Document:

EXHIBIT 10.7

FIRST AMENDMENT TO
CREDIT AGREEMENT

          THIS
AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of June 30,
2005 by and between RIMAGE CORPORATION, a Minnesota corporation (“Borrower”),
and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).

RECITALS

          WHEREAS,
Borrower is currently indebted to Bank pursuant to the terms and conditions of
that certain Credit Agreement between Borrower and Bank dated as of March 29,
2004 as amended from time to time (“Credit Agreement”).

          WHEREAS,
Bank and Borrower have agreed to certain changes in the terms and conditions
set forth in the Credit Agreement and have agreed to amend the Credit Agreement
to reflect said changes.

          NOW,
THEREFORE, for valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree that the Credit Agreement shall
be amended as follows:

          1.     Section
1.1. (a) is hereby amended by deleting “June 30, 2005” as the last day on which
Bank will make advances under the Line of Credit and by substituting for said
date “July 1, 2006,” with such change to be effective upon the execution and
delivery to Bank of a promissory note dated as of June 30, 2005 (which
promissory note shall replace and be deemed the Line of Credit Note defined in
and made pursuant to the Credit Agreement) and all other contracts, instruments
and documents required by Bank to evidence such change.

          2.     Section
1.2. (a) is hereby deleted in its entirety, and the following substituted
therefor:

          “(a)     Foreign
Exchange Facility.  Subject to the
terms and conditions of this Agreement, Bank hereby agrees to make available to
Borrower a facility (the “Foreign Exchange Facility”) under which Bank, from
time to time up to and including June 30, 2006, will enter into foreign
exchange contracts for the account of Borrower for the purchase and/or sale by
Borrower of currencies that have been agreed to in advance by Bank; provided
however, that the maximum amount of all outstanding foreign exchange contracts
shall not at any time exceed an aggregate of Five Million United States Dollars
(US$5,000,000.00).  No foreign exchange
contract shall be executed for a term in excess of twelve (12) months.  Borrower shall have a “Delivery
Limit” under
the Foreign Exchange Facility not to exceed at any time the aggregate principal
amount of One Million United States Dollars (US$1,000,000.00), which Delivery
Limit reflects the maximum principal amount of Borrower’s foreign exchange
contracts which may mature during any two (2) day period.  All foreign exchange transactions shall be
subject to the additional terms of a Foreign Exchange Agreement dated as of
March 3, 

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2004 (“Foreign Exchange Agreement”), all terms of
which are incorporated herein by this reference.”

          3.     Section
1.3.  (b) is hereby deleted in its
entirety, and the following substituted therefor:

          “(b)     Computation
and Payment.  Interest shall be
computed on the basis of a 365-day year, actual days elapsed.  Interest shall be payable at the times and
place set forth in each promissory note or other instrument or document
required hereby.”

          4.     Except
as specifically provided herein, all terms and conditions of the Credit
Agreement remain in full force and effect, without waiver or modification.  All terms defined in the Credit
Agreement
shall have the same meaning when used in this Amendment.  This Amendment and the Credit Agreement
shall be read together, as one document.

          5.     Borrower
hereby remakes all representations and warranties contained in the Credit
Agreement and reaffirms all covenants set forth therein.  Borrower further certifies that as of the
date of this Amendment there exists no Event of Default as defined in the
Credit Agreement, nor any condition, act or event which with the giving of
notice or the passage of time or both would constitute any such Event of
Default.

          IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the day and year first written above.

	
 

	
 

	
 

	
 

	
 

	
 

	
RIMAGE
  CORPORATION

	
 

	
WELLS FARGO
  BANK, NATIONAL ASSOCIATION

	
 

	
 

	
 

	
 

	
By:

	
/s/  Bernard P. Aldrich

	
 

	
By:

	
/s/  Cindy Goplen

	
 

	

	
 

	
 

	

	
 

	
 

	
Bernard P.
  Aldrich, President and 

  Chief Executive Officer

	
 

	
 

	
Cindy
  Goplen, Vice President

	
 

	
 

	
 

	
 

	
By:

	
/s/  Robert M. Wolf

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
Robert M.
  Wolf, Secretary and Chief Financial Officer

	
 

	
 

	
 

2Exhibit 10.8

	
   

  	
   

  
	
  WELLS FARGO

  	
  REVOLVING
  LINE OF CREDIT NOTE

  
	
  

  	
  

  
	
   

  	
   

  
	
  $10,000,000.00

  	
  Bloomington,
  Minnesota

  
	
   

  	
  June
  30, 2005

  

FOR VALUE RECEIVED, the undersigned Rimage
Corporation (“Borrower”) promises to
pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its
office at Bloomington RCBO, 7900 Xerxes Ave
S, Bloomington, MN 55431, or at such other place as the holder
hereof may designate, in lawful money of the United States of America and in
immediately available funds, the principal sum of $10,000,000.00, or so much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the
date of its disbursement as set forth herein.

