Exhibit 99.7
EARN OUT AGREEMENT
This Earn Out Agreement (the "Agreement") is made as of September
29, 1999 by and between UNITED XXXXXXX CORPORATION, a Colorado
corporation (the "Buyer") and XXXXX X. XXXXXXXX ("HAK"), XXXXXXX
X. XXXXXXXX ("BJK"), THE XXXXX X. XXXXXXXX REVOCABLE TRUST, XXXXX
X. XXXXXXXX AND XXXXXXX X. XXXXXXXX, TRUSTEES, dated February 6,
1996, (the "HAK Trust"), THE XXXXXXX X. XXXXXXXX REVOCABLE TRUST,
XXXXXXX X. XXXXXXXX AND XXXXX X. XXXXXXXX, TRUSTEES, dated
February 6, 1996 (the "BJK Trust") and THE XXXXXXXX FAMILY NOMINEE
TRUST, XXXXX X. XXXXXXXX AND XXXXXXX X. XXXXXXXX, TRUSTEES, under
Declaration of Trust dated February 6, 1996 and recorded with the
Berkshire County (Middle District) Registry of Deeds in Book 910,
Page 800 (the "Family Trust") (HAK, BJK and HAK Trust, the BJK
Trust and the Family Trust, referred to collectively as
"Sellers").
RECITALS: Concurrently with the execution and delivery of this
Agreement, Buyer is purchasing, all of the issued and outstanding
shares (the "Shares") of capital stock of Pittsfield Mold & Tool,
Inc., a Massachusetts corporation (the "Company"), and the real
property located at Stearnsville Industrial Park, 10 Betnr
Industrial Drive, Pittsfield, Massachusetts, pursuant to the terms
and conditions of a Stock Purchase Agreement made as of August 27,
1999 (the "Stock Purchase Agreement"). Section 2.6 of the Stock
Purchase Agreement requires that an Earn Out Agreement be executed
by Buyer and delivered to Sellers as a condition to the sale of
the Shares by Sellers.
AGREEMENT: The parties, intending to be legally bound, agree as
follows:
1. DEFINITIONS: Capitalized terms not expressly defined in this
Agreement shall have the meanings ascribed to them in the Stock
Purchase Agreement.
2. EARN OUT: As an inducement for Sellers to enter into the Stock
Purchase Agreement, Buyer has agreed to the following additional
consideration to be paid to Sellers under the Stock Purchase
Agreement:
For a period of six (6) years beginning as of the Closing Date,
Buyer shall pay Sellers an amount equal to five (5%) percent of
the annual Net Sales of the Company in excess of $10,000,000.00
each year, payable each year, not later than ninety (90) days
after the end of the previous year, pro-rated for any partial
years. Any installment or payment due hereunder which shall be
received by Sellers after its due date shall be subject to an
additional charge of five (5%) percent of the amount so overdue.
3. REMEDIES: If Buyer breaches its payment obligation as set
forth at paragraph 2 above, Sellers will be entitled to the
following remedies:
a. Damages from Buyer;
b. A release of their obligations under the Non Competition
Agreements;
c. Prosecution of the $250,000.00 Letter of Credit referred to at
Section 8.8(i) of the Stock Purchase Agreement;
d. Xxxxxx X. Xxxxxxxx shall be entitled to a release of his
obligations under the Employment Agreement; and,
e. All reasonable costs of collection and reasonable attorney's
fees paid or incurred by Sellers in enforcing their rights
hereunder.
In addition, Buyer's breach of this Agreement shall constitute an
Event of Default under the Promissory Note.
4. SUCCESSORS AND ASSIGNS: This Agreement will be binding upon
Buyer, its successors and assigns and will enure to the benefit of
Sellers, their successors, assigns, heirs and legal
representatives.
5. NOTICES: All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be
deemed to have been duly given when (a) delivered by hand (with
written confirmation of receipt); (b) sent by telecopier (with
written confirmation of receipt), provided that a copy is mailed
by registered mail, return receipt requested, or (c) when received
by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the
appropriate addresses and telecopier numbers set forth below (or
to such other addresses and telecopier numbers as a party may
designate by notice to the other parties):
Sellers: Xxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxxxx
00 Xxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
With a copy to: Xxxx X. Xxxxxx, Xx., Esquire
XXXXXX & XXXXXXXX, LLP
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Telecopier number: (000) 000-0000
Buyer: United Xxxxxxx Corporation
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: President
Facsimile number: (000) 000-0000
With a copy to: Xxxxxxx X. Xxxxxxxx, Xx., Esquire
XXXXXXXX & SHOHL LLP
1900 Chemed Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile number: (000) 000-0000
6. JURISDICTION; SERVICE OF PROCESS: Any action or proceeding
seeking to enforce any provision of, or based on any right arising
out of, this Agreement may be brought against any of the parties
in the courts of the Commonwealth of Massachusetts, County of
Berkshire, or, if it has or can acquire jurisdiction, in the
United State District Court for the Western District of
Massachusetts, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection
to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party
anywhere in the world.
7. WAIVER: The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure
nor any delay by any party in exercising any right, power, or
privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power, or
privilege, or no single or partial exercise of any such right,
power, or privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law, (a)
no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in
whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver
that may be given by a party will be applicable except in the
specific instance for which it is given; and (c) no notice to or
demand on one party will be deemed to be a waiver of any
obligation of such party or the right of the party giving such
notice or demand to take further action without notice or demand
as provided in this Agreement or the documents referred to in this
Agreement
8. ENTIRE AGREEMENT AND MODIFICATION: This Agreement supersedes
all prior agreements between the parties with respect to its
subject matter and constitutes (along with the documents referred
to in this Agreement) a complete and exclusive statement of the
terms of the agreement between the parties with respect to its
subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the
amendment.
9. SEVERABILITY: If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction,
the other provisions of this Agreement will remain in full force
and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and
effect to the extent not held invalid or unenforceable.
10. SECTION HEADINGS, CONSTRUCTION: The headings of Sections in
this Agreement are provided for convenience only and will not
affect its construction or interpretation. All references to
"Section" or "Sections" referred to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will
be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.
11. TIME OF ESSENCE: With regard to all dates and time periods
set forth or referred to in this Agreement, time is of the
essence.
12. GOVERNING LAW: This Agreement will be governed by the laws of
the State of Ohio without regard to conflicts of laws principles.
13. COUNTERPARTS: This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy
of this Agreement and all of which, when taken together, will be
deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Buyer: Sellers:
UNITED XXXXXXX CORPORATION
By /s/Xxxxxx X. Xxxxxxxxx, /s/ Xxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxxx, Xx. XXXXX X. XXXXXXXX
/s/ Xxxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXXXX
THE XXXXX X. XXXXXXXX
REVOCABLE TRUST
By /s/ Xxxxx X. Xxxxxxxx
XXXXX X. XXXXXXXX
By /s/ Xxxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXXXX
THE XXXXXXX X. XXXXXXXX
REVOCABLE TRUST
By /s/ Xxxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXXXX
By /s/ Xxxxx X. Xxxxxxxx
XXXXX X. XXXXXXXX
XXXXXXXX FAMILY NOMINEE TRUST
By /s/ Xxxxx X. Xxxxxxxx
XXXXX X. XXXXXXXX
By /s/ Xxxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXXXX
