<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 1, 1998
ATG INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or other jurisdiction of incorporation)
0-23781 94-2657762
(Commission File Number) (IRS Employer Identification No.)
47375 FREMONT BOULEVARD, FREMONT, CA 94538
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 490-3008
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 1, 1998, ATG Inc. (the "Company"), through its wholly-owned
subsidiary, ATG Nuclear Services, L.L.C., and through a 90% owned subsidiary,
ATG Catalytics, L.L.C., acquired certain assets and business lines from the
trustee (the "Trustee" or "Seller") for debtors under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for the District of
Massachusetts - Case Nos. 97-21385-CJK through 97-21389-CJK. The assets and
business lines acquired were formerly owned by Molten Metal Technologies, Inc.
or its affiliates.
The assets purchased by ATG Nuclear Services, L.L.C. include substantially
all of the assets, contracts, licenses and permits associated with the Seller's
wet waste business based in Oak Ridge, Tennessee and a facility in Columbia,
South Carolina. The business lines acquired include: 1) on-site and off-site
treatment of radioactive liquids; 2) dewatering and volume reduction of spent
ion exchange resins; 3) solidification and volume reduction of sludges; 4)
rental of containers and shielded transportation equipment; and 5) the design
and sale of treatment, dewatering and volume reduction equipment. The acquired
assets include machinery and equipment, inventory, transportation equipment,
shielded containers, customer contracts, subcontracts and teaming agreements,
permits and licenses, intellectual property, furniture, computing equipment and
office equipment, accounts receivable and the Columbia, SC facilities, along
with rights to certain tradenames.
The assets purchased by ATG Catalytics, L.L.C. include substantially all of
the assets, contracts, licenses and permits associated with the Seller's
catalytic extraction processing business conducted substantially at Oak Ridge,
Tennessee. The acquired business comprises the treatment and ultimate disposal
of radioactively contaminated resins used at nuclear power plants. The acquired
assets include: 1) real estate, buildings, improvements and equipment located at
the Seller's Bear Creek Road facility in Oak Ridge, TN (the "Bear Creek
Facility"); 2) rights to an existing $1.6 million cash collateral account posted
in connection with decontamination and decommissioning costs related to the Bear
Creek Facility; 3) related permits and licenses; 4) office furniture and
computer equipment; 5) accounts receivable; 6) rights to enforce certain non-
compete agreements; 7) customer contracts, subcontracts and teaming agreements;
and 8) intellectual property related to the business.
The Company intends to operate the acquired businesses in the same
locations as had been employed by the Seller. It is anticipated that these
business lines will complement other waste processing services of the Company
currently provided in Richland, Washington. More particularly, the new business
lines expand the Company's business into the treatment of liquid wastes at
nuclear power facilities and the treatment of high activity resins. In
addition, certain acquired contracts and business relationships are expected to
expand the Company's presence overseas.
The purchase price included the payment of $10.5 million in cash at
closing, a commitment to pay an additional $1.0 million in cash one year from
the date of closing for
<PAGE>
the wet waste business, and future payments of 5% of EBITDA of the resin
business acquired by ATG Catalytics, L.L.C., but not less than $800,000
annually, in each of the next five years. The purchase price was determined
through a bidding process with the Trustee selecting the highest qualified
bidder. The Company also had to meet the requirements of the Department of
Radiological Health of the State of Tennessee and regulatory requirements of the
State of South Carolina before the permits and licenses to operate could be
issued.
The Company purchased the assets and businesses through a combination of
cash, a term loan and line of credit borrowings. The Company paid cash of $2.0
million and borrowed $4.0 million under an unsecured term loan from its bank.
The loan must be repaid in three years and bears interest at the prime rate of
interest, currently 7.75%. The balance of the purchase price was provided by
borrowings under a revolving line of credit agreement with the same bank.
Concurrent with the closing, the bank line of credit was increased from $8.0
million to $9.5 million. Borrowings under the line of credit bear interest at
the prime rate of interest. The Company anticipates that these short-term
borrowings will be refinanced with longer term equipment loans and/or leases
with rates no less favorable than the current rates.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a) and b). The financial statements of businesses acquired and pro forma
financial information required by this item will be filed by
amendment to this Form 8-K on or before February 14, 1999.
c). Exhibits
2.1 Final bankruptcy court bid dated November 13, 1998.
2.2 Form of letter agreement dated December 1, 1998 among the
purchasers and the Trustee.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ATG Inc.
(Registrant)
Dated : December 16, 1998 By: /s/ Steven J. Guerrettaz
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Steven J. Guerrettaz
Vice President -- Chief Financial
Officer
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EXHIBIT 2.1
November 13, 1998
Stephen S. Gray, Trustee
c/o The Recovery Group
270 Congress Street
Boston, MA 02210
Re: Acquisition of "Wet Waste Assets" and "CEP Business" of the Debtors
Dear Mr. Gray:
The seller is a trustee (the "Trustee" or "Seller") for debtors under
Chapter 11 of the United States Bankruptcy Code (the "Code") in the United
States Bankruptcy Court for the District of Massachusetts (Eastern District)
(the "Court") jointly administered in Case Nos. 97-21385-CJK through 97-21389-
CJK (the "Chapter 11 Case"). This letter sets forth the binding terms under
which ATG, Inc. or its nominee(s) (the "Wet Waste Assets Buyer") offers to
purchase, as more particularly set forth in Part I hereof, the Wet Waste Assets
(as defined in Part I), and Quantum Catalytics, LLC or its nominee(s) (the "CEP
---
Assets Buyer" or the "CEP Buyer") offers to purchase, as more particularly set
forth in Part II hereof, the CEP Assets (as defined in Part II). This is a joint
offer to purchase the specified assets of the Seller, and the closing of the
purchase and sale of either the Wet Waste Assets or the CEP Assets is dependent
on the purchase and sale of the other. The Wet Waste Assets Buyer and the CEP
Assets Buyer are jointly referred to herein as the "Buyers" and each as a
"Buyer". Each Buyer shall be severally, and not jointly, responsible for the
obligations and payments relating to the respective asset sales each proposes
herein and shall have no obligation, responsibility or liability with respect to
the other Buyer's proposal. The combined consideration accruing to the Sellers
with respect to this joint proposal includes:
1. A deposit via certified check from the Wet Waste Assets Buyer in the
amount of $1,050,000; (which previously has been delivered to Alan Braunstein,
Esq. of Riemer & Braunstein, counsel to the Seller);
2. A certified check from the Wet Waste Assets Buyer at Closing in the
amount of $9,450,000;
3. An unsecured promissory note from ATG, Inc. in the principal amount of
$288,000 at an interest rate equal to five (5%) per centum per annum, simple
interest, with one balloon payment of principal and accrued interest payable on
April 1, 2002.
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Stephen S. Gray, Trustee
November 13, 1998
Page 3
SECTION 1. ASSETS AND CONTRACT RIGHTS SUBJECT TO OFFER
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The Buyer submits this offer (the "Offer") to purchase all of the Seller's
right, title and interest in and to the assets of (or used in connection with)
the Wet Waste Business, including, but not limited to (a) those assets
identified on the schedule attached hereto as Exhibit A, as well as related work
in process, construction in progress, inventory, including, without limitation,
those assets described in that Exhibit A; (b) all customer contracts which are a
part of or are used in the "Wet Waste Business", including, but not limited to,
those customer contracts identified in Exhibit B hereto and the contracts the
Seller previously acquired from VECTRA and SEG, which the Buyer elects to
assume, but excluding any of such contracts which relate to the CEP Business (as
defined in Part II) (collectively, the "Subject Customer Agreements"); (c) all
subcontracts or teaming agreements including, but not limited to, all executory
contracts used in the Wet Waste Business which the Buyer may elect to assume
(collectively, "Subcontracts" and, together with the Subject Customer
Agreements, the "Subject Agreements"); (d) all permits and licenses issued to
the Seller primarily for use in the Wet Waste Business to the extent assignable
under applicable law (the "Subject Permits"), to the extent assignable by the
Seller; (e) the Intellectual Assets (as defined below) used or useable in the
Wet Waste Business (except those Intellectual Assets used or useable in the
provision of CEP Business and only incidentally used in the Wet Waste Business,
as to which the Seller or the CEP Buyer shall issue as part of the Wet Waste
Assets a perpetual, non-exclusive, assignable, royalty-free license to use the
same on customary terms and protections to be used solely in connection with the
Wet Waste Business); (f) all furniture, telephones, copiers, scanners, facsimile
machines, printers, plotters, computers, monitors, modems, software and other
office equipment that is used or useable in the normal conduct of the Wet Waste
Business (provided that any of the foregoing that are used in the provision of
CEP Business shall be shared by the Buyer and the CEP Buyer as determined by
mutual agreement of the Buyer and the CEP Buyer); (g) the accounts receivable
generated by the Seller from the operation of the Wet Waste Business through the
Closing Date (the "Subject Accounts Receivable"); (h) the Columbia, South
Carolina facility operated by the Seller together with the Letter of Credit in
the amount of $288,000 and cash collateral posted as financial assurance
relating to such facility; (i) offers and proposals in progress; (j) business
books and records, subject to the Seller retaining reasonable access, use and
copying rights; (k) the Advanced Water Processing unit and technology; and (1)
any radioactive, hazardous or mixed waste that the Seller has control over or
possession of, title to, or disposal obligations for ("Waste Products"), as to
which the Seller has not recognized revenues or Waste Products that are in the
process lines and equipment included in the Wet Waste Assets ("Transferred Waste
Products") (with all of the foregoing referred to collectively as the "Wet Waste
Assets"). Relative to the Bear Creek Facility, the Buyer will rent building
space from the CEP Assets
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Stephen S. Gray, Trustee
November 13, 1998
Page 4
Buyer in the north end of the building and the Buyer's liability will be limited
to that portion of the north end of the building actually and solely used by the
Buyer.
Expressly excluded from the Wet Waste Assets and the purchase and sale
proposed hereunder are: (i) cash, cash equivalents, and marketable securities
(except as expressly set forth above): (ii) any notes receivable or other
receivables of the Seller (exclusive of the Subject Accounts Receivable); (iii)
any and all obligations owed to the Seller and/or its affiliates by former or
existing consultants, agents, employees, officers and/or directors of the
Debtors (which the Seller hereby represents, to its knowledge, are limited to
certain notes from such employees or avoidance actions (as defined below)); (iv)
any and all funds due and owing the Seller associated with tax refunds,
insurance claims and/or insurance premiums, but any insurance claims relating to
the Wet Waste Assets accruing on or after November 3, 1998 shall be considered
Wet Waste Assets; (v) any and all amounts arising under any claims associated
with the bankruptcy proceeding entitled Vectra Technologies, Inc. a/k/a Pacific
---------------------------------------
Nuclear Systems. Inc., Case No. 97-13001, pending in the United States
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Bankruptcy Court for the Western District of Washington at Seattle; (vi) any and
all trade names of the Debtors and its parents and subsidiaries except those
trademarks associated with the Wet Waste Business, and other entities under
common control with the Debtors; (vii) all Waste Products that are not
Transferred Waste Products; and (viii) the Seller's CEP facilities and those
Assets used solely to provide CEP Services; (ix) any other assets of the Seller
including any and all causes of action arising from bankruptcy avoidance actions
pursuant to the United States Bankruptcy Code ("Avoidance Actions") or otherwise
arising under or related to the Bankruptcy Code and any causes of action not
related to the Wet Waste Assets; and (x) any tanks, piping, equipment and
related building/yard space, whether or not located in the North building, that
is used primarily for storing, handling, processing or transporting CEP
materials; (xi) the temporary employment agreement with American Technical
Associates, Inc. and the Flour Daniels contract; (xii) any assets which are
excluded by Wet Waste Buyer pursuant to Section 5.
