1
Exhibit 10.3*
ASSET TRANSFER AGREEMENT
THIS ASSET TRANSFER AGREEMENT (this "Agreement") is dated as of the 16th
day of June, 1997 and is by and among Lockheed ▇▇▇▇▇▇ Corporation, a Maryland
corporation ("LMC"), Lockheed ▇▇▇▇▇▇ Advanced Environmental Systems, Inc., a
Delaware corporation and a wholly owned subsidiary of LMC ("LMAES"), M4
Environmental L.P., a Delaware limited partnership ("M4"), and Molten Metal
Technology, Inc., a Delaware corporation ("MMT").
WHEREAS, under the Revolving Credit Agreement between LMC and M4 dated as
of April 30, 1996 (the "Revolving Credit Agreement"), M4 is indebted to LMC in
the principal amount of $15 million and for accrued interest and other amounts
outstanding under the Revolving Credit Agreement.
WHEREAS, as of the date hereof, LMC and MMT have entered into a Master
Restructuring Agreement (the "Restructuring Agreement") relating to the
restructuring of M4 pursuant to which, inter alia, M4, at the direction of LMC,
shall convey to LMAES all of the assets of M4 relating to M4's ReTech division
("ReTech"), including all related Intellectual Property (as defined in the
Restructuring Agreement), and LMAES shall assume all of M4's liabilities
relating to ReTech, in full payment and satisfaction of all of M4's indebtedness
to LMC under the Revolving Credit Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, LMC, LMAES, MMT and M4 hereby agree as follows:
Article 1
Definitions
Defined terms used and not otherwise defined herein shall have the
meanings ascribed thereto in the Restructuring Agreement. In addition, as used
herein the following terms not otherwise defined have the following respective
meanings:
"1996 License Agreement" means the Amended and Restated License Agreement,
dated as of April 30, 1996, by and among M4, MMT and LMC.
* Confidential treatment has been requested for certain portions of this Exhibit
10.3.
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"Asset Acquisition Agreement" means the Asset Acquisition Agreement, dated
as of March 15, 1996, between M4 and Lockheed Environmental Systems &
Technologies Co., a Nevada corporation, and joined in by LMC, MMT Federal
Holdings, Inc., a Delaware corporation, and MMT.
"Affiliate" means, with respect to any specific Person, any other Person
controlling, controlled by or under common control with such specific Person
(but, with respect to LMC, not including M4). As used in this context, "control"
(including, with its correlative meanings, "controlled by" and "under common
control with") means the possession, directly or indirectly, or power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of Voting Securities (as defined in the Restructuring
Agreement), by contract or otherwise.
"Filtering Technology" means *
"Person" means any corporation, association, partnership, trust, limited
liability company, organization, business, individual, government or political
subdivision thereof or governmental agency.
"Restructuring Agreement" has the meaning set forth in the preamble.
"Revolving Credit Amount" means the sum of (i) $15,552,850.14, which
represents the total principal and accrued interest and other amounts
outstanding and owed by M4 to LMC under the Revolving Credit Agreement as of
April 27, 1997, plus (ii) all additional interest and other amounts accrued
under the Revolving Credit Agreement from April 27, 1997 through June 11, 1997.
"ThermUHex Technology" means a thermal process for producing uranium oxide
and hydrogen fluoride by reacting uranium hexafluoride with a gaseous mixture
including hydrogen and an oxygen-containing compound.
Article 2
Purchase And Sale
2.1. Acquired Assets. Subject to the terms and conditions set forth in
this Agreement, at the Closing referred to in Article 4 hereof, and pursuant to
the direction of
* Confidential treatment has been requested for this portion of Exhibit 10.3.
