Exhibit 10.7
CORPORATE GUARANTY
WHERAS, Pyramid Music Corp. (the "Guarantor") hereby agrees to guarantee the
payment obligations under the Amended and Restated Note, by and between Allen
Jacobi and Pyramid Records, Corp. ("JACOBI") and Ned Siegel and Neil Strum
(collectively the "Holders"); and
WHEREAS, JACOBI is obligated to pay the Holders principal and interest on an
Amended and Restated Note as delineated on Exhibit A hereto (the "Note"); and
WHEREAS, JACOBI caused an assignment and assumption of a Distribution Agreement
dated May 1, 2003 by and between JACOBI and Ark 21 Records, Inc. (the
"Distribution Agreement") to the Guarantor; and
WHEREAS, the Guarantor and JACOBI executed an Assignment and Assumption
Agreement respecting the Distribution Agreement (the "Assignment") pursuant to
which terms the Guarantor has agreed to guaranty the payment obligations of the
Note;
NOW, THERFORE, FOR VALUE RECEIVED, receipt of which is hereby acknowledged, the
undersigned Guarantor, hereby absolutely and unconditionally guarantees to the
Holders the payment obligations under the Note.
The obligation of Guarantor under this Guaranty shall be a direct and primary
obligation, and the Holder shall not be required to exhaust any of the Holder's
rights or remedies against the Guarantor prior to making any demand on or
invoking any of the promises rights and remedies against a Guarantor. In
furtherance of the foregoing, Holder may proceed, at one time or successively
and without notice to any Guarantor, against any Guarantor, or against any one
or more of them. In any action brought by Holder against a Guarantor under this
Guaranty, no Guarantor shall be entitled to, and shall not, plead as a defense
that Holder is not legally or equitably insolvent or is dissolved or liquidated,
and each Guarantor covenants and agrees to pay to the Holder all costs and
expenses (including attorney's fees) incurred by Holder in any such action.
This Guaranty and all rights, obligations and liabilities arising hereunder
shall be construed and enforced in accordance with the laws of the State of
Florida.
This Guaranty shall bind each Guarantor below and each Guarantor's respective
successors and assigns, and shall inure to the benefit of Holder and Holder's
executors, administrators, personal and legal representatives, estate and
legatees.
IN WITNESS WHEREOF, this Guaranty has been duly executed by the Guarantor(s) on
the 5th day of March, 2004.
Pyramid Music Corp.
By:
---------------------
David Levy, President
Attest:
By:
----------------------
EXHIBIT A
Amended and Restated Note
AMENDED AND RESTATED PROMISSORY NOTE
$350,000 March 5, 2004
FOR VALUE RECEIVED, Allen Jacobi and Pyramid Records Corp., a Florida
corporation, 11077 Biscayne Blvd., Suite 200, Miami, FL 33161 (the "Company")
hereby promises to pay to the order of Ned Siegel, 5000 T Rex Ave, Suite 150,
Boca Raton, FL 33431 and Neil Strum, 3849 Rambla Pacifico, Malibu, CA 90265
(collectively, the "Holder"), the principal sum of Three Hundred and Fifty
Thousand and 00/100 Dollars ($350,000.00) upon the following terms:
1. AMENDMENT AND RESTATEMENT. The parties agree that this Note shall amend,
restate and replace the Notes delineated on Schedule I hereto
2. INTEREST. The unpaid principal balance shall bear interest at a rate of 8%
per annum.
3. MANNER OF PAYMENT. The Company agrees to pay the principal and interest
hereunder in 48 equal monthly payments of Eight Thousand Five Hundred and Forty
Five and 00/100 Dollars ($8,545.00) on the tenth day of each month commencing
with March 10, 2004 (each payment hereunder being a "Due Date"). The Company
will allocate the payments hereunder with each Holder receiving 50% of any sums
paid hereunder unless and until otherwise directed in writing by both Holders
from time to time.