Notwithstanding the foregoing, the Seller shall provide the Buyer with a
non-exclusive royalty-free license agreement (in form and substance reasonably
satisfactory to the Buyer) sufficient to permit the Buyer to operate under the
"MMT of Tennessee" name for a period of up to 18 months after the Closing Date,
and shall assign to the Buyer any rights it may have to use the "Vectra" or
"SEG" tradenames.
Intellectual Assets - As used herein, the term "Intellectual Assets" shall
mean licenses, patent applications, patents, designs, drawings, software,
trademarks, topical reports, certificates of compliance, procedures,
specifications, service marks, copyrights, quality assurance programs, process-
control programs, customer approved tender status, sales lists, contract lists,
project
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 5
references, and proposals, as well as patent pending, ideas and applications,
records, files, software, inventions and software licenses, and other such items
commonly know as "intellectual property rights" and "intangible items" and all
manuals and documentation related to any of the foregoing. To the extent that
any Intellectual Assets which are exclusively transferred to the Buyer hereunder
are also used in the Seller's business lines not sold to the Buyer, the Buyer
shall grant to the Seller (subject to re-assignment by the Seller to buyers of
other business lines) a perpetual, non-exclusive, assignable, royalty-free
license to use such Intellectual Assets which are exclusively transferred to the
Buyer hereunder on customary terms and protections solely in connection with the
operation of such other business lines.
SECTION 2. TERMS OF PURCHASE
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(a) On the Closing Date, the Buyer shall purchase all of the Seller's
right, title and interest in and to the Wet Waste Assets, free and
clear of all liens encumbrances and interests, pursuant to Section
363(b) and (f) of the Code and, in connection therewith, the Seller
shall assign the Subject Permits to the Buyer to the full extent
permitted by law and the Buyer shall assume, and the Seller shall
assign, the Subject Agreements to the Buyer (only those pursuant to
Section 365 of the Code). The total price to be paid for the Wet Waste
Assets is $10,500,000 (Ten Million Five Hundred Thousand Dollars) (the
"Purchase Price"). The Purchase Price shall be allocated among the Wet
Waste Assets in accordance with the Buyer's instruction and
discretion. Subject to satisfaction of the Conditions Precedent set
forth in Section 19 hereof, the Purchase Price is payable in cash or
cash equivalent as follows:
(i) $1,050,000, which previously has been paid to counsel to the
Seller, as a Deposit (the "Deposit"); and
(ii) $9,450,000 to be paid within three (3) business days (the
"Closing Date") after entry of the Sale Order (the date of such
entry, the "Approval Date") at which time the Seller shall convey
to the Buyer all of the Wet Waste Assets.
(b) An unsecured promissory note from the ATG, Inc. in the principal
amount of $288,000 at an interest rate equal to five (5%) per centum
per annum, simple interest, with one balloon payment of principal and
accrued interest payable on April 1, 2002.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 6
(c) Through the Closing Date, the Deposit shall be held by the Trustee's
counsel, Riemer & Braunstein, in an interest bearing client funds
escrow account. The Deposit (and all interest earned thereon) shall be
applied to the Purchase Price if the balance thereof is paid by the
Buyer. The Deposit, together with all interest thereon, shall be
returned to the Buyer within two (2) business days if the Seller
defaults hereunder, or if the Seller or the Court does not authorize
the sale of the Wet Waste Assets to the Buyer. Notwithstanding
anything herein to the contrary, the Deposit, together with all
interest thereon, promptly shall be returned to the Buyer if the Sale
Order has not been entered by November 24, 1998, or if any of the
Conditions Precedent have not been satisfied on or before December 1,
1998 (the "Termination Date"), or if the Closing Date has not occurred
prior to the Termination Date. The Deposit shall be forfeited to the
Seller as the Seller and the Trustee's sole remedy at law or in equity
if the Buyer defaults hereunder as set forth in Section 4 of the
Notice of Offer previously issued by the Seller.
(c) The Seller is responsible for, and the Buyer shall not assume or
otherwise be liable for, any debts, claims, liabilities or any other
obligations of the Seller of any nature whatsoever, whether such
debts, liabilities or obligations are known or unknown, liquidated or
contingent, direct or indirect, including, but not limited to, any
liens, attachments, environmental liabilities, trade debt, sale taxes
relating to these transactions, accounts payable, warranty
obligations, tax liabilities, claims of employees, pension liabilities
or any expenses of administration of the Chapter 11 estate
(collectively, the "Excluded Liabilities"). The sale and purchase of
assets embodied in this agreement will be consummated in contemplation
of the Seller proposing a plan of reorganization, therefore, under
applicable bankruptcy law, transfer taxes cannot be imposed on the
sale of the Wet Waste Assets; provided, however, that if any such
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taxes are lawfully imposed and become due and payable, the liability
for such transfer taxes shall be borne by the Seller or the Buyer in
the usual and customary manner. All Excluded Liabilities shall remain
with the Seller's estate.
(d) The parties believe, based upon preliminary due diligence, that no
approval of these transactions will be necessary under the Hart Scott
Rodino Act ("HSRA"). However, if the Buyer reasonably concludes that
HSRA approval is necessary, the Seller shall obtain such approval and
the filing fee required for such approval shall be split equally (50%
each) between the Seller and the Buyer.
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Stephen S. Gray, Trustee
November 13, 1998
Page 7
(e) The Purchase Price shall be adjusted, on the Closing Date, as follows:
(1) increased by an amount equal to 90% of the amount if any, by which
the fair value of the current period collectible accounts receivable
(net of offsets and contras) and current inventory and spare parts
(the "Good Current Assets") on the Closing Date exceeds $2,653,000; or
(2) decreased by an amount equal to 90% of the amount, if any, by
which the fair value of the Good Current Assets on the Closing Date is
less than $2,047,000.
(f) The sale of Assets hereunder shall be without representation or
warranty of the Seller (including as to merchantability or fitness for
use) except as to any that may be specifically set forth herein, and
(except as specifically set forth herein) WHERE IS and AS IS.
SECTION 3. COURT APPROVAL
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The Trustee shall immediately file in the Chapter 11 Case a motion (the
"Motion") seeking an Order of the Court in form reasonably acceptable to Seller
and the Buyer (the "Sale Order") approving, pursuant to Sections 363(b) and (f)
and 365 of the Code, the sale by the Seller of the Wet Waste Assets, free and
clear of liens, encumbrances and interests. The Sale Order shall, among other
things, (i) determine that this Agreement was proposed by the Buyer in good
faith, (ii) determine that the Buyer is a good faith purchaser under Section
363(m) of the Code, and (iii) permanently enjoins each and every holder of an
Excluded Liability from commencing, continuing or otherwise pursuing or
enforcing and remedy claim, or cause of action against the Buyer relative to
such Excluded Liability. Regarding the Wet Waste Assets the Buyer is expressly
accepting hereunder, the Buyer shall be responsible for fulfilling the
requirements of Section 365(1)(A) (which pertain to the curing of defaults
under the Subject Agreements), and 365(f)(2)(B) pertains to the providing of
adequate assurance of future performance), of the Code; provided, however, that
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Buyer's obligation shall not exceed $50,000 in the aggregate. To the extent that
the aggregate cure payments to be made pursuant to Code Section 365(l)(A)
exceeds $50,000, the Seller agrees and acknowledges that the payment of such
amounts shall be an obligation of the Seller and that Seller shall pay
(immediately upon receipt of the Purchase Price, and regardless of any other
claims asserted or that could be asserted in the Chapter 11 Case) such amounts
from the proceeds of the sale of the Wet Waste Business pursuant to this Offer.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 8
SECTION 4. AFFIRMATIVE COVENANTS OF THE BUYER
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As an express condition of the Seller's acceptance of this Offer, the Buyer
hereby covenants that, if the Wet Waste Assets are conveyed to the Buyer, then
the Buyer shall enter into a separate agreement or agreements with CEP Buyer
with respect to Wet Waste services required to support CEP Services. The Buyer
further covenants to provide in conjunction with the CEP Buyer quality assurance
(QA) support on reasonable commercial terms consistent with the current QA
requirements for the facility insofar as it is used to provide CEP Services;
provided that Buyer shall not be liable for any claims, damages or losses
arising out of or relating to the operation of the Seller's QA Program.
SECTION 5. EXCLUSION OF CERTAIN ASSETS
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The Buyer shall have the right to exclude from this Offer such of the Wet
Waste Assets, including, but not limited to, executory contracts, as it elects
in writing, on or before November 23, 1998 (the "Exclusion Notice Date");
provided, however, that such election shall not give the Buyer the right to
- -------- -------
reduce the Purchase Price. In such event, the Buyer shall deliver that excluded
property or dispose of it as directed by the Seller, provided, however, that the
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cost for delivery and/or disposal shall be the responsibility of the Seller and
shall be deducted by the Buyer from the Purchase Price.
SECTION 6. AFFIRMATIVE COVENANTS OF SELLER
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As an express condition of this Offer by the Buyer, the Trustee hereby
covenants that, if the Buyer purchases the Wet Waste Assets:
(a) the Trustee shall reasonably assist the Buyer in the transfer of the
Wet Waste Assets and the operation of the Wet Waste Business,
including the providing of reasonable access to all records, employees
and staff;
(b) the Trustee shall cooperate with the Buyer in its efforts to
facilitate timely transfers of the Subject Permits or other
governmental approvals related to the continued use of the Wet Waste
Assets; and
(c) to the extent permitted under the Code, the Seller will transfer to
the Buyer or its Affiliate any non-competition agreements the Seller
now has with respect to the Wet Waste Business which are beneficial to
the Wet Waste Business the Buyer is acquiring from the Seller.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 9
Notwithstanding the foregoing:
(d) nothing herein contained shall be deemed to constitute a joint venture
or partnership between the Buyer and the Seller; and
(e) the Seller undertakes to bind any legal successor with the same
obligations as set for hereunder.
SECTION 7. COURT APPROVAL
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All obligations of the Seller under this Offer shall be subject to approval
by the Court, which approval the Trustee shall in good faith seek as
expeditiously as possible.
SECTION 8. MAINTENANCE OF LICENSES, INSURANCE, REGULATORY FILINGS AND PERMITS
- -----------------------------------------------------------------------------
The South Carolina Facility is designated as included in the Wet Waste
Assets subject to this Offer. If the Wet Waste Buyer's Offer is accepted, the
Seller will use its best efforts to maintain licenses, insurance, regulatory
filings and permits that are necessary or appropriate for the operation of such
facility, for the shorter of (i) a period of sixty (60) days following the
Closing Date; and (ii) until all required licenses and permits are transferred,
at the Seller's expense before the Closing Date, and at the Wet Waste Buyer's
expense after the Closing Date (the "Transition Period"). The Seller shall
authorize and allow the Wet Waste Buyer or its nominee(s) to operate under each
such licenses, insurance, regulatory filings and permits that are necessary or
appropriate for the operation of such facility during the Transition Period, to
the extent permitted by law. However, ATG, Inc. shall indemnify, defend and hold
harmless the Seller for any and all claims made against the Seller for any
losses, damages or claims caused after the Closing Date on account of Wet Waste
Buyer's use or acquisition of the facility and for Seller's reasonable and
necessary costs of defending same.
