Golenbock, Eiseman, Assor & Bell
437 Madison Avenue
New York, New York 10022-7302
December 14, 1998
Philipp Brothers Chemicals, Inc.
One Parker Plaza
Fort Lee, N.J. 07024
Re: Philipp Brothers Chemicals, Inc. Registration Statement on Form S-4
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Ladies and Gentlemen:
We have acted as counsel to Philipp Brothers Chemicals, Inc.,
a New York corporation (the "Company"), and the Designated Guarantors (as
hereinafter defined), in connection with the public offering of $100,000,000
aggregate principal amount of 9 7/8% Senior Subordinated Notes due 2008 (the
"New Notes") of the Company, which will be guaranteed, on a senior subordinated
basis pursuant to the guarantees (the "Guarantees" and, together with the New
Notes, the "New Securities") by Phibro-Tech, Inc., a Delaware corporation,
Prince Agriproducts, Inc., a Delaware corporation, MRT Management Corp., a
Delaware corporation, Mineral Resource Technologies, L.L.C. ("MRT"), a Delaware
limited liability company, Koffolk, Inc., a Delaware corporation, C.P.
Chemicals, Inc., a New Jersey corporation, Phibrochem, Inc., a New Jersey
corporation, Phibro Chemicals, Inc., a New York corporation, The Prince
Manufacturing Company, an Illinois corporation, The Prince Manufacturing
Company, a Pennsylvania corporation, and Western Magnesium Corp., a California
corporation (collectively, the "Guarantors"). Such eight Guarantors incorporated
or formed under the laws of the States of New York, Delaware or New Jersey are
collectively referred to as the "Designated Guarantors." The New Securities are
to be issued pursuant to an exchange offer (the "Exchange Offer") in exchange
for a like principal amount of the issued and outstanding 9 7/8% Senior
Subordinated Notes due 2008 of the Company (the "Old Securities") under an
Indenture dated as of June 11, 1998 (the "Indenture"), by and among the Company,
the Guarantors and The Chase Manhattan Bank, as trustee (the "Trustee"), as
contemplated by the Registration Rights Agreement dated
Philipp Brothers Chemicals, Inc.
December 14, 1998
Page 2
June 11, 1998 (the "Registration Rights Agreement"), by and among the Company,
the Guarantors and Schroder & Co. Inc.
This opinion is being furnished to you in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of
1933, as amended (the "Act"), in connection with the filing of the Registration
Statement (as hereinafter defined) and for no other purpose.
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
Registration Statement on Form S-4 (File No. 333-64641) as filed with the
Securities and Exchange Commission (the "Commission") on September 29, 1998
under the Act, Amendment No.1 thereto as filed with the Commission on
November 23, 1998 and Amendment No. 2 thereto as filed with the Commission
on December 14, 1998 (such Registration Statement, as so amended, being
hereinafter referred to as the "Registration Statement"); (ii) an executed copy
of the Registration Rights Agreement; (iii) an executed copy of the Indenture;
(iv) the Certificate of Incorporation of the Company, the Certificate of
Formation of MRT, and the Certificate of Incorporation of each of the other
Designated Guarantors, each as amended to date; (v) the By-Laws of the Company,
the Limited Liability Company Agreement of MRT, and the By-Laws of each of the
other Designated Guarantors, each as amended to date; (vi) Certificates issued
by the Secretary of State of the States of New York, Delaware and New Jersey,
certifying the existence of the Company and each of the Designated Guarantors
and its respective authority to transact business in its state of incorporation
or formation; (vii) certain resolutions adopted by the Board of Directors and
shareholders of the Company, relating to the Exchange Offer, the issuance of the
New Notes and the New Securities, the Indenture and related matters, certified
by the Secretary of the Company as true and complete; (viii) certain resolutions
adopted by the Board of Directors and shareholders (or, in the case of MRT, the
Managing Member) of each of the Designated Guarantors relating to, among other
things, the issuance of the Guarantees by the Designated Guarantors, certified
by the Secretary of each of the applicable Designated Guarantors as true and
complete; (ix) the Form T-1 of the Trustee filed as an exhibit to the
Registration Statement; and (ix) the form of the New Notes (including the form
of Guarantees). We have also examined originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company and the
Designated Guarantors and such agreements, certificates of public officials,
certificates of officers or other representatives of the Company, the Designated
Guarantors and others, and such other documents, certificates and records as we
have deemed necessary or appropriate as a basis for the opinions set forth
herein.
Philipp Brothers Chemicals, Inc.
December 14, 1998
Page 3
In rendering these opinions we have assumed (i) the
genuineness of all signatures, the legal capacity of all natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified, conformed or
photostatic copies or by electronic means and the authenticity of the originals
of such latter documents; (ii) that all parties other than the Company and the
Designated Guarantors have the power, corporate or otherwise, to enter into and
perform all obligations under all documents we have examined in connection with
these opinions (the "Examined Documents"); (iii) that all the Examined Documents
have been duly authorized by all requisite action, corporate or other, and
executed and delivered by, and each of them constitutes the legally valid and
binding obligation of, such other parties, as applicable, enforceable against
such other parties in accordance with their respective terms; and (iv) that the
resolutions of the Board of Directors and shareholders (and, in the case of MRT,
the Managing Member) of the Company and the Designated Guarantors in connection
with the Purchase Agreement dated June 5, 1998 between the Company and Schroder
& Co. Inc. and the sale of the Old Securities have not been rescinded and
revoked. We have also assumed (i) that the execution, delivery and performance
of the Guarantees and the Indenture by each of the Guarantors incorporated under
the laws of Pennsylvania, Illinois or California will not violate any provisions
of the laws of such state, (ii) the validity, binding effect and enforceability
of the Indenture and the Guarantees of the Guarantors incorporated under the
laws of Pennsylvania, Illinois or California under the laws of such states, and
(iii) that the laws of such jurisdictions would not affect any of the
conclusions stated herein. As to any fact material to the opinions expressed
herein which we have not independently established or verified, we have relied
upon statements and representations of officers and other representatives of the
Company, the Guarantors and others. In addition, we have assumed that there will
be no changes in applicable law between the date of this opinion and the date of
issuance and delivery of the New Securities.