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LMC (in payment and satisfaction of the Revolving Credit Amount
and in order to avoid multiple conveyances of assets from M4 to LMC and then
from LMC to LMAES), M4 shall assign, transfer and deliver to LMAES, and LMAES
shall acquire and take assignment and delivery of, all of the assets of M4
relating to ReTech but excluding the Excluded Assets (as defined in Section 2.2)
(all of which assets are hereinafter referred to collectively as the "Acquired
Assets"), including, without limitation:
(a) all accounts receivable relating to ReTech, including, without
limitation, those set forth on Schedule 2.1(a) hereto;
(b) all contracts, agreements, purchase orders, leases and other
commitments and obligations relating to ReTech, including, without limitation,
those set forth on Schedule 2.1(b) hereto;
(c) all furniture, fixtures, machinery, equipment and other tangible
personal property relating to ReTech, including, without limitation, those set
forth on Schedule 2.1(c) hereto;
(d) all raw materials, work-in-process, manufacturing supplies,
packaging materials, purchased products and finished product inventories
relating to ReTech, including, without limitation, those set forth on Schedule
2.1(d) hereto;
(e) all permits, approvals, certificates, franchises, licenses and
other authorizations of any federal, state, local or foreign governmental or
regulatory body relating to ReTech, including, without limitation, those set
forth on Schedule 2.1(e) hereto;
(f) all trade names, trademarks or service marks, copyrights,
pending or issued registrations for any of the foregoing, patents, patent
applications (including, without limitation, the patents listed on Schedule
2.1(f) hereto), unpatented inventions, and trade secrets and other confidential
or proprietary information relating to ReTech, including, without limitation,
the Intellectual Property set forth on Schedule 2.1(f) hereto; and
(g) all cash and cash equivalents relating to ReTech, including
without limitation the deposits listed on Schedule 2.1(g) hereto.
2.2. Excluded Assets. Notwithstanding the foregoing, M4 is not
transferring and LMAES is not acquiring pursuant to this Agreement, and the
term "Acquired Assets" shall not include, any of the following assets
(collectively, the "Excluded Assets"):
(a) any of M4's Intellectual Property relating to the ThermUHex
Technology;
(b) any of M4's Intellectual Property relating to the Filtering
Technology; and
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(c) any of M4's Intellectual Property (including any of the "MMT
Licensed Property" that was subject to the 1996 License Agreement) that relates
to CEP.
2.3. Mixed Assets. In the event that any assets of M4 are used in
connection with ReTech and are also used in connection with any other business
of M4, then M4 and LMAES will discuss in good faith whether such assets are used
primarily in ReTech's business or primarily in such other business of M4 and
accordingly whether or not such assets should constitute Acquired Assets or
Excluded Assets for purposes of this Agreement. The foregoing sentence shall not
apply to any of the Excluded Assets identified in Section 2.2.
Article 3
Assumption of Obligations; Termination of
Revolving Credit Agreement; Cash Adjustments
3.1. Assumption of Obligations. Except as set forth on Schedule 3.1(a)
hereto, effective upon consummation of the Closing (as defined in Article 4),
LMAES hereby agrees to pay, perform, fulfill and discharge all obligations of M4
of any nature, known or unknown, fixed or contingent, relating to ReTech,
including, without limitation, any and all Assumed Liabilities as defined in the
Asset Acquisition Agreement (collectively, the Assumed Obligations") and those
liabilities listed on Schedule 3.1(b) hereto.
3.2. Termination of Revolving Credit Agreement. As partial consideration
for the transfer of the Acquired Assets by M4 to LMAES, LMC agrees that,
effective upon the Closing, the Revolving Credit Agreement shall be considered
terminated for all purposes and all amounts owed thereunder shall be considered
paid in full.
3.3. Cash Adjustment.
Prior to the Closing, representatives of M4 and LMC established the
fair market value of the Acquired Assets, net of the Assumed Liabilities, as of
the Closing Date (as defined in Article 4), to be $17,000,000 ("Net Transferred
Value"). In addition, these representatives determined that the Revolving Credit
Amount was $15,760,000. As the Net Transferred Value exceeds the Revolving
Credit Amount, LMC will pay cash to M4 at the Closing in the amount of
$1,240,000.
Article 4
Closing
4.1. Time and Place. The closing of the transfer and delivery of all
documents and instruments necessary to consummate the transactions contemplated
by this Agreement (the "Closing") shall be held at the offices of ▇▇▇▇▇▇▇, ▇▇▇▇
& ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, immediately after the
execution and delivery of this Agreement. The
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date on which the Closing is actually held hereunder is sometimes referred to
herein as the "Closing Date".
