EXHIBIT 10.7
Payment and Severance Agreement and Guarantee
dated January 2, 2001
PAYMENT AND SEVERANCE AGREEMENT AND GUARANTEE
AND NOW, this ____ day of ______________, 2001, by and between
International Plastics and Equipment Corporation, a Pennsylvania Corporation,
(hereinafter referred to as "IPEC"), and Sherwood LLC, a Massachusetts Limited
Liability Company (hereinafter referred to as " Sherwood" ("the Agreement").
WITNESSETH:
WHEREAS, Sherwood has rendered substantial services to IPEC during the
past one (1) year;
WHEREAS, Sherwood has agreed to make itself available, at IPEC's
request, to provide consulting services to IPEC in accordance with the
Consulting Agreement attached hereto as Exhibit 1; and;
WHEREAS, IPEC wishes to purchase and Sherwood wishes to sell its entire
interest in IPEC's company as described in the Stock Purchase Agreement dated on
or about January 2000 ("the Stock Purchase Agreement") attached hereto as
Exhibit 2 and;
WHEREAS, IPEC and Sherwood desire this Agreement to supercede any other
agreement including Exhibit 2, as signed between the parties.
1. IPEC will pay to Sherwood the sum of One Million Dollars
($1,000,000.00) in accordance with the Schedule attached as Exhibit 3 to this
Agreement.
2. IPEC at its determination can pay Sherwood, sooner than the attached
Schedule allows without penalty. Upon final payment by IPEC of the amount listed
on Exhibit 3 Sherwood shall return its Stock certificate to IPEC immediately.
3. IPEC will not be obligated to pay any interest on any of the
payments called for by this Agreement unless an individual payment is not made
by its due date. Should a payment not be made by its due date, IPEC shall pay
Sherwood, in addition to the payment or payment due, interest on all overdue
payments at that interest rate equal to the lesser of (i) the highest rate
permitted by applicable law or (ii) the rate of nine (9%) percent per year. In
the event that IPEC terminates payment under this Agreement, Sherwood will
retain its non-diluted ownership percentage as well as reserve any rights
granted in equity and/or law.
4. IPEC and Sherwood have agreed to a pro-rata reduction Sherwood's
responsibility on its line of credit as per Exhibit 4.
5. Sherwood hereby acknowledges that it personally is liable, and shall
be solely responsible, for all taxes of any kind or nature which are due and
owing to any taxing authority because of any of the payments made pursuant to
the terms of this Agreement. IPEC shall not withhold or pay any amounts for
federal, state or local income tax, social security tax, unemployment
compensation or xxxxxxx'x compensation taxes. In accordance with current law,
IPEC shall file with the Internal Revenue Service a Form 1099-MISC, U.S.
information return for recipients of miscellaneous income, reflecting the gross
annual payments by IPEC to Sherwood pursuant to this Agreement.
6. This payment and surety agreement and guarantee, represents the
entire agreement between IPEC and Sherwood concerning payments to be made to
Sherwood on and after _______________ ____, 2001. Neither IPEC nor Sherwood has
made any written or oral representations, promises or agreements concerning the
matters covered by this document other than those which are contained in this
document itself.
7. This Agreement shall be governed by, and construed in accordance
with, the internal laws of the Commonwealth of Pennsylvania, not the law of
conflicts thereof, and shall inure to the benefit of the successors, assigns,
heirs, representatives and nominees of IPEC and Sherwood and shall be binding
upon their successors, assigns, heirs, representatives and nominees.
8. To the fullest extent by applicable law, unless otherwise expressly
provided for herein, no supplement, modification, waiver or termination of this
Agreement shall be binding unless executed in writing, by IPEC and Sherwood.
9. Any and all payments to be made pursuant to the terms hereof shall
be made free and clear of any offsets, deductions or counterclaims.
10. This Agreement serves to supercede ALL other Agreements between
IPEC and Sherwood.
11. No waiver of any provision of this Agreement shall be deemed or
shall constitute a waiver of any other provision thereof, whether or not
similar, nor shall any such waiver constitute a continuing waiver unless
otherwise provided.
12. Nothing in this Agreement shall be construed to require any
unlawful act and in the event of a conflict between any provision thereof and
any applicable statue, law, or ordinance contrary to which the parties have no
legal right to contract, the latter shall prevail, but in such event, provisions
of this Agreement affected shall be curtailed and limited only to the extent
necessary to bring it within the legal requirements.
13. If any term or provision of this Agreement or the application
thereof to any person's circumstances shall, to any extend be invalid or
unenforceable, the remainder of this Agreement or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable shall not be affected
thereby.
14. Agreement may be executed in as many counterparts as may be
necessary and convenient, and by difference parties hereto on separate
counterparts, each of which when so executed, shall be deemed an original, but
also each counterpart shall constitute but one and the same instrument.
15. The parties hereby agree that any legal actions or proceedings
brought by any party hereunder may be brought in the Allegheny County Court of
Common Pleas of the Commonwealth of Pennsylvania, or the United States District
Court for the Western District of Pennsylvania, as the Plaintiff in such action
or proceeding may elect, and by execution and delivery hereof each part submits
to each such jurisdiction and agrees that any summons or other proceeding
against any other party may be served by registered mail, addressed to said
party at the last address for said party known to the party transmitting such
service.
IN WITNESS WHEREOF, the parties hereto intending to be legally bound hereby have
caused this instrument to be executed, as of the day and year first above
written.
ATTEST: SHERWOOD LLC
___________________________ By: _________________________________
Its: _________________________________
ATTEST: INTERNATIONAL PLASTICS & EQUIPMENT CORPORATION
___________________________ By: _________________________________
Its: _________________________________
EXHIBIT 3
PAYMENT DUE DATE BALANCE REMAINING
$250,000.00 3/31/01 $750,000.00
$150,000.00 4/30/01 $600,000.00
$150,000.00 5/31/01 $450,000.00
$150,000.00 6/30/01 $300,000.00
$100,000.00 7/31/01 $200,000.00
$100,000.00 8/31/01 $100,000.00
$100,000.00 9/30/01 -
In addition to the above-referenced payment, Sherwood will be entitled to the
following one-time Additional Compensation if Recapitalization of IPEC occurs
before the third anniversary of this Agreement based on the following table:
Recapitalization/Capital Infusion PAYMENT TO SHERWOOD
$2,000,000.00 $50,000.00
$4,000,000.00 $150,000.00*
*Pro-rata distribution up to $150,000.00 on $4,000,000.00 capital infusion.
