Exhibit 10.6
AMENDMENT TO ASSIGNMENT AND ASSUMPTION AGREEMENT
This Amendment dated as of March 8th, 2004, by and among Pyramid Media Group,
Inc., a Florida corporation ("PMG"), Xxxxx Xxxxxx, and Pyramid Records
International, Inc., a Florida corporation (the "Company"),
WHEREAS, PMG and the Company entered into an Assignment and Assumption Agreement
dated of even date herewith whereby PMG assigned over its right, title and
interest to a Distribution Agreement with Ark 21 records to the Company, and
WHEREAS, in accordance with that Agreement, the Company agreed to assume the
payment obligations on the Notes delineated on Exhibit A hereto (the "Xxxxxx
Notes"), and
WHEREAS, the Company has agreed to guaranty the payment Xxxxxx Notes subject to
the terms and conditions hereof,
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, the parties hereto
hereby agree as follows:
1. INCORPORATION OF RECITALS. The Recitals set forth above are hereby
incorporated into this Agreement.
2. AMENDMENT. Section 3 of the Assignment and Assumption Agreement shall be
amended as follows:
(a) The Company hereby agrees to pay PMG upon the terms set forth in and
in amount equal to the sums set forth in an amended and restated
note attached hereto as Exhibit B (the "Amended and Restated Note");
(b) The Company shall make the payments set forth in the Amended and
Restated Note directly to the Note Holder upon the terms and
conditions set forth in the Amended and Restated Note.
(c) In consideration of the Note Holder agreeing to enter into modified
payment and interest terms under the Amended and Restated Note, to
make the following payments of principal on behalf the borrowers
under the Xxxxxx Notes, unless the Amended and Restated Note has
otherwise been fully satisfied in accordance with its terms, as
follows: (i) $50,000 upon the Company raising equity capital of $2.1
million; (ii) $75,000 upon the Company raising equity capital of
$3.5 million; and (iii) $100,000 upon the Company raising equity
capital of $5.0 million, (iv) $100,000 upon the Company raising
equity capital of $7.0 million, and (v) to the extent any principal
amount is remaining after the foregoing, the balance will be paid
off in full, inclusive of outstanding interest, upon the Company
raising equity capital of $10.0 million. The capital raises set
forth in (i) -(v) are aggregate sums and include amounts raised
prior to the date hereof. The Company agrees that the foregoing
payments shall not be in lieu of the monthly amortization due under
the Amended and Restated Note, however, once the
outstanding principal and interest are paid in full, no further
payments shall be due hereunder. The parties further agree that, for
purposes of this paragraph 2(c), if the Company raises money through
convertible debentures, 50% of such monies shall be deemed equity
capital until such time as it is converted to equity, at which time
the remaining 50% shall be considered equity. Notwithstanding the
foregoing sentence, the Company agrees that 100% of the capital
raised from convertible debentures prior to the date hereof shall be
treated as equity for purposes of this paragraph 2(c). Any payments
due hereunder shall be paid by the Company no later than the tenth
day of the month following the month the capital was raised.
(d) The Company agrees to provide monthly reports on the tenth day of
each month to the Note Holders specifying the amount of equity or
convertible debentures raised in each prior month. Additionally, the
Company will provide a report to Note Holders specifying the amount
of equity raised prior to the date hereof, it being represented that
the Company has heretofore raised $1,000,000 in equity and $50,000
as convertible debentures.
(e) Until such time as the Note Holders are paid in full, the Company
agrees not to prepay any loans made prior to the date hereof to the
Company by any of the original shareholders of the Company. Loans
made to the Company by original shareholders after the date hereof
shall not be subject to this provision. Notwithstanding the
foregoing, any loan repayments to any third parties shall in no way
encumber or limit the Company's obligation to make the payments to
the Note Holders pursuant to paragraphs 2(b) and (c) above.
(f) The Company will cause Xxxxx Xxxxxx to transfer 5,000 shares of
Preferred Stock held by him under his Employment Agreement with the
Company to each of the Note Holders simultaneously herewith.
3. No Changes. All other provisions of the Assignment and Assumption Agreement
shall remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed as of the date first above written.
PYRAMID RECORDS INTERNATIONAL, INC.
By:
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Name: Xxxxx Xxxx
Title:
PYRAMID MEDIA GROUP, INC.
By:
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Name: Xxxxx Xxxxxx
Title: CEO
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Xxxxx Xxxxxx
As a Note Holder of the Xxxxxx Notes delineated on Exhibit A hereto, I hereby
consent to amending and restating the notes as set forth in Exhibit B hereto and
payment of the obligations pursuant to said Amended and Restated Note upon the
terms for payment set forth therein and waive all past defaults under the Xxxxxx
Notes.
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Xxx Xxxxxx
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Xxxx Xxxxx
