EXHIBIT 2.1
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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 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
▇▇▇▇▇▇ 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
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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
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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
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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
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VEBA a warrant, in the form attached hereto as Exhibit A (the "Warrant"), to
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purchase 460,000 shares of Kaiser Common Stock.
2.3 Contingent Payment. In addition, VEBA 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 VEBA:
(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 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 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
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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 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
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warrants to Kaiser as follows:
(a) Organization and Authorization. VEBA is a trust that has been
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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
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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
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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
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shares of the 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
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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
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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.
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(a) Legal Opinion from VEBA's Counsel. Kaiser has received a legal
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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 ▇▇▇▇▇▇'▇ Counsel. VEBA has received a legal
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opinion from ▇▇▇▇▇▇'▇ 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
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consent of
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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 ▇▇▇▇▇▇'▇ 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").
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7. Resignations. On execution hereof, VEBA has delivered to Kaiser an
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executed irrevocable resignation for each of four VEBA affiliated individuals
currently serving on ▇▇▇▇▇▇'▇ 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.
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, (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
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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
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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.
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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 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
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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.
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▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Kaiser Ventures Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to VEBA: The New Kaiser Voluntary Employees'
Beneficiary Association
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
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 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
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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 VEBA.
(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 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.
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"VEBA" "Kaiser"
New Kaiser Voluntary Employees' ▇▇▇▇▇▇ Ventures Inc.
Beneficiary Association
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman, Administrative Committee President, Chief Executive
Officer
& Chairman of the Board
By: ▇▇▇▇▇ Fargo Bank of California, as trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Assistant Vice President
Institutional Trust Group
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇
Vice President and Area Manager
Los Angeles Office
Institutional Trust Group
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