EXHIBIT 2.04
00 XXXXXXXXX XXXXXX LIMITED PARTNERSHIP
EQUITY PURCHASE AGREEMENT
THIS EQUITY PURCHASE AGREEMENT is dated as of this 1st day of
September, 2003, by and among (i) Portola Packaging, Inc., a Delaware
corporation (the "Buyer"), and (ii) each of the parties listed on Schedule A
hereto (collectively, the "Sellers," and each individually, a "Seller").
WHEREAS, 00 Xxxxxxxxx Xxxxxx Limited Partnership, a Rhode Island
limited partnership (the "Partnership"), is the owner of that certain parcel of
land located at 84 Fairmount Street, Woonsocket, Rhode Island and more
particularly described on Exhibit A hereto (the "Land"), together with the
building(s), improvements and fixtures now situated on the Land (the
"Improvements") as set forth on said Exhibit A (the Land, together with the
Improvements, being referred to herein collectively as the "Property");
WHEREAS, the Sellers own all of the partnership interests in the
Partnership (the "Interests"); and
WHEREAS, the Sellers desire to sell all of the Interests to the Buyer,
and the Buyer desires to purchase all of the Interests from the Sellers, upon
the terms and subject to the conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, the parties hereto agree as follows:
1. PURCHASE AND SALE OF INTERESTS.
1.1. Purchase and Sale. Subject to the terms and conditions set forth
in this Agreement, the Sellers agree to sell to the Buyer, and the Buyer agrees
to purchase from the Sellers, at the Closing (as defined to in Section 2
hereof), all of the Interests, in exchange for the payment of the Purchase Price
(as defined in Section 1.2 hereof).
1.2. Delivery of Purchase Price. At the Closing, the Buyer shall pay to
the Sellers, as the aggregate purchase price for the Interests (the "Purchase
Price"), an amount equal to $626,350 (allocated for all tax purposes $242,310 to
land and $384,040 to improvements) plus a $2,250 security deposit. The payment
of the Purchase Price shall be made to the Sellers pro rata in accordance with
the percentages specified as their respective pro rata shares opposite their
names on
Schedule A hereto (as to each Seller, such Seller's "Pro Rata Share"), by wire
transfer of immediately available funds.
2. CLOSING.
2.1. Time and Place. The closing of the purchase and sale of the
Interests (the "Closing") shall be held at the offices of Xxxxxxx XxXxxxxxx LLP,
000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, at 10:00 a.m. on September 15, 2003
or at such other time, date and place as the Buyer and the Sellers may agree.
The date on which the Closing is actually held hereunder is referred to herein
as the "Closing Date."
2.2. Transactions at Closing. At the Closing, in addition to any other
instruments or documents referred to herein:
(a) Each of the Sellers shall deliver to the Buyer, and
the Buyer shall deliver to each of the Sellers, an executed Assignment and
Assumption of Interests for and with respect to each of the Interests, in the
form of Exhibit B hereto. The Interests shall be assigned and transferred to
Buyer or to Buyer's nominee or nominees.
(b) The Buyer shall deliver the Purchase Price to the
Sellers by wire transfer of immediately available funds.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each of the Sellers
hereby jointly and severally represents and warrants to the Buyer as follows:
3.1. Organization; Authority. The Partnership is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of Rhode Island. The Sellers have delivered to the Buyer complete and
correct copies of the Partnership's certificate of limited partnership and
limited partnership agreement and all amendments thereto. The Partnership has
all requisite power and authority to own or lease and operate its properties and
to carry on its business as such business is now conducted.
3.2. Right to Sell Interests; Approvals; Binding Effect. The Sellers
have all requisite power and full legal right to enter into this Agreement, to
perform all of their agreements and obligations hereunder in accordance with its
terms, and to sell to the Buyer all of the Interests. Each Seller has obtained
all necessary authorizations and approvals required for the execution and
delivery of the Agreement and the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by each Seller and
-2-
constitutes the legal, valid and binding obligation of such Seller, enforceable
against such Seller in accordance with its terms, except as the enforceability
thereof may be limited by any applicable bankruptcy, reorganization, insolvency
or other laws affecting creditors' rights generally or by general principles of
equity.
3.3. Non-Contravention. The execution and delivery by each Seller of
this Agreement, and the consummation by such Seller of the transactions
contemplated hereby, will not constitute a violation of, or be in conflict with,
constitute or create a default under, or result in the creation or imposition of
any lien upon any property of such Seller pursuant to (a) any agreement or
instrument to which such Seller is a party or by which such Seller or any of
such Seller's property is bound or to which such Seller or any of such Seller's
property is subject, or (ii) any statute, judgment, decree, order, regulation or
rule of any court or governmental authority to which such Seller is subject.
3.4. Governmental Consents. No consent, approval or authorization of,
or registration, qualification or filing with, any governmental agency or
authority is required for the execution and delivery by each Seller of this
Agreement or for the consummation by each Seller of the transactions
contemplated hereby.
3.5. Capitalization. All of the outstanding partnership interests in
the Partnership are owned of record by the Sellers as set forth on Schedule A
hereto. All of the Interests will be sold by the Sellers to the Buyer pursuant
hereto and are validly issued and outstanding. There are no commitments for the
purchase or sale of, and no options, warrants or other rights to subscribe for
or purchase, any securities of or interests in the Partnership.
3.6. Title to Interests, Liens. Each Seller has, and as of the
consummation of the Closing the Buyer will have, sole record and beneficial
ownership of all of the Interests set forth opposite such Seller's name on
Schedule A hereto, free and clear of any mortgage, lien, pledge, charge,
security interest, encumbrance, title retention agreement, option, equity or
other adverse claim thereto.
