<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
GTS Duratek, Inc.
- --------------------------------------------------------------------------------
(NAME OF ISSUER)
Common Stock, par value $.01 per share
- --------------------------------------------------------------------------------
(TITLE OF CLASS OF SECURITIES)
362-37J-107
- --------------------------------------------------------------------------------
(CUSIP NUMBER)
Gregory S. Feis, Esq.
Morgan, Lewis & Bockius LLP
1800 M Street, NW
Washington, DC 20036
(202) 467-7000
- --------------------------------------------------------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER
OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS)
November 7, 1995
- --------------------------------------------------------------------------------
(DATE OF EVENT WHICH REQUIRES FILING
OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ X ].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.)
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<TABLE>
<CAPTION>
CUSIP NO. 362-37J-107
<S> <C>
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
BNFL Inc
- --------------------------------------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------------------------------------
4. Source of Funds
00
- --------------------------------------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------------------------------------
7. Sole Voting Power: None
Number of -----------------------------------------------------------------------------
Shares
Beneficially 8. Shared Voting Power: 1,381,575 shares of Common Stock
Owned by Each -----------------------------------------------------------------------------
Reporting Person
With 9. Sole Dispositive Power: None
-----------------------------------------------------------------------------
10. Shared Dispositive Power: 1,381,575 shares of Common Stock
- --------------------------------------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,381,575 shares of Common Stock
- -------------------------------------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
- -------------------------------------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
13.4%
- -------------------------------------------------------------------------------------------------------------
14. Type of Reporting Person
CO
- -------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
CUSIP NO. 362-37J-107
<S> <C>
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
British Nuclear Fuels plc
- -------------------------------------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------
3. SEC Use Only
- -------------------------------------------------------------------------------------------------------------
4. Source of Funds
00
- -------------------------------------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------
6. Citizenship or Place of Organization
England and Wales
-------------------------------------------------------------------------------------------------------------
7. Sole Voting Power: None
Number of
Shares ------------------------------------------------------------------------------
Beneficially 8. Shared Voting Power: 1,381,575 shares of Common Stock
Owned by Each
Reporting Person -------------------------------------------------------------------------------
With 9. Sole Dispositive Power: None
-------------------------------------------------------------------------------
10. Shared Dispositive Power: 1,381,575 shares of Common Stock
- ---------------------------------------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
1,381,575 shares of Common Stock
- ---------------------------------------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
- ---------------------------------------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
13.4%
- ---------------------------------------------------------------------------------------------------------------
14. Type of Reporting Person
CO
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER.
-------------------
This Schedule 13D relates to the Common Stock, par value $.01
per share ("Common Stock"), of GTS Duratek, Inc. (the "Issuer"). The principal
executive offices of the Issuer are located at 8955 Guilford Road, Columbia,
Maryland 21046.
ITEM 2. IDENTITY AND BACKGROUND.
-----------------------
This Schedule 13D is filed by British Nuclear Fuels plc
("Parent"), a company incorporated under the laws of England and Wales; and BNFL
Inc. ("BNFL"), a Delaware corporation which is a wholly-owned subsidiary of
Parent. The principal business of Parent and BNFL is nuclear fuels treatment,
handling and storage. Parent is wholly-owned by the British governme nt.
The address of the principal business and principal office of
Parent is Risley, Warrington, Cheshire WA3 6AS, United Kingdom. The address of
the principal business and principal office of BNFL is 1776 I St., NW, Suite
750, Washington, DC 20006.
Parent and BNFL are sometimes collectively referred to herein as
the "Reporting Persons," and are making this filing jointly pursuant to a Joint
Filing Agreement, a copy of which is filed as Exhibit 1 to this Schedule 13D.
For information in response to General Instruction C to Schedule 13D with
respect to the executive officers and directors of the Reporting Persons,
reference is made to Schedule I annexed hereto and incorporated herein by
reference.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
-------------------------------------------------
The Reporting Persons became the beneficial owners of 1,381,575
shares of Common Stock as a result of entering into a Convertible Debenture
dated November 7, 1995, a copy of which is filed as Exhibit 2 to this Schedule
13D (the "Convertible Debenture Agreement"), pursuant to which the Issuer
granted BNFL the right to acquire up to 1,381,575 shares of Common Stock (the
"Option Stock") upon conversion of the debenture to common stock. The
consideration for the conversion right was a $10,000,000 loan from BNFL to the
Issuer on the date of the Convertible Debenture Agreement, which is convertible
for five years into the Option Stock. There will be no consideration payable to
convert, other than conversions of the repayment obligation of the Issuer into
shares of Option Stock.
The Convertible Debenture Agreement included at Exhibit 2 is
hereby incorporated herein by reference in its entirety, and can be referred to
for additional
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<PAGE>
information concerning the consideration.
ITEM 4. PURPOSE OF TRANSACTION.
----------------------
The purpose of the transaction was the infusion of capital into
the Issuer. The Reporting Persons' purpose in acquiring the securities of the
Issuer (should they choose to do so) is for investment and possible resale at a
later date, but not for the purpose of acquiring control of, or effecting any
material changes in the makeup of the Board of Directors of, the Issuer/1/. In
connection with such possible resale, the Convertible Debenture Agreement calls
for BNFL and GTSD to enter into a registration rights agreement (the
"Registration Rights Agreement"), pursuant to which BNFL would have certain
demand and piggy-back registration rights which it may use in order to resell
some or all of the Common Stock it may acquire upon conversion of the Debenture.
The Registration Rights Agreement is included as an exhibit to Exhibit 2 hereto,
and is hereby incorporated herein by reference in its entirety, and can be
referred to for additional information concerning the registration rights.
Except as otherwise referenced herein, the Reporting Persons
have no plans or proposals which relate to or would result in (a) the
acquisition by any person of additional securities of the Issuer, or the
disposition of securities of the Issuer; (b) an extraordinary corporate
transaction involving the Issuer or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of the Issuer or any of its
subsidiaries; (d) any material change in the present board of directors or
management of the Issuer/1/; (e) any other material change in the present
capitalization or dividend policy of the Issuer; (f) any other material change
in the Issuer's business or corporate structure; (g) changes in the Issuer's
charter, bylaws or instruments corresponding thereto or other actions which may
impede the acquisition of the Issuer by any person; (h) causing a class of
securities of the Issuer to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; (i) a class of equity securities of
the Issuer becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934; or (j) any action similar to
any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
------------------------------------
(a) The Reporting Persons beneficially own, or are deemed to
beneficially own, 1,381,575 shares of Common Stock, representing 13.4% of the
class of such securities.
___________________________
/1/ However, a Teaming Agreement entered into by and between BNFL and GTSD
on November 7, 1995 gives BNFL the right to have one observer to, or
director on, the Board of Directors of GTSD. A copy of the Teaming
Agreement is included at Exhibit 3.
-5-
<PAGE>
(b) The responses of the Reporting Persons set forth above
in Items 7 to 11 of the cover pages of this Schedule 13D which relate to shares
of Common Stock beneficially owned by the Reporting Persons are incorporated
herein by reference.
(c) Except as described in this Schedule 13D, no transaction
in the Common Stock has been effected by the Reporting Persons during the past
sixty (60) days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
-------------------------------------------------------------
RESPECT TO SECURITIES OF THE ISSUER.
-----------------------------------
BNFL may resell shares of Common Stock in the future, either
pursuant to the Registration Rights Agreement (see item 4, above), or pursuant
to available exemption for such resale under the Securities Act of 1933, as
amended.
Except as otherwise referenced in this Schedule 13D, there are
no contracts, arrangements, understandings or relationships (legal or otherwise)
between the Reporting Persons and any other person with respect to any
securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
--------------------------------
1. Agreement between Parent and BNFL in relation to the joint
filing of this Schedule 13D.
2. Convertible Debenture Agreement.
3. Teaming Agreement.
-6-
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
STATEMENT is true, complete and correct.
