EXHIBIT 10.30
FIRST 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, 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 (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 (the "Note"). As of July 20, 1995, the outstanding
principal balance of the Note is $1,416,262.84 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 Sections 5.7, 5.8 and 5.9 of the Credit
Agreement.
D. The Bank is willing to grant the Borrower's 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 1.1 of the Credit Agreement is hereby further amended by adding
the following new definition of "Subordinated Debt" in the appropriate
alphabetical location in Section 1.1:
"`Subordinated Debt' means the Debt of the Borrower from K-Tel USA
which is subordinated in right of payment to all indebtedness and
obligations of the Borrower to the Bank, pursuant to a Debt Subordination
Agreement, duly executed by K-Tel USA and the Borrower, in substantially
the form attached as Exhibit A to the First Amendment to Revolving Credit
Agreement and to Revolving Note."
4. Section 5.7 of the Credit Agreement is hereby amended to read as
follows:
"Section 5.7 Current Ratio. The Borrower will maintain at all times
the ratio of its Current Assets to Current Liabilities at not less than 1.2
to 1."
5. Section 5.8 of the Credit Agreement is hereby amended to read as
follows:
"Section 5.8 Ratio of Debt to Tangible Net Worth plus Subordinated
Debt. The Borrower will maintain at all times the ratio of its Debt to
Tangible Net Worth at not more than 4.4 to 1."
6. Section 5.9 of the Credit Agreement is hereby amended to read as
follows:
"Section 5.9 Tangible Net Worth plus Subordinated Debt. The Borrower
will maintain at all times the sum of its Tangible Net Worth plus
Subordinated Debt in an amount not less than $800,000."
7. 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".
8. 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.
9. 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.
10. Except as explicitly amended by this Amendment, all of the original
terms and conditions of the Credit Agreement and the other Loan Documents shall
remain in full force and effect.
11. 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.
12. The Borrower, and K-Tel International, 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 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.
13. 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 Amendment and the documents and instruments incidental thereto.
14. 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, 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 Borrower 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 12 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 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
The undersigned, a guarantor of the indebtedness of the Borrower 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 12 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 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 (USA), INC.
By /S/ Xxxx Xxxxx
Its Vice President
The undersigned, a guarantor of the indebtedness of the Borrower 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 12 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 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.
DOMINION ENTERTAINMENT, INC.
By /S/ Xxxx Xxxxx
Its Vice President