1.       DEFINITIONS:

          As
used herein, the following terms shall have the meanings set forth after each,
and any other term defined in this Note shall have the meaning set forth at the
place defined:

1.1     “Business Day” means
any day except a Saturday, Sunday or any other day on which commercial banks in
Minnesota are authorized or required by law to close.

1.2     “Fixed Rate Term”
means a period commencing on a Business Day and continuing for 1 month, as designated by Borrower, during
which all or a portion of the outstanding principal balance of this Note bears
interest determined in relation to LIBOR; provided however, that no Fixed Rate
Term may be selected for a principal amount less than $100,000.00; and provided further, that no
Fixed Rate Term shall extend beyond the scheduled maturity date hereof.  If any Fixed Rate Term would end on a day
which is not a Business Day, then such Fixed Rate Term shall be extended to the
next succeeding Business Day.

1.3     “LIBOR” means the
rate per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%)
determined by dividing Base LIBOR by a percentage equal to 100% less any LIBOR
Reserve Percentage.

	
   

  	
   

  
	
   

  	
  (a)     “Base LIBOR” means
  the rate per annum for United States dollar deposits quoted by Bank as the
  Inter-Bank Market Offered Rate, with the understanding that such rate is
  quoted by Bank for the purpose of calculating effective rates of interest for
  loans making reference thereto, on the first day of a Fixed Rate Term for
  delivery of funds on said date for a period of time approximately equal to
  the number of days in such Fixed Rate Term and in an amount approximately
  equal to the principal amount to which such Fixed Rate Term applies.  Borrower understands and agrees that Bank
  may base its quotation of the Inter-Bank Market Offered Rate upon such offers
  or other market indicators of the Inter-Bank Market as Bank in its discretion
  deems appropriate including, but not limited to, the rate offered for U.S.
  dollar deposits on the London Inter-Bank Market

  

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  (b)     “LIBOR Reserve
  Percentage” means the reserve percentage prescribed by the Board of Governors
  of the Federal Reserve System (or any successor) for “Eurocurrency
  Liabilities” (as defined in Regulation D of the Federal Reserve Board, as
  amended), adjusted by Bank for expected changes in such reserve percentage
  during the applicable Fixed Rate Term.

  

1.4     “Prime Rate” means at
any time the rate of interest most recently announced within Bank at its
principal office as its Prime Rate, with the understanding that the Prime Rate
is one of Bank’s base rates and serves as the basis upon which effective rates
of interest are calculated for those loans making reference thereto, and is
evidenced by the recording thereof after its announcement in such internal
publication or publications as Bank may designate.

2.       INTEREST:

2.1     Interest. The
outstanding principal balance of this Note shall bear interest (computed on the
basis of a 365-day year, actual
days elapsed) either (a) at a fluctuating rate per annum equal to the Prime Rate in effect from time
to time, or (b) at a fixed rate per annum determined by Bank to be 1.50000% above LIBOR in effect on the first
day of the applicable Fixed Rate Term.
When interest is determined in relation to the Prime Rate, each change
in the rate of interest hereunder shall become effective on the date each Prime
Rate change is announced within Bank.
With respect to each LIBOR selection option selected hereunder, Bank is
hereby authorized to note the date, principal amount, interest rate and Fixed
Rate Term applicable thereto and any payments made thereon on Bank’s books and
records (either manually or by electronic entry) and/or on any schedule
attached to this Note, which notations shall be prima facie evidence of the
accuracy of the information noted.