Dated: November 7, 1995 BNFL Inc.
By: /s/ Dennis C. Fransen
_____________________________________
Name/Title:
Dennis C. Fransen
Vice President, Finance; Treasurer
Dated: November 7, 1995 BRITISH NUCLEAR FUELS plc
By: /s/ Ross A.N. Chiese
_____________________________________
Name/Title:
Ross A.N. Chiese
Group Finance Director
-7-
<PAGE>
Schedule I to Schedule 13D
--------------------------
SCHEDULE 13D
Information with Respect to Executive Officers and Directors of the Reporting
- -----------------------------------------------------------------------------
Persons
- -------
The following sets forth as to each of the executive officers and
directors of the Reporting Persons: his name; his business address; and his
present principal occupation or employment and the name, principal business and
address of any corporation or other organization in which such employment is
conducted.
Unless otherwise specified below, the principal employer of each
individual listed below under the heading "British Nuclear Fuels plc" is British
Nuclear Fuels plc ("Parent"), and each such individual is a citizen of England.
Unless otherwise specified below, the principal employer of each
individual listed below under the heading "BNFL Inc." is BNFL Inc. ("BNFL"), and
each such individual is a citizen of the United States.
The address of Parent is Risley, Warrington, Cheshire WA3 6AS
(United Kingdom). The address of BNFL is 1776 I St., NW, Suite 750, Washington,
DC 20006.
To the knowledge of the Reporting Persons, during the last five
years none of the individuals so listed has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors), and no such
person was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which he was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities law or finding any
violation with respect to such laws.
Unless otherwise specified below, to the knowledge of the
Reporting Persons no such individual is the beneficial owner of any shares of
Common Stock, par value $.01 per share ("Common Stock"), of GTS Duratek, Inc.
(the "Issuer"), no transaction in the Common Stock has been effected by such
individual during the past sixty (60) days, and there are no contracts,
arrangements, understandings or relationships (legal or otherwise) between such
individual and any person with respect to any securities of the Issuer.
-8-
<PAGE>
British Nuclear Fuels plc
- -------------------------
(a) Executive Directors
-------------------
Mr. John R.S. Guinness CB
Chairman
British Nuclear Fuels plc
65 Buckingham Gate
London SW1E 6AP
United Kingdom
Dr. Gregg G. Butier
Deputy Chief Executive
British Nuclear Fuels plc
Risley, Warrington
Cheshire WA3 6AS
United Kingdom
Mr. L. Neville Chamberlain CBE
Chief Executive
British Nuclear Fuels plc
Risley, Warrington
Cheshire WA3 6AS
United Kingdom
Mr. Ross A. N. Chiese
Group Finance Director
British Nuclear Fuels plc
Risley, Warrington
Cheshire WA3 6AS
United Kingdom
Mr. Ken J. Jackson
Director, BNFL Engineering
The Victoria
Quays Loop Road
Harbor City
Salford Quays
Manchester M5 2SP
United Kingdom
-9-
<PAGE>
Mr. Graham L. Watts
Director, International Group
British Nuclear Fuels plc
Risley, Warrington
Cheshire WA3 6AS
United Kingdom
(b) Non-Executive Directors
-----------------------
Ms. Kate M. H. Mortimer
Advisor
UK Know How Fund
Lower Corscombe
Okehampton
Devon EX20 1SD
Mr. Ray R. Knowland CBE
Director
Laporte plc
Herons Wake
Flowers Hall
Pangbourne,
Reading, RG8 7BD
Mr. D. John S. Roques
High Down,
Cokes Lane,
Chalfont St. Giles,
Buckinghamshire HP8 4TQ
Principal Employment:
Senior Partner and Chief Executive
Touche Ross & Co.
Stonecutter Court,
1 Stonecutter Street,
London EC4A 4TR
-10-
<PAGE>
Sir Norman Wooding CBE
Chairman, East European Trade Council
Deputy Chairman, Royal London Insurance
Chairman, EIS Group plc
Boss Lane House
Boss Lane
Hughenden
High Wycombe HP14
United Kingdom
BNFL Inc.
- --------
(a) Executive Officers
------------------
Mr. Rolland A. Langley
President and Chief Executive Officer
1776 I Street NW, Suite 750
Washington, DC 20006
Mr. James R. Janis
Executive Vice President
1776 I Street NW, Suite 750
Washington, DC 20006
Mr. Phillip Bradbury
Vice President, Facilities Ownership
Management and Operation
9302 Lee Highway, Suite 950
Fairfax, VA 22031-1207
Mr. Stuart G. Donn
Vice President
1981 Snyder Road, Suite 2
Richland, WA 99352
Mr. Dennis C. Fransen
Vice President, Finance; and Treasurer
9302 Lee Highway, Suite 950
Fairfax, VA 22031-1207
-11-
<PAGE>
Mr. John Graham
Vice President, Environmental Health
and Safety/Quality Assurance
5655 S. Yosemite Street, Suite 100
Englewood, CO 80111
Mr. Joe La Grone
Vice President
9302 Lee Highway, Suite 950
Fairfax, VA 22031-1207
Mr. Richard H. Peebles
Vice President
9302 Lee Highway, Suite 950
Fairfax, VA 22031-1207
Mr. B.J. Reckman
Vice President
9302 Lee Highway, Suite 950
Fairfax, VA 22031-1207
Mr. Stanley L. Reid
Vice President, Corporate External Affairs
1776 I Street NW, Suite 950
Washington, DC 20006
Mr. John R. Smith
Vice President
9302 Lee Highway, Suite 950
Fairfax, VA 22031-1207
Mr. Alvin J. Shuttleworth
Secretary
c/o British Nuclear Fuels plc
Risley, Warrington
Cheshire WA3 6AS
United Kingdom
Mr. K. Edward Newkirk
Assistant Secretary
BNFL Inc.
9302 Lee Highway, Suite 950
Fairfax, VA 22031-1207
-12-
<PAGE>
(b) Directors
---------
Mr. Ross A. N. Chiese
Oaklands
31 Nicholas Way
Northwood
Middlesex HA6 2TR
United Kingdom
Principal Employment:
Group Finance Director
British Nuclear Fuels plc
Risley, Warrington
Cheshire WA3 6AS
United Kingdom
Mr. L. Neville Chamberlain CBE
Spring House
56 Blinstage Road
Heswal
Wirrall L60 1XG
United Kingdom
Principal Employment:
Chief Executive
British Nuclear Fuels plc
Risley, Warrington
Cheshire WA3 6AS
United Kingdom
Mr. Graham L. Watts
Westridge House
Blandyshill
Kintbury
Berkshire RG15 OUF
United Kingdom
Principal Employment:
Director, International Group
British Nuclear Fuels plc
Risley, Warrington
Cheshire WA3 6AS
United Kingdom
-13-
<PAGE>
Mr. Edward E. Kinter
P.O. Box 682
Bradley Hill Road
Norwich, VT 05055
(Retired Executive Vice
President of General Public
Utilities Nuclear Corporation)
Mr. Rolland A. Langley
1341 28th Street, NW
Washington, DC 20007
Principal Employment:
President and CEO
BNFL Inc.
