EXHIBIT 10.31
SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
AND TO REVOLVING NOTE
This Amendment is made as of this 20th day of July, 1995, by and between
K-TEL INTERNATIONAL (USA), INC., a Minnesota corporation, having its principal
place of business in Plymouth, Minnesota ("K-Tel USA") and DOMINION
ENTERTAINMENT, INC., a Minnesota corporation, having its principal place of
business in Plymouth, Minnesota ("Dominion"; K-Tel USA and Dominion are
sometimes herein collectively referred to as the "Borrowers" and each is
sometimes individually referred to as a "Borrower"), and TCF BANK MINNESOTA FSB,
a federally chartered stock savings bank (the "Bank").
RECITALS
A. The Borrowers and the Bank have entered into a Revolving Credit
Agreement dated as of July 22, 1994, as amended by a First Amendment to
Revolving Credit Agreement dated as of January 30, 1995 (as amended, the "Credit
Agreement"), pursuant to which the Bank, subject to the terms and conditions set
forth therein, agreed to make revolving advances to the Borrowers in the
aggregate amount of up to $2,000,000.
B. The Borrowers' joint and several obligation to repay the revolving
advances made by the Bank under the Credit Agreement is evidenced by the
Borrowers' Revolving Note dated January 30, 1995, payable to the Bank's order in
the original principal amount of $2,000,000 (the "Note"). As of July 20, 1995,
the outstanding principal balance of the Note is $1,262,508.92 and interest
thereon has been paid through July 1, 1995.
C. The Borrower has requested that the Bank, among other things, (i) extend
the Commitment Termination Date and the Maturity Date from July 22, 1995 to
November 30, 1995, and (ii) revise Section 5.11 of the Credit Agreement.
D. The Bank is willing to grant the Borrowers' requests subject to the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. All capitalized terms used in this Amendment, unless specifically
defined herein, shall have the meanings given to such terms in the Credit
Agreement.
2. The definitions of "Commitment Termination Date" and "Maturity Date" in
Section 1.1 of the Credit Agreement are each hereby amended by deleting the date
"July 22, 1995" as it appears therein and by substituting therefor the date
"November 30, 1995".
3. Section 5.11 of the Credit Agreement is hereby amended to read as
follows:
"Section 5.11 Tangible Net Worth of Dominion. Dominion will maintain
at all times its Tangible Net Worth in an amount not less than $2,000,000."
4. The Note is hereby amended by deleting the date "July 22, 1995" as it
appears in the first paragraph thereof and by substituting therefor the date
"November 30, 1995".
5. From and after the date of this Amendment all references in the Loan
Documents to "the Credit Agreement" shall be deemed to refer to the Credit
Agreement as amended by this Amendment and all references in the Credit
Agreement to "this Agreement" shall be deemed to refer to the Credit Agreement
as amended by this Amendment.
6. From and after the date of this Amendment all references in the Loan
Documents to "the Note" shall be deemed to refer to the Note as amended by this
Amendment and all references in the Note to "this Note" shall be deemed to refer
to the Note as amended by this Amendment.
7. Except as explicitly amended by this Amendment, all of the original
terms and conditions of the Credit Agreement shall remain in full force and
effect.
8. The execution of this Amendment and acceptance of any documents related
thereto shall not be deemed to be a waiver of any Default or Event of Default
under the Credit Agreement or any other Loan Document, whether or not known to
the Bank and whether or not such Default or Event of Default exists on the date
of this Amendment.
9. The Borrowers, and K-Tel International and K-Tel, Inc. by signing the
Acknowledgement and Agreement of Guarantors set forth below, each hereby
absolutely and unconditionally releases and forever discharges the Bank, and any
and all participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing, from any and all claims, demands or causes of action of
any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which the
Borrowers or either of the Guarantors has had, now has or has made claim to have
against any such person for or by reason of any act, omission, matter, cause or
thing whatsoever arising from the beginning of time to and including the date of
this Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown.
10. The Borrowers hereby reaffirm their agreement under Section 8.5 of the
Credit Agreement. Without limiting the generality of the foregoing, the
Borrowers specifically agree to pay all fees and disbursements of counsel to the
Bank for the services performed by such counsel in connection with the
preparation of this Amendment and the documents and instruments incidental
thereto.
11. This Amendment and the Acknowledgment and Agreement of Guarantors may
be executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original and all of which counterparts, taken
together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
K-TEL INTERNATIONAL (USA), INC.
By /S/ Xxxx Xxxxx
Its Vice President
DOMINION ENTERTAINMENT, INC.
By /S/ Xxxx Xxxxx
Its Vice President
TCF BANK MINNESOTA FSB
By /S/ Xxxxxxx X. Xxxxxx
Its Vice President
And
By /S/ Milli Navara
Its Commercial Banking Officer
ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS
The undersigned, a guarantor of the indebtedness of the Borrowers to the
Bank pursuant to its Guaranty dated as of July 22, 1994 (the "Guaranty"), hereby
(i) acknowledges receipt of the foregoing Amendment; (ii) consents to the terms
(including without limitation the release set forth in paragraph 9 of the
foregoing Amendment) and execution thereof; (iii) reaffirms its obligations to
the Bank pursuant to the terms of its Guaranty; and (iv) acknowledges and agrees
that the Bank may amend, restate, extend, renew or otherwise modify the Credit
Agreement and any indebtedness or agreement of the Borrowers, or enter into any
agreement or extend additional or other credit accommodations, without notifying
or obtaining the consent of the undersigned and without impairing the liability
of the undersigned under its Guaranty for all of the present and future
indebtedness of the Borrowers to the Bank.
K-TEL INTERNATIONAL, INC.
By /S/ Xxxx Xxxxx
Its Vice President
The undersigned, a guarantor of the indebtedness of the Borrowers to the
Bank pursuant to its Guaranty dated as of January 30, 1995 (the "Guaranty"),
hereby (i) acknowledges receipt of the foregoing Amendment; (ii) consents to the
terms (including without limitation the release set forth in paragraph 9 of the
foregoing Amendment) and execution thereof; (iii) reaffirms its obligations to
the Bank pursuant to the terms of its Guaranty; and (iv) acknowledges and agrees
that the Bank may amend, restate, extend, renew or otherwise modify the Credit
Agreement and any indebtedness or agreement of the Borrowers, or enter into any
agreement or extend additional or other credit accommodations, without notifying
or obtaining the consent of the undersigned and without impairing the liability
of the undersigned under its Guaranty for all of the present and future
indebtedness of the Borrowers to the Bank.
K-TEL, INC.
By /S/ Xxxx Xxxxx
Its Vice President