3.7. Broker. Except with respect to Edgeview Partners LLC, whose fees
in connection with the transactions contemplated hereby shall be the sole
responsibility of the Sellers, the Sellers have not retained, utilized or been
represented by any broker, agent, finder or intermediary in connection with the
negotiation or consummation of the transactions contemplated by this Agreement.
3.8. Litigation. There is no litigation pending or, to Sellers' actual
knowledge, threatened, against or affecting the Partnership, Sellers, or the
-3-
Property or any part thereof (including eminent domain or condemnation
proceedings), or which would prevent or materially hinder or impair Sellers'
performance of its obligations under this Agreement.
3.9. Encumbrances. There are no possessory interests in, or obligations
running with title to, the Property, other than the occupancy rights of Tech
Industries, Inc., the easements, rights-of-way and other matters of record, any
encroachments or boundary discrepancies that would be revealed by an accurate
survey and all Permitted Encumbrances (as defined below). The Partnership is
subject to no obligations or liabilities (fixed or contingent) that will survive
the Closing other than those of record running with title to the Property, the
Tech Industries, Inc. lease, property taxes and assessments that are not
delinquent, all Permitted Encumbrances.
3.10. Compliance. To Sellers' actual knowledge, the Property (including
the Improvements) conforms in all material respects to, and is being operated in
material compliance with, all applicable laws, regulations, permits and
approvals, including laws governing zoning, land use and the subdivision of
property.
3.11. Environmental Conditions. To Sellers' actual knowledge, other
than as disclosed in the report identified in Section 5.12(a) of the Tech
Purchase Agreement, no hazardous or toxic substance of any kind has been brought
onto, stored or used at or upon, or released upon the Property or any part
thereof, in violation of any law or regulation or as to require clean-up or
remediation under any law or regulation. As used in this Section 3.11, a
substance shall be deemed "hazardous" or "toxic" if liability for its removal or
cleanup could or might be imposed under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section
9601 et seq.) or any similar statute or law.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer hereby
represents and warrants to the Sellers as follows:
4.1. Organization; Authority. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
4.2. Corporate Approval; Binding Effect. The Buyer has all requisite
power and full legal right to enter into this Agreement, and to perform all of
the Buyer's agreements and obligations hereunder, in accordance with its terms.
The Buyer has obtained all necessary corporate or organizational authorizations
and approvals required for the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has
-4-
been duly executed and delivered by the Buyer and constitutes the legal, valid
and binding obligation of the Buyer, enforceable against the Buyer in accordance
with its terms, except as enforceability thereof may be limited by any
applicable bankruptcy, reorganization, insolvency or other laws affecting
creditors' rights generally or by general principles of equity.
4.3. Non-Contravention. The execution and delivery by the Buyer of this
Agreement, and the consummation by the Buyer of the transactions contemplated
hereby, will not (a) violate or conflict with any provisions of the charter
documents or By-Laws or other constituent documents of the Buyer, each as
amended to date; or (b) constitute a violation of, or be in conflict with,
constitute or create a default under, or result in the creation or imposition of
any lien upon any property of the Buyer pursuant to (i) any agreement or
instrument to which the Buyer is a party or by which the Buyer or any of its
properties is bound, or to which the Buyer or any of its properties is subject,
or (ii) any statute, judgment, decree, order, regulation or rule of any court or
governmental authority to which the Buyer is subject.
4.4. Governmental Consents. No consent, approval or authorization of,
or registration, qualification or filing with, any governmental agency or
authority is required for the execution and delivery by the Buyer of this
Agreement or for the consummation by the Buyer of the transactions contemplated
hereby.
4.5. Broker. The Buyer has not retained, utilized or been represented
by any broker, agent, finder or other intermediary in connection with the
negotiation or consummation of the transactions contemplated by this Agreement.
5. CONDUCT OF BUSINESS BY THE PARTNERSHIP PENDING CLOSING. Each Seller
covenants and agrees that, from and after the date of this Agreement and until
the Closing, except as otherwise specifically consented to or approved by the
Buyer in writing:
5.1. Carry on in Regular Course. The Sellers shall cause the
Partnership to operate and maintain the Property substantially in the same
manner consistent with past practice, and to maintain in effect all current
insurance it currently maintains affecting or covering the Property. Neither the
Sellers nor the Partnership shall voluntarily impose upon the Property any new
lien (including, without limitation, the extension or amendment of any lien on
the Property existing as of the date of this Agreement), easement, or other
encumbrance or obligation, nor shall the Sellers or the Partnership incur any
additional debt obligation with respect to the Partnership whether or not
secured by the Property, that will not be released and discharged on or before
the Closing Date.
-5-
5.2. Distributions. The Partnership shall be permitted to distribute to
the Sellers all cash and cash equivalents of the Partnership.
6. CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS. The obligation of
the Buyer to consummate the Closing shall be subject to the satisfaction at or
prior to the Closing of each of the following conditions (to the extent
noncompliance thereof is not waived in writing by the Buyer):
6.1. Representations and Warranties True at Closing. The
representations and warranties made by the Sellers in or pursuant to this
Agreement shall be true and correct at and as of the Closing Date with the same
effect as though such representations and warranties had been made or given at
and as of the Closing Date.
6.2. Compliance with Agreements. The Sellers shall have performed and
complied with all of their obligations under this Agreement to be performed or
complied with by them on or prior to the Closing Date.
6.3. Certificate of Sellers. The Sellers shall have delivered to the
Buyer in writing, at and as of the Closing, a certificate duly executed by the
Sellers, in form and substance reasonably satisfactory to the Buyer and its
counsel, to the effect that the conditions in each of Sections 6.1 and 6.2
hereof have been satisfied.
