Exhibit 10.1
 
 
FIRST AMENDMENT TO REVOLVING CREDIT
AND SECURITY AGREEMENT
 
This First Amendment to Revolving Credit and Security Agreement (the
“Amendment”) is made this 1st day of May, 2013 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 a “Borrower”, and collectively
“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 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 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.            Amendment. Upon the Effective Date, the Loan Agreement shall be
amended as follows:
 
(a)           Upon the Effective Date, Section 1.2 of the Loan Agreement shall
be amended by adding the following defined terms in their appropriate
alphabetical order:
 
“Compliance Authority” shall mean each and all of the (a) U.S. Treasury
Department/Office of Foreign Assets Control, (b) U.S. Treasury
Department/Financial Crimes Enforcement Network, (c) U.S. State
Department/Directorate of Defense Trade Controls, (d) U.S. Commerce
Department/Bureau of Industry and Security, (e) the U.S. Internal Revenue
Service, (f) the U.S. Justice Department, and (g) the U.S. Securities and
Exchange Commission.
 
“Covered Entity” shall mean each Borrower, each Borrower’s Subsidiaries, all
Guarantors, pledgors of Collateral and any Person controlling any of the
foregoing and all brokers or other agents of any Borrower acting in any capacity
in connection with the Obligations. For purposes of this definition, control of
Person shall mean the power, direct or indirect, (x) to vote 25% or more of the
Equity
 

 
 

--------------------------------------------------------------------------------

 

Interests having ordinary voting power for the election of directors of such
Person or other Persons performing similar functions for any such Person, or (y)
to direct or cause the direction of management and policies of such Person
whether by ownership of Equity Interests, contract or otherwise.
 
“First Amendment” shall mean the First Amendment to Revolving Credit and
Security Agreement dated as the First Amendment Closing Date among the
Borrowers, Lenders and Agent.
 
“First Amendment Closing Date” shall mean May 1, 2013.
 
“Flood Laws” shall mean all Applicable Laws relating to policies and procedures
that address requirements placed on federally regulated lenders under the
National Flood Insurance Reform Act of 1994 or any substitute or replacement
thereof.
 
“Reportable Compliance Event” shall mean that any Covered Entity becomes a
Sanctioned Person, or is indicted, arraigned or custodially detained, or
receives a written inquiry from regulatory or law enforcement officials, in
connection with any Anti-Terrorism Law or any predicate crime to any
Anti-Terrorism Law, or self-discovers that its operations are in violation of
any Anti-Terrorism Law.
 
“Sanctioned Country” shall mean a country subject to a sanctions program
maintained by any Compliance Authority.
 
“Sanctioned Person” shall mean any individual person, group, regime, entity or
thing listed or otherwise recognized as a specially designated, prohibited,
sanctioned or debarred person or entity, or subject to any limitations or
prohibitions (including but not limited to the blocking of property or rejection
of transactions), under any order or directive of any Compliance Authority or
otherwise specially designated under, any sanctions program maintained by any
Compliance Authority.
 
(b)           Section 1.2 of the Loan Agreement shall be amended by deleting the
following definitions and replacing them as follows:
 
“Anti-Terrorism Laws” shall mean Applicable Laws relating to terrorism, trade
sanctions programs and embargoes, import/export licensing, money laundering or
bribery, all as amended, supplemented or replaced from time to time.
 
“Change in Law” shall mean the occurrence, after the Closing Date, of any of the
following:  (a) the adoption or taking effect of any Applicable Law; (b) any
change in any Applicable Law or in the administration, implementation, or
application thereof by any Governmental Body; or (c) the making or issuance of
any rule, guideline or directive (whether or not having the force of law) by any
Governmental Body; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all re-
 

 
2

--------------------------------------------------------------------------------

 

quests, rules, regulations, guidelines, interpretations or directives thereunder
or issued in connection therewith (whether or not having the force of Applicable
Law) and (y) all rules, regulations, guidelines, interpretations or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United States
or foreign regulatory authorities (whether or not having the force of law), in
each case pursuant to Basel III, shall in each case be deemed to be a Change in
Law regardless of the date enacted, adopted, issued, promulgated or implemented.
 
“Fee Letter” shall mean the amended and restated fee letter, dated as of the
First Amendment Closing Date, among Agent and Borrowers.
 
“Maximum Loan Amount” shall mean $50,000,000.
 