During the Transition Period, the Wet Waste Buyer agrees that:
a. the Trustee and/or its representatives will have access to the
facility during normal business hours upon one (1) day's notice
to the Wet Waste Buyer;
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 10
b. the Wet Waste Buyer will operate each facility in accordance with
all applicable laws and ordinances and in compliance with
applicable permits and licenses;
c. the Wet Waste Buyer will provide the Seller with all reports
provided to all state and federal agencies;
SECTION 9. WET WASTE BUSINESS EMPLOYEES
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By November 20, 1998, the Wet Waste Buyer shall submit to the Seller a list
of the Seller's employees (including key employees for the purposes of Section
20(i), independent contractors, and consultants that are engaged primarily or
exclusively in the Wet Waste Business including staff involved in the
administrative and other support functions (the "Wet Waste Employees") that it
desires to hire (the "Selected Employees"). At Closing, the Seller shall release
the Selected Employees from any non-compete agreements in effect to allow the
Wet Waste Buyer to employ such Selected Employees in the operation of the Wet
Waste Business and the Wet Waste Assets, and the Wet Waste Buyer shall make
offers of employment to the Selected Employees contingent only upon the closing
of the sale transaction contemplated hereby. Any Selected Employees that
commence work with the Wet Waste Buyer shall be paid all non-disputed post-
petition salary, expense and vacation pay unless limited by prior order of the
Bankruptcy Court. If a Selected Employee does not accept employment with the Wet
Waste Buyer (a "Rejection Employee") and as a result collects severance pay from
the Trustee, then the Wet Waste Buyer agrees for a period of six (6) months
commencing as of the Closing Date; that it shall not employ the Rejection
Employee unless in connection therewith; (i) the Wet Waste Buyer reimburses the
Seller for such Rejection Employee's severance pay actually paid by Seller, or
(ii) the Wet Waste Buyer obtains the Seller's consent.
The Wet Waste Buyer agrees that for a period of one (1) year commencing as
of the Closing Date (the "One Year Period"); it shall not employ any current Wet
Waste Employee who is not a Selected Employee ("Non-Selected Employee") unless
in connection therewith (i) the Wet Waste Buyer reimburses the Seller for such
employee's severance pay actually paid by Seller, or (ii) the Wet Waste Buyer
obtains the Seller's consent.
Nothing herein shall prevent the Wet Waste Buyer from retaining any Non-
Selected Employee as a consultant and not as a full-time employee. The Wet Waste
Buyer shall not have an obligation to reimburse the Seller for such Employee's
severance pay as contemplated by the previous paragraph so long as the
compensation earned by such Non-Selected Employee is, during the One Year
Period, not greater than 60% of such Non-Selected Employee's annual
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 11
salary during the year prior to the Closing Date. In the event that such Non-
Selected Employee's compensation as a consultant to the Wet Waste Buyer exceeds
60% of such Non-Selected Employee's annual salary during the One Year Period,
the Wet Waste Buyer shall reimburse the Seller for such Non-Selected Employee's
severance pay actually paid by the Seller. (If such current Wet Waste Employee
was employed by Seller for less than a full year, then the same calculations
will apply but will be pro rated for such time the current Wet Waste Employee
was employed.)
SECTION 10. COLUMBIA, SOUTH CAROLINA FACILITY
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The Columbia, South Carolina facility is designated as a Wet Waste Asset
subject to this Offer.
SECTION 11. USE OF SELLER'S QUALITY ASSURANCE (QA) PROGRAM
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The Seller shall cooperate with the Buyer in the transition of its QA
Program to the Buyer, including, without limitation, the transfer of
Certificates of Compliance on casks and high integrity containers and
communications and meeting with customers to support a timely takeover by the
Buyer.
SECTION 12. REPRESENTATIONS AND WARRANTIES
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The Buyer represents that it has made a due diligence investigation of the
Wet Waste Assets, that the Buyer is relying solely on that due diligence
investigation in making this Offer, and that the Buyer has not relied and is not
relying on any representation or warranty of the Seller or any of its agents
except those that are specifically set forth herein.
The Buyer represents and warrants to, and agrees with, the Seller as follows:
(a) The Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of California. The Buyer has
full power and authority to carry on its business as and where now
conducted and to own or lease and operate its properties at and where
now owned, leased and operated by it, and is duly qualified to do
business and is in good standing in every jurisdiction in which the
property owned, leased or operated by it, or the nature of the
business conducted by it, makes such qualification necessary.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 12
(b) The execution, delivery and consummation of this Offer by the Buyer
has been authorized by the Directors of the Buyer in accordance with
all applicable laws and the Buyer's Certificates of Incorporation, and
at the Closing Date no further action will be necessary on the Buyer's
part to make this Offer valid and binding and enforceable against the
Buyer in accordance with its terms. The foregoing shall not diminish
the rights of the Buyer stated herein to exclude certain Subject
Agreements, proposals and bids. The execution, delivery and
consummation of this Offer by the Buyer (i) is not contrary to the
Buyer's Certificate of Incorporation or Bylaws, (ii) will not violate
any order, law, rule or regulation known by the Buyer to be applicable
to the Buyer; (iii) does not now and will not, with the passage of
time, the giving of notice or otherwise, result in a violation or
breach of or constitute a default under, any term of provision of any
material indenture, mortgage, deed of trust, lease, instrument; order,
judgment, decree, rule, regulation, law, contract, agreement or any
other restriction to which the Buyer is a party or to which the Buyer
or any of its assets is subject or bound; and (iv) will not result in
any acceleration or termination of any loan or security interest
agreement to which the Buyer is a party or to which the Buyer or any
of its assets is subject or bound.
(c) Litigation. There is no judicial or administrative action, proceeding
----------
or investigation pending, or to the Buyer's knowledge, threatened,
that calls into question the validity of this Offer or any action
taken or to be taken by the Buyer in connection herewith. There is no
litigation, proceeding or investigation pending, or to the Buyer's
knowledge, threatened, or any order, injunction or decree outstanding,
against the Buyer that, if adversely determined would have a material
adverse effect upon the Buyer's ability to perform its obligations
under this Offer.
(d) Financial Capacity. The Buyer has the financial capacity to consummate
------------------
all of the transactions contemplated by this Offer.
(e) Compliance with Laws. To the Buyer's knowledge, the Buyer has complied
--------------------
in all materials respects with all laws, regulations, rules and orders
of any governmental department or agency or any other commission
board, agency or instrumentality, federal, state, local or other
requirements of law in connection with the operation of its business,
and is not in material default under or in violation of any provision
of any federal, state or local law, regulation, rule or order.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 13
(f) Approval. The Buyer is not aware of any reason why it would be denied
--------
any necessary approval, consent, permit or other governmental
authorization necessary to purchase and/or operate the Wet Waste
Business and/or the Wet Waste Assets. Notwithstanding the Closing and
the consummation of the transactions contemplated by this Offer, the
representations, warranties and covenants of the Buyer contained in
this Offer or any agreement, instrument, paper, or certificate
executed and delivered by the Buyer in connection with the
transactions contemplated hereby, will survive the Closing.
(g) Notwithstanding the Closing and the consummation of the transactions
contemplated by this Offer, the covenants of the Wet Waste Buyer
contained in this Offer or any agreement, instrument, paper, or
certificate executed and delivered by the Wet Waste Buyer in
connection with the transactions contemplated hereby, will survive the
Closing.
SECTION 13. ACCESS TO SELLER'S FACILITY
- ---------------------------------------
The Seller agrees to make available to the Wet Assets Buyer and its
attorneys, accountants, agent and advisors, prior to the Closing Date, such
records, information and personnel as the Wet Assets Buyer may reasonably
request. As a condition to the Seller's granting to the Wet Assets Buyer and/or
its agents physical access to the Seller's Wet Assets Business facilities, the
Wet Assets Buyer shall provide the Seller proof of workers compensation or
similar insurance as well as of such liability and other insurance as may be
required by applicable regulatory or other law, in such amounts as the Seller
may reasonably require.
SECTION 14. EXPENSES
- --------------------
Each party shall bear its own costs and expenses (including attorney's
fees) associated with this Offer and the performance thereof.
SECTION 15. TAXES ASSOCIATED WITH THE SALE
- ------------------------------------------
Each party shall pay when due any taxes assessed under applicable law
against such party relating to these transactions. The sale and purchase of
assets embodied in this agreement will be consummated as part of a Chapter 11
Reorganization proceeding and in contemplation of the Seller proposing a plan,
if possible; therefore, under applicable bankruptcy law, transfer taxes and/or
recording fees cannot be imposed on the sale of the Wet Waste Assets; provided,
--------
however, that if any such taxes or fees are lawfully imposed and become due and
- -------
payable, the
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 14
liability for such transfer taxes or recording fees shall be borne by the Seller
or the Buyer in the usual and customary manner. All Excluded Liabilities shall
remain with the Seller's estate.
SECTION 16. SEVERABILITY
- ------------------------
If (but only if) the Buyer elects, if any portion of this Offer is held
invalid or unenforceable, any remaining portion shall continue in full force and
effect and the invalid or unenforceable portion shall be replaced by a valid and
enforceable portion reflecting the original intent of the parties as closely as
possible. If a material aspect of this Offer is severed by the Court and, prior
to Closing, either party determines that this Offer as modified (that is,
without the severed portion) is deficient, it may terminate this Offer.
SECTION 17. NOTICES
- -------------------
All notices required or permitted to be given pursuant to the terms of this
Offer shall be sent by hand or private overnight delivery service of national
reputation and also by facsimile transmission as follows:
To the Seller Stephen S. Gray, Trustee
c/o The Recovery Group
270 Congress Street
Boston, MA 02210
Telecopy: (617) 482-9804
To the Buyer ATG, Inc.
47375 Fremont Boulevard
Fremont, CA 94538
Attention: Bill Hewitt
Telecopy: (510) 651-3731
with a copy to
The Buyer's counsel: Jarvis P. Kellogg
Epstein Becker & Green, P.C.
75 State Street
Boston, MA 02109
Telecopy: (617) 341-4001
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 15
Copy to: Steve Guerrettaz
47375 Fremont Boulevard
Fremont, CA 94538
Telecopy: (510) 651-3731
SECTION 18. CHOICE OF LAW
- -------------------------
Enforcement of this Offer and legal matters not governed by the Code shall
be determined in accordance with the laws of the Commonwealth of Massachusetts,
without reference to its choice of law doctrine. The Buyer consents to the
jurisdiction of the Court as to any proceeding to enforce or interpret this
Agreement.
SECTION 19. HEADINGS
- --------------------
The section headings contained herein are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Offer.