6.4. Closing of Tech Purchase Agreement. The "Closing" under that
certain Stock Purchase Agreement, dated as of September 1, 2003 (the "Tech
Purchase Agreement"), by and among Xxxxxxx Xxxx and Xxxxx X. Xxxxxx and Xxxxxxxx
X. Xxxxxxxxxxx, as trustees of The Xxxxxxx Xxxx 1988-1 Irrevocable Trust, and
the Buyer, with respect to the purchase and sale of all of the outstanding
capital stock of Tech Industries, Inc., a Rhode Island corporation, shall have
occurred.
6.5. Due Diligence. Beginning on the date of this Agreement and
continuing until September 10, 2003 (the "Due Diligence Period"), Buyer (and any
agents and consultants retained by Buyer) shall have the right at such
reasonable times as Buyer and the Sellers may determine to examine and inspect
the Property, to investigate the condition of title, zoning, value and
usefulness of the Property, to review and examine the Partnership's financial
statements, books and records related to the Property (including maintenance
thereof) and the operation of the Property, and to determine the suitability of
the Property for the use and further development contemplated by Buyer. It is
anticipated that during this period Buyer, both directly and through its agents
and consultants,
-6-
including its structural engineer ("Buyer's Engineer"), will at such reasonable
times and such reasonable manner as Buyer and Sellers may determine conduct
physical examinations of the Property (including improvements thereto and
facilities thereon, and also including environmental review, soil and ground
water sampling, including ground penetrations required therefor, and any
material and structural testing required to evaluate and inspect the
improvements on the Property), and will examine the condition of title, zoning
and the value of the Property. Buyer shall also have the right, during this
period and at Buyer's expense, to obtain a current or updated survey of the
Property. It is understood that Buyer and its agents and consultants shall have
access to the Property and all books and records of the Partnership, in each
case, at such reasonable times as Buyer and Sellers may determine, for the
purpose of conducting its investigation. It shall be a condition of Closing and
of Buyer's obligations to purchase the Property that Buyer, in its sole
discretion, has approved the physical condition of the Property (including
without limitation its environmental condition) and the condition of title and
zoning, and has determined that the use, operation and development limitations
and opportunities of the Property are reasonably satisfactory to Buyer (such
conditions are referred to herein as the "Due Diligence Conditions"). Buyer
shall have the right to notify Sellers in writing at any time prior to the
expiration of the Due Diligence Period that the Due Diligence Conditions are not
satisfied, in which event this Agreement shall automatically be terminated with
no further liability of either party hereunder except as otherwise expressly
provided in this Agreement. Notwithstanding the foregoing, (a) Buyer shall have
no right to so notify Sellers that the Due Diligence Conditions are not
satisfied unless the written report of Buyer's Engineer (the "Engineer's
Report") delivered to Buyer and Sellers on or prior to the Closing Date has
disclosed defects or problems with the physical condition of the Property which
require at least, in any individual case or in the aggregate, $375,000 (the
"Minimum Defects Amount") to remedy same (herein, "Material Physical Condition
Defects") (exclusive of, and without regards to, for purposes of this
calculation, each and every individual defect or problem relating to such
physical condition less than $5,000), and (b) notwithstanding the existence of
Material Physical Condition Defects, Buyer shall still not have the right to so
notify Sellers that the Due Diligence Conditions are not satisfied on account
thereof if Sellers deposit into escrow, pursuant to the terms of the Escrow
Agreement substantially in the form of Exhibit C hereto (the "Structural Escrow
Agreement"), an amount not to exceed $375,000 to be used to remedy the Material
Physical Condition Defects in excess of the Minimum Defects Amount as reasonably
specified in the Engineer's Report, upon the terms and conditions more
particularly set forth in the Structural Escrow Agreement, upon which the Due
Diligence Conditions shall be deemed satisfied. Should, however, Buyer fail to
so notify Sellers as aforesaid by the end of the Due
-7-
Diligence Period, the Property shall be deemed satisfactory and the Due
Diligence Conditions set forth herein shall be deemed satisfied.
In connection with the foregoing, Buyer shall not communicate with
employees of Tech Industries, Inc., other than Xxxxx X. Xxxxxx and Xxxxxxx Xxxx,
without the prior written consent of Sellers, and Sellers shall have the right
to have a representative present (who shall be either Xxxxx X. Xxxxxx or Xxxxxxx
Xxxx) at and to participate in any meetings, telephone discussions or other
forms of communication between Buyer and any employee or other third party
(including governmental agencies) with respect to the Property. Buyer agrees
that it will indemnify and hold Sellers harmless from and against all damage to
persons or property and all related actions, claims, penalties, damages and
expenses, including reasonable attorneys fees and court costs, based upon or
arising out of the activities of Buyer and its agents and consultants or any of
their respective inspectors, contractors, or affiliates while on or about the
Property or the land adjacent thereto. Buyer agrees that all information in
connection with the above-referenced inspections, examinations or tests shall be
kept confidential by Buyer and its inspectors, consultants, contractors, agents,
investors, lenders, and affiliates except to the extent otherwise required by
applicable law.
6.6. Title. A title company reasonably designated by Buyer shall have
issued or shall be fully prepared to issue an Owners ALTA policy or binder of
title insurance (at Buyer's option) in form and substance reasonably
satisfactory to Buyer, including a non-imputation endorsement and such other
endorsements and additional coverages as Buyer may reasonably request, in the
full amount of the Purchase Price, showing fee title fully vested in the
Partnership subject only to (i) property taxes and assessments not delinquent,
(ii) all matters which would be shown by an accurate survey, (iii) all matters
of record and all Permitted Encumbrances other than deeds of trust, mortgages or
other liens for security purposes (other than liens for non-delinquent taxes and
assessments), (iv) the occupancy rights of Tech Industries, Inc., and (v)
statutory or regulatory requirements affecting the Property. It is understood
that Sellers shall, as a covenant and a condition to the Closing, remove all
deeds of trust, mortgages and other liens for monetary obligations of Sellers or
the Partnership encumbering the Property.
