Exhibit 1
STOCK PURCHASE AGREEMENT
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 New Kaiser Voluntary EmployeeS' Beneficiary
Association, a tax exempt trust formed pursuant to Section 501(a) and 501(c)(9)
of the Internal Revenue Code of 1986, as amended ("VEBA").
RECITALS
A. VEBA owns shares of the $.03 par value common stock of Kaiser which
VEBA 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 VEBA 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 2,730,950 shares of the Kaiser common stock (the "VEBA Shares")
owned by VEBA 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
this Agreement, Kaiser hereby purchases from VEBA, and VEBA hereby sells to
Kaiser, the VEBA Shares.
2. PURCHASE PRICE AND PAYMENT TERMS. The purchase price payable by
Kaiser to VEBA for the VEBA 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 fixed purchase price of $35,502,415 paid by wire transfer of immediately
available funds contemporaneously herewith.
2.2 WARRANT. Contemporaneously herewith, Kaiser is delivering
to VEBA a warrant, in the form attached hereto as Exhibit A (the "WARRANT"), to
purchase 460,000 shares of Kaiser Common Stock.
2.3 CONTINGENT PAYMENT. In addition, VEBA will have the right
to 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.
3. REPRESENTATIONS AND WARRANTIES OF KAISER. Kaiser represents and
warrants to VEBA:
(a) ORGANIZATION AND AUTHORIZATION. Kaiser has been duly
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
VEBA and are attached to the opinion of counsel provided to VEBA. 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 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 obligation of Kaiser, Kaiser has not employed any broker or finder in
connection with the Transaction, and shall hold VEBA 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 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 VEBA in writing at the
Board of Directors meeting at which this Agreement was approved.
4. REPRESENTATIONS AND WARRANTIES OF VEBA. VEBA hereby represents and
warrants to Kaiser as follows:
(a) ORGANIZATION AND AUTHORIZATION. VEBA is a trust that has
been duly formed, is validly existing and in good standing under California and
applicable federal laws. 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 VEBA 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 VEBA, 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. VEBA 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 VEBA.
(b) CONSENTS. VEBA has obtained any necessary third party
consent or approval that may be required to be obtained by it to complete the
Transaction.
(c) OWNERSHIP. VEBA is the record and beneficial owner of
3,387,940 shares of the
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common stock of Kaiser, including the VEBA Shares. VEBA has and Kaiser will
receive title to the VEBA 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 is being exercisable are being acquired for investment for VEBA'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. VEBA has the requisite knowledge and experience to assess the relative
merits and risks of an acquisition of the Warrant and such shares. VEBA is an
"accredited investor" as that term is defined by Rule 501(a) promulgated under
the Securities Exchange Act of 1933, as amended. The VEBA 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) BROKERS. VEBA 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 VEBA in connection with the
Transaction.
5. OTHER DOCUMENTS.
(a) LEGAL OPINION FROM VEBA'S COUNSEL. Kaiser has received a
legal opinion from VEBA'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 VEBA; (b) the Transaction does not contravene any
applicable law, rule, or regulation or any order or decree binding on VEBA; and
(c) the completion of the Transaction on the part of VEBA does not require the
consent or authorization of any governmental authority that has not been
obtained.
(b) LEGAL OPINION FROM XXXXXX'X COUNSEL. VEBA has received a
legal 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. VEBA agrees that, without the prior written
consent of Kaiser, which consent Kaiser may grant or deny in its sole and
absolute discretion, VEBA 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 VEBA 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 VEBA are entering into the Registration Rights Agreement in the form
attached hereto as Exhibit C (the "REGISTRATION RIGHTS AGREEMENT").
7. RESIGNATIONS. On execution hereof, VEBA has delivered to Kaiser an
executed irrevocable resignation for each of four VEBA affiliated individuals
currently serving on Xxxxxx'x Board of Directors, and the Board of Directors of
Kaiser has, subject to the execution of this Agreement, appointed the
representative designated by VEBA to the Board of Directors of Kaiser.
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8. SURVIVAL OF EXISTING INDEMNITIES. The existing rights to
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, (i)
Kaiser 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 VEBA representatives 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
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 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 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.
(a) SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable 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
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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 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 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 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 VEBA 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 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 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
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 VEBA: The New Kaiser Voluntary Employees' Beneficiary
Association
0000 Xxxxxx Xxxxxx, Xxxxx X
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000)000-0000
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Any notice or communication mailed shall also be faxed to the
appropriate number specified above.
(g) INTERPRETATION. In this Agreement the singular included
the 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 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 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
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 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 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 VEBA.
(l) ENFORCEMENT COSTS. In the event of any legal proceeding to
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 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 consummate the Transaction.
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(o) PUBLIC ANNOUNCEMENTS. Neither party shall make any public
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 remainder of this 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 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.
"VEBA" "KAISER"
New Kaiser Voluntary Employees' Xxxxxx Ventures Inc.
Beneficiary Association
By: By:
______________________________ _________________________
Xxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxxx
Chairman, Administrative Committee President, Chief Executive
Officer & Chairman of the Board
By: Xxxxx Fargo Bank of California, as trustee
By:__________________________
Xxxxx Xxxxxxxx
Assistant Vice President
Institutional Trust Group
By:__________________________
Xxxxxxx Xxxx
Vice President and Area Manager
Los Angeles Office
Institutional Trust Group
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