1
Exhibit 10.1
CONFORMED COPY
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ASSET PURCHASE AGREEMENT
By and Among
MOLTEN METAL TECHNOLOGY, INC.
and
MMT OF TENNESSEE INC.
and
THE SCIENTIFIC ECOLOGY GROUP, INC.
and
WESTINGHOUSE ELECTRIC CORPORATION
Dated as of December 10, 1996
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Table of Contents
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Article Page
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1. Purchase and Sale........................................................................... 2
1.1. SEG Acquired Assets............................................................ 2
1.2. Westinghouse Acquired Assets................................................... 4
1.3. Excluded Assets................................................................ 5
2. Assumption of Certain Obligations........................................................... 5
2.1. Assumed Liabilities............................................................ 5
2.2. Excluded Liabilities........................................................... 6
3. Purchase Price.............................................................................. 6
3.1. Purchase Price to be Paid at Closing........................................... 6
3.2. Allocation..................................................................... 6
4. Closing ............................................................................... 7
4.1. Time and Place................................................................. 7
4.2. Transactions at Closing........................................................ 7
5. Representations and Warranties of the Seller and Westinghouse............................... 8
5.1. Organization; Authority........................................................ 9
5.2. Binding Effect................................................................. 9
5.3. Non-Contravention.............................................................. 9
5.4. Governmental Consents; Transferability of Licenses, Etc........................ 9
5.5. Litigation, Etc................................................................ 10
5.6. Conformity to Law.............................................................. 10
5.7. Title to Acquired Assets....................................................... 11
5.8. Safety, Zoning and Environmental Matters....................................... 11
5.9. Equipment...................................................................... 12
5.10. Insurance...................................................................... 13
5.11. Contracts...................................................................... 13
5.12. Employee Benefit Plans......................................................... 14
5.13. Compensation of and Contracts with Employees................................... 15
5.14. Labor Relations................................................................ 15
5.15. Trademarks, Patents, Etc....................................................... 16
5.16. Brokers........................................................................ 18
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6. Representations and Warranties of the Buyer
and the Buyer Sub........................................................................... 18
6.1. Organization and Standing of Buyer and
the Buyer Sub................................................................ 18
6.2. Corporate Approval; Binding Effect............................................ 18
6.3. Non-Contravention; Approvals................................................... 19
6.4. Brokers........................................................................ 19
6.5. Knowledge of Misrepresentations................................................ 19
7. Transitional Matters and Post-Closing Covenants............................................. 19
7.1. Proposed Assumed Employees..................................................... 19
7.2. Employee Benefit Plans......................................................... 21
7.3. General Assistance; Books and Records.......................................... 23
7.4. Guaranties and Indemnities..................................................... 25
7.5. Radioactive Material License................................................... 25
7.6. Radiologic Air Emissions....................................................... 26
7.7. Storm Water Emissions.......................................................... 26
7.8. Q-CEP Container................................................................ 27
7.9. Arrowsmith Non-Compete......................................................... 28
7.10. Equipment Disposal............................................................. 28
7.11. Termination of Master Agreement; Release....................................... 28
7.12. Executive Committee............................................................ 29
7.13. Acquired Resins; Processing and Storage........................................ 30
7.14. General Signal; Quanterra..................................................... 31
7.15. Copying of Books and Records................................................... 31
7.16. Discounts...................................................................... 32
7.17. Dryer.......................................................................... 32
7.18. Methodology with Respect to Customer Contracts................................. 32
7.19. Nontransferable Contracts...................................................... 34
8. Confidentiality and Related Matters......................................................... 36
8.1. Confidentiality Obligations of the Buyer....................................... 36
8.2. Confidentiality Obligations of the Seller and Westinghouse..................... 37
8.3. Third Party Information........................................................ 38
8.4. Limitations on Obligations..................................................... 38
8.5. Confidential Treatment of Certain Acquisition
Agreements................................................................... 39
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9. Non-Competition and Related Covenants....................................................... 39
9.1. Noncompetition................................................................. 39
9.2. Non-Advocacy; Preferred Provider............................................... 42
10. Indemnification............................................................................. 43
10.1. Indemnity by the Seller and Westinghouse....................................... 43
10.2. Indemnity by the Buyer......................................................... 44
10.3. Environmental Indemnity........................................................ 45
10.4. Time Limitations............................................................... 47
10.5. Materiality Standards; Dollar Thresholds....................................... 48
10.6. Claims......................................................................... 49
10.7. Method and Manner of Paying Claims; Set-Off.................................... 50
10.8. Straddle Claims................................................................ 50
10.9. Insurance Proceeds............................................................. 51
10.10. Scope of this Article 10....................................................... 52
10.11. Exclusion of Certain Claims.................................................... 52
10.12. Property Coverage.............................................................. 53
11. General ............................................................................... 53
11.1. Expenses....................................................................... 53
11.2. Notices........................................................................ 54
11.3. Entire Agreement............................................................... 55
11.4. Governing Law.................................................................. 55
11.5. Sections and Section Headings.................................................. 55
11.6. Assigns........................................................................ 55
11.7. Survival and Materiality of Representations and Warranties..................... 56
11.8. Further Assurances............................................................. 56
11.9. Tax Treatment.................................................................. 56
11.10. No Implied Rights or Remedies.................................................. 56
11.11. Counterparts................................................................... 57
11.12. Public Statements or Releases.................................................. 57
11.13. Jurisdiction and Consent to Service of Process,
Waiver of Jury Trial......................................................... 57
11.14. Construction................................................................... 57
11.15. Nature of Obligations.......................................................... 57
12. Certain Definitions......................................................................... 58
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
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1.1(a)(ii) Machinery and Equipment
1.1(a)(iii) Casks
1.1(a)(iv) Liners
1.1(a)(v) Resin Express Containers
1.1(a)(vi) Dewatering and Demineralization Equipment
1.1(a)(vii) Reverse Osmosis Systems
1.1(a)(ix) SWEET Unit
1.1(b) SEG Customer Contracts
1.1(c) Owned Real Property
1.1(d) Personal Property Leases
1.1(e)(i) SEG Trademarks
1.1(e)(ii) Certain Other SEG Acquired IP
1.1(g) Miscellaneous Purchase Orders
1.2(a) WEC Patents
1.2(b) Westinghouse Customer Contracts
5.3 Non-Contravention
5.4 Governmental Consents; Licenses
5.5 Litigation
5.6 Conformity to Law
5.7(a) Title to Acquired Assets
5.7(b) Encumbrances
5.8 Safety, Zoning and Environmental Matters
5.10 Insurance
5.11(b) Breaches/Noncompliance with Processing Contracts and
Assumed Contracts
5.11(c) Stop Work Orders/Defaults under Processing Contracts
5.11(d) Claims/Charges Relating to Processing Activities
5.12(a) Employee Benefit Plans
5.13(a) Information Relating to Proposed Assumed Employees
5.13(b) Compensation of and Contracts with Employees
5.13(c) Loan/Advances to Proposed Assumed Employees
5.13(d) Transferred Employees
5.14 Labor Relations
5.15(a) Trademarks, Patents
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5.15(b) Non-Exclusive Intellectual Property
5.15(d) Confidentiality Restrictions
6.3 Non-Contravention; Approvals
7.1(a) Proposed Assumed Employees
7.1(b) Buyer's Benefits
7.4 Support Agreements
7.13 Acquired Resins and Pricing
EXHIBITS
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A-1 Form of ▇▇▇▇ of Sale and Agreement
A-2 Interim Lease
A-3 Form of Deed
B-1 Form of Assignment of U.K. Patent
B-2 Form of Assignment of U.S. Patents
C Form of Intellectual Property License Agreement
D-1 Form of Assignment of Registered Trademark
D-2 Form of Assignment of Unregistered Trademarks
E-1 Form of General Signal Assignment
E-2 Form of Quanterra Assignment
F Form of Assumption Agreement
G Form of Services and Operating Agreement
H-1 Form of Complete Assignment and Assumption Agreement
H-2 Form of Partial Assignment and Assumption Agreement (SEG)
H-3 Form of Partial Assignment and Assumption Agreement
(Westinghouse)
I-l Form of Short-Term Subcontract (SEG)
I-2 Form of Short-Term Subcontract (Westinghouse)
I-3 Form of Subcontract (Small Generators)
J-1 Form of Closing Certificate of Westinghouse
J-2 Form of Closing Certificate of SEG
J-3 Form of Closing Certificate of MMT
J-4 Form of Closing Certificate of MMT Sub
K-1 Form of Opinion of Counsel to Sellers
K-2 Form of Opinion of Counsel to Buyers
L Form of Amendment to Arrowsmith Non-Compete
M Form of Unassigned Contract Subcontract
* Pursuant to Item 601(b)(2) of Regulation S-K, the foregoing schedules and
exhibits to the Asset Purchase Agreement have not been included as part of this
Current Report on Form 8-K. The registrant hereby agrees to furnish
supplementally to the Commission copies of any of the foregoing schedules and
exhibits upon request.
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ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is dated as of
December 10, 1996, by and between MOLTEN METAL TECHNOLOGY, INC., a Delaware
corporation (the "BUYER"), MMT OF TENNESSEE INC., a Delaware corporation (the
"BUYER SUB"), THE SCIENTIFIC ECOLOGY GROUP, INC., a Tennessee corporation (the
"SELLER"), and WESTINGHOUSE ELECTRIC CORPORATION, a Pennsylvania corporation
("WESTINGHOUSE").
RECITALS
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The Buyer is an environmental technology company engaged in the
commercialization and continued development of its innovative, proprietary
processing technology known as Catalytic Extraction Processing or CEP or, for
radioactive wastes, Quantum CEP[Trademark].
The Seller owns and operates facilities that service the environmental
needs of, among others, the nuclear power industry and radioactive waste
generators, employing technologies, including its thermal treatment, compaction
and metal melting capabilities and facilities, which support such efforts.
Westinghouse owns all of the outstanding shares of capital stock of the
Seller and owns certain patents relating to the Processing Activities.
Pursuant to a Master Agreement, dated as of December 2, 1994 (the
"MASTER AGREEMENT"), between the Seller and the Buyer, the Seller and the Buyer
agreed to engineer, construct and operate a CEP Plant in Oak Ridge, Tennessee
(referred to in the Master Agreement as the "First Project" and in this
Agreement as the "Q-CEP PLANT").
The Buyer has formed the Buyer Sub to own and operate the Q-CEP Plant
and conduct the Processing Activities after the Closing.
This Agreement contemplates a transaction in which (i) the Seller and
Westinghouse sell certain specified assets relating to the Q-CEP Plant and the
Processing Activities to the Buyer Sub and the Buyer, (ii) the Buyer Sub and the
Buyer assume certain specified liabilities of the Seller and Westinghouse
relating to the Q-CEP Plant and the Processing Activities, and (iii) the Master
Agreement is terminated.
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In connection with the negotiation and preparation of this Agreement,
the Seller, Westinghouse, the Buyer and the Buyer Sub have prepared a set of
disclosure schedules, dated the date hereof and delivered separately as one or
more volumes (the "DISCLOSURE SCHEDULE", with any reference herein to a Schedule
being to the Disclosure Schedule). Article 12 contains a list of definitions of
certain capitalized terms used in this Agreement, together with a
cross-reference to terms defined elsewhere in this Agreement.
In consideration of the mutual promises and agreements set forth
herein, the Buyer, the Buyer Sub, the Seller and Westinghouse agree as follows:
Article 1
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Purchase And Sale
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1.1. SEG ACQUIRED ASSETS. Subject to the terms and conditions set forth
in this Agreement, at the Closing referred to in Article 4 hereof, the Seller
shall sell, assign, transfer and deliver to the Buyer Sub, or, in the case of
the assets referred to in paragraphs (e) and (f) below, to the Buyer, and the
Buyer Sub or the Buyer, as applicable, shall purchase, acquire and take
assignment and delivery of, the following assets, as the same exist on the
Closing Date (with all of such assets included in this Section 1.1 hereinafter
referred to collectively as the "SEG ACQUIRED ASSETS"):
(a) all of the Seller's title to and interest in the
following personal property (the "EQUIPMENT"):
(i) the machinery, equipment, tools, spare
parts, supplies, materials and other personal property owned
by the Seller and located in or fixed to the Owned Real
Property;
(ii) the machinery and equipment listed on
SCHEDULE 1.1(a)(ii) together with the tools, spare parts,
supplies, materials and other personal property to be
identified as being transferred pursuant to the procedures set
forth in SCHEDULE 1.1(a)(ii);
(iii) the casks listed on SCHEDULE 1.1(a)(iii)
(the "CASKS");
(iv) the liners (used for the Casks) and related
parts in the amounts and of the types described on SCHEDULE
1.1(a)(iv) hereto;
(v) the resin express containers in the amounts
and of the types described on SCHEDULE 1.1(a)(v);
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(vi) the dewatering and demineralization
equipment listed on SCHEDULE 1.1(a)(vi);
(vii) the two reverse osmosis systems described on
SCHEDULE 1.1(a)(vii);
(viii) the containers listed on SCHEDULE 7.13; and
(ix) the SWEET sewage processing unit described
on SCHEDULE 1.1(a)(ix);
(b) with respect to those contracts and purchase orders
(whether or not such purchase orders have been acknowledged by the
counterparty and whether or not such purchase orders have been executed
by the issuing entity) with customers of the Seller listed on SCHEDULE
1.1(b) hereto (the "SEG CUSTOMER CONTRACTS"), certain rights of the
Seller under such SEG Customer Contracts to the extent, and only to the
extent, that such rights relate to the performance of Processing
Activities after the Closing; the SEG Customer Contracts to be assigned
completely or partially to the Buyer Sub are identified as such on
SCHEDULE 1.1(b); the SEG Customer Contracts to be subcontracted to the
Buyer Sub are identified as such on SCHEDULE 1.1(b); and certain of the
SEG Customer Contracts (as indicated on SCHEDULE 1.1(b)) will be
subject to both an assignment and a subcontract;
(c) all of the Seller's title to and interest in the
owned real property listed on SCHEDULE 1.1(c) and the properties
therein described and the buildings, plants and other structures,
fixtures, installations and improvements owned or leased by the Seller
and attached thereto or located thereon (collectively, the "OWNED REAL
PROPERTY");
(d) all of the Seller's title to, interest in and rights
under the personal property leases described on SCHEDULE 1.1(d) (the
"PERSONAL PROPERTY LEASES");
(e) subject to the rights retained by the Seller pursuant
to the Intellectual Property License Agreement referred to in Section
4.2(b) (the "SEG RETAINED IP"), all of the Seller's title to, interest
in and rights of the Seller with respect to (i) the trademarks listed
on SCHEDULE 1.1(e)(i), and (ii) the right to use, for any purpose, any
know-how and trade secrets of the Seller needed to use the Equipment in
the Q-CEP Plant and in the Processing Activities and the right to use,
for any purpose, any know-how and trade secrets of the Seller needed to
perform the Processing Activities, including any know-how and trade
secrets of the Seller relating to the
▇▇
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▇▇▇▇▇▇▇▇▇▇▇▇ Patents (with all of the foregoing referred to as the "SEG
ACQUIRED IP"); the SEG Acquired IP will include the Intellectual
Property listed on SCHEDULE 1.1(e)(ii);
(f) all of the Seller's title to, interest in and rights
of the Seller with respect to the License and Technical Assistance
Agreement, dated as of January 1, 1990, between General Signal
Corporation and the Seller (the "GENERAL SIGNAL AGREEMENT"), pursuant
to the General Signal Assignment and Assumption Agreement referred to
in Section 4.2;
(g) the outstanding purchase orders listed on SCHEDULE
1.1(g) hereto (the "MISCELLANEOUS PURCHASE ORDERS");
(h) the Amended and Restated License Agreement, dated as
of January 1, 1996, between the Seller and Quanterra Incorporated (the
"QUANTERRA AGREEMENT");
(i) the resins listed on SCHEDULE 7.13; and
(j) copies of all documents and records relating
exclusively to the other SEG Acquired Assets, including originals of
the Assumed Contracts.
1.2. WESTINGHOUSE ACQUIRED ASSETS. Subject to the terms and conditions
set forth in this Agreement, at the Closing referred to in Article 4 hereof,
Westinghouse shall sell, assign, transfer and deliver to the Buyer, in the case
of paragraph (a) below, and to the Buyer Sub, in the case of paragraphs (b) and
(c) below, and the Buyer or the Buyer Sub, as applicable, shall purchase,
acquire and take assignment and delivery of, the following assets, as the same
exist on the Closing Date (with all of such assets included in this Section 1.2
hereinafter referred to collectively as the "WESTINGHOUSE ACQUIRED ASSETS" and
together with the SEG Acquired Assets as the "ACQUIRED ASSETS"):
(a) subject to the rights retained by Westinghouse
pursuant to the Intellectual Property License Agreement (the
"WESTINGHOUSE RETAINED IP"), all of Westinghouse's title to, interest
in and rights under the patents listed on SCHEDULE 1.2(a) along with
all of Westinghouse's know-how and trade secrets, if any, relating to
the Westinghouse Patents (the "WESTINGHOUSE PATENTS", and together with
the SEG Acquired IP, the "ACQUIRED IP");
(b) with respect to those contracts and purchase orders
(whether or not such purchase orders have been acknowledged by the
counterparty and whether or not such purchase orders have been executed
by the issuing entity) with customers of Westinghouse listed on
SCHEDULE 1.2(b) hereto
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(the "WESTINGHOUSE CUSTOMER CONTRACTS" and, together with the SEG
Customer Contracts, the "CUSTOMER CONTRACTS"), certain rights of
Westinghouse under all Westinghouse Customer Contracts to the extent,
and only to the extent, that such rights relate to the performance of
Processing Activities after the Closing; the Westinghouse Customer
Contracts to be assigned completely or partially to the Buyer Sub are
identified as such on SCHEDULE 1.2(b); the Westinghouse Customer
Contracts to be subcontracted to the Buyer Sub are identified as such
on SCHEDULE 1.2(b); and certain of the Westinghouse Customer Contracts
(as indicated on SCHEDULE 1.2(b))will be subject to both an assignment
and a subcontract; and
(c) copies of all documents and records relating
exclusively to the Westinghouse Acquired Assets.
1.3. EXCLUDED ASSETS. Notwithstanding the foregoing, the Seller and
Westinghouse are not selling, and the Buyer Sub is not purchasing pursuant to
this Agreement, any other assets of the Seller or Westinghouse and the term
"ACQUIRED ASSETS" shall not include, any such assets of the Seller or
Westinghouse, including, without limitation, any of the following assets
(collectively, the "EXCLUDED ASSETS"):
(a) all assets relating to Employee Benefit Plans in
which any of the Assumed Employees participate;
(b) all rights under all Customer Contracts except to the
extent, and only to the extent, such rights relate to the Processing
Activities;
(c) copies of all documents and records relating to the
Acquired Assets, other than any documents or records relating to any
Acquired IP that does not constitute Westinghouse Retained IP or SEG
Retained IP; and
(d) the rights of the Seller and Westinghouse under this
Agreement and the Acquisition Agreements.