1776 I Street NW, Suite 950
Washington, DC 20006
The Honorable
Elliott L. Richardson
1100 Crest Lane
McLean, VA 22101
Principal Employment:
Senior Resident Partner
Milbank, Tweed, Hadley & McCloy
1825 I Street NW, Suite 1100
Washington, DC 20006
The Honorable
James R. Schlesinger
3601 North 26th Street
Arlington, VA 22207
Principal Employment:
Senior Advisor
Lehman Brothers
800 Connecticut Avenue NW, Suite 1200
Washington, DC 20006-2709
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<PAGE>
The Lady Shuttleworth
Leck Hall
by Carnforth
Lancashire LA6 2JF
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<PAGE>
Exhibit Index
-------------
Exhibit Page
------- ----
1. Joint Filing Agreement
2. Convertible Debenture Agreement
3. Teaming Agreement
-16-
<PAGE>
Exhibit 1
SCHEDULE 13D
JOINT FILING AGREEMENT
----------------------
In accordance with Rule 13d-1(f) under the Securities Exchange Act of 1934,
as amended, the undersigned hereby agree to the joint filing on behalf of each
of them of the Schedule 13D to which this Agreement is an Exhibit, and agree
that this Agreement be included as an Exhibit to such joint filing. This
Agreement may be executed in any number of counterparts all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement this 7th
day of November, 1995.
BRITISH NUCLEAR FUELS plc
By: /s/ Ross A.N. Chiese
_____________________________________
Name/Title:
Ross A.N. Chiese
Group Finance Director
BNFL INC.
By: /s/ Dennis C. Fransen
_____________________________________
Name/Title:
Dennis C. Fransen
Vice President, Finance; Treasurer
<PAGE>
Exhibit 2
---------
THIS CONVERTIBLE DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR THE SECURITIES ACT OF ANY STATE. THIS
CONVERTIBLE DEBENTURE HAS BEEN ISSUED IN RELIANCE ON THE EXEMPTIONS FROM
REGISTRATION CONTAINED IN THE ACT AND IN THE SECURITIES ACTS OF APPLICABLE
STATES AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO EFFECTIVE
REGISTRATION UNDER SUCH ACTS OR IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH
ACTS.
GTS DURATEK, INC.
CONVERTIBLE DEBENTURE
---------------------
$10,000,000.00 November 7, 1995
Columbia, Maryland
FOR VALUE RECEIVED, GTS DURATEK, INC., a Delaware corporation
("Duratek"), GENERAL TECHNICAL SERVICES, INC., a Maryland corporation ("GTS"),
and GTS INSTRUMENT SERVICES INCORPORATED, a Maryland corporation ("GTSIS"),
(Duratek, GTS and GTSIS are hereinafter collectively referred to as the
"Borrower"), jointly and severally promise to pay to the order of BNFL Inc., a
Delaware corporation (the "Holder"), the principal sum of TEN MILLION DOLLARS
($10,000,000) (the "Principal Amount"), pursuant to the terms and subject to the
conditions set forth herein.
The Holder agrees that the payment of principal, interest and all other
fees and charges in connection with this Debenture is hereby expressly
subordinated in right of payment to the prior payment of principal, interest and
all other fees and charges in connection with any Senior Debt. For purposes of
this Debenture, the term "Senior Debt" shall mean any indebtedness of the
Borrower for money borrowed from banks, including without limitation First
Fidelity Bank, N.A., or other institutional lenders, existing on the date hereof
or hereafter created or incurred, which by its terms is senior to this Debenture
and is secured by any of the assets of the Borrower; provided, however, that the
Holder shall have the authority to negotiate in good faith and execute any
documents required by the banks or institutional lenders in respect of such
subordination.
The following terms shall apply to this Debenture:
Section 1. Maturity Date. Unless sooner paid in full, the Borrower
-------------
promises to pay to the Holder the outstanding and unpaid balance of the
Principal Amount, together with all accrued and unpaid interest thereon and any
late charges, costs, expenses, fees and sums, in full on or before November 7,
2005 (the "Maturity Date"), unless the Holder has converted this Debenture into
the Borrower's common stock pursuant to Section 11 below.
Section 2. Interest Rate. From the date hereof until November 7,
-------------
2000 (the "Initial Period Termination Date," and such period shall be referred
to as the "Initial Period"), interest shall accrue on the unpaid balance of the
Principal Amount at the floating and fluctuating interest rate per annum equal
to the one (1) year London Interbank Offered Rate ("LIBOR Rate") as
<PAGE>
quoted in the "Money Rates" column of the Wall Street Journal on the first
-------------------
business day of each calendar quarter or, if such day is not a business day or
if the specified rate is not so quoted in the Wall Street Journal, then the next
-------------------
succeeding business day when such specified rate is quoted. The LIBOR Rate so
quoted pursuant to the preceding sentence shall apply until the LIBOR Rate is
determined at the beginning of the next succeeding calendar quarter. On the
Initial Period Termination Date, all accrued and unpaid interest on the unpaid
balance of the Principal Amount during the Initial Period shall be capitalized
and thereafter treated as principal by adding such amount (the "Capitalized
Interest Amount") to the unpaid balance of the Principal Amount, and the total
of such unpaid balance of the Principal Amount plus the Capitalized Interest
Amount is referred to herein as the "Adjusted Principal Balance," and the term
"Principal Amount" shall be deemed to refer to the Adjusted Principal Balance at
all times on and after the Initial Period Termination Date. From the Initial
Period Termination Date until all sums due and owing hereunder have been paid in
full, interest shall accrue upon the Adjusted Principal Balance at the LIBOR
Rate. Interest shall be calculated on the basis of a three hundred sixty (360)
day year applied to the actual number of days that the Principal Amount or the
Adjusted Principal Balance, or any portion thereof, as the case may be, is
outstanding. For purposes of this Debenture, the term "business day" shall mean
any day, except a Saturday, Sunday or legal holiday, on which commercial banking
institutions are open for business in the State of Maryland. Notwithstanding
anything contained herein to the contrary, all interest shall compound annually.
Section 3. Payment. The Adjusted Principal Balance, along with
--------
accrued interest thereon, shall be paid in five (5) annual installments
commencing on November 7, 2001 and continuing on the next four (4) anniversaries
of such date, with the last such payment date being the Maturity Date (each such
date shall be referred to as a "Payment Date"). The amount of such payment for
the first four (4) Payment Dates shall be determined by the Borrower, in its
sole discretion, provided that each such payment shall not be less than One
Million Dollars ($1,000,000.00) and the amount of the fifth and final payment on
the Maturity Date shall be equal to the outstanding and unpaid balance of the
Adjusted Principal Balance together with all accrued and unpaid interest
thereon, and any late charges, costs, expenses, fees and other sums due
hereunder. If any amounts due under this Debenture are to be paid to the Holder
on a day which is not a business day, then such amounts shall be due on the next
following day which is a regular business day.
Section 4. Application of Payments. All payments made hereunder
------------------------
shall be applied first to late charges, costs, expenses, fees and other sums
owing to the Holder, pursuant to this Debenture, next to accrued and unpaid
interest, and then to the unpaid Principal Amount.
Section 5. Manner of Payment. All payments of the unpaid balance of
------------------
the Adjusted Principal Balance and interest thereon, and all other sums due
hereunder, shall be paid by wire transfer of immediately available funds, in
lawful money of the United States of America, during regular business hours to
such account in the United States as the Holder may at any time or
- 2 -
<PAGE>
from time to time designate in writing to the Borrower effective on five (5)
days prior written notice to the Borrower.
Section 6. Events of Default; Acceleration. Any time after the
--------------------------------
occurrence of an Event of Default (as hereinafter defined), the Holder may, in
the Holder's sole and absolute discretion, declare the entire unpaid balance of
the Principal Amount, plus accrued interest and other sums due hereunder, to be
immediately due and payable. The occurrence of any of the following shall be an
event of default ("Event of Default") hereunder: (i) the failure of the Borrower
to pay Holder when due any amount due hereunder, and such failure to pay is not
cured within seven (7) calendar days, or the breach of any other material
provision of this Debenture that is not cured by the Borrower within twenty (20)
calendar days of receipt of written notice of such breach provided by the Holder
to the Borrower, (ii) the occurrence of a default under any Senior Debt
instrument that is not waived by the senior lender thereunder or cured by the
Borrower within thirty (30) calendar days after notice of the default by the
holder of the Senior Debt, (iii) the filing of any petition under the U.S.