SECTION 20. BUYER'S CONDITIONS PRECEDENT
- ----------------------------------------
The obligation of the Buyer to consummate the transactions to be performed
by it hereunder is subject to the satisfaction on or before the Closing of the
following conditions precedent (the "Conditions Precedent"), any or all of which
Buyer may elect to waive or not waive, extend or not extend in its absolute
discretion:
(a) Any representation and warranties made by the Seller hereunder shall
be true and correct in all material respects as of the Closing Date.
(b) The Seller shall have performed and complied with any agreements and
undertakings made by it hereunder in all material respects as of the
Closing Date.
(c) No action, suit, proceeding or regulatory determination shall be
pending or threatened wherein an unfavorable ruling would: (a) prevent
consummation of any of the transactions contemplated hereunder; (b)
cause any of the transactions contemplated hereunder to be rescinded
following consummation; or (c) affect adversely the right of Buyer to
own or use the Assets.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 16
(d) The Court shall have entered the Sale Order, which Sale Order shall
not have been reversed, stayed, modified or amended in any material
respect prior to the Closing Date.
(e) If the Wet Waste Buyer reasonably concludes that HSRA approval is
necessary, any applicable waiting periods relating to the transfers
contemplated hereby under the HSRA shall have expired without
extension or challenge to such transactions, and any approvals
required by such Act have been issued. The Wet Waste Buyer and the
Seller shall file all required notifications, pursuant to HRRA and the
filing fee required for such approval shall be split equally (50%
each) between the Seller and the Wet Waste Buyer. In the event any
HSRA waiting period applies hereto, the Wet Waste Buyer and the Seller
agree that the Closing Date shall be deemed to be three (3) days after
such waiting period has elapsed.
(f) The CEP Business sale referred to Part II hereof shall have closed.
(g) The Seller shall have continued to conduct the Wet Waste Business in
the ordinary course, consistent with past practice and in the same
manner as it is presently being conducted;
(h) No material adverse change shall have accrued to the Wet Waste
Business or the Wet Waste Assets after November 3, 1998, including,
without limitation, any material adverse change in the level of
receivables. Adverse changes constituting a breach of this condition
shall include material diminution in customers or revenues, material
income, in costs or liabilities;
(i) The Wet Waste Buyer shall have entered into agreements to hire such of
the Seller's Wet Waste Business employees as it deems, in its sole
discretion, to be necessary to the continued operation of the Wet
Waste Business, which number is currently estimated at no more than
eight (8) such employees, it being agreed with the Seller that
obtaining agreements with at least six (6) of such employees shall
constitute full compliance with this condition;
(j) All pleadings, orders, agreements and other documents related directly
or indirectly to the sale anticipated herein shall be in form and
substance satisfactory to the Wet Waste Buyer;
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 17
(k) The Closing Date shall occur on or before December 1, 1998 subject to
paragraph (e);
(1) The Seller shall have delivered to the Buyer, in form reasonable
acceptable to the Buyer, deeds, bills of sale, assignments or other
instruments of transfer necessary and appropriate to transfer and vest
in the Buyer the Wet Waste Assets.
(m) The Seller shall on or before the Closing Date have been authorized to
assume and assign all executory contracts that the Wet Waste Buyer
seeks to purchase and a court order entered prior to the Closing Date
shall have determined the cure amount due under such contracts;
SECTION 21. SELLER'S CONDITIONS PRECEDENT
- -----------------------------------------
The obligation of the Seller to consummate the transactions to be performed
by it hereunder is subject to the satisfaction of the following conditions
precedent, any or all of which Seller may elect to waive or not waive in its
absolute discretion.
(a) Any representation and warranties made by the Buyer hereunder shall be
true and correct in all material respects as of the Closing Date.
(b) The Buyer shall have performed and complied with any covenants made by
it hereunder in all material respects as of the Closing Date.
(c) The Court shall have entered the Sale Order, which Sale Order shall
not have been reversed stayed, modified or amended in any material
respect prior to the Closing Date.
(d) The sale of the CEP Business (as defined in Part II) to the CEP Assets
Buyer shall have closed or will close concurrently with the closing of
the sale of the Wet Waste Assets to the Wet Waste Assets Buyer.
(e) Any applicable waiting periods relating to the transfers contemplated
hereby under the HSRA shall have expired without extension or
challenge to such transactions, and any approvals required by such Act
have been issued.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 18
SECTION 22. COUNTERPARTS
- ------------------------
This Offer may be signed in any two (2) or more counterparts, all of which,
taken together, shall be deemed to constitute the original Offer.
By its signature below, the Seller accepts this offer, subject to the terms
and conditions set forth herein and to approval by the Court.
SECTION 23. CLOSING
- -------------------
The closing date shall occur on the later of three (3) business days after
the entry of the Sale Order or the satisfaction of all conditions (as set forth
in Section 20), subject to the CEP Buyer's right to waive or extend such
conditions in its discretion (the "Closing Date").
SECTION 24. CLOSING ADJUSTMENTS
- -------------------------------
Appropriate pro rata adjustment through the Closing Date shall be provided
for matters normally adjusted at closing, including but not limited to: real
estate taxes with respect to the Bear Creek Road Facility, fuel with respect to
the Bear Creek Road Facility and the Fall River Facility, utilities with respect
to the Bear Creek Road Facility and the Fall River Facility, prepaid vendors for
services the CEP Buyer received post-closing, and the like.
SECTION 25. OVERBIDS
- --------------------
To qualify as a counter-offer for both the Wet Waste Assets and the CEP
Assets, the upfront payment shall by such counter-offeror be at least
$10,750,000 of which at least $100,000 shall be allocated to the CEP Assets.
REST OF PAGE INTENTIONALLY LEFT BLANK
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page
ATG, INC.
BY: /s/ Bill Hewitt
-------------------------
ITS DULY AUTHORIZED OFFICER
AGREED TO:
/s/ Stephen S. Gray
_____________________________
Stephen S. Gray, Trustee
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 20
PART II [CEP ASSETS]
--------------------
The following sets forth the binding terms under the "CEP Buyer" offers to
purchase, as more particularly set forth below, substantially all of the assets
of, together with contracts, licenses and permits associated with, the Seller's
Catalytic Extraction Processing ("CEP") business conducted substantially at Oak
Ridge, Tennessee, and certain assets located at the Tech Center facility located
in Oak Ridge, Tennessee (the "Tech Center Facility") and substantially all of
the assets located in the facility in Fall River, Massachusetts (the "Fall River
Facility"), and all of the Intellectual Assets (as defined below) hereinafter
collectively referred to as the "CEP Business". Capitalized terms used in this
Part II shall have the meanings set forth in this Part II, unless otherwise
stated.
For purposes of this offer, the term "CEP Assets" means all assets,
properties and rights of every kind, character and description (other than
property and rights specifically excluded in this Agreement) used or useful in
or for the benefit of the CEP Business consistent with the Wet Waste Buyer's
Offer plus the Intellectual Assets and other assets designated herein,
including, without limitation, the following:
a. All real estate, improvements, buildings, fixtures, tangible property
and equipment located at the Bear Creek Road facility located in Oak
Ridge, Tennessee (the "Bear Creek Road Facility");
b. All rights in and to the existing $1.6 million Letter of Credit and
the cash collateral posted in connection therewith for decontamination
and decommissioning/closure costs relating to the Bear Creek Road
Facility;
c. All rights in and to the existing $91,000 Letter of Credit and the
cash collateral posted in connection therewith for decontamination and
decommissioning/closure costs relating to the Fall River Facility;
d. All ion exchange resins ("IER") contracts relating to the CEP
Business;
e. All of Seller's right, title and interest in the licenses and permits
relating to the CEP Business (with respect to licenses or permits
relating to the Tech Center Facility only such licenses or permits
necessary for the removal of the assets from the Tech Center
Facility);
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 21
f. All of Debtors' rights and licenses to store radiological material for
CEP processing at the Hake and Duratek locations;
g. Debtors' rights to enforce and obtain the benefits under existing
GTS/Duratek non-compete, preferred vendor status and shared boundary
radiological dose limit agreements; including, but not limited to, all
of Debtors' rights under the Asset Purchase Agreement between Debtors
and Westinghouse dated December 10, 1996 and related agreements;
h. All accounts receivable associated with the CEP Business;
i. All intellectual assets of the debtors except those used primarily in
the "Wet Waste Business" and designated as such in Part I hereof.
Intellectual Assets shall include without limitation, all licenses
related to intellectual property rights, patents, patent applications,
patent disclosures, designs, drawings, formulas, processes, software,
trade secrets, trademarks, tradenames, topical reports,
specifications, service marks, copyrights, quality assurance programs,
process control programs, sales lists, contract lists, project
references, proposals, ideas, inventions and software or process
licenses and all other proprietary information commonly known as
"intellectual property rights", including, but not limited to, the
specific intellectual assets set forth on the Part II Schedule
(Intellectual Property) schedule attached hereto ("Intellectual
Assets"); provided, however, that Intellectual Assets should not
--------- -------
include those items listed on the "Schedule of Exchange Intellectual
Property";
j. All development equipment, analytical equipment, electrical switches,
induction power supplies (including the power supplies for RPU(4)),
electrical power supply, computers, computer software, general
intangibles, office equipment located or associated with the Tech
Center Facility, and used or usable in connection with the CEP
Business including, but not limited to, those assets listed in Part II
Schedule (Tech Center);
k. All office furniture, personal computers and telephone and network
infrastructures located at the Tech Center Facility and used by or
available to CEP Business personnel or used in the CEP Business,
including, but not limited to, those items set forth on the Part II
Schedule (Tech Center) schedule;
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 22
l. All assets located at the Debtors' Fall River, Massachusetts facility,
including, but not limited to, the research and development equipment,
supplies and other tangible property used in the conduct of research
and development activities, including, but not limited to, the
equipment and supplies set forth on the Part II Schedule (Research and
Development Equipment) attached hereto, all permits and licenses
associated with the Fall River facility, and all rights to occupy the
Fall River facility to conduct research and development operations and
conduct sales and marketing activities to support the CEP Business and
related businesses;
m. Existing proposals, contracts and agreements, including, but not
limited to, executory contracts and unexpired leases, and, to the
extent that the Seller has no financial interest therein, any
transferable benefits for Selected Employees, including, but not
limited to life insurance policies, entered into in connection with
the CEP Business including, but not limited to the following:
(i) Crystal Systems
(ii) AFCEE
(iii) SNPE
(iv) US DoD BAA
(v) Ebara
(vi) NKK Nichemen; and
n. All causes of action related to the CEP Business.