Article 2
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Assumption Of Certain Obligations
---------------------------------
2.1. ASSUMED LIABILITIES. Subject to the obligations of the Seller and
Westinghouse to indemnify the Buyer and the Buyer Sub with respect to certain
obligations and liabilities of the Seller and Westinghouse pursuant to this
Agreement, at the Closing:
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(i) effective upon consummation of the Closing,
the Buyer Sub hereby assumes, and agrees to pay, perform,
fulfill and discharge, all obligations and liabilities under
the Assumed Contracts (other than the General Signal
Agreement) to the extent, and only to the extent, such
obligations and liabilities accrue after the Closing and
relate to the performance of such Assumed Contracts after the
Closing; and
(ii) effective upon consummation of the Closing,
the Buyer hereby assumes, and agrees to pay, perform, fulfill
and discharge, all obligations and liabilities under the
General Signal Agreement to the extent, and only the extent,
such obligations and liabilities accrue after the Closing and
relate to the performance of the General Signal Agreement
after the Closing (with the obligations and liabilities
referred to in clause (i) and this clause (ii) referred to
collectively as the "ASSUMED LIABILITIES").
2.2. EXCLUDED LIABILITIES. The Buyer and the Buyer Sub shall not
assume, and shall not be deemed to have assumed, any liability or obligation of
any nature, fixed or contingent or known or unknown, of the Seller or
Westinghouse whatsoever other than as specifically set forth in this Article 2
or as otherwise specifically set forth in another Article of this Agreement
(with all such unassumed liabilities and obligations referred to in this
Agreement as the "EXCLUDED LIABILITIES").
Article 3
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Purchase Price
--------------
3.1. PURCHASE PRICE TO BE PAID AT CLOSING. At the Closing, the Buyer
Sub shall pay to Westinghouse the sum of $31,000,000 (the "PURCHASE PRICE"). The
Purchase Price will be paid by wire transfer of same day funds by the Buyer Sub
to an account designated in writing by Westinghouse.
3.2. ALLOCATION. Westinghouse, on behalf of itself and the Seller, and
the Buyer, on behalf of itself and the Buyer Sub, agree to confer as to the
allocation of the Purchase Price for tax and accounting purposes. However, in
the event that Westinghouse and the Buyer do not reach an agreement as to any
such allocation, then the Seller, Westinghouse, the Buyer and Buyer Sub shall
not be bound by any partial or preceding agreement and each may use its own
allocation. Nothing in this Section 3.2 shall be construed as requiring that the
Seller, Westinghouse, the Buyer or the Buyer Sub hire appraisers or otherwise
incur out-of-pocket expenses in order to reach agreement as to any of the
allocations described above.
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Article 4
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Closing
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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 immediately after the execution
and delivery of this Agreement, at the offices of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇. The date on which the Closing is actually
held hereunder is sometimes referred to herein as the "CLOSING DATE". The
Closing will be deemed to be effective for purposes of this Agreement as of
12:01 a.m. E.S.T on the Closing Date (the "EFFECTIVE TIME").
4.2. Transactions at Closing. At the Closing:
-----------------------
(a) The Seller shall duly execute and deliver to the
Buyer Sub or the Buyer, as applicable, or their nominee or nominees
such deeds, bills of sale, certificates of title and other instruments
of assignment or transfer with respect to the SEG Acquired Assets as
the Buyer or the Buyer Sub may reasonably request and as may be
necessary to vest in the Buyer or the Buyer Sub or their nominee(s)
good record and marketable title to all of the SEG Acquired Assets, in
each case subject to no Encumbrance (as defined in Section 5.7) except
for Permitted Encumbrances (as defined in Section 5.7); these transfer
instruments will include one or more Bills of Sale in the form of
EXHIBIT A-1 hereto (the "▇▇▇▇ OF SALE"). In addition, at the Closing
the Seller and the Buyer shall enter into the short-term lease for the
Owned Real Property in the form of EXHIBIT A-2 hereto (the "INTERIM
LEASE"). As soon as the Seller and the Buyer Sub have completed a
subdivision with respect to the Owned Real Property and taken all other
steps required prior to conveyancing, the Seller shall convey the Owned
Real Property to the Buyer Sub pursuant to a deed in the form of
EXHIBIT A-3 hereto.
(b) In order to transfer to the Buyer the Westinghouse
Patents, Westinghouse and the Buyer will enter into Patent Assignments
in the forms of EXHIBITS B-1 AND B-2 hereto (the "PATENT ASSIGNMENTS");
and in order to license to the Seller and Westinghouse the SEG Retained
IP and Westinghouse Retained IP, the Seller, Westinghouse and the Buyer
will enter into the Intellectual Property License Agreement in the form
of EXHIBIT C hereto (the "LICENSE AGREEMENT").
(c) In order to transfer to the Buyer the registered and
unregistered trademarks of the Seller listed in SCHEDULE 1.1(e)(i), the
Buyer and the Seller will enter into the Trademark Assignments in the
form of EXHIBITS D-1 and D-2 hereto (the "TRADEMARK ASSIGNMENTS").
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(d) In order to assign the General Signal Agreement to the
Buyer, the Buyer and the Seller will enter into the General Signal
Assignment and Assumption Agreement in the form of EXHIBIT E-1 hereto
(the "GENERAL SIGNAL ASSIGNMENT"); in order to assign the Quanterra
Agreement to the Buyer Sub, the Buyer Sub and the Seller will enter
into the Quanterra Assignment and Assumption Agreement in the form of
EXHIBIT E-2 hereto (the "QUANTERRA ASSIGNMENT").
(e) The Buyer and the Buyer Sub shall duly execute and deliver
to the Seller and Westinghouse such instruments of assumption with
respect to the Assumed Liabilities as the Seller may reasonably
request, including an Assumption Agreement in the form of EXHIBIT F
hereto.
(f) The Buyer Sub and the Seller will enter into a Services
and Operating Agreement in the form of EXHIBIT G hereto (the "SERVICES
AGREEMENT").
(g) The Seller, Westinghouse and the Buyer Sub will enter into
the assignments of certain Customer Contracts in the forms of EXHIBITS
H-1 to H-3 hereto (with such assignments referred to as the "CC
ASSIGNMENTS") in order to assign to the Buyer Sub certain rights under
the Customer Contracts relating to the performance of Processing
Activities after the Closing; in addition, the Seller, Westinghouse and
the Buyer Sub will enter into the subcontracts in the forms of EXHIBITS
I-1 to I-3 hereto (the "PROCESSING SUBCONTRACTS") in order to
subcontract to the Buyer Sub post-Closing Processing Activities with
respect to certain Customer Contracts.
(h) Westinghouse, the Seller, the Buyer and the Buyer Sub will
deliver Officers' Certificates in the form of EXHIBITS J-1 to J-4
hereto, respectively.
(i) Westinghouse and the Seller will deliver opinion(s) of
counsel in the form of EXHIBIT K-1 hereto; the Buyer and the Buyer Sub
will deliver an opinion of counsel in the form of EXHIBIT K-2 hereto.
(j) The Buyer Sub will deliver the Purchase Price as provided
in Section 3.1.
Article 5
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Representations and Warranties of the Seller and Westinghouse
-------------------------------------------------------------
The Seller and Westinghouse jointly and severally represent and warrant
to the Buyer and the Buyer Sub as follows:
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5.1. ORGANIZATION; AUTHORITY. Each of the Seller and Westinghouse is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization with corporate power and authority to enter
into this Agreement and, if a party thereto, the Interim Lease, the Patent
Assignments, the License Agreement, the Trademark Assignments, the General
Signal Assignment, the Quanterra Assignment, the Services Agreement, the
Processing Subcontracts and the CC Assignments (collectively, the "ACQUISITION
AGREEMENTS"), and to perform its obligations hereunder and thereunder. The
Seller is qualified as a foreign corporation in each jurisdiction in which its
assets or business operations require such qualification, except for those
jurisdictions where the failure to so qualify would not have a Material Adverse
Effect.
5.2. BINDING EFFECT. This Agreement and the other Acquisition
Agreements have been duly authorized by all necessary corporate action of the
Board of Directors and shareholder of the Seller, have been duly authorized by
all necessary corporate action on the part of Westinghouse and this Agreement
has been duly executed and delivered by the Seller and Westinghouse and
constitutes, and each of the other Acquisition Agreements to which they are a
party when executed and delivered will constitute, the legal, valid and binding
obligation of the Seller and Westinghouse, to the extent a party thereto,
enforceable against each of them in accordance with its terms.
5.3. NON-CONTRAVENTION. Except as set forth in SCHEDULE 5.3 hereto and
except for any consents to transfer or subcontract required in connection with
the execution and delivery of the Processing Subcontracts, the transfer to the
Buyer of the Assumed Contracts and except as provided in Section 5.4, neither
the execution and delivery of this Agreement and the other Acquisition
Agreements by the Seller and Westinghouse nor the consummation by the Seller and
Westinghouse of the transactions contemplated hereby and thereby will 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 of the
Acquired Assets pursuant to, (a) any agreement or commitment to which the Seller
or Westinghouse is a party or by which the Seller or Westinghouse or any of
their properties (including, without limitation, any of the Acquired Assets) is
bound or to which the Seller or Westinghouse or any of their properties is
subject, (b) the articles of incorporation or By-laws or other constitutive
documents of the Seller or Westinghouse or (c) any statute, regulation, rule,
judgment, order, decree or injunction of any government, governmental agency or
court or other tribunal to which the Seller or Westinghouse or any of their
properties is subject.
5.4. GOVERNMENTAL CONSENTS; TRANSFERABILITY OF LICENSES, ETC. Except as
set forth on SCHEDULE 5.4, and except for filing and recording appropriate
documents normally required in connection with conveyance of title to real or
personal property or the transfer of permits or licenses from any governmental
16
-10-
authority to the extent any such permits or licenses are being transferred or
are transferable, no consent, approval or authorization of, or registration,
qualification or filing with, any governmental agency or authority is required
for the execution and delivery of this Agreement and the other Acquisition
Agreements by the Seller or Westinghouse or for the consummation by the Seller
or Westinghouse of the transactions contemplated hereby and thereby. The Seller
has and maintains, and SCHEDULE 5.4 lists, all licenses, permits and other
authorizations from all governmental authorities required to be maintained by
the Seller in connection with either (a) the ownership or operation by the
Seller or Westinghouse of the Acquired Assets or (b) the current conduct by the
Seller of any of the Processing Activities, including without limitation all
permits and licenses required for the casks, liners and resin express containers
included as part of the Equipment, except for licenses, permits or other
authorizations where the failure of the Seller to have and maintain any or all
of such licenses, permits and authorizations would not have a Material Adverse
Effect.
5.5. LITIGATION, ETC. Except as set forth on SCHEDULE 5.5 hereto, to
the Seller's knowledge no action, suit, proceeding or investigation is pending
or threatened against the Seller, any of its Affiliates or any of its directors
or officers relating to or affecting the ownership or operation by the Seller or
Westinghouse of the Acquired Assets or the conduct by the Seller of any of the
Processing Activities, or which questions the validity of this Agreement or
challenges any of the transactions contemplated hereby or thereby, except for
any actions, suits, proceedings or investigations that individually or in the
aggregate would not have a Material Adverse Effect.
5.6. CONFORMITY TO LAW. Except as set forth on SCHEDULE 5.6, to the
Seller's knowledge the Seller and Westinghouse have complied in all material
respects with, and are in compliance in all material respects with, all laws,
statutes, governmental regulations, licenses, permits and other authorizations
from governmental authorities and all judicial or administrative or tribunal
orders, judgments, writs, injunctions, decrees or similar commands applicable to
the ownership or operation by the Seller and Westinghouse of the Acquired Assets
owned respectively by them or the conduct by the Seller of any of the Processing
Activities (except for those matters addressed by the representations and
warranties in Sections 5.8 and 5.14, which are not intended to be the subject of
this Section 5.6). Except as set forth in SCHEDULE 5.5, SCHEDULE 5.6, SCHEDULE
5.8 or SCHEDULE 5.14 hereto, to the Seller's knowledge neither the Seller nor
Westinghouse has committed, been charged with, or been under investigation with
respect to, nor does there exist, any violation of any provision of any
national, state or local law or administrative regulation in respect of the
ownership or operation by the Seller or Westinghouse of the Acquired Assets
owned respectively by them or the conduct by the Seller of any of the Processing
17
-11-
Activities, except for any violation that individually or in the aggregate would
not have a Material Adverse Effect.
5.7. TITLE TO ACQUIRED ASSETS. Except (a) for mortgages and other liens
described on SCHEDULE 5.7(a) hereto which will be discharged at or prior to the
Closing, (b) restrictions on transfer referred to in Section 5.3 or 5.4, and (c)
for Permitted Encumbrances (as defined below), the Seller or Westinghouse, as
applicable, is the lawful owner of, has good and valid record and marketable
title to, and has the full right to sell, convey, transfer, assign and deliver
the Acquired Assets and all of the Acquired Assets are 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"). Except as
expressly provided in this Agreement, at and as of the Closing (or, in the case
of the Owned Real Property, at the later date contemplated by Section 4.2(a)),
the Seller or Westinghouse, as applicable, will convey the Acquired Assets to
the Buyer or the Buyer Sub, as applicable, by deeds, bills of sale, certificates
of title and instruments of assignment and transfer effective to vest in the
Buyer or the Buyer Sub, as applicable, and the Buyer or the Buyer Sub, as
applicable, will receive, good and valid record and marketable title to, all of
the Acquired Assets, free and clear of all Encumbrances, except for Encumbrances
that (i) are listed in SCHEDULE 5.7(b), (ii) arise out of Taxes not in default
and payable without penalty or interest or the validity of which is being
contested in good faith by appropriate proceedings, or (iii) represent the
rights of customers, suppliers and subcontractors in the ordinary course of
business under contracts or under general principles of commercial law and that
will not individually and in the aggregate have a Material Adverse Effect
(collectively, "PERMITTED ENCUMBRANCES").
5.8. SAFETY, ZONING AND ENVIRONMENTAL MATTERS. To the Seller's
knowledge the facilities, offices or properties in or on which the Seller
carries on any aspect of its ownership or operation of the Acquired Assets or
conduct of any of the Processing Activities are not in violation in any material
respect of any zoning, health or safety law or regulation, including, without
limitation, the Occupational Safety and Health Act of 1970, as amended, the
Atomic Energy Act of 1954, as amended, and the Americans With Disabilities Act,
as promulgated and in effect on the date hereof. Except as set forth in SCHEDULE
5.8 hereto, to the Seller's knowledge, except for any violation of any
Environmental Law that individually or in the aggregate will not have a Material
Adverse Effect:
(a) insofar as it relates to the Seller's or Westinghouse's
ownership or operation of the Acquired Assets or the conduct by the
Seller of any of the Processing Activities, neither the Seller nor
Westinghouse has received notice from any third party, including
without limitation any
18
-12-
federal, state or local governmental authority, (i) that the Seller or
any predecessor in interest has been identified by the United States
Environmental Protection Agency ("EPA") or any state regulatory
authority as a potentially responsible party under CERCLA with respect
to a site listed on the National Priorities List, 40 C.F.R. Part ▇▇▇
▇▇▇▇▇▇▇▇ ▇ (1986); (ii) that any hazardous waste as defined by 42
U.S.C. [Section]6903(5), any hazardous substances as defined by 42
U.S.C. [Section]9601(14), any pollutant or contaminant as defined by 42
U.S.C. [Section]9601(33) and any Hazardous Substances which the Seller
or any predecessor in interest has generated, transported or disposed
of has been found at any site at which a federal, state or local agency
or other third party has conducted or has ordered that the Seller or
any predecessor in interest conduct a remedial investigation, removal
or other response action pursuant to any Environmental Law; or (iii)
that the Seller or any predecessor in interest is or will be a named
party to any claim, action, cause of action, complaint (contingent or
otherwise) or legal or administrative proceeding arising out of any
third party's incurrence of costs, expenses, losses or damages of any
kind whatsoever in connection with the Release of Hazardous Substances;
and
(b) insofar as it relates to the Seller's ownership or
operation of the Acquired Assets, the conduct by the Seller of any of
the Processing Activities or the Owned Real Property or ▇▇▇▇▇▇▇▇
Facility, (i) no underground tank or other underground storage
receptacle for Hazardous Substances is located on any of the Owned Real
Property or the ▇▇▇▇▇▇▇▇ Facility; (ii) there have been no Releases by
the Seller on, upon, into or from such properties, except for any such
Releases effected in compliance in all material respects with
Environmental Laws and that individually and in the aggregate will not
have a Material Adverse Effect; (iii) there have been no Releases on,
upon, from or into any real property in the vicinity of any real
property presently or formerly owned, leased or operated by the Seller
which, through soil or groundwater contamination, may have come to be
located on, and which would have a material adverse effect on the value
of, the Owned Real Property.
5.9. EQUIPMENT. All the Casks, liners and resin express containers
included as part of the Equipment are used or usable in the ordinary course
operation of the Seller's business as currently conducted as it relates to the
Processing Activities; and all of such resin express containers are in good
working condition, reasonable wear and tear excepted. All other Equipment and
all personal property leased by the Seller under the Personal Property Leases
are utilized by the Seller either in connection with the activities conducted by
it to date pursuant to the terms of the Master Agreement or in connection with
its performance of any of the Processing Activities as currently conducted and
are in good condition and repair, reasonable wear and tear excepted, for their
present use in such activities. EXCEPT AS SET
19
-13-
FORTH IN THIS AGREEMENT, NEITHER THE SELLER NOR WESTINGHOUSE MAKES ANY
WARRANTIES, EXPRESS OR IMPLIED, AS TO THE CONDITION OR OPERATION OF THE ACQUIRED
ASSETS INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
5.10. INSURANCE. Attached as SCHEDULE 5.10 is a description of all
insurance policies maintained by or for the benefit of the Seller in connection
with the activities conducted by it pursuant to the Master Agreement or the
Processing Activities.
5.11. Contracts.
---------
(a) The Seller has delivered or caused to be delivered or will
deliver or cause to be delivered to the Buyer or the Buyer Sub correct
and complete copies of each written Customer Contract and complete
copies of the related contract files; PROVIDED HOWEVER, that the Seller
may take such action as it deems reasonably appropriate to separate or
redact information from the copies of the Customer Contracts and
contract files delivered or to be delivered to the Buyer or the Buyer
Sub to the extent any such information is unrelated to the Processing
Activities. The applicable Customer Contract and related contract file
in its redacted form will not exclude any information the Buyer Sub
requires to perform its obligations under the applicable Processing
Subcontract or Assigned Customer Contract.
(b) Except to the extent that a Customer Contract or an
Assumed Contract is not evidenced by a written agreement executed by
all of the parties thereto, each Customer Contract and each Assumed
Contract is a valid, binding and enforceable obligation of the Seller
or Westinghouse, as the case may be, and, to the knowledge of the
Seller, the other party or parties thereto, and is in full force and
effect in all material respects. Except as set forth in SCHEDULE
5.11(b) hereto, neither the Seller or Westinghouse nor, to the
knowledge of the Seller, the other party or parties thereto, is in
breach or non-compliance, or is considered to be in breach or
non-compliance by the other party thereto, of any term of any Customer
Contract or Assumed Contract, except for any breaches or non-compliance
that individually or in the aggregate would not have a Material Adverse
Effect. Except (i) as set forth in SCHEDULE 5.11(b), (ii) for any
possible allegation of breach of any Customer Contract or any Assumed
Contract arising out of the conditional assignment or subcontracting of
rights in conformity with Sections 4.2(g) and 7.19 hereof, and (iii)
for any default notice or threat thereof relating to activities
conducted by the Seller or Westinghouse under the Customer Contracts,
other than Processing
20
-14-
Activities, that do not affect and have no reasonable likelihood of
affecting the Processing Activities, since January 1, 1996 to the
Seller's knowledge neither the Seller nor Westinghouse has received any
written default notice or written threat thereof with respect to any
Customer Contract or Assumed Contract, and to the Seller's knowledge
neither the Seller nor Westinghouse has any reasonable basis for
suspecting that any such action will be forthcoming, other than, with
respect to the Customer Contracts which are not Assigned Customer
Contracts, any defaults that individually or in the aggregate would not
have a Material Adverse Effect.
