AND SECURITY AGREEMENT
Exhibit 10.2
NINTH AMENDMENT TO REVOLVING CREDIT, TERM LOAN
AND SECURITY AGREEMENT
This Ninth Amendment to Revolving Credit, Term Loan and Security Agreement (the “Amendment”) is made this 25th day of September, 2017 by and among EVINE LIVE INC., a Minnesota corporation; 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, NORWELL TELEVISION, LLC, a Delaware limited liability company and PW ACQUISITION COMPANY, LLC, a Minnesota limited liability company (each a “Borrower”, and collectively “Borrowers”); the financial institutions which are now or which hereafter become a party thereto 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 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) Section 4.15(h) of the Loan Agreement shall be deleted in its entirety and replaced as follows:
(h) Establishment of a Lockbox Account, Dominion Account. Subject to the terms of the Intercreditor Agreement, all proceeds of Collateral (other than Term Loan Priority Collateral), shall be deposited by Borrowers into either (i) a lockbox account, dominion account or such other “blocked account” (such accounts, together with the Private Bank Account, defined below, the “Blocked Accounts”) established at a bank or banks (each such bank, a “Blocked Account Bank”) pursuant to an arrangement with such Blocked Account Bank as may be selected by Borrowing Agent and be acceptable to Agent or (ii) depository
accounts (“Depository Accounts”) established at the Agent for the deposit of such proceeds. Each applicable Borrower, Agent and each Blocked Account Bank shall enter into a deposit account control agreement in form and substance satisfactory to Agent directing that upon the delivery of a notice (the “Trigger Notice”) from Agent to such Blocked Account Bank (which Trigger Notice may be delivered at any time (x) on or after any date on which Borrowers’ Undrawn Availability is less than the greater of 12% of the Maximum Revolving Advance Amount or $10,800,000 or (y) upon or after the occurrence and during the continuance of a Default or Event of Default), such Blocked Account Bank shall transfer such funds so deposited to Agent, either to any account maintained by Agent at said Blocked Account Bank or by wire transfer to appropriate account(s) of Agent. All funds deposited in such Blocked Accounts (other than identifiable proceeds of Term Loan Priority Collateral) shall immediately become the property of Agent upon the delivery of the Trigger Notice, and Borrowing Agent shall use its commercially reasonable efforts to obtain the agreement by such Blocked Account Bank to waive any offset rights against the funds so deposited. At all times following the delivery of a Trigger Notice all funds on deposit in the Blocked Accounts and/or Depository Accounts (other than identifiable proceeds of Term Loan Priority Collateral) shall be applied to reduce the outstanding Obligations in the order determined by Agent. Neither Agent nor any Lender assumes any responsibility for such blocked account arrangement, including any claim of accord and satisfaction or release with respect to deposits accepted by any Blocked Account Bank thereunder. Notwithstanding anything to the contrary above, Borrowers may maintain a deposit account at The PrivateBank and Trust Company (“Private Bank Account”) so long as (i) the account is subject to a springing deposit account control agreement in favor of Agent and which can be effected by delivery of a Trigger Notice, (ii) the account does not hold more than the lesser of 20% of available unrestricted cash of Borrowers or $4,000,000, (iii) the account may not be used to make disbursements, and (iv) Agent shall be notified of any deposits or withdraws from the account. All deposit accounts and investment accounts of each Borrower and its Subsidiaries are set forth on Schedule 4.15(h).