SECTION 1. ASSETS AND CONTRACT RIGHTS SUBJECT TO OFFER
- ------------------------------------------------------
The CEP Buyer submits this Offer to Purchase all of the Seller's right,
title and interest in and to (a) the CEP Assets, including, without limitation,
those assets described above or identified on the schedules attached hereto, as
well as related work in process, construction in progress and inventory; (b) all
customer contracts which are a part of or are used in the CEP Business which CEP
Buyer may elect to assume, including, but not limited to, those customer
contracts identified in the Part II Schedule (Customer Contracts) schedule
attached hereto and the contracts the Seller previously acquired from VECTRA and
SEG (collectively the "Subject Agreements"); (c) all subcontracts or teaming
agreements used in the business related to the assets which CEP Buyer may elect
to assume; (d) all permits and licenses issued to the Seller primarily for use
in the CEP Business (the "Subject Permits") to the extent assignable by the
Seller, including letters of credit in the amount of $1.6 million and the
$91,000 and cash collateral posted as financial assurance relating to Subject
Permits; (e) business books and
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 23
records, subject to Seller's retaining reasonable access, use and copying
rights; (f) the Intellectual Assets used or useable in the CEP Business (except
those Intellectual Assets or useable in the provision of Wet Waste Business and
only incidentally used in the CEP Business, as to which the Seller or the Wet
Waste Buyer shall issue to the CEP Buyer as part of the CEP Assets a perpetual,
non-exclusive, assignable, royalty-free license to use the same on customary
terms and protections to be used solely in connection with the CEP Business);
(g) an option to acquire the MMT Environmental Fund for ninety (90) days after
the Closing Date, if and only if, the Seller determines that the MMT
Environmental Fund is of no economic value to the estate; (h) all furniture,
telephones, copiers, scanners, facsimile machines, printers, plotters,
computers, monitors, modems, software and other office equipment that is used or
useable in the normal conduct of the CEP Business (provided that any of the
foregoing that are used in the provision of Wet Waste Business shall be shared
by the CEP Buyer and Wet Waste Buyer as determined by mutual agreement of the
CEP Buyer and the Wet Waste Buyer).
Expressly excluded from the CEP Assets and the purchase and sale proposal
hereunder are: (i) cash, cash equivalents, and marketable securities (except as
expressly set forth above); (ii) any and all trade names of the Debtors and its
parents and subsidiaries, and other entities under common control with the
Debtors; (iii) any and all obligations owed to the Seller and/or its affiliates
by former or existing consultants, agents, employees, officers and/or directors
of the Debtor (which the Seller hereby represents, to its knowledge, are limited
to certain notes from such employees or avoidance actions (as defined below));
(iv) any and all funds due and owing the Seller associated with tax refunds,
insurance claims and/or insurance premiums, but any insurance claims relating to
the CEP Assets accruing on or after November 3, 1998 shall be considered CEP
Assets; (v) any and all causes of action arising from bankruptcy avoidance
actions pursuant to the provisions of the United States Bankruptcy Code
("Avoidance Actions") or otherwise arising under or related to the Bankruptcy
Code and any causes of action not related to the CEP Business; (vi) any and all
amounts arising under any claims associated with the bankruptcy proceeding
entitled Vectra Technologies, Inc. a/k/a/ Pacific Nuclear Systems, Inc., Case
--------------------------------------------------------------
No. 97-13001, pending in the United States Bankruptcy Court for the Western
District of Washington at Seattle; (vii) the Seller's Wet Waste Assets defined
in Part I hereof; (viii) all radioactively contaminated commercial processing
equipment (i.e., select RPU4 components) at the Tech Center Facility; (x) the
contents of the PermaCan box located at the Tech Center Facility; (ix) the
temporary employment agreement with American Technical Associates, Inc., the
Flour Daniels contract and the lease for real property at the Fall River
Facility; and (x) any assets which are excluded by the CEP Buyer pursuant to
Section 5.
To the extent that any Intellectual Assets are also used in Seller's
business lines not sold to CEP Buyer or Wet Waste Buyer, CEP Buyer shall grant
to Seller) a perpetual, non-exclusive,
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 24
non-assignable, royalty-free license to use such Intellectual Assets on
customary terms and protections, solely in connection with the operation of such
other business lines; provided, however, that Seller shall be permitted to
-------- -------
assign such license to buyers of such other business lines.
SECTION 2. TERMS OF PURCHASE
- ----------------------------
(a) On the Closing Date, the Seller shall transfer to CEP Buyer and CEP
Buyer shall acquire from Seller all of the Seller's right, title and
interest in and to the CEP Assets, free and clear of all liens
encumbrances and interests, pursuant to Section 363(b) and (f) of the
Code and, in connection therewith, the Seller shall assign the permits
and licenses included in the CEP Assets to the CEP Buyer to the full
extent permitted by law and CEP Buyer shall assume and purchase, and
Seller shall assign and sell the Subject Agreements, which the CEP
Buyer has accepted, to the CEP Buyer. The consideration exchanged for
the CEP Assets shall be allocated among the CEP Assets in accordance
with the CEP Buyer's instructions and discretion.
(b) The CEP Buyer shall assume and be responsible for (i) the cost to
dispose of primary and secondary waste on site; (ii) costs of
decontamination and decommissioning of the Bear Creek Road Facility
and the Fall River Facility if operations and the permits/licenses of
either facility are terminated; (iii) secondary waste in the
possession of or delivered to American Ecology and Manufacturing
Sciences; and (iv) the liability for inventory at the Hake and Duratek
locations; provided, however, that the CEP Buyer assumes the
-------- -------
liabilities pursuant to this subsection (v) only in the event that the
Seller brings Hake and Duratek current for all amounts owed from the
time of the Trustee's appointment in the Chapter 11 Case through and
including the Closing Date, which the Seller agrees to do (the
"Assumed Environmental Liabilities").
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 25
(c) As additional consideration for the transfer of the CEP Assets,
Quantum Catalytics, LLC shall deliver to Seller, an unsecured
promissory note (the "Note") in the principal amount of $2,091,000
with interest at the rate of five (5%) per centum per annum, simple
interest, payable as follows:
Due Date Amount
April 1, 2000 $500,000 plus accrued interest
April 1, 2001 $500,000 plus accrued interest
April 1, 2002 $1,091,000 plus accrued interest
(d) If and only if the CEP Buyer's or its affiliates or Subsidiaries to
the extent they are performing CEP Business aggregate EBITDA, measured
in accordance with GAAP as applied by the CEP Buyer, for the three-
year period commencing on January 1, 1999 ("EBITDA") exceeds
$50,000,000, then the CEP Buyer shall make a payment equal to five
(5%) percent of EBITDA (the "EBITDA Payment"). For purposes of
calculating the EBITDA Payment, any bonuses paid to any officers,
directors or shareholder shall not be included in such calculation.
The EBITDA Payment shall be payable on April 1, 2002. The parties
expressly agree and acknowledge that the earnings of any subsidiary of
the CEP Buyer formed to perform the Wet Waste processing intended to
be performed at the north end of the Bear Creek Road Facility shall be
excluded from the calculation of the CEP Buyer's EBITDA for purposes
of calculating the EBITDA Payment. The CEP Buyer and any of its
affiliates, or subsidiaries shall run their business in any manner
they see fit without restriction from the Trustee or any other party
entitled to the EBITDA Payment, except to the extent fraud is
committed to reduce the EBITDA Payment.
(e) Other than the Assumed Environmental Liability, and obligations
occurring after the Closing Date with respect to the CEP Assets, the
Seller is responsible for and the CEP Buyer shall not assume or
otherwise be liable for any debts, claims, liabilities or any other
obligations of the Seller of any nature whatsoever, whether such
debts, liabilities or obligations are known or unknown, liquidated or
contingent, direct or indirect, including, but not limited to, any
liens, attachments environmental liabilities, trade debt, sale taxes
relating to these transactions, accounts payable, warranty
obligations, tax liabilities, claims of employees, pension liabilities
or any expenses of administration of the Chapter 11 estate
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 26
(collectively, "Excluded Liabilities"). All Excluded Liabilities shall
remain with the Seller's estate.
(f) Immediately after the Approval Date (as defined in Part I), the Seller
shall issue notices to all of its employees, and to all other relevant
parties (e.g. licensing authorities) advising them of the sale of the
CEP Assets to CEP Buyer. The notices shall be made in a form mutually
agreed by Seller and CEP Buyer. Notices to the parties to the Subject
Agreements shall include appropriate notice that such agreements will
be assumed and assigned by the Seller to the CEP Buyer.
(g) The parties believe, based upon preliminary due diligence, that no
approval of these transactions will be necessary under the Hart-Scott
Rodino Act ("HSRA").
The sale of CEP Assets hereunder shall be without representation or
warranty of the Seller (including as to merchantability or fitness for use)
except as to any that may be specifically set forth herein, and (except as
specifically set forth herein) WHERE IS and AS IS.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 27
SECTION 3. COURT APPROVAL
- -------------------------
The Trustee shall take all steps necessary to obtain on the Approval Date
an Order of the Court in form reasonably acceptable to the CEP Buyer (the "Sale
Order") approving, pursuant to Sections 363(b) and (f) and 365 of the Code, the
sale by the Seller of the CEP Assets, free and clear of liens, encumbrances and
interests, and the purchase and assumption and assignment to the CEP Buyer of
the Subject Agreements. The Sale Order shall, among other things, (i) determine
that this Agreement was proposed by the CEP Buyer in good faith, (ii) determine
that the CEP Buyer is a good faith purchaser under section 363(m) of the Code,
and (iii) permanently enjoin each and every holder of an Excluded Liability from
commencing, continuing or otherwise pursuing or enforcing and remedy claim, or
cause of action against the CEP Buyer relative to such Excluded Liability.
Regarding the CEP Assets the CEP Buyer is expressly accepting hereunder, the
Seller shall be responsible for fulfilling the requirements of Section 365(1)(A)
(which pertains to the curing of defaults under the Subject Agreements) and the
CEP Buyer shall be responsible for fulfilling the requirements of Section
365(f)(2)(B) of the Bankruptcy Code (which pertains to the providing of adequate
assurance of future performance). Notwithstanding the above, the CEP Buyer shall
pay all amounts required to cure defaults in the contracts being assigned to CEP
Buyer and the Note shall be reduced by the amount paid, first with respect to
the amount due in April 1, 2001 and then with respect to the next earliest
payment.
SECTION 4. AFFIRMATIVE COVENANTS OF SELLER
- ------------------------------------------
As an express condition of this Offer by the CEP Buyer, the Trustee hereby
covenants that, if the CEP Buyer purchases the Assets:
(a) the Trustee shall reasonably assist the CEP Buyer in the transfer of
the CEP Assets and the operation of the CEP Business, including the
providing of reasonable access to all records, employees and staff,
and the Seller's offices and facilities;
(b) the Trustee shall cooperate with the CEP Buyer in its efforts to
facilitate timely transfers of its Subject Permits or other
governmental approvals related to the continued use of the CEP Assets;
and
(c) to the extent permitted under the Bankruptcy Code, the Seller will
transfer to the CEP Buyer or its Affiliate any non-competition
agreements the Seller now has related to the CEP Business which are
beneficial to the CEP Business.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 28
SECTION 5. EXCLUSION OF CERTAIN ASSETS
- --------------------------------------
The CEP Buyer shall have the right to exclude from this Offer such of the
CEP Assets, except executory contracts as it elects in writing, on or before
November 23, 1998 (the "Exclusion Notice Date"); provided, however, the CEP
-------- -------
Buyer should not have the right to exclude from this Offer tangible assets at
the Bear Creek Road Facility and the Fall River Facility; provided, further,
--------
however, that such election shall not be made with respect to the real estate or
facilities which are subject to the Assumed Environmental Liabilities, provided,
--------
however, that such election shall not give the CEP Buyer the right to reduce the
- -------
Purchase Price. With respect to executory contracts, the Exclusion Notice Data
shall be extended to the Closing Date.