Notwithstanding Section 6.5 of this Agreement, if Buyer identifies any
title matters, noted as exceptions on a title commitment which Buyer shall
obtain during the Due Diligence Period (the "Title Commitment"), that are not
acceptable to Buyer in Buyer's sole discretion, Buyer shall give written notice
to Sellers (the "Title Notice") within the Due Diligence Period which identifies
such title matters that are not acceptable. If Buyer fails to give the Title
Notice to Sellers within the Due Diligence Period then all such exceptions,
excluding any
-8-
deeds of trust, mortgages and other liens for monetary obligations of Sellers or
the Partnership encumbering the Property which Sellers are otherwise obligated
to remove, shall be deemed Permitted Encumbrances. If the Title Notice sets
forth title matters that are not acceptable to the Buyer, then the Sellers,
subject to the limitations below shall use reasonable efforts to remedy the
title matters raised by the Buyer in the Title Notice or to make arrangements
pursuant to which such title matters will be remedied on the Closing Date (or
promptly thereafter in accordance with customary conveyancing procedures). If
despite such reasonable efforts, Sellers are unable either to remedy such title
matters or make arrangements pursuant to which such title matters will be so
remedied before the earlier of the Closing Date or fifteen (15) days after the
Sellers' receipt of the Title Notice, then Sellers shall give notice to the
Buyer identifying the title matters that Sellers will not be able to remedy
before the Closing Date, and this Agreement shall terminate unless Buyer, within
fifteen (15) days after the expiration of such period but in any event before
the Closing Date, gives notice to Sellers waiving the objections to title set
forth in the Title Notice that Sellers will not be able to remedy, in which
event any such matter objected to that Sellers will not be able to remedy shall
be deemed to be a Permitted Exception. Sellers shall not, however, be obligated
to expend more than $10,000.00 to correct title defects hereunder, not including
funds necessary to pay monetary encumbrances.
6.7. Closing Documents. Sellers shall have executed and delivered to
Buyer, or shall be fully ready, willing and able to execute and deliver to Buyer
at or before Closing, (i) the Assignment and Assumption of Interests
contemplated in Section 2.2(a) above; (ii) a certificate certifying that Sellers
are not foreign persons within the meaning of the Foreign Investment in Real
Property Tax Act of 1980, and such other certificates as may reasonably be
requested by Buyer for the purpose of confirming that Buyer is under no
obligation to withhold any portion of the purchase price under federal or state
law; and (iii) a standard affidavit indemnifying against claims of workmen and
materialmen arising from activities undertaken prior to the Closing and (iv)
such other assignments, transfer documents and certificates as Buyer may
reasonably request.
6.8. Structural Escrow Agreement. If required pursuant to Section 6.5
hereof, the Sellers and the escrow agent under the Structural Escrow Agreement
shall have entered into the Structural Escrow Agreement.
6.9. Environmental Escrow Agreement. The Sellers and the equityholders
(the "Fairmount Realty Sellers") of Fairmount Realty Associates ("Fairmount
Realty Associates") shall have entered into the Escrow Agreement substantially
in the form of Exhibit D hereto (the "Environmental Escrow Agreement"), with the
escrow agent thereunder, pursuant to which the Sellers and the Fairmount
-9-
Realty Sellers shall have deposited into escrow the aggregate sum of $200,000 to
be used to remedy environmental problems (if any) located at the Property and at
the property owned by Fairmount Realty Associates located at 85 Fairmount
Street, Woonsocket, Rhode Island.
7. CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS. The obligation of
the Sellers to consummate the Closing shall be subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (to the extent
noncompliance thereof is not waived in writing by the Sellers):
7.1. Representations and Warranties True at Closing. The
representations and warranties made by the Buyer in this Agreement shall be true
and correct at and as of the Closing Date with the same effect as though such
representations and warranties had been made or given at and as of the Closing
Date.
7.2. Compliance with Agreements. The Buyer shall have performed and
complied with all of its obligations under this Agreement that are to be
performed or complied with by it at or prior to the Closing.
7.3. Certificate of Buyer. The Buyer shall have delivered to the
Sellers in writing, at and as of the Closing, a certificate duly executed by the
President of the Buyer, in form and substance reasonably satisfactory to the
Sellers and their counsel, to the effect that the conditions in each of Sections
7.1 and 7.2 hereof have been satisfied.
7.4. Closing of Tech Purchase Agreement. The "Closing" under the Tech
Purchase Agreement shall have occurred.
7.5. Structural Escrow Agreement. If required pursuant to Section 6.5
hereof, the Buyer and the escrow agent under the Structural Escrow Agreement
shall have entered into the Structural Escrow Agreement.
7.6. Environmental Escrow Agreement. The Buyer and the escrow agent
under the Environmental Escrow Agreement shall have entered into the
Environmental Escrow Agreement.
8. LIMITATIONS REGARDING THE PROPERTY.
8.1. Limitations. The Buyer and the Sellers agree that, except for the
express warranties, representations and agreements set forth in this Agreement
or the Tech Purchase Agreement, the Buyer is acquiring the Property (indirectly
through its acquisition of the Interests) in its "AS IS" condition, WITH ALL
FAULTS, IF ANY, AND WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED.
