SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13D-
1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
(Amendment No. 5)
Kaiser Ventures, Inc.
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(Name of Issuer)
Common Stock, par value $0.03 per share
(Title of Class of Securities)
483088 10 0
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(CUSIP Number)
Ronald E. Bitonti, Chairman
Administrative Committee
New Kaiser Voluntary Employees' Beneficiary Association
9810 Sierra Avenue, Suite A
Fontana, CA 92335
909-356-3663
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 22, 1999
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box:. |_|
Note. Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1 (a) for other parties to whom copies are to
be sent.
(Continued on following pages)
(Page 1 of 5 Pages)
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CUSIP No. 483088 10 0 13D Page 2 of 5 Pages
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1 NAME OF REPORTING PERSONS New Kaiser Voluntary Employees' Beneficiary
Association
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
33-033-0153
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|_|
(b)|_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
CALIFORNIA
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NUMBER OF 7 SOLE VOTING POWER
SHARES 1,116,987
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,116,987
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PERSON 10 SHARED DISPOSITIVE POWER
WITH -0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,116,987
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.59%
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14 TYPE OF REPORTING PERSONS*
EP
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CUSIP No. 483088 10 0 13D Page 3 of 5 Pages
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Item 1. Security & Issuer
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This statement relates to the common stock, par value $0.03 per share
(the "Common Stock"), of Kaiser Ventures, Inc. (the "Company"). The Company's
principal executive offices are located at 3633 East Inland Empire Blvd., Suite
850, Ontario, California 91764.
Item 2. Identity & Background
- ------------------------------
(a) New Kaiser Voluntary Employees' Beneficiary Association, an
employee benefit trust.
(b) 9810 Sierra Avenue, Suite A, Fontana, California 92335.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Organized in California.
Item 3. Source & Amount of Funds & Other Consideration
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Item 3 is hereby amended in its entirety to read as follows:
The shares of Common Stock held by the VEBA were acquired pursuant to
the post-bankruptcy reorganization of Kaiser Steel Corporation, the predecessor
to the Company.
Item 4. Purpose of Transactions
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Not applicable.
Item 5. Interest in Securities of the Issuer
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(a) The VEBA holds 656,987 shares of Common Stock,
representing 10.47% of the 6,274,853 shares of Common Stock currently
outstanding. In addition, the Company has the right to purchase 460,000 shares
at a price of $17.00 per share under the terms of a stock purchase warrant,
which is currently exercisable and expires on September 30, 2004. See Item 5(c)
below. Giving effect to the exercise of this warrant, the VEBA beneficially owns
1,116,987 shares, or 16.59% of Kaiser common stock.
(b) The VEBA has the sole power to vote and dispose of all of
the shares of Common Stock held by the VEBA.
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(c) On November 22, 1997 the Company repurchased 2,730,950
shares of the Common Stock from the VEBA and 1,693,551 shares of Common Stock
from the Pension Benefit Guaranty Corporation ("PBGC"). The VEBA and the PBGC
were the Company's two largest shareholders prior to such repurchase.
Pursuant to a Stock Purchase Agreement dated November 22,
1999, the VEBA received $13.00 per share in cash and warrants to purchase
460,000 shares of the Company pursuant to a Stock Purchase Warrant dated
November 22, 1999. The Company has agreed to register the 460,000 shares for
resale under the Securities Act of 1933, pursuant to a Registration Rights
Agreement dated as of November 22, 1999.
In addition, through a Contingent Payment Agreement with the
Company dated November 22, 1999, the VEBA and the PBGC will have certain limited
participation in the future success of the Company. First, if there is a
qualifying sale of the Company's Mill Site real estate generally prior to
December 31, 2000, the VEBA and PBGC would receive their pro rata portion of any
proceeds in excess of certain minimum amount. This contingent payment would
equal approximately $1.10 per share if the previously announced transaction for
the sale of the Company's remaining Mill Site property to Ontario Ventures I,
LLC were to close on its current terms.
Each of these Agreements are filed as Exhibits to this
Schedule 13D.
With completion of the transaction, the Company's outstanding
shares of common stock were reduced from 10,699,354 shares to 6,274,853 shares .
In addition, the size of the Company's Board of Directors was reduced from
eleven members to seven members, with the VEBA retaining a single Board
representative.
An independent committee of the Company's Board evaluated and
negotiated the transaction and made a determination that the transaction was
fair to the Company and the non-selling shareholders. Merrill Lynch served as
financial advisor to the independent committee and rendered an opinion that the
transaction was fair from a financial point of view to the Company and the
non-selling shareholders.
(d) Not applicable
(e) Not applicable
Item 6. Materials to be Filed as Exhibits
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1. There is filed herewith as Exhibit 1 the Stock Purchase Agreement
pursuant to which the VEBA sold the shares described herein to the
Company.
2. There is filed herewith as Exhibit 2 the Stock Purchase Warrant dated
as of November 22, 1999 and bearing an expiration date of September
30, 2004.
