EXHIBIT 2.2
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Stock Purchase Agreement
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This STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into this
22nd day of November, 1999, by and between KAISER VENTURES INC., a Delaware
corporation, ("Kaiser") and the Pension Benefit Guaranty Corporation ("PBGC").
Recitals
A. PBGC owns shares of the $.03 par value common stock of Kaiser which
PBGC received in connection with the Chapter 11 bankruptcy reorganization of
Xxxxxx Steel Corporation.
B. The Board of Directors of Kaiser, having considered the
recommendations of its duly authorized Independent Special Committee, has
determined that the acquisition by Kaiser of the PBGC Shares (as defined below)
is in the best interests of the nonselling shareholders of Kaiser.
C. The parties desire to enter this Agreement and to pursue the
transaction contemplated hereby (the "Transaction") pursuant to which Kaiser
will purchase 1,693,551 shares of the Kaiser common stock (the "PBGC Shares")
owned by PBGC upon the terms and conditions of this Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
parties hereto agree as follows:
1. Purchase and Sale of Shares. Subject to the terms and conditions of
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this Agreement, Kaiser hereby purchases from PBGC, and PBGC hereby sells to
Kaiser, the PBGC Shares.
2. Purchase Price and Payment Terms. The purchase price payable by
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Kaiser to PBGC for the PBGC Shares (the "Purchase Price") consists of (i) a
fixed per share payment (ii) Warrants, and (iii) a contingent payment, which is
being paid as follows:
2.1 Fixed Payment. A fixed payment of $13.00 per share for a total
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fixed purchase price of $22,016,163 paid by wire transfer of immediately
available funds contemporaneously herewith.
2.2 Warrant. Contemporaneously herewith, Kaiser is delivering to
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PBGC a warrant, in the form attached hereto as Exhibit A (the "Warrant"), to
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purchase 285,260 shares of Kaiser Common Stock.
2.3 Contingent Payment. In addition, PBGC will have the right to
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receive a contingent payment (the "Contingent Payment") on the terms and
conditions of the Contingent Payment Agreement in the form attached hereto as
Exhibit B.
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3. Representations and Warranties of Kaiser. Kaiser represents and
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warrants to PBGC:
(a) Organization and Authorization. Kaiser has been duly
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incorporated, is
validly existing and in good standing under the laws of the State of Delaware.
The execution, delivery and performance of this Agreement, the Warrant, the
Contingent Payment Agreement and the Registration Rights Agreement (as hereafter
defined) have been duly authorized by all requisite action. No charter, bylaw,
material agreement, material document or material instrument of any kind of
which Kaiser is a party or by which it may be bound would be violated by the
Transaction. Kaiser has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement, the Warrant,
the Contingent Payment Agreement and the Registration Rights Agreement
constitute the valid and legally binding obligation of Kaiser, enforceable in
accordance with its terms and conditions, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
creditors' rights generally. Kaiser need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement. The Transaction does not contravene any applicable law, rule, or
regulation or any order or decree binding on Kaiser. A true and correct copy of
the resolutions of the Independent Committee of the Board of Directors of Kaiser
and those of the Board of Directors of Kaiser approving the Transaction had
previously been delivered to PBGC and are attached to the opinion of counsel
provided to PBGC. Prior to adopting those resolutions, the Independent Committee
and the Board of Directors of Kaiser received an opinion from Xxxxxxx Xxxxx as
to the fairness of the Transaction to the nonselling shareholders of Kaiser.
(b) Consents. Kaiser has obtained any necessary third party consent
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or approval that may be required to be obtained by it to complete the
Transaction.
(c) Brokers. Except for Xxxxxxx Xxxxx, whose fees shall be the sole
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obligation of Kaiser, Kaiser has not employed any broker or finder in connection
with the Transaction, and shall hold PBGC harmless from any liability or loss as
a result of or in connection with any brokerage or finder's fee or other
commission of any person retained by Kaiser in connection with the Transaction.
(d) No Material Adverse Changes. Since December 31, 1998, there has
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not been any material adverse changes in the business, financial condition,
operations, results of operations, or future prospects of Kaiser and no material
transactions involving Kaiser are pending including any material transactions
involving Mine Reclamation Corporation or Mill Site, except as disclosed (a) to
the public in press releases or filings with the Securities and Exchange
Commission or (b) to the representatives of the PBGC in writing at the Board of
Directors meeting at which this Agreement was approved.
4. Representations and Warranties of PBGC. PBGC hereby represents and
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warrants to Kaiser as follows:
(a) Organization and Authorization. PBGC is a corporation that has
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been duly formed, is validly existing and in good standing under federal law.