-10-
Except for the express warranties, representations and agreements in this
Agreement and the Tech Purchase Agreement, none of the Sellers nor any
shareholders, beneficiaries, trustees, directors, officers, agents,
representatives or employees of the Sellers, have made any representations or
warranties, direct or indirect, oral or written, express or implied, to the
Buyer or any agents, representatives or employees of the Buyer, with respect to
the condition of the Property, its fitness for any particular purpose, or its
compliance with any laws, and the Buyer is not aware of and does not rely upon
any such representation to any other party. The Buyer expressly acknowledges
that the Purchase Price reflects that, except for the express warranties,
representations and agreements set forth in this Agreement or the Tech Purchase
Agreement, the Buyer is acquiring the Property (indirectly through its
acquisition of the Interests) in an "AS IS" condition. The Buyer acknowledges
that it has had and will have under this Agreement the opportunity to make such
inspections (or have such inspections made by consultants) as it desires of the
Property and all factors relevant to its use, including, without limitation, the
interior, exterior and structure of all Improvements, and the condition of soils
and subsurfaces (particularly with respect to the presence or absence of
hazardous substances).
8.2. Permitted Exceptions. Subject to Buyer's title due diligence and
termination rights under Sections 6.5 and 6.6 of this Agreement, the Buyer
hereby agrees it is acquiring the Property (indirectly through its acquisition
of the Interests), subject to the following (each a "Permitted Encumbrance"):
(a) All exception items not otherwise objected to by Buyer
pursuant to Section 6.6 of this Agreement and as shown on the Title Commitment,
possible title objections, survey objections, and any defects in or to title to
the Property or other matters affecting or relating to the title to, or the
survey of, or the condition of, the Property which existed as of the Closing
Date, except to the extent any of the same are inconsistent with Sellers'
warranties in Section 3.8 above, and except that Sellers shall (in accordance
with Section 6.6) remove all deeds of trust, mortgages and other liens for
monetary obligations of Sellers or the Partnership encumbering the Property.
Notwithstanding the foregoing, any material encumbrance to title (other than an
encumbrance for a monetary obligation Sellers are obligated to remove) arising
or recorded after the effective date of the Title Commitment and before the
Closing Date shall give Buyer the option, on the Closing Date, to either (i)
terminate this Agreement by written notice to Sellers or (ii) close hereunder,
in which event such encumbrance will be a Permitted Encumbrance.
(b) The lien of non-delinquent real and personal property taxes
and assessments.
-11-
(c) Discrepancies, conflicts in boundary lines, shortages in area,
encroachments, and any state of facts which an accurate survey of the Property
would disclose and which are not shown by the public records.
(d) Easements or claims of easements shown by the public records.
8.3. Release. Except for the warranties, representations, agreements
and other obligations of Sellers under this Agreement or the Tech Purchase
Agreement (all of which shall survive the Closing), Buyer hereby remises and
releases the Sellers and their respective shareholders, beneficiaries, trustees,
directors, officers, agents, representatives and employees, from any and all
claims, liabilities, losses, damages, costs and expenses that the Buyer may have
relating to or arising from (a) the condition of the Property at any time,
whether before or after the Closing Date, including, without limitation, the
presence of any asbestos, oil or hazardous substance, or (b) any other matter
pertaining to the Property. The release set forth in this Section 8.3 shall
survive the Closing or the termination of this Agreement for any reason
whatsoever.
9. INDEMNIFICATION.
9.1. Indemnity by the Sellers. Subject to the overall limitations,
minimum amounts and time limitations set forth in Section 9.5 hereof, each
Seller agrees to indemnify and hold the Buyer and its directors, officers,
employees and Affiliates (as defined in the Tech Purchase Agreement) harmless
from and with respect to any and all claims, liabilities, losses, damages, costs
and expenses, including, without limitation, the fees and disbursements of
counsel (collectively, "Losses"), related to or arising, directly or indirectly,
out of any failure or any breach by the Sellers of any representation or
warranty, covenant, obligation or undertaking made by the Sellers in this
Agreement, any Schedule or Exhibit hereto, or any other certificate or other
instrument delivered pursuant hereto.
9.2. Indemnity by the Buyer. Subject to the overall limitations,
minimum amounts and time limitations set forth in Section 9.5 hereof, the Buyer
agrees to indemnify and hold the Sellers and its Affiliates harmless from and
with respect to any and all Losses related to or arising from, directly or
indirectly, any failure or any breach by the Buyer of any representation or
warranty, covenant, obligation or undertaking made by the Buyer in this
Agreement, any Schedule or Exhibit hereto, or any other certificate or other
instrument delivered pursuant hereto.
-12-
9.3. Claims.
(a) Notice. Any party seeking indemnification hereunder (the
"Indemnified Party") shall notify the other party hereto (the "Indemnifying
Party") of any action, suit, proceeding, demand or breach (a "Claim") with
respect to which the Indemnified Party claims indemnification hereunder, which
notification shall be made within ten (10) days after the Indemnified Party
becomes aware of any such Claim.
(b) Third Party Claims. If such Claim relates to any action, suit,
proceeding or demand instituted against the Indemnified Party by a third party
(a "Third Party Claim"), the Indemnifying Party shall be entitled to participate
in the defense of such Third Party Claim after receipt of notice of such claim
from the Indemnified Party. Within thirty (30) days after receipt of notice of a
particular matter from the Indemnified Party, the Indemnifying Party may assume
the defense of such Third Party Claim, provided it does so at its expense, in
which case the Indemnifying Party shall have the authority to negotiate,
compromise and settle such Third Party Claim, if and only if the following
conditions are satisfied:
(i) the Indemnifying Party shall have confirmed
in writing that it is obligated hereunder to indemnify the Indemnified
Party with respect to such Third Party Claim; and
(ii) such Third Party Claim involves only money
damages and does not seek an injunction or other equitable relief.
The Indemnified Party shall retain the right to employ its own counsel and to
participate in the defense of any Third Party Claim, the defense of which has
been assumed by the Indemnifying Party pursuant hereto, but the Indemnified
Party shall bear and shall be solely responsible for its own costs and expenses
in connection with such participation.
