EXHIBIT 10.41


                        SEPARATION AGREEMENT AND RELEASE


         THIS AGREEMENT, is made and entered into as of February 19, 1996,
between MICKEY ELFENBEIN ("Elfenbein") and K-TEL INTERNATIONAL, INC., a
Minnesota corporation (the "Company").

                              W I T N E S S E T H:

         WHEREAS, Elfenbein is employed by the Company as its President and
Secretary and has served as a director of the Company and an officer and
director of its subsidiaries and affiliates;

         WHEREAS, the purpose of this Agreement is to set forth the terms and
conditions under which Elfenbein and the Company will terminate their employment
relationship; and

         WHEREAS, Elfenbein and K-5 Leisure Products, Inc. ("K-5") have entered
into the stock transfer and loan repayment agreement dated the date hereof (the
"Simitar Agreement") pursuant to which Elfenbein will acquire K-5 shares in
Simitar Entertainment, Inc.

         NOW, THEREFORE, in consideration of the covenants and promises set
forth below, the adequacy of which the parties acknowledge, the parties agree as
follows:

         1. Resignation. The Company has requested that Elfenbein resign as an
officer and director of the Company and its subsidiaries. Elfenbein hereby
acknowledges and confirms his resignation as an employee and officer of the
Company and as a director of the Company and an officer and director of its
subsidiaries and affiliates effective March 1, 1996; provided, however that from
the date hereof through March 1, 1996 Elfenbein shall remain on the payroll of
the Company as an employee but shall be on paid leave of absence. Elfenbein will
provide the Company with a letter of resignation in the form attached hereto as
Exhibit A on the date he signs this Agreement. The Company will maintain
Elfenbein's letter of resignation with its official records, which will state
that Elfenbein voluntarily resigned his employment and other positions with the
Company and its subsidiaries and affiliates.

         2. Payments. The Company has made or agrees to transfer the property
described below and make the following payments, less regular payroll deductions
and subject to applicable federal and state tax and FICA and Medicare
withholding, to Elfenbein:

                  (a) Final Payroll. $10,513.48 as the final payroll for the
         period February 16, 1996 through March 1, 1996.


                  (b) Additional Consideration.

                           (i) The Company will pay Elfenbein $45,000 (without
                  any federal or state income tax withholding) upon expiration
                  of the period described in paragraph 10 below as full and
                  complete severance compensation (including all amounts due for
                  accrued vacation pay, sick pay or other severance or
                  compensation benefits) and as a consideration for the
                  undertakings of Elfenbein herein contained.

                           (ii) Elfenbein may receive up to an additional
                  $100,000 (which amount shall be escrowed to assure performance
                  of the Company's obligations hereunder) if he disposes of
                  350,000 of his shares of the Company pursuant to a Stock
                  Transfer and Loan Repayment Agreement of even date herewith by
                  and between Elfenbein and K-5 Leisure Products, Inc. on the
                  following basis:

                          If Shares                             Additional
                          ---------                             ----------
                       Disposed Of By                         Amount Received
                       --------------                         ---------------

                       April 30, 1996                            $100,000

                                or

                       after April 30, 1996
                       and on or before May 31, 1996             $ 65,000

                                or

                       after May 31, 1996
                       and on or before July 1, 1996             $ 35,000

                                or

                       after July 1, 1996                              -0-


                           (iii) That certain equipment described on Exhibit B
                  hereto (the "Retained Equipment").

If Elfenbein rescinds this Agreement pursuant to paragraph 10 below, then this
Agreement shall be null and void, neither party shall have any obligations
hereunder and the Company will not be obligated to make the additional payments
or to provide the consideration specified in paragraph 2(b) above.

         3. Insurance. Elfenbein has the right at his sole expense to continue
his health and life insurance under the C.O.B.R.A. laws upon his termination.

         4. Benefits. Elfenbein is a participant in various employee benefit
plans sponsored by the Company as listed on Exhibit C. The payment of benefits,
including the amounts and the timing thereof, will be governed by the terms of
the employee benefit plans.