The execution, delivery and performance of this Agreement and the Registration
Rights Agreement have been duly authorized by all requisite action as necessary.
No trust document, bylaw, material agreement, material document, or material
instrument of any kind of which PBGC is party or by which it may be bound would
be violated by the Transaction. This Agreement and the Registration Rights
Agreement constitute the valid and legally binding obligation of PBGC,
enforceable in accordance with its terms and conditions, subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to creditors' rights generally. PBGC need not give any notice to, make
any filing with, or obtain any
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authorization, consent, or approval of any government or governmental agency in
order to consummate the transactions contemplated by this Agreement. The
Transaction does not contravene any applicable law, rule, or regulation or any
order or decree binding on PBGC.
(b) Consents. PBGC has obtained any necessary third party consent or
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approval that may be required to be obtained by it to complete the Transaction.
(c) Ownership. PBGC is the record and beneficial owner of 2,100,966
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shares of the common stock of Kaiser, including the PBGC Shares. PBGC has and
Kaiser will receive title to the PBGC Shares, free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
charges or other encumbrances of any nature whatsoever.
(d) Warrant Representations. The Warrant and the Shares for which it
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is being exercisable are being acquired for investment for PBGC's own account,
not as a nominee or agent, and not with a view to the sale or distribution of
all or any part thereof in violation of applicable securities laws. PBGC has
the requisite knowledge and experience to assess the relative merits and risks
of an acquisition of the Warrant and such shares. PBGC is an "accredited
investor" as that term is defined by Rule 501(a) promulgated under the
Securities Exchange Act of 1933, as amended. The PBGC understands that each
certificates for the Warrant and such shares may be legended as a result of the
application of Securities and Exchange Commission Rule 144.
(e) Authority of Pacholder Associates, Inc. The PBGC has appointed
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Pacholder Associates, Inc. ("Pacholder") as the PBGC's agent with respect to the
matters contemplated by this Agreement, with full authority to act on behalf of
the PBGC.
(f) Brokers. Except with respect to its agreement with Pacholder,
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PBGC has not employed any broker or finder in connection with the Transaction,
and shall hold Kaiser harmless from any liability or loss as a result of or in
connection with any brokerage or finder's fee or other commission of any person
retained by PBGC in connection with the Transaction.
5. Other Documents.
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(a) Legal Opinion from PBGC's Counsel. Kaiser has received a legal
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opinion from PBGC's legal counsel to the effect that: (a) this Agreement and
the Registration Rights Agreement have been duly authorized by required legal
action on the part of PBGC; (b) the Transaction does not contravene any
applicable law, rule, or regulation or any order or decree binding on PBGC; and
(c) the completion of the Transaction on the part of PBGC does not require the
consent or authorization of any governmental authority that has not been
obtained.
(b) Legal Opinion from Xxxxxx'x Counsel. PBGC has received a legal
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opinion from Xxxxxx'x legal counsel to the effect that: (a) this Agreement, the
Warrant, the Contingent Payment Agreement and the Registration Rights Agreement
have been authorized by required legal action on the part of Kaiser; (b) the
Transaction does not contravene any applicable law, rule, or regulation or any
order or decree binding on Kaiser; and (c) the completion of the Transaction on
the part of Kaiser does not require the consent or authorization of any
governmental authority that has not been obtained.
6. Limited Stock Lock-Up. PBGC agrees that, without the prior written
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consent of
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Kaiser, which consent Kaiser may grant or deny in its sole and absolute
discretion, PBGC will not offer, sell, contract to sell, pledge or otherwise
dispose of ("Transfer"), directly or indirectly, any shares of: (i) Kaiser
Common Stock or (ii) any securities convertible into or exercisable or
exchangeable for Kaiser Common Stock, nor will it publicly disclose the
intention to make any such Transfer, for a period of 180 days after the dates
thereof as specified in this Agreement. Kaiser and its transfer agent and
registrar are hereby authorized by PBGC to decline to make any Transfer of
shares of Kaiser Common Stock if such Transfer would constitute a violation or
breach of this Agreement. A copy of this paragraph shall be sufficient notice of
these restrictions to Xxxxxx'x stock transfer agent and registrar. In addition,
Kaiser and PBGC are entering into the Registration Rights Agreement in the form
attached hereto as Exhibit C (the "Registration Rights Agreement").
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7. Resignations. On execution hereof, PBGC has delivered to Kaiser an
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executed irrevocable resignation for the PBGC affiliated individual currently
serving on Xxxxxx'x Board of Directors.
