SCHMIEDESKAMP, ROBERTSON, NEU & MITCHELL
525 Jersey
Quincy, Illinois 62306
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
Dear Sirs:
We have acted as special counsel to The Prince Manufacturing
Company, an Illinois corporation (the "Subsidiary"), 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 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 Agri Products, 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 Prince
Manufacturing Company, a Pennsylvania corporation, Phibro Chemicals, Inc., a New
York corporation and Western Magnesium Corp., a California 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 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 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").
Philipp Brothers Chemicals, Inc.
December 14, 1998
Page 2
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 thereto as filed with the
Commission on November 23, 1998 and Amendment No. 2 thereto as filed with the
Commission on December 14, 1998 (collectively, 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 Illinois on May 18, 1998;
(v) the Bylaws of the Subsidiary, certified as true and complete by an
officer of the Subsidiary;
(vi) copies of resolutions of the Board of Directors of the Subsidiary
authorizing and approving, among other things, the execution and delivery of the
Indenture and the Guarantees, certified by the Secretary of the Subsidiary as
true and complete;
(vii) the Form T-1 of the Trustee filed as an exhibit to the
Registration Statement; and
(viii) the form of the New Notes and the Guarantees.
Items (i) - (viii) above are hereinafter referred to as the Examined
Documents. Capitalized words and phrases having a defined meaning in the
Examined Documents shall have the same meanings when used herein unless
otherwise defined.
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 Examined Documents submitted to us as originals, the
conformity to original documents of all Examined 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 Examined Documents we have reviewed in connection with
Philipp Brothers Chemicals, Inc.
December 14, 1998
Page 3
these opinions; (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 to the laws of the State of New York. 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 Illinois, 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 Illinois
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 Illinois.
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 such Subsidiary in accordance with its terms.
The opinion set forth above is qualified further 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 ("Fraudulent Conveyance Laws")),
(ii) general principles of equity including, without limitation, concepts of
materially, reasonableness, good faith and fair dealing
Philipp Brothers Chemicals, Inc.
December 14, 1998
Page 4
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. However, 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.
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 one of the Subsidiaries, (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 also that under the laws of the State of
Illinois, 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 entitle the prevailing party in any such action,
whether or not such party is the party specified in such agreement, to be
Philipp Brothers Chemicals, Inc.
December 14, 1998
Page 5
awarded its reasonable attorneys' fees, costs and necessary disbursement as
determined by the court.
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.
Yours truly,
/s/ Schmiedeskamp, Robertson, Neu & Mitchell