EXHIBIT 10.5
CONSENT, WAIVER, AND AMENDMENT
This Consent, Waiver, and Amendment, dated as of January 5,
1998 is made by and between CoreStates Bank, N.A., a national banking
association ("Lender") and National Media Corporation, a Delaware corporation
("NMC"), Quantum North America, Inc., formerly known as Media Arts
International, Ltd., Quantum International Limited, Positive Response
Television, Inc. and DirectAmerica Corporation (collectively, with NMC, the
"Loan Parties") in reference to the Amended and Restated Loan and Security
Agreement dated as of June 26, 1996 between NMC, certain of the Loan Parties and
Meridian Bank, as lender (the "Amended and Restated Loan Agreement"), the
Secured Subordinated Notes issued by NMC and dated December 1, 1994 and April 1,
1995, respectively in the original principal amount of $5 million (the "Notes")
and the Loan Modification Agreement dated as of September 18, 1997 by and among
NMC, certain of the Loan Parties and Lender (the "Loan Modification Agreement"),
and any other indebtedness, guaranties, collateral or other agreements between
Lender and any of the Loan Parties existing as of the date hereof (collectively,
with the Amended and Restated Loan Agreement, the Notes and the Loan
Modification Agreement, the "Loan Documents").
In consideration of the premises contained herein and for other good and
valuable consideration the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Effective as of the date hereof, Lender hereby (i) consents to and
approves the transactions described in the Agreement and Plan of Reorganization
and Merger (the "Merger Agreement") dated as of the date hereof by and among
NMC, ValueVision International, Inc., a Minnesota corporation ("ValueVision")
and X-X Holdings Corp., a Delaware corporation, and the related documents
attached as exhibits thereto (collectively, with the Merger Agreement, the
"Merger Documents") (including, without limitation, the $10 Million Demand
Promissory Note dated as of the date hereof between NMC and ValueVision (the
"Demand Promissory Note")), which consent and approval is hereby deemed to
constitute and satisfy any consents required under the Loan Documents as a
result of and in connection with the transactions described in the Merger
Documents, including any consents required under the Amended and Restated Loan
Agreement with respect to the incurrence of any indebtedness under the Demand
Promissory Note (Section 8.3); the issuance of any guaranties (Section 8.5); the
entry into any mergers, consolidations or other acquisition transactions
(Section 8.7); and any failure to comply with the financial covenants set forth
in Article 9 to the extent such failure is attributable to the incurrence of
indebtedness under the Demand Promissory Note, and/or any expenses or
expenditures incurred or accrued in connection with or as a result of the
execution or consummation of the transactions described in the Merger Documents
in an aggregate amount up to, but not in excess of, $5.0 million, and/or foreign
exchange translation adjustments since June 30, 1997 and/or deferred taxes; and
any consents required under Section 13 of the Loan Modification Agreement to a
person other than Xxxxxx Xxxxxxxx acting as the President and/or Chief Executive
Officer of NMC following the consummation of the merger contemplated in the
Merger Agreement, and (ii) waives any provisions under the Loan Documents which
would otherwise be violated as a result of or in connection with the
transactions described in the
Merger Documents. Notwithstanding the foregoing, if NMC fails to comply with the
provisions of Paragraphs 2-6 below or there is a failure to comply with
Paragraphs 7 or 8, this Consent, Waiver, and Amendment shall terminate and shall
be null and void and Lender shall be entitled to exercise all rights and
remedies it may have under the Loan Documents or applicable law.
2. Effective as of the date hereof, the Accrued Interest (as defined in the
Loan Modification Agreement) for the period from September 18, 1997 through
December 31, 1997 shall be paid on the date hereof. As of and after the date
hereof, interest shall be paid monthly in accordance with the Loan Modification
Agreement but at a rate equal to the Prime Rate (as defined in the Loan
Modification Agreement) plus the Contract Rate Margin (as defined in the Loan
Modification Agreement).
3. NMC shall not make any voluntary pre-payment of the principal amounts
outstanding under the Demand Promissory Note, without obtaining the prior
consent of Lender, which consent shall not be unreasonably withheld.
4. The warrant certificate representing the right to acquire 125,000 shares
of common stock of NMC which right was issued pursuant to the terms of the Loan
Modification Agreement, shall be finalized in accordance with the Loan
Modification Agreement and executed and delivered as of even date herewith.