         5. Full Compensation; Termination of Options and Consulting Agreement.
The payments that will be made to Elfenbein or for his benefit pursuant to this
Agreement will compensate him for and extinguish any and all of his claims
arising out of his employment with the Company or the termination of his
employment with the Company, including but not limited to his claims for
attorney's fees and costs, and all of his claims for any type of legal or
equitable relief as further set forth in paragraph 13 hereof. All options
granted by the Company to Elfenbein to purchase shares of the Company's common
stock shall terminate and expire as of the date hereof. Elfenbein also hereby
confirms that the consulting agreement dated January 1, 1986 between the Company
and Elex Resources, Inc., a company owned by Elfenbein, has been terminated and
no amounts are owing thereunder.

         6. Records, Documents and Property. Prior to his execution of this
Agreement, Elfenbein will return to the Company (a) all its records,
correspondence, computer tapes and disks, and documents, and (b) all property of
the Company, including corporate credit cards and keys, except that Elfenbein
may retain for his personal use the following property ("Excluded Property"):
(i) sample products of the Company or its subsidiaries currently in Elfenbein's
possession and which has been and will be used solely for personal enjoyment or
use, (ii) any public information concerning the Company, and (iii) Elfenbein's
personal correspondence file currently in his possession at his residence,
provided that such files shall not contain any contracts or other material
information which is confidential or proprietary to the Company or its
subsidiaries. Elfenbein hereby represents that he has returned to the Company
all of its property in his possession or under his control, including, without
limitation, keys, badges, computer sheets, price sheets, reports, other
documents and copies of same, except for the Excluded Property and the Retained
Equipment. Elfenbein further represents that he has no such property in his
possession or under his control, except for the Excluded Property and the
Retained Equipment. Elfenbein understands that these representations are
material, and the Company is relying on these representations in entering into
this Agreement.

         7. Proprietary Information and Relationships.

                  (a) Elfenbein reaffirms his continuing obligation to and
         agrees not take for his own use, or disclose to others, trade secrets
         or confidential information which he received as an employee, executive
         officer or director of the Company or any of its subsidiaries.
         Elfenbein further agrees that he will not disparage the Company, any of
         its subsidiaries or affiliates and their respective officers,
         directors, employees, shareholders, suppliers or customers and will not
         do anything to harm the Company or any of its subsidiaries or
         affiliates or their respective businesses or to interfere with their
         respective relations with their officers, directors, employees,
         shareholders, suppliers or customers, provided that competition with
         the Company or its subsidiaries or affiliates shall not be deemed to be
         any harm or interference so long as Elfenbein complies with all of the
         other provisions of this Agreement. Elfenbein agrees that he will not
         divulge to any other person, firm or corporation, or in any way use for
         his own benefit, any trade secrets or confidential information of the
         Company or its subsidiaries obtained during the course of his
         employment with the Company.

                  (b) The Company agrees it will not disparage Elfenbein,
         Simitar Entertainment, Inc. ("SEI") or its officers, directors,
         employees, shareholders, suppliers or customers and will not do
         anything to harm Elfenbein or SEI or their respective businesses or to
         interfere with their respective relations with their officers,
         directors, employees, shareholders, suppliers or customers, provided
         that competition with Elfenbein or Simitar shall not be deemed to be
         any harm or interference so long as the Company complies with it
         obligations under paragraph 8(b) below.

                  (c) By executing this Agreement below, Philip Kives ("Kives")
         agrees he will not disparage Elfenbein, SEI or its officers, directors,
         employees, shareholders, suppliers or customers and will not do
         anything to harm Elfenbein or SEI or their respective businesses or to
         interfere with their respective relations with their officers,
         directors, employees, shareholders, suppliers or customers, provided
         that competition with Elfenbein or Simitar shall not be deemed to be
         any harm or interference so long as Kives complies with it obligations
         under paragraph 8(b) below.