Members of our firm are admitted to the bar in the State of
New York and we express no opinion with regard to any matter which may be
governed by any law other than the federal law of the United States of America,
the laws of the State of New York and, to the extent necessary to render this
opinion, the Delaware General Corporation Law and the New Jersey Business
Corporation Act.
Based upon and subject to the foregoing and the limitations,
assumptions, qualifications and exceptions set forth herein, we are of the
opinion that the New Securities have been duly authorized by the Company and the
Designated Guarantors, and when (i) the
Philipp Brothers Chemicals, Inc.
December 14, 1998
Page 4
Registration Statement becomes effective under the Act and the Indenture has
been qualified under the Trust Indenture Act of 1939, as amended, and (ii) the
New Securities have been duly executed and authenticated in accordance with the
terms of the Indenture and have been delivered upon consummation of the Exchange
Offer against receipt of Old Securities surrendered in exchange therefor in
accordance with the terms of the Exchange Offer, the New Securities will
constitute valid and binding obligations of the Company and each of the
Designated Guarantors, enforceable against the Company and each of the
Designated Guarantors in accordance with their terms.
The opinion set forth above is qualified as follows:
A. The validity and enforceability of obligations, and the
availability of rights and remedies, under the Indenture and under the
Guarantees, are subject to and may be limited or affected by (i) bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect affecting creditors' rights generally (including, without limitation,
Section 548 of the United States Bankruptcy Code, state fraudulent transfer laws
and other similar laws relating to fraud on creditors), (ii) general principles
of equity including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief, regardless of whether such validity
or enforceability of obligations or availability of rights and remedies is
considered in a proceeding in equity or at law, and (iii) laws and legal
principles imposing duties to act in good faith or in a commercially reasonable
manner.
B. The validity and enforceability of obligations, and the
availability of rights and remedies, under the Indenture and the Guarantees, may
be further limited by other laws and judicial decisions with respect to or
affecting remedial or procedural provisions contained in such documents, but in
our judgment and subject to the other qualifications set forth in this letter,
such other laws and judicial decisions do not render the Indenture invalid as a
whole or substantially interfere with realization of the principal benefits
intended to be provided thereby.
C. The validity and enforceability of obligations, and the
availability of rights and remedies, under the Indenture, including the
Guarantees under the Indenture, may be further limited by other laws and
judicial decisions with respect to the enforceability of any waiver granted
under Section 6.04 of the Indenture.
Philipp Brothers Chemicals, Inc.
December 14, 1998
Page 5
D. In rendering the opinion expressed in this letter, we
express no opinion with respect to any provisions in the Indenture insofar as
such provisions purport (i) to establish evidentiary standards or conclusive
presumptions as to factual matters, (ii) to appoint any person or entity as
attorney-in-fact for the Company or a Designated Guarantor, (iii) to require
amendments, modifications or waivers of any provisions of the Indenture to be in
writing, or (iv) to provide that any person or entity (A) may have rights to
release, exculpation, indemnity or contribution, (B) may have rights to the
payment or reimbursement of attorneys' fees except to the extent that a court
determines that such fees are reasonable, (C) may have rights to forfeiture or
the payment of any sum as liquidated damages, penalties, late charges or
prepayment premiums, (D) may have rights to any increase in any rate of interest
upon delinquency in payment or the occurrence of a default, (E) may pursue
inconsistent or cumulative remedies or (F) waives any right, remedy or defense.
E. We also express no opinion as to any securities laws of any
jurisdiction or the rules and regulations of the National Association of
Securities Dealers, Inc.
F. We call to your attention that:
(i) any provision in an agreement requiring a
party to pay another party's attorneys' fees and costs in any action to enforce
the provisions of such agreement may be construed to entitle the prevailing
party in any such action, whether or not such party is the party specified in
such agreement, to be awarded its reasonable attorneys' fees, costs and
necessary disbursements; and
(ii) courts may consider extrinsic evidence
(both oral and written) of circumstances of the Indenture to ascertain the
intent of the parties in using the language set forth in the Indenture,
regardless of whether or not the language set forth in the Indenture is plain
and unambiguous on its face and regardless of any statement by the parties in
the Indenture that the Indenture constitutes an integrated expression of the
agreement of the parties, and such courts may incorporate additional or
supplementary terms into the Indenture.
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. We also consent to the
reference to our firm under the caption "Legal Matters" in the Registration
Statement. In giving this consent, we do not thereby admit
Philipp Brothers Chemicals, Inc.
December 14, 1998
Page 6
that we are included in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission.
Very truly yours,
/s/ Golenbock, Eiseman, Assor & Bell
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