SECTION 6. COURT APPROVAL
- -------------------------
All obligations of the Seller under this Offer shall be subject to approval
by the Court, which approval the Trustee shall in good faith seek as
expeditiously as possible.
SECTION 7. CEP BUSINESS EMPLOYEES
- ---------------------------------
By November 20, 1998, the CEP Buyer shall submit to the Seller a list of
the Seller's employees, independent contractors, and consultants that are
engaged primarily or exclusively in the CEP Business including staff involved in
the administrative and other support functions (the "CEP Employees") that it
desires to hire (the "Selected Employees"). At Closing, the Seller shall release
the Selected Employees from any non-compete agreements in effect to allow the
CEP Buyer to employ such Selected Employees in the operation of the CEP Business
and the CEP Assets, and the CEP Buyer shall make offers of employment to the
Selected Employees contingent only upon the closing of the sale transaction
contemplated hereby. Any Selected Employees that commence work with the CEP
Buyer shall be paid all non-disputed post-petition salary, expense and vacation
pay unless limited by prior order of the Bankruptcy Court. If a Selected
Employee does not accept employment with the CEP Buyer (a "Rejection Employee")
and as a result collects severance pay from the Trustee, then the CEP Buyer
agrees for a period of six (6) months commencing as of the Closing Date; that it
shall not employ the Rejection Employee unless in connection therewith; (i) the
CEP Buyer reimburses the Seller for such Rejection Employee's severance pay
actually paid by Seller, or (ii) the CEP Buyer obtains the Seller's consent.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 29
The CEP Buyer agrees that for a period of one (1) year commencing as of the
Closing Date (the "One Year Period"); it shall not employ any current CEP
Employee who is not a Selected Employee ("Non-Selected Employee") unless in
connection therewith (i) the CEP Buyer reimburses the Seller for such employee's
severance pay actually paid by Seller, or (ii) the CEP Buyer obtains the
Seller's consent.
Nothing herein shall prevent the CEP Buyer from retaining any Non-Selected
Employee as a consultant and not as a full-time employee. The CEP Buyer shall
not have an obligation to reimburse the Seller for such Employee's severance pay
as contemplated by the previous paragraph so long as the compensation earned by
such Non-Selected Employee is, during the One Year Period, not greater than 60%
of such Non-Selected Employee's annual salary during the year prior to the
Closing Date. In the event that such Non-Selected Employee's compensation as a
consultant to the CEP Buyer exceeds 60% of such Non-Selected Employee's annual
salary during the One Year Period, the CEP Buyer shall reimburse the Seller for
such Non-Selected Employee's severance pay actually paid by the Seller. (If such
current CEP Employee was employed by Seller for less than a full year, then the
same calculations will apply but will be pro rated for such time the current CEP
Employee was employed.)
SECTION 8. MAINTENANCE OF LICENSES, INSURANCE, REGULATORY FILINGS AND PERMITS
- -----------------------------------------------------------------------------
The Fall River Facility and the Bear Creek Road Facility are each
designated as included in the CEP Assets subject to this Offer. If CEP Buyer's
Offer is accepted, the Seller will use its best efforts to maintain licenses,
insurance, regulatory filings and permits that are necessary or appropriate for
the operation of each facility, for the shorter of (i) a period of sixty (60)
days following the Closing Date; and (ii) until all required licenses and
permits are transferred, at the Seller's expense before the Closing Date, and at
the CEP Buyer's expense after the Closing Date (the "Transition Period"). The
Seller shall authorize and allow the CEP Buyer or its nominee(s) to operate
under each such licenses, insurance, regulatory filings and permits that are
necessary or appropriate for the operation of each facility during the
Transition Period, to the extent permitted by law. However, CEP Buyer shall
indemnify, defend and hold harmless the Seller for any and all claims made
against the Seller for any losses, damages or claims caused after the Closing
Date on account of CEP Buyer's use or acquisition of the facility and for
Seller's reasonable and necessary costs of defending same.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 30
During the Transition Period, the CEP Buyer agrees that:
a. the Trustee and/or its representatives will have access to the
facility during normal business hours upon one (1) day's notice
to the CEP Buyer;
b. the CEP Buyer will operate each facility in accordance with all
applicable laws and ordinances and in compliance with applicable
permits and licenses;
c. the CEP Buyer will provide the Seller with all reports provided
to all state and federal agencies;
SECTION 9. TRANSITION FACILITY AND ADMINISTRATIVE SERVICES
- ----------------------------------------------------------
The Trustee shall provide reasonable space in the Seller's Tech Center at
1000 Clearview Court, Oak Ridge, Tennessee, for CEP Buyer to store the "Tech
Center Assets" for up to 30 days following the Closing Date, to afford CEP Buyer
the requisite time to obtain approvals and to remove such assets. CEP Buyer will
promptly apply for and diligently pursue such required approvals. Failing the
availability of such space, the Seller will authorize the CEP Buyer to move such
assets at the Tech Center Facility, as CEP Buyer may elect, to the Bear Creek
Road Facility or other suitable location. The CEP Buyer will use fully licensed
carriers and shall pay the cost of transportation and any costs related to
removal and storage. The CEP Buyer shall notify the Seller before incurring any
such expense in excess of $10,000. In the event the closing of the sale to the
CEP Buyer does not occur, then all such costs shall be reimbursed by the Seller
forthwith.
The CEP Buyer shall use its best efforts to obtain binders for nuclear
liability insurance and environmental impairment insurance and any and all
necessary insurance in connection with the operation of the CEP Assets. In the
event the closing of the Sale to the CEP Buyer does not occur any and all costs
paid by the CEP Seller in connection with the insurance shall be reimbursed by
the Seller.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 31
SECTION 10. PRE-CLOSING INFORMATION TO THE CEP BUYER
- ----------------------------------------------------
As soon as possible, but in any event no more than three days from the
submission of this Offer, the Trustee shall provide to the CEP Buyer the
following information solely to the extent such information is related to the
CEP Business and has not been made available previously to CEP Buyer:
(a) listings of all projects with on-going work being performed over the
next three weeks and the associated personnel;
(b) listings of all set-offs, contracts and the like as to all contracts
to be assumed. Listings are to include a short description of each
contract, expiration date, and value;
(c) copies of agreements that the Seller has with employees;
(d) copies of contracts that contain performance penalties, obligations to
take possession or title to waste; and
(e) a list of all open bids and proposals with respect to the CEP Business
setting forth the status of each such bid and proposal and details
regarding the same.
SECTION 11. REPRESENTATIONS AND WARRANTIES
- ------------------------------------------
CEP Buyer represents and warrants to, and agrees with, Seller as follows:
(a) Organization and Good Standing of CEP Buyer. CEP Buyer is or will be a
-------------------------------------------
newly formed corporation or limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware. CEP Buyer has full power and authority to carry on its
business and where now conducted and to own or lease and operate its
properties at and where now owned or leased and operated by it, and is
or will be duly qualified to do business as a foreign limited
liability company in Massachusetts and Tennessee.
(b) Authority of CEP Buyer Consents. The execution, delivery and
-------------------------------
consummation of this Offer by CEP Buyer has been or will be authorized
by the managers of CEP Buyer in accordance with all applicable laws
and CEP Buyer's Certificates of limited liability company, and at the
Closing Date no further action will be
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 32
necessary on CEP Buyer's part to make this Offer valid and binding and
enforceable against CEP Buyer in accordance with its terms. The
execution, delivery and consummation of this Offer by CEP Buyer (i) is
not or will not be contrary to the CEP limited liability company or
Operating Agreement; (ii) will not violate any order law rule or
regulation known by CEP Buyer to be applicable to CEP Buyer; (iii)
does not now and will not, with the passage of time, the giving of
notice or otherwise, result in a violation or breach of or constitute
a default under, any term of provision of any material indenture,
mortgage, deed of trust, lease, instrument order, judgment, decree,
rule, regulation, law, contract, agreement or any other restriction to
which CEP Buyer is a party or to which CEP Buyer or any of its assets
is subject or bound; and (iv) will not result in any acceleration or
termination of any loan or security interest agreement to which CEP
Buyer is a party or to which CEP Buyer or any of its assets is subject
or bound.
(c) Litigation. There is no judicial or administrative action, proceeding
----------
or investigation pending or to CEP Buyer's knowledge, threatened, that
calls into question the validity of this Offer or any action taken or
to be taken by CEP Buyer in connection herewith. There is no
litigation, proceeding or investigation pending or, to CEP Buyer's
knowledge, threatened, or any order, injunction or decree outstanding,
against CEP Buyer that, if adversely determined, would have a material
adverse effect upon CEP Buyer's ability to perform its obligations
under this Offer.
(d) Approval. The CEP Buyer is not aware of any reason why it would be
--------
denied any necessary approval, consent, permit or other governmental
authorization necessary to purchase and/or operate the CEP Business
and/or the CEP Assets.
(e) Notwithstanding the Closing and the consummation of the transactions
contemplated by this Offer, the covenants of the CEP Buyer contained
in this Offer or any agreement, instrument, paper, or certificate
executed and delivered by the CEP Buyer in connection with the
transactions contemplated hereby, will survive the Closing.
SECTION 12. ACCESS TO SELLER'S FACILITY
- ---------------------------------------
Seller agrees to make available to the CEP Buyer and its attorneys,
accountants, agents and advisors, prior to the Closing Date, such records,
information and personnel as the CEP
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 33
Buyer may reasonably request. As a condition to the Seller's granting to the CEP
Buyer and/or its agents physical access to the Seller's CEP Business facilities,
the CEP Buyer shall provide the Seller proof of workers compensation or similar
insurance as well as of such liability and other insurance as may be required by
applicable regulatory or other law, in such amounts as the Seller may reasonably
require.
SECTION 13. EXPENSES
- --------------------
Each party shall bear its own costs and expenses (including attorney's
fees) associated with this offer and the performance thereof.
SECTION 14. TAXES ASSOCIATED WITH THE SALE
- ------------------------------------------
Each party shall pay when due any taxes assessed under applicable law
against such party relating to these transactions. The sale and purchase of
assets embodied in this agreement will be consummated as part of a Chapter 11
Reorganization proceeding and in contemplation of the Seller proposing a plan,
if possible; therefore, under applicable bankruptcy law, transfer taxes and/or
recording fees cannot be imposed on the sale of the CEP Assets; provided,
--------
however, that if any such taxes or fees are lawfully imposed and become due and
- -------
payable, the liability for such transfer taxes or recording fees shall be borne
by the Seller or the Buyer in the usual and customary manner. All Excluded
Liabilities shall remain with the Seller's estate.
SECTION 15. SEVERABILITY
- ------------------------
If (and only if) CEP Buyer elects, if any portion of this offer is held
invalid or unenforceable any remaining portion shall continue in full force and
effect and the invalid or unenforceable portion shall be replaced by a valid and
enforceable portion reflecting the original intent of the parties as closely as
possible. If a material aspect of this Offer is severed by the Court and, prior
to Closing, either party determines that the Offer as modified (that is, without
the severed portion) is deficient, it may terminate the Offer.