5. Upon the termination of the ASB Bank Limited Facility Agreement between
ASB Bank Limited and Prestige Marketing Limited, a New Zealand corporation and a
subsidiary of NMC ("Prestige") or any extension thereof, and the satisfaction of
Prestige's obligations thereunder, Prestige shall (at Lender's option) guaranty
the Obligations (as defined below) or become a co-borrower under the Loan
Documents and NMC and Prestige shall grant Lender a security interest in the
collateral that secured such facility pursuant to substantially similar
documentation, to the extent of NMC's obligations with respect to principal,
interest, fees or expenses under the Loan Documents (collectively, the
"Obligations").
6. The proceeds of any fees received by NMC from ValueVision pursuant to
Section 7.3(b) of the Merger Agreement shall be first applied to the
satisfaction of any Obligations outstanding under the Loan Documents.
7. Contemporaneously with the consummation of the transactions contemplated
by the Merger Agreement, Lender will receive a guaranty executed by X-X Holdings
Corp., ValueVision and its operating subsidiaries of NMC's obligations under the
Loan Documents, in substantially the form attached hereto.
8. During the period commencing on the date hereof and until the
consummation of the transactions contemplated by the Merger Agreement,
ValueVision will not (i) create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens or
charges upon properties acquired or to be acquired under conditional sales
agreements or other title retention devices) ("Liens") on its property or
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assets, whether now owned or hereafter acquired or upon any income, profits or
proceeds therefrom, except: (a) Liens existing on the date hereof (none of which
cover ValueVision's inventory and/or receivables, as a whole, and to the extent
that any such Liens exist, such Liens are not, in the aggregate, material with
respect to the aggregate value of ValueVision's inventory and/or receivables),
(b) Liens incurred or deposits made in the ordinary course of business,
including (x) in connection with worker's compensation, unemployment insurance,
social security and other like laws or (y) to secure the performance of
statutory obligations, not incurred in connection with either the borrowing of
money or the deferred purchase price of goods or inventory, or (c) encumbrances
consisting of zoning restrictions, easements, restrictions on the use of real
property or minor irregularities of title thereto, none of which impairs the use
of such property by ValueVision in the operation of its business, (ii) merge
into or consolidate with any person (other than any of its subsidiaries, parent
company or any subsidiary of such parent company) or sell or otherwise dispose
of more than 85% of ValueVision's total assets to any person (other than any of
its subsidiaries, parent company or any subsidiary of such parent company),
which percentage shall be measured by dividing the aggregate book value of the
assets sold by the aggregate book value of the total assets of ValueVision as of
the date of such transaction, or (iii) pay dividends or make other distributions
on account of its capital stock.
9. The Loan Documents, as amended by this Consent, Waiver and
Amendment, constitute the entire agreement between the parties pertaining to the
subject matter hereof and fully supersedes any and all prior or contemporaneous
agreements or understandings between the parties hereto pertaining to the
subject matter hereof.
10. Except as expressly contemplated and modified in this Consent, Waiver,
and Amendment, the Loan Documents shall remain in full force and effect.
11. This Consent, Waiver and Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the undersigned have caused this Consent,
Waiver and Amendment to be duly executed and delivered by its officer thereunto
duly authorized as of the date first above written.
CORESTATES BANK, N.A.
/s/ Xxxxxxxx X. Barfory
----------------------------
By: Xxxxxxxx X. Barfory
Its: Vice President
NATIONAL MEDIA CORPORATION
/s/ Xxxxxx X. Xxxxxxxx
----------------------------
By: Xxxxxx X. Xxxxxxxx
Its: President and Chief
Executive Officer
QUANTUM NORTH AMERICA
/s/ Xxxxx X. Xxxxx
----------------------------
By: Xxxxx X. Xxxxx
Its: Sr. Vice President
QUANTUM INTERNATIONAL LIMITED
/s/ Xxxx Xxxxxxxx
----------------------------
By: Xxxx Xxxxxxxx
Its: Director
POSITIVE RESPONSE TELEVISION, INC.
/s/ Xxxxx X. Xxxxx
----------------------------
By: Xxxxx X. Xxxxx
Its: Sr. Vice President
DIRECTAMERICA CORPORATION
/s/ Xxxxx X. Xxxxx
----------------------------
By: Xxxxx X. Xxxxx
Its: Sr. Vice President
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