4. PREPAYMENT. This Note may be prepaid in full or part at any time without
penalty to the Company. Any partial prepayments shall be applied to installments
of principal in inverse order of their maturity.
5. LATE FEES. In the event payment is not made within 10 days of the Due Date,
the Company shall pay a late fee equal to $1,000.
6. EVENTS OF DEFAULT. The entire principal balance due under this Note may be
accelerated and become due and payable immediately, at the Holder's option, upon
the occurrence of any Event of Default, which is defined as any of the
following:
(a) Failure to pay when due any payment of principal, and such failure
continues for 20 days; or
(b) Pyramid Music Corp. fails to make the principal payments required
under its Guaranty of even date herewith.
7. REMEDIES. Notwithstanding anything to the contrary herein, any Event of
Default shall allow the Holder to do the following:
(a) accelerate the maturity of this Note and demand immediate payment of
all outstanding principal; or
(b) exercise any and all rights available to it under applicable law.
8. SECURITY. All interest and principal payments due under this Note or to
become due are secured by those assets described in the Security Agreements and
any and all UCC filings pertaining thereto between the parties hereto ( the
"Security"). The parties hereto re-affirm and restate the aforesaid Security
Agreement.
9. WAIVER. Except as set forth herein, the Company hereby (i) waives
presentment, demand, notice, protest, notice of protest and notice of
non-payment and any other notice required to be given under the law in
connection with the delivery, acceptance, performance, default or enforcement of
this Note or any of any document or instrument evidencing any security for
payment of this Note; (ii) consents to any and all delays, extensions, renewals
or other modifications of the Note or waivers of any term hereof or release or
discharge by the Holder of the Company or release, substitution or exchange of
any security or guarantee for the payment hereof or the failure to act on the
part of the Holder or any indulgence shown by the Holder, from time to time and
in one or more instances, (without notice to or further assent from the Company)
and agrees that no such action, failure to act or failure to exercise any right
or remedy, on the part of the Holder shall in any way affect or impair the
obligations of the Company or be construed as a waiver by the Holder of, or
otherwise affect, any of the Holder's rights under this Note or under any
document or instrument evidencing any security or guarantee for payment of this
Note; and (iii) agrees to pay in the Event of Default hereunder, on demand, all
costs and expenses of collection of this Note and/or the enforcement of the
Holder's right with respect to, or the administration, supervision,
preservation, protection of, or realization upon, any property securing payment
or guarantee of payment hereof, including reasonable attorneys' fees plus costs,
all such amounts payable as obligations of the Company.
10. PARTIES IN INTEREST. All of the terms and provisions of this Note shall be
binding upon, inure to the benefit of and be enforceable by each of the parties
hereto, and their respective successors, heirs, personal representatives, and
permitted assigns. This Note may not be transferred or assigned by the Holder
except with the written consent of the Company, which will not be unreasonably
withheld, or by operation of law, and any person accepting such transfer or
assignment shall take this Note subject to the terms of this Note. All Notices
and payments hereunder shall be forwarded to the addresses set forth in the
Preamble of this Note.
11. SEVERABILITY. If any part of this Note is adjudged illegal, invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Note that can be given effect without such provision.
12. GOVERNING LAW. This Note shall be governed by, and construed in accordance
with, the laws of the State of Florida without regard to conflicts of laws
principles.
13. AMENDMENTS. This Note may not be varied, amended or modified except in
writing signed by the Company and the Holder.
IN WITNESS WHEREOF, this Note has been executed by the Company as of the
date and year first above written.
ATTEST: Pyramid Records, Corp.
- ------------------------------- ------------------------------
, Secretary Allen Jacobi, President
Personal Guaranty
The undersigned individual hereby absolutely and unconditionally guarantees to
the Holder the performance by the Company of each and every covenant, agreement
and obligation of the Company under this Note including, without limitation, the
payment to the Holder (or, if applicable, successors or assignees) of all sums
due under the Note at the time such sums shall be due and payable.