SECTION 16. NOTICES
- -------------------
All notices required or permitted to be given pursuant to the terms of
this Offer shall be sent by hand or private overnight delivery service of
national reputation and also by facsimile transmission as follows:
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 34
To Seller Stephen S. Gray, Trustee
c/o The Recovery Group
270 Congress Street
Boston, MA 02210
Telecopy: (617) 482-9804
To CEP Buyer John T. Preston, Officer
9 Martins Cover Lane
Hingham, MA 02043
Telecopy: (781) 740-2056
with a copy to
CEP Buyers counsel: Richard E. Mikels, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C.
One Financial Center
Boston, MA 02111
Telephone: 617/542-6000
Telecopy: 617/542-2241
SECTION 17. CHOICE OF LAW
- -------------------------
Enforcement of this Offer and legal matters not governed by the Code shall
be determined in accordance with the laws of the Commonwealth of Massachusetts,
without reference to its choice of law doctrine. CEP Buyer consents to the
jurisdiction of the Court as to any proceeding to enforce or interpret this
Agreement.
SECTION 18. HEADINGS
- --------------------
The section headings contained herein are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Offer.
SECTION 19. COUNTERPARTS
- ------------------------
This Offer may be signed in any two (2) or more counterparts, all of which,
taken together, shall be deemed to constitute the original Offer.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 35
By its signature below, the Seller accepts this offer, subject to the terms
and conditions set forth herein and to approval by the Court.
SECTION 20. CEP BUYER'S CONDITIONS PRECEDENT
- --------------------------------------------
The obligation of the CEP Buyer to consummate the transactions to be
performed by it hereunder is subject to the satisfaction on or before the
Closing Date of the following conditions precedent, any or all of which CEP
Buyer may elect to waive or not waive, extend or not extend, in its absolute
discretion:
(a) Any representation and warranties made by the Seller hereunder shall
be true and correct in all material respects as of the Closing Date.
(b) The Seller shall have performed and complied with any agreements and
undertakings made by it hereunder in all material respects as of the
Closing Date.
(c) No action, suit or proceeding shall be pending or threatened wherein
an unfavorable ruling would (a) prevent consummation of any of the
transactions contemplated hereunder; (b) cause any of the transactions
contemplated hereunder to be rescinded following consummation; or (c)
affect adversely the right of CEP Buyer to own or use the CEP Assets.
(d) The Court shall have entered the Sale Order, which Sale Order shall
not have been reversed, stayed, modified or amended in material
respects prior to the Closing Date.
(e) The Seller shall have continued to conduct the CEP Business in the
ordinary course, consistent with past practice and in the same manner
as it is presently being conducted;
(f) No material adverse change shall have accrued to the CEP Business or
the CEP Assets after November 3, 1998, including, without limitation,
any material adverse change in the level of receivables. Adverse
changes constituting a breach of this condition shall include without
limitation material diminution in customers or revenues, material
increase in costs or liabilities, or losses of existing key employees
or experienced work force;
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 36
(g) All pleadings, orders, agreements and other documents related directly
or indirectly to the sale anticipated herein shall be in form and
substance satisfactory to the CEP Buyer;
(h) If the CEP Buyer reasonably concludes that HSRA approval is necessary,
any applicable waiting periods relating to the transfers contemplated
hereby under the HSRA shall have expired without extension or
challenge to such transactions, and any approvals required by such Act
have been issued. The CEP Buyer and the Seller shall file all required
notifications, pursuant to HRRA and the filing fee required for such
approval shall be split equally (50% each) between the Seller and the
CEP Buyer. In the event any HSRA waiting period applies hereto, the
CEP Buyer and the Seller agree that the Closing Date shall be deemed
to be three (3) days after such waiting period has elapsed.
(i) The Closing Date shall occur on or before December 1, 1998, subject to
paragraph (i).
(j) The Wet Waste Asset sale referred to in Part I hereof shall have
closed.
(k) The Seller shall have delivered to the CEP Buyer, in form reasonable
acceptable to the CEP Buyer, deeds, bills of sale, assignments or
other instruments of transfer necessary and appropriate to transfer
and vest the CEP Buyer with the CEP Assets.
(l) The CEP Buyer shall on or before November 23, 1998 have entered into a
binding letter of intent with the landlord of the Fall River facility
on terms reasonable satisfactory to the CEP Buyer; in its sole
discretion;
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 37
(m) The Seller shall maintain permits, licenses, insurance and have
agreements with all parties necessary to allow the CEP Buyer to remove
all CEP Assets from the Tech Center Facility as more fully set forth
in Section 9;
(n) The Seller shall on or before the Closing Date have been authorized to
assume and assign all executory contracts that the CEP Buyer seeks to
purchase and a court order entered prior to the Closing Date shall
have determined the cure amount due under such contracts;
(o) The cure payments required in connection with executory contracts
shall not exceed $100,000.
SECTION 21. SELLER'S CONDITIONS PRECEDENT
- -----------------------------------------
The obligation of the Seller to consummate the transactions to be performed
by it hereunder is subject to the satisfaction of the following conditions
precedent, any or all of which Seller may elect to waive or not waive in its
absolute discretion.
(a) Any representation and warranties made by the CEP Buyer hereunder
shall be true and correct in all material respects as of the Closing
Date.
(b) The CEP Buyer shall have performed and complied with any covenants
made by it hereunder in all material respects as of the Closing Date.
(c) The Court shall have entered the Sale Order, which Sale Order shall
not have been reversed stayed, modified or amended in any material
respects prior to the Closing Date.
(d) The sale of the Wet Waste Business (as defined in Part 1) to the Wet
Waste Assets Buyer shall have closed or will close concurrently with
the closing of the sale of the CEP Assets to the CEP Buyer.
(e) Any applicable waiting periods relating to the transfers contemplated
hereby under the HSRA shall have expired without extension or
challenge to such transactions, and any approvals required by such Act
have been issued.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 38
SECTION 22. CLOSING
- -------------------
The closing date shall occur on the later of three (3) business days after
the entry of the Sale Order or the satisfaction of all conditions (as set forth
in Section 20), subject to the CEP Buyer's right to waive or extend such
conditions in its discretion (the "Closing Date").
SECTION 23. COUNTEROFFERS
- -------------------------
The CEP Buyer acknowledges and agrees that, pursuant to the standard
practice and procedure of the Court and under the Code for sales of assets of a
Chapter 11 estate, this offer shall be subject to the counteroffer and bid
procedure described in Rule 6004-1 (a)(1)(B) of the Local Bankruptcy Rules of
the Court (MLBR). In accordance with MLBR 6004-1 (a)(2)(13), the Seller shall
request in the Motion that, to qualify for consideration, counteroffers for the
CEP Assets call for an up front payment of at least $100,000 and must be on
terms and provisions that one more favorable to the estate is the Trustee's
business judgment than the CEP Buyer's offer after consideration of all facts
and circumstances including the fact that the offer is a joint bid which
includes the Wet Waste Assets.
In addition, the Seller shall immediately seek, on an expedited basis, the
Court's approval of a "break-up fee" payable to CEP Buyer in the amount of
$25,000, and payable only in the event the Court approves the sale of the CEP
Assets to a buyer other than CEP Buyer at the hearing on the approval of the
enclosed offer presently set for November 24, 1998.
In the event that the CEP buyer is to be reimbursed pursuant to Section 9
for terms transportation, decommissioning or insurance costs, such amounts shall
be reimbursed to the CEP Buyer first from the proceeds from the CEP Assets after
payment of the break-up fee and shall be paid forthwith from other assets of the
Seller.
SECTION 24. CLOSING ADJUSTMENTS
- -------------------------------
Appropriate pro rata adjustment through the Closing Date shall be provided
for matters normally adjusted at closing, including but not limited to: real
estate taxes with respect to the Bear Creek Road Facility, fuel with respect to
the Bear Creek Road Facility and the Fall River Facility, utilities with respect
to the Bear Creek Road Facility and the Fall River Facility, prepaid vendors for
services the CEP Buyer received post-closing, and the like.
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 39
SECTION 25. OVERBID
- -------------------
To qualify as a counter-offer for both the Wet Waste Assets and the CEP
Assets, the upfront payment by such counter-offeror shall be at least
$10,750,000 of which at least $100,000 shall be allocated to the CEP Assets.
REST OF PAGE INTENTIONALLY LEFT BLANK
<PAGE>
Stephen S. Gray, Trustee
November 13, 1998
Page 40
QUANTUM CATALYTICS, LLC
BY:/s/ John T. Preston
---------------------------
ITS DULY AUTHORIZED MEMBER
AGREED TO:
/s/ Stephen S. Gray
______________________________
STEPHEN S. GRAY, TRUSTEE
<PAGE>
EXHIBIT 2.2
December 1, 1998
Stephen S. Gray, Trustee
c/o The Recovery Group
270 Congress Street
Boston, MA 02210
Dear Mr. Gray:
Reference is made to an offer dated November 13, 1998, as amended and filed
with the United States Bankruptcy Court for the District of Massachusetts
(Eastern District) (the "Court") on November 24, 1998 (as amended, the "Bid") in
jointly administered Case Nos. 97-21385CJK through 97-21389CJK (the "Chapter 11
Case") and to an Order of Sale entered by the Court on November 25, 1998 (the
"Sale Order") approving the sale on the terms and conditions set forth in the
Bid. Capitalized terms used in this letter agreement shall have the same
meanings herein as in the Bid.
Pursuant to the Bid and the Order, the parties have agreed that:
Purchase by ATG Nuclear. ATG Nuclear Services L.L.C. ("ATG Nuclear") will
purchase the Wet Waste Assets from the Trustee (including the assets and real
estate located in South Carolina) at 12:01 a.m. on December 1, 1998 (the "First
Closing") under a Bill of Sale and related closing documents in form and scope
satisfactory to the parties executed and delivered by the Trustee.
Notwithstanding the foregoing, the accounts receivable generated from the Wet
Waste Business outstanding as of the date hereof (the "Wet Waste Receivables")
shall be held back from the Wet Waste Assets until the earlier to occur of: (i)
the posting of the letter of credit as provided for in Section 4(c) hereof or
(ii) the amount deposited in the Collateral Account (as defined below) equaling
or exceeding $1,800,000.
Purchase by ATG Catalytics. ATG Catalytics L.L.C. ("ATG Catalytics") will
purchase the CEP Assets (other than certain intellectual property belonging to
QC and the Fall River assets, which are referred to herein as the "QC Assets")
as of December 1, 1998 from the Trustee which shall be conveyed and delivered
immediately upon the earlier of (i) December 4, 1998 or (ii) the issuance of an
operating license by the State of Tennessee pursuant to which ATG Catalytics is
empowered to operate the CEP Assets (the "Second Closing") under a Bill of Sale
and related closing documents in form and scope satisfactory to the parties
executed and delivered by the Trustee. Notwithstanding the foregoing, the
accounts receivable generated from the CEP Business outstanding as of the date
hereof or arising on or after the date hereof through the Second Closing (the
"CEP Accounts Receivable" and, together with the Wet Waste Receivables, the
"Receivables") shall be held back from the CEP Assets until the earlier to occur
of: (i) the posting of the letter of credit as provided for in Section 4(c)
hereof or (ii) the amount deposited in the Collateral Account equaling or
exceeding $1,800,000.