         8. Non-Solicitation/Non-Hire of Employees.

                  (a) Elfenbein agrees that for a period of twelve months from
         the date of this Agreement he will not, either directly or indirectly,
         on his own behalf or in the service or on behalf of others solicit,
         divert or hire, or in any manner attempt to solicit, divert or hire any
         full-time employee of the Company or any subsidiary or affiliate, and
         whether or not such employment was pursuant to a written or oral
         contract of employment and whether or not such employment was for a
         determined period or was at will except for those employees listed on
         Exhibit D; provided that, in the event Elfenbein desires to employ any
         such employee of the Company or its subsidiaries, he will contact the
         Company's designated representative (who shall be Philip Kives unless
         otherwise notified by the Company) and such representative will give
         Elfenbein permission to make an employment offer to such employee
         unless the departure of such employee could cause a material hardship
         to the Company or any of its subsidiaries.

                  (b) The Company agrees that for a period of twelve months from
         the date of this Agreement it will not, either directly or indirectly,
         on its own behalf or in the service or on behalf of others solicit,
         divert or hire, or in any manner attempt to solicit, divert or hire any
         full-time employee of Elfenbein or SEI, and whether or not such
         employment was pursuant to a written or oral contract of employment and
         whether or not such employment was for a determined period or was at
         will.

                  (c) By executing this Agreement below, Kives agrees that for a
         period of twelve months from the date of this Agreement he will not,
         either directly or indirectly, on his own behalf or in the service or
         on behalf of others solicit, divert or hire, or in any manner attempt
         to solicit, divert or hire any full-time employee of Elfenbein or SEI,
         and whether or not such employment was pursuant to a written or oral
         contract of employment and whether or not such employment was for a
         determined period or was at will.

                  (d) In the event the Simitar Agreement is terminated in
         accordance with paragraph 9 thereof without the transaction
         contemplated thereby having been closed (the "Simitar Agreement
         Termination"), then the obligations of the parties hereto and Kives
         under this paragraph 8 shall terminate and expire upon the Simitar
         Agreement Termination.

         9. Time to Consider this Agreement. Elfenbein may have twenty-one (21)
days from the day that he receives this Agreement, not counting that day upon
which he receives it, to consider whether he wishes to sign this Agreement.
Elfenbein acknowledges that if he signs this Agreement before the end of the
21-day period, it will be his personal voluntary decision to do so.

         10. Rescission. Elfenbein may rescind this Agreement within fifteen
(15) days after he signs it, not counting the day upon which he signs it. This
Agreement shall not become effective or enforceable until after the 15-day
rescission period has expired. If Elfenbein rescinds this Agreement, the Company
shall have no obligations under this Agreement.

         11. Procedures for Acceptance or Revocation. To accept the terms of
this Agreement, Elfenbein must deliver this Agreement, after it has been signed,
to the Company by hand or by mail within the 21-day period that he has to
consider this Agreement. To rescind acceptance, Elfenbein must deliver to the
Company a written, signed statement of rescission within the 15-day rescission
period. All deliveries shall be made to the Company at the following address:

                           Mr. Philip Kives
                           K-5 Leisure Products, Inc.
                           220 Saulteaux Crescent
                           Winnipeg, Manitoba
                           Canada R3J 3W2

If Elfenbein chooses to deliver acceptance or notice of rescission by mail, it
must be (a) postmarked within the period stated above, (b) properly addressed to
the Company at the address stated in the preceding sentence, and (c) sent by
certified mail, return receipt requested.

         12. Advice to Consult with an Attorney. Elfenbein understands and
acknowledges that he is being advised by the Company to consult with an attorney
prior to signing this Agreement. Elfenbein represents that he has consulted with
an attorney to the extent that he thinks appropriate. Elfenbein has not relied
on any explanations, statements or premises made by the Company or its agents or
attorneys other than as set forth in this Agreement.

         13. General Release by Elfenbein and the Company.

                  (a) Definitions. All the words in this paragraph have their
         plain meaning in ordinary English. Specific terms used in this
         paragraph have the following meanings:

                           (i) "Elfenbein" means Mickey Elfenbein and includes
                  Elfenbein and anyone who has or obtains any legal rights or
                  claims through him.

                           (ii) "Company" means K-tel International, Inc., a
                  Minnesota corporation and its subsidiaries and affiliates and
                  any organization or entity related to K-tel International,
                  Inc. in the present or past, and past or present officers,
                  directors, employees, shareholders, committees, agents,
                  attorneys, insurers, indemnitors, successors or assigns of,
                  any person who acted on behalf of, or an instruction from,
                  K-tel International, Inc. or any related organization or
                  entity.