Bankruptcy Code, in effect from time to time, or any similar Federal or state
statute by or against the Borrower or the failure of the Borrower generally to
pay its debts as such debts become due, (iv) the filing of an application for
the appointment of a receiver for, the making of a general assignment for the
benefit of creditors by, or the insolvency of, the Borrower, or (v) the
Borrower's liquidation, dissolution, termination of existence or cessation of
the conduct of its business operations, or (vi) the material breach of the
provisions of Article XII of the Teaming Agreement by and between Duratek and
the Holder dated November 7, 1995 (the "Teaming Agreement").
Section 7. Default Interest Rate. Upon the occurrence of, and
----------------------
during the continuance of, an Event of Default, the rate of interest accruing on
the unpaid balance of the Principal Amount and accrued interest thereon, shall
increase by the lesser of (i) two (2) percentage points per annum above the rate
of interest otherwise applicable and (ii) the maximum amount permitted by law,
independent of whether the Holder elects to accelerate the unpaid balance of the
Principal Amount as a result of such Event of Default.
Section 8. Interest Rate After Judgment. If judgment is entered
-----------------------------
against the Borrower on this Debenture, the amount of the judgment entered
(which may include the Principal Amount, interest, default interest, late
charges, fees, expenses and costs) shall bear interest at the lesser of (i) the
highest rate authorized under this Debenture and (ii) the maximum amount
permitted by law, as of the date of entry of the judgment.
Section 9. Expenses of Collection. Should this Debenture be
------------------------
referred to an attorney for collection, and whether or not a suit has been
filed, the Borrower shall pay all of the Holder's actual costs, fees (including
reasonable attorney's fees) and expenses resulting from such referral.
Section 10. Waiver of Protest. The Borrower, and all parties to this
------------------
Debenture, whether maker, endorser, or guarantor, waive presentment, notice of
dishonor and protest.
- 3 -
<PAGE>
Section 11. Conversion of Debenture.
------------------------
11.1 Right to Convert. Subject to the provisions of this
-----------------
Section 11.1 and upon compliance with the provisions of this Debenture, the
Holder of this Debenture shall have the right (the "Conversion Right"), at the
Holder's option, at any time from the date hereof until November 7, 2000 (the
"Exercise Period") to cause the conversion of all, but not less than all, of the
unpaid Principal Amount and all accrued interest thereon into a total of
1,381,575 fully paid and nonassessable shares of Common Stock (as defined below)
of the Borrower, subject to adjustment pursuant to Section 11.5 below; provided,
however, that should there be any substantial U.S. regulatory obstacle to the
receipt by BNFL of all such shares, then BNFL shall be entitled to convert less
than all of the unpaid Principal Amount and accrued interest thereon in order to
receive the maximum number of shares in such conversion (the "First Conversion")
as may be permitted notwithstanding such obstacle (the "Maximum Convertible
Number"), and in such case, the remainder of the Principal Amount and accrued
interest thereon not so converted shall be treated thereafter as follows: the
outstanding principal due under this Debenture shall be reset, to be an amount
(the "New Principal Amount") equal to (1) the Principal Amount plus accrued but
unpaid interest immediately prior to the First Conversion, minus (2) the product
of (x) the Principal Amount plus all accrued but unpaid interest immediately
prior to the First Conversion, multiplied by (y) the Maximum Convertible Number,
divided by (z) 1,381,575 (as such number may be adjusted pursuant to Section
11.5 hereof). In such event, interest shall accrue on the New Principal Amount
and the Exercise Period will be extended until not later than the Maturity Date
for the conversion of the New Principal Amount and all accrued and unpaid
interest thereon, provided that the Holder will use its best efforts to
eliminate such U.S. regulatory obstacle and to convert such New Principal Amount
into Common Stock (also referred to herein as a "Conversion Right") as soon as
legally practicable, and the conversion rights hereunder shall terminate 90 days
after receipt of applicable regulatory approval if not previously exercised. If
the New Principal Amount is not converted hereunder into shares of Common Stock
prior to the Maturity Date, the Borrower shall pay in full the outstanding and
unpaid balance of the New Principal Amount, together with all accrued and unpaid
interest thereon and any late charges, costs, expenses, fees and sums in full on
the Maturity Date. Following the exercise in full of the Conversion Right, the
Holder shall have no further right to collect the Principal Amount or any
accrued interest thereon.
11.2 Exercise of Conversion Rights. In order to exercise the
------------------------------
Conversion Right in accordance with Section 11.1, the Holder shall send notice
of the exercise of such Conversion Right to the Borrower (the "Conversion
Notice") and shall simultaneously present this Debenture, or an affidavit of
loss with appropriate provision for indemnification by the Holder, to the
Borrower at the office of the Borrower. As soon as practicable after the receipt
of the Conversion Notice and the presentation of this Debenture (or such
affidavit and indemnification), the Borrower shall issue and shall deliver to
the Holder a certificate or certificates for the number of full shares of Common
Stock issuable upon the conversion of this Debenture. Such conversion shall be
deemed to have been effected immediately prior to the close of business on
- 4 -
<PAGE>
the date on which the Conversion Notice and this Debenture (or such affidavit
and indemnification) shall have been received by the Borrower, and at such time
the rights of the Holder under this Debenture shall cease and the Holder shall
be deemed to have become the registered owner of record of the shares
represented thereby; provided however that should the Holder be able to convert
only the Maximum Convertible Number, then the Holder shall continue to hold this
Debenture until the earlier of (i) the time the Holder is able to convert (and
does convert) the balance of this Debenture into shares of Common Stock, or (ii)
the Maturity Date.
11.3 No Fractional Shares. No fractional shares or scrip
---------------------
representing fractional shares shall be issued upon the exercise of the
Conversion Right. The number of shares so issued shall be only a whole number
obtained by rounding up or down to the nearest whole number for any fractions
resulting from the calculation of the number of shares to be delivered.
11.4 Notice of Certain Actions. In case at any time:
--------------------------
(a) the Borrower shall declare any dividend upon its
common stock, $.01 par value per share (the "Common Stock"), payable in
securities or make any special dividend or other distribution (other than a cash
dividend to the holders of its Common Stock);
(b) the Borrower shall offer for subscription pro rata
to the holders of its Common Stock any additional securities of any class or
other rights;
(c) there shall be any capital reorganization, or
reclassification of the capital stock of the Borrower (other than the conversion
of the Borrower's outstanding 8% Cumulative Redeemable Preferred Stock), or
consolidation or merger of the Borrower, or sale of all or substantially all its
assets;
(d) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Borrower; or
(e) the Borrower shall enter into an agreement or adopt
a plan for the purpose of effecting a consolidation, merger, or sale of all or
substantially all of its assets;
then, in any one or more of said cases, the Borrower shall give written notice
to the Holder of the date on which (i) the books of the Borrower shall close or
a record shall be taken for such dividend, distribution or subscription rights,
or (ii) such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up shall take place, as the case may be.
Such notice shall also specify the dates as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, or winding up, as the
case may be. Such written notice shall be given at least 30 days prior to the
action
- 5 -
<PAGE>
in question and not less than 30 days prior to the record date or the date on
which the Borrower's transfer books are closed in respect thereto.
11.5 Adjustment to Number of Shares Issued Upon Exercise of
------------------------------------------------------
Conversion Right. In the event that the Borrower shall (i) declare a dividend
- ----------------
or make a distribution on its outstanding shares of Common Stock in shares of
Common Stock, (ii) subdivide or reclassify its outstanding shares of Common
Stock into a greater number of shares or (iii) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares, the
aggregate number of shares of Common Stock into which this Debenture is
convertible shall be proportionately adjusted as of the effective date of such
event by multiplying the number of shares of Common Stock issuable upon the
conversion of this Debenture by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately following such event
and the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior thereto.