4.2. Transactions at Closing. At the Closing:
(a) M4 shall duly execute and deliver to LMAES or its nominee or
nominees such deeds, certificates of title or other instruments of assignment
and transfer with respect to the Acquired Assets as LMC may reasonably request
and as may be necessary to vest in LMAES all of M4's title to and interest in
all of the Acquired Assets, in each case subject to no Encumbrance (as defined
in Section 5.3) except for the Encumbrances specified in Schedule 4.2(a) hereto
(the "Permitted Encumbrances"). These transfer instruments will include a ▇▇▇▇
of Sale and Assignment in the form of Exhibit A hereto, Patent Assignments in
the form of Exhibit B-1 and Exhibit B-2 hereto, and a Trademark Assignment in
the form of Exhibit C hereto.
(b) M4 shall deliver or cause to be delivered to LMAES all of the
contracts and agreements of M4 included in the Acquired Assets, and all of the
business records, tax returns, books and other data of M4 relating to the
Acquired Assets; provided, however, that M4, after consultations with LMC, may
take such action as M4 deems reasonably appropriate to separate or redact
information unrelated to any of the Acquired Assets from business records, tax
returns, books and other data of M4 to be delivered to LMAES at the Closing
pursuant to this Section 4.2(b).
Article 5
Representations and Warranties of M4 and MMT
M4 and MMT jointly and severally represent and warrant to each of LMC and
LMAES as follows:
5.1. Organization; Authority. MMT is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
all requisite power and authority to execute and deliver this Agreement and to
carry out all of the actions required of it pursuant to the terms of this
Agreement.
5.2. Approvals; Binding Effect. M4 has obtained all necessary
authorizations and approvals from its general partner and limited partners
required for the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by M4 and constitutes the legal, valid and binding obligation of
M4 enforceable against it in accordance with its terms, except to the extent the
enforceability of this Agreement may be limited by any applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors' rights generally
or by general principles of equity. MMT has obtained all necessary
authorizations and approvals from its Board of Directors and stockholders
required for the execution and delivery of this
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Agreement and the consummation of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by MMT and constitutes the legal,
valid and binding obligation of MMT enforceable against it in accordance with
its terms, except to the extent the enforceability of this Agreement may be
limited by any applicable bankruptcy, reorganization, insolvency or other laws
affecting creditors' rights generally or by general principles of equity.
5.3. Non-Contravention. Except for any consents to transfer referred to in
Section 5.4, the execution and delivery by M4 of this Agreement and the
consummation by M4 of the transactions contemplated hereby will not (a) violate
or conflict with any provision of the Certificate of Limited Partnership or
Limited Partnership Agreement of M4, each as amended as of the date hereof; or
(b) constitute a violation of, or be in conflict with, or constitute or create a
default under, or result in the creation or imposition of any Encumbrance upon
any property of M4 (including without limitation any of the Acquired Assets)
pursuant to (i) any agreement or instrument to which M4 is a party or by which
M4 or any of its properties (including, without limitation, any of the Acquired
Assets) is bound or to which M4 or any of such properties is subject, or (ii)
any statute, judgment, decree, order, regulation or rule of any court or
governmental or regulatory authority. Except for any consents to transfer
referred to in Section 5.4, the execution and delivery by MMT of this Agreement
and the consummation by MMT of the transactions contemplated hereby will not (a)
violate or conflict with any provision of the Certificate of Incorporation or
By-Laws of MMT, each as amended as of the date hereof; or (b) constitute a
violation of, or be in conflict with, or constitute or create a default under,
or result in the creation or imposition of any Encumbrance upon any property of
MMT pursuant to (i) any agreement or instrument to which MMT is a party or by
which MMT or any of its properties is bound or to which MMT or any of such
properties is subject, or (ii) any statute, judgment, decree, order, regulation
or rule of any court or governmental or regulatory authority.
5.4. Title to Acquired Assets. Except for any consents to transfer
required with respect to the contracts and other agreements included in the
Acquired Assets (the "Assumed Contracts") and except for Permitted Encumbrances,
M4 is the lawful owner of and has good and valid title to all of the Acquired
Assets, and has the full right to sell, convey, transfer, assign and deliver the
Acquired Assets, without the need to obtain the consent or approval of any third
party. Except for Permitted Encumbrances, all of the Acquired Assets are
entirely free and clear of any security interests, liens, claims, charges,
options, mortgages, debts, leases (or subleases), conditional sales agreements,
title retention agreements, encumbrances of any kind, material defects as to
title or restrictions against the transfer or assignment thereof (collectively,
"Encumbrances"). At and as of the Closing, M4 will convey the Acquired Assets to
LMAES by deeds, bills of sale, certificates of title and other instruments of
assignment and transfer effective in each case to vest in LMAES, and LMAES will
have, good and valid record and marketable title to all of the Acquired Assets,
free and clear of all Encumbrances.