(c) Except as specifically identified in SCHEDULE 5.11(c),
since January 1, 1996 the Seller has not received written notice of any
stop work order, suspension of work order or default notice or written
threat of debarment or suspension with respect to any Customer
Contract.
(d) Except as specifically identified in SCHEDULE 5.11(d), no
claim, change order, request for equitable adjustment, or request for
contract funding, price or schedule adjustment, between the Seller or
Westinghouse and any of its suppliers, or between the Seller or
Westinghouse and any of its customers, relating to any Processing
Activities pursuant to any Customer Contract is pending or to the
knowledge of the Seller threatened (nor to the knowledge of the Seller
is there any basis for the foregoing) except for (i) any routine
contract claims not in excess of $25,000 each arising in the ordinary
commercial conduct by the Seller of its activities pursuant to the
Master Agreement or its conduct of any of the Processing Activities and
(ii) any routine change orders arising in the ordinary commercial
conduct by the Seller or Westinghouse of its activities pursuant to the
Master Agreement or its conduct of the Processing Activities and
relating solely to price increases or schedule or quantity adjustments.
5.12. Employee Benefit Plans.
----------------------
(a) IDENTIFICATION OF PLANS. Except for the arrangements set
forth in SCHEDULE 5.12(a), neither the Seller nor Westinghouse
currently maintains, contributes to, or participates in any pension,
profit-sharing, deferred compensation, bonus, stock option, share
appreciation right, severance, group or individual health, dental,
medical, life insurance, survivor benefit, car allowance, or similar
plan, policy or arrangement, whether formal or informal (an "EMPLOYEE
BENEFIT PLAN"), for the benefit of any Proposed Assumed Employees.
(b) DELIVERY OF DOCUMENTS. The Seller has heretofore delivered
or made available to the Buyer true, correct and complete copies of
each such Employee Benefit Plan or, in the case of any Employee
21
-15-
Benefit Plan not in written form, an accurate summary thereof, and with
respect to each such Employee Benefit Plan (i) any associated trust or
custodial agreements, (ii) any annual report, actuarial report, or
disclosure materials (including specifically any summary plan
descriptions) submitted to any governmental agency or distributed to
participants or beneficiaries thereunder in the current or any of the
three preceding calendar years and (iii) the most recently received IRS
determination letters and any governmental advisory opinions or
rulings.
5.13. Compensation of and Contracts with Employees.
--------------------------------------------
(a) SCHEDULE 5.13(A) hereto sets forth a complete and accurate
list of the Proposed Assumed Employees (as defined in Section 7.1) and
the date of hire and years of service for each such employee. The
Seller has previously delivered to the Buyer a complete and accurate
schedule showing the total salary and bonus paid to each Proposed
Assumed Employee for the fiscal year ended December 31, 1995 and for
the period from January 1, 1996 through September 30, 1996. Except as
described in the schedule previously delivered to the Buyer, there have
been no changes in such compensation since September 30, 1996.
(b) Neither the Seller nor Westinghouse has an employment
agreement, written or oral, with any Proposed Assumed Employee except
as set forth on SCHEDULE 5.13(b). Except pursuant to any Employee
Benefit Plan or as set forth on SCHEDULE 5.13(b), since December 31,
1995 neither the Seller nor Westinghouse has made any pension, bonus or
other payment, other than base salary, or become obligated to make any
such payment, to any Proposed Assumed Employee.
(c) Except as set forth on SCHEDULE 5.13(c), neither the
Seller nor Westinghouse has any outstanding loans or advances to any
Proposed Assumed Employee.
(d) Except as set forth in SCHEDULE 5.13(d), since January 1,
1996 no employee of the Seller whose business unit included the Q-CEP
Plant or provided services which included any of the Processing
Activities has been transferred to any other business unit of the
Seller or Westinghouse or any other Subsidiary of Westinghouse.
5.14. Labor Relations.
---------------
(a) To the Seller's knowledge, except as set forth on SCHEDULE
5.14, in connection with the activities conducted to date by the Seller
pursuant to the Master Agreement, the ownership or operation by the
22
-16-
Seller or Westinghouse of the Acquired Assets or the conduct by the
Seller of any of the Processing Activities:
(i) the Seller is in compliance in all material
respects with all national, state and local laws respecting
employment and employment practices, terms and conditions of
employment, wages and hours and nondiscrimination in
employment, and is not engaged in any unfair labor practice;
(ii) there is no charge pending or threatened
against the Seller alleging unlawful discrimination in
employment practices before any court or agency and there is
no charge of or proceeding with regard to any unfair labor
practice against the Seller pending before the National Labor
Relations Board or any similar governmental agency;
(iii) there is no labor strike, dispute, slow-down
or work stoppage actually pending or threatened against or
involving the Seller;
(iv) no one has petitioned within the last three
years, and no one is now petitioning, for union representation
of any employees of the Seller;
(v) no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is
pending against the Seller and no claim therefor has been
asserted;
(vi) none of the Seller's employees is covered by
any collective bargaining agreement, and no collective
bargaining agreement is currently being negotiated by the
Seller;
(vii) no labor organization (whether certified or
not) represents or to the Seller's knowledge purports to
represent any of the Proposed Assumed Employees; and
(viii) the Seller has not experienced any labor
strike, dispute, slow-down or similar work stoppage in the
last three years.
5.15. Trademarks, Patents, Etc.
------------------------
(a) SCHEDULE 5.15(a) hereto sets forth a complete and
accurate list of all patents, trademarks, trade names and copyrights
owned by and registered in the name of the Seller or Westinghouse and
all applications therefor and used or proposed to be used by the Seller
in connection with
23
-17-
the ownership and operation by the Seller or Westinghouse of the
Acquired Assets or the conduct by the Seller of any of the Processing
Activities. The General Signal Agreement represents the only agreement
relating to Intellectual Property in effect on the date hereof which
the Seller or Westinghouse has licensed or authorized for use by others
or which has been licensed or authorized for use to the Seller or
Westinghouse in connection with the Q-CEP Plant and the ownership or
operation of the Acquired Assets or the conduct by the Seller of any of
the Processing Activities.
(b) Except to the extent set forth in SCHEDULE 5.15(b) hereto,
the Seller and Westinghouse own or have the sole and exclusive right to
use, and the Acquired Assets will include, all Intellectual Property
used or necessary for the conduct by the Seller of its activities as of
the date hereof pursuant to the Master Agreement or the conduct as of
the date hereof by the Seller of any of the Processing Activities, and
the consummation of the Closing will not alter or impair any such
right. Except as set forth in SCHEDULE 5.15(b), no royalties are paid
or payable by the Seller or Westinghouse on or with respect to any of
the Intellectual Property, and upon the consummation of the Closing no
additional royalties (other than those already specified in SCHEDULE
5.15(b)) shall be payable with respect to such Intellectual Property.
(c) The Seller and Westinghouse have complied with all of
their obligations of confidentiality in respect of the Intellectual
Property of others and to the knowledge of the Seller there are no
violations of such obligations of confidentiality as are owed to the
Seller or Westinghouse, except for any non-compliance or violations
that singly or in the aggregate would not have a Material Adverse
Effect.
(d) Except as set forth in SCHEDULE 5.15(d), to the knowledge
of the Seller, no employee, agent or consultant of the Seller or
Westinghouse is subject to confidentiality restrictions in favor of any
third Person the breach of which would have a Material Adverse Effect.
(e) No claims are pending, and to the knowledge of the Seller
no claims have been threatened, by any Person regarding use of any
Intellectual Property used or necessary for the conduct by the Seller
of its activities as of the date hereof pursuant to the Master
Agreement or the conduct as of the date hereof of any of the Processing
Activities, or challenging or questioning the validity or effectiveness
of any license or agreement relating to any such Intellectual Property
and to the Seller's knowledge there is no basis for any such claim
except in the case of any of the foregoing for any claims that
individually or in the aggregate will not
24
-18-
have a Material Adverse Effect. To the knowledge of the Seller, the use
by the Seller or Westinghouse of the Intellectual Property listed in
any part of SCHEDULE 5.15(a) does not conflict with or infringe on the
rights of any Person and the Seller has not received any claim or
written notice from any Person to such effect, except for any
conflicts, infringements or violations that singly or in the aggregate
will not cause any Intellectual Property listed on SCHEDULE 5.15(a)-(d)
hereto to no longer be available to the Seller or Westinghouse or
otherwise have a Material Adverse Effect. To the knowledge of the
Seller, no third party is infringing, violating or otherwise using, in
an unauthorized manner, the Intellectual Property of the Seller or
Westinghouse relating to the Acquired Assets or the conduct of any of
the Processing Activities, except for any conflicts, infringements or
violations that singly or in the aggregate will not cause any
Intellectual Property to no longer be available to the Seller or
otherwise have a Material Adverse Effect.
5.16. BROKERS. Neither the Seller nor Westinghouse has retained,
utilized or been represented by any broker or finder in connection with the
transactions contemplated by this Agreement.
Article 6
---------
Representations and Warranties of the Buyer and the Buyer Sub
-------------------------------------------------------------
The Buyer and the Buyer Sub jointly and severally represent and warrant
to the Seller and Westinghouse as follows:
6.1. ORGANIZATION AND STANDING OF BUYER AND THE BUYER SUB. Each of the
Buyer and the Buyer Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Each of the Buyer and the
Buyer Sub has full power and authority under its Certificate of Incorporation
and By-Laws and applicable laws to execute and deliver this Agreement and the
other Acquisition Agreements to which it is a party and to consummate the
transactions contemplated hereby and thereby.
6.2. CORPORATE APPROVAL; BINDING EFFECT. Each of the Buyer and the
Buyer Sub has obtained all necessary corporate authorizations and approvals
required for the execution and delivery of this Agreement and the other
Acquisition Agreements to which it is a party and the consummation of the
transactions contemplated hereby and thereby. This Agreement has been duly
executed and delivered by the Buyer and the Buyer Sub and constitutes, and each
of the other Acquisition Agreements to which it is a party when executed and
delivered by the Buyer and the Buyer Sub will constitute, the legal, valid and
binding obligations of the Buyer and the Buyer Sub to the extent a party
thereto, enforceable against them in accordance with their terms.
25
-19-
6.3. NON-CONTRAVENTION; APPROVALS. Neither the execution and delivery
of this Agreement and the other Acquisition Agreements by the Buyer and the
Buyer Sub nor the consummation by the Buyer and the Buyer Sub of the
transactions contemplated hereby and thereby will constitute a violation of, or
be in conflict with, constitute or create a default under, or result in the
creation or imposition of any liens upon any property of the Buyer or the Buyer
Sub pursuant to (a) the Certificate of Incorporation or By-Laws of the Buyer or
the Buyer Sub; (b) any agreement or commitment to which the Buyer or the Buyer
Sub is a party or by which the Buyer or the Buyer Sub or any of their properties
is bound or to which the Buyer or the Buyer Sub or any of their properties is
subject; or (c) except as set forth on SCHEDULE 6.3, any statute, regulation,
rule, judgment, order, decree, stipulation, injunction, charge or other
restriction of any government, governmental agency or court or other tribunal to
which the Buyer or the Buyer Sub or any of their properties is subject. Except
as set forth on SCHEDULE 6.3, no consent, approval or authorization of, or
registration, qualification or filing by the Buyer or the Buyer Sub with, any
governmental agency or authority is required for the execution and delivery of
this Agreement and the other Acquisition Agreements by the Buyer or the Buyer
Sub or for the consummation by the Buyer and the Buyer Sub of the transactions
contemplated hereby and thereby.
6.4. BROKERS. Neither the Buyer nor the Buyer Sub has retained,
utilized or been represented by any broker or finder in connection with the
transactions contemplated by this Agreement.
6.5. KNOWLEDGE OF MISREPRESENTATIONS. As of the execution and delivery
of this Agreement, the Buyer has no knowledge that any of the representations or
warranties in any of Sections 5.4, 5.5, 5.6, 5.8 and 5.14 are incorrect. For
purposes of this Section 6.5, the Buyer's knowledge shall be limited to the
actual knowledge of ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ at the time of the execution and delivery
of this Agreement.
Article 7
---------
Transitional Matters and Post-Closing Covenants
-----------------------------------------------
7.1. Proposed Assumed Employees.
--------------------------
(a) Attached hereto as SCHEDULE 7.1(a) is a list of the
Seller's employees to whom the Buyer has made employment offers on
behalf of the Buyer Sub, conditioned on the occurrence of the Closing
(the "PROPOSED ASSUMED EMPLOYEES"). Those Proposed Assumed Employees
who become employees of the Buyer are referred to in this Agreement as
the "ASSUMED EMPLOYEES". The Buyer hereby confirms, and represents and
warrants, to the Seller that the offers of employment to the Proposed
Assumed Employees were for wages or salary at least equal to those
26
-20-
currently paid to the Proposed Assumed Employees and that as of the
Closing the Buyer Sub will provide the Assumed Employees with the
benefits listed on SCHEDULE 7.1(b).
(b) The Seller shall retain all responsibility for all
employees of the Seller other than the Assumed Employees. Nothing in
this Agreement shall obligate the Buyer or the Buyer Sub to make any
offer of employment to anyone other than a Proposed Assumed Employee
or, except as provided in paragraph (c) below, to provide continued
employment to any employee, whether or not the subject of an employment
offer from the Buyer or the Buyer Sub, for any specified period of time
following the Closing Date, or to maintain the same terms of employment
(including compensation and benefits) for any specified period of time
following the Closing Date. Except as provided in this paragraph (b) or
in a letter agreement dated as of the date hereof among the parties
hereto, for a period ending on the first anniversary of the Closing
Date the Buyer and the Buyer Sub and their Affiliates (which does not
include M4 Environmental L.P. or its general partner (collectively,
"M4") for purposes of this paragraph (b)) shall not, without the prior
written consent of the Seller, directly or indirectly, solicit the
employment of or employ or offer to employ any employee of the Seller,
including, without limitation, any Proposed Assumed Employee who is not
an Assumed Employee; PROVIDED THAT the Buyer and the Buyer Sub may
solicit the employment of or offer employment to any persons after
their employment has been terminated by the Seller or Westinghouse.
During such one-year period the Buyer and the Buyer Sub shall not
solicit, employ or offer to employ on behalf of M4 any employee of the
Seller if the Buyer could not do so on its own behalf. In addition,
during this one-year period the Buyer, the Buyer Sub and their
Affiliates (other than M4) shall not employ any such employees even if
such employees were first employed by M4, unless permitted under the
proviso to the second preceding sentence. For a period ending on the
first anniversary of the Closing Date, neither the Seller nor
Westinghouse nor their Affiliates shall, without the prior written
consent of the Buyer or the Buyer Sub, directly or indirectly, solicit
the employment of or employ or offer to employ any employee of the
Buyer or its Subsidiaries (including the Buyer Sub), including, without
limitation, any Assumed Employee; PROVIDED THAT the Seller and
Westinghouse and their Affiliates may solicit the employment of or
offer employment to any persons after their employment has been
terminated by the Buyer or one of its Subsidiaries.
(c) The Buyer and the Buyer Sub agree that, for a period of 60
days after the Closing Date, they will not cause any of the Assumed
Employees to suffer "employment loss", excluding any employment loss in
connection with the completion of a project as contemplated by 29
U.S.C.
27
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[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 employment loss could create any
liability for the Seller, unless the Buyer or the Buyer Sub delivers
notices under the WARN Act in such a manner and at such a time that the
Seller bears no liability with respect thereto. The Seller agrees that,
for a period of 60 days after the Closing Date, it will not cause any
of its 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 the Buyer or
the Buyer Sub, unless the Seller delivers notices under the WARN Act in
such a manner and at such a time that the Buyer and the Buyer Sub bears
no liability with respect thereto.
(d) Westinghouse and the Buyer have retained Strategic
Employee Services, Inc. to determine whether, in its professional
opinion, the wages and benefits to be offered by the Buyer Sub to the
Proposed Assumed Employees are comparable in the aggregate to the wages
and benefits currently provided by the Seller. The parties agree to
each pay one-half of the fees and expenses of Strategic Employee
Services, Inc. to perform such study.
7.2. Employee Benefit Plans.
----------------------
(a) Except as otherwise specifically provided in this Section
7.2, effective as of the Closing Date each Assumed Employee who is an
active participant in any Employee Benefit Plan shall cease to be an
active participant and all Assumed Employees shall become immediately
eligible to participate in each of the Buyer's Employee Benefit Plans.
(b) The Buyer and the Buyer Sub shall grant to each Assumed
Employee credit for service with the Seller and Westinghouse prior to
the Closing Date for the purpose of eligibility and vesting (but not
benefit accrual) under any Employee Pension Benefit Plan (as defined in
ERISA) maintained by the Buyer or the Buyer Sub.
(c) The Buyer and the Buyer Sub shall grant to each Assumed
Employee credit for service with the Seller and Westinghouse prior to
the Closing Date under any Welfare Benefit Plan (as defined in ERISA)
maintained by the Buyer or the Buyer Sub and other welfare and fringe
benefit arrangements which the Buyer Sub offers or negotiates for the
Assumed Employees (including, to the extent offered or negotiated, but
not limited to arrangements providing retiree health, disability,
vacation, severance and sick time benefits) and shall grant credit for
deductibles and co-payments previously paid, except that the Buyer Sub
shall not be
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required to provide such service credit for purposes of the Buyer's
sabbatical program and "life cycle" account. The Welfare Benefit Plans
of the Buyer and the Buyer Sub shall not exclude from coverage any
pre-existing condition of any of the Assumed Employees or any of their
respective covered dependents (other than conditions excluded or
excludable as of the Closing Date as pre-existing conditions under the
applicable Welfare Benefit Plan of the Seller). Any valid claims of any
of the Assumed Employees or any of their respective covered dependents
made against the Seller's Welfare Benefit Plans to the extent arising
in connection with incidents occurring prior to the Closing Date shall
be satisfied by the Seller under such plans. The Seller shall remain
solely responsible for any and all claims for hospitalization or other
confinement charges with respect to any Assumed Employee
hospitalization or other confinement that commences prior to the
Closing Date, in accordance with the terms and provisions of the
Seller's plans and policies. Any valid claims of any of the Assumed
Employees or any of their respective covered dependents made against
the Welfare Benefit Plans of the Buyer and the Buyer Sub to the extent
arising in connection with incidents occurring on or after the Closing
Date shall be satisfied by the Buyer or the Buyer Sub under such plans.
Promptly after the Closing the Seller shall pay to the Assumed
Employees the amount of vacation and sick time accrued up to the
Closing Date in accordance with the terms and provisions of the
Seller's Welfare Benefit Plans.