                  (b) Elfenbein's Claims. The claims Elfenbein is releasing in
         paragraph 13(c) below include all of his rights to any relief of any
         kind from the Company, including but not limited to:

                           (i) all claims he has now, whether or not he now
                  knows about the claims;

                           (ii) all claims for attorney's fees;

                           (iii) all claims against the Company for alleged
                  discrimination against him under any federal, state, or local
                  law, including, for example, the federal Age Discrimination in
                  Employment Act ("ADEA") and the Minnesota Human Rights Act
                  ("MHRA");

                           (iv) all claims arising out of Elfenbein's
                  employment, the Company's request for his resignation, or
                  separation from employment with the Company, including, but
                  not limited to, any alleged breach of contract, wrongful
                  termination, defamation or intentional infliction of emotional
                  distress;

                           (v) all claims for any other alleged unlawful
                  employment practices arising out of or relating to Elfenbein's
                  employment or separation from employment;

                           (vi) all claims for any other form of remuneration;
                  and

                           (vii) all claims against all parties related to that
                  certain transaction described in an Agreement of Purchase and
                  Sale dated June 28, 1995, as amended.

                  (c) Elfenbein's Release. The money and benefits Elfenbein will
         receive as set forth in this Agreement are full and fair payment for
         the release of all his claims. The Company does not owe him anything in
         addition to what he will receive under this Agreement; provided,
         however, that Elfenbein shall continue to be entitled to any applicable
         indemnification under the Company's current By-laws or Minnesota law as
         an officer and director of the Company and its subsidiaries and
         affiliates.

                  (d) Payment by Related Companies. Elfenbein shall cause to be
         paid prior to payment to him of the amount due pursuant to paragraph
         2(b)(i) the net amount of $8,019.70 owing by Excel International, Inc.
         to the Company as of the date hereof.

                  (e) Release by Company. The Company hereby releases Elfenbein
         from any claims or liabilities to the Company arising prior to the date
         hereof, except for (i) Elfenbein's obligations under this Agreement and
         (ii) matters where material information concerning the matter has been
         concealed by Elfenbein from the Company.

         14. Statements. If either party is asked about the circumstances of
Elfenbein's departure, the party shall respond that a mutually satisfactory
agreement was reached.

         15. Claims Involving the Company; Reasonable Assistance. In
consideration of the payments provided above, Elfenbein agrees to make himself
reasonably available to the Company (consistent with any obligations Elfenbein
has or may have to any future employer or business in which he engages) for
consultation regarding the Company's past operations, record catalogue and
licensing and any pending or future lawsuits involving the Company where
Elfenbein has or may have knowledge of the underlying facts. Should the Company
require Elfenbein's assistance either (i) at any place outside the state of
Minnesota, (ii) for any extended period or (iii) after the earlier of the
Simitar Agreement Termination or December 31, 1996, Elfenbein will be reasonably
compensated, plus appropriate out of pocket expenses (including business class
airfare). The Company will advance Elfenbein the anticipated compensation and
out of pocket expenses prior to his providing the requested assistance and
Elfenbein will promptly present an expense statement to the Company upon
completion of the assistance and any balance due Elfenbein will be promptly paid
by the Company or any refund due the Company will be promptly paid by Elfenbein.
In addition, Elfenbein will not voluntarily aid, assist, or cooperate with any
actual or potential claimants or plaintiffs or their attorneys or agents in any
claims or lawsuits proposed to be asserted, pending or commenced on the date
hereof or in the future against the Company; provided, however, that nothing in
this Agreement will be construed to prevent Elfenbein from testifying at an
administrative hearing, a deposition, or in court in response to a lawful
subpoena in any litigation or proceeding involving the Company.

         16. Non-Admission. Nothing in this Agreement is intended to be, nor
will be deemed to be, an admission of liability by the Company that it has
violated any state or federal statute, local ordinance, or principal of common
law, or that it has engaged in any wrongdoing or that Elfenbein has any claim
against the Company.

