Exhibit 10.9
Beta Foods, LLC
00000 Xxxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
May 14, 2004
American Consolidated Management Group, Inc.
000 Xxxxxxxx Xxxx
Xxxxx, Xxxxx Xxxxxxxx 00000
Re: Amendment to Technology Transfer Agreement
Gentlemen:
When accepted by you, this shall constitute our complete amendment to our
agreement concerning the transfer to you of certain technology, and the rights
to manufacture, market, and distribute products made with the subject
technology.
ACMG has negotiated a settlement and compromise agreement by and between
itself and AR Funding ["ARF"] concerning conflicting claims as to debts claimed,
and shares issued to Xxxx Xxxx and Xxxxx X. Xxxxxx.
Part of the consideration between ACMG and Beta in their original agreement
was the issuance of shares of ACMG common stock, and the cleaning up of
indebtedness of ACMG in order to add value to ACMG.
In order to facilitate ACMG's reduction of debt to ARF, Beta hereby agrees
to the following:
a. Beta shall repay the principal sum of $ 2,640,000.00 to ARF; provided,
that Beta's liability is hereby expressly limited to, and contingent
upon, the payment of the increased royalty set out herein, such that
the general assets of Beta shall not be subject to a charge by ARF for
this indebtedness. This indebtedness is further limited to the
increased portion of the royalty set out herein, and shall not be
charged, or chargeable against the current ten percent (10%) royalty
between ACMG and Beta. Beta agrees to wire transfer to ARF the monthly
royalty against which this indebtedness is chargeable, within 2
business days of receipt of said payments; provided that, ARF has
provided Beta with proper wiring instructions.
b. For and in consideration of this agreement, the monthly royalty
payable to Beta by ACMG pursuant to the agreement, dated March 23,
2004, by and between ACMG and Beta, shall be increased from ten
percent (10%) to thirty percent (30%), with the increased portion
[20%] to be utilized first for the repayment to AFR of the debt listed
hereinabove, and second for any increased income tax liability for
Beta that results from the payment to Beta of the increased royalty
set out herein. In this regard, it is specifically agreed and
understood that Beta is assuming, to the extent set out herein, the
indebtedness set out hereinabove from ACMG, and that the purpose of
that assumption is to facilitate the start-up operations of ACMG in
which Beta has a vested interest. As additional consideration for this
assumption of debt, ACMG shall pay Beta, from and out of this
increased royalty, an amount equal to ten (10%) percent of said
indebtedness. Upon such time as the ARF debt is paid in full, the
additional ten (10%) percent is paid into Beta, as well as any
additional compensation determined by competent tax advisors and/or
counselors, to compensate and cover any increased tax liabilities of
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Beta resulting from the payment of the ARF debt, then the increased
royalty (20%) shall automatically revert back to ACMG. In this regard,
Beta may elect to obtain independent tax counsel from either an
attorney or certified public accountant regarding the income tax
liability consequences of this transaction. ACMG shall bear the costs
of such opinion, and said opinion shall be binding upon ACMG, and
shall control the length of time that this increased royalty shall be
in effect. Notwithstanding anything herein to the contrary, it is
agreed that this indebtedness, $2,640,000.00, shall be paid in full
within one (1) year from the date hereof. If not, interest shall
accrue on the unpaid balance at the rate of twelve (12) percent per
annum and the unpaid balance shall be paid in full within one (1)
additional year.
This amendment is specifically contingent upon the full and complete
execution and delivery, in form and substance satisfactory to ACMG, of a
release of indebtedness by ARF of any and all claims by ARF against ACMG,
as well as any subsidiary of ACMG, without conditions. In the event that
said release is not executed and delivered to ACMG simultaneously with this
letter amendment, then in such event, this letter amendment shall
automatically be void, regardless if executed and delivered.
Except as specifically amended herein, the terms and provisions of the
original agreement, dated March 23, 2004, shall remain in full force and effect.
If the foregoing is your understanding of our agreement, and is completely
satisfactory to you, please indicate your acceptance in the space provided below
and return two copies to our offices.
Regards,
/s/ Xxxxxxx Xxxxxx
--------------------
Xxxxxxx Xxxxxx
President
Agreed to and accepted this 14th day of May, 2004.
American Consolidated Management Group, Inc.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx
Director
Agreed to and accepted by
Associated Receivables Funding, Inc.
on this 14th day of May, 2004, for the express
limited purpose of agreeing to the repayment
of debt from and out of the royalty.
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
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