(d) Effective as of the Closing Date, the Buyer shall have in
effect a defined contribution plan that includes a qualified cash or
deferred arrangement within the meaning of Section 401(k) of the Code
(the "BUYER'S 401(k) PLAN") providing benefits as of the Closing to the
Assumed Employees participating in the Westinghouse Savings Program
and/or the Seller's Employees Retirement Savings Plan immediately prior
to the Closing. Each Assumed Employee who was participating in the
Westinghouse Savings Program and/or the Seller's Employees Retirement
Savings Plan shall become a participant in the Buyer's 401(k) Plan as
of the Closing. Assumed Employees shall receive credit for all service
with the Seller and Westinghouse for purposes of eligibility and
vesting under the Buyer's 401(k) Plan. As soon as practicable following
the Closing Date, the Seller and Westinghouse shall cause to be
transferred from the Seller's Employees Retirement Savings Plan and the
Westinghouse Savings Program to the Buyer's 401(k) Plan assets having a
fair market value equal to the aggregate value of the account balances
of the (i) Assumed Employees and (ii) alternate payees under qualified
domestic relations orders, each within the meaning of Section 414(p) of
the Code, relating to Assumed Employees, in such plans as of the date
of transfer (such transfer to be in notes evidencing loans to Assumed
Employees from their account
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balances and in cash). The Buyer shall cause the Buyer's 401(k) Plan to
provide for the receipt of such transfer. The Buyer represents and
warrants to the Seller and Westinghouse, and the Seller and
Westinghouse represent and warrant to the Buyer and the Buyer Sub, that
each has heretofore delivered to the other a true and correct copy of
the most recent favorable determination letter issued by the Internal
Revenue Service as to the qualified status of its respective plan
described in this subsection and that, to the best of its knowledge,
nothing has occurred since the date of such letter, including as a
result of plan operation or legislative or regulatory developments,
which would adversely affect such determination.
7.3. General Assistance; Books and Records.
-------------------------------------
(a) The Seller and Westinghouse agree that, on and after the
Closing Date, during normal business hours, they will permit the Buyer
and the Buyer Sub and their auditors to have access to and examine and
take copies of all books and records of the Seller or Westinghouse
relating to the Q-CEP Plant or the Processing Activities which are not
delivered to the Buyer or the Buyer Sub pursuant to this Agreement and
relating to (i) events occurring prior to the Closing and (ii)
transactions or events occurring subsequent to the Closing which are
related to or arise out of transactions or events occurring prior to
the Closing, as the Buyer or the Buyer Sub may reasonably require.
(b) The Buyer and the Buyer Sub agree that, on and after the
Closing Date, during normal business hours, they will permit the Seller
and Westinghouse and their auditors to have access to and examine and
take copies of all books and records relating to the Q-CEP Plant or the
Processing Activities and transferred to the Buyer or the Buyer Sub as
part of the Acquired Assets, as the Seller or Westinghouse may
reasonably require.
(c) The Buyer and the Buyer Sub agree to provide such support
(including the availability of personnel and records) as the Seller or
Westinghouse may reasonably request to assist the Seller or
Westinghouse in (i) defending any litigation, arbitration or other
dispute-resolution proceeding relating to any casualty, personal
injury, property damage, Equal Employment Opportunity Commission or
other claims against the Seller and/or Westinghouse constituting part
of the Excluded Liabilities, (ii) pursuing claims of the Seller and/or
Westinghouse against insurers or other miscellaneous claims, or (iii)
in examining or utilizing records referred to in this Section 7.3. The
Seller and/or Westinghouse as applicable shall continue to direct all
such litigation and shall be responsible for all costs (including legal
fees and expenses incurred in
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connection therewith). To the extent such support becomes overly
burdensome, the Buyer and/or the Buyer Sub, as applicable, and the
Seller and/or Westinghouse, as applicable, will agree on mutually
acceptable reimbursement provisions relating to the time actually
incurred by the other party's or parties' employees to reflect such
burden.
(d) The Seller and Westinghouse agree to provide such support
(including the availability of personnel and records) as the Buyer or
the Buyer Sub may reasonably request to assist the Buyer or the Buyer
Sub in (i) defending any litigation, arbitration or other
dispute-resolution proceeding relating to any casualty, personal
injury, property damage, Equal Employment Opportunity Commission or
other claims (other than Excluded Liabilities), (ii) pursuing claims
against insurers or other miscellaneous claims, or (iii) in examining
or utilizing records referred to in this Section 7.3. The Buyer and/or
the Buyer Sub shall direct all such litigation and shall be responsible
for all costs (including legal fees and expenses incurred in connection
therewith). To the extent such support becomes overly burdensome, the
Buyer and/or the Buyer Sub, as applicable, and the Seller and/or
Westinghouse, as applicable, will agree on mutually acceptable
reimbursement provisions relating to the time actually incurred by the
other party's employees to reflect such burden.
(e) The Buyer, the Buyer Sub, Westinghouse and the Seller each
agree to preserve and protect all books, records, files and data to the
extent they relate to the Q-CEP Plant or the Processing Activities
prior to the Closing (i) maintained for the preparation of tax returns
for a period of ten years after the Closing Date, and (ii) other than
those described in (i) above, for a period of six years after the
Closing Date.
(f) The Buyer, the Buyer Sub, Westinghouse and the Seller each
agree not to destroy any files or records which are subject to this
Section 7.3 (i) for the periods described in clause (e) of this Section
7.3 and (ii) thereafter, without giving at least thirty (30) days'
notice to the other parties. Upon receipt of such notice, such other
party may (i) cause to be delivered to it the records intended to be
destroyed, at such other party's expense or (ii) notify the first party
that such other party will pay the cost of storing and maintaining such
books and records (including any necessary costs of moving such books
and records to a location under control of such other party).
(g) Each party may take such action as it deems reasonably
appropriate to separate or redact information unrelated to the Q-CEP
Plant or the Processing Activities prior to the Closing from documents
and other materials requested and made available pursuant to this
Section 7.3 and, to
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the extent not adequately addressed by Article 8, to condition access
to materials that it deems confidential to the execution and delivery
of an agreement in customary form by the requesting party not to
disclose or misuse such information.
7.4. GUARANTIES AND INDEMNITIES. Attached as SCHEDULE 7.4 is a list
of existing bonds, letters of credit, guaranties and similar credit supports
outstanding in connection with the Q-CEP Plant or the Processing Activities (the
"SUPPORT AGREEMENTS"). The Buyer Sub agrees to use commercially reasonable
efforts, which will not include the payment of any consent fee or similar
amount, but which will include the provision of substitute security of like
character, quality and amount, to obtain the release of the Seller from those
Support Agreements indicated as "To Be Released" on SCHEDULE 7.4. The Buyer Sub
will consult with the Seller from time to time concerning the progress made with
respect to any such releases, and will permit the Seller reasonable
participation in such process. In the event that any such Support Agreements are
not released prior to the Closing, the Buyer and the Buyer Sub will indemnify
the Seller with respect to such Support Agreements on the terms set forth in
Section 10.2(b).
7.5. Radioactive Material License.
----------------------------
(a) The Seller and the Buyer Sub will mutually control the
shared boundary between their properties consistent with the dose
limits and plan outlined in the Seller's and the Buyer's joint October
9, 1996 correspondence to the Tennessee Division of Radiological
Health, which provides that no individual occupational worker will
receive more than 500 mrem/year based on a 20% occupancy factor. The
Seller and the Buyer Sub each will survey the shared boundary for dose
limits on a weekly basis and exchange all survey information.
(b) The Seller and the Buyer Sub each agrees to limit exposure
so that neither will utilize more than half of the 500 mrem/year
allocated exposure level (I.E., no more than 250 mrem/year of exposure
at the fenceline for each of the Seller and the Buyer Sub). Neither
party shall exceed the 250 mrem/year limit without the prior written
consent of the other party. The liability for any violation of the
exposure level shall be the responsibility of the party which caused
such violation.
(c) A Radiation Safety Officer from each of the Seller and the
Buyer Sub will meet not less than quarterly to mutually review the
boundary's radiological situation and assure that the agreed controls
on each side are sufficiently maintained to assure compliance. If such
Radiation Safety Officers cannot resolve any issues which arise
regarding
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the shared boundary, these issues will be referred to the Executive
Committee for resolution.
7.6. Radiologic Air Emissions.
------------------------
(a) The Seller and the Buyer Sub will each collect radiologic
emissions data from continuous stack emissions monitoring systems on an
annual basis.
(b) Neither the Seller nor the Buyer Sub shall permit its
stack source radiologic emission level to exceed 10 mrem/yr, or such
other amount allowed by applicable Law. The liability for any violation
of stack source radiologic emissions shall be the responsibility of the
party which caused such violation.
(c) A Radiation Safety Officer from each of the Seller and the
Buyer Sub will meet not less than annually to mutually review the stack
source radiological emissions and assure that the agreed controls on
each side are sufficiently maintained to assure compliance. If such
Radiation Safety Officers cannot resolve any issues that arise
regarding such emissions, these issues will be referred to the
Executive Committee for resolution.
7.7. Storm Water Emissions.
---------------------
(a) A design has been developed for segregating the stormwater
collection systems that will service, respectively, the Owned
Real Property and that portion of "Parcel 4" which will be
retained by the Seller (the "SEG SITE") after the Closing. The
Buyer Sub will pay the Seller $72,000 as payment in full for
its share of the costs associated with implementation of this
separate stormwater collection system and the related fence
and curb. The Seller shall manage the implementation of the
new "Stormwater Management Area", and fence and curb
installation. The Seller shall also manage and effect the
related stormwater system modifications that straddle the curb
and are required to separate the systems as defined above. The
Seller and the Buyer Sub shall each bear the repair and
maintenance costs of the shared curb and fence in the future.
To the extent one party's activities have damaged, require
alteration or otherwise affect the shared curb or fence, the
party responsible shall promptly effect and pay for these
changes.
(b) The Buyer and the Buyer Sub and the Seller agree that
storm water runoff from the SEG Site may continue to be discharged
through the currently established stormwater collection system until
the fully
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segregated system described in paragraph (a) above is implemented. In
the interim period, the Seller shall conduct all required monitoring of
storm water discharges from its property and provide the Buyer Sub with
the results thereof. To the extent possible, the Seller will provide
the Buyer Sub with at least five (5) days prior written notice before
conducting any such monitoring in order to allow the Buyer Sub to
conduct coordinated sampling with the Seller.
(c) Until such time that the Seller has established its
separate storm water collection and retention system and discharge
point, the Seller and the Buyer Sub each agree to restrict discharges
through the common outfall such that neither party exceeds 50% of the
effluent parameters specified in Table 7.1 and paragraphs 7(a), (b) and
(d) of Rule 1200-4-10-.04, as established under the authority of the
Tennessee Water Quality Control Act of 1977 (the "STORM WATER RULE").
Neither party shall exceed the 50% effluent parameter without the prior
written consent of the other party. The liability for any violation of
the storm water permit will remain the responsibility of the party
which caused the violation.
(d) In the event of any discharge through the common outfall
in the interim period that constitutes a non-compliance under the Storm
Water Rule, the Buyer Sub and the Seller agree to jointly investigate
the cause or source of such non-compliance. If compliance personnel
from the Buyer Sub and the Seller cannot resolve any issues related to
such non-compliance condition, these issues will be referred to the
Executive Committee for resolution.
(e) With respect to the settlement collection basin
constituting part of the existing stormwater system, the Seller agrees
to remediate the settlement collection basin, promptly after the
Closing, so that it is below accepted background levels of 5 picocuries
per gram of artificial (not naturally occurring) radionuclides. Such
remediation shall be at the Seller's expense. In addition, promptly
after the Seller has installed its separate stormwater collection
system, it will if required remediate the settlement collection basin
so that it is below accepted background levels of 5 picocuries per gram
of artificial (not naturally occurring) radionuclides. Such remediation
shall be shared equally by the Seller and the Buyer Sub.
7.8. Q-CEP CONTAINER. The Seller confirms that it has completed at its
own expense the South Carolina state approval process for the design of a final
form of Q-CEP container. The Buyer and the Buyer Sub and the Seller will
cooperate with each other to have such approval issued to the Buyer Sub with
respect to the use thereof.
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7.9. ARROWSMITH NON-COMPETE. SEG agrees that at the Closing it will
enter into an amendment of its non-competition arrangements with ▇▇. ▇▇▇▇▇▇▇▇▇▇
in the form of EXHIBIT L hereto.
7.10. EQUIPMENT DISPOSAL. As between the Buyer and the Buyer Sub, on
the one hand, and Westinghouse and the Seller, on the other hand, effective as
of the Closing the Buyer Sub shall be responsible for the ultimate disposal of
all Equipment transferred to the Buyer Sub at the end of such Equipment's useful
life, except as otherwise provided in Section 10.4(b).
7.11. Termination of Master Agreement; Release.
----------------------------------------
(a) Effective as of the Closing, the Buyer and the Seller
hereby terminate the Master Agreement pursuant to Section 16.1 thereof.
Notwithstanding any provision in the Master Agreement to the contrary
(including, but not limited to, Section 16.6 thereof), no provision of
the Master Agreement will survive such termination, including, but not
limited to, the provisions of Articles 1, 3, 6, 7 (including Section
7.5), 7, 9, 12, 13 (including Section 13.1), 14, 15, 16 (including
Section 16.7), 17, 19, 20 and 21. No such termination shall affect
SEG's or MMT's rights with respect to any breach or nonperformance by
the other party of any Section of the Master Agreement expressly
excluded from the provisions of paragraphs (b), (c) and (d) below. Any
such claims shall be subject to and governed by Article 10 of this
Agreement.
(b) Effective as of the Closing, the Seller, the Buyer and, in
the case of the Westinghouse Agreement, Westinghouse hereby agree to
terminate the Dispute Resolution Agreement, the Environmental
Indemnification Agreement, the Westinghouse Agreement and any other
Related Agreement. Notwithstanding any provision in any Related
Agreement or the Master Agreement to the contrary, no provision of any
Related Agreement will survive such termination. No such termination
shall affect the Buyer's rights with respect to any breach or
nonperformance by Westinghouse of the Westinghouse Agreement insofar as
it relates to Article 20 of the Master Agreement. Any such claims shall
be subject to and governed by Article 10 of this Agreement.
(c) Effective as of the Closing, the Buyer hereby releases and
forever discharges the Seller and Westinghouse and their respective
Affiliates, officers, directors, agents, employees, successors and
assigns (collectively, the "SELLER/WEC RELEASEES"), from all actions,
causes of actions, debts, demands and claims, whether liquidated or
unliquidated (including, without limitation, costs and expenses) based
upon, arising under or with respect to the Master Agreement or any
Related Agreement and the transactions contemplated thereby, whether
known or unknown,
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suspected or claimed, which the Buyer ever had, now has or hereafter
may claim to have (other than under this Agreement or the agreements to
be entered into pursuant hereto) against the Seller/WEC Releasees or
any of them, except for any claim by the Buyer against the Seller or
Westinghouse for breach or non-performance of any of the provisions of
Article 14 or 20 of the Master Agreement or the Westinghouse Agreement
insofar as it relates to Article 20 of the Master Agreement. Any such
claims shall be subject to and governed by Article 10 of this
Agreement. The Buyer hereby confirms that as of the date of this
Agreement it has no actual knowledge (which for purposes of this
paragraph (c) shall be limited to the actual knowledge of Messrs. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, Haney, Gatto, ▇▇▇▇▇ and Jacks) of any breach by the Seller
or Westinghouse of the sections of the Master Agreement or Westinghouse
Agreement referred to above.
(d) Effective as of the Closing, the Seller and Westinghouse
hereby release and forever discharge the Buyer and its Affiliates,
officers, directors, agents, employees, successors and assigns
(collectively, the "BUYER RELEASEES"), from all actions, causes of
actions, debts, demands and claims, whether liquidated or unliquidated
(including, without limitation, costs and expenses) based upon, arising
under or with respect to the Master Agreement or any Related Agreement
and the transactions contemplated thereby, whether known or unknown,
suspected or claimed, which the Seller or Westinghouse ever had, now
have or hereafter may claim to have (other than under this Agreement or
the agreements to be entered into pursuant hereto) against the Buyer
Releasees or any of them, except for any claim by the Seller or
Westinghouse for breach or non-performance of any of the provisions of
Article 14 or 20 of the Master Agreement. Any such claims shall be
subject to and governed by Article 10 of this Agreement. The Seller
hereby confirms that as of the date of this Agreement it has no
knowledge of any breach by the Buyer of the sections of the Master
Agreement referred to above.
7.12. EXECUTIVE COMMITTEE. The Buyer and the Seller shall establish
an executive committee to implement the terms and conditions of this Agreement
(the "EXECUTIVE COMMITTEE") consisting of a single senior representative
designated by the Seller and a single senior representative designated by the
Buyer ("DIRECTORS"). Any Director designated by a party must be reasonably
satisfactory to the other party. The initial Directors are Messrs. Caso and
▇▇▇▇▇. The Executive Committee's initial principal functions will be to oversee
the transition of the Seller's interest in the Q-CEP Plant and the Processing
Activities to the Buyer Sub and to implement the activities contemplated by the
Services Agreement. The Directors shall meet from time to time to discuss any
issues that may have arisen under this Agreement or any of the Agreements
entered into pursuant hereto. During the first year after the Closing the
Executive Committee shall meet no less
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often than quarterly. Either Director shall have the right to call a meeting to
discuss any outstanding issues.
7.13. Acquired Resins; Processing and Storage.
---------------------------------------
(a) Attached as SCHEDULE 7.13 is a list of ion exchange resins
that constitute part of the Acquired Assets (the "ACQUIRED RESINS").
The Seller has previously accepted the Acquired Resins for processing
pursuant to contracts with customers and has already invoiced the
applicable customers for such processing services in the amounts set
forth on SCHEDULE 7.13 (the "INVOICED PRICES").
(b) The Buyer Sub agrees to assume the Seller's obligations to
process, treat, dispose or otherwise handle the Acquired Resins. In
doing so, (i) the Buyer Sub shall be free to choose the methods used,
subject to the Seller's contractual commitments to such customers and
applicable Laws, and (ii) the Buyer Sub will comply with all of the
Seller's relevant obligations under the applicable contracts with
customers and all applicable Laws.
(c) In consideration for the Buyer Sub's agreement to assume
the foregoing obligation to process or otherwise handle the Acquired
Resins, the Seller agrees to pay to the Buyer Sub the Invoiced Prices.
To the extent payment has previously been made to SEG, such payment
will be made at the Closing. With respect to any payment not previously
made, the Seller shall remit to the Buyer Sub any such payment promptly
after receipt. Such payment shall constitute payment in full of the
Buyer Sub for its activities under this Section 7.13.
(d) The Seller agrees that, for the first ninety (90) days
after the Closing, the Seller will permit the Buyer Sub to store the
Acquired Resins at the Seller's Bear Creek site, so long as such
storage is allowed under all applicable Laws. At the end of such ninety
day period the Seller shall convey possession to the Buyer Sub of any
remaining Acquired Resins at the Bear Creek site, other than those
Acquired Resins to be processed by the Seller pursuant to the notice
given by the Buyer Sub pursuant to paragraph (e) below.