9.4. Method and Manner of Paying Claims. With respect to any liquidated
Claim or other claim that has been the subject of a notice under Section 9.3(a)
above, if within (30) thirty days after the receipt of written notice thereof
under Section 9.3(a) hereof the Indemnifying Party has not contested such Claim
in writing, the Indemnifying Party will pay the full amount thereof within ten
(10) days after the expiration of such period. Any amount owed by an
Indemnifying Party hereunder with respect to any Claim may be set-off by the
Indemnified Party against any amounts owed by the Indemnified Party to any
Indemnifying Party.
-13-
9.5. Limitations on Indemnification.
(a) No Indemnifying Party shall be required to indemnify an
Indemnified Party hereunder except to the extent that the aggregate amount of
Losses for which the Indemnified Party is otherwise entitled to indemnification
pursuant to this Section 9 exceeds an amount equal to ten percent (10%) of the
Indemnification Cap under Section 9.5(b) (the "Indemnification Threshold"),
whereupon the Indemnified Party shall be entitled to be paid the excess of the
aggregate amount of all such Losses over the Indemnification Threshold, subject
to the limitations on maximum amount of recovery set forth in Section 9.5(b)
hereof; provided, that Losses related to or arising directly or indirectly out
of any claims for indemnification made by the Buyer under Section 9.1 hereof
with respect to (i) any inaccuracies in any representation or warranty made by
the Sellers in Sections 3.5 or 3.6 hereof, or (ii) any breach of any covenant,
obligation or undertaking of the Sellers under this Agreement (collectively,
"Purchase Price Limited Claims"), shall not be subject to the limitations set
forth in this Section 9.5(a).
(b) The aggregate amount of Losses payable by the Sellers on the
one hand, and the Buyer on the other hand, pursuant to this Section 9 with
respect to all claims for indemnification (excluding Purchase Price Limited
Claims) shall not exceed ten percent (10%) of the Purchase Price. The aggregate
amount of Losses payable by the Sellers on the one hand, and the Buyer on the
other hand, pursuant to this Section 9 with respect to all claims for
indemnification, (including Purchase Price Limited Claims) shall not exceed the
Purchase Price.
(c) No Indemnifying Party shall be liable for any Losses pursuant
to this Section 9 unless a written claim for indemnification in accordance with
Section 9.4 hereof is given by the Indemnified Party to the Indemnifying Party
with respect thereto within one (1) year after the Closing, except that this
time limitation shall not apply to any Losses related to or arising directly or
indirectly out of any Purchase Price Limited Claims, as to which in each case
the applicable statute of limitations shall apply.
10. CASUALTY OR CONDEMNATION. In the event that prior to the Closing
Date either the Improvements are damaged or destroyed, in whole or in part, by
fire or other cause, or any portion of the Land or the Improvements becomes the
subject of a condemnation proceeding by a public or quasi-public authority
having the power of eminent domain, then the parties hereto shall proceed with
the purchase and sale of the Interests contemplated under this Agreement, in
which event (i) the Partnership shall be entitled to receive any insurance
proceeds or condemnation awards and (ii) in the case of damage by an
-14-
uninsured casualty, any post-closing cost of repair shall be credited against
the Purchase Price. Anything above to the contrary notwithstanding, (i) in the
event of any damage by an uninsured casualty where the cost of repair is
expected to exceed $250,000, Sellers shall have the right to terminate this
Agreement within 10 days after the occurrence of the damage (and provided, that
if such uninsured damage occurs less than 10 days before the scheduled Closing
Date, the Closing Date shall be delayed until seven days after Sellers have
either waived their right of termination in writing or the 10-day period for
termination has expired without Sellers exercising their right of termination);
and (ii) in the event of any damage (whether by an insured or an uninsured
casualty) where the cost of repair is expected to exceed $500,000, Buyer shall
have the right to terminate this Agreement within 10 days after the occurrence
of the damage (and provided, that if such damage occurs less than 10 days before
the scheduled Closing Date, the Closing Date shall be delayed until seven days
after Buyer has either waived its right of termination in writing or the 10-day
period for termination has expired without Buyer exercising its right of
termination).
11. RECORDING PROHIBITED. This Agreement shall not be recorded in any
Registry of Deeds or other office or place of public record. If the Buyer shall
record this Agreement or cause or permit the same to be recorded, the Sellers
may, at their option, elect to treat such act as a default and breach by Buyer
under this Agreement.
12. TERMINATION. This Agreement may be terminated by either the Buyer
or the Sellers in writing, without liability to the terminating party on account
of such termination (provided the terminating party is not otherwise in default
or in breach of this Agreement), if the "Closing" under the Tech Purchase
Agreement shall not have occurred on or before October 24, 2003, unless such
failure to close is a consequence of the breach of this Agreement, or the
default on its obligations hereunder, by the terminating party.
13. TAX MATTERS.
13.1. Filing of Tax Returns and Payment of Taxes. The Sellers shall
prepare and file (or cause to be prepared and filed) on a timely basis all
income tax returns of the Partnership for taxable periods ending on or prior to
or including the Closing Date that are due (taking all applicable extensions
into account) or may be filed after the Closing Date. Such tax returns shall be
prepared on a basis consistent with the Partnership's prior tax returns to the
extent appropriate and permitted under all applicable tax laws, rules and
regulations. With respect to each such tax return, the Buyer shall provide the
Sellers with such powers of attorney as are necessary to enable the Sellers to
file such tax return.
-15-
13.2. Audits. The Sellers shall be solely responsible for defending any
audit, litigation or other proceeding with respect to income taxes of the
Partnership attributable to any taxable period (or portion thereof) prior to the
Closing Date, and shall have the exclusive authority to negotiate, compromise
and settle any such audit, litigation or other proceeding. The Sellers shall
keep the Buyer reasonably informed as to the progress of any such audit,
litigation or other proceeding, and shall, if the Buyer so requests in writing,
permit the Buyer, at its expense, to participate in any such audit, litigation
or other proceeding.
