EXHIBIT 10.33
SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
This Second Amendment is made as of this 2nd day of October, 1995, by and
between K-TEL, INC., a Minnesota corporation, having its principal place of
business in Plymouth, Minnesota ("Borrower"), and TCF BANK MINNESOTA FSB, a
federally chartered stock savings bank (the "Bank").
RECITALS
A. The Borrower and the Bank have entered into a Revolving Credit Agreement
dated as of January 30, 1995, as amended by a First Amendment to Revolving
Credit Agreement and to Revolving Note dated as of July 20, 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 Borrower
in the aggregate amount of up to $3,000,000.
B. The Borrower's obligation to repay the revolving advances made by the
Bank under the Credit Agreement is evidenced by the Borrower's Revolving Note
dated January 30, 1995, payable to the Bank's order in the original principal
amount of $3,000,000, as amended (the "Note"). As of September 25, 1995, the
outstanding principal balance of the Note was $1,926,713.29 and interest thereon
has been paid through September 1, 1995.
C. K-Tel International (USA), Inc. ("K-Tel USA") and Dominion
Entertainment, Inc. ("Dominion") and the Bank have entered into a Revolving
Credit Agreement dated as of July 22, 1994, as amended (the "K-Tel USA/Dominion
Credit Agreement").
D. K-Tel USA and Dominion have requested that the Bank increase the
Commitment Amount of the Bank under the K-Tel USA/Dominion Credit Agreement from
$2,000,000 to $3,500,000.
E. The Bank is willing to grant the request of K-Tel USA and Dominion,
provided that the Borrower enter into this Second Amendment.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. All capitalized terms used in this Second Amendment, unless
specifically defined herein, shall have the meanings given to such terms in the
Credit Agreement.
2. Advances. Section 2.1 of the Credit Agreement is hereby amended to read
as follows:
"Section 2.1 The Advances. The Bank agrees, on the terms and
conditions here set forth, to make Advances to the Borrower from time to
time during the period from the date when all of the conditions set forth
in Section 3.1 hereof are met (the "Closing Date") to and including the
Commitment Termination Date in an aggregate amount not to exceed at any
time outstanding the Borrowing Base less the L/C Amount; provided, however,
in no event shall the Borrower request, nor shall the Bank be obligated to
make, any Advance if, after giving effect to such Advance, the sum of the
aggregate outstanding Advances and the L/C Amount under this Agreement plus
the aggregate outstanding Advances under that certain Revolving Credit
Agreement dated as of July 22, 1994, as amended, between K-Tel USA,
Dominion and the Bank, would exceed $5,500,000. Within the above limits,
the Borrower may borrow, prepay pursuant to Section 2.7 and re-borrow under
this Section 2.1. The Advances made by the Bank shall be evidenced by a
single promissory note of the Borrower, dated the Closing Date, payable to
the order of the Bank appropriately completed in substantially the form of
Exhibit A attached hereto as the same may be renewed, extended, amended or
any note shall be issued in substitution therefor from time to time (the
"Note"). The Note shall bear interest in accordance with Section 2.3 hereof
and principal of and interest on the Note shall be due and payable as
provided in Section 2.5 hereof."
3. Standby Letters of Credit. Section 2.11(a) of the Credit Agreement is
hereby amended to read as follows:
"(a) Subject to the terms and conditions set forth in this Section
2.11 and in Article III, the Bank shall issue one or more irrevocable
standby letters of credit for the account of the Borrower (each a "Standby
Letter of Credit") from time to time during the period from the date hereof
to and including the Commitment Termination Date, in an aggregate amount at
any time outstanding not to exceed the lesser of (i) $2,000,000 or (ii) the
Borrowing Base less the sum of (A) all outstanding Advances under this
Agreement and (B) the L/C Amount; provided, however in no event shall the
Borrower request, nor shall the Bank be obligated to issue, any Letter of
Credit if, after giving effect to such Letter of Credit, the sum of the
aggregate outstanding Advances and the L/C Amount under this Agreement plus
the aggregate outstanding Advances under that certain Revolving Credit
Agreement dated as of July 22, 1994, as amended between K-Tel USA, Dominion
and the Bank, would exceed $5,500,000."
4. Conditions Precedent. The effectiveness of this Second Amendment shall
be subject to the condition precedent that the Bank shall have received each of
the following in form and substance acceptable to the Bank:
(a) A certified copy of the resolutions of the Board of Directors of
the Borrower evidencing approval of this Second Amendment and other matters
contemplated hereby, certified by the Secretary or Assistant Secretary of
the Borrower as being a true, correct and complete copy thereof which has
been duly adopted and is in full force and effect, together with a
certificate of such Secretary or Assistant of the Borrower certifying the
names and true signatures of the officers of the Borrower authorized to
sign this Second Amendment and the other documents to be delivered by the
Borrower hereunder.
(b) A Certificate of the Secretary of the Borrower certifying as to
(1) the fact that the articles of incorporation and bylaws of the Borrower,
which were previously certified and delivered to the Lender continue in
full force and effect and have not been amended or otherwise modified
except as set forth in the Certificate to be delivered.
Acknowledgment and Agreement of Guarantors attached below.
(d) Such other items as the Bank may require.
5. References. From and after the date of this Second Amendment all
references in the Credit Agreement to "this Agreement" shall be deemed to refer
to the Credit Agreement as amended by this Second Amendment.
6. No Other Changes. Except as explicitly amended by this Second Amendment,
all of the original terms and conditions of the Credit Agreement shall remain in
full force and effect.
7. No Waiver. The execution of this Second 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 Second Amendment.
8. Release. The Borrower, and K-Tel International, Inc., K-Tel USA and
Dominion, 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 Borrower or any Guarantor 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 Second Amendment, whether such claims, demands
and causes of action are matured or unmatured or known or unknown.
9. Expenses. The Borrower hereby reaffirms its agreement under Section 8.5
of the Credit Agreement. Without limiting the generality of the foregoing, the
Borrower specifically agrees 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 Second Amendment and the documents and instruments
incidental thereto.
10. Counterparts. This Second 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 Second Amendment to
be duly executed as of the date first above written.
K-TEL, INC.
By /S/ Xxxx Xxxxx
Its Vice President
TCF BANK MINNESOTA FSB
By /S/ Xxxxxx X. Xxxxx
Its Sr. Vice President
And
By /S/ Xxxxxxx X. Xxxxxx
Its Vice President
ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS
The undersigned, K-Tel International, Inc., and K-Tel International (USA),
Inc., and Dominion Entertainment, Inc. each a guarantor of the indebtedness of
K-Tel, Inc. (the "Borrower") to the Bank pursuant to their Guaranties dated as
of January 30, 1995, respectively, (the "Guaranties"), each hereby (i)
acknowledges receipt of the foregoing Second Amendment; (ii) consents to the
terms (including without limitation the release set forth in paragraph 8 of the
foregoing Second 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
Borrower, 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 Borrower to the Bank.
K-TEL INTERNATIONAL, INC.
By /S/ Xxxx Xxxxx
Its Vice President
K-TEL INTERNATIONAL (USA), INC.
By /S/ Xxxx Xxxxx
Its Vice President
DOMINION ENTERTAINMENT, INC.
By /S/ Xxxx Xxxxx
Its Vice President