11.6 Reorganization, Reclassification, Consolidation, Merger or
----------------------------------------------------------
Sale. Any capital reorganization, reclassification, consolidation, merger or
- ----
sale of all or substantially all of the Borrower's assets to another person
which is effected in such a way that holders of Common Stock are entitled to
receive (either directly or upon subsequent liquidation) stock, securities or
assets with respect to or in exchange for Common Stock is referred to herein as
an "Organic Change." Prior to the consummation of any Organic Change, the
Borrower will make provisions to insure that the Holder will thereafter have the
right to acquire and receive, in lieu of or in addition to the shares of Common
Stock immediately theretofore acquirable and receivable upon the conversion of
this Debenture, securities or assets as the Holder would have received in
connection with such Organic Change if the Holder had converted this Debenture
immediately prior to such Organic Change. The Borrower shall not effect any such
consolidation, merger or sale, unless prior to the consummation thereof, the
successor corporation (of other than the Borrower) resulting from consolidation
or merger or the corporation purchasing such assets assumes, by written
instrument, the obligation to deliver to the Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to acquire.
11.7 Reservation of Shares. The Borrower shall at all times
----------------------
reserve and keep available out of its authorized Common Stock, solely for the
purpose of issue upon conversion of this Debenture as herein provided, such
number of shares of Common Stock as shall then be issuable upon the exercise of
the Conversion Right. The Borrower covenants that all such Common Stock which
shall be so issuable shall, upon the conversion of this Debenture as herein
provided, be duly and validly issued and fully paid and nonassessable by the
Borrower.
11.8 Registration Rights for Issued Shares. Simultaneous with
-------------------------------------
the issuance of the Common Stock upon the exercise by the Holder of the
Conversion Right, the Borrower and the Holder shall enter into a registration
rights agreement substantially in the form of the agreement attached hereto as
EXHIBIT A.
- 6 -
<PAGE>
11.9 Taxes. The issuance of certificates for shares upon
-----
conversion of this Debenture shall be made without charge to the holder of this
Debenture for any issuance tax in respect thereto.
Section 12. Modification; Waiver. No modification, change, waiver or
---------------------
amendment of this Debenture shall be effective unless in writing signed by the
Holder and the Borrower. No delay on the part of the Holder in exercising any
right or remedy hereunder shall operate as a waiver thereof, and no single or
partial exercise of any such right or remedy shall preclude other or future
exercise thereof, or the exercise of any other right or remedy. Waiver by the
Holder of any default by the Borrower or any other party shall not constitute a
waiver of any subsequent defaults, but shall be restricted to the default so
waived. All rights and remedies of the Holder hereunder are irrevocable and
cumulative, and not alternate or exclusive, and shall be in addition to all
rights and remedies given in any other instrument or by any laws, whether now
existing or hereafter enacted.
Section 13. Providing Information to the Holder. For as long as this
-----------------------------------
Debenture is outstanding, the Borrower shall provide to the Holder annual
audited and quarterly financial statements of the Borrower on a consolidated
basis. This provision shall be deemed satisfied by the Borrower providing to the
Holder its Annual Report on Form 10-K and its quarterly reports on Form 10-Q,
for as long as the Borrower is required to file such reports pursuant to the
Securities Exchange Act of 1934 (the "1934 Act"), no later than the date such
reports are made available to the public. If the Borrower is not required to
file such report pursuant to the 1934 Act, the quarterly financial statements of
the Borrower will be provided to the Holder within 45 days of the end of the
quarter for which they relate and the annual audited financial statements of the
Borrower will be provided to the Holder within 90 days of the end of the fiscal
year to which they relate. The Borrower shall promptly provide to the Holder
copies of any notices of default or notices indicating noncompliance with any
terms of the Senior Debt that it receives from any holder of Senior Debt.
Section 14. Representations and Warranties of GTS and GTSIS.
-----------------------------------------------
14.1 GTS hereby represents and warrants to the Holder as of the
date hereof as follows:
(i) GTS is a corporation duly incorporated and validly existing
under the laws of the State of Maryland.
(ii) GTS has all requisite corporate power and authority to enter
into this Debenture and carry out and perform its obligations hereunder.
- 7 -
<PAGE>
(iii) The execution, delivery and performance of this Debenture
has been duly authorized and approved by all necessary corporate action and this
Debenture, when duly executed and delivered by GTS, will constitute a valid and
legally binding obligation of GTS, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to the rights of creditors generally.
(iv) The execution and performance of this Debenture does not and
will not (i) violate GTS's articles of incorporation or bylaws, or the terms of
any judgment, decree or order of any court or administrative authority or the
terms of any material agreement to which it is a party or by which it is bound
or (ii) require the filing, declaration or registration with, or permit, consent
or approval of, or the giving of any notice to, any governmental authority or
third party, excluding those that have already been obtained prior to the date
hereof.
(v) There is no litigation, arbitration, mediation or other
investigation or proceeding pending or, to the best of GTS's knowledge,
threatened or in prospect, against GTS with respect to the transactions
contemplated by this Debenture.
14.2 GTSIS hereby represents and warrants to the Holder as of the
date hereof as follows:
(i) GTSIS is a corporation duly incorporated and validly existing
under the laws of the State of Maryland.
(ii) GTSIS has all requisite corporate power and authority to
enter into this Debenture and carry out and perform its obligations hereunder.
(iii) The execution, delivery and performance of this Debenture
has been duly authorized and approved by all necessary corporate action and this
Debenture, when duly executed and delivered by GTSIS, will constitute a valid
and legally binding obligation of GTSIS, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to the rights of creditors generally.
(iv) The execution and performance of this Debenture does not and
will not (i) violate GTSIS's articles of incorporation or bylaws, or the terms
of any judgment, decree or order of any court or administrative authority or the
terms of any material agreement to which it is a party or by which it is bound
or (ii) require the filing, declaration or registration with, or permit, consent
or approval of, or the giving of any notice to, any governmental authority or
third party, excluding those that have already been obtained prior to the date
hereof.
(v) There is no litigation, arbitration, mediation or other
investigation or proceeding pending or, to the best of GTSIS's knowledge,
threatened or in prospect, against GTSIS with respect to the transactions
contemplated by this Debenture.
- 8 -
<PAGE>
Section 15. Right of Offset. Notwithstanding anything herein to the
---------------
contrary, in the event that the Holder has defaulted on its obligation to pay
the Article XII and Non-Competition Fee (as defined in the Teaming Agreement),
to Duratek pursuant to Article III of the Teaming Agreement, then the Borrower
has the right to offset any amounts due to Holder hereunder until such time as
the payment default with respect to the Article XII and Non-Competition Fee has
been cured by the Holder or waived by the Borrower. The offset by the Borrower
of any amounts due to Holder pursuant to this Section 15 shall not constitute an
Event of Default under Section 6 of this Debenture.
Section 16. Invalidity of Any Part. If one or more provisions of this
-----------------------
Debenture shall be found to be illegal, invalid or unenforceable under any
applicable law, then such contravention or invalidity shall not invalidate the
entire Agreement. Such provision shall be deemed to be modified consistent with
the intent of the parties to the extent necessary to render it legal, valid and
enforceable, and if no such modification shall render it legal, valid and
enforceable, then this Agreement shall be construed as if not containing the
provision held to be invalid, and the rights and obligations of the parties
shall be construed and enforced accordingly.
Section 17. Assignment. This Debenture may not be assigned by the
-----------
Holder or the Borrower at any time, in whole or in part, without the approval of
the other party.
Section 18. Time of the Essence. Time is of the essence to this
-------------------
Debenture and to all obligations of the Borrower hereunder.
Section 19. Notices. Except as otherwise expressly stated, all
-------
notices required to be given or which may be given under this Agreement shall be
in writing and shall be deemed given upon the earlier of (i) when it is
personally delivered, (ii) three (3) days after having been mailed by certified
mail, postage prepaid, return receipt requested, (iii) two (2) days after having
been sent by recognized overnight delivery service or (iv) one day after having
been sent by facsimile transmission, addressed as follows:
if to:
(a) Borrower:
GTS Duratek, Inc.
