Subscription and Exchange Agreement
Prior to the effectiveness hereof, Phibro-Tech, Inc., a Delaware
corporation (the "Corporation"), has filed a Certificate of Amendment to its
Certificate of Incorporation pursuant to which, among other things, the
Corporation's common stock is classified into two classes, consisting of Class A
Common Stock, par value $.01 ("Class A Stock"), and Class B Common Stock, par
value $.01 (the "Class B Stock"), which are identical in all respects except
that the shares of Class A Stock are entitled to full voting power and the
shares Class B Stock are not entitled to any voting rights whatsoever, except as
may otherwise be required by law. I. Xxxxx Xxxxx, Xxxxxx X. Xxxxxxxxx and Xxxxx
X. Xxxxxxxx (each a "Stockholder" and collectively the "Stockholders")
respectively own 240.08, 71.67 and 71.67 shares of Class A Stock. C.P.
Chemicals, Inc., a New Jersey corporation ("C.P. Chemicals"), owns 3,200 shares
of Class A Stock. C.P. Chemicals is a wholly-owned subsidiary of Philipp
Brothers Chemicals, Inc., a New York corporation ("Philipp Brothers").
The Stockholders and Phibro-Tech have entered into a Stockholders
Agreement, dated as of February 21, 1995, and amended as of June 11, 1998 (as
the same may be amended and/or restated from time to time, the "Stockholders
Agreement"), to which the Stockholders' shares of Class A Stock are subject. In
particular, Section 7 of the Stockholders Agreement provides that the
Stockholders shall vote their Shares (as such term is defined therein) in the
Corporation in the manner recommended by the Board of Directors of the
Corporation.
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed as follows:
1. Each Stockholder hereby subscribes for that number of shares of
Class B Stock (the "Class B Shares") that equals the number of shares of Class A
Stock that he owns immediately prior to the effectiveness hereof. Certificates
for such Class B Shares shall be issued upon the execution hereof, whereupon
such shares shall be duly and validly issued, fully paid, non-assessable. In
exchange and consideration therefor, each Stockholder hereby transfers, assigns
and conveys to the Corporation all shares of Class A Stock issued to or held by
him. Upon the execution hereof, each Stockholder shall deliver to the
Corporation for cancellation a certificate for such Stockholder's shares of
Class A Stock, accompanied by duly executed stock powers.
2. Each Stockholder hereby represents and warrants (severally and
not jointly) that he is the sole record and beneficial owner of all shares of
Class A Stock issued to or held by him free and clear of any and all liens,
pledges and encumbrances (other than the Stockholders Agreement) (collectively
"Liens"), and that this Agreement will convey to the Corporation lawful and
valid title to all shares of Class A Stock issued to or held by him free and
clear of any and all Liens.
3. Each Stockholder acknowledges that the Class B Shares are not
registered under the Securities Act, and that, except as otherwise provided in
the Stockholders Agreement, the Corporation shall not have any obligation to so
register any of the Class B Shares and that the Class B Shares must be held
indefinitely unless they are subsequently registered under the Securities Act of
1933, as amended (the "Securities Act"), or an exemption from such registration
is available. Each Stockholder hereby represents and warrants (severally and not
jointly) to the Corporation that he is acquiring the Class B Shares for his own
interest and account, for investment purposes only, and without a view toward
the sale or distribution thereof within the meaning of the Securities Act.
4. Each Stockholder acknowledges that he has been afforded access to
all information which he has requested and/or deemed relevant to his decision to
acquire Class B Shares and that neither the Corporation nor anyone acting on its
behalf has made any representations or warranties to him which have induced or
persuaded him to acquire such Class B Shares.
5. Each Stockholder represents and warrants (severally and not
jointly) that he has the knowledge and experience in financial and business
matters to be capable of evaluating the merits and risks of his holdings of
shares of capital stock of the Corporation, and he is and will be able to bear
the economic risk thereof.
6. Each Stockholder agrees that each certificate representing the
Class B Shares to be issued to such Stockholder hereunder will bear a legend in
the form required by Section 8.2 of the Stockholders Agreement.
7. The Stockholders and the Corporation acknowledge and agree that
the Class B Shares shall be deemed for all purposes of the Stockholders
Agreement to be "Shares" thereunder
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(as defined therein), and that the Stockholders Agreement shall remain in full
force and effect.
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8. This Agreement may be executed in two or more counterparts, all
of which shall constitute one and the same agreement.
Dated as of January 29, 1999
PHIBRO-TECH, INC.
By: /s/ I. Xxxxx Xxxxx
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/s/ I. Xxxxx Xxxxx
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I. XXXXX XXXXX
/s/ Xxxxxx X. Xxxxxxxxx
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XXXXXX X. XXXXXXXXX
/s/ Xxxxx X. Xxxxxxxx
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XXXXX X. XXXXXXXX
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