8. Survival of Existing Indemnities. The existing rights to
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indemnification in favor of the present or former directors, officers, employees
and agents of Kaiser (from November 1, 1988, forward only) and its subsidiaries
shall survive the Transaction and shall continue in full force and effect
following the date hereof. For at least four years after the date thereof,
Kaiser (i) shall use commercially reasonable efforts to maintain policies of
directors' and officers' liability insurance providing coverage of no less than
$15,000,000 with respect to matters existing or occurring at or prior to the
date thereof and (ii) will include the former PBGC representative on the Board
of Directors of Kaiser as beneficiaries under any directors' and officers'
liability insurance policy which is obtained by Kaiser.
9. Nature and Survival of Representations. Subject to Paragraph 10, all
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representations, warranties and covenants made by any party in this Agreement
shall survive the closing hereunder and the consummation of the Transaction,
regardless of any facts that come to the attention of the party.
10. Right of Indemnification. Each party (the "Indemnifying Party") shall
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indemnify and hold the other party (the "Indemnified Party") harmless from and
against all costs and expenses (including reasonable attorneys' fees), damages
and losses ("Losses") arising out of or resulting from a breach of any
representation, warranty or covenant made by the Indemnifying Party in this
Agreement. Except with respect to claims for actual fraud, which may be made
without regard to any limitation, (i) each party shall be required to indemnify
the other only to the extent that the aggregate amount of Losses for which it
must provide indemnity exceeds $10,000 and (ii) the aggregate recoveries from
either party may each not exceed an aggregate of the Purchase Price as a result
of all Losses under this Agreement or with respect to the Transaction. If any
claim is asserted or any action or proceeding is brought in respect of which
indemnity may be sought, the Indemnified Party will promptly notify the
Indemnifying Party in writing of such asserted claim or the institution of such
action or proceeding; provided, however, that the Indemnified Party's failure to
so notify the Indemnifying Party will not relieve the Indemnifying Party from
any liability it might otherwise have on account of this indemnity, except to
the extent that the Indemnifying Party has been materially prejudiced by such
failure to notify. The Indemnifying Party may, at its option, undertake full
responsibility for the defense of any third-party claim which, if successful,
would result in an obligation of indemnity under this Agreement. The
Indemnifying Party may contest or settle any such claim on such terms as the
Indemnifying Party may choose, provided that the Indemnifying Party will not
have the right, without the Indemnified
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Party's prior written consent, to settle any such claim if such settlement (i)
arises from or is part of any criminal action, suit or proceeding, (ii) contains
a stipulation to, confession of judgement with respect to, or admission or
acknowledgement of, any liability or wrongdoing on the part of the Indemnified
Party, (iii) relates to any tax matters, (iv) provides for injunctive relief, or
other relief or finding other than money damages, which is binding on the
Indemnified Party, or (v) does not contain an unconditional release of the
Indemnified Party. Such defense will be conducted by reputable attorneys
retained by the Indemnifying Party at the Indemnifying Party's cost and expense,
but the Indemnified Party will have the right to participate in such proceedings
and to be separately represented by attorneys of its own choosing. The
Indemnified Party will be responsible for the costs of such separate
representation. The Indemnifying Party and the Indemnified Party shall cooperate
in determining the validity of any third-party claim for any Loss for which a
claim of indemnification may be made hereunder. Each party shall also use all
reasonable efforts to minimize all Losses.
11. Miscellaneous Provisions.
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(a) Specific Performance. The parties hereto agree that irreparable
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damage would occur in the event that any of the provisions of this Agreement
were not performed by the applicable party hereto in accordance with the
specific terms of this Agreement or were otherwise breached. Each of the
parties hereto shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement by the other and to enforce specifically the terms
and provisions hereof in addition to any other remedy to which such party is
entitled at law or in equity, and each party waives the posting of any bond or
security in connection with any proceeding related thereto.
(b) Expenses. Except as may otherwise be provided herein, no party
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hereto shall be responsible for the payment of any other party's expenses
incurred in connection with this Agreement.
(c) Third Party Beneficiaries. Except as expressly provided in this
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Agreement, the terms and provisions of this Agreement are intended solely for
the benefit of each party hereto and its respective successors and assigns, and
it is not the intention of the parties to confer third party beneficiary rights
upon any other person or entity.
(d) Further Assurances. At any time, and from time to time, after the
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date thereof, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to PBGC Shares or otherwise to carry out the intent and purposes of this
Agreement.