3. There is filed herewith as Exhibit 3 the Contingent Payment Agreement
dated as of November 22, 1999.
4. There is filed herewith as Exhibit 4 the Registration Rights Agreement
dated as of November 22, 1999.
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Signatures
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After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: December 8, 1999
NEW KAISER VOLUNTARY
EMPLOYEES' BENEFICIARY ASSOCIATION
By: /s/Ronald E. Bitonti
-----------------------------------------
Ronald E. Bitonti
Chairman, Administrative Committee
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
Kaiser 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
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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 Merrill Lynch 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 Merrill Lynch, 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 KAISER'S COUNSEL. VEBA has received a
legal opinion from Kaiser's 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 Kaiser's 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 Kaiser's 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.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Attention: President
With a copy to:
Terry L. Cook, Esq.
Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Telephone: (909) 483-8500
Facsimile: (909) 944-6605
IF TO VEBA: The New Kaiser Voluntary Employees' Beneficiary
Association
9810 Sierra Avenue, Suite A
Fontana, CA 92335
Telephone: (909) 356-3663
Facsimile: (909)356-4672
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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' Kaiser Ventures Inc.
Beneficiary Association
By: By:
______________________________ _________________________
Ronald E. Bitonti Richard E. Stoddard
Chairman, Administrative Committee President, Chief Executive
Officer & Chairman of the Board
By: Wells Fargo Bank of California, as trustee
By:__________________________
Mario Gonzalez
Assistant Vice President
Institutional Trust Group
By:__________________________
Susanna Ryan
Vice President and Area Manager
Los Angeles Office
Institutional Trust Group
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KAISER VENTURES INC.
STOCK PURCHASE WARRANT
THE WARRANTS EVIDENCED HEREBY AND THE SHARES OF STOCK ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
OFFERED OR SOLD WITHOUT REGISTRATION UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE UNDER SUCH ACT OR THE RULES OR
REGULATIONS PROMULGATED THEREUNDER
Expiration Date: September 30, 2004
WARRANT TO PURCHASE
460,000
SHARES OF COMMON STOCK
AS DESCRIBED HEREIN
This certifies that, for value received, New Kaiser Employees'
Voluntary Benefit Association, a tax exempt trust formed pursuant to Section
501(a) and 501(c)(9) of the Internal Revenue Code of 1986, as amended, or its
successors and assigns ("HOLDER"), is entitled to purchase from Kaiser Ventures
Inc., a Delaware corporation (the "COMPANY"), up to and including Four Hundred
Sixty Thousand (460,000) fully paid and nonassessable shares (the "NUMBER OF
SHARES") of the common stock, $.03 per share, of the Company (the "COMMON
STOCK") on the terms set forth herein. The exercise price (the "PURCHASE PRICE")
shall be $17.00 per share. The Number of Shares and the Purchase Price may be
adjusted from time to time as described in this Warrant.
1. EXERCISE.
TIME FOR EXERCISE. This Warrant may be exercised in whole or in part
at any time, and from time to time, during the period commencing on
the date hereof and expiring on September 30, 2004
1.1 MANNER OF EXERCISE. This Warrant shall be exercised by delivering it to
the Company with the attached exercise form duly completed and signed,
specifying (i) the number of shares as to which the Warrant is being exercised
at that time (the "EXERCISE NUMBER"), and (ii) whether the Holder wishes the
exercise to be made by "purchase" or "exchange".
1.1.1 PURCHASE. If the Holder elects the purchase option, the Holder
shall deliver to the Company cash or a certified check in an amount equal to the
Exercise Number multiplied by the Purchase Price within five (5) business days
of the exercise, and the Holder shall be entitled to receive the full Exercise
Number of shares of Common Stock.
<PAGE>
1.1.2 EXCHANGE. If the Holder elects the exchange option, the Holder
shall be entitled (without cash payment) to receive that number of shares of
Common Stock having an aggregate Market Value on the date of exercise equal to
the difference between the Market Value of the Exercise Number of shares and the
aggregate Purchase Price thereof. For purposes of this Section 1.1.2, "Market
Value" means on any given date means (i) the average closing price of the Common
Stock for the prior ten trading days on which the stock actually traded on the
principal stock exchange on which the Common Stock is then traded or (ii) if not
so traded, the closing (or, if no closing price is available, the average of the
bid and asked prices) for such period on the NASDAQ if such the Common Stock is
listed on NASDAQ or (iii) if not listed on any exchange or quoted on the NASDAQ,
the Company's board of directors shall provide Holder with a good faith
determination of value, and Holder may either accept such determination or
request a determination by a mutually acceptable investment banking firm, whose
fees will be paid by the Holder unless the Market Price so determined exceeds
110% of that set by the Board.