8955 Guilford Road, Suite 200
Columbia, Maryland 21046
Attn: Robert E. Prince, President and Chief Executive Officer
Telecopy No.: (301) 621-8211
- 9 -
<PAGE>
(b) Holder:
BNFL Inc.
9302 Lee Highway, Suite 950
Fairfax, Virginia 22031
Attn: K. Edward Newkirk, General Counsel
Telecopy No.: (703) 359-0442
Section 20. Governing Law. This Debenture is executed and delivered
--------------
in, and shall be governed by and construed under the laws of, the State of
Maryland. The Borrower and the Holder agree that all claims of any kind arising
from or relating to this Debenture shall be brought in a court of competent
jurisdiction in the State of Maryland and agree to the jurisdiction of the
Maryland courts (including the Unites States District Court for the District of
Maryland) in all such matters. Both the Borrower and the Holder waive all
objections to venue.
IN WITNESS WHEREOF, the Borrower has caused this Debenture to be executed
in its name, under its seal, by its duly authorized officer on its behalf, the
day and year first above written.
ATTEST: GTS DURATEK, INC.
_____________________________ By:__________________________(SEAL)
Diane Brown, Secretary Robert E. Prince, President
ATTEST: GENERAL TECHNICAL SERVICES, INC.
_____________________________ By:__________________________(SEAL)
Diane Brown, Secretary Robert E. Prince, President
ATTEST: GTS INSTRUMENT SERVICES, INC.
_____________________________ By:__________________________(SEAL)
Diane Brown, Secretary Robert E. Prince, President
- 10 -
<PAGE>
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
-------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
___________________, ______ is entered into by and among GTS Duratek, Inc., a
Delaware corporation (the "Company") and BNFL Inc., Delaware corporation
("BNFL").
WHEREAS the Company issued to BNFL a Convertible Debenture dated November
7, 1995 (the "Debenture"), which is convertible into shares of common stock of
the Company, in exchange for BNFL providing $10.0 million to the Company;
WHEREAS in consideration of BNFL providing $10.0 million of capital to
the Company, the Company wishes to provide BNFL the rights described herein;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, the parties hereto agree as follows:
1. Certain Definitions: As used in this Agreement, the following terms
-------------------
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange
----------
Commission, or any other federal agency at the time administering the Securities
Act.
"Common Stock" shall mean the Common Stock, $.Ol par value
------------
per share, of the Company, as constituted as of the date of this Agreement.
"Conversion Shares" shall mean shares of Common Stock issued
-----------------
or issuable upon conversion of the Debenture.
"Exchange Act" shall mean the Securities Exchange Act of
------------
1934, as amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.
"Person" shall include all natural persons, corporations,
------
business trusts, associations, partnerships, limited liability companies, joint
ventures and other legal entities, including government agencies.
<PAGE>
"Registration Expenses" shall mean the expenses so described
---------------------
in Section 5.
"Securities Act" shall mean the Securities Act of 1933, as
--------------
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in
----------------
Section 5.
"Shares" shall mean, collectively, the shares of Common
------
Stock and the Conversion Shares.
2. Required Registration. (a) BNFL shall have a one time right to
---------------------
require the Company, at the Company's expense pursuant to Section 5 hereof, to
register under the Securities Act all or any portion of the Shares held by BNFL
for sale in the manner specified in a written notice from BNFL to the Company.
BNFL shall have one additional right, at its own expense, as provided in Section
5 hereof, to require the Company to register under the Securities Act all or any
portion of the Shares held by it for sale in the manner specified in a written
notice from BNFL to the Company. The only securities which the Company shall be
required to register pursuant hereto shall be shares of Common Stock.
Notwithstanding anything to the contrary contained herein, no request may be
made under this Section 2 either (i) within three months after the effective
date of the most recent registration statement filed by the Company (other than
registration statements on Forms S-4, S-8, or any other form not available for
registering the Shares for sale to the public, or any successor thereto) or (ii)
if less than fifty percent of the Shares held by BNFL is to be registered.
(b) Following receipt of any notice under this Section 2 from
BNFL, the Company shall use its best efforts to register under the Securities
Act, for public sale in accordance with the method of disposition specified in
such notice from BNFL, the number of Shares specified in such notice. If such
method of disposition shall be an underwritten public offering, the Company may
designate the managing underwriter of such offering, subject to the approval of
BNFL, which approval shall not be unreasonably withheld or delayed. The Company
shall be obligated to register Shares pursuant to this Section 2 on two
occasions only for BNFL (one at the expense of BNFL, as provided in Section 5),
provided, however, that each such obligation shall be deemed satisfied only when
- -----------------
a registration statement covering all of the Shares specified in the notice
received as aforesaid,
-2-
<PAGE>
for sale in accordance with the method of disposition specified by the
requesting party, shall have become effective and, if such method of disposition
is a firm commitment underwritten public offering, at least 75% of such Shares
shall have been sold pursuant thereto.
(c) The Company shall be entitled to include in any
registration statement referred to in this Section 2, for sale in accordance
with the method of disposition specified by the requesting party, securities to
be sold by the Company for its own account, except as and to the extent that, in
the opinion of the managing underwriter (if such method of disposition shall be
an underwritten public offering), such inclusion would adversely affect the
marketing of the Shares to be sold. Except for registration statements on Form
S-4, S-8 or another form not available for registering the Shares for sale to
the public, or any successor thereto, the Company will not, without the consent
of the stockholders selling a majority of the Shares in such offering pursuant
to this Section 2, file with the Commission any other registration statement
with respect to its Common Stock, whether for its own account or that of other
stockholders, from the date of receipt of a notice from requesting holders
pursuant to this Section 2 until the completion of the period of distribution of
the securities contemplated thereby as provided in Section 4.
3. Incidental Registration. (a) If the Company at any time (other
------------------------
than pursuant to Section 2 and excluding the Company's current shelf
registration statement on file with the Commission) proposes to register any of
its securities under the Securities Act for sale to the public, whether for its
own account or for the account of other security holders or both (except with
respect to registration statements on Forms S-4, S-8 or another form not
available for registering the Shares for sale to the public, or any successor
thereto), each such time it will give written notice to BNFL of its intention so
to do not less than 10 days prior to the filing of such registration statement.
Upon the written request of BNFL received by the Company within 10 days after
the giving of any such notice by the Company, to register any of its Shares, in
whole or in part, (which request shall state the intended method of disposition
thereof), the Company shall use its best efforts to cause the Shares as to which
registration shall have been so requested to be included in the securities to be
covered by the registration statement proposed to be filed by the Company, all
to the extent requisite to permit the sale or other disposition by such party
(in accordance with its written request) of such Shares so registered. BNFL's
right to have its Shares registered under this Section 3 shall be on a fully
subordinated basis to the Company and on a subordinated basis to The Carlyle
Group and its affiliated entities (collectively, "Carlyle") and to National
-3-
<PAGE>
Patent Development Corporation ("NPD") as described in the next sentence. In the
event that any registration pursuant to this Section 3 shall be, in whole or in
part, an underwritten public offering of Common Stock, the number of Shares to
be included in such an underwriting may be reduced, in whole or in part, if and
to the extent that the managing underwriter shall be of the opinion that such
inclusion would adversely affect the marketing of the securities to be sold by
the Company therein, as follows: none of the Shares owned by Carlyle or NPD
which they intend to include in such registration statement shall be reduced
unless such number would adversely affect the marketing of the securities, in
the opinion of the managing underwriter, and then only to the extent required by
the managing underwriter, and the Shares owned by other selling stockholders
shall be reduced pro rata among such other selling stockholders based upon the
number of Shares owned by such holders, provided, however, that such number of
-----------------
Shares shall not be reduced if any Shares are to be included in such
underwriting for the account of any person other than the Company, Carlyle or
NPD if the Shares to be registered by such other person have not also been
reduced pro rata. Notwithstanding the foregoing provisions, the Company may
withdraw any registration statement referred to in this Section 3 without
thereby incurring any liability to BNFL.
