Exhibit 2.05
CLOSING AGREEMENT
This CLOSING AGREEMENT, dated as of September 19, 2003, is by and among
(i) Herbert Wang and James J. Carria and Lawrence I. Silverstein, as Trustees of
The Herbert Wang 1988-1 Irrevocable Trust (GST Exempt Share), and The Herbert
Wang 1988-1 Irrevocable Trust (Non-GST Exempt Share) (collectively, the "Tech
Industries Sellers"), (ii) Tech Investments, Inc., a Rhode Island corporation
("Tech Investments"), David M. Wang, Scott E. Wang and Beth A. Nast
(collectively, the "84 Fairmount Street Sellers"), (iii) James J. Carria and
Lawrence I. Silverstein, as Trustees of The Herbert Wang 1988 Irrevocable Real
Estate Trust (collectively with Tech Investments, the "Fairmount Realty
Sellers"), and (iv) Portola Packaging, Inc., a Delaware corporation (the
"Buyer").
WHEREAS, the Buyer and the Tech Industries Sellers have entered into
that certain Stock Purchase Agreement dated as of September 1, 2003 (the "Tech
Industries Purchase Agreement"), pursuant to which the Buyer has agreed to
purchase all of the issued and outstanding shares of capital stock (the "Tech
Industries Stock") of Tech Industries, Inc., a Rhode Island corporation ("Tech
Industries");
WHEREAS, the Buyer and Herbert Wang have entered into that certain
Stock Purchase Agreement dated as of September 1, 2003 (the "Tech UK Purchase
Agreement"), pursuant to which the Buyer has agreed to purchase all of the
issued and outstanding shares of capital stock of Tech Industries U.K. Ltd., a
Rhode Island corporation;
WHEREAS, the Buyer and the Fairmount Realty Sellers have entered into
that certain Equity Purchase Agreement dated as of September 1, 2003 (the
"Fairmount Realty Purchase Agreement"), pursuant to which the Buyer has agreed
to purchase all of the outstanding partnership interests (the "Fairmount Realty
Interests") in Fairmount Realty Associates, a Rhode Island limited partnership,
which owns all of the land, buildings, improvements and fixtures located at 85
Fairmount Street, Woonsocket, Rhode Island;
WHEREAS, the Buyer and the 84 Fairmount Street Sellers have entered
into that certain Equity Purchase Agreement dated as of September 1, 2003 (the
"84 Fairmount Street Purchase Agreement"), pursuant to which the Buyer has
agreed to purchase all of the outstanding partnership interests (the "84
Fairmount Street Interests," and together with the Fairmount Realty Interests,
the "Real Estate Interests") in 84 Fairmount Street Limited Partnership, a Rhode
Island limited partnership, which owns all of the land, buildings, improvements
and fixtures located at 84 Fairmount Street, Woonsocket, Rhode Island;
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WHEREAS, the Buyer is contemporaneously herewith purchasing all of the
Tech Industries Stock pursuant to the terms of the Tech Industries Purchase
Agreement;
WHEREAS, immediately after the consummation of the purchase by the
Buyer of the Tech Industries Stock as aforesaid, the Buyer is assigning its
rights under the Fairmount Realty Purchase Agreement and the 84 Fairmount Street
Purchase Agreement to Tech Industries to purchase the Real Estate Interests;
WHEREAS, the Buyer and the Tech Industries Sellers have agreed to
modify certain provisions of the Tech Industries Purchase Agreement, to set
forth their agreement with respect to the effect on the provisions of the Tech
Industries Purchase Agreement caused by the purchase by Tech Industries (in lieu
of the Buyer) of the Real Estate Interests, and to provide for certain other
matters, all as more particularly hereinafter set forth;
WHEREAS, the consummation of the transactions contemplated under the
Tech Industries Purchase Agreement, the Tech UK Purchase Agreement, the
Fairmount Realty Purchase Agreement and the 84 Fairmount Street Purchase
Agreement are referred to herein collectively as the "Transaction"; and
WHEREAS, all capitalized terms used herein without definition shall
have the meanings ascribed to such terms in the Tech Industries Purchase
Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth in this Agreement, the parties hereto hereby agree as follows:
1. Reduction of Purchase Price Under Tech Industries Purchase
Agreement. Reference is hereby made to Section 1.2 of the Tech Industries
Purchase Agreement. The Tech Industries Sellers and the Buyer hereby agree that
(a) the dollar amount therein of $33,742,329 shall be changed to $33,727,637,
and (b) the provisions thereof shall be accordingly modified.