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Article 6
Representations And Warranties
of LMC and LMAES
LMC and LMAES jointly and severally represent and warrant to each of M4
and MMT as follows:
6.1. Organization of Buyer; Authority. LMAES is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite power and authority to execute and deliver this
Agreement and to carry out all of the actions required of it pursuant to the
terms of this Agreement. LMC is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland, and has all
requisite power and authority to execute and deliver this Agreement and to carry
out all of the actions required of it pursuant to the terms of this Agreement.
6.2. Corporate Approvals; Binding Effect. LMAES has obtained all necessary
authorizations and approvals from its Board of Directors and stockholder
required for the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by LMAES and constitutes the legal, valid and binding obligation
of LMAES enforceable against LMAES in accordance with it terms, except to the
extent enforceability of this Agreement may be limited by any applicable
bankruptcy, reorganization, insolvency or other laws affecting creditors' rights
generally or by general principles of equity. LMC has obtained all necessary
authorizations and approvals from its Board of Directors required for the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by LMC and constitutes the legal, valid and binding obligation of LMC
enforceable against LMC in accordance with its terms, except to the extent
enforceability of this Agreement may be limited by any applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors' rights generally
or by general principles of equity.
6.3. Non-Contravention. The execution and delivery by LMC and LMAES of
this Agreement and the consummation by LMC and LMAES of the transactions
contemplated hereby will not (a) violate or conflict with any provisions of the
Certificate of Incorporation or By-Laws of LMC or LMAES, each as amended to
date; or (b) constitute a violation of, or be in conflict with, constitute or
create a default under, or result in the creation or imposition of any lien upon
any property of LMC or LMAES pursuant to (i) any agreement or instrument to
which LMC or LMAES is a party or by which LMC or LMAES or any of their
respective properties are bound or to which LMC or LMAES or any of their
respective properties are subject, or (ii) any statute, judgment, decree, order,
regulation or rule of any court or governmental authority to which LMC or LMAES
is subject.
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Article 7
Certain Transitional and Other Matters
7.1. Nonassignable Contracts.
(a) To the extent that any Assumed Contract is not capable of being
transferred by M4 to LMAES pursuant to this Agreement without the consent,
approval or waiver of a third Person, and such consent, approval or waiver is
not obtained prior to the Closing, or if such transfer or attempted transfer
would constitute a breach thereof or a violation of any law, rule or regulation,
nothing in this Agreement will constitute a transfer or an attempted transfer
thereof. Notwithstanding anything contained in this Agreement to the contrary,
M4 shall not be obligated to transfer to LMAES any of its rights and obligations
in and to any of the Assumed Contracts referred to in this Section 7.1 without
first having obtained any consents, approvals and waivers necessary for the
transfer of such Assumed Contract.
(b) In the event that such consents, approvals and waivers referred
to in subparagraph (a) above are not obtained, then, in the case of any such
Assumed Contract, LMC, MMT, LMAES and M4 shall continue to cooperate and use
their best efforts to obtain the necessary consents, approvals and waivers (to
the extent that it is reasonably likely that such efforts will be successful),
and unless and until any such necessary consent, approval or waiver is obtained,
M4 will use its best reasonable efforts, to the extent permitted by applicable
law, the terms of the Assumed Contract and the directions of the customer, to
(a) cooperate in any reasonable arrangement designed to provide to LMAES the
benefits and burdens of any Assumed Contract referred to in subparagraph (a)
above without incurring any obligation to any other Person other than to provide
such benefits to LMAES, including, without limitation, the appointment of LMAES
as M4's agent for purposes of such Assumed Contract, and (b) enforce, at LMC's
and LMAES' request for LMAES' account and at LMAES' cost, any rights of M4
arising from any such Assumed Contract (including, without limitation, the right
to elect to terminate such Assumed Contract in accordance with the terms thereof
upon the advice of LMC or LMAES).