(e) Within sixty (60) days after the Closing Date the Buyer
Sub will determine whether it wishes the Seller to provide any
processing services with respect to any of the Acquired Resins and will
provide notice to the Seller of such determination, specifying in
reasonable detail the Acquired Resins to be processed by the Seller. In
the event the Buyer Sub requests the Seller to perform any processing
services on behalf of the Buyer Sub with respect to the Acquired
Resins, the Seller will process the
37
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applicable Acquired Resins if (i) they meet the Seller's "waste
acceptance criteria" then in effect and (ii) the Seller can process
such Acquired Resins using commercially reasonable efforts, within the
time limits, if any, imposed by its applicable permits and contract
requirements. The Buyer Sub and the Seller will cooperate with respect
to any such processing so that the Seller is able to process the
Acquired Resins within the time limits, if any, imposed by its
applicable permits. As the applicable Acquired Resins are designated by
the Buyer Sub for processing or other handling by the Seller, the
Seller will invoice the Buyer Sub in the amount of the applicable
Invoiced Prices. Payment terms will be net ten (10) days from the date
of invoice. Such payment shall constitute payment in full of the Seller
for its processing or handling activities under this Section 7.13.
(f) So long as any of the Acquired Resins are located at the
Bear Creek site the Buyer Sub agrees to indemnify the Seller from and
against all Losses (as defined in Article 10) arising from the storage
of the Acquired Resins at the Seller's site, except to the extent that
any such Losses are caused by Seller's negligence or willful
misconduct.
7.14. GENERAL SIGNAL; QUANTERRA. The Buyer's assumption and
agreement in Section 2 of the General Signal Assignment is intended to be for
the benefit of General Signal Corporation, and is not intended as between the
parties hereto to affect the allocation of responsibilities provided for in the
Agreement, pursuant to which the Seller and Westinghouse are to remain
responsible for all Excluded Liabilities and the Buyer and the Buyer Sub are to
assume and perform all Assumed Liabilities. The Buyer Sub's assumption and
agreement in Section 2 of the Quanterra Assignment is intended to be for the
benefit of Quanterra Incorporated, and is not intended as between the parties
hereto to affect the allocation of responsibilities provided for in the
Quanterra Assignment, pursuant to which the Seller and Westinghouse are to
remain responsible for all Excluded Liabilities and the Buyer and the Buyer Sub
are to assume and perform all Assumed Liabilities.
7.15. COPYING OF BOOKS AND RECORDS. In addition to their obligations
under Section 7.3, to the extent not already delivered prior to the Closing the
Seller will deliver copies or originals of the Customer Contracts and related
contract files consistent with Section 5.11(a) and consistent with the terms of
the CC Assignments and the Processing Subcontracts. In addition, representatives
of the Buyer Sub and the Seller will meet promptly after the Closing to ensure
that the Seller has delivered or will deliver promptly copies of all other
material records and documents constituting part of the Acquired Assets. In
addition, with respect to any documents and records constituting part of the
Acquired IP, the Buyer Sub may request that the Seller deliver all copies of
centrally located
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documents and records that constitute part of the Acquired IP but do not
constitute part of the SEG Retained IP or Westinghouse Retained IP.
7.16. DISCOUNTS. To the extent that the Seller or Westinghouse has
provided discounts with respect to any Customer Contracts pursuant to any of the
Westinghouse steam generator litigation settlement agreements with a customer,
if the Buyer Sub is required to continue such discount then Westinghouse will
reimburse the Buyer Sub for the amount of such discount, promptly after receipt
of the Buyer Sub's invoice therefor.
7.17. DRYER. With respect to the dryer to be used for the Q-CEP
Plant, the Seller agrees to pay the Buyer Sub the amount of $250,000 at Closing
to reimburse the Buyer Sub for anticipated costs of repairing or replacing the
dryer. In addition, the Seller will transfer to the Buyer Sub as part of the
Acquired Assets all rights the Seller has against the manufacturer, Jaygo. In
addition, the Seller agrees that if requested by the Buyer Sub prior to the
first anniversary of the Closing it will dispose of the dryer at no charge to
the Buyer Sub.
7.18. Methodology with Respect to Customer Contracts.
----------------------------------------------
(a) The parties hereto acknowledge that, in transferring
all or part of the Customer Contracts to the Buyer Sub as part of the
Acquired Assets, their intent and methodology has been as follows:
(i) those Customer Contracts with scopes of work
which involve solely Processing Activities are to be assigned
to the Buyer Sub in full;
(ii) those Customer Contracts with scopes of work
that include, but are not limited to, Processing Activities
which have already been definitized and priced, are to be
assigned to the Buyer Sub solely to the extent of such
definitized and priced Processing Activities;
(iii) those Customer Contracts that are to be
partially assigned to the Buyer Sub pursuant to clause (ii)
above which also involve scopes of work that include Assumable
Services (as defined below), currently not definitized and
priced, that may arise in the future, will be subcontracted to
the Buyer Sub at its election pursuant to a Processing
Subcontract for the nine-month period contemplated by
paragraph (b) below;
(iv) with respect to services to be performed
with respect to small generators and brokered waste streams,
such services will
39
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be performed by the Buyer Sub pursuant to a Processing
Subcontract;
(v) any consents required from customers will be
addressed by the provisions of Section 7.19;
(vi) with respect to current contracts of the
Seller or Westinghouse omitted (inadvertently or otherwise)
from SCHEDULES 1.1(b) AND 1.2(b), but which provide for
Assumable Services (as defined below), in the event that
during the first nine (9) months after the Closing the Seller
or Westinghouse is requested or required to perform any
activities under any such contract, such services will be
performed by the Buyer Sub or the Seller or Westinghouse as
provided in paragraph (b) below; in the event any consent from
a customer is required for the performance by the Buyer Sub of
such Assumable Services pursuant to a Processing Subcontract,
the applicable parties will seek such consent and, if not
obtained, enter into arrangements of the type contemplated by
Section 7.19(d); and
(vii) with respect to all of the Customer
Contracts, the Seller or Westinghouse will retain the economic
benefits and burdens relating to performance prior to the
Closing, and the Buyer Sub will be transferred and will assume
the benefits and burdens relating to the performance of such
Customer Contracts after the Closing (subject, in the case of
the Customer Contracts referred to in clause (iii) above, to
the lapse of the applicable Processing Subcontract).
Accordingly, SEG and Westinghouse, as applicable, agree to
perform that portion of the Customer Contracts not assigned to
Buyer Sub pursuant to CC Assignments or subcontracted to the
Buyer Sub pursuant to Subcontracts, that portion of any
Non-Transferred Contract for which the Buyer Sub is not to
bear the economic benefits and burdens as provided in Section
7.19(d) and any Assumable Service that the Buyer Sub elects
not to perform pursuant to paragraph (b) below. In addition,
the Buyer Sub agrees to perform that portion of the Customer
Contracts assigned to the Buyer Sub pursuant to CC Assignments
or subcontracted to the Buyer pursuant to Subcontracts, that
portion of any Non-Transferred Contract for which the Buyer
Sub is to bear the economic benefits and burdens as provided
in Section 7.19(d) and any Assumable Services that the Buyer
Sub elects to perform pursuant to paragraph (b) below. Without
limiting the generality of the foregoing, promptly after the
Closing the Seller and the Buyer Sub will make an appropriate
adjustment between them to reflect
40
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services to be performed after the Closing by the Buyer Sub
which have been invoiced prior to the Closing by the Seller or
Westinghouse.
(b) The Seller and Westinghouse agree that, for a period of
nine (9) months after the Closing, in the event any Person who as of
the Closing Date is a party to one of the Customer Contracts requests
either of them to perform services relating to Radioactive Wastes that
are capable of being performed with the Q-CEP Plant or the Acquired
Assets and, if Westinghouse is the one requested, such services had
traditionally been performed by SEG on behalf of Westinghouse (with any
of such services referred to as "ASSUMABLE SERVICES"), whether or not
the applicable Customer Contract is still in effect, then the Seller or
Westinghouse will make the Buyer Sub aware of any Assumable Services
requested by customers and provide the Buyer Sub the information
reasonably required by it to make its decision to perform such
Assumable Services. If the Buyer Sub elects to perform such Assumable
Services, it will do so pursuant to a Processing Subcontract generally
in the form of EXHIBIT I-1 hereto, unless it enters into a contract
directly with the customer, and in either case neither Westinghouse nor
the Seller shall perform such Assumable Services. If the Buyer Sub
elects not to perform such Assumable Services, it will notify the
Seller of such decision promptly, and thereafter the Seller or
Westinghouse shall be free to perform or have performed such Assumable
Services, notwithstanding the provisions of Section 9.1. The Executive
Committee shall meet as required to resolve any issues relating to the
performance of any such Assumable Services.
7.19. Nontransferable Contracts.
-------------------------
(a) To the extent that any Assumed Contract may not be
transferred by the Seller or Westinghouse to the Buyer or the Buyer Sub
pursuant to this Agreement, or a Customer Contract that is the subject
of a Processing Subcontract may not be subcontracted to the Buyer Sub
pursuant to this Agreement, without the consent, approval or waiver of
a third person or entity (including a governmental authority), and such
consent 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 or permit or license, nothing in this
Agreement will constitute a transfer or subcontract or an attempted
transfer or subcontract thereof.
(b) Notwithstanding anything contained in this Agreement to
the contrary, the Seller and Westinghouse will not be obligated to
transfer to the Buyer or the Buyer Sub any of their rights and
obligations in and to any of the Assumed Contracts referred to in
paragraph (a) above or to subcontract any of
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the Customer Contracts referred to in paragraph (a) above without first
having obtained all consents, approvals and waivers necessary for such
transfers or subcontracts. The Seller and Westinghouse and the Buyer
and the Buyer Sub will use their commercially reasonable efforts to
obtain such consents, approvals and waivers and to obtain any other
consents, approvals and waivers necessary to assign to the Buyer Sub
any of such Assumed Contracts or to subcontract to the Buyer Sub any of
such Customer Contracts. Each of the Seller and Westinghouse and the
Buyer and Buyer Sub shall bear its own expenses incurred in connection
with such efforts.
(c) In the event that any consent, approval or waiver
necessary to assign to the Buyer or the Buyer Sub any Assumed Contract
or to subcontract any applicable Customer Contract has not been
obtained prior to the Closing, then the Seller and Westinghouse and the
Buyer or the Buyer Sub will each use its reasonable commercial efforts,
each at its own expense, to (i) provide to the Buyer or the Buyer Sub,
as applicable, the benefits and burdens of any such Assumed Contract or
Customer Contract, (ii) cooperate in any reasonable and lawful
arrangement designed to provide such benefits and burdens to the Buyer
or the Buyer Sub, as applicable, in accordance with this Agreement,
without incurring any additional obligation to any other Person,
including without limitation the appointment of the Buyer or the Buyer
Sub as the agent of the Seller for purposes of such Assumed Contract
and (iii) enforce, at the request of the Buyer or the Buyer Sub for the
account of the Buyer or the Buyer Sub, any rights arising from any such
Assumed Contract or Customer Contract (including without limitation the
right to elect to terminate an Assumed Contract in accordance with the
terms thereof upon the advice of the Buyer or the Buyer Sub).
(d) The Seller and Westinghouse and the Buyer Sub agree that,
with respect to any Assigned Customer Contract of the type referred to
above in paragraph (c), if a consent to assignment cannot be obtained
and a consent to subcontract is required from a third person, they will
solicit such consent. If such a consent to subcontract is obtained with
respect to any such Assigned Customer Contract, the Seller or
Westinghouse, as applicable, and the Buyer Sub will enter into a
subcontract substantially in the form of EXHIBIT M (an "UNASSIGNED
CONTRACT SUBCONTRACT"), and thereafter the Buyer Sub will complete the
performance of such Assigned Customer Contract pursuant to such
Unassigned Contract Subcontract.
(e) If the Buyer Sub and the Seller or Westinghouse, as
applicable, are unable to obtain any required consents to assign or
subcontract any particular Assigned Customer Contract or to enter into
any particular Processing Subcontract (with any such Assigned Customer
Contract or Customer Contract for which the parties had intended to
enter into a
42
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Processing Subcontract referred to herein as an "NON-TRANSFERRED
CONTRACT"), and the Seller or Westinghouse, as applicable, and the
Buyer Sub agree that no such consent will be obtained, and no other
mutually satisfactory arrangements are agreed to, then (i) such
Non-Transferred Contract shall be deemed not to have been transferred
or subcontracted to the Buyer Sub, and (ii) the Seller or Westinghouse,
as applicable and the Buyer Sub shall treat such Non-Transferred
Contract as if the Seller or Westinghouse, as applicable, and the Buyer
Sub had entered into a seconding arrangement with respect to the
personnel and equipment performing such Non-Transferred Contract as of
the Closing Date. Such seconding agreement shall be in a mutually
acceptable form and shall be structured similar to the arrangements
described in clauses (i)-(iii) of the first sentence of paragraph (c)
above, with the effect that the Buyer Sub bears economic responsibility
for all profits and losses for the applicable transferred scope of such
Non-Transferred Contract and all liabilities arising after the Closing
with respect to the performance of the applicable transferred scope of
such Non-Transferred Contract.
(f) No consent, approval or waiver of a third person or entity
(including a governmental authority) with respect to the transfer of,
or any novation with respect to, any Assumed Contract or Processing
Subcontract shall cause an Excluded Liability to be deemed for purposes
of this Agreement to have become an Assumed Liability or vice-versa or
otherwise affect the respective rights of the parties to this Agreement
under Article 10.
Article 8
---------
Confidentiality and Related Matters
-----------------------------------
8.1. Confidentiality Obligations of the Buyer
----------------------------------------
(a) The Buyer and the Buyer Sub agree that they will use SEG
Confidential Information only in connection with the Q-CEP Plant and
the Processing Activities or as otherwise contemplated by this
Agreement or any Acquisition Agreement, and they will not disclose any
SEG Confidential Information to any Person except as expressly
permitted by this Section 8.1. The foregoing restriction shall not
apply to the disclosure or use of information which: (i) the Buyer or
the Buyer Sub can show was previously known to it prior to receipt from
the Seller; (ii) the Buyer or the Buyer Sub can show was developed by
employees or agents of the Buyer or the Buyer Sub independently of and
without reference to any SEG Confidential Information; (iii) is now, or
hereafter becomes, widely known or widely available in the radioactive
waste industry through no wrongful act of the Buyer or the Buyer Sub;
or (iv) is subsequently disclosed to the
43
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Buyer or the Buyer Sub by a third party not owing an obligation of
confidence to the Seller or Westinghouse.
(b) The Buyer and the Buyer Sub may disclose SEG
Confidential Information:
(i) to the Buyer's directors, officers,
employees and representatives (including outside legal
counsel, accountants and other professionals) who have a
reasonable need to know the contents thereof and who are
subject to a written confidentiality agreement with the Buyer
or the Buyer Sub obligating them to keep confidential the SEG
Confidential Information, subject to customary exceptions
similar to those set forth in paragraphs (a) above and (b)(ii)
below; and
(ii) to the extent required by applicable
statute, rule or regulation or any court of competent
jurisdiction; PROVIDED that the Buyer or the Buyer Sub has
made reasonable efforts to conduct its relevant business
activities in a manner such that the disclosure requirements
of such statute, rule or regulation or court of competent
jurisdiction do not apply, and PROVIDED FURTHER that the
Seller is given notice and an adequate opportunity to contest
such disclosure or to use any means available to minimize such
disclosure (E.G., the "confidential treatment" provisions of
Rule 24b-2 promulgated under the Securities Exchange Act of
1934, as amended).
8.2. Confidentiality Obligations of the Seller and Westinghouse.
----------------------------------------------------------
(a) Each of the Seller and Westinghouse agrees that it
will use MMT Confidential Information only in connection with the
activities contemplated by this Agreement or any Acquisition Agreement,
and it will not disclose any MMT Confidential Information except as
expressly permitted by this Section 8.2. The foregoing restriction
shall not apply to the disclosure or use of information which: (i) the
Seller or Westinghouse can show was previously known to it prior to
receipt from the Buyer or the Buyer Sub; (ii) the Seller or
Westinghouse can show was developed by its or their respective
employees or agents independently of and without reference to any MMT
Confidential Information; (iii) is now, or hereafter becomes, widely
known or widely available in the radioactive waste industry through no
wrongful act of the Seller or Westinghouse; or (iv) is subsequently
disclosed to the Seller or Westinghouse by a third party not owing an
obligation of confidence to the Buyer or the Buyer Sub.
44
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(b) The Seller and Westinghouse may disclose MMT
Confidential Information:
(i) to its directors, officers, employees and
representatives (including outside legal counsel, accountants
and other professionals) who have a reasonable need to know
the contents thereof and who are subject to a written
confidentiality agreement with the Seller or Westinghouse, as
applicable, obligating them to keep confidential the MMT
Confidential Information, subject to customary exceptions
similar to those set forth in paragraphs (a) above and (b)(ii)
below; and
(ii) to the extent required by applicable
statute, rule or regulation or any court of competent
jurisdiction; PROVIDED that the Seller or Westinghouse has
made reasonable efforts to conduct its relevant business
activities in a manner such that the disclosure requirements
of such statute, rule or regulation or court of competent
jurisdiction do not apply, and PROVIDED further that the
Buyer or the Buyer Sub is given notice and an adequate
opportunity to contest such disclosure or to use any means
available to minimize such disclosure (E.G., the
"confidential treatment" provisions of Rule 24b-2
promulgated under the Securities Exchange Act of 1934, as
amended).
8.3. THIRD PARTY INFORMATION. The Buyer, the Buyer Sub, Westinghouse
and the Seller agree that nothing in this Agreement or any agreement entered
into pursuant hereto shall be deemed to obligate any of them to disclose SEG
Confidential Information or MMT Confidential Information in violation of a
confidentiality obligation owed by the party possessing such information. In the
event that the Seller or Westinghouse discloses SEG Confidential Information to
the Buyer or the Buyer Sub, or the Buyer or the Buyer Sub discloses MMT
Confidential Information to the Seller or Westinghouse, in violation of a
confidentiality obligation owed to a third party by the disclosing party, the
recipient shall, without limiting its other obligations under this Article 8,
upon request return to the disclosing party all copies of such confidential
information in any tangible form.
8.4. LIMITATIONS ON OBLIGATIONS. The restrictions set forth in Section
8.1(a) and Section 8.2(a) shall apply to SEG Confidential Information or MMT
Confidential Information, as applicable, only to the extent such confidential or
proprietary information (i) if first disclosed in tangible form, is marked as
"Proprietary" or "Confidential" or (ii) if first disclosed in verbal, visual or
other intangible form, at the time of disclosure was identified or referred to
as confidential or proprietary and is within sixty (60) days after such
disclosure
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embodied or described in a tangible form, marked "Confidential" or
"Proprietary", furnished by the disclosing party to the receiving party.
8.5. CONFIDENTIAL TREATMENT OF CERTAIN ACQUISITION AGREEMENTS. The
parties hereto agree to treat the terms of the Services Agreement and the
exhibits to the CC Assignments and Processing Subcontracts as MMT Confidential
Information and SEG Confidential Information. However, Westinghouse and the
Seller may disclose the terms of the Services Agreement and the exhibits to the
CC Assignments and Processing Subcontracts to prospective purchasers of the
Seller provided such parties have entered into a written confidentiality
agreement, in customary form and of which the Buyer and the Buyer Sub are
intended beneficiaries, obligating them to keep the terms of the Acquisition
Agreements confidential.
