BLANC WILLAMS JOHNSTON & KRONSTADT
1900 Avenue of the Stars
Suite 1700
Los Angeles, California 90067
December 14, 1998
Philipp Brothers Chemicals, Inc.
One Parker Plaza
Fort Lee, NJ 07024
Re: Philipp Brothers Chemicals, Inc. Registration Statement on Form S-4
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Dear Sirs:
We have acted as special counsel to Western Magnesium Corp., a
California corporation (the "Subsidiary"), in connection with the public
offering of $100,000,000 aggregate principal amount of 97/8% Senior Subordinated
Notes due 2008 (the "New Notes") of Philipp Brothers Chemicals, Inc., a New York
corporation (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 the Subsidiary, Phibro-Tech, Inc., a Delaware
corporation, Prince Agriproducts, Inc., a Delaware corporation, MRT Management
Corp., a Delaware corporation, Mineral Resource Technologies, L.L.C., a limited
liability company formed under the laws of Delaware, Koffolk, Inc., a Delaware
corporation, C.P. Chemicals, Inc., a New Jersey corporation, Phibrochem, Inc., a
New Jersey corporation, The Price Manufacturing Company, an Illinois
corporation, The Primce Manufacturing Company, a Pennsylvania corporation and
Phibro Chemicals, Inc., a New York corporation (collectively, the "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
97/8% 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 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 this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the following
documents:
(i) The Registration Statement on Form S-4 (File No.333-64641) as filed
by the Company with the Securities and Exchange Commission (the "Commission") on
September 29,
1998, Amendment No. 1 as filed on November 23, 1998, and Amendment No. 2 thereto
as filed with the Commission on December 14, 1998 (as amended, the "Registration
Statement");
(ii) an executed copy of the Registration Rights Agreement;
(iii) an executed copy of the Indenture;
(iv) the Articles of Incorporation of the Subsidiary, certified as true
and correct by the Secretary of State of the State of California on December __,
1998;
(v) the Bylaws of the Subsidiary, certified as true and complete by an
officer of such corporation;
(vi) Certificate dated _______, 1998 issued by the Secretary of State
of the State of California certifying the existence of the Subsidiary and its
respective authority to transact business in corporate form in the State of
California;
(vii) copies of resolutions of the Board of Directors of the Subsidiary
authorizing and approving, among other things, the issuance of the New
Securities and the Exchange Offer, certified by the Secretary of Subsidiary as
true and complete;
(viii) the Form T-1 of the Trustee filed as an exhibit to the
Registration Statement; and (ix) the form of the New Notes and the Guarantees.
We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such other documents, certificates and
records as we have deemed necessary or appropriate as a basis for the opinions
set forth herein.
In rendering these opinions we have assumed, with your permission and
without having made any independent investigation of the facts: (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 or photostatic
copies and the authenticity of the originals of such latter documents; (ii) that
all parties other than the Subsidiary 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, 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; (iv) that the resolutions of the Board of Directors
of the Subsidiary 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; and (v) that all material factual matters,
including, without limitation, representations and warranties, contained in the
Examined Documents are true and correct as set forth therein.
We note that the Indenture is by its terms governed by the laws of the
State of New York. We are not admitted to practice in the State of New York, and
accordingly express no opinion as
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to the laws of such State. We express no opinion as to the validity of such
choice of law. Our opinion should be understood to the effect to be given to
such documents under the internal laws of the State of California if a court
were to apply such law notwithstanding the parties' choice of other law.
Members of our firm are admitted to the bar in the State of California
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 and the laws of
the State of California.
Based upon and subject to the limitations, assumptions, qualifications
and exceptions set forth herein, we are of the opinion that when (i) the
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 Guarantee of the Subsidiary
will constitute a valid and binding obligation of the Subsidiary, enforceable
against the Subsidiary in accordance with its 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, including the Guarantees under the
Indenture, 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 ("Fraudulent Conveyance
Laws")), (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 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 under 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 availability of
rights and remedies, under the Indenture and the Guarantees, 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.
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D. In rendering the opinion expressed in this letter, we express no
opinion with respect to: (i) any provisions in the Indenture pertaining to
jurisdiction or venue, or (ii) any other provisions in the Indenture insofar as
such provisions purport (A) to establish evidentiary standards or conclusive
presumptions as to factual matters, (B) to appoint any person or entity as
attorney-in-fact for the Subsidiary, (C) to require amendments, modifications or
waivers of any provisions of the Indenture to be in writing, or (D) to provide
that any person or entity (1) may have rights to release, exculpation, indemnity
or contribution, (2) may have rights to the payment or reimbursement of
attorneys' fees except to the extent that a court determines that such fees are
reasonable, (3) may have rights to forfeiture or the payment of any sum as
liquidated damages, penalties, late charges or prepayment premiums, (4) may have
rights to any increase in any rate of interest upon delinquency in payment or
the occurrence of a default, (5) may pursue inconsistent or cumulative remedies
or (6) 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) under the laws of the State of California, 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 will be construed to
entitled 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) the courts of the State of California will 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 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.
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Very truly yours,
/s/ Blanc Williams Johnston & Kronstadt