2.2     Selection of
Interest Rate Options. At any time any portion of this Note bears interest
determined in relation to LIBOR, it may be continued by Borrower at the end of
the Fixed Rate Term applicable thereto so that all or a portion thereof bears
interest determined in relation to the Prime Rate or to LIBOR for a new Fixed
Rate Term designated by Borrower.  At
any time any portion of this Note bears interest determined in relation to the
Prime Rate, Borrower may convert all or a portion thereof so that it bears
interest determined in relation to LIBOR for a Fixed Rate Term designated by
Borrower At such time as Borrower requests an advance hereunder or wishes to
select a LIBOR option for all or a portion of the outstanding principal balance
hereof, and at the end of each Fixed Rate Term, Borrower shall give Bank notice
specifying: (a) the interest rate option selected by Borrower; (b) the
principal amount subject thereto; and (c) for each LIBOR selection, the length
of the applicable Fixed Rate Term.  Any
such notice may be given by telephone (or such other electronic method as Bank
may permit) so long as, with respect to each LIBOR selection, (i) if requested
by Bank, Borrower provides to Bank written confirmation thereof not later than
3 Business Days after such notice is given, and (ii) such notice is given to
Bank prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at a later
time during any Business Day if Bank, at it’s sole option but without
obligation to do so, accepts Borrower’s notice and quotes a fixed rate to
Borrower.  If Borrower does not
immediately accept a fixed rate when quoted by Bank, the quoted rate shall
expire and any subsequent LIBOR request from Borrower shall be subject to a
redetermination by Bank of the applicable fixed rate.  If no specific designation of interest is made at the time any advance
is requested hereunder or at the end of any Fixed Rate Term, Borrower shall be
deemed to have 

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made a Prime Rate interest selection for such advance
or the principal amount to which such Fixed Rate Term applied.

2.3     Taxes and
Regulatory Costs. Borrower shall pay to Bank immediately upon demand, in
addition to any other amounts due or to become due hereunder, any and all (a)
withholdings, interest equalization taxes, stamp taxes or other taxes (except
income and franchise taxes) imposed by any domestic or foreign governmental
authority and related in any manner to LIBOR, and (b) future, supplemental,
emergency or other changes in the LIBOR Reserve Percentage, assessment rates
imposed by the Federal Deposit Insurance Corporation, or similar requirements
or costs imposed by any domestic or foreign governmental authority or resulting
from compliance by Bank with any request or directive (whether or not having
the force of law) from any central bank or other governmental authority and
related in any manner to LIBOR to the extent they are not included in the
calculation of LIBOR.  In determining
which of the foregoing are [note:  this verb should be “is”]i attributable
to any LIBOR option available to Borrower hereunder, any reasonable allocation
made by Bank among its operations shall be conclusive and binding upon
Borrower.

2.4     Payment of
Interest. Interest accrued on this Note shall be payable on the last day of each month, commencing July 31,
2005.

2.5     Default Interest.  From and after the
maturity date of this
Note, or such earlier date as all principal owing hereunder becomes due and
payable by acceleration or otherwise, the outstanding principal balance of this
Note shall bear interest until paid in full at an increased rate per annum
(computed on the basis of a 365-day
year, actual days elapsed) equal to 4% above the rate of interest from time to
time applicable to this Note

3.       BORROWING
AND REPAYMENT:

3.1     Borrowing and
Repayment. Borrower may from time to time during the term of this Note
borrow, partially or wholly repay its outstanding borrowings, and reborrow,
subject to all of the limitations, terms and conditions of this Note and of the
Credit Agreement between Borrower and Bank defined below; provided however,
that the total outstanding borrowings under this Note shall not at any time
exceed the principal amount stated above.
The unpaid principal balance of this obligation at any time shall be the
total amounts advanced hereunder by the holder hereof less the amount of
principal payments made hereon by or for any Borrower, which balance may be
endorsed hereon from time to time by the holder.  The outstanding principal balance of this Note shall be due and
payable in full on July 1, 2006.

3.2     Advances. Advances
hereunder, to the total amount of the principal sum available hereunder, may be
made by the holder at the oral or written request of (a) Robert M. Wolf or Bernard P.  Aldrich, any one acting alone, who are
authorized to
request advances and direct the disposition of any advances until written
notice of the revocation of such authority is received by the holder at the
office designated above, or (b) any person, with respect to advances deposited
to the credit of any deposit account of any Borrower, which advances, when so
deposited, shall be conclusively presumed to have been made to or for the
benefit of each Borrower regardless of the fact that persons other than those
authorized to request advances may have authority to draw against such
account.  The holder shall have no
obligation to determine whether any person requesting an advance is or has been
authorized by any Borrower.

3

3.3     Application of
Payments.  Each payment made on this
Note shall be credited first, to any interest then due and second, to the
outstanding principal balance hereof All payments credited to principal shall
be applied first, to the outstanding principal balance of this Note which bears
interest determined in relation to the Prime Rate, if any, and second, to the
outstanding principal balance of this Note which bears interest determined in
relation to LIBOR, with such payments applied to the oldest Fixed Rate Term
first.