7.2. Hiring Employees and Related Matters.
(a)(i) At the Closing, LMAES will offer employment to the employees
of M4 listed on Schedule 7.2(i) hereto at wages (excluding incentive
compensation programs) and benefits comparable in the aggregate to the wages and
benefits currently provided to such employees by M4. The employees accepting
such offer are referred to below as the "LMAES Assumed Employees." LMAES shall
have all responsibility for severance to any LMAES Assumed Employee. LMAES shall
recognize for each LMAES Assumed Employee who accepts an offer of employment and
commences work with LMAES service with M4 prior to the Closing Date under any
Welfare Benefit Plan (as defined in the Employee Retirement Security Act of
1974, as amended) maintained by LMAES to the extent such service was recognized
under a comparable M4 plan.
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(▇▇) ▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ will offer employment to the employees of
M4 listed on Schedule 7.2(ii) hereto at wages (excluding incentive compensation
programs) and benefits comparable in the aggregate to the wages and benefits
currently provided to such employees by M4. The employees accepting such offer
are referred to below as the "MMT Assumed Employees." MMT shall have all
responsibility for severance to any MMT Assumed Employee. MMT shall recognize
for each MMT Assumed Employee who accepts an offer of employment and commences
work with MMT service with M4 prior to the Closing Date under any Welfare
Benefit Plan (as defined in the Employee Retirement Security Act of 1974, as
amended) maintained by MMT to the extent such service was recognized under a
comparable M4 plan.
(iii) After giving effect to the offers of employment referred to in
subparagraphs (i) and (ii) above, M4 will continue to employ those transitional
employees referred to in Exhibit 11 of the HR Plan. As provided in Exhibit 11 of
the HR Plan and Section 9.4 of the Restructuring Agreement, the cost of these
transitional employees will be shared equally by LMC and MMT.
(b)(i) Nothing in this Agreement shall obligate LMAES to make any
offer of employment to anyone other than a LMAES Assumed Employee or, except as
provided in paragraph (c) below, to provide continued employment to any employee
of M4, whether or not the subject of an employment offer from LMAES, for any
specified period of time following the Closing Date, or to maintain the same
terms of employment (including, without limitation, compensation and benefits)
for any specified period of time following the Closing Date. LMAES will not be
obligated to offer employment to anyone other than the persons listed on
Schedule 7.2(i) hereto. Each LMAES Assumed Employee offered a position at LMAES
will be considered an employee at will whose employment may be terminated at any
time and for any reason.
(ii) Nothing in this Agreement shall obligate MMT to make any offer
of employment to anyone other than an MMT Assumed Employee or, except as
provided in paragraph (c) below, to provide continued employment to any employee
of M4, whether or not the subject of an employment offer from MMT, for any
specified period of time following the Closing Date, or to maintain the same
terms of employment (including, without limitation, compensation and benefits)
for any specified period of time following the Closing Date. MMT will not be
obligated to offer employment to anyone other than the persons listed on
Schedule 7.2(ii) hereto. Each MMT Assumed Employee offered a position at MMT
will be considered an employee at will whose employment may be terminated at any
time and for any reason.
(c) LMAES agrees that, for a period of 60 days after the Closing
Date, it will not cause any of the LMAES Assumed Employees hired by it to suffer
"employment loss," excluding any employment loss in connection with the
completion of a project as contemplated by 29 U.S.C. Section 2103, for purposes
of the Worker Adjustment and Retraining Notification Act, 29 U.S.C.
Sections 2101-2109, and related regulations (the "WARN Act") if such
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employment loss could create any liability for M4, unless LMAES delivers notices
under the WARN Act in such a manner and at such a time that M4 bears no
liability with respect thereto. MMT agrees that, for a period of 60 days after
the Closing Date, it will not cause any of the MMT Assumed Employees to suffer
an "employment loss," excluding any employment loss in connection with the
termination of a project as contemplated by 29 U.S.C. Section 2103, for purposes
of the WARN Act if such employment loss could result in any liability for M4
unless MMT delivers notices under the WARN Act in such a manner and at such a
time that M4 bears no liability with respect thereto.
(d)(i) M4 agrees to provide reasonable cooperation to LMAES in
connection with the transition by the LMAES Assumed Employees and their
dependents and beneficiaries to the medical and dental benefits coverage offered
by LMAES. To the extent not prohibited by applicable laws or any confidentiality
obligations of M4, this cooperation will include the provision by M4 to LMAES or
LMAES' insurers of information regarding any pre-existing conditions of the
LMAES Assumed Employees or any of their dependents or beneficiaries.