(b) The Company shall be obligated to register Shares pursuant
to this Section 3 on three occasions only for BNFL, provided, however, that such
-----------------
obligation shall be deemed satisfied only when a registration covering at least
50% of the total Shares requested by a party shall have become effective and, if
such method of disposition is a firm commitment underwritten public offering,
all such Shares have been sold pursuant thereto.
4. Registration Procedures. If and whenever the Company is required
-----------------------
by the provisions of Sections 2 or 3 to use its best efforts to effect the
registration of any Shares under the Securities Act, the Company will, as
expeditiously as possible:
(a) within 90 days in the case of an underwritten public
offering and in the case of a non-underwritten public offering, within 30 days
if Form S-3 is used and within 60 days if a form other than Form S-3 is used,
prepare and file with the Commission a registration statement (which, in the
case of an underwritten public offering pursuant to Section 2, shall be on Form
S-3 or other form of general applicability satisfactory to the managing
underwriter selected as therein provided) with respect to such securities and
use its best efforts to cause such registration statement to become and remain
effective for the period of the distribution contemplated thereby (determined as
-4-
<PAGE>
hereinafter provided) and to cause such registration statement to comply as to
form and content in all material respects with the Commission's forms, rules and
regulations;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in paragraph (a) above and comply with the provisions of
the Securities Act with respect to the disposition of all shares covered by such
registration statement in accordance with the sellers' intended method of
disposition set forth in such registration statement for such period and will
furnish to each such seller, prior to the filing thereof, a copy of any such
amendment or supplement to such registration statement or prospectus;
(c) furnish to each seller of Shares and to each underwriter
such number of copies of the registration statement and the prospectus included
in the registration statement (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale or other
disposition of the Shares covered by such registration statement;
(d) use all reasonable efforts to register or qualify the
Shares covered by such registration statement under the securities or "blue sky"
laws of such jurisdictions as the sellers of Shares or, in the case of an
underwritten public offering, the managing underwriter reasonably shall request,
and to keep such registration or qualification in effect for so long as the
period of distribution contemplated thereby (determined hereinafter provided)
and do any and all other acts which may be necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of its Shares covered
by such registration statement, provided, however, that the Company shall not
-----------------
for any such purpose be required to qualify generally to transact business as a
foreign corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such jurisdiction;
(e) use its best efforts to list the Shares covered by such
registration statement with any securities exchange or NASDAQ on which the
Common Stock of the Company is then listed;
(f) immediately notify each seller of Shares and each
underwriter under such registration statement, at any time
-5-
<PAGE>
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event of which the Company has knowledge
as a result of which the prospectus contained in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;
(g) if the offering is underwritten and at the request of any
seller of Shares, use its best efforts to furnish on the date that Shares are
delivered to the underwriters for sale pursuant to such registration: (i) an
opinion dated such date of counsel representing the Company for the purposes of
such registration, addressed to the underwriters and to such seller, stating
that such registration statement has become effective under the Securities Act
and that (A) to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Securities Act, (B) the
registration statement, the related prospectus and each amendment or supplement
thereof comply as to form in all material respects with the requirements of the
Securities Act (except that such counsel need not express any opinion as to
financial statements contained therein), (C) to such other effects as reasonably
may be requested by counsel for the underwriters or by such seller or its
counsel and (D) (not in an opinion but as a negative assurance) that to the best
knowledge of such counsel, such registration statement does not contain a
material misrepresentation or omission to state a material fact necessary to
make the statements therein not misleading; and (ii) a letter dated such date
from the independent public accountants retained by the Company, addressed to
the underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters reasonably may request;
(h) make available for inspection by each seller of Shares, any
underwriter participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by such seller
or underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers,
-6-
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directors and employees to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with such
registration statement; and
(i) provide and cause to be maintained a transfer agent and
registrar for all Shares covered by such registration statement from and after a
date not later than the effective date of such registration statement.
For purposes of Section 4(a), 4(b) and 4(d), the period of distribution
of Shares in a firm commitment underwritten public offering shall be deemed to
extend until each underwriter has completed the distribution of all securities
purchased by it (but no later than 180 days), and the period of distribution of
Shares in any other registration shall be deemed to extend until the earlier of
the sale of all Shares covered thereby and 120 days after the effective date
thereof.
In connection with each registration hereunder, the seller of Shares will
furnish to the Company in writing such information with respect to itself and
its proposed distribution as reasonably shall be necessary in order to assure
compliance with federal and applicable state securities laws.
In connection with each registration pursuant to Sections 2 or 3 covering
an underwritten public offering, the Company and each seller agree to enter into
a written agreement with the managing underwriter selected in the manner herein
provided in such form and containing such provisions as are customary in the
securities business for such an arrangement between such underwriter and
companies of the Company's size and investment stature.
Notwithstanding any provision contained herein to the contrary, the
Company will not be required to register any Shares owned by BNFL pursuant to
Sections 2 or 3, or take any other action, in the event that such registration
or action would, in the Company's reasonable judgment, adversely affect the
registration rights granted to Carlyle and NPD pursuant to that certain
Registration Rights Agreement by and among the Company, Carlyle and NPD dated as
of January 24, 1995.
5. Expenses. All expenses incurred by the Company in complying with
--------
Sections 2 and 3, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses (including counsel fees)
incurred
-7-
<PAGE>
in connection with complying with state securities or "blue sky" laws, fees of
the National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents and registrars, costs of insurance, but excluding any Selling
Expenses, are called "Registration Expenses". All fees and disbursements of
counsel for, or consultants to, BNFL and all underwriting discounts and selling
commissions applicable to the sale of the Shares are called "Selling Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement under Sections 2 or 3, except that BNFL shall be
responsible for all Registration Expenses in connection with a second
registration of its shares as permitted pursuant to Section 2(a) hereof and
except to the extent that any such Registration Expenses must be borne by the
participating sellers in order to permit the sale of shares in any state under
the state securities or "blue sky" laws thereof. All Selling Expenses in
connection with each registration statement under Sections 2 or 3, and any
Registration Expenses borne by the sellers pursuant to the preceding sentence
shall be borne by the participating sellers in proportion to the number of
shares sold by each, or by such participating sellers (including the Company if
it shall be a participating seller) as they may agree.
6. Indemnification and Contribution. (a) In the event of a
--------------------------------
registration of any of the Shares under the Securities Act pursuant to Sections
2 or 3, the Company will indemnify and hold harmless each seller of such Shares
thereunder, each underwriter of such Shares thereunder and each other person, if
any, who controls such seller or underwriter within the meaning of the
Securities Act, against any losses, claims, damages, liabilities or expenses,
joint or several (or actions in respect thereof), to which such seller,
underwriter or controlling person may become subject under the Securities Act,
the Exchange Act, or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company), insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement (the "Registration
Statement") under which such Shares were registered or qualified under the
Securities Act or applicable state securities laws pursuant to Sections 2 or 3,
any preliminary prospectus (the "Preliminary Prospectus") or final prospectus
("Prospectus") contained therein, or any amendment or supplement thereof, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arise out of or are based in whole or in
part on any inaccuracy in the
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representations and warranties of the Company contained in an underwriting
agreement with the underwriters or any failure of the Company to perform its
obligations under such underwriting agreement; and will reimburse each such
seller, each such underwriter and each such controlling person for any legal and
other expenses as such expenses are reasonably incurred by them in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the Company
-----------------
will not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with the information
furnished in writing to the Company by any such seller, any such underwriter or
any such controlling person specifically for use therein.
