Exhibit R
CONTINGENT PAYMENT AGREEMENT
This CONTINGENT PAYMENT 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. The parties hereto are the parties to that certain
Stock Purchase Agreement (the "Stock Purchase Agreement") dated
as of even date herewith pursuant to which PBGC is selling to
Kaiser certain 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. Certain
capitalized terms not otherwise defined in this Agreement will be
defined as set out in the Stock Purchase Agreement.
B. A portion of the consideration under the Stock Purchase
Agreement is a Contingent Payment to be made by Kaiser under
certain terms and conditions.
C. This Agreement is the Contingent Payment Agreement
contemplated by the Stock Purchase Agreement under which the
Contingent Payment will be made.
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. Contingent Payment.
(a) Contingency. In addition to the other
consideration provided for in the Stock Purchase Agreement, if
(i) Kaiser is engaged in active, ongoing discussions with a
specific purchaser or purchasers at the end of the first year
from the date hereof for the sale or other transfer in a single
transaction (or a series of related transactions to one or more
buyers) of at least 65% of the approximately 592 acres of Mill
Site real estate other than the NAPA lots and the Rancho
Cucamonga lots (which are excluded from this test, but not from
the calculation of the payment due hereunder), including the
assumption of all or substantially all known and unknown
environmental remediation and liabilities (including, without
limitation, environmental liabilities to third parties)
associated with all such real estate whether title is actually
transferred or not, (a "Bulk Real Estate Transaction"), and (ii)
Kaiser in fact executes a definitive agreement with such
purchaser or its affiliates (including but not limited to an
option or other conveyance) on or before December 31, 2000
relating to the Bulk Real Estate Transaction under active
negotiation at the end of the year and (iii) that Bulk Real
Estate Transaction in fact closes (regardless of whether before
or after December 31, 2000), then Kaiser will make an additional
cash payment to VEBA (the "VEBA Contingent Real Estate Payment").
The term "Mill Site" refers to the East Slag Pile and the Kaiser
Commerce Center real estate properties which are composed of the
parcels commonly referred to by Kaiser as the West End, West Slag
Pile and Valley Boulevard.
(b) Timing of Payment. Kaiser will make the PBGC
Contingent Real Estate Payment within 10 business days following
the closing and the receipt of funds from the Bulk Real Estate
Transaction.
(c) Calculation. The "PBGC Contingent Real Estate
Payment" shall mean 15.31% of the excess of the net after-tax
proceeds received by Kaiser from the Bulk Real Estate Transaction
(net of all commissions, closing costs, investment banking fees,
Mill Site environmental remediation liabilities not assumed by
the buyer, and income taxes at the rate of 28%) above $8,073,064
as reflected in the "Asset Valuation" contained in Exhibit I
hereto. The PBGC Contingent Real Estate Payment shall be
determined by utilizing the "Contingent Real Estate Payment"
model contained in Exhibit I and shall be calculated by modifying
those assumptions for the actual amounts in the Bulk Real Estate
Transaction. As an example, based upon the example assumptions
shown in Exhibit I, the PBGC Contingent Real Estate Payment
would be $1,843,711.
2. Miscellaneous Provisions.
(a) 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.
(b) Third Party Beneficiaries. 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.
(c) Further Assurances. At any time, and from time to
time, after the Closing Date, 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.
(d) 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.
(e) 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 Xxxx
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
0000 Xxxxxxx Xxxxx
000 Xxxxxx Xxxxxxx
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.
(f) 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.
(g) 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.
(h) 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.
(i) Binding Effect. This Agreement shall be binding
upon the parties hereto and inure to the benefit of the parties,
their respective successors and assigns.
(j) 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 PBGC.
(k) 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.
(l) 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.
(m) Good Faith. The parties agree to seek in good
faith to seek to consummate the Transaction.
(n) 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.
(o) 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.
"PBGC" "Kaiser"
Pension Benefit Guaranty Kaiser Ventures Inc.
Corporation
By: Pacholder Associates,
Inc., as Agent By:_____________________________
Xxxxxxx X. Xxxxxxxx
By:________________________ President, Chief Executive
Xxxxxx X. Xxxxxxxx. II Officer & Chairman of the
Senior Vice President Board
