute and deliver such further documents and do such further acts and things
in order to effectuate the foregoing.
 

 
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(d)    Any Lender, with the consent of Agent which shall not be unreasonably
withheld or delayed, may directly or indirectly sell, assign or transfer all or
any portion of its rights and obligations under or relating to Revolving
Advances or Term Loans under this Agreement and the Other Documents to an
entity, whether a corporation, partnership, trust, limited liability company or
other entity that (i) is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and (ii) is administered, serviced or managed by the assigning
Lender or an Affiliate of such Lender (a "Purchasing CLO" and together with each
Participant and Purchasing Lender, each a "Transferee" and collectively the
"Transferees"), pursuant to a Commitment Transfer Supplement modified as
appropriate to reflect the interest being assigned ("Modified Commitment
Transfer Supplement"), executed by any intermediate purchaser, the Purchasing
CLO, the transferor Lender, and Agent as appropriate and delivered to Agent for
recording. Upon such execution and delivery, from and after the transfer
effective date determined pursuant to such Modified Commitment Transfer
Supplement, (i) Purchasing CLO thereunder shall be a party hereto and, to the
extent provided in such Modified Commitment Transfer Supplement, have the rights
and obligations of a Lender thereunder and (ii) the transferor Lender thereunder
shall, to the extent provided in such Modified Commitment Transfer Supplement,
be released from its obligations under this Agreement, the Modified Commitment
Transfer Supplement creating a novation for that purpose. Such Modified
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing CLO. Each Borrower hereby consents to the addition of such Purchasing
CLO. Borrowers shall execute and deliver such further documents and do such
further acts and things in order to effectuate the foregoing.

3.         Security Interest. As security for the payment of the Obligations,
and satisfaction by Borrowers of all covenants and undertakings contained in the
Loan Agreement, the Other Documents and the Existing Financing Agreements, the
Joining Borrower hereby assigns and grants, and the Existing Borrower reconfirms
the prior grant of, a security interest in and first priority, perfected lien in
favor of Agent for its benefit and the ratable benefit of each Lender, upon and
to, all of its right, title and interest in and to the Collateral, whether now
owned or hereafter acquired, created or arising and wherever located.
 
4.         Representations and Warranties.  Each of the Borrowers hereby:
 
(a)           reaffirms all representations and warranties made to Agent and
Lenders under the Loan Agreement and all of the other Existing Financing
Agreements and confirms
 

 
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that after giving effect to the updated schedules all are true and correct in
all material respects as of the date hereof (except to the extent any such
representations and warranties specifically relate to a specific date, in which
case such representations and warranties were true and correct in all material
respects on and as of such other specific date);
 
(b)           reaffirms all of the covenants contained in the Loan Agreement,
covenants to abide thereby until all Advances, Obligations and other liabilities
of Borrowers and Guarantor to Agent and Lenders under the Loan Agreement of
whatever nature and whenever incurred, are satisfied and/or released by Agent
and Lenders;
 
(c)           represents and warrants that no Default or Event of Default has
occurred and is continuing under any of the Existing Financing Agreements;
 
(d)           represents and warrants that it has the authority and legal right
to execute, deliver and carry out the terms of this Amendment, that such actions
were duly authorized by all necessary limited liability company or corporate
action, as applicable, and that the officers executing this Amendment on its
behalf were similarly authorized and empowered, and that this Amendment does not
contravene any provisions of its certificate of incorporation or formation,
operating agreement, bylaws, or other formation documents, as applicable, or of
any contract or agreement to which it is a party or by which any of its
properties are bound; and
 
(e)           represents and warrants that this Amendment and all assignments,
instruments, documents, and agreements executed and delivered in connection
herewith, are valid, binding and enforceable in accordance with their respective
terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights
generally.
 
5.           Conditions Precedent/Effectiveness Conditions.  This Amendment
shall be effective upon the occurrence of the following conditions precedent,
each in form and substance satisfactory to Agent (the “Effective Date”):
 
(a)           Agent’s receipt of this Amendment fully executed by the Borrowers;
 
(b)          Agent’s receipt of a fully executed Second Amended and Restated
Revolving Credit Note;
 
(c)          Agent’s receipt of a fully executed Term Loan Note;
 
(d)          Agent’s receipt of a fully executed Second Amended and Restated Fee
Letter together with any payments required thereunder; and
 
(e)          Agent shall have received a secretary and incumbency certificate
for each Borrower identifying all authorized officers with specimen signatures,
a certificate of no change to the organizational documents of each Borrower, and
authorizing resolutions of each Borrower authorizing the execution of this
Amendment and the Notes and the transactions contemplated herein;
 

 
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(f)          Agent shall have received the executed legal opinion of Faegre
Baker Daniels LLP in form and substance satisfactory to Agent which shall cover
such matters incident to the transactions contemplated by this Amendment as
Agent may reasonably require and each Borrower hereby authorizes and directs
such counsel to deliver such opinions to Agent and Lenders;
 
(g)          Agent shall have received Uniform Commercial Code, judgment and
state and federal tax lien searches against Borrowers showing no Liens on any of
the Collateral, other than Permitted Encumbrances;
 