1.2 EFFECT OF EXERCISE. Promptly (but in any case within five business
days) after any exercise, the Company shall deliver to the Holder (i) duly
executed certificates in the name or names specified in the exercise notice
representing the aggregate number of shares issuable upon such exercise, and
(ii) if this Warrant is exercised only in part, a new Warrant of like tenor
representing the balance of the Number of Shares. Such certificates shall be
deemed to have been issued, and the person receiving them shall be deemed to be
a holder of record of such shares, as of the close of business on the date the
actions required in Section 1.1 shall have been completed or, if on that date
the stock transfer books of the Company are closed, as of the next business day.
2. TRANSFER OF WARRANTS AND STOCK.
2.1 TRANSFER RESTRICTIONS. Neither this Warrant nor the securities issuable
upon its exercise may be sold, transferred or pledged unless the Company shall
have been supplied with reasonably satisfactory evidence that such transfer is
not in violation of the Securities Act of 1933, as amended, and any applicable
state securities laws. The Company may place a legend to that effect on this
Warrant, any replacement Warrant and each certificate representing shares
issuable upon exercise of this Warrant. Subject to the satisfaction of this
condition only, this Warrant shall be freely transferable by the Holder.
2.2 MANNER OF TRANSFER. Upon delivery of this Warrant to the Company with
the attached assignment form duly completed and signed, the Company will
promptly (but in any case within five business days) execute and deliver to each
transferee and, if applicable, the Holder, Warrants of like tenor evidencing the
rights (i) of the transferee(s) to purchase the Number of Shares specified for
each in the assignment forms, and (ii) of the Holder to purchase any
untransferred portion, which in the aggregate shall equal the Number of Shares
of the original Warrant. The Company may decline to proceed with any partial
transfer if any new Warrant would represent the right to purchase fewer than one
thousand shares of Common Stock (such number to be adjusted as provided in
Section 4). If this Warrant is properly assigned in compliance with this Section
2, it may be exercised by an assignee without having a new Warrant issued.
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<PAGE>
2.3 LOSS, DESTRUCTION OF WARRANT CERTIFICATES. Upon receipt of (i) evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and (ii) except in the case of mutilation, an
indemnity or security reasonably satisfactory to the Company (the original
Holder's or any institutional Holder's indemnity agreed to be satisfactory), the
Company will promptly (but in any case within five business days) execute and
deliver a replacement Warrant of like tenor representing the right to purchase
the same Number of Shares.
3. COST OF ISSUANCES. The Company shall pay all expenses, transfer taxes and
other charges payable in connection with the preparation, issuance and delivery
of stock certificates or replacement Warrants, except for any transfer tax or
other charge imposed as a result of (i) any issuance of stock certificates in
any name other than the name of the Holder upon exercise of the Warrant or (ii)
any transfer of the Warrant. The Company shall not be required to issue or
deliver any stock certificate or Warrant until it receives reasonably
satisfactory evidence that any such tax or other charge has been paid by the
Holder.
4. ANTI-DILUTION PROVISIONS. If any of the following events occur at any time
hereafter during the life of this Warrant, then the Purchase Price and the
Number of Shares immediately prior to such event shall be changed as described
in order to prevent dilution:
4.1 STOCK SPLITS AND REVERSE SPLITS. If at any time the outstanding shares
of Common Stock are subdivided into a greater number of shares, then the
Purchase Price will be reduced proportionately and the Number of Shares will be
increased proportionately. Conversely, if at any time the outstanding shares of
Common Stock are consolidated into a smaller number of shares, then the Purchase
Price will be increased proportionately and the Number of Shares will be reduced
proportionately.
4.2 DIVIDENDS. In the event the Company declares a dividend upon the Common
Stock whether in cash, property or securities (except for cash dividends not in
excess of the per share amount paid by the Company under that certain Contingent
Payment Agreement between the Company and the initial Holder dated as of
November 17, 1999), at the time of subsequent exercise of this Warrant, the
Company shall deliver both (i) the Number of Shares for which exercise is made
plus (ii) such dividends as would have been previously distributed to the Holder
if such exercise had been made on the date hereof. If the Company shall declare
a dividend payable in cash on its Common Stock and shall at substantially the
same time offer to its shareholders a right to purchase new Common Stock from
the proceeds of such dividend, or for an amount substantially equal to the
dividend, the amount of Common Stock so offered shall, for the purpose of this
Warrant, be deemed to have been issued as a stock dividend.
4.3 EFFECT OF REORGANIZATION AND ASSET SALES. If any (i) reorganization or
reclassification of the Common Stock, (ii) consolidation or merger of the
Company with or into another corporation, (iii) sale of all or substantially all
of its operating assets to another corporation, or (iv) sale of the Company
substantially as a going concern followed by a liquidation of the Company (any
such occurrence shall be an "EVENT"), is effected in such a way that holders of
Common Stock are entitled to receive securities and/or assets as a result of
their
3
<PAGE>
Common Stock ownership, then upon exercise of this Warrant the Holder will have
the right to receive the shares of stock, securities or assets which they would
have received if such rights had been fully exercised as of the record date for
such Event. The Company will not effect any Event unless prior to or
simultaneously with its consummation the successor corporation resulting from
the consolidation or merger (if other than the Company), or the corporation
purchasing the Company's assets, assumes the performance of the Company's
obligations under this Warrant (as appropriately adjusted to reflect such
consolidation, merger or sale such that the Holder's rights under this Warrant
remain, as nearly as practicable, unchanged) by a binding written instrument.