Article 9
---------
Non-competition and Related Covenants
-------------------------------------
9.1. Noncompetition.
--------------
(a) Each of the Seller and Westinghouse agrees that for a
period of five (5) years after the Closing Date (the "RESTRICTED
PERIOD"), it shall not anywhere in the world either directly or
indirectly (whether through its Affiliates, as a shareholder, partner
or consultant or otherwise) promote, market, sell, license, own,
operate, finance or otherwise commercialize or engage in, or solicit or
negotiate to engage in, any business to volume reduce, recycle or
otherwise treat or process IER Feedstocks, including without limitation
any processing using gasification, plasma, vitrification, incineration,
metal melting, CEP or any similar or comparable technologies; PROVIDED
THAT the provisions of this paragraph (a) shall not restrict the Seller
or Westinghouse, directly or indirectly, from engaging, soliciting or
negotiating to engage in the handling or other preprocessing of IER
Feedstocks in anticipation of, but not to include, their burial,
destruction, recycling or other final processing. Without limiting
their obligations under Section 9.2, nothing in this paragraph (a)
shall prohibit Westinghouse or the Seller from retaining any third
party to provide any of the services referred to in this paragraph (a)
if such activities are provided ancillary to other services provided by
Westinghouse or the Seller, as applicable.
(b) The Seller agrees that during the Restricted Period it
shall not, at any operating commercial nuclear power plant anywhere in
the world, engage, either directly or indirectly (whether through its
Affiliates, as a shareholder, partner or consultant or otherwise), in
(i) the removal of water from Radioactive Waste accomplished primarily
by physical means,
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for disposal without further treatment or processing of such
Radioactive Waste or (ii) solidification of Radioactive Waste with a
cement binder in preparation for disposal without further treatment or
processing of such Radioactive Waste (the "SPECIFIED RESTRICTED
PROCESSES"); PROVIDED THAT the provisions of this paragraph (b) shall
not restrict the Seller, directly or indirectly, from (x) engaging in
any treatment of Radioactive Waste performed before the Radioactive
Waste is further treated in any process, other than the Specified
Restricted Processes, which the Seller provides or will provide in the
future, (y) processing any Secondary Waste of the Seller or (z) either
the removal of water from Radioactive Waste or solidification of
Radioactive Waste with a cement binder, provided that the amount of
Radioactive Waste processed at the request of any customer pursuant to
this clause (z) is DE MINIMIS (i.e., not more than the equivalent of
two 55-gallon drums over the life of the applicable contract), and such
services are provided ancillary to other services provided by the
Seller to the same customer. This paragraph (b) is not intended to
apply to activities of Westinghouse or its Affiliates (other than the
Seller or its Subsidiaries) unless Westinghouse or such Affiliates are
performing such activities on behalf of the Seller.
(c) The activities prohibited by paragraph (a) above are
referred to herein as a "FIRST COMPETING ACTIVITY", the activities
prohibited by paragraph (b) above are referred to herein as a "SECOND
COMPETING ACTIVITY" and they are collectively referred to herein as the
"COMPETING ACTIVITIES".
(d) The restrictions set forth in paragraphs (a) and (b) above
shall not restrict the Seller, Westinghouse or any of their respective
Affiliates from performing their respective obligations pursuant to
contracts with the United States of America or any agency thereof or
any other domestic or foreign government or government agency or
pursuant to any subcontracts, supply contracts or other similar
contracts or other agreements entered into in connection with or under
any such governmental contracts, subject to their respective
obligations under Section 9.2. In addition, the restrictions set forth
in paragraphs (a) and (b) above shall not prohibit the Seller or
Westinghouse or any of their respective Affiliates from owning,
directly or indirectly, less than five percent (5%) of any class of
securities listed on a national securities exchange or traded publicly
in the over-the-counter market of any corporation engaged in any
Competing Activity. In addition, the restrictions set forth in
paragraphs (a) and (b) above shall not prohibit the Seller or
Westinghouse from performing their obligations under any Subcontract,
or from entering into the arrangements contemplated by Section 7.19(d)
with respect to any Non-Transferred Contract or, during the first nine
months after the Closing, from performing
47
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any of the Assumable Services that the Buyer Sub elects not to perform
pursuant to Section 7.18(a)(vi) or (b).
(e) It is recognized by the parties hereto that damages for
breaches of covenants of the nature contained in this Section 9.1 are
difficult if not impossible precisely to prove; therefore, it is agreed
that this Section 9.1 shall be enforceable by mandatory injunction, in
addition to any other remedy available to the Buyer or the Buyer Sub
under this Agreement or at law or equity. If any of the restrictions
contained in this Section 9.1 shall be deemed to be unenforceable by
reason of the extent, duration or geographical scope or other provision
hereof, then the parties hereto contemplate that the court shall reduce
such extent, duration, geographical scope or other provision hereof and
enforce this Section 9.1 in its reduced form for all purposes in the
manner contemplated hereby.
(f) If during the Restricted Period the Seller transfers or
agrees to transfer any substantial portion of its assets to any third
party or Westinghouse transfers or agrees to transfer (by sale, merger
or otherwise) all or substantially all of the Seller's capital stock to
any third party, as a condition precedent to such transfer Westinghouse
and the Seller shall cause the transferee to agree in writing with the
Buyer and the Buyer Sub to comply with the Seller's obligations under
Section 9.1(a) and Section 9.2 for the remainder of the Restricted
Period. However, in the event Westinghouse sells the capital stock of
the Seller or the Seller sells all or substantially all of its assets
to a third party (the "SEG SUCCESSOR"), during the remainder of the
Restricted Period the geographic scope of the non-competition
obligation set forth in paragraph (a) above for the SEG Successor (and,
in the event of a stock transfer or merger in which the Seller
survives, the Seller) will be reduced to North America and the SEG
Successor will not be required to divest or shut down any existing
operations in North America; PROVIDED, HOWEVER, that any expansion of
any First Competing Activity (which for purposes hereof shall mean
either (x) any increase in total design capacity for processing of IER
Feedstocks or (y) any increase in the design radiation level of the IER
Feedstocks to be processed) by the Seller or the SEG Successor would be
subject to the non-competition obligation set forth in paragraph (a)
above. Any SEG Successor would not be subject to the non-competition
obligation set forth in paragraph (b) above.
(g) If during the Restricted Period Westinghouse agrees to
transfer any substantial portion of its assets to any third party or
any third party agrees to acquire (by sale, merger or otherwise) all or
substantially all of Westinghouse's capital stock, as a condition
precedent to such transfer Westinghouse shall cause the transferee to
agree in writing with the Buyer
48
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to comply with the restrictions applicable to Westinghouse under
Section 9.1(a) and Section 9.2 for the remainder of the Restricted
Period. Without limiting the generality of the foregoing, if during the
Restricted Period Westinghouse intends to distribute to its
stockholders in a "spin-off" transaction (a "SPIN-OFF TRANSACTION") any
material portion of its businesses (whether or not the businesses to be
distributed then include SEG), then as a condition precedent to such
distribution Westinghouse shall cause the Person whose securities are
distributed to stockholders in such Spin-Off Transaction to agree in
writing with the Buyer and the Buyer Sub to comply with the
restrictions applicable to Westinghouse under Section 9.1(a) and
Section 9.2 for the remainder of the Restricted Period. In the event
that any third party acquires all of Westinghouse's capital stock
without entering into any agreement with Westinghouse, such third party
shall be deemed to have acquired such capital stock subject to the
restrictions applicable to Westinghouse under Section 9.1(a) and
Section 9.2 for the remainder of the Restricted Period. However, in the
event Westinghouse sells all or substantially all of its assets to a
third party or any third party acquires (by sale, merger or otherwise)
all or substantially all of the capital stock of Westinghouse (the "WEC
SUCCESSOR"), the geographic scope of the non-competition obligation set
forth in paragraph (a) above for the WEC Successor (and, in the event
of a stock transfer or merger in which Westinghouse survives,
Westinghouse) will be reduced to North America, and the WEC Successor
will not be required to divest or shut down any existing operations;
PROVIDED, HOWEVER, any expansion of any First Competing Activity (which
for purposes hereof shall mean either (x) any increase in total design
capacity for processing of IER Feedstocks or (y) any increase in the
design radiation level of the IER Feedstocks to be processed) by
Westinghouse or the WEC Successor would be subject to the
non-competition obligation set forth in paragraph (a) above.
9.2. Non-advocacy; Preferred Provider.
--------------------------------
(a) During the Restricted Period Westinghouse will not
directly or indirectly advocate the use of any technology (other than
Q-CEP) in any First Competing Activity. Any ancillary services
subcontracted to third parties pursuant to the last sentence of Section
9.1(a) will not be considered a violation of this paragraph (a).
(b) For a period of three years after the Closing Date, the
Seller and Westinghouse shall use the Buyer and the Buyer Sub as their
preferred provider for the treatment or processing of IER Feedstocks.
As the preferred provider, the Buyer and the Buyer Sub will have the
right to process and dispose of all IER Feedstocks generated or
collected by the
49
-43-
Seller or Westinghouse, so long as the fees of the Buyer and the Buyer
Sub for these services are (i) less expensive than the cost for final
disposal, including burial of primary and Secondary Waste, without any
volume reduction, and (ii) no more than 25% greater than the fees of
the least expensive alternative provider based on such provider's
published price lists and similar volumes, and the applicable customer
does not refuse to permit the Buyer or the Buyer Sub to process such
IER Feedstocks, unless the customer's consent is required under the
terms of the applicable contract for the Buyer or the Buyer Sub to
perform such services and the customer does not provide such consent.
(c) For a period of three years after the Closing Date, in the
event that the Buyer or the Buyer Sub elects for any reason to have any
third party process any IER Feedstocks, the Buyer and the Buyer Sub
shall use the Seller as its preferred provider for the treatment or
processing of IER Feedstocks, in which event as to such IER Feedstocks
the restrictions set forth in Section 9.1(a) shall not apply. As the
preferred provider, the Seller will have the right to process and
dispose of all IER Feedstocks generated or collected by the Buyer or
the Buyer Sub, so long as the Seller's fees for these services are (i)
less expensive than the cost for final disposal, including burial of
primary and Secondary Waste, without any volume reduction, and (ii) no
more than 25% greater than the fees of the least expensive alternative
provider based on such provider's published price lists and similar
volumes and the applicable customer does not refuse to permit the
Seller to process such IER Feedstocks, unless the customer's consent is
required under the terms of the applicable contract for the Seller to
perform such services and the customer does not provide such consent.
Article 10
----------
Indemnification
---------------
10.1. INDEMNITY BY THE SELLER AND WESTINGHOUSE. Subject to the
provisions of Sections 10.3 through 10.11, the Seller and Westinghouse jointly
and severally agree to indemnify and hold the Buyer, the Buyer Sub and their
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 of the following:
(a) Any breach of any representation or warranty made by the
Seller or Westinghouse in this Agreement or any other Acquisition
Agreement or any breach by the Seller or Westinghouse of any covenant,
obligation, or undertaking made by the Seller or Westinghouse in this
Agreement or any other Acquisition Agreement;
50
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(b) the Excluded Liabilities, including, without
limitation, the following:
(i) except as provided in Section 11.1, any
actual or alleged liability for Taxes of the Seller for
taxable periods ending on or before the Closing Date;
(ii) any of the matters referred to or listed on
SCHEDULE 5.8; or
(iii) any claim, liability or obligation relating
to any broker or finder retained or utilized by the Seller or
Westinghouse or representing the Seller or Westinghouse in
connection with the transactions contemplated by this
Agreement; or
(c) (i) that portion of the Customer Contracts not
assigned to Buyer Sub pursuant to CC Assignments or
subcontracted to the Buyer Sub pursuant to Subcontracts, (ii)
that portion of any Non-Transferred Contract for which the
Buyer Sub is not to bear the economic benefits and burdens
pursuant to Section 7.19(d) or (iii) any Assumable Services
that the Buyer Sub elects not to perform pursuant to Section
7.18;
(d) the design, development or operation of the Outside
Battery Limits Equipment prior to the Closing; PROVIDED, HOWEVER, that
this paragraph (d) is limited to Losses asserted by third parties; or
(e) any claims of the Buyer under the Master Agreement or
the Westinghouse Agreement (insofar as it relates to unreleased claims
under the Master Agreement) not released under Section 7.11(c).
10.2. INDEMNITY BY BUYER. Subject to the provisions of Sections 10.3
through 10.11, the Buyer and the Buyer Sub jointly and severally agree to
indemnify and hold the Seller, Westinghouse and their Affiliates harmless from
and with respect to any and all Losses related to or arising directly or
indirectly out of any of the following:
(a) any breach of any representation or warranty made by
the Buyer or the Buyer Sub in this Agreement or any other Acquisition
Agreement (other than any representation or warranty made in Section
6.5, for which the Seller and Westinghouse are not entitled to
indemnification under this Article 10 or otherwise) or any breach by
the Buyer or the Buyer Sub of any covenant, obligation or undertaking
made by the Buyer or the Buyer Sub in this Agreement or any other
Acquisition Agreement;
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(b) any failure of the Buyer or the Buyer Sub, as
applicable, to perform the Assumed Liabilities;
(c) (i) that portion of the Customer Contracts either
assigned to the Buyer Sub pursuant to CC Assignments or subcontracted
to the Buyer Sub pursuant to Subcontracts, (ii) that portion of any
Non-Transferred Contract for which the Buyer Sub is to bear the
economic benefits and burdens pursuant to Section 7.19(d) or (iii) any
Assumable Services that the Buyer Sub elects to perform pursuant to
Section 7.18;
(d) the design, development or operation of the Inside
Battery Limits Equipment prior to the Closing; PROVIDED, HOWEVER, that
this paragraph (d) is limited to Losses asserted by third parties;
(e) any claims or liability of a third party for personal
injury or property damage occurring on the Owned Real Property during
the period between the Closing and the time the Owned Real Property is
conveyed to the Buyer Sub pursuant to Section 4.2, other than any such
claim or liability caused by the Seller's negligence or willful
misconduct;
(f) any claim, liability or obligation relating to any
broker or finder retained or utilized by the Buyer or the Buyer Sub or
representing the Buyer or the Buyer Sub in connection with the
transactions contemplated by this Agreement; or
(g) any claims of the Seller and Westinghouse under the
Master Agreement or the Westinghouse Agreement (insofar as it relates
to unreleased claims under the Master Agreement) not released under
Section 7.11(d).
10.3. ENVIRONMENTAL INDEMNITY. Subject to the provisions of Sections
10.4 through 10.11, with respect to certain Losses related to environmental
matters relating to periods prior to the Closing:
(a) INDEMNITY BY THE SELLER AND WESTINGHOUSE. The Seller
and Westinghouse jointly and severally agree to indemnify and hold the
Buyer, the Buyer Sub and their Affiliates harmless from and with
respect to any and all Losses related to or arising out of any of the
following (the "SEG ENVIRONMENTAL INDEMNITY MATTERS"):
(i) an Agency Action directed to, or any other claim
of a third party arising out of, a violation by the Seller or
its agents at or before the Closing of any Environmental Law,
whether or not relating to the Owned Real Property or the
▇▇▇▇▇▇▇▇ Facility;
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(ii) an Agency Action directed to, or any other
claim of a third party arising out of, a Hazardous Substance
or Radioactive Substance that was present at, on, or under the
Owned Real Property at or before the date of the Master
Agreement;
(iii) an Agency Action directed to, or any other
claim of a third party arising out of, the Release or Threat
of Release of a Hazardous Substance or Radioactive Substance
caused by the Seller or its agents at, on or under the Owned
Real Property, at or before the Closing;
(iv) an Agency Action directed to, or any other
claim of a third party arising out of, a Hazardous Substance
or Radioactive Substance that was present at, on or under the
▇▇▇▇▇▇▇▇ Site at or before the Closing; and
(v) any breach of any representation or warranty
made by the Seller or Westinghouse pursuant to Section 5.8 of
this Agreement.
(b) INDEMNITY BY THE BUYER AND THE BUYER SUB. The Buyer
and the Buyer Sub jointly and severally agree to indemnify and hold the
Seller, Westinghouse and their Affiliates harmless from and with
respect to any and all Losses related to or arising out of any of the
following (the "BUYER ENVIRONMENTAL INDEMNITY MATTERS"):
(i) an Agency Action directed to, or any other
claim of a third party arising out of, a violation of any
Environmental Law at or before the Closing by Buyer or its
agents, whether or not relating to the Owned Real Property or
the ▇▇▇▇▇▇▇▇ Facility; and
(ii) an Agency Action directed to, or any other
claim of a third party arising out of, a Release or Threat of
a Release of a Hazardous Substance or Radioactive Substance
caused by Buyer or its agents at, on, or under the Owned Real
Property or the ▇▇▇▇▇▇▇▇ Facility, at or before the Closing,
and, with respect to the Owned Real Property, between the
Closing and the time the Owned Real Property is conveyed to
the Buyer Sub pursuant to Section 4.2(a).
(c) CONTROL AND PARTICIPATION. With respect to matters
indemnified pursuant to this Section 10.3 and relating to an Agency
Action, the party obligated to provide indemnification hereunder (the
"INDEMNIFYING PARTY") upon accepting its responsibility and liability
therefor, shall have full control in dealing and negotiating with the
cognizant regulatory authorities in order to settle all matters giving
rise to
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the Loss; PROVIDED, HOWEVER, that (i) the party entitled to
indemnification hereunder (the "INDEMNIFIED PARTY") shall have the
right to attend, at its own expense, any meetings with the regulatory
authorities and to receive, upon request, copies of all correspondence,
reports, or other documents submitted or received by or on behalf of
the Indemnifying Party, and (ii) the Indemnifying Party shall not,
without the prior written consent of the Indemnified Party (which shall
not be unreasonably withheld), take any measure or step that imposes
any unreasonable burden or encumbrance upon the conduct of the
Indemnified Party's operations.
Where Remedial Action is required pursuant to this Section
10.3, the Indemnifying Party shall have the opportunity to perform such
Remedial Action, and the Indemnified Party agrees that it shall grant
or exercise reasonable efforts to cause to be granted to the
Indemnifying Party a right of reasonable access to the affected real
property and agrees that it will exercise reasonable efforts to obtain
a similar right of access to any leased real property from the
Indemnified Party's tenants, for the purpose of undertaking such
Remedial Action; PROVIDED, HOWEVER, that such Remedial Action shall be
conducted in a manner so as to assure no reasonable interference with
ongoing operations. In addition, all Remedial Actions conducted by the
Indemnifying Party shall be conducted in compliance with all applicable
Laws (including Environmental Laws) and in a manner so as not to
violate any of the Indemnified Party's licenses and permits.
10.4. Time Limitations.
----------------
(a) Neither the Seller and Westinghouse nor the Buyer and the
Buyer Sub shall be liable to the other under this Article 10 for any
claim relating to a breach of any representation or warranty referred
to in Section 10.1(a), Section 10.2(a) or Section 10.3(a)(v) unless,
(i) in the case of any claim arising under any of Sections 5.4, 5.5,
5.6, 5.10, 5.11, 5.12, 5.13, 5.14, 5.15 or 5.16 or Section 6.4 (each a
"SPECIFIED MISREPRESENTATION CLAIM"), the claim is asserted in writing
by the party seeking indemnification hereunder no later than ▇▇▇▇▇ ▇▇,
▇▇▇▇, (▇▇) in the case of any claim arising under Section 10.1(b)(i) (a
"TAX CLAIM"), not later than three (3) months after the expiration of
the applicable statute of limitations with respect to the tax matter to
which the Tax Claim relates, as such limitation period may be extended
from time to time, and (iii) in the case of any claim arising under
Section 10.3(a)(v), the claim is asserted in writing by the party
seeking indemnification hereunder within ten (10) years after the
Closing Date. Except as provided in paragraph (b) below, any (x) claim
for indemnification arising under Section 10.1 or Section 10.2 other
than a Specified Misrepresentation Claim or a Tax Claim may be made at
any
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time in the future, subject to any applicable statute of limitations,
and (y) any claim for indemnification under Section 10.3 may be made no
later than the tenth anniversary of the Closing Date.