2. Modifications to Purchase Price Adjustment Provisions. Reference is
hereby made to Section 3 of the Tech Industries Purchase Agreement. With respect
thereto, the Tech Industries Sellers and the Buyer agree that:
(a) notwithstanding the provisions of Sections 3(a) and (b) of
the Tech Industries Purchase Agreement, in lieu of the Sellers preparing and
delivering to the Buyer a Calculation Date Balance Sheet and a Calculation Date
Certificate and making an initial adjustment to the Purchase Price based on the
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amount of the Calculation Date Net Working Capital as required thereunder, the
Sellers have prepared and delivered to the Buyer on the Closing occurring on the
date hereof (i) an estimated projected balance sheet of Tech Industries as of
the close of business on the Closing Date immediately prior to giving effect to
the Closing (the "Estimated Closing Date Balance Sheet"), which Estimated
Closing Date Balance Sheet has been prepared in accordance with generally
accepted accounting principles applied on a basis consistent with the May 2003
Balance Sheet taking into account any possible exceptions to such accounting
principles disclosed on Schedule 5.8 to the Tech Industries Purchase Agreement,
and (ii) a certificate signed by the President of Tech Industries (the
"Estimated Closing Date Certificate"), certifying (A) that the Estimated Closing
Date Balance Sheet was prepared on the basis described in clause (i) above, and
(B) as to the estimated and projected Net Working Capital as of the Closing Date
(the "Estimated Closing Date Net Working Capital"); the Estimated Closing Date
Certificate, together with the Estimated Closing Date Balance Sheet, is attached
hereto as Exhibit A;
(b) the Purchase Price payable at the Closing is being
increased dollar-for-dollar by $590,826, which amount equals the amount that the
Estimated Closing Date Net Working Capital is greater than $5,200,000 (with such
amount being deemed the "Initial Adjustment" for purposes of Section 3(e) of the
Tech Industries Purchase Agreement), thereby resulting in a Purchase Price
payable at the Closing of $34,318,463 ($33,727,637 + the aforesaid $590,826);
(c) all references in the Tech Industries Purchase Agreement
to the terms "Calculation Date Balance Sheet," "Calculation Date Certificate"
and "Calculation Date Net Working Capital," respectively, shall be deemed
deleted and replaced with the terms "Estimated Closing Date Balance Sheet,"
"Estimated Closing Date Certificate" and "Estimated Closing Date Net Working
Capital," respectively, and all references in the Tech Industries Purchase
Agreement to the term "Calculation Date" shall be deemed deleted;
(d) the provisions of the Tech Industries Purchase Agreement
(including, without limitation, Section 3(e) thereof) shall be deemed modified
by the provisions of this Section 1; and
(e) the Calculation Date Certificate of the President of Tech
Industries dated as of September 10, 2003 previously delivered to the Buyer
shall be deemed null and void and of no force and effect.
3. Effect of Purchase by Tech Industries of Real Estate Interests.
Notwithstanding that the Buyer is assigning its rights under the Fairmount
Realty Purchase Agreement and the 84 Fairmount Street Purchase Agreement to Tech
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Industries to purchase the Real Estate Interests, for purposes of the
transactions contemplated by the Tech Industries Purchase Agreement and
notwithstanding anything to the contrary set forth therein:
(a) the purchase by Tech Industries of the Real Estate
Interests shall have no effect of any nature whatsoever on, and shall not be
considered a part of, the transactions contemplated by the Tech Industries
Purchase Agreement;
(b) the preparation of the Closing Date Balance Sheet and the
determination of the Closing Date Net Working Capital shall be made without
regards to, and shall give no effect to, the purchase by Tech Industries of the
Real Estate Interests; and
(c) the representations and warranties of the Sellers in
Section 5 of the Tech Industries Purchase Agreement, for purposes of Section 8.1
of the Tech Industries Purchase Agreement, shall be made without regards to, and
shall give no effect to, the purchase by Tech Industries of the Real Estate
Interests.
4. Reduction of Purchase Price Under Tech UK Purchase Agreement.
Reference is hereby made to Section 1.2 and 3 of the Tech UK Purchase Agreement.
Herbert Wang and the Buyer agree that (a) the purchase price under Section 1.2
shall be changed to a fixed purchase price of $70,255 without adjustment, (b)
the purchase price adjustment provisions of Section 3 shall be deemed deleted in
their entirety, and (c) the provisions thereof shall be accordingly modified.
5. Reduction of Purchase Price Under 84 Fairmount Street Purchase
Agreement. Reference is hereby made to Section 1.2 of the 84 Fairmount Street
Purchase Agreement. The 84 Fairmount Street Sellers and the Buyer agree that (a)
the reference therein to the $2,250 security deposit shall be deemed deleted,
(b) the purchase price payable thereunder shall be accordingly reduced by such
$2,250 amount, and (c) the provisions thereof shall be accordingly modified.
6. Flow of Funds. The Buyer shall make (or cause to be made) on the
date hereof the following payments to the following parties in connection with
the consummation of the Transaction in accordance with the applicable wire
transfer instructions attached hereto as Schedule A:
(a) In accordance with the terms of Section 2(b) hereof, at
the Closing the Tech Industries Sellers are entitled under the Tech Industries
Purchase Agreement to the aggregate amount of $34,318,463. The Buyer shall
deduct from such amount (i) the amount of $1,122,293, and pay such amount for
the account of the Tech Industries Sellers to EVP Securities LLC (as designee of
Edgeview
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Partners LLC), and (ii) the amount of $100,000, and pay such amount for
the account of the 84 Fairmount Street Sellers to Citizens Bank of Rhode Island,
as Escrow Agent (the "Escrow Agent") under the Environmental Escrow Agreement of
even date herewith (the "Escrow Agreement").