(ii) M4 agrees to provide reasonable cooperation to MMT in
connection with the transition by the MMT Assumed Employees and their dependents
and beneficiaries to the medical and dental benefits coverage offered by MMT. To
the extent not prohibited by applicable laws or any confidentiality obligations
of M4, this cooperation will include the provision by M4 to MMT or MMT's
insurers of information regarding any pre-existing conditions of the MMT Assumed
Employees or any of their dependents or beneficiaries.
(e) Following the Closing, M4 shall remain the sponsor of the 401(k)
Savings Plan and the Capital Accumulation Plan (the "Frozen Plans") in which the
LMAES Assumed Employees and MMT Assumed Employees currently participate. No
further contributions will be made to the Frozen Plans with respect to service
on or after the Closing Date and no new participants will be added to the Frozen
Plans on or after the Closing Date. All participants shall become 100% vested in
their account balances as of the Closing Date. M4 shall take all actions
reasonably necessary, including amending the Frozen Plans, to obtain favorable
determination letters from the IRS for the Frozen Plans. Promptly following the
receipt of such favorable determination letters, the then existing account
balances in the Frozen Plans relating to LMAES Assumed Employees shall be
transferred in cash or in the form of the particular LMAES Assumed Employee's
promissory note(s) (evidencing loans to the particular LMAES Assumed Employee
under the Frozen Plans), to a qualified defined contribution plan (or plans)
designated by LMAES. The parties shall reasonably cooperate in connection with
administering loan repayments by participants to the Frozen Plans prior to the
transfer of account balances as described above. As soon as practicable
following the Closing, M4 shall designate a nationally recognized bank that is
acceptable to LMAES to serve as trustee of the Frozen Plans.
(f) As contemplated by Section 9.4 of the Restructuring Agreement,
M4 will be responsible for the administration and winding up of its employee
benefit plans (including the Frozen Plans) until they are terminated. LMC and
MMT shall each be
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responsible for one-half of M4's out-of-pocket costs incurred in connection with
the foregoing. M4 shall bear its own internal costs.
(g) Except as expressly provided above in this Section 7.2,
responsibility between LMC and MMT regarding the employment by M4 of any of its
employees prior to the Closing Date and its benefit plans shall be allocated as
provided in Sections 8.3 and 9.4 of the Restructuring Agreement.
Article 8
Indemnification
8.1. Indemnity by M4 and MMT. M4 and MMT jointly and severally hereby
agree to indemnify and hold LMC and LMAES and their respective Affiliates
harmless from and with respect to any and all claims, liabilities, losses,
damages, costs and expenses, including without limitation the reasonable fees
and disbursements of counsel (collectively, the "Losses"), related to or arising
directly or indirectly out of any failure or any breach by M4 or MMT of any
representation or warranty, covenant, obligation or undertaking made by M4 or
MMT in this Agreement (including the Schedules and Exhibits hereto).
8.2. Indemnity by LMC and LMAES. LMC and LMAES jointly and severally
hereby agree to indemnify and hold each of M4 and MMT and their respective
Affiliates harmless from and with respect to any and all Losses related to or
arising directly or indirectly out of any failure or breach by LMC or LMAES of
any representation or warranty, covenant, obligation or undertaking (including
any failure of LMAES to perform, fulfill and discharge all of the Assumed
Liabilities) made by LMC or LMAES in this Agreement (including the Schedules and
Exhibits hereto).
8.3. Restructuring Agreement. In the event of any conflict between this
Article 8 and the provisions of Section 8.3 of the Restructuring Agreement,
which provides, among other things, that except as otherwise provided therein
MMT and LMC are each to bear responsibility for fifty percent (50%) of all
liabilities and obligations of M4 and its general partner attributable to the
period prior to the Closing, the provisions of Section 8.3 of the Restructuring
Agreement shall prevail.
8.4. LIMITATIONS. The total amount payable by M4 and MMT under Section
8.1 with respect to any Claim (as defined in Section 8.5) relating to a breach
of a representation or warranty shall be limited to fifty percent (50%) of the
Losses attributable thereto.
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8.5. Claims.
