**EXHIBIT10.20**

AMENDMENT NO. 2

TO

CREDIT AGREEMENTAND NOTE

This Amendment No.2 (this “Amendment”) to that certain Credit Agreement, dated September 27,1999, as amended by that certain Amendment, dated February 12, 2002 (as soamended, the “Original Agreement”) and to that certain Promissory Note, in theprincipal amount of $8,000,000, dated September 27,1999 (the “Note”), is made,effective the 20th day of July, 2005, by and between K-Tel International, Inc(the “Borrower”) and K-5 Leisure Products, Inc. (the “Lender”).

RECITALS

WHEREAS, theLender and the Borrower desire to amend the Original Agreement and the Note;

NOW, THEREFORE,for good and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, the Borrower and the Lender agree as follows:

1.             Defined Terms.

Defined terms usedin this Amendment and not otherwise defined herein shall have the meaningsascribed to them in the Original Agreement.

2.             Amendment of Original Agreement.

Section 1.10 ofthe Original Agreement is hereby amended by replacing “July 20, 2005” with “July20, 2008.”

3.             Amendment of Note.

The Note is herbyamended by extending the maturity date to July 20, 2008.

4.             Authorization.

The Borrowerhereby authorizes the Lender to file, electronically or otherwise, financingstatements under the Uniform Commercial Code in all jurisdictions in which suchfilings are appropriate or necessary to continue the security interest grantedpursuant to or in connection with the Original Agreement, including withoutlimitation the Security Agreement and the Stock Security Agreement.  The Borrower hereby confirms that theOriginal Agreement and the Note, each as amended hereby, are secured by theSecurity Agreement and the Stock Security Agreement.

4.             Borrower’s Warranties.

The Borrowerrepresents and warrants that (1) each representation, warranty and covenantmade by it in the Original Agreement is true and correct on the date hereof,with the same effect as if made on such date (other than as set forth onExhibit A hereto); and (2) as of the effective date of this Amendment, it isnot in default under the Original Agreement, nor has any event occurred which,with notice or lapse of time, would result in such a default, except for suchdefaults as have been waived by the Lender.

5.             Incorporation of Terms.

Except asspecifically set forth in this Amendment No. 2, all of the terms and conditionsof the Original Agreement and the Note, and all documents related thereto,shall remain in full force and effect.

6.             No Waiver, etc.

The Borroweracknowledges that no provision of this Amendment shall be construed to be awaiver by the Lender of any rights or remedies that the Lender may have due tothe occurrence of any default under the Agreement or the Note that may haveoccurred heretofore or which may occur hereafter.  The Borrower hereby represents and warrantsthat it has no defenses or rights of set-off against the Lender.

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7.             Confirmation of Guaranty.

Certain affiliatedcompanies of the Borrower (collectively, the “Guarantors”), are parties to thatcertain Guaranty, dated September 27, 1999. Each of the Guarantors hereby acknowledges and agrees that such Guarantyremains in full force and effect, notwithstanding this Amendment, the extensionof the term of the Original Agreement, any delay in executing this Amendment,or any other matter which would, but for this Confirmation, release a Guarantorfrom its obligations under the Guaranty.

IN WITNESSWHEREOF, this Amendment has been executed to be effective as of the day andyear first above written.
|   | K-TEL INTERNATIONAL, INC.   |
|--------|-----------------------------|
|   |                        |
|   | By                          | /s/ Philip Kives |   |
|   |                        |
|   | K-R LEISURE  PRODUCTS, INC. |
|   |                        |
|   | By                          | /s/ Philip Kives |   |

 
| Agreed to and Accepted for     |
|--------------------------------|
| Purposes of  Section 7:        |
|                           |
| DOMINION  ENTERTAINMENT, INC.  |
|                           |
| By                             | /s/ Philip Kives |   |   |
|                           | Its: President |   |   |
|                           |
|                           |
| K-TEL CONSUMER  PRODUCTS, INC. |
|                           |
| By                             | /s/ Philip Kives |   |   |
|                           | Its: President |   |   |
|                           |
| K-TEL TV, INC.                 |
|                           |
| By                             | /s/ Philip Kives |   |   |
|                           | Its: President |   |   |
|                           |
| K-TEL VIDEO,  INC.             |
|                           |
| By                             | /s/ Philip Kives |   |   |
|                           | Its: President |   |   |
|                           |
| K-TEL  ENTERTAINMENT, INC.     |
|                           |
| By                             | /s/ Philip Kives |   |   |
|                           | Its: President |   |   |
|                           |
| K-TEL ONLINE,  INC.            |
|                           |
| By                             | /s/ Philip Kives |   |   |
|                           | Its: President |   |   |
|                           |
| K-TEL  ENTERTAINMENT (UK) LTD. |
|                           |
| By                             | /s/ Philip Kives |   |   |
|                           | Its: President |   |   |

 

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| K-TEL ENTERTAINMENT (CAN)  INC. |
|---------------------------------|
|                            |
| By                              | /s/ Philip Kives |   |   |
|                            | Its: President |   |   |
| K-TEL DIRECT,  INC.             |
|                            |
| By                              | /s/ Philip Kives |   |   |
|                            | Its: President |   |   |

 

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