“Maximum Revolving Advance Amount” shall mean $50,000,000.
 
“Mortgage” shall mean, collectively and individually as the context may require,
the mortgage on the Real Property located at (i) 4811 Nashville Road, Bowling
Green, Kentucky 42101 and (ii) upon the granting of the mortgages contemplated
in the First Amendment, 6690 and 6740 Shady Oak Road, Eden Prairie, Minnesota,
55344 in each case securing the Obligations, together with all extensions,
renewals, amendments, supplements, modifications, substitutions and replacements
thereto and thereof.
 
(c)           The following parenthetical shall be inserted after the clause “or
any change therein” located in the first sentence of Section 2.2(g) of the Loan
Agreement:
 
“(including, without limitation, any Change in Law)”
 
(d)           Section 4.11 of the Loan Agreement is hereby re-numbered as
Section 4.11(a) and a new Section 4.11(b) is hereby added to the Loan Agreement
and provides as follows:
 
(b)           With respect to all improved  real property owned in fee simple by
each Borrower (the “Owned Real Property”), each Borrower shall take all actions
required under the Flood Laws to ensure that each Lender is in compliance with
the Flood Laws applicable to such Owned Real Property, including, but not
limited to, providing Agent with the address or legal description or parcel
identification number of each parcel of improved Owned Real Property that will
be subject to a mortgage in favor of Agent, for the benefit of the Lenders, and,
to the extent required under applicable Flood Laws, promptly obtaining flood
insurance for such parcel of Owned Real Property, and thereafter maintaining
such flood insurance in full force and effect for so long as required by the
Flood Laws.
 
(e)           A new Section 5.7(d) is hereby added to the Loan Agreement and
provides as follows:
 
(d)           All Owned Real Property is insured pursuant to policies and other
bonds which are valid and in full force and effect and which provide adequate
coverage from reputable and financially sound insurers in amounts sufficient to
insure such Owned Real Property in accordance with prudent business practice in
 

 
3

--------------------------------------------------------------------------------

 

the industry of the Borrowers.  With respect to the Owned Real Property, each
Borrower has taken all actions required under the Flood Laws to ensure that each
Lender is in compliance with the Flood Laws applicable to such improved Owned
Real Property, including, but not limited to, providing Agent with the address
or legal description or parcel identification number of each parcel of improved
Owned Real Property that will be subject to a Mortgage in favor of Agent, for
the benefit of the Lenders, and, to the extent required, obtaining flood
insurance for such property, structures and contents prior to such property,
structures and contents becoming Collateral.
 
(f)           Section 5.24 of the Loan Agreement is hereby deleted in its
entirety and marked “Reserved.”
 
(g)           Section 5.25 of the Loan Agreement is hereby deleted in its
entirety and marked “Reserved.”
 
(h)           Sections 6.5(b) and (d) shall be deleted in their entirety and
replaced as follows:
 
(b)           Minimum EBITDA.  If at any time during any fiscal quarter
commencing with the fiscal quarter ending on or about April 30, 2012 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 $12,000,000,
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 $12,000,000 (in each case to be tested for the four quarter period
then ending on or about the date specified below):
 

 
Period Ending
Amount
   
April 30, 2013
$7,500,000
   
July 31, 2013
$8,300,000
   
October 31, 2013
$9,900,000
   
January 31, 2014
$9,700,000
   
April 30, 2014
$10,750,000
   
July 31, 2014
$12,260,000
   
October 31, 2014
$13,240,000
   
January 31, 2015
$14,700,000
   
April 30, 2015
$16,000,000
   
July 31, 2015
$16,000,000
   
October 31, 2015
$16,000,000
   
January 31, 2016
$16,000,000
 

 
4

--------------------------------------------------------------------------------

 

 
Period Ending
Amount
   
April 30, 2016 and each quarter thereafter
$22,000,000
 

 
(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, 2013
$7,000,000
   
Fiscal year ending on or about January 31, 2014
$13,000,000
   
Fiscal year ending on or about January 31, 2015
$25,000,000
   
Fiscal year ending on or about January 31, 2016
$18,000,000
   
Fiscal year ending on or about January 31, 2017
$19,000,000
   
Fiscal year ending on or about January 31, 2018
$21,000,000
 

(i)           A new Section 10.21 is hereby added to the Loan Agreement and
provides as follows:
 
10.21           Reportable Compliance Event.  The occurrence of any Reportable
Compliance Event, or any Borrower’s failure to immediately report a Reportable
Compliance Event in accordance with Section 16.18 hereof.
 