(a) Notice. Any party seeking indemnification hereunder (the
"Indemnified Party") shall promptly notify the other party hereto (the
"Indemnifying Party") of any action, suit, proceeding, demand or breach (a
"Claim") with respect to which the Indemnified Party claims indemnification
hereunder, provided that failure of the Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations under this Article 8
except to the extent, if at all, that such Indemnifying Party shall have been
prejudiced thereby.
(b) Third Party Claims. If a Claim relates to any action, suit,
proceeding or demand instituted against the Indemnified Party by a third party
(a "Third Party Claim"), the Indemnifying Party shall be entitled to participate
in the defense of such Third Party Claim after receipt of notice of such claim
from the Indemnified Party. Within thirty (30) days after receipt of notice of a
particular matter from the Indemnified Party, the Indemnifying Party may assume
the defense of such Third Party Claim, in which case the Indemnifying Party
shall have the authority to negotiate, compromise and settle such Third Party
Claim, if and only if the following conditions are satisfied:
(i) the Indemnifying Party shall have confirmed in writing
that it is obligated hereunder to indemnify the Indemnified Party with
respect to such Third Party Claim; and
(ii) the Indemnified Party shall not have given the
Indemnifying Party written notice that it has determined, in the exercise
of its reasonable discretion, that matters of corporate or management
policy or a conflict of interest make separate representation by the
Indemnified Party's own counsel advisable.
The Indemnified Party shall retain the right to employ its own counsel and to
participate in the defense of any Third Party Claim, the defense of which has
been assumed by the Indemnifying Party pursuant hereto, but the Indemnified
Party shall bear and shall be solely responsible for its own costs and expenses
in connection with such participation.
8.6. Method and Manner of Paying Claims. In the event of any Claims under
this Article 8, the claimant shall advise the party or parties who are required
to provide indemnification therefor in writing of the amount and circumstances
surrounding such claim. With respect to liquidated Claims, if within thirty (30)
days the other party has not contested such Claim in writing, the other party
will pay the full amount thereof within ten (10) days after the expiration of
such 30-day period. Any amount owed by an Indemnifying Party hereunder with
respect to any Claim may be set-off by the Indemnified Party against any amounts
owed by the Indemnified Party to any Indemnifying Party. The unpaid balance of a
Claim shall bear interest at a rate per annum equal to the lowest prime rate
published in the
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▇▇▇▇ ▇▇▇▇▇▇ Journal in its "Money Rates" column on the date notice thereof is
given by the Indemnified Party to the Indemnifying Party.
Article 9
General
9.1. Survival of Representations and Warranties. The representations and
warranties of the parties hereto contained in this Agreement or otherwise made
in writing in connection with the transactions contemplated hereby (in each case
except as affected by the transactions contemplated by this Agreement) shall be
deemed material and, notwithstanding any investigation by LMC or LMAES, shall be
deemed to have been relied on by LMC or LMAES and shall survive the Closing and
the consummation of the transactions contemplated hereby.
9.2. Expenses. All transfer and sales taxes payable with respect to the
conveyance of the Acquired Assets by M4 to LMAES shall be paid fifty percent
(50%) by M4 and fifty percent (50%) by LMAES. All expenses of the preparation,
execution and consummation of this Agreement and of the transactions
contemplated hereby, including without limitation attorneys', accountants' and
outside advisers' fees and disbursements, shall be borne by the party incurring
such expenses.
9.3. Notices. All notices, demands and other communications hereunder
shall be in writing or by written telecommunication, and shall be deemed to have
been duly given if delivered personally or if mailed by certified mail, return
receipt requested, postage prepaid or if sent by overnight courier or sent by
written telecommunication, as follows:
If to M4 to:
M4 Environmental L.P.
c/o Molten Metal Technology, Inc.
▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III,
President and Chief Executive Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Vice President
and General Counsel
with a copy sent contemporaneously to:
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
IF to MMT: as provided in the Restructuring Agreement.
If to LMC: as provided in the Restructuring Agreement.
