EXHIBIT 10.51
FIRST AMENDMENT TO GUARANTY BY CORPORATION
(K-Tel International, Inc.)
This Amendment, dated as of September __, 1997, is made by and
between K-TEL INTERNATIONAL, INC., a Minnesota corporation (the "Guarantor") and
TCF NATIONAL BANK MINNESOTA, a national banking association, formerly known and
organized as TCF Bank Minnesota fsb, a federally chartered stock savings bank
(the "Bank").
RECITALS
A. The Guarantor has executed and delivered to the Bank an
Amended and Restated Guaranty by Corporation dated April 10, 1997 (the
"Guaranty"), pursuant to which the Guarantor has guaranteed, among other things,
all of the present and future debts, liabilities and obligations of K-Tel
International (USA), Inc., a Minnesota corporation ("K-Tel USA"), Dominion
Entertainment, Inc., a Minnesota corporation ("Dominion"), K-Tel Productions,
Inc., a Minnesota corporation ("K-Tel Productions"), K-Tel Video, Inc., a
Minnesota corporation ("K-Tel Video"), K-Tel Direct, Inc., a Minnesota
corporation ("K-Tel Direct"), K-Tel TV, Inc., a Minnesota corporation ("K-Tel
TV"), and K-Tel Consumer Products, Inc., a Minnesota corporation ("K-Tel
Consumer Products"; collectively, the "Borrowers") to the Bank, including,
without limitation, all present and future debts, liabilities and obligations of
the Borrower arising under the Amended and Restated Revolving Credit Agreement
dated as of April 10, 1997, as amended by a First Amendment to Amended and
Restated Revolving Credit Agreement dated as of July 31, 1997, and by a Second
Amendment to Amended and Restated Revolving Credit Agreement of even date
herewith, as the same may be amended or restated from time to time (the "Credit
Agreement").
B. As a condition to entering into the Second Amendment to
Amended and Restated Revolving Credit Agreement of even date herewith and to
making any further loans or extensions of credit to the Borrowers, the Bank has
required that the Guarantor execute and deliver this Amendment.
ACCORDINGLY, in consideration of the premises and for other
good and valuable consideration, the Guarantor and the Bank hereby agree as
follows:
1. Paragraph 16 of the Guaranty is hereby amended to read as
follows:
"16. The Guarantor will not incur, create, assume or permit to
exist any indebtedness for borrowed money, or any other indebtedness or
liability evidenced by notes, bonds, debentures or similar obligations,
except unsecured indebtedness to Xxxxxx Xxxxx or an entity controlled
by Xxxxxx Xxxxx. The Guarantor covenants and agrees that, so long as
any Advances (as defined in the Credit Agreement) shall be outstanding
and/or the Bank's Commitment (as defined in the Credit Agreement) shall
be outstanding, the Guarantor will not repay any principal of any
indebtedness owing by the Guarantor to Xxxxxx Xxxxx or to an entity
controlled by Xxxxxx Xxxxx. Nothing in this paragraph 16 shall be
deemed to prohibit the payment of interest, when due, by the Guarantor
to Xxxxxx Xxxxx or to an entity controlled by Xxxxxx Xxxxx with respect
to the outstanding principal indebtedness owed by the Guarantor to
Xxxxxx Xxxxx or to an entity controlled by Xxxxxx Xxxxx."
2. The Guaranty is hereby amended by adding the following new
paragraph 21:
"21. The Guarantor covenants and agrees that, so long as any
Advances (as defined in the Credit Agreement) to the Borrowers shall be
unpaid or the Bank's Commitment (as defined in the Credit Agreement)
shall be outstanding, the Guarantor will not repurchase any of the
issued and outstanding stock of the Guarantor."
3. Except as amended by this Amendment, all of the terms and
conditions of the Guaranty shall remain in all other respects in full force and
effect.
4. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, this Amendment has been duly executed by
the parties hereto as the date first written above.
K-TEL INTERNATIONAL, INC.
By ______________________________________
Its___________________________________
TCF NATIONAL BANK MINNESOTA
By ______________________________________
Its___________________________________
And
By ______________________________________
Its___________________________________