(b) Sections 6.5 (a) and (b) of the Loan Agreement shall be deleted in their 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 July 31, 2017 or during any fiscal quarter thereafter, (i) an Event of Default is continuing or (ii) Borrowers' Undrawn Availability is equal to or less than the greater of 12% of the Maximum Revolving Advance Amount or $10,800,000, cause to be maintained as of the end of the fiscal quarter immediately prior to the fiscal quarter during which Borrowers’ Undrawn Availability was less than the foregoing amount or during which such Event of Default occurred and as of the end of each fiscal quarter thereafter until such Event of Default is waived or Undrawn Availability at all times during a subsequent fiscal quarter is not less than the greater of 12% of the Maximum Revolving Advance Amount or
$10,800,000, a Fixed Charge Coverage Ratio of not less than 1.1 to 1.0, measured in each case 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 July 31, 2017 or during any fiscal quarter thereafter, (i) an Event of Default is continuing or (ii) Borrowers’ Undrawn Availability is equal to or less than the greater of 12% of the Maximum Revolving Advance Amount or $10,800,000, cause to be achieved a minimum EBITDA of not less than the following amounts as of the end of the fiscal quarter immediately prior to the fiscal quarter during which Borrowers’ Undrawn Availability was less than the foregoing amount or during which such Event of Default occurred and as of the end of each fiscal quarter thereafter until such Event of Default is waived or Undrawn Availability at all times during a subsequent fiscal quarter is not less than the greater of 12% of the Maximum Revolving Advance Amount or $10,800,000 (in each case to be tested for the four quarter period then ending on or about the date specified below):
Quarters Ending | Amount |
July 31, 2017, October 31, 2017 | $14,000,000 |
January 31, 2018, April 30, 2018, July 31, 2018, October 31, 2018 | $16,000,000 |
Each fiscal year thereafter, the EBITDA to be tested in each fiscal quarter during such year, shall be an amount equal to 115% of the prior fiscal year covenant amount
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 after giving effect to any 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.
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 fully executed by the Borrowers;
(b) Agent’s receipt of a fully executed amendment to the GACP Loan Agreement;
(c) Agent’s receipt, for the benefit of the Lenders, of an amendment fee in the amount of $25,000, 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; and
(d) 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. [Reserved].
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.
(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.
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: | ||
By: | /s/ XXXXXXX XXXXXXXX | |
Name: | Xxxxxxx Xxxxxxxx | |
Title: | Chief Financial Officer | |
VALUEVISION INTERACTIVE, INC. | ||
By: | /s/ XXXXXXX XXXXXXXX | |
Name: | Xxxxxxx Xxxxxxxx | |
Title: | Chief Financial Officer | |
VVI FULFILLMENT CENTER, INC. | ||
By: | /s/ XXXXXXX XXXXXXXX | |
Name: | Xxxxxxx Xxxxxxxx | |
Title: | Chief Financial Officer | |
VALUEVISION MEDIA ACQUISITIONS, INC. | ||
By: | /s/ XXXXXXX XXXXXXXX | |
Name: | Xxxxxxx Xxxxxxxx | |
Title: | Chief Financial Officer | |
VALUEVISION RETAIL, INC. | ||
By: | /s/ XXXXXXX XXXXXXXX | |
Name: | Xxxxxxx Xxxxxxxx | |
Title: | Chief Financial Officer | |
NORWELL TELEVISION, LLC | ||
By: | /s/ XXXXXXX XXXXXXXX | |
Name: | Xxxxxxx Xxxxxxxx | |
Title: | Chief Financial Officer | |
PW ACQUISITION COMPANY LLC | ||
By: | /s/ XXXXXXX XXXXXXXX | |
Name: | Xxxxxxx Xxxxxxxx | |
Title: | Chief Financial Officer | |
[SIGNATURE PAGE TO NINTH AMENDMENT TO REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT]
AGENT: | PNC BANK, NATIONAL ASSOCIATION, | |
as Lender and Agent | ||
By: | /s/ XXXXXX XXXXXX | |
Xxxxxx Xxxxxx, Vice President | ||
Address: 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000 | ||
Xxxxxxx, Xxxxxxxx 00000 | ||
LENDERS: | PNC BANK, NATIONAL ASSOCIATION, | |
as Lender and Agent | ||
By: | /s/ XXXXXX XXXXXX | |
Xxxxxx Xxxxxx, Vice President | ||
Revolving Commitment Percentage: 77.0% | ||
Term Loan Commitment Percentage: 77.0% | ||
CIBC BANK USA f/k/a THE PRIVATEBANK AND TRUST COMPANY, as Lender | ||
By: | /s/ XXXXXXX XXXXXX | |
Name: | Xxxxxxx Xxxxxx | |
Title: | Managing Director | |
Revolving Commitment Percentage: 23.0% | ||
Term Loan Commitment Percentage: 23.0% | ||
[SIGNATURE PAGE TO NINTH AMENDMENT TO REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT]