(e) Waiver. Any failure on the part of any party hereto to comply
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with any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
(f) Notices. All notices and other communications hereunder shall be
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in writing and shall be deemed to have been given if delivered in person or sent
by prepaid first class registered or certified mail, return receipt requested to
the respective principal offices of the parties hereto to the respective
principal offices of the parties hereto as specified below:
If to Kaiser: Kaiser Ventures Inc.
0000 X. Xxxxxx Xxxxxx Xxxxxxxxx
0
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
With a copy to:
Xxxxx X. Xxxx, Esq.
Kaiser Ventures Inc.
0000 X. Xxxxxx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to PBGC: Pension Benefit Guaranty Corporation
c/o Pacholder Associates, Inc., as Agent
0000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, XX
Senior Vice President and
Associate General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxx, Xxxxxxxxxx & Xxxxxxxxx
1800 Firstar Tower
000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any notice or communication mailed shall also be faxed to the appropriate
number specified above.
(g) Interpretation. In this Agreement the singular included the
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plural and the plural the singular; words importing any gender include the other
genders; references to statutes are to be construed as including all statutory
provisions consolidating, amending or replacing the statute referred to;
references to "writing," include printing, typing, lithography and other means
of reproducing words in a tangible visible form; the word "including,"
"includes" and "include" are deemed to be followed by the words "but not limited
to"; and references to paragraphs (or subdivisions of paragraphs) recitals or
exhibits are to those of this Agreement unless otherwise indicated. The
language used in this Agreement will be deemed to be the language chosen by the
parties to this
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Agreement to express their mutual intent, and no rule of strict construction
shall be applied against any party.
(h) Counterparts. This Agreement may be executed simultaneously in
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two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(i) Governing Law. This Agreement shall be governed by, and
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interpreted in accordance with, the laws of the State of Delaware, without
regard to the conflict of law principles thereof. All actions and proceedings
arising out of or relating to this Agreement shall be heard and determined in
any state or Federal court sitting in Delaware. Each of the parties hereto (i)
consents to submit such party to the personal jurisdiction of any Federal court
located in the State of Delaware or any Delaware state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated
hereby; (ii) agrees that such party will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court;
(iii) agrees that such party will not bring any action relating to this
Agreement or the transactions contemplated hereby in any court other than a
Federal court sitting in the State of Delaware or a Delaware state court; and
(iv) waives any right to trial by jury with respect to any claim or proceeding
related to or arising out of this Agreement or any of the transactions
contemplated hereby.
(j) Binding Effect. This Agreement shall be binding upon the parties
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hereto and inure to the benefit of the parties, their respective successors and
assigns.
(k) Entire Agreement. This Agreement and the exhibits to be attached
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hereto constitute the entire agreement of the parties covering everything agreed
upon or understood in the Transaction. The parties are executing and carrying
out this Agreement in reliance solely on the representations, warranties and
covenants and agreements contained in this Agreement and in the written
documents contemplated by this Agreement. This Agreement may not be amended or
modified except by a written document executed by Kaiser and PBGC.
(l) Enforcement Costs. In the event of any legal proceeding to
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enforce any of the terms hereof, the prevailing party shall be entitled to
receive payment for its attorneys' fees and all other costs required to enforce
its rights hereunder.
(m) Regulatory Filings. Each party shall be reasonable for completing
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and filing any regulatory filings that may be applicable to it, including, but
not limited to, any filings with the Securities and Exchange Commission.
(n) Good Faith. The parties agree to seek in good faith to seek to
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consummate the Transaction.
(o) Public Announcements. Neither party shall make any public
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announcements concerning this Agreement or the Transactions contemplated herein
without prior written consent of the other party except as required by law,
regulation or court order; provided however that in any case any party required
to make a public announcement shall notify the other, and shall reasonably
cooperate with that other party in making such required disclosure.
(p) Severability. The validity, legality or enforceability of the
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remainder of this
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Agreement shall not be affected even if one or more of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable in any respect.
To the extent permitted by applicable law, the parties hereby waive any
provision of law that would render any provision hereof prohibited or
unenforceable in any respect.
(q) Headings. The headings in this Agreement are inserted only as a
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matter of convenience, and in no way define, limit, or extend or interpret the
scope of this Agreement or of any particular paragraph.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the day and year first above written.
"PBGC" "Kaiser"
Pension Benefit Guaranty Corporation Kaiser Ventures Inc.
By: Pacholder Associates, Inc., as Agent
By: /s/ Xxxxxx X. Xxxxxxxx, III By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, XX Xxxxxxx X. Xxxxxxxx
Senior Vice President and President, Chief Executive
Associate General Counsel Officer & Chairman of the
Board
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