4.       PREPAYMENT:

4.1     Prime Rate. Borrower
may prepay principal on any portion of this Note which bears interest
determined in relation to the Prime Rate at any time, in any amount and without
penalty.

4.2     LIBOR. Borrower
may prepay principal on any portion of this Note which bears interest
determined in relation to LIBOR at any time and in the minimum amount of $100,000.00, provided however, that if the
outstanding principal balance of such portion of this Note is less than said
amount, the minimum prepayment amount shall be the entire outstanding principal
balance thereof.  In consideration of
Bank providing this prepayment option to Borrower, or if any such portion of
this Note shall become due and payable at any time prior to the last day of the
Fixed Rate Term applicable thereto by acceleration or otherwise, Borrower shall
pay to Bank immediately upon demand a fee which is the sum of the discounted
monthly differences for each month from the month of prepayment through the
month in which such Fixed Rate Term matures, calculated as follows for each
such month:

	
   

  	
   

  
	
   

  	
  (a)     Determine the
  amount of interest which would have accrued each month on the amount prepaid
  at the interest rate applicable to such amount had it remained outstanding
  until the last day of the Fixed Rate Term applicable thereto

  
	
   

  	
   

  
	
   

  	
  (b)     Subtract from the
  amount determined in (a) above the amount of interest which would have
  accrued for the same month on the amount prepaid for the remaining term of
  such Fixed Rate Term at LIBOR in effect on the date of prepayment for new
  loans made for such term and in a principal amount equal to the amount
  prepaid.

  
	
   

  	
   

  
	
   

  	
  (c)     If the result
  obtained in (b) for any month is greater than zero, discount that difference
  by LIBOR used in (b) above.

  

Each Borrower acknowledges that prepayment of such
amount may result in Bank incurring additional costs, expenses and/or
liabilities, and that it is difficult to ascertain the full extent of such
costs, expenses and/or liabilities.
Each Borrower, therefore, agrees to pay the above-described prepayment
fee and agrees that said amount represents a reasonable estimate of the
prepayment costs, expenses and/or liabilities of Bank.  If Borrower fails to pay any prepayment fee
when due, the amount of such prepayment fee shall thereafter bear interest
until paid at a rate per annum 2.000% above
the Prime Rate in effect from time to time (computed on the basis of a 365-day year, actual days elapsed).  Each change in the
rate of interest on any
such past due prepayment fee shall become effective on the date each Prime Rate
change is announced within Bank.

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5.       EVENTS
OF DEFAULT:

This Note is made pursuant to and is subject to the
terms and conditions of that certain Credit Agreement between Borrower and Bank
dated as of March 29, 2004, as
amended from time to time (the “Credit Agreement”).  Any default in the payment or performance of any obligation under
this Note, or any defined event of default under the Credit Agreement, shall
constitute an “Event of Default” under this Note.

6.       MISCELLANEOUS:

6.1     Remedies. Upon
the occurrence of any Event of Default, the holder of this Note, at the holder’s
option, may declare all sums of principal and interest outstanding hereunder to
be immediately due and payable without presentment, demand, notice of
nonperformance, notice of protest, protest or notice of dishonor, all of which
are expressly waived by each Borrower, and the obligation, if any, of the
holder to extend any further credit hereunder shall immediately cease and
terminate.  Each Borrower shall pay to the
holder immediately upon demand the full amount of all payments, advances,
charges, costs and expenses, including reasonable attorneys’ fees (to include
outside counsel fees and all allocated costs of the holder’s in-house counsel),
expended or incurred by the holder in connection with the enforcement of the
holder’s rights and/or the collection of any amounts which become due to the
holder under this Note, and the prosecution or defense of any action in any way
related to this Note, including without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity.

6.2     Obligations Joint
and Several. Should more than one person or entity sign this Note as a
Borrower, the obligations of each such Borrower shall be joint and several.

6.3     Governing Law.
This Note shall be governed by and construed in accordance with the laws of the
State of Minnesota.

IN WITNESS WHEREOF, the undersigned has executed this
Note as of the date first written above.

	
   

  	
   

  	
   

  
	
  RIMAGE CORPORATION

  
	
   

  	
   

  
	
  By:

  	
  /s/ Bernard P. Aldrich

  
	
   

  	
  

  	
   

  
	
   

  	
  Bernard P. Aldrich, President and Chief 

  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Robert M. Wolf

  
	
   

  	
  

  	
   

  
	
   

  	
  Robert M. Wolf, Secretary and Chief 

  Financial Officer

  

5

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