(j)           Section 13.1 of the Loan Agreement shall be deleted in its
entirety and replaced as follows:
 
13.1           Term.  This Agreement, which shall inure to the benefit of and
shall be binding upon the respective successors and permitted assigns of each
Borrower, Agent and each Lender, shall become effective on the date hereof and
shall continue in full force and effect until May 1, 2018 (the “Term”) unless
sooner terminated as herein provided.  Borrowers may terminate this Agreement at
any time upon ten (10) Business Days’ prior written notice and upon payment in
full of the Obligations other than contingent indemnification Obligations for
which no claim has been asserted and Letters of Credit to the extent such
Letters of Credit have been cash collateralized.
 
(k)           Section 16.17 of the Loan Agreement is hereby re-numbered as
Section 16.17(a) and a new Section 16.17(b) is hereby added to the Loan
Agreement and provides as follows:
 

 
5

--------------------------------------------------------------------------------

 

(b)           The USA PATRIOT Act requires all financial institutions to obtain,
verify and record certain information that identifies individuals or business
entities which open an "account" with such financial institution. Consequently,
Lender may from time to time request, and Borrower shall provide to Lender,
Borrower's name, address, tax identification number and/or such other
identifying information as shall be necessary for Lender to comply with the USA
PATRIOT Act and any other Anti-Terrorism Law.
 
(l)           A new Section 16.18 is hereby added to the Loan Agreement and
provides as follows:
 
16.18           Anti-Money Laundering/International Trade Law Compliance.  Each
Borrower represents and warrants to the Agent, as of the date of this Agreement,
the date of each Advance, the date of any renewal, extension or modification of
this Agreement, and at all times until this Agreement has been terminated and
all Obligations have been indefeasibly paid in full, that: (a) no Covered Entity
(i) is a Sanctioned Person; (ii) has any of its assets in a Sanctioned Country
or in the possession, custody or control of a Sanctioned Person; or (iii) does
business in or with, or derives any of its operating income from investments in
or transactions with, any Sanctioned Country or Sanctioned Person in violation
of any law, regulation, order or directive enforced by any Compliance Authority;
(b) the Advances will not be used to fund any operations in, finance any
investments or activities in, or, make any payments to, a Sanctioned Country or
Sanctioned Person in violation of any law, regulation, order or directive
enforced by any Compliance Authority; (c) the funds used to repay the
Obligations are not derived from any unlawful activity; and (d) each Covered
Entity is in compliance with, and no Covered Entity engages in any dealings or
transactions prohibited by any Anti-Terrorism Laws.  The Borrowers covenant and
agree that they shall promptly notify the Agent in writing upon the occurrence
of a Reportable Compliance Event.
 
2.            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 that 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 provi-
 

 
6

--------------------------------------------------------------------------------

 

sions 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.
 
3.            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 and the Fee Letter fully
executed by the Borrowers;
 
(b)           Agent’s receipt of the Amended and Restated Revolving Credit Note
fully executed by Borrowers;
 
(c)           Agent’s receipt of updated schedules to the Loan Agreement;
 
(d)           Agent’s receipt of a certificate of Secretary of each Borrower
dated as of the date of this Amendment certifying: (i) as true and correct a
copy of resolutions adopted by the Board of Directors, Board of Managers or
other similar managing body of each Borrower (whether pursuant to a meeting of
such body or by written action of the members of such body in lieu of a meeting)
approving and authorizing the execution, delivery and performance by Borrower of
this Amendment and all documents, instruments and agreements executed and/or
delivered in connection herewith (including without limitation the Amended and
Revolving Credit Note and the Fee Letter) (collectively, the “Amendment
Documents”) and of the transactions contemplated herein and therein, (ii) that
there have been no amendments, supplements, or other modifications to such
Borrower’s Articles or Certificate of Incorporation or Formation, as applicable,
since the Closing Date and that the copies of such Articles or Certificate of
Incorporation or Formation, as applicable, or such Borrower’s By-Laws or
Operating Agreements, as applicable, or any of such Borrower’s other
Organizational Documents delivered to Agents on such date as a part of the
“secretary’s certificate” delivered by such Borrower on the Closing Date
pursuant to Section 8.1(n) of the Loan Agreement are true, correct and complete
copies of such Organizational Documents as currently in full force and effect
(or, if any such amendments, supplements or modifications have been made since
the Effective Date, attaching and certifying true, complete and correct copies
of such Organizational Document(s) as in effect on the date of this Amendment)
and (iii) the names and signatures of the officers of such Borrower authorized
to execute and deliver this Amendment and the Amendment Documents on behalf of
such Borrower pursuant to the resolutions referenced in clause (i) above (and
such certificate shall be countersigned by another officer of such Borrower
certifying the name, office  and signature of the Secretary or an Assistant
Secretary of such Borrower giving such certificate);
 