The obligation of Guarantor under this Guaranty shall be a direct and primary
obligation, and the Holder shall not be required to exhaust any of its rights or
remedies against the Company or any Guarantor prior to making any demand on or
invoking any of the Holder's rights and remedies against the Guarantor. In any
action brought by Holder against the Guarantor under this Guaranty, the
Guarantor shall not be entitled to, and shall not, plead as a defense that
Holder is legally or equitably insolvent or is dissolved or liquidated, and the
Guarantor covenants and agrees to pay to the Holder all costs and expenses
(including attorney's fees) incurred by Holder in any such action.
The Guarantor hereby (i) waives presentment, demand, notice, protest, notice of
protest and notice of non-payment and any other notice required to be given
under the law in connection with the delivery, acceptance, performance, default
or enforcement of the Note or any of any document or instrument evidencing any
security for payment of this Note; (ii) consents to any and all delays,
extensions, renewals or other modifications of the Note or waivers of any term
hereof or release or discharge by the Holder of the Company or release,
substitution or exchange of any security or guarantee for the payment hereof or
the failure to act on the part of the Holder or any indulgence shown by the
Holder, from time to time and in one or more instances, (without notice to or
further assent from the Company) and agrees that no such action, failure to act
or failure to exercise any right or remedy, on the part of the Holder shall in
any way affect or impair the obligations of the Company or the Guarantor or be
construed as a waiver by the Holder of, or otherwise affect, any of the Holder's
rights under this Note or under any document or instrument evidencing any
security or guarantee for payment of this Note; and (iii) agrees to pay in the
event of a default hereunder, on demand, all costs and expenses of collection of
this Note and/or the enforcement of the Holder's right with respect to, or the
administration, supervision, preservation, protection of, or realization upon,
any property securing payment or guarantee of payment hereof, including
reasonable attorneys' fees plus costs, all such amounts payable as obligations
of the Company.
This Guaranty and all rights, obligations and liabilities arising hereunder
shall be construed and enforced in accordance with the laws of the State of
Florida.
This Guaranty shall bind the Guarantor below and the Guarantor's heirs,
legatees, representatives, successors and assigns, and shall inure to the
benefit of Holder, its successors and its assigns.
IN WITNESS WHEREOF, this Guaranty has been duly executed by the Guarantor on the
5th day of March, 2004.
Guarantor:
-----------------------
Allen Jacobi
Schedule I
List of Notes Being Guaranteed
1. Promissory Note with Ned Siegel dated August 31, 2001 in the principal amount
of $2,500.00
2. Promissory Note with Ned Siegel dated September 14, 2001 in the principal
amount of $20,000.00
3. Promissory Note with Ned Siegel dated October 5, 2001 in the principal amount
of $15,000.00
4. Promissory Note with Ned Siegel dated October 26, 2001 in the principal
amount of $1,200.00
5. Promissory Note with Ned Siegel dated December 5, 2001 in the principal
amount of $3,200.00
6. Promissory Note with Ned Siegel dated December 7, 2001 in the principal
amount of $10,000.00
7. Promissory Note with Ned Siegel dated November 14, 2001 in the principal
amount of $5,000.00
8. Promissory Note with Ned Siegel dated November 15, 2001 in the principal
amount of $10,415.00
9. Amendment to Promissory Notes with Ned Siegel dated October 5, 2001 in
regards to Promissory Notes dated January 14, 1998 in the amount of $100,000 and
May 4, 1998 in the amount of $12,000
10. Promissory Note with Neil Strum dated January 14, 1998 in the principal
amount of $50,000.00
11. Promissory Note with Neil Strum dated February , 1998 in the principal
amount of $20,000.00
12. Promissory Note with Neil Strum dated March, 1998 in the principal amount of
$5,500.00
13. Promissory Note with Neil Strum dated March 14, 1998 in the principal amount
of $10,500.00
14. Promissory Note with Neil Strum dated May 4, 1998 in the principal amount of
$12,000.00