4.4 OTHER SECURITIES ADJUSTMENTS. If as a result of this Section 4, a
Holder is entitled to receive any securities other than Common Stock upon
exercise of this Warrant, the number and purchase price of such securities shall
thereafter be adjusted from time to time in the same manner as provided pursuant
to this Section 4 for Common Stock. To the extent that a Right receivable on
exercise of this Warrant has lapsed or been lost prior to the date of exercise,
on exercise the Company shall pay in cash an amount equal to the Market Value of
the Right which lapsed or was lost, determined as of the time which such Right
lapsed or was lost. The allocation of purchase price between various securities
shall be made in writing by the Board of Directors of the Company in good faith
at the time of the event by which the Holder become entitled to receive new
securities, and a copy sent to the Holder.
4.5 NOTICES.
4.5.1 NOTICE OF ADJUSTMENTS. When any adjustment is required to be
made under this Section 4, the Company shall promptly (i) determine such
adjustments, (ii) prepare and retain on file a statement describing in
reasonable detail the method used in arriving at the adjustment; and (iii) cause
a copy of such statement, together with any agreement required by Section 4.3,
to be mailed to the Holder within 10 days after the date on which the
circumstances giving rise to such adjustment occurred.
4.5.2 NOTICE OF EVENTS. If at any time (i) the Company declares any
dividends on the Common Stock, (ii) any Event is expected to occur, or (iii)
there is a voluntary or involuntary dissolution, liquidation or winding up of
the Company, then the Company shall give the Holder at least thirty (30) but not
more than ninety (90) days written notice of the date on which the books of the
Company will close or upon which a record will be taken with regard to such
occurrence. Such notice will also specify the date as of which the holders of
the Common Stock will participate in the dividend or will be entitled to
exchange their shares for securities or other property. The notice may state
that the record date is subject to the effectiveness of a registration statement
under the Securities Act or to a favorable vote or determination of shareholders
or of any governmental agency.
4.6 COMPUTATIONS AND ADJUSTMENTS. Upon each computation of an adjustment
under this Section 4, the Purchase Price shall be computed to the next lowest
cent and the Number of Shares shall be calculated to the next highest whole
share. However, the fractional amount shall be used in calculating any future
adjustments. No fractional shares of Common Stock shall be issued in connection
with the exercise of this Warrant, but the Company shall, in
4
<PAGE>
the case of the final exercise under this Warrant, make a cash payment for any
fractional shares based on the closing price on the date of exercise of a share
of Common Stock on the principal exchange or system on which the Common Stock is
listed or traded (or, if not then listed or traded thereon, the mean of the
closing bid and asked prices on an automated quotation system, or, if such
quotations are not available, such value (determined without discount for
illiquidity or minority status) as may be determined in good faith by the
Company's Board of Directors, which determination shall be conclusively binding
on the parties). Notwithstanding any changes in the Purchase Price or the Number
of Shares, this Warrant, and any Warrants issued in replacement or upon transfer
thereof, may continue to state the initial Purchase Price and the initial Number
of Shares. Alternatively, the Company may elect to issue a new Warrant or
Warrants of like tenor for the additional shares of Common Stock purchasable
hereunder or, upon surrender of the existing Warrant, to issue a replacement
Warrant evidencing the aggregate Number of Shares to which the Holder is
entitled after such adjustments.
4.7 EXERCISE BEFORE PAYMENT DATE. In the event that this Warrant is
exercised after the record date for any event requiring an adjustment, but prior
to the actual event, the Company may elect to defer issuing to the Holder any
payment or additional securities required by such adjustment until the actual
event occurs; provided, however, that the Company shall deliver a "due bill" or
other appropriate instrument to the Holder transferable to the same extent as
the Common Stock issuable on exercise evidencing the Holder's right to receive
such additional payment or securities upon the occurrence of the event requiring
such adjustment.
5. COVENANTS. The Company agrees that:
5.1 RESERVATION OF STOCK. During the period in which this Warrant may be
exercised, the Company will reserve sufficient authorized but unissued
securities (and, if applicable, property) to enable it to satisfy its
obligations on exercise of this Warrant. If at any time the Company's authorized
securities shall not be sufficient to allow the exercise of this Warrant, the
Company shall take such corporate action as may be necessary to increase its
authorized but unissued securities to be sufficient for such purpose;
5.2 NO LIENS, ETC. All securities that may be issued upon exercise of this
Warrant will, upon issuance, be validly issued, fully paid, nonassessable and
free from all taxes, liens and charges with respect to the issue thereof, and
shall be listed on any exchanges or authorized for trading on any automated
systems on which that class of securities is listed or authorized for trading;
5.3 FURNISH INFORMATION. The Company will promptly deliver to the Holder
copies of all financial statements, reports, proxy statements and other
information which the Company shall have sent to its shareholders generally; and
6. STATUS OF HOLDER.
6.1 NOT A SHAREHOLDER. Except as otherwise provided in this Warrant, unless
the Holder exercises this Warrant in writing, the Holder shall not be entitled
to any rights (i) as a shareholder of the Company with respect to the shares as
to which the Warrant is exercisable
5
<PAGE>
including, without limitation, the right to vote or receive dividends or other
distributions, or (ii) to receive any notice of any proceedings of the Company.