(e)           Agent’s receipt of executed legal opinions of (i) Cahill Gordon &
Reindel LLP and (ii) Faegre Baker Daniels LLP, which shall cover such matters
incident to the transactions contemplated by this Amendment, the Note, the Eden
Prairie Mortgage, the Other Documents and related agreements as Agent may
reasonably require and each Borrower hereby authorizes and directs such counsel
to deliver such opinions to Agent and Lenders;
 
(f)           Borrowers payment to the Agent, for the benefit of the Lenders, of
an amendment fee in the amount of One Hundred Thousand Dollars ($100,000), in
immediately available funds, which fee shall be fully earned as of the date of
this Amendment, non-refundable and not subject to pro-ration;
 
(g)            Agent’s receipt of modifications to all existing Mortgages to
Real Property securing the Obligations;
 

 
7

--------------------------------------------------------------------------------

 

(h)           Agent’s receipt of a fully paid bringdown or modification title
endorsement issued by a title insurance company satisfactory to Agent with
respect to the Mortgage on Borrowers’ Real Property located at 4811 Nashville
Road, Bowling Green, Kentucky 42101;
 
(i)           Agent’s receipt of a Mortgage on Borrowers’ Real Property located
at 6690 and 6740 Shady Oak Road, Eden Prairie, Minnesota, 55344 securing the
Obligations (the “Eden Prairie Mortgage”);
 
(j)           Agent’s receipt of a fully paid title insurance policy issued in
an amount equal to not less than one hundred twenty percent (120%) of the fair
market value of the Eden Prairie property by a title insurance company
satisfactory to Agent insuring the first lien position of the Eden Prairie
Mortgage together with a survey of such property;
 
(k)           Agent’s receipt of a survey prepared by AMEC of the Real Property
located in Eden Prairie assessing if there are any potential  asbestos
containing  materials (“PACM”) present, and if PACM are present, an Operations &
Maintenance Plan to address management of the PACM and the lawful removal of any
 Friable asbestos that is identified by AMEC;
 
(l)           No Default or Event of Default shall have occurred and be
continuing, both prior and after giving effect to the terms of this Amendment;
and
 
(m)           Agent’s receipt of such other documents as Agent or counsel to
Agent may reasonably request.
 
4.            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.
 
5.            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.
 
6.            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.
 
7.            Confirmation of Indebtedness.  Borrowers confirm and acknowledge
that as of the close of business on April 30, 2013, 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 $0 is the undrawn amount 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.
 
8.            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.
 

 
8

--------------------------------------------------------------------------------

 

(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.
 

 
9

--------------------------------------------------------------------------------

 

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.
 
BORROWERS:
VALUEVISION MEDIA, INC.
       
By:
   
Name: William J. McGrath
 
Title: Chief Financial Officer
         
VALUEVISION INTERACTIVE, INC.
       
By:
   
Name: William J. McGrath
 
Title: Chief Financial Officer
         
VVI FULFILLMENT CENTER, INC.
       
By:
   
Name: William J. McGrath
 
Title: Chief Financial Officer
         
VALUEVISION MEDIA ACQUISITIONS, INC.
       
By:
   
Name: William J. McGrath
 
Title: Chief Financial Officer
         
VALUEVISION RETAIL, INC.
       
By:
   
Name: William J. McGrath
 
Title: Chief Financial Officer
       
AGENT AND LENDER:
PNC BANK, NATIONAL ASSOCIATION, as Lender and as Agent
       
By:
 
    Sherry Winick, Vice President      
Address:  200 South Wacker Drive, Suite 600
 
Chicago, Illinois 60606
       
Commitment Percentage:  100%

 
 
[Signature Page to First Amendment To Revolving Credit
And Security Agreement]