EXHIBIT 10.57
RESTATED AMENDMENT NUMBER TWO
TO
LOAN AND SECURITY AGREEMENT
This Restated Amendment Number Two to Loan and Security Agreement
("Amendment") is entered into as of September 30, 1998, by and among FOOTHILL
CAPITAL CORPORATION, a California corporation ("Foothill"), and K-TEL
INTERNATIONAL (USA), INC., DOMINION ENTERTAINMENT, INC., K-TEL CONSUMER
PRODUCTS, INC., K-TEL TV, INC. and K-TEL VIDEO, INC., all of which are Minnesota
corporations (jointly "Borrowers"), in light of the following:
FACT ONE: Borrowers and Foothill have previously entered into that
certain Loan and Security Agreement, dated as of November 20, 1997 (as amended,
the "Agreement").
FACT TWO: Borrowers and Foothill desire to further amend the Agreement
as provided for and on the conditions herein.
NOW, THEREFORE, Borrowers and Foothill hereby amend and supplement the
Agreement as follows:
1. DEFINITIONS. All initially capitalized terms used in this Amendment
shall have the meanings given to them in the Agreement unless specifically
defined herein.
2. AMENDMENTS.
(a) The definition of Intangible Assets in Section 1.1 of the
Agreement is amended to read as follows:
"'Intangible Assets' means, with respect to any Person, that
portion of the book value of all of such Person's assets that would be
treated as intangibles under GAAP, and specifically including such
Person's goodwill and prepaid assets, and excluding the Library."
(b) Section 7.20 of the Agreement is amended to read as
follows:
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"FINANCIAL COVENANTS. Have Parent fail to have Tangible Net
Worth of at least the following amounts, as of the dates set forth
below, and for the quarters ending September 30, 1998 through September
30, 1999 such amounts shall be increased by the aggregate amount of
monies received by Parent upon exercise of outstanding stock options up
to $1,000,000:
Minimum Tangible Net Worth Fiscal Quarter Ending
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$700,000 September 30, 1998
$700,000 December 31, 1998
$400,000 March 31, 1999
$500,000 June 30, 1999
$425,000 September 30, 1999
$8,000,000 December 31, 1999 and
thereafter"
3. REPRESENTATIONS AND WARRANTIES. Borrowers hereby affirms to Foothill
that all of Borrowers' representations and warranties set forth in the Agreement
are true, complete and accurate in all respects as of the date hereof.
4. NO DEFAULTS. Borrowers hereby affirm to Foothill that no Event of
Default has occurred and is continuing as of the date hereof.
5. CONDITION PRECEDENT. The effectiveness of this Amendment is
expressly conditioned upon the following:
(a) Payment by Borrowers to Foothill of a fee in the aggregate
amount of $3,500 (of which $2,500 has previously been paid by Borrowers) such
fee to be charged to Borrowers' loan account pursuant to Section 2.5(d) of the
Agreement; and
(b) Receipt by Foothill of an executed copy of this Amendment.
6. COSTS AND EXPENSES. Borrowers shall pay to Foothill all of
Foothill's out-of-pocket costs and expenses (including, without limitation, the
fees and expenses of its counsel, which counsel may include any local counsel
deemed necessary, search fees, filing and recording fees, documentation fees,
appraisal fees, travel expenses, and other fees) arising in connection with the
preparation, execution, and delivery of this Amendment and all related
documents.
7. LIMITED EFFECT. In the event of a conflict between the terms and
provisions of this Amendment and the terms and provisions of the Agreement, the
terms and provisions of this Amendment shall govern. In all other respects, the
Agreement, as amended and supplemented hereby, shall remain in full force and
effect. This Amendment amends, restates and replaces in its entirety Amendment
Number Two to Loan and Security Agreement.
8. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which when so executed and delivered shall be deemed to be an original. All
such
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counterparts, taken together, shall constitute but one and the same Amendment.
This Amendment shall become effective upon the execution of a counterpart of
this Amendment by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first set forth above.
FOOTHILL CAPITAL CORPORATION,
a California corporation
By:
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Title:
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K-TEL INTERNATIONAL (USA), INC.,
a Minnesota corporation
By:
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Title:
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DOMINION ENTERTAINMENT, INC.,
a Minnesota corporation
By:
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Title:
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K-TEL CONSUMER PRODUCTS, INC.,
a Minnesota corporation
By:
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Title:
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K-TEL TV, INC.,
a Minnesota corporation
By:
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Title:
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K-TEL VIDEO, INC.,
a Minnesota corporation
By:
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Title:
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The undersigned has executed a Continuing Guaranty in favor of Foothill
Capital Corporation ("Foothill") respecting the obligations of the Borrowers, as
defined in the attached Amendment, owing to Foothill. The undersigned
acknowledges the terms of the above Amendment and reaffirms and agrees that: its
Continuing Guaranty remains in full force and effect; nothing in such Continuing
Guaranty obligates Foothill to notify the undersigned of any changes in the
financial accommodations made available to Borrowers or to seek reaffirmations
of the Continuing Guaranty; and no requirement to so notify the undersigned or
to seek reaffirmations in the future shall be implied by the execution of this
reaffirmation.
K-TEL INTERNATIONAL, INC.
a Minnesota corporation
By:
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Name:
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Title:
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