6.2 LIMITATION OF LIABILITY. Unless the Holder exercises this Warrant in
writing, the Holder's rights and privileges hereunder shall not give rise to any
liability for the Purchase Price or as a shareholder of the Company, whether to
the Company or its creditors.
7. GENERAL PROVISIONS.
7.1 COMPLETE AGREEMENT; MODIFICATIONS. This Warrant and any documents
referred to herein or executed contemporaneously herewith constitute the
parties' entire agreement with respect to the subject matter hereof and
supersede all agreements, representations, warranties, statements, promises and
understandings, whether oral or written, with respect to the subject matter
hereof. This Warrant may not be amended, altered or modified except by a writing
signed by the parties.
7.2 ADDITIONAL DOCUMENTS. Each party hereto agrees to execute any and all
further documents and writings and to perform such other actions which may be or
become necessary or expedient to effectuate and carry out this Warrant.
7.3 NOTICES. All notices under this Warrant shall be in writing and shall
be delivered by personal service, facsimile or certified mail (if certified mail
is not available, then by first class mail), postage prepaid, to such address as
may be designated from time to time by the relevant party, and which shall
initially be:
IF TO THE COMPANY: Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Attention: President
With a copy to:
Terry L. Cook, Esq.
Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Telephone: (909) 483-8500
Facsimile: (909) 944-6605
IF TO HOLDER: The New Kaiser Voluntary
Employees' Beneficiary Association
9810 Sierra Avenue, Suite A
Fontana, CA 92335
6
<PAGE>
Telephone: (909) 356-3663
Facsimile: (909)356-4672
Any notice sent by certified mail shall be deemed to have been given three
(3) days after the date on which it is mailed. All other notices shall be deemed
given when received. No objection may be made to the manner of delivery of any
notice actually received in writing by an authorized agent of a party.
7.4 NO THIRD-PARTY BENEFITS; SUCCESSORS AND ASSIGNS. None of the provisions
of this Warrant shall be for the benefit of, or enforceable by, any third-party
beneficiary. Except as provided herein to the contrary, this Warrant shall be
binding upon and inure to the benefit of the parties, their respective
successors and permitted assigns. The Holder may assign its rights and
obligations under this Warrant to any third party if done so in compliance with
the requirements of Section 2. The Company may only assign its rights and
obligations this Warrant in connection with a merger, consolidation or sale of
substantially all of its operating assets to the extent expressly permitted by,
and in compliance with all the requirements of, Section 4.3.
7.5 WAIVERS STRICTLY CONSTRUED. With regard to any power, remedy or right
provided herein or otherwise available to any party hereunder (i) no waiver or
extension of time shall be effective unless expressly contained in a writing
signed by the waiving party, and (ii) no alteration, modification or impairment
shall be implied by reason of any previous waiver, extension of time, delay or
omission in exercise, or other indulgence.
7.6 SEVERABILITY. The validity, legality or enforceability of the remainder
of this Warrant shall not be affected even if one or more of its provisions
shall be held to be invalid, illegal or unenforceable in any respect.
7
<PAGE>
7.7 ATTORNEYS' FEES. Should any litigation or arbitration be commenced
(including any proceedings in a bankruptcy court) between the parties hereto or
their representatives concerning any provision of this Warrant or the rights and
duties of any person or entity hereunder, the party or parties prevailing in
such proceeding shall be entitled, in addition to such other relief as may be
granted, to the attorneys' fees and court costs incurred by reason of such
litigation or arbitration.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
effective as of November 22, 1999.
KAISER VENTURES, INC.
By:_________________________________
Richard Stoddard
Its President
Attest:
By:______________________________
Terry L. Cook
Its Secretary
8
<PAGE>
ASSIGNMENT FORM
(To Be Executed Upon Transfer of Warrant)
FOR VALUE RECEIVED, ______________________________ hereby sells, assigns
and transfers to the transferee named below [the rights to purchase ___ of the
Number of Shares under] this Warrant, together with all rights, title and
interest therein. [The rights to purchase the remaining Number of Shares shall
remain the property of the undersigned.] [This includes a transfer of the
registration rights in the Warrant.]