13.3. Retention of Records. For a period of seven (7) years after the
Closing Date or such longer period as may be required by law, the Buyer shall
retain and not destroy or dispose of all income tax returns (including
supporting materials), books and records (including computer files) of, or with
respect to the activities or income taxes of, the Partnership for all taxable
periods or portions thereof ending on or prior to the Closing Date to the extent
the Buyer or the Partnership received or had possession of such records on the
Closing Date. Thereafter, the Buyer shall not destroy or dispose of any such
income tax returns, books or records unless it first offers such tax returns,
books and records to the Sellers in writing and the Sellers fail to accept such
offer within sixty (60) days of its being made.
14. GENERAL.
14.1. Consent to Jurisdiction. The Sellers and the Buyer hereby
irrevocably submit to the jurisdiction of any state or federal court sitting in
the State of Rhode Island over any action or proceeding arising out of or
relating to this Agreement, and the Sellers and the Buyer hereby irrevocably
agree that all claims in respect to such action or proceeding may be heard and
determined in such state or federal court. The Sellers and the Buyer hereby
agree that a final judgment in any action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
14.2. Expenses. The Buyer shall pay and be responsible for all
settlement expenses, except as set forth in the following sentence, in
connection with the transfer of the Interests (and indirectly the Property),
including, without limitation, recording fees, the costs of obtaining a binder
or commitment from a title insurance company, the premium for any title
insurance policy procured by the Buyer with respect to the Property, the costs
of municipal lien certificates and utility readings, and all other costs and
expenses incidental to or in connection with the sale of the Interests. All
expenses of the preparation, execution and consummation of this Agreement,
including, without limitation, attorneys',
-16-
accountants' and outside advisers' fees and disbursements, shall be borne by the
party incurring such expenses, and Sellers and Buyer shall each be responsible
for one-half of all transfer and personal property sales taxes, if any.
14.3. Notices. All notices, demands and other communications hereunder
shall be in writing or by written telecommunication, and shall be deemed to have
been duly given if delivered personally or if mailed by certified mail, return
receipt requested, postage prepaid, or if sent by overnight courier, or sent by
written telecommunication, as follows:
If to any Seller, to:
Xx. Xxxxx X. Xxxx
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: 000-000-0000
with a copy sent contemporaneously to:
Xx. Xxxxx X. Xxxxxx
Xx. Xxxxxxx X. Xxxx
Tech Industries, Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
and
Xxxxxxxx X. Xxxxxxxxxxx, Esq.
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
If to the Buyer, to:
Portola Packaging, Inc.
000 Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Mr. Xxx Xxxxxx, President
Fax: 000-000-0000
-17-
with a copy sent contemporaneously to:
Xxxxxxxxxxxx X. Xxxxxx
Vice President and General Counsel
Portola Packaging, Inc.
000 Xxxx Xxxxxx #000
Xxx Xxxxxxxxx, XX 00000
Fax: 000-000-0000
Any such notice shall be effective (a) if delivered personally, when
received, (b) if sent by overnight courier, when receipted for, (c) if mailed,
five (5) days after being mailed as described above, and (d) if sent by written
telecommunication, when received.
14.4. 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.
14.5. 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.
14.6. Sections and Section Headings. The headings of sections and
subsections are for reference only and shall not limit or control the meaning
thereof.
14.7. 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 party hereto, except that Buyer shall have the
right (without Sellers' consent) to assign its rights under this Agreement to
any corporation, limited liability company or other entity controlled by or
under common control with Buyer.
14.8. 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.
-18-
14.9. Further Assurances. The parties hereto agree, whether before or
after Closing, to take such reasonable steps and execute such other and further
documents (at no cost to Sellers if the request is from Buyer and no cost to
Buyer if the request is from Sellers) as the other party may reasonably request
to cause the terms and conditions contained herein and the purpose of this
transaction to be carried into effect.
14.10. 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 equity holders, if any, any
rights or remedies under or by reason of this Agreement.
14.11. 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.
14.12. Satisfaction of Conditions Precedent. Each of the Sellers and
the Buyer will use his or its commercially reasonable efforts to cause the
satisfaction of the conditions precedent contained in this Agreement; provided,
however, that nothing contained in this Section 14.12 shall obligate either
party hereto to waive any right or condition under this Agreement.
14.13. Public Statements or Releases. Each of the parties hereto agrees
that prior to the consummation of the Closing no party to this Agreement will
make, issue or release any public announcement, statement or acknowledgment of
the existence of, or reveal the status of, this Agreement or the transactions
provided for herein, without first obtaining the consent of the other party
hereto.
[Remainder of page intentionally left blank]
-19-
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have caused this Agreement to be duly executed and delivered as a
sealed instrument as of the date and year first above written.
BUYER:
PORTOLA PACKAGING, INC.
By: /s/ XXXXX XXXXXX
---------------------------------------
Xxxxx Xxxxxx
President
SELLERS:
TECH INVESTMENTS, INC.