(b) With respect to any claim for indemnification for a breach
of the representations and warranties set forth in Section 5.9, any
claim for indemnification must be made by the close of business on
December 24, 1996, except as provided in Section 7.17 with respect to
the Seller's obligations to dispose of the Jaygo dryer. Except as
provided in Section 7.17, the Buyer Sub's sole remedy for such a claim
shall be to return the applicable Equipment to the Seller, and the
Seller shall be obligated to accept such Equipment. The Buyer Sub's
sole remedy under Section 5.9 as it relates to the Jaygo drier is set
forth in Section 7.17.
10.5. Materiality Standards; Dollar Thresholds.
----------------------------------------
(a) For purposes of determining those Losses arising from
breaches of representations, warranties or covenants that will be
considered immaterial in nature and accordingly not subject to
indemnification hereunder, the Buyer, the Buyer Sub, the Seller and
Westinghouse have agreed to use predictable dollar thresholds as
provided in this paragraph (a). Accordingly, the Buyer, the Buyer Sub,
Westinghouse and the Seller agree that with respect to any
representation, warranty or covenant referred to in Section 10.1(a) or
10.2(a), if such representation, warranty or covenant contains a
materiality qualification (E.G., "material," "materially," "material to
the Q-CEP Plant or the Processing Activities," "in all material
respects," or similar qualifiers), such materiality qualification shall
be deemed to have been met, and such representation, warranty or
covenant shall be deemed to have been breached, if the Buyer and the
Buyer Sub or the Seller and Westinghouse, as applicable, incurs or is
alleged to have incurred Losses in excess of $25,000 in connection with
the matter or event to which such representation, warranty or covenant
relates.
(b) Neither the Seller and Westinghouse nor the Buyer and the
Buyer Sub shall be liable to the other for any Specified
Misrepresentation Claim or any claim under Section 10.3, including any
claim relating to Section 5.8 (an "ENVIRONMENTAL CLAIM"), if the total
Losses with respect to such Specified Misrepresentation Claim or such
Environmental Claim do not exceed $25,000 ("MINOR CLAIMS").
(c) The Seller and Westinghouse shall not be liable to the
Buyer and the Buyer Sub for any Specified Misrepresentation Claims or
Environmental Claims unless and until the total Losses suffered by the
Buyer and the Buyer Sub with respect to all Specified Misrepresentation
Claims and Environmental Claims exceeds $300,000, excluding Losses
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with respect to Minor Claims, and then only to the extent of such
excess. The Buyer and the Buyer Sub shall not be liable to the Seller
and Westinghouse for any Specified Misrepresentation Claims or
Environmental Claims unless and until the total Losses suffered by the
Seller and Westinghouse with respect to all Specified Misrepresentation
Claims and Environmental Claims exceeds $300,000, excluding Losses with
respect to Minor Claims, and then only to the extent of such excess.
(d) The total amount payable by the Seller and
Westinghouse under Section 10.1(a) with respect to all Specified
Misrepresentation Claims shall be the Purchase Price. The total amount
payable by the Buyer and the Buyer Sub under Section 10.2(a) with
respect to all Specified Misrepresentation Claims shall be the Purchase
Price.
(e) No claim for indemnification under Section 10.1 or
Section 10.2 or Section 10.3, other than a Specified Misrepresentation
Claim or, as provided in paragraph (c) with respect to Environmental
Claims, an Environmental Claim, shall be subject to any threshold
amount or deductible amount or cap on liability. Without limiting the
generality of the foregoing, no Environmental Claim will be subject to
a cap on liability.
10.6. Claims.
------
(a) Any party seeking indemnification hereunder (the
"INDEMNIFIED PARTY") shall promptly notify the other party hereto
obligated to provide indemnification hereunder (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 any Indemnifying Party of its obligations
under this Article 10 except to the extent, if at all, that such
Indemnifying Party shall have been prejudiced thereby. If such Claim
relates to any action, suit, proceeding or demand instituted against
the Indemnified Party by a third party (a "THIRD PARTY CLAIM"), upon
receipt of such notice from the Indemnified Party, the Indemnifying
Party shall be entitled to participate in the defense of such Third
Party Claim, and if and only if each of the following conditions is
satisfied, the Indemnifying Party may assume the defense of such Third
Party Claim, and in the case of such an assumption the Indemnifying
Party shall have the authority to negotiate, compromise and settle such
Third Party Claim:
(i) the Indemnifying Party confirms in writing
that it is obligated hereunder to indemnify the Indemnified
Party with respect to such Third Party Claim;
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(ii) the Indemnified Party does not give 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; and
(iii) the Indemnifying Party establishes to the
reasonable satisfaction of the Indemnified Party that the
Indemnifying Party has (and will continue to have) adequate
financial resources to satisfy and discharge such action or
claim.
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.
(b) Notwithstanding the foregoing provisions of this
Section 10.6, (i) no Indemnifying Party shall be entitled to settle any
Third Party Claim without the Indemnified Party's prior written consent
unless as part of such settlement the Indemnified Party is released in
writing from all liability with respect to such Third Party Claim and
(ii) no Indemnified Party shall be entitled to settle any Third Party
Claim without the Indemnifying Party's prior written consent unless as
part of such settlement the Indemnifying Party is released in writing
from all liability with respect to such Third Party Claim.
(c) In the event one party hereunder should have a claim
for indemnification that does not involve a Third-Party Claim, the
party seeking indemnification shall promptly send notice of such Claim
to the other party.
10.7. METHOD AND MANNER OF PAYING CLAIMS; SET-OFF. Subject to the
Indemnifying Party's right pursuant to Section 10.6 to defend, negotiate,
compromise and settle a Third Party Claim, the amount of any Claim shall be paid
by the Indemnifying Party forthwith on demand. Any amounts owed or amounts in
dispute by the Seller or Westinghouse to the Buyer or the Buyer Sub or one of
their Affiliates (whether under this Agreement or otherwise) may be set off in
satisfaction of amounts owed or amounts in dispute by the Buyer and the Buyer
Sub or one of their Affiliates to the Seller or Westinghouse or one of their
Affiliates (whether under this Agreement or otherwise) and vice versa.
10.8. STRADDLE CLAIMS. With respect to the indemnification obligations
of the Seller, Westinghouse, the Buyer and the Buyer Sub under this Article 10,
to the extent that any matter, event or occurrence exists both before and after
the
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Closing Date, such that the Buyer and the Buyer Sub, on the one hand, and the
Seller and Westinghouse, on the other hand, could both be entitled to
indemnification with respect thereto (such as an ongoing OSHA violation with
respect to which the Seller and the Buyer Sub are assessed a fine attributable
to both pre-Closing and post-Closing periods), the respective indemnification
obligations of the Buyer and the Buyer Sub, on the one hand, and the Seller and
Westinghouse, on the other hand, shall be equitably apportioned between the
Buyer and the Buyer Sub, on the one hand, and the Seller and Westinghouse, on
the other hand, based on respective lengths of time, comparative opportunity to
correct or prevent such matter or occurrence, whether or not the underlying
matter or occurrence also gives rise to a breach of any of the representations
and warranties made by any party to this Agreement or other equitable factors.
10.9. Insurance Proceeds.
------------------
(a) Except as provided in Section 8.4 of the Services
Agreement, no Indemnified Party shall be obligated to pursue or collect
from any insurer prior to making a claim for indemnification pursuant
to this Article 10 and no Indemnifying Party shall be entitled to
postpone performance of any indemnification obligation under this
Article 10 while an insurance claim is pending. However, without
limiting any of the provisions of Sections 10.1 through 10.11 in
connection with any matter subject to indemnification under this
Article 10, all parties shall cooperate with each other in giving
notice of any claim to any insurer (including an insurer of an
Indemnified Party) and shall provide reasonable assistance in the
collection of any such claim; PROVIDED, HOWEVER, that there is no duty
to provide notice, cooperate or assist with respect to an Indemnified
Party's insurance policies where the Indemnified Party determines in
its sole discretion that such notice, cooperation or assistance could
invalidate any portion of the coverage available under such policy or
result in the imposition of retroactive premiums or prospective premium
increases. In addition, if an Indemnified Party makes such a
determination after it has notified its insurer, it shall be entitled
to retract such notice.
(b) If an Indemnified Party actually receives insurance
proceeds, the amount for which such Indemnified Party is entitled to
indemnification under this Article 10 shall be reduced appropriately.
In the event an Indemnified Party receives insurance proceeds after
being paid by the Indemnifying Party with respect to an indemnifiable
matter under this Article 10, the Indemnified Party will remit such
proceeds to the Indemnifying Party, up to the amount previously paid by
the Indemnifying Party with respect to such matter. Nothing in this
Section 10.9 shall be deemed to waive or limit the subrogation rights
of any insurer.
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10.10 SCOPE OF THIS ARTICLE 10. The parties hereto agree that,
except for injunctive relief, including specific performance, its and their sole
and exclusive remedy with respect to any and all claims relating to the subject
matter of this Agreement shall be subject to this Article 10, except that any
claims relating to the Services Agreement shall be governed by the Services
Agreement.
10.11 Exclusion of Certain Claims.
---------------------------
(a) Except for any deductible amount under the nuclear all
risk property damage policy maintained by Buyer, the Buyer Sub or any
of their Affiliates for the Owned Real Property and the personalty
located thereon that does not exceed two and one-half million dollars
($2,500,000), the Seller and Westinghouse shall not be liable to the
Buyer, the Buyer Sub or any of their Affiliates, whether in contract,
in tort (including negligence or strict liability) or otherwise, for
losses or damages to property at or on the Owned Real Property arising
out of or resulting from any Release by Seller or its Affiliates or
agents due to or caused by radioactive contamination on, from or out of
the SEG Site or the Seller's other real property located on Bear Creek
Road (collectively, the "SELLER'S SITES") provided that such
radioactive contamination is the result of a covered cause of loss
under the nuclear all risk property damage policy maintained by Buyer,
the Buyer Sub or any of their Affiliates for the Owned Real Property
and the personalty located thereon. The foregoing is based on the
Buyer's and Buyer Sub's sublimit as of the Closing Date of $15 million
of liability for radiation cross-contamination under the
above-referenced nuclear all risk property damage policy. In the event
this sublimit is reduced by the insurer prior to the third anniversary
of the Closing Date as a result of any act or omission of the Seller or
its Affiliates, the exclusion of liability set forth above in this
paragraph (a) shall not extend to any loss or damage to the extent of
the difference between the current $15 million radiation
cross-contamination sublimit and such new reduced sublimit, but in no
event shall such exception to the liability exclusion of this paragraph
(a) exceed $7,500,000. The Buyer and the Buyer Sub agree to use
commercially reasonable efforts to give the Seller and Westinghouse as
much prior notice as is practicable of any such reduction in sublimits.
(b) Except for any deductible amount under the nuclear all
risk property damage policy maintained by Seller or any of its
Affiliates for the Seller Sites and the personalty located thereon that
does not exceed one million dollars ($1,000,000), the Buyer and the
Buyer Sub shall not be liable to the Seller, Westinghouse or any of
their Affiliates, whether in contract, in tort (including negligence or
strict liability) or otherwise, for losses or damages to property at or
on the Seller Sites arising out of or resulting from any Release by
Buyer, the Buyer Sub or their Affiliates or
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agents due to or caused by radioactive contamination on, from or out of
the Owned Real Property provided that such radioactive contamination is
the result of a covered cause of loss under the nuclear all risk
property damage policy maintained by Seller or any of its Affiliates
for the Seller's Sites and the personalty located thereon. The
foregoing is based on the Seller's sublimit as of the Closing Date of
$35 million of liability for radiation cross-contamination under the
above-referenced nuclear all risk property damage policy. In the event
this sublimit is reduced by the insurer prior to the third anniversary
of the Closing Date as a result of any act or omission of the Buyer,
Buyer Sub or their Affiliates, the exclusion of liability set forth
above in this paragraph (b) shall not extend to any loss or damage to
the extent of the difference between the current $35 million radiation
cross-contamination sublimit and such new reduced sublimit, but in no
event shall such exception to the liability exclusion of this paragraph
(b) exceed $17.5 million. The Seller agrees to use commercially
reasonable efforts to give the Buyer and the Buyer Sub as much prior
notice as is practicable of any such reduction in sublimits.
(c) Each of the Seller and Westinghouse and the Buyer and
the Buyer Sub will waive any right of subrogation any such party may
have with respect to any liability for an insurable loss covered by
this Section 10.11.
(d) All losses and damages for which the Seller and
Westinghouse or the Buyer and the Buyer Sub, as applicable, are not to
be responsible pursuant to this Section 10.11 are referred to as
"EXCLUDED CONTAMINATION CLAIMS".
10.12. PROPERTY COVERAGE. During the first five years after the
Closing Date, each of the Seller and the Buyer and the Buyer Sub shall cause
their own non-nuclear property insurance policies covering the Seller's Sites
(in the case of the Seller) and the Owned Real Property (in the case of the
Buyer and the Buyer Sub) to provide that, in the event of any loss payment under
such policy, the insurer shall waive rights of subrogation against the Buyer and
the Buyer Sub (in the case of the Seller's insurer) or their insurance carrier
or against the Seller (in the case of the Buyer's and the Buyer Sub's insurer)
or its insurance carrier.
Article 11
----------
General
-------
11.1. EXPENSES. All transfer, recording and sales taxes and fees
payable with respect to the sale and conveyance of the Acquired Assets to the
Buyer and the Buyer Sub shall be split equally by the Seller and the Buyer Sub.
Except as
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otherwise provided in this Agreement, 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.
11.2. 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 the Buyer:
Molten Metal Technology, Inc.
▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III, President and Chief
Executive Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Vice President
and General Counsel
If to the Buyer Sub:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
in each case with a copy sent contemporaneously to:
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
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If to the Seller to:
The Scientific Ecology Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
with a copy sent contemporaneously to:
General Counsel
Westinghouse Electric Corporation
Six Gateway Center
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Westinghouse to:
General Counsel
Westinghouse Electric Corporation
Six Gateway Center
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
11.3. ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules hereto), together with that certain license agreement and letter
agreement being delivered contemporaneously herewith and referring to this
Agreement, contains the entire understanding of the parties, supersedes all
prior agreements and understandings relating to the subject matter hereof
(including, without limitation, the Master Agreement and each Related Agreement)
and shall not be amended except by a written instrument hereafter signed by all
of the parties hereto.
11.4. GOVERNING LAW. The validity and construction of this Agreement
shall be governed by the internal laws (and not the choice-of-law rules) of the
State of Delaware.
11.5. SECTIONS AND SECTION HEADINGS. The headings of sections and
subsections are for reference only and shall not limit or control the meaning
thereof.
11.6. ASSIGNS. Except as provided in Section 9.1 with respect to an SEG
Successor or WEC Successor, this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, successors and
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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 the other parties hereto, except that (i) the Buyer may
assign its rights to one or more Subsidiaries, (ii) the Seller may assign its
rights to a purchaser of all or substantially all of its assets, provided that
the purchaser agrees in writing with the Buyer and the Buyer Sub to assume and
perform all of the Seller's obligations under this Agreement and the other
Acquisition Agreements and (iii) Westinghouse may assign its rights to a
purchaser of all or substantially all of its assets, provided that the purchaser
agrees in writing with the Buyer and the Buyer Sub to assume and perform all of
Westinghouse's obligations under this Agreement and the other Acquisition
Agreements. No assignment referred to in (i) above shall relieve the Buyer from
its obligations under this Agreement and no assignment by the Seller or
Westinghouse referred to in (ii) or (iii) above will relieve either the Seller
or Westinghouse from their obligations under Articles 8 and 9 of this Agreement.
11.7. SURVIVAL AND MATERIALITY 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 survive the Closing and the consummation of the transactions
contemplated hereby. Such representations and warranties shall expire on the
last day (if any) on which a claim for indemnification may be made pursuant to
Article 10 for a breach thereof.
11.8. FURTHER ASSURANCES. From time to time, at the request of the
Buyer or the Buyer Sub and without further consideration, the Seller and
Westinghouse shall execute and deliver such further instruments of conveyance
and transfer and take such other actions as the Buyer or the Buyer Sub may
reasonably require more effectively to convey and transfer any of the Acquired
Assets to the Buyer Sub. The Seller and Westinghouse and the Buyer and the Buyer
Sub shall also execute and deliver to the appropriate other party such other
instruments as may be reasonably required in connection with the performance
this Agreement and each shall take all such further actions as may be reasonably
required to carry out the transactions contemplated by this Agreement.
11.9. TAX TREATMENT. Each of the Buyer and the Buyer Sub and the Seller
and Westinghouse agrees to file with the Internal Revenue Service an IRS Form
8594 (Asset Statement under Section 1060), with respect to the acquisition by
the Buyer of the Acquired Assets, with its Federal income tax return for the
year in which the Closing Date occurs.
11.10. NO IMPLIED RIGHTS OR REMEDIES. Except as otherwise expressly
provided herein, nothing herein expressed or implied is intended or shall be
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construed to confer upon or to give any person, firm or corporation, except the
Seller, the Buyer, the Buyer Sub and Westinghouse, any rights or remedies under
or by reason of this Agreement.
11.11. 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.
11.12. PUBLIC STATEMENTS OR RELEASES. The parties hereto each agree
that both prior to and following the consummation of the Closing, no party to
this Agreement will make, issue or release any public announcement, statement or
acknowledgment of the existence of, or reveal the status of, this Agreement or
the transactions provided for herein, without first obtaining the consent of the
other parties hereto to the form of such announcement or statement. Nothing
contained in this Section 11.12 shall prevent any party from making such public
announcements as such party may consider necessary in order to obtain financing
for the transactions contemplated hereby or to satisfy such party's legal or
contractual obligations.
11.13. JURISDICTION AND CONSENT TO SERVICE OF PROCESS, WAIVER OF JURY
TRIAL. The parties agree that any legal action, suit or proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby may be
instituted in a federal or state court sitting within the Western District of
Pennsylvania, the District of Massachusetts or the Eastern District of
Tennessee, which shall be the exclusive venues of said legal proceedings. Each
party waives any objection which such party may now or hereafter have to the
laying of venue of any such action in any such court, and irrevocably submits to
the jurisdiction of any such court in any such action, suit or proceeding. Any
and all service of process and any other notice in any such action shall be
effective against such party when transmitted in accordance with Section 11.2.
Nothing contained herein shall be deemed to affect the right of any party to
serve process in any manner permitted by applicable law. EACH OF THE BUYER, THE
BUYER SUB, THE SELLER AND WESTINGHOUSE WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT OR PROCEEDING (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF RELATING TO THIS AGREEMENT, ANY ACQUISITION AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
11.14. 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.
11.15. NATURE OF OBLIGATIONS. All obligations of the Seller and
Westinghouse in this Agreement and the other Acquisition Agreements are joint
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and several, whether or not so expressed. All obligations of the Buyer and the
Buyer Sub in this Agreement and the other Acquisition Agreements are joint and
several, whether or not so expressed.