[NAME OF HOLDER]
Dated: _______________ By:_________________________________
Signature
Name:_______________________________
(Please Print)
Title:______________________________
Address:____________________________
____________________________
____________________________
Employer Identification Number,
Social Security Number or other
identifying number:_________________
TRANSFEREE:
Name:__________________________________
(Please Print)
Address:_______________________________
_______________________________
_______________________________
Employer Identification Number,
Social Security Number or other
identifying number:____________________
9
<PAGE>
EXERCISE FORM
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby exercises the Warrant with regard to
_____________ shares of Common Stock and herewith [makes payment of the purchase
price in full] [or requests that the Company exchange the Warrant as provided in
Section 1.1.2 of the Warrant]. The undersigned requests that the certificate(s)
for such shares [and the Warrant for the unexercised portion of this Warrant] be
issued [to the Holder] [in the name set forth below].
[NAME OF HOLDER]
Dated: _______________ By:_________________________________
Signature
Name:_______________________________
(Please Print)
Title:______________________________
Address:____________________________
____________________________
____________________________
Employer Identification Number,
Social Security Number or other
identifying number:_________________
TRANSFEREE:
Name:__________________________________
(Please Print)
Address:_______________________________
_______________________________
_______________________________
Employer Identification Number,
Social Security Number or other
identifying number:____________________
10
Exhibit 3
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 New Kaiser Voluntary EmployeeS'
BenefiCIARY Association, a tax exempt trust formed pursuant to Sections 501(a)
and 501(c)(9) of the Internal Revenue Code of 1986, as amended ("VEBA").
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 VEBA is selling to Kaiser certain shares of the $.03 par value
common stock of Kaiser, which VEBA received in connection with the Chapter 11
bankruptcy reorganization of Kaiser 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 VEBA 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 "VEBA Contingent Real Estate Payment"
shall mean 24.69% of the excess of the net after-tax proceeds received by Kaiser
from the Bulk Real Estate
<PAGE>
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 VEBA 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 VEBA
Contingent Real Estate Payment would be $2,973,300.
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 VEBA 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.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Attention: President
With a copy to:
Terry L. Cook, Esq.
Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Telephone: (909) 483-8500
Facsimile: (909) 944-6605
If to VEBA: The New Kaiser Voluntary Employees' Beneficiary
Association
9810 Sierra Avenue, Suite A
2
<PAGE>
Fontana, CA 92335
Telephone: (909) 356-3663
Facsimile: (909)356-4672
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 VEBA.
(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
3
<PAGE>
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.
"VEBA" "Kaiser"
New Kaiser Voluntary Employees' Kaiser Ventures Inc.
Benefit Association
By: _________________________________ By: ____________________________
Ronald E. Bitonti Richard E. Stoddard
Chairman, Administrative Committee President, Chief Executive
Officer & Chairman of the Board
By: Wells Fargo Bank of California, as trustee
By: __________________________
Mario Gonzalez
Assistant Vice President
Institutional Trust Group
By: ______________________________
Susanna Ryan
Vice President and Area Manager
Los Angeles Office
Institutional Trust Group
4
Exhibit 4
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made as of
November 22, 1999 between Kaiser Ventures Inc., a Delaware corporation (the
"Company") and 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") and the Pension Benefit Guaranty
Corporation ("PBGC").
WHEREAS, the Company, and VEBA, and the Company and PBGC, are each
parties to two separate Stock Purchase Agreements dated as of even date herewith
pursuant to which the Company is purchasing certain shares of its stock from
VEBA and from PBGC (the "Stock Purchase Agreements"). However, VEBA will be
receiving a warrant to purchase up to 460,000 shares of the common stock (the
"Common Stock") of the Company and PBGC will be receiving a warrant to purchase
up to 285,260 shares of Common Stock (collectively, the "Warrants") pursuant to
the Stock Purchase Agreements.
WHEREAS, pursuant to the Stock Purchase Agreements, the parties agreed
to enter into this Agreement, pursuant to which the Company will grant to VEBA
and PBGC (the "Sellers") certain registration rights with respect to the Shares
and the Warrant. Unless otherwise provided in this Agreement, capitalized terms
used in this Agreement will have the meanings set forth in paragraph 8 hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Company and the Sellers agree as
follows:
1. Demand Registration.
(a) Notice of Demand. At any one time after September 30,
2001, the Sellers may be written notice request (a "Demand Registration") that
the Company register Registrable Securities under the Securities Act of 1933, as
amended (the "Securities Act") so long as the registration may be accomplished
through the use of a Form S-3 or comparable form. The notice shall set forth (i)
the number of shares to be included; (ii) the names of the Sellers and the
amounts to be sold by each; and (iii) the proposed manner of sale.
(b) Registration. Promptly after receipt of the notice
pursuant to Section 1(a), the Company shall prepare and file with the Securities
and Exchange Commission a registration statement with respect to the Registrable
Securities specified in such notice, and use its best efforts to cause such
registration statement to become effective.
