K TEL INTERNATIONAL INC
EX-10.14
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<TYPE>EX-10.14
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<FILENAME>a03-3990_1ex10d14.htm
<DESCRIPTION>EX-10.14
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<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit 10.14</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">U.S. $8,000.000<br>
PROMISSORY NOTE<br>
given by<br>
<br>
K-TEL INTERNATIONAL, INC.<br>
to<br>
K-5 LEISURE PRODUCTS, INC.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

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  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dated:&#160; September 27, 1999</font></p>
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  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
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  <td width="48%" valign="top" style="padding:0in 0in 0in 0in;width:48.64%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">At: Minneapolis, Minnesota</font></p>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">FOR VALUE
RECEIVED, UPON DEMAND, or if demand is not made before November 20, 2001, then
on November 20, 2001 (the &#147;Maturity Date&#148;) the undersigned K-TEL INTERNATIONAL,
INC. promises to pay to the order of K-5 LEISURE PRODUCTS, INC. (&#147;Lender&#148;) at
its principal place of business at 220 Saulteaux Crescent, Winnipeg, Manitoba
R3J 3W3, Canada or at such other place as the holder hereof may from time to
time designate, the principal sum of Eight Million and no/100 U.S. Dollars
(U.S. $8,000,000.00) together with interest upon the unpaid principal balance
outstanding from the date hereof at an annual rate equal to the Reference Rate
of Interest (computed on the basis of actual days elapsed in a 365-day year) as
the same may change from time to time.&#160;
Interest shall be payable on demand, but until such demand is made,
monthly, commencing October 31, 1999 and continuing on the same day of each
succeeding month until this Note is paid in full.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The term
&#147;Reference Rate of Interest&#148; shall be that rate of interest most recently
announced by Norwest Bank Minnesota, National Association, or any successor thereto,
as its &#147;Reference Rate,&#148; irrespective of whether such announced rate is the
best rate available from such financial institution.&#160; All changes in the rate of interest due hereunder are effective
automatically on the same day that said bank&#146;s Reference Rate change takes
effect.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All payments
received hereon shall be applied first in payment of accrued interest and the
balance thereof shall be applied in reduction of principal.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This Note is
the Current Note referred to in that certain Credit Agreement between the
undersigned and Lender dated as of the date hereof (the &#147;Credit Agreement&#148;) and
is secured by, among other things, a Security Agreement dated the date hereof,
from the undersigned as Debtor to the Lender as Secured Party (the &#147;Security
Agreement&#148;), and Stock Security Agreements (as defined in the Credit Agreement)
and is subject to acceleration as provided therein.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All of the
agreements, conditions, covenants, provisions and stipulations contained in the
Credit Agreement, the Security Agreement and the Stock Security Agreements are
hereby made a part of this Note to the same extent and with the same force and
effect as if they were fully set forth herein.&#160;
Time is of the essence hereof.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
undersigned agree to pay any reasonable attorneys&#146; fees incurred by the Lender
in preparation, administration, collection or enforcement of this Note, the
Credit Agreement, the Security Agreements and the Stock Security Agreements,
whether suit be brought or not, and payment thereof may be enforced and recovered
in whole or in part at any time by one or more of the remedies provided in this
Note, the Credit Agreement, the Security Agreements and the Stock Security
Agreement.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This Note
shall also become automatically due and payable (including unpaid interest
accrued hereon) without notice or demand if an Event of Default occurs under
the Credit Agreement.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
undersigned and any guarantor, surety or endorser hereby waive demand,
presentment, notice of nonpayment, protest, notice of protest, notice of
dishonor and diligence in collection and agree that without any notice</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1</font></p>


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<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the Lender hereof may take
and/or release additional security for this Note or the Lender hereof may, from
time to time, release any part or parts of the property and interests subject
to the Security Agreement or the Stock Security Agreements with or without
consideration and that in any such case the undersigned and any guarantor,
surety or endorser shall remain liable to pay the unpaid balance of the
indebtedness evidenced hereby as so additionally secured, extended, renewed or
modified and notwithstanding any such release.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The remedies
of the Lender, as provided herein and in the Credit Agreement, the Security
Agreement and the Stock Security Agreements, shall be cumulative and concurrent
and may be pursued singly, successively or together, at the sole discretion of
the Lender, and may be exercised as often as occasion therefor shall
occur.&#160; The Lender may, in its
discretion, waive any default hereunder and its consequences and rescind any
declaration of acceleration of principal; provided, however, that no action or
inaction by the Lender shall be deemed a waiver of any of the Lender&#146;s rights
or remedies unless the Lender specifically agrees in writing that such action
or inaction shall constitute a waiver of its rights or remedies.&#160; Any waiver shall only apply to the
particular instance for which it was agreed.&#160;
No delay in exercising and no failure in exercising any right or remedy
hereunder or afforded by law shall be a waiver of or preclude the exercise of
any right or remedy hereunder or provided by law, whether on such occasion or
any future occasion, nor shall such delay be construed as a waiver of any
default or acquiescence therein.&#160; The
exercise or the beginning of the exercise of one right or remedy shall not be
deemed a waiver of the right to exercise at the same time or thereafter any
other right or remedy.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This Note may
be prepaid in whole or in part at any time without fee or penalty.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">It is intended
that this Note is made with reference to and shall be governed by and construed
in accordance with the laws of the State of Minnesota, except insofar as the
Lender may rely on the laws of the United States to justify the interest rate
charged hereunder.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All agreements
between the Maker and the Lender are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of acceleration of maturity
of the indebtedness evidenced hereby or otherwise, shall the amount paid or
agreed to be paid to the Lender for the use, forbearance, loaning or detention
of the indebtedness evidenced hereby exceed the maximum rate permissible under
applicable law.&#160; If under any circumstances
whatsoever, performance of any obligation herein or in any security instrument
at any time given as security for the performance of such obligation shall
involve exceeding the limit of validity prescribed by law, then the obligation
to be performed shall automatically be reduced to the limit of such validity
and if for any circumstances the Lender should ever receive as interest an
amount which would exceed the highest lawful rate.&#160; Such amount which would be in excess of interest at the highest
lawful rate shall be applied to the reduction of the principal balance
evidenced hereby and not to the payment of interest.&#160; This provision shall control every other provision of all
agreements between maker and Lender and shall also be binding upon and
available to any subsequent holder or endorsee of this Note.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>


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<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">IN WITNESS
WHEREOF, the undersigned has executed this Note on the date and year first
above written.</font></p>

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  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
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  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">K-TEL
  INTERNATIONAL, INC.</font></p>
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  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
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  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
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  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
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  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
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  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By</font></p>
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  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Lawrence
  Kieves</font></p>
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  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
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  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Its </font></p>
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  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PRESIDENT</font></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>


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