         17. No Other Agreements. This Agreement and the employee benefit plans
in which Elfenbein is a participant as described on Exhibit C supersede all
prior oral and written agreements and communications between the parties.
Elfenbein agrees that any and all claims which he might have against the Company
are fully released and discharged by this Agreement and that the only claims
that he may hereafter assert against the Company will be derived only from an
alleged breach of the terms of this Agreement or of an employee benefit plan as
described on Exhibit C in which Elfenbein is a participant.

         18. Entire Agreement. This Agreement and the employee benefit plans as
described on Exhibit C in which Elfenbein is a participant constitute the entire
agreement between the parties with respect to the termination of Elfenbein's
employment relationship with the Company, and the parties agree that there were
no inducements or representations leading to the execution of this Agreement
except as stated in this Agreement.

         19. Invalidity. In case any one or more of the provisions of this
Agreement should be invalid, illegal, or unenforceable in any respect, the
validity, legality, and enforceability of the remaining provisions contained in
this Agreement will not in any way be affected or impaired thereby.

         20. Voluntary and Knowing Action. Elfenbein represents that he has read
and understands the terms of this Agreement and that he is voluntarily entering
into this Agreement to resolve his disputes against the Company.

         21. Future Dealings between the Parties. The parties acknowledge that
they may in the future have dealings with each other. Any such future dealings
will be determined by such written agreement as the parties may enter into after
this Agreement is signed and this Agreement will not apply to any such future
dealings.

         22. Governing Law. This Agreement will be construed and interpreted in
accordance with the laws of the State of Minnesota.

         23. Jurisdiction, Service of Process. Any suit, action or proceeding
between the parties with respect to this Agreement or any judgment entered by
any court in respect of any thereof may be brought in the courts of the State of
Minnesota or in the U.S. District Court for the District of Minnesota as a party
hereto may elect, and the other party hereby accepts the nonexclusive
jurisdiction of those courts for the purpose of any such suit, action or
proceeding. In addition, each party hereby irrevocably waives, to the fullest
extent permitted by law, any objection that he or it may now or hereafter have
to the laying of venue of any such suit, action or proceeding arising out of or
relating to this Agreement or any judgment entered by any court in respect of
any thereof brought in the State of Minnesota, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in the State
of Minnesota has been brought in an inconvenient forum.

         24. Binding Effect. This Agreement is binding upon and inures to the
benefit of the parties hereto and their respective heirs, successors or assigns.

         25. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.


         IN WITNESS WHEREOF, the respective parties hereto have executed this
Agreement on the day and year written below their respective signatures to this
Agreement.

                                      K-TEL INTERNATIONAL, INC.



                                      By  /S/ Philip Kives
                                          -------------------------------------
                                          Philip Kives, Chairman
                                          and Chief Executive Officer


                                      Dated:  March 1, 1996




                                          /S/ Mickey Elfenbein
                                      -----------------------------------------
                                      Mickey Elfenbein


                                      Dated:   March 15, 1996


         By executing this Agreement in the space below, Philip Kives agrees to
the provisions of paragraphs 7(c) and 8(c) of this Agreement as if he was a
party to this Agreement.



                                         /S/ Philip Kives
                                      -----------------------------------------
                                      Philip Kives


                                      Dated:  March 1, 1996



                                                                       Exhibit A


                                   RESIGNATION


         Effective March 1, 1996, the undersigned resigns as the President,
Secretary, as a member of its Board of Directors and as an officer of K-tel
International, Inc. and as an Officer and Director of its subsidiaries and
affiliates.


                                          /S/ Mickey Elfenbein
                                      -----------------------------------------
                                      Mickey Elfenbein




                                                                       Exhibit B

                               Retained Equipment
                               ------------------

1.       Compaq 575 and peripheral equipment

2.       HP Laser Jet 4

3.       Compaq Contura Aero and peripherals

4.       NEC P60M and peripherals

5.       Satellite dish



                                                                       Exhibit C

                             Employee Benefit Plans

         401(k) Plan
         (participation through date of termination,
         benefits as defined in the plan)



                                                                       Exhibit D

                            List of Certain Employees

         1.       Denise Bois
         2.       Barbara Elfenbein
         3.       Mark Elfenbein
         4.       Jonathan Finegold