(h)          Agent shall be reasonably satisfied that the Credit Parties are in
compliance in all material respects with all law and regulations and permit
requirements under the Environmental Protection Act, including, without
limitation, permit compliance under Title V thereof;
 
(i)          Agent shall have received a closing certificate signed by the Chief
Financial Officer of each Borrower dated as of the Effective Date, stating that
(i) all representations and warranties set forth in this Agreement and the Other
Documents are true and correct in all material respects on and as of such date
after giving effect to the updated schedules, except to the extent such
representation or warranty was expressly made as of an earlier date, in which
case, such representation and warranty was true and correct in all material
respects on and as of such earlier date, (ii) each Borrower is on such date in
compliance in all material respects with all the terms and provisions set forth
in this Agreement and the Other Documents and (iii) on such date no Default or
Event of Default has occurred or is continuing; and
 
(j)          Agent’s receipt of such other documents as Agent or counsel to
Agent may reasonably request.
 
6.           Further Assurances.  Each of the Borrowers hereby agrees to take
all such actions and to execute and/or deliver to Agent and Lenders all such
documents, assignments, financing statements and other documents, as Agent and
Lenders may reasonably require from time to time, to effectuate and implement
the purposes of this Amendment.
 
7.           Payment of Expenses.  Borrowers shall pay or reimburse Agent and
Lenders for its reasonable attorneys’ fees and expenses in connection with the
preparation, negotiation and execution of this Amendment and the documents
provided for herein or related hereto.
 
8.           Reaffirmation of Loan Agreement.  Except as modified by the terms
hereof, all of the terms and conditions of the Loan Agreement, as amended, and
all other of the Existing Financing Agreements are hereby reaffirmed and shall
continue in full force and effect as therein written.
 
9.           Confirmation of Indebtedness.  Borrowers confirm and acknowledge
that as of the close of business on January 28, 2014, Borrowers were indebted to
Agent and Lenders for the Advances under the Loan Agreement without any
deduction, defense, setoff, claim or counterclaim, of any nature, in the
aggregate principal amount of $38,000,000, of which $38,000,000 is due on
account of Revolving Advances, and $3,527,946 is the undrawn amount
 

 
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outstanding under Letters of Credit, plus all fees, costs and expenses incurred
to date in connection with the Loan Agreement and the Other Documents that are
required to be reimbursed pursuant to the terms of the Loan Agreement and that
have not previously been so reimbursed.
 
10.           Miscellaneous.
 
(a)          Third Party Rights.  No rights are intended to be created hereunder
for the benefit of any third party donee, creditor, or incidental beneficiary.
 
(b)          Headings.  The headings of any paragraph of this Amendment are for
convenience only and shall not be used to interpret any provision hereof.
 
(c)          Modifications.  No modification hereof or any agreement referred to
herein shall be binding or enforceable unless in writing and signed on behalf of
the party against whom enforcement is sought.
 
(d)          Governing Law.  This Amendment shall be governed by and construed
in accordance with the laws of the State of New York applied to contracts to be
performed wholly within the State of New York.
 
(e)          Counterparts.  This Amendment may be executed in any number of and
by different parties hereto on separate counterparts, all of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the same agreement.  Any signature delivered by a party by
facsimile transmission or PDF shall be deemed to be an original signature
hereto.
 

 
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and
delivered by their duly authorized officers as of the date first above written.

EXISTING BORROWERS:
VALUEVISION MEDIA, INC.
       
By:
/s/ William McGrath
 
Name:
William McGrath
 
Title:
EVP, CFO
       
VALUEVISION INTERACTIVE, INC.
       
By:
/s/ William McGrath
 
Name:
William McGrath
 
Title:
EVP, CFO
       
VVI FULFILLMENT CENTER, INC.
       
By:
/s/ William McGrath
 
Name:
William McGrath
 
Title:
EVP, CFO
       
VALUEVISION MEDIA ACQUISITIONS, INC.
       
By:
/s/ William McGrath
 
Name:
William McGrath
 
Title:
EVP, CFO
       
VALUEVISION RETAIL, INC.
       
By:
/s/ William McGrath
 
Name:
William McGrath
 
Title:
EVP, CFO
     
JOINING BORROWER:
NORWELL TELEVISION, LLC
       
By:
/s/ William McGrath
 
Name:
William McGrath
 
Title:
CFO, Treasurer

 
[SIGNATURE PAGE TO THIRD AMENDMENT TO REVOLVING CREDIT
AND SECURITY AGREEMENT]

 
 

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AGENT AND LENDER:
PNC BANK, NATIONAL ASSOCIATION, as Lender and as Agent
       
By:
/s/ Sherry Winick
   
Sherry Winick, Vice President
     

 

 
Address:
200 South Wacker Drive, Suite 600
Chicago, Illinois 60606
 
Commitment Percentage:  100%

 
 
 
 
[SIGNATURE PAGE TO THIRD AMENDMENT TO REVOLVING CREDIT
AND SECURITY AGREEMENT]