If to LMAES to:
Lockheed ▇▇▇▇▇▇ Advanced
Environmental Systems, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., General Counsel
with a copy sent contemporaneously to:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
9.4. Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) together with the Related Agreements (as defined in the
Restructuring Agreement) contains the entire understanding of the parties hereto
and thereto, except as provided below supersedes all prior agreements and
understandings relating to the subject matter hereof and thereof and shall not
be amended except by a written instrument hereafter signed by all of the parties
hereto or thereto, as applicable. No waiver of any provision of this Agreement
shall be effective unless evidenced by a written instrument signed by the
waiving party. The parties further acknowledge and agree that, in entering into
this Agreement and entering or causing their Subsidiaries to enter into the
Related Agreements, they have not in any way relied upon any oral or written
agreements, statements, promises, information, arrangements, understandings,
representations or warranties, express or implied, not specifically set forth in
this Agreement or the Related Agreements.
9.5. Governing Law, Etc. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
all rights and remedies being governed by such laws, without regard to its
conflict of laws rules, and, to the extent applicable, federal laws of the
United States of America. As provided in the Amended and
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Restated Dispute Resolution Agreement (as defined in the Restructuring
Agreement), the parties hereto have submitted to the exclusive jurisdiction of
state and federal courts located in Delaware.
9.6. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY RIGHTS THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY OF THE RELATED
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF
ANY OF THE PARTIES HERETO RELATING THERETO.
9.7. Waiver of Certain Damages. EACH OF THE PARTIES HERETO TO THE FULLEST
EXTENT PERMITTED BY LAW IRREVOCABLY WAIVES ANY RIGHTS THAT IT MAY HAVE TO
PUNITIVE, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY
LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY RELATED
AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF
ANY OF THE PARTIES HERETO RELATING THERETO.
9.8. Tax Treatment. LMC, LMAES and M4 shall treat and report the
transactions contemplated by this Agreement in all respects consistently for
purposes of any federal, state or local tax, including, without limitation, with
respect to the calculation of the amount of gain or loss, if any, realized by M4
on the transactions contemplated by this Agreement and the basis of the Acquired
Assets in the hand of LMAES, (i) as the sale, exchange and conveyance by M4 of
the Acquired Assets in exchange for the sum of (a) the Revolving Credit Amount,
(b) LMAES' assumption of the Assumed Obligations, and (c) LMC's cash adjustment
pursuant to Section 3.3; and (ii) as M4's payment of the Net Transferred Value
(net of LMC's cash adjustment payment pursuant to Section 3.3) in full payment
and satisfaction of the Revolving Credit Amount. The parties hereto shall not
take any actions or positions inconsistent with the obligations set forth
herein. To the extent required, both LMAES and M4 agree to file with the
Internal Revenue Service an IRS Form 8594 (Asset Acquisition Statement under
Section 1060) with respect to the acquisition by LMAES of the Acquired Assets,
with their respective federal income tax returns for the year in which the
Closing Date occurs.
9.9. Sections and Section Headings. The headings of sections and
subsections of this Agreement are for reference only and shall not limit or
control the meaning thereof.
9.10. Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
permitted assigns. Neither this Agreement nor the obligations of any party
hereunder shall be assignable or transferable by such party without the prior
written consent of each of the other parties hereto.
9.11. No Implied Rights or Remedies. Except as otherwise expressly
provided herein, nothing herein expressed or implied is intended or shall be
construed to confer upon
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or to give any Person, except the parties hereto, any rights or remedies under
or by reason of this Agreement.
9.12. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.13. Dispute Resolution. All disputes or claims arising under or in
any way relating to this Agreement shall be subject to the Amended and
Restated Dispute Resolution Agreement (as defined in the Restructuring
Agreement).
9.14. Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and
no rule of strict construction will be applied against any party.
9.15. Severability. The invalidity or unenforceability of any
particular provision of this Agreement or any Related Agreement shall not
affect the other provisions hereof or thereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provision was
omitted.
9.16. Nature of Obligations. All obligations of LMC and LMAES in this
Agreement are joint and several, whether or not so expressed. All obligations
of MMT and M4 in this Agreement are joint and several, whether or not so
expressed.
[signature page to follow]
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Agreement to be duly executed and delivered as a sealed
instrument as of the date and year first above written.
M4 ENVIRONMENTAL L.P.
By: M4 Environmental Management, Inc.,
as general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Vice President
MOLTEN METAL TECHNOLOGY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Vice President
LOCKHEED ▇▇▇▇▇▇ COOPERATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
LOCKHEED ▇▇▇▇▇▇ ADVANCED
ENVIRONMENTAL SYSTEMS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President