Purchase by Quantum Catalytic. Quantum Catalytic LLC ("QC") will purchase the
QC Assets from the Trustee at the First Closing under a Bill of Sale and related
closing documents in form and scope satisfactory to the parties executed and
delivered by the Trustee.
<PAGE>
Consideration. The consideration paid to the Trustee will be as follows:
For the Wet Waste Assets, $10,500,000 paid in cash by ATG Nuclear at the First
Closing ($1,050,000 of which was released at the First Closing from an escrow of
previously deposited funds) together with its Promissory Note in the principal
amount of $1,000,000, payable in full on the first anniversary of the closing
(the "Promissory Note").
For the CEP Assets, ATG Catalytics will make a payment of five percent (5%) of
annual EBITDA arising from the ongoing operations of and/or generation of
revenues from the CEP Business and/or the CEP Assets and QC will make a payment
of five percent (5%) of annual EBITDA arising from the ongoing operations of
and/or generation of revenues from the QC Business and/or the QC Assets, each
such payment payable each calendar year commencing January 1, 1999 for a period
of five years from the Closing (together the "EBITDA Payments"). The EBITDA
Payments will be in the minimum amount of $800,000 per year for each year of the
five-year period, and will be due 90 days following the end of each calendar
year during such five-year period. In the event of a sale of all or
substantially all of the CEP Business (other than the QC Assets) at any time
during such five-year period, ATG Catalytics shall make the payments required by
Part II, Section 2(d) of the Bid.
The Promissory Note and the EBITDA Payments will be guaranteed by ATG Inc.
("ATG"), the parent of ATG Nuclear and ATG Catalytics, pursuant to the terms of
a Guaranty executed simultaneously herewith. ATG's guaranty of payment of the
Promissory Note and the first of the EBITDA Payments (in the amount of $800,000)
(the "Guaranteed Payments") will be secured by a letter of credit in form, scope
and substance satisfactory to the Trustee, with such letter of credit to be in
place within thirty (30) days of the date hereof; provided, however, that until
the letter of credit is issued, any proceeds collected from the Receivables
shall be deposited in a segregated, interest-bearing account (the "Collateral
Account") (subject to the provisions of Section 6(b) hereof). The principal
balance of the Collateral Account shall not exceed $1,800,000, exclusive of
accrued interest. In the event that the principal balance in the Collateral
Account equals or exceeds $1,800,000, any additional proceeds collected from the
Receivables shall be turned over to ATG. The Collateral Account shall secure
the Guaranteed Payments. In the event that the letter of credit is not issued
and to the extent there is a default under the Guaranty with respect to the
Guaranteed Payments, the Trustee shall apply the funds in the Collateral Account
to satisfy the Guaranteed Payments. In the event that the Guaranteed Payments
are paid in full, (i) if the letter of credit has been issued, it shall be
terminated or (ii) if the letter of credit has not been issued, the funds in the
Collateral Account shall be returned to ATG. The Trustee shall be entitled to
withdraw up to $225,000 from the Collateral Account to pay Estate expenses
incurred prior to the date hereof; provided, that the Trustee shall deposit in
the Collateral Account an amount equal to the amounts so withdrawn (together
with interest thereon at the rate of interest earned on the cash collateral
referred to below) upon receipt of the proceeds of the cash collateral
supporting the South Carolina letter of credit.
For the QC Assets, QC will pay (i) $100,000 in cash at the First Closing and
(ii) its portion of the EBITDA Payments as set forth in Section 4(b) hereof. In
the event of a sale of all or substantially all of the QC Assets at any time
during the five-year period commencing on the Closing, QC shall make the
payments required by Part II, Section 2(d) of the Bid.
Attached as Exhibit A hereto is a schedule setting forth the prepayments made to
vendors prior to the First Closing for services to be rendered after the First
Closing, which amount ATG has paid to the Trustee. In the event that the
contracts set forth on Exhibit A hereto that are marked with an asterisk are
terminated after the Second Closing and to the extent there exists any balance
<PAGE>
outstanding with respect to the amounts prepaid under such contracts, the
Trustee shall reimburse to ATG, or its nominee, such balance. Any other
adjustments to the purchase price shall be made in accordance with Part I,
Section 24 or Part II, Section 24 of the Bid, as the case may be.
For the purposes contained herein as well as for purposes of the Bid, "EBITDA"
shall be defined as earnings before interest, taxes, depreciation and
amortization, as determined in accordance with generally accepted accounting
principles. In addition to the foregoing, for purposes of calculating the
EBITDA payment, any bonuses and other extraordinary compensation payable to
officers, directors or shareholders shall not be included in such calculation.
Trustee's Title to Bear Creek Facility. For the period from the First Closing
to the Second Closing (the "Interim Period") the portion of the Wet Waste Assets
and CEP Assets constituting the Bear Creek Facility and all operations thereof
shall continue under the exclusive jurisdiction and control of the Trustee and
there shall be no transfer of ownership or title with respect to such assets
(including without limitation all such assets comprising real property) to any
third party by the Trustee until the Second Closing.
Operation of Bear Creek Facility During Interim Period.
a) ATG Catalytics agrees that, during the Interim Period, ATG Catalytics shall
bear the costs of the operations of the Bear Creek Facility, which the
Trustee shall endeavor to operate in accordance with the budget attached to
this letter agreement as Exhibit B (the "Budget"). The parties agree
further that all accounts receivable generated or collected during the
Interim Period in respect of the Bear Creek Facility shall be for the
benefit of ATG Catalytics, except as provided in Section 4(c) hereof, it
being the intention of the parties that ATG Catalytics shall bear the
costs, and benefit from the revenues, of the Bear Creek Facility during the
Interim Period as though it had been transferred from the Trustee to ATG
Catalytics at the First Closing. The parties covenant and agree that solely
with respect to the Bear Creek Facility the Trustee shall continue to
operate such facility in the same manner and method as previously operated
by the Trustee, including, without limitation, the continued employment of
all employees associated with such facility to the extent not employed by
ATG Nuclear or QC.
b) During the Interim Period, the Trustee with the consent of its post-
petition lender shall utilize the cash collateral of the post-petition lender to
pay the operating costs of the Bear Creek Facility during the Interim Period
(the "Operating Costs"). The Operating Costs shall be reimbursed by ATG on a
daily basis. To the extent that the Operating Costs are not reimbursed on or
before the expiration of five days after the Interim Period, the Trustee, upon
prior telephonic notice or telefax notice to ATG's counsel, may withdraw funds
held in the Collateral Account for reimbursement to the Estate, and such
withdrawal shall not effect the requirements of Section 4(c) hereof.
Notwithstanding the foregoing, in the event that the post-petition lender does
not consent to the use of its cash collateral to pay the Operating Costs, ATG
agrees to establish an account for the benefit of the Trustee in an amount equal
to the costs expected to be incurred for the operation of the Bear Creek
Facility in accordance with the Budget (the "Operating Cost Account"). Such
funds may be withdrawn by the Trustee to pay any and all operating costs of the
Bear Creek Facility incurred during the Interim Period. To the extent that the
actual costs of operation of the Bear Creek Facility during the Interim Period
are less than the amount deposited in the Operating Cost Account, such excess
funds shall be transferred to the Collateral Account, subject to the limitation
provided in Section 4(c) above.
<PAGE>
Attached hereto as Exhibit C is a schedule setting forth the Good Current
Assets. Pursuant to such schedule, the parties acknowledge and agree that there
is no adjustment to the purchase price pursuant to Part I, Section 2(e) of the
Bid.
The parties hereby agree to cooperate with each other with respect to the
transfer of utility accounts. To the extent there exists any deposits paid by
the Bankruptcy Estates, such deposits shall be returned to the Trustee.
Post-Closing Issues
a) The parties agree to cooperate in undertaking the appropriate measures
to have the letters of credit referenced in the Bid terminated, cancelled and
returned. Upon the termination of such letters of credit and the receipt by the
Trustee of the cash collateral securing such letters of credit, the Trustee
shall remit to QC the sum of $91,000, and to ATG, or its nominee, the sum of
$1,600,000, together with all interest thereon. Any additional funds associated
with such letters of credit shall be retained by the Trustee.
b) The cash in the approximate amount of $140,000 to secure the
performance of the Kepco contract (Contract No. KH972NN800) shall be returned to
the Trustee upon the performance of the obligations under such contract to the
extent that such funds would be and are returned in accordance with the terms of
such contract.
c) ATG has determined that the fair market value of the assets to be
purchased pursuant to the Bid does not exceed the "size of the transaction" test
under the HSRA.
d) ATG Nuclear or QC, as the case may be, shall pay the salaries of the
Selected Employees accrued from and after the First Closing.
e) ATG Nuclear shall reimburse the Trustee for all expenses of the
Trustee associated with licenses, insurance, regulatory filings and permits that
are necessary or appropriate for ATG Nuclear's operation of the South Carolina
Facility pursuant to Part I, Section 8 of the Bid and incurred after the First
Closing.
f) The Trustee shall pay the outstanding real estate taxes associated
with the South Carolina property which accrued prior to the First Closing, which
amount is approximately $6,200. With respect to the Bear Creek Facility, the
Trustee shall pay the outstanding real estate taxes associated with such
facility which accrued prior to the First Closing, unless the Trustee reasonably
believes that the payment of such taxes would require a court order, in which
case the Trustee shall use his best efforts to obtain such court order.
g) The parties agree to coordinate their efforts and cooperate with each
other regarding the termination of Wet Waste Employees and CEP Employees by the
Trustee.
h) The parties agree that the Exclusion Notice Date with respect to
executory contracts referenced in Part II, Section 5 shall be extended to the
date of the Second Closing.
Miscellaneous Provisions
a) To the extent not explicitly modified by this letter agreement, the
Bid shall remain in full force and effect.
<PAGE>
b) This letter agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts without application of its
principles of conflict of laws.
b) This letter agreement may be executed in counterparts and shall constitute
a single document.
Further Assurances. The parties each agree to execute all such documents and
take all such actions after the date hereof as any other party shall reasonably
request in connection with carrying out and effectuating the intent and purpose
hereof and all transactions and things contemplated by this letter agreement,
including, without limitation, the execution and delivery of any and all
confirmatory and other documents in addition to those to be delivered
simultaneously with the execution hereof and all actions which may reasonably be
necessary or desirable to complete the transactions contemplated hereby.
Without limiting the foregoing, the parties expressly agree and acknowledge that
ATG Nuclear, ATG Catalytics and/or QC (collectively, the "Buyers") shall make
available at the reasonable request of the Trustee, within five (5) days written
notice, any and all books and records requested by the Trustee, in his sole and
complete discretion, including, but not limited to, any and all original
documents. The Buyers further agree to use their best efforts to preserve the
books and records until the closing of the respective Bankruptcy Estates.
[Remainder of Page Intentionally Left Blank]
<PAGE>
Sincerely,
ATG INC.
By:__________________________________________
ATG NUCLEAR SERVICES L.L.C.
By:__________________________________________
ATG CATALYTICS L.L.C.
By:__________________________________________
QUANTUM CATALYTIC LLC
By:__________________________________________
Accepted and agreed:
___________________________________
Stephen S. Gray, as Trustee
and not individually