(b) The balance of the purchase price payable to the Tech
Industries Sellers at the Closing as referenced in Section 2(b) hereof is
$33,096,170; such amount shall be paid to the Tech Industries Sellers as
follows:
Tech Industries Sellers Pro Rata Amount
----------------------- ---------------
Herbert Wang $843,952
The Herbert Wang 1988-1
Irrevocable Trust (GST Exempt Share) $16,041,714
The Herbert Wang 1988-1
Irrevocable Trust (Non-GST Exempt Share) $16,210,504
(c) The purchase price to be paid on the date hereof to
Herbert Wang under the Tech UK Purchase Agreement is $70,255.
(d) The purchase price to be paid on the date hereof to the
Fairmount Realty Sellers under the Fairmount Realty Purchase Agreement is
$648,263; $100,000 of such amount shall be paid for the account of the Fairmount
Realty Sellers to the Escrow Agent under the Escrow Agreement; $548,263,
representing the balance of such purchase price, shall be paid to the Fairmount
Realty Sellers as follows:
Fairmount Realty Sellers Pro Rata Amount
------------------------ ---------------
Tech Investments, Inc. $5,483
The Herbert Wang 1988
Irrevocable Real Estate Trust $542,780
(e) The purchase price to be paid on the date hereof to the 84
Fairmount Street Sellers under the 84 Fairmount Street Purchase Agreement is
$626,350; such amount shall be paid entirely to Tech Investments, for the
benefit of itself and the other 84 Fairmount Street Sellers, as follows:
84 Fairmount Street Sellers Pro Rata Amount
--------------------------- ---------------
Tech Investments, Inc. $6,262
David M. Wang $206,696
Scott E. Wang $206,696
Beth A. Nast $206,696
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7. General.
(a) Governing Law. The validity and construction of this
Agreement shall be governed by, and construed and enforced in accordance with,
the internal laws (and not the choice-of-law rules) of the State of Rhode
Island.
(b) Entire Agreement. This Agreement contains the entire
understanding of the parties, supersedes all prior agreements and understandings
relating to the subject matter hereof, and shall not be amended except by a
written instrument hereafter signed by all of the parties hereto.
(c) Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, successors and
permitted assigns. Neither this Agreement nor the obligations of any party
hereunder shall be assignable or transferable by such party without the prior
written consent of the other parties hereto.
(d) Severability. In the event that any covenant, condition,
or other provision herein contained is held to be invalid, void, or illegal by
any court of competent jurisdiction, the same shall be deemed to be severable
from the remainder of this Agreement and shall in no way affect, impair, or
invalidate any other covenant, condition, or other provision contained herein.
(e) Further Assurances. The parties hereto agree to take such
reasonable steps and execute such other and further documents as may be
necessary or appropriate to cause the terms and conditions contained herein to
be carried into effect.
(f) No Implied Rights or Remedies. Except as otherwise
expressly provided herein, nothing herein expressed or implied is intended or
shall be construed to confer upon or to give any Person, other than the Sellers
and the Buyer and their respective shareholders or other equityholders, if any,
any rights or remedies under or by reason of this Agreement.
(g) Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Signatures on Following Page]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as an
instrument under seal as of the day and year first written above.
/s/ HERBERT WANG
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Herbert Wang
THE HERBERT WANG 1988-1 IRREVOCABLE
TRUST (GST EXEMPT SHARE)
By: /s/ JAMES J. CARRIA
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James J. Carria, Trustee
By: /s/ LAWRENCE I. SILVERSTEIN
-------------------------------
Lawrence I. Silverstein,
Trustee
THE HERBERT WANG 1988-1 IRREVOCABLE
TRUST (NON-GST EXEMPT SHARE)
By: /s/ JAMES J. CARRIA
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James J. Carria, Trustee
By: /s/ LAWRENCE I. SILVERSTEIN
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Lawrence I. Silverstein,
Trustee
TECH INVESTMENTS, INC.
By: /s/ DAVID M. WANG
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David M. Wang
President
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/s/ DAVID M. WANG
-----------------------------------
David M. Wang
/s/ SCOTT E. WANG
-----------------------------------
Scott E. Wang
/s/ BETH A. NAST
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Beth A. Nast
THE HERBERT WANG 1988
IRREVOCABLE REAL ESTATE TRUST
By: /s/ JAMES J. CARRIA
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James J. Carria, Trustee
By: /s/ LAWRENCE I. SILVERSTEIN
-------------------------------
Lawrence I. Silverstein,
Trustee
PORTOLA PACKAGING, INC.
By: /s/ JACK L. WATTS
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Jack L. Watts, Chairman and
Chief Executive Officer
Schedule A to the Closing Agreement
WIRE TRANSFER INSTRUCTIONS
Exhibit A to the Closing Agreement
ESTIMATED CLOSING DATE CERTIFCATE
WITH ATTACHED ESTIMATED CLOSING DATE
BALANCE SHEET