Article 12
----------
Certain Definitions
-------------------
As used herein the following terms not otherwise defined have the
following respective meanings:
"ACQUIRED ASSETS" has the meaning given in Section 1.2.
"ACQUIRED IP" has the meaning given in Section 1.2.
"ACQUIRED RESINS" has the meaning given in Section 7.13.
"ACQUISITION AGREEMENTS" has the meaning given in Section 5.1.
"AFFILIATE" means with respect to any Person, any Person controlling,
controlled by or under common control with such Person.
"AGENCY ACTION" means any notice of violation, complaint, order,
consent order, consent agreement or other final action brought by a federal,
state, or local regulatory agency having the requisite authority and
jurisdiction to bring such action.
"AGREEMENT" has the meaning set forth in the preamble.
"ASSIGNED CUSTOMER CONTRACTS" means (i) those Customer Contracts
assigned to the Buyer Sub in their entirety and (ii) with respect to those
Customer Contracts partially assigned to the Buyer Sub, that portion so
assigned.
"ASSUMABLE SERVICES" has the meaning given in Section 7.18(b).
"ASSUMED CONTRACTS" means the Assigned Customer Contracts, the Personal
Property Leases, the Quanterra Agreement, the General Signal Agreement and the
Miscellaneous Purchase Orders.
"ASSUMED EMPLOYEES" has the meaning given in Section 7.1.
"ASSUMED LIABILITIES" has the meaning given in Section 2.1.
"BUYER" has the meaning given in the first paragraph of this Agreement.
"BUYER ENVIRONMENTAL INDEMNITY MATTERS" has the meaning given in
Section 10.3(b).
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"BUYER RELEASEES" has the meaning given in Section 7.11(d).
"BUYER SUB" has the meaning given in the first paragraph of this
Agreement.
"BUYER'S 401(k) PLAN" has the meaning given in Section 7.2.
"CASKS" has the meaning given in Section 1.1(a)(iii).
"CATALYTIC EXTRACTION PROCESSING" or "CEP" means the processes, methods
and means and equipment, apparatus and systems (including all intellectual and
intangible and tangible property associated therewith and including all aspects
of accepting Feedstocks, reactions within a CEP Plant, and handling Recovered
Materials), now or hereafter owned or used by the Buyer, directed to the
processing of Feedstocks by introducing the Feedstocks to a processing vessel
containing liquefied metal, and includes the processes, methods, means,
equipment, apparatus and systems owned or used by the Buyer directed to the
processing of Radioactive Feedstocks and known collectively as "QUANTUM CEP" or
"Q-CEP". Notwithstanding the foregoing, CEP does not include SEG Metal Melting
Technology.
"CC ASSIGNMENTS" has the meaning given in Section 4.2.
"CEP PLANT" means the plant, equipment and other facilities necessary
to perform, operate and maintain CEP on a commercial basis.
"CLAIM" has the meaning given in Section 10.6(a).
"CLOSING" has the meaning given in Section 4.1.
"CLOSING DATE" has the meaning given in Section 4.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPETING ACTIVITIES" has the meaning given in Section 9.1(c).
"CONTROL" (including its correlatives "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of any Person
through ownership of a majority of securities or partnership or other ownership
rights or agreements.
"CUSTOMER CONTRACTS" has the meaning given in Section 1.2.
"DIRECTORS" has the meaning given in Section 7.12.
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"DISCLOSURE SCHEDULE" has the meaning given in the introduction to this
Agreement.
"DISPUTE RESOLUTION AGREEMENT" has the meaning set forth in the Master
Agreement.
"EFFECTIVE TIME" has the meaning set forth in Section 4.1.
"EMPLOYEE BENEFIT PLAN" has the meaning given in Section 5.12(a).
"ENCUMBRANCES" has the meaning given in Section 5.7.
"ENVIRONMENT" means the soil, surface waters, ground waters, land,
stream sediments, surface or sub-surface strata and ambient air.
"ENVIRONMENTAL CLAIMS" has the meaning set forth in Section 10.5.
"ENVIRONMENTAL INDEMNIFICATION AGREEMENT" has the meaning given in the
Master Agreement.
"ENVIRONMENTAL LAWS" means any Law promulgated or in effect as of the
date hereof relating to the Environment, to health and safety, to any Hazardous
Substance or Radioactive Substance (including without limitation the use,
handling, transportation, production, disposed, discharge or storage thereof),
or to drinking water, groundwater, wetlands, landfills, open dumps, storage
tanks, underground storage tanks, solid waste, waste water, storm water run-off,
waste emissions or ▇▇▇▇▇. Without limiting the generality of the foregoing, the
term shall encompass each of the following statutes, and regulations promulgated
thereunder: (i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (codified in scattered sections of 26 U.S.C.; 33 U.S.C.;
42 U.S.C. and 42 U.S.C. [Section]9601 ET SEQ.) ("CERCLA"); (ii) the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. [Section]6901 ET SEQ.)
("RCRA"); (iii) the Hazardous Materials Transportation Act (49 U.S.C.
[Section]1801 ET SEQ.); (iv) the Toxic Substances Control Act (15 U.S.C.
[Section]2061 ET seq.); (v) the Clean Water Act (33 U.S.C. [Section]1251 ET
SEQ.); (vi) the Clean Air Act (42 U.S.C. [Section]7401 ET SEQ.); (vii) the Safe
Drinking Water Act (21 U.S.C. [Section]349; 42 U.S.C. [Section]201 and
[Section]300f ET SEQ.); (viii) the NatiONal Environmental Policy Act of 1969 (42
U.S.C. [Section]4321); (ix) the Superfund Amendment and Reauthorization Act of
1986 (codified in scattered sections of 10 U.S.C., 29 U.S.C., 33 U.S.C. and 42
U.S.C.); (x) Title III of the Superfund Amendment and Reauthorization Act (40
U.S.C. [Section]1101 ET SEQ.); (xi) the Atomic Energy Act of 1954 ([Section]42
U.S.C. 2011 ET SEQ.), and (xii) any applicable state statutes analogous to any
of the foregoing.
"EPA" has the meaning given in Section 5.8(a).
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"EQUIPMENT" has the meaning given in Section 1.1(a).
"ERISA" means the Employee Retirement Security Act of 1974, as amended.
"EXCLUDED ASSETS" has the meaning given in Section 1.3.
"EXECUTIVE COMMITTEE" has the meaning given in Section 7.12.
"EXCLUDED CONTAMINATION CLAIMS" has the meaning set forth in Section
10.11.
"EXCLUDED LIABILITIES" has the meaning given in Section 2.2.
"FEEDSTOCKS" means, with respect to any CEP Plant, the wastes,
industrial by-products and other materials to be processed by such CEP Plant.
"FIRST COMPETING ACTIVITY" has the meaning given in Section 9.1(c).
"▇▇▇▇▇▇▇▇ FACILITY" means the facilities of the Seller known as
Building 3 and Building 4 on ▇▇▇▇▇▇▇▇ Road.
"▇▇▇▇▇▇▇▇ SITE" means the site on which the ▇▇▇▇▇▇▇▇ Facility is
located.
"GENERAL SIGNAL AGREEMENT" has the meaning given in Section 1.1(f).
"GENERAL SIGNAL ASSIGNMENT" has the meaning given in Section 4.2(d).
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal, local or
other governmental agency, department, commission, board, bureau, regulatory
authority, instrumentality, judicial or administrative body.
"HAZARDOUS SUBSTANCE" means (a) any oil, gas, other hydrocarbon,
flammable substance, explosive, hazardous waste or substance, toxic waste or
substance, regulated substance or any other material or pollutant that causes
the Owned Real Property or the ▇▇▇▇▇▇▇▇ Site or any portion thereof to be
subject to any remediation requirement under any Environmental Law; (b) asbestos
in any form that is friable or polychlorinated biphenyls, either of which is in
excess of any level that would cause the Owned Real Property or the ▇▇▇▇▇▇▇▇
Site or any portion thereof to be either in violation of or subject to the
remediation requirements of any Environmental Law; (c) any chemical, material or
substance defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous waste,"
"restricted hazardous waste," or "toxic substances" or words of similar import
under any applicable Environmental Law, and (d) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
applicable
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governmental authority. Notwithstanding the foregoing, Radioactive Substances
shall not be considered Hazardous Substances for purposes of this Agreement.
"IER FEEDSTOCKS" means (i) with respect to ion exchange resins
generated in the United States of America, radioactively contaminated ion
exchange resins generated by commercial generators that have become spent and
(ii) with respect to ion exchange resins generated outside the United States of
America, radioactively contaminated ion exchange resins generated by commercial
nuclear power plants that have become spent.
"IMPROVEMENTS" means, with respect to any Intellectual Property, any
improvements, developments, updates, upgrades, enhancements, additions,
revisions, corrections, fixes and other modifications to such Intellectual
Property that MMT or SEG, as applicable, may acquire, discover, invent,
originate, conceive or have a right to develop or manufacture, whether or not
the same is patentable, commercially useful or reduced to writing or practice.
"INDEMNIFIED PARTY" has the meaning given in Sections 10.3(c) and
10.6(a).
"INDEMNIFYING PARTY" has the meaning given in Sections 10.3(c) and
10.6(a).
"INSIDE BATTERY LIMITS EQUIPMENT" has the meaning given in the Master
Agreement.
"INTELLECTUAL PROPERTY" means patents, inventions (whether patentable
or unpatentable), trade secrets, know-how, trademarks and associated goodwill,
service marks, trade dress, logos, trade names, copyrights, mask works and
registrations and applications for each of the foregoing, and computer software
programs (other than standard off-the-shelf so-called shrink wrap programs),
computer data bases and related documentation and materials.
"INTERIM LEASE" has the meaning set forth in Section 4.2.
"INVOICED PRICE" has the meaning set forth in Section 7.13.
"KNOWLEDGE" or "to knowledge of the Seller" or similar knowledge
qualifications shall be deemed to mean the actual knowledge of any of the
following officers or employees of Westinghouse or the Seller:
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For Westinghouse:
Name Title
---- -----
▇▇▇▇▇ ▇▇▇▇ General Manager, Special Operations
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Managing Director, Global Capital Markets
For the Seller:
Name Title
---- -----
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ President
▇▇▇ ▇▇▇▇▇▇▇ Vice President, Human Resources
▇▇▇▇ ▇▇▇▇▇▇ Vice President, Chief Financial Officer
▇▇▇▇ ▇▇▇▇▇▇▇ Vice President, Transportation
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Vice President, Quality Assurance
▇▇▇▇▇ ▇▇▇▇▇▇▇ Legal/Contracts
▇▇▇ ▇▇▇▇▇ Vice President, Field Services
▇▇▇▇▇ ▇▇▇ Vice President, Technology
▇▇▇▇ ▇▇▇▇ Waste Operations
▇▇▇▇ ▇▇▇▇▇▇ Vice President, Sales and Marketing
▇▇▇ ▇▇▇▇▇▇ Engineering & Development
▇▇▇▇▇ ▇▇▇▇▇▇ Radiation Safety Officer
"LAW" means any statute, law, regulation, ordinance, rule, judgment,
order, decree, permit, concession, grant, franchise, license, agreement,
directive, requirement, or other governmental restriction or any similar form of
decision of or determination by, or any interpretation or administration of any
of the foregoing by, any Government Authority, now existing, enacted or in
effect.
"LICENSE AGREEMENT" has the meaning given in Section 4.2(b).
"LOSSES" has the meaning given in Section 10.1.
"MASTER AGREEMENT" has the meaning given in the introduction to this
Agreement.
"MATERIAL ADVERSE EFFECT" means, with respect to any fact, event or
circumstance, that such fact, event or circumstance would (i) subject the Seller
to any criminal penalty or (ii) absent the consummation of the transactions
contemplated by this Agreement, would have a material adverse effect on the
ability of the Seller and Westinghouse to own and operate the Acquired Assets
respectively owned by them or the ability of the Seller to conduct any of the
Processing Activities which it is currently conducting or (iii) would have a
material adverse effect on the ability of the Seller or Westinghouse to
consummate
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the transactions contemplated by this Agreement and the other Acquisition
Agreements or to perform their respective obligations thereunder.
"MINOR CLAIMS" has the meaning given in Section 10.5(b).
"MISCELLANEOUS PURCHASE ORDERS" has the meaning given in Section
1.1(g).
"MMT CONFIDENTIAL INFORMATION" means any confidential or proprietary
information of any type of the Buyer or furnished by the Buyer.
"NON-TRANSFERRED CONTRACT" has the meaning given in Section 7.19.
"OUTSIDE BATTERY LIMITS EQUIPMENT" has the meaning given in the Master
Agreement.
"OWNED REAL PROPERTY" has the meaning given in Section 1.1(c).
"PATENT ASSIGNMENTS" has the meaning given in Section 4.2(b).
"PERMITTED ENCUMBRANCES" has the meaning given in Section 5.7.
"PERSON" means a corporation, an association, a partnership, a limited
liability company, an organization, a business, an individual, a government or
political subdivision thereof or a governmental agency.
"PERSONAL PROPERTY LEASES" has the meaning given in Section 1.1(d).
"PROCESSING ACTIVITIES" means any of the activities that have been
performed by the Seller that are to be performed by the Buyer Sub pursuant to
the Assigned Customer Contracts and Subcontracts.
"PROCESSING SUBCONTRACTS" has the meaning given in Section 4.2.
"PROPOSED ASSUMED EMPLOYEES" has the meaning given in Section 7.1(a).
"PURCHASE PRICE" has the meaning given in Section 3.1.
"QUANTERRA AGREEMENT" has the meaning given in Section 1.1.
"QUANTERRA ASSIGNMENT" has the meaning given in Section 4.2(d).
"Q-CEP PLANT" has the meaning given in the introduction to the
Agreement.
"RADIOACTIVE SUBSTANCE" means any substance that contains
disintegrating isotopes, either natural or man-made, that have been either added
to or enhanced in the material that make up such Radioactive Substance or that
have contaminated such Radioactive Substance, including any "source material"
"special nuclear
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material" or "byproduct material" as defined in the Atomic Energy Act of 1954,
as in effect on the date hereof.
"RADIOACTIVE WASTE" means waste generated from a water containing
system used by a commercial waste generator or nuclear electric generating
plant, which consists principally of ion exchange resins, radioactively
contaminated sludges, filter media and cartridges, carbon absorbers, sediments,
precipitates or organically contaminated aqueous streams.
"RECOVERED MATERIALS" means the elements and compounds produced by a
CEP Plant, whether or not produced through the use of reactants and whether or
not suitable for reuse or resale.
"RELATED AGREEMENTS" has the meaning given in the Master Agreement.
"RELEASE" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, storing, escaping, leaching, migrating,
dumping or discarding, burying, abandoning or disposing into the Environment.
"REMEDIAL ACTION" means any and all actions required pursuant to
applicable Environmental Laws to address the Release or Threat of Release of a
Hazardous Substance or Radioactive Substance, including, but not limited to,
investigation and cleanup.
"RESTRICTED PERIOD" has the meaning given in Section 9.1(a).
"SECOND COMPETING ACTIVITY" has the meaning given in Section 9.1(c).
"SECONDARY WASTE" means, with respect to any Person, waste generated in
the course of conduct of services performed by such Person.
"SEG ACQUIRED ASSETS" has the meaning given in Section 1.1.
"SEG ACQUIRED IP" has the meaning given in Section 1.1(e).
"SEG CONFIDENTIAL INFORMATION" means any confidential or proprietary
information of any type of the Seller or furnished by the Seller, but excluding
any information constituting part of the Acquired Assets.
"SEG CUSTOMER CONTRACTS" has the meaning given in Section 1.1(b).
"SEG ENVIRONMENTAL INDEMNITY MATTERS" has the meaning given in Section
10.3(a).
"SEG METAL MELTING TECHNOLOGY" means all Intellectual Property owned or
controlled by the Seller relating to the Seller's metal melting technology for
the
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physical separation of Radioactive elements from Radioactively contaminated
metal through metal melting. Notwithstanding the foregoing, SEG Metal Melting
Technology does not include CEP.
"SEG RETAINED IP" has the meaning given in Section 1.1(e).
"SEG SITE" has the meaning given in Section 7.7.
"SEG SUCCESSOR" has the meaning given in Section 9.1(f).
"SELLER" has the meaning given in the first paragraph of the Agreement.
"SELLER/WEC RELEASEES" has the meaning given in Section 7.11(c).
"SELLER SITES" has the meaning set forth in Section 10.11.
"SERVICES AGREEMENT" has the meaning given in Section 4.2(f).
"SPECIFIED MISREPRESENTATION CLAIM" has the meaning given in Section
10.4.
"SPECIFIED RESTRICTED PROCESSES" has the meaning given in Section
9.1(b).
"SPIN-OFF TRANSACTION" has the meaning specified in Section 9.1.
"STORM WATER RULE" has the meaning given in Section 7.7(c).
"SUBCONTRACTS" means Processing Subcontracts and Unassigned Contract
Subcontracts.
"SUBSIDIARY" means, with respect to any Person, any corporation a
majority (by number of votes) of the outstanding shares of any class or classes
of which shall at the time be owned by such Person or by a Subsidiary of such
Person, if the holders of the shares of such class or classes (a) are
ordinarily, in the absence of contingencies, entitled to vote for the election
of a majority of the directors (or persons performing similar functions) of the
issuer thereof, even though the right so to vote has been suspended by the
happening of such a contingency, or (b) are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the issuer thereof, whether or not the right so
to vote exists by reason of the happening of a contingency.
"SUPPORT AGREEMENTS" has the meaning given in Section 7.4.
"TAX" means any federal, state, local, or foreign income, gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, registration, value added, excise, natural resources, severance,
stamp, occupation,
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premium, windfall profit, environmental, customs, duties, real property,
personal property, capital stock, intangibles, social security, unemployment,
disability, payroll, license, employee, or other tax or levy, of any kind
whatsoever, including any interest, penalties, or additions to tax in respect of
the foregoing.
"TAX CLAIM" has the meaning given in Section 10.4.
"THIRD PARTY CLAIM" has the meaning given in Section 10.6(a).
"THREAT OF RELEASE" means a substantial likelihood of a Release which
requires action to prevent or mitigate damage to the Environment which may
result from such Release.
"TRADEMARK ASSIGNMENTS" has the meaning given in Section 4.2(c).
"UNASSIGNED CONTRACT SUBCONTRACT" has the meaning given in Section
7.19.
"WARN ACT" has the meaning given in Section 7.1(c).
"WEC SUCCESSOR" has the meaning given in Section 9.1(g).
"WESTINGHOUSE" has the meaning given in the first paragraph of this
Agreement.
"WESTINGHOUSE ACQUIRED ASSETS" has the meaning given in Section 1.2.
"WESTINGHOUSE AGREEMENT" has the meaning set forth in the Master
Agreement.
"WESTINGHOUSE CUSTOMER CONTRACTS" has the meaning given in Section
1.2(b).
"WESTINGHOUSE PATENTS" has the meaning given in Section 1.2.
"WESTINGHOUSE RETAINED IP" has the meaning given in Section 1.2.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have caused this Asset Purchase Agreement to be duly executed and
delivered as a sealed instrument as of the date and year first above written.
MOLTEN METAL TECHNOLOGY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Vice President
MMT OF TENNESSEE INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
THE SCIENTIFIC ECOLOGY GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
Name: ▇▇▇▇▇ ▇▇▇
Title: Vice President
WESTINGHOUSE ELECTRIC CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director, Global Capital
Markets