(c) Holdback. In the event that a registration is demanded
pursuant to this Section 1, and in the reasonable judgment of the Company it
cannot be undertaken without serious injury to the Company (the grounds for
which decision shall be confidentially disclosed to any requesting Holder), the
Company shall have the option to require the Selling Holders to withdraw such
registration demand for a period of up to 180 days (which may be extended if
such facts continue to be in effect).
<PAGE>
2. Piggyback Registration Rights.
(a) Right To Piggyback. If the Company proposes to register
any of its common stock under the Securities Act and the registration form to be
used may be used for the registration of Registrable Securities (as defined
below) ("Piggyback Registration") (Piggyback Registrations and Demand
Registrations are "Registrations"), the Company will give written notice to the
Sellers of its intention to effect such a registration and will include in such
registration all Registrable Securities with respect to which the Company has
received a written request from either Seller for inclusion therein within 15
days after the receipt of the Company's notice, subject to subparagraph 2(c)
below.
(c) Priority on Registrations. If the managing underwriters of
the Piggyback Registration determined in their sole but good faith discretion
and advise the Company in writing that in their reasonable opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering without adversely affecting the marketability
of the offering, the Company will include in such registration (i) first, the
securities the Company proposes to sell, (ii) second, the Registrable Securities
requested by the Sellers to be included in such registration (in proportion to
their overall holdings of Common Stock) and (iii) third, other securities
requested to be included in such registration.
3. Procedures.
(a) Piggyback Expenses. The Registration Expenses (as
defined below) of the Sellers will be paid by the Company in a Registration.
(b) Remedies. Neither Seller will not seek an injunction
restraining or otherwise delaying any Registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Agreement.
(c) Availability of Documents. The Company shall furnish to
the Sellers such number of copies of prospectuses, including preliminary
prospectuses, reasonably necessary to conform with the requirements of the
Securities Act, and such other documents as the Sellers may reasonably request,
to facilitate the disposition of the Registrable Securities being sold by the
Sellers upon exercise of the Registration rights contained in this Agreement.
(d) Blue Sky Compliance. The Company shall use its reasonable
efforts to register and qualify securities covered by the Registration rights
contained in this Agreement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably appropriate for the distribution of the
securities covered by the Registration; provided, however, that the Company will
not be required to qualify as a foreign corporation or to take any action which
would subject it to the service of process in such state or jurisdiction, other
than as to matters and transactions relating to the offer and sale of the
offered securities, in any jurisdiction where it is not now so subject.
4. Holdback Agreements. Each Seller agrees not to effect any sale,
transfer or other distribution (including sales pursuant to Rule 144 or Rule
144A) of equity securities of the
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Company, or any securities convertible into or exchangeable or exercisable for
such securities, for the period commencing seven days prior to and ending on the
first to occur of the (i) six months from the effective date of any Registration
in which Registrable Securities are included (except as part of such
underwritten registration) or (ii) the date on which any similar lock-up imposed
upon the Company in such Registration terminates, unless the underwriters
managing the registered public offering otherwise agree.
5. Conditions Of Obligation To Register Shares. The obligations of the
Company under this Agreement are subject to the following conditions:
(a) If a Piggyback Registration is underwritten, the Company
will not be required to include any Registrable Securities in a Piggyback
Registration unless the Seller involved accepts, in writing, the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
the Company. If either Seller does not accept the terms of the underwriting as
agreed upon between the Company and the underwriter, that Seller shall withdraw.
(b) Each Seller will cooperate with the Company in connection
with the preparation of the registration statement, and for so long as the
Company is obligated to file and keep effective the registration statement, will
provide to the Company, in writing, for use in the registration statement, all
information regarding that Seller as may be necessary to enable the Company to
prepare the registration statement and prospectus covering the Registrable
Securities, to maintain the currency and effectiveness thereof and otherwise to
comply with all applicable requirements of law in connection therewith.
(c) During such time as a Seller may be engaged in a
distribution of Registrable Securities, such Seller will comply with Rules 10b-7
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and pursuant thereto, the Seller will, among other things, cause to be
furnished to each broker through whom Registrable Securities may be offered, or
to the offeree if an offer is not made through a broker, such copies of the
prospectus covering the Registrable Securities and any amendment or supplement
thereto and documents incorporated by reference therein as may be required by
law and the Seller shall not bid for or purchase any shares of the Company or
attempt to induce any other person to purchase any securities of the Company
other than as permitted under Exchange Act.
6. Certain Limitation on Future Rights. From and after the date of this
Agreement, the Company shall not enter into any agreement with any other holder
or prospective holder of any securities of the Company providing for the grant
to any such prospective holder of registration rights unless such agreement
includes the substantial equivalent of (a) Section 2(c) of this Agreement as a
term of such agreement and in such section, the agreement provides that the
Sellers will have a priority with respect to Piggyback Registration superior to
any other holder of securities of the Company, excluding, in all cases, the
Company, and (b) Section 3 of this Agreement as a term of such agreement.
7. Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation
all registration
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<PAGE>
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified public
accountants, underwriters (if any) (excluding discounts and commissions) and
other Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), will be borne as provided in this Agreement.
8. Indemnification.
(a) The Company agrees to indemnify, to the extent permitted
by law, the Sellers, their trustees, officers, directors, counsel and each
Person who controls the Sellers (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by the Sellers for use therein
or by the Seller's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished the Sellers with a sufficient number of copies of the same. In
connection with an underwritten offering, the Company will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the Sellers.
(b) In connection with any registration statement in which the
Sellers are participating, the Sellers will furnish to the Company in writing
such information, affidavits instruments and other documents as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the extent permitted by law, indemnify the Company, its
directors, officers, counsel, accountants and each Person who controls the
Company (within the meaning of the Securities Act) against all losses, claims,
damages, liabilities and expenses resulting from any untrue or alleged untrue
statement of material fact contained in the registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in any information or
affidavit so furnished in writing by the Sellers.
(c) Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld, conditioned or delayed). An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such
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<PAGE>
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and will survive the transfer of securities.
9. Participation in Underwritten Registrations. No Seller may not
participate in any registration hereunder which is underwritten unless it (a )
agrees to sell its securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
10. Definitions.
"Person" means any individual, corporation, partnership, limited
liability company, limited liability partnership, firm, joint venture,
association, joint-stock company, trust or unincorporated organization
"Registrable Securities" means (i) any Common Stock issued or issuable
with respect to the Warrants (the "Warrant Shares") and (ii) any Common Stock
issued or issuable with respect to the Warrant Shares by way of a stock
dividend, stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular Registrable Securities, such securities will cease to be Registrable
Securities when they have been distributed to the public or may be immediately
sold to the public through a broker, dealer or market maker in compliance with
Rule 144 or Rule 144A under the Securities Act (or any similar rule then in
force).
11. Termination. This Agreement shall automatically terminate and be of
no further force or effect upon the first to occur of (i) that Seller's failure
to participate in two underwritten public offerings in which Piggyback
Registration rights were offered to it and there was no material restriction on
the number of Registrable Securities proposed to be registered on behalf of the
Company, or (ii) the seventh anniversary date of this Agreement. The termination
of this Agreement does not eliminate any liability of the parties for prior
breaches.
12. Miscellaneous.
(a) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only upon the
prior written consent of the Company and the Sellers. In any instance where a
single decision by Sellers is reasonably necessary, Sellers shall act by
majority based on the Registrable Securities then held or covered by Warrant.
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<PAGE>
(b) Successors and Assigns. This Agreement and the respective
rights and obligations hereunder shall not be assigned by either party except
with the prior written consent of the non-assigning party, which consent shall
be subject to the sole discretion of the non-assigning party.
(c) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(d) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
will constitute one and the same Agreement.
(e) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
(f) Governing Law. All other questions concerning the
construction, validity and interpretation of this Agreement and the exhibits and
schedules hereto will be governed by the internal law, and not the law of
conflicts, of Delaware.
(g) Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable express courier
service (charges prepaid) or mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid. Such notices, demand and
other communications will be sent to the addresses indicated below:
To: The New Kaiser Voluntary Employees' Beneficiary
Association
9810 Sierra Avenue, Suite A
Fontana, CA 92335
Telephone: (909) 356-3663
Facsimile: (909)356-4672
To: Pension Benefit Guaranty Corporation
c/o Pacholder Associates, Inc., as Agent
8044 Montgomery Road, Suite 480
Cincinnati, Ohio 45236
Attention: Thomas M. Barnhart, II
Senior Vice President and
Associate General Counsel
Telephone: (513) 381-2838
Facsimile: (513) 985-3217
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<PAGE>
With a copy to:
Timothy E. Hoberg, Esq.
Taft, Stettinius & Hollister
1800 Firstar Tower
425 Walnut Street,
Cincinnati, Ohio 45202
Telephone: (513) 381-2838
Facsimile: (513) 381-0205
To: Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Attention: President
With a copy to:
Terry L. Cook, Esq.
c/o Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Telephone: (909) 356-3663
Facsimile: (909) 356-4672
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
[Next page is signature page]
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<PAGE>
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
"VEBA" "Kaiser"
New Kaiser Voluntary Employees' Kaiser Ventures Inc.
Beneficiary Association
By: _______________________________________ By:_______________________________
Ronald E. Bitonti Richard E. Stoddard
Chairman, Administrative Committee President, Chief Executive
Officer & Chairman of the Board
By: Wells Fargo Bank of California, as trustee
By:__________________________
Mario Gonzalez
Assistant Vice President
Institutional Trust Group
By:______________________________
Susanna Ryan
Vice President and Area Manager
Los Angeles Office
Institutional Trust Group
"PBGC"
Pension Benefit Guaranty Corporation
By: Pacholder Associates, Inc., as Agent
By: _____________________________________
Thomas M. Barnhart. II
Senior Vice President and
Associate General Counsel
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