By: /s/ XXXXX X. XXXX
---------------------------------------
Xxxxx X. Xxxx
President
/s/ XXXXX X. XXXX
-------------------------------------------
Xxxxx X. Xxxx
/s/ XXXXX X. XXXX
-------------------------------------------
Xxxxx X. Xxxx
/s/ XXXX X. XXXX
-------------------------------------------
Xxxx X. Xxxx
-20-
SCHEDULE A
SELLERS' PRO RATA SHARES
SELLER TYPE OF PARTNER PRO RATA SHARES
------ --------------- ---------------
Tech Investments, Inc. General Partner 1%
Xxxxx X. Xxxx Limited Partner 33%
Xxxxx X. Xxxx Limited Partner 33%
Xxxx X. Xxxx Limited Partner 33%
EXHIBIT A
DESCRIPTION OF LAND AND IMPROVEMENTS
84 FAIRMOUNT STREET, WOONSOCKET, RHODE ISLAND
A certain lot or parcel of land with all buildings and other
improvements thereon situated on the southerly and easterly side of
Fairmount Street, the southwesterly side of Water Street and the
westerly side of Canal Street in the City of Woonsocket, County of
Providence and State of Rhode Island bounded and described as follows:
Said parcel is more particularly bounded and described as follows, viz;
-
Beginning at a point on the southerly side of aforesaid Fairmount
Street at the northwesterly corner of former Xxxxxxx Street and being
the most northwesterly corner of parcel herein described; -
Thence: N 77-28'-00" E, with the aforesaid southerly side of Fairmount
Street three hundred forty-three and twenty-seven one hundredths
(343.27) feet; -
Thence: N 30-14'-00" E, still continuing with the aforesaid Fairmount
Street three hundred six and seventy-one one hundredths (306.71) feet
to the intersection of the southwesterly side of aforesaid Water
Street; -
Thence: S 59-46'-00" E, with the southwesterly side of aforesaid Water
Street three hundred ninety-four and thirty-three one hundredths
(394.33) feet to the westerly side of aforesaid Canal Street; -
Thence: S 30-14'-00" W, with the westerly side of aforesaid Canal
Street eighty-three and thirty-two one hundredths (83.32) feet; -
Thence: S 33-34'-00" E, crossing aforesaid Canal Street and land of
Imperial Packaging Corporation two hundred ninety-four and eighty-four
one hundredths (294.84) feet to land of City of Woonsocket; -
Thence: S 64-31'-00" W, with aforesaid City of Woonsocket land one
hundred ninety-three and eleven one hundredths (193.11) feet; -
Thence: N 59-37'-00" W, forty-four and nineteen one hundredths (44.19)
feet; -
Thence: S 71-37'-00" W, one hundred seventy-nine and fifty-six one
hundredths (179.56) feet; -
Thence: N 60-10'-00" W, sixteen and seventy-five one hundredths (16.75)
feet; -
Thence: N 60-02'-26" W, fifty-four and fifty-three one hundredths
(54.53) feet; -
Thence: S 71-37'-00" W, one hundred eighty six and eighty-eight one
hundredths (186.88) feet; -
Thence: N 59-45'-00" W, four hundred seventy-four and forty-nine one
hundredths (474.49) feet to the southerly side of aforesaid Fairmount
Street and point of beginning, the last seven (7) lines bounded by
aforesaid City of Woonsocket land;
Being the same premises conveyed to 00 Xxxxxxxxx Xxxxxx Limited
Partnership by Quitclaim Deed from Eastland Savings Bank, dated June
27, 1991.
EXHIBIT B
[To be transferred to one or more assignees depending
on whether buyer wishes to keep the partnership intact]
00 XXXXXXXXX XXXXXX LIMITED PARTNERSHIP
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (this "Agreement") dated as of
this ___ day of ________, 2003, by and among (i) Portola Packaging, Inc., a
Delaware corporation (the "Assignee"), and (ii) each of the general partners and
limited partners (collectively, the "Assignors," and each individually, an
"Assignor") of 00 Xxxxxxxxx Xxxxxx Limited Partnership, a Rhode Island limited
partnership (the "Partnership").
WITNESSETH:
WHEREAS, Assignors are the holders of all of the general partnership
interests and limited partnership interests (the "Assigned Interests") of the
Partnership;
WHEREAS, the parties hereto are parties to that certain Equity Purchase
Agreement, dated as of September 1, 2003 (the "Purchase Agreement") pursuant to
which the Assignors agreed to sell and assign the Assigned Interests to the
Assignee;
WHEREAS, each Assignor wishes to transfer and assign all of such
Assignor's Assigned Interests to Assignee, and Assignee desires to acquire the
Assigned Interests; and
WHEREAS, each Assignor intends that Assignee shall become a substitute
general partner and a substitute limited partner of the Partnership (a
"Substitute Partner") pursuant to the terms of the limited partnership agreement
of the Partnership, dated as of _______, _____, as amended from time to time
(the "Partnership Agreement").
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the
covenants and agreements made in the Purchase Agreement to which this Agreement
is a part, the parties hereby agree as follows:
1. Each Assignor hereby assigns and transfers such Assignor's
Assigned Interest to Assignee effective the date hereof, intending that Assignee
shall become a Substitute Partner. Each Assignor acknowledges receipt of the
agreed payment for the Assigned Interests.
2. Assignee hereby joins and becomes a party to the Partnership
Agreement and assumes all of the obligations of each Assignor under the
Partnership Agreement. Assignee accepts (a) the Assigned Interests and (b) all
of the terms and provisions of the Partnership Agreement.
3. Assignee and Assignor shall execute, deliver, acknowledge,
file, and record such other instruments as they each may reasonably require in
order to further evidence or effect the assignment of the Assigned Interests
hereunder.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
ASSIGNEE:
PORTOLA PACKAGING, INC.
By: /s/ XXXXX XXXXXX
---------------------------------------
Xxxxx Xxxxxx
President
ASSIGNORS:
TECH INVESTMENTS, INC.
By: /s/ XXXXX X. XXXX
---------------------------------------
Xxxxx X. Xxxx
President
/s/ XXXXX X. XXXX
-------------------------------------------
Xxxxx X. Xxxx
/s/ XXXXX X. XXXX
-------------------------------------------
Xxxxx X. Xxxx
/s/ XXXX X. XXXX
-------------------------------------------
Xxxx X. Xxxx
EXHIBIT C
Structural Escrow Agreement
EXHIBIT D
Environmental Escrow Agreement