(b) In the event of a registration of any of the Shares under
the Securities Act pursuant to Sections 2 or 3, each seller of such Shares
thereunder, severally and not jointly, will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of the
Securities Act, each officer of the Company who signs the registration
statement, each director of the Company, each underwriter, each person who
controls any underwriter within the meaning of the Securities Act and each other
seller of Shares thereunder, against any losses, claims, damages, liabilities or
expenses, joint or several, to which the Company or such officer, director,
underwriter, controlling person or other seller may become subject under the
Securities Act, Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation if such settlement is effected with the written consent of seller of
the Shares), insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or arise out
of or are based in whole or in part on any inaccuracy in the representations and
warranties of the seller of such Shares contained in an underwriting agreement
with the underwriters or any failure of such seller to perform its obligations
under such agreement or under law; provided, however, that such seller will be
-----------------
liable hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance
-9-
<PAGE>
upon and in strict conformity with information pertaining to such seller, as
such, furnished in writing to the Company by such seller stated to be
specifically for use in such registration statement and prospectus; provided,
---------
further, however, that the liability of each seller hereunder shall be limited
- ----------------
to the proportion of any such loss, claim, damage, liability or expense which is
equal to the proportion that the public offering price of the shares sold by
such seller under such registration statement bears to the total public offering
price of all securities sold thereunder, but not in any event to exceed the
proceeds received by such seller from the sale of Shares covered by such
registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to such indemnified party for contribution or
otherwise other than under this Section 6 and shall only relieve it from any
liability which it may have to such indemnified party under this Section 6 if
and to the extent the indemnifying party is prejudiced by such omission. In case
any such action shall be brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party,
the indemnifying party will be entitled to participate in and, to the extent it
may wish, jointly with all other indemnifying parties similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and indemnifying party and the indemnified
party shall have reasonably concluded that there may be a conflict between the
positions of the indemnifying party and the indemnified party in conducting the
defense of any such action or that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of
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<PAGE>
more than one separate counsel) or (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement of
the action, in each of which cases the fees and expenses of counsel shall be at
the expense of the indemnifying party.
(d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either (i) any
holder of Shares exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 6 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 6 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling holder or any such controlling
person in circumstances for which indemnification is provided under this Section
6; then, and in each such case, the Company and such holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such holder
is responsible for the portion represented by the percentage that the public
offering price of its Shares offered by the registration statement bears to the
public offering price of all securities offered by such registration statement,
arid the Company is responsible for the remaining portion; provided, however,
-----------------
that, in any such case, (A) no such holder will be required to contribute any
amount in excess of the public offering price of all such Shares offered by it
pursuant to such registration statement; and (B) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person or entity who
was not guilty of such fraudulent misrepresentation.
7. Changes in Common Stock. If, and as often as, there is any change
-----------------------
in the Common Stock by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Common Stock as so changed.
8. Rule 144 Reporting. With a view to making available the benefits
------------------
of certain rules and regulations of the Commission which may at any time permit
the sale of the Shares to the public
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<PAGE>
without registration, at all times after 90 days after any registration
statement covering a public offering of securities of the Company under the
Securities Act shall have become effective, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act ("Rule 144");
(b) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) furnish to each holder of Shares forthwith upon request a
written statement by the Company as to its compliance with the reporting
requirements of Rule 144 and of the Securities Act and the Exchange Act, a copy
of the most recent annual or quarterly report of the Company, and such other
reports and documents so filed by the Company as such holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing
such holder to sell any Shares without registration.
9. Miscellaneous.
-------------
(a) All covenants and agreements contained in this Agreement by
or on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto (including without
limitation transferees of any Shares), whether so expressed or not, provided,
--------
however, that registration rights conferred herein on the holders of Shares
- -------
shall only inure to the benefit of a transferee of Shares if such transferee is
a partner, shareholder or affiliate of the transferor.
(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be sent by either (i) certified mail,
postage prepaid, return receipt requested, (ii) recognized overnight delivery
service, or (iii) facsimile transmission, addressed as follows:
if the Company or BNFL, at the address of such party set
forth in the Debenture;
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<PAGE>
if to any subsequent holder of Shares, to it at such
address as may have been furnished to the Company in writing by
such holder;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Shares) or to the holders
of Shares (in the case of the Company) in accordance with the provisions of this
paragraph.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland. Each of the parties agree
that all claims of any kind arising from or relating to this Agreement shall be
brought in a court of competent jurisdiction in the State of Maryland and agree
to the jurisdiction of the Maryland courts (including the United States District
Court for the District of Maryland) in all such matters. Each of the parties
waives all objections to venue.
(d) This Agreement may not be amended or modified, and no
provision hereof may be waived, without the written consent of all of the
parties hereto.
(e) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(f) The obligations of the Company to register Shares under
Sections 2 or 3 shall terminate as to any holder of Shares or permissible
transferees or assignees of such rights if such person (a) holds one percent
(1%) or less of the outstanding shares of Common Stock of the Company and (b)
would be permitted to sell all of the Shares held by it within one three month
period pursuant to Rule 144.
(g) If requested in writing by the underwriters for the public
offering, each holder of Shares who is a party to this Agreement shall agree not
to sell publicly any Shares or any other shares of Common Stock (other than
Shares or other shares of Common Stock being registered in such offering),
without the consent of such underwriters, for such period as may be agreed to
between the underwriters and such holder following the effective date of the
registration statement relating to such offering; provided, however, that all
-----------------
persons entitled to registration rights with respect to shares of Common Stock
who are not parties to this Agreement, all other persons selling shares of
Common Stock in such offering and all executive officers and directors of the
Company shall also have agreed not to sell publicly their Common Stock under the
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circumstances and pursuant to the terms set forth in this Section 9(g).
(h) Notwithstanding the provisions of Section 4(a), the
Company's obligation to file a registration statement, or cause such
registration statement to become and remain effective, shall be suspended for a
period not to exceed 90 days in any 24-month period if there exists at the time
material non-public information relating to the Company which, in the reasonable
opinion of the Company, should not be disclosed.
(i) Except for currently existing registration rights granted
by the Company, the Company shall not grant to any third party any registration
rights which will adversely affect the registration rights granted hereunder, so
long as any of the registration rights under this Agreement remain in effect.
(j) If one or more provisions of this Agreement shall be found
to be illegal, invalid or unenforceable under any applicable law, then such
contravention or invalidity shall not invalidate the entire Agreement. Such
provision shall be deemed to be modified consistent with the intent of the
parties to the extent necessary to render it legal, valid and enforceable, and
if no such modification shall render it legal, valid and enforceable, then this
Agreement shall be construed as if not containing the provision held to be
invalid, and the rights and obligations of the parties shall be construed and
enforced accordingly.
IN WITNESS WHEREOF, the Company and BNFL have caused this Agreement to be
executed as of the date first above written.
GTS DURATEK, INC.
By: ___________________________
Name:
Title:
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<PAGE>
BNFL INC.
By: ____________________________
Name:
Title:
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<PAGE>
EXHIBIT 3
TEAMING AGREEMENT
THIS TEAMING AGREEMENT (this "Agreement") is made this 7th day of
November 1995 by and between GTS Duratek, Inc., a Delaware corporation ("GTSD")
and BNFL Inc., a Delaware corporation ("BNFL").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, GTSD has specialized knowledge, experience and rights to
technology for the vitrification of radioactive, hazardous and other wastes;
WHEREAS, BNFL possesses experience in the processing and stabilization of
radioactive waste which could complement the specialized knowledge, experience
and technology rights of GTSD for the treatment and handling of wastes at DOE
(as defined) sites throughout the United States and all of its territories and
possessions;
WHEREAS, GTSD and BNFL believe that a cooperative pursuit of contracts
and other potential business opportunities with the DOE to treat and handle
wastes at DOE sites throughout the United States and all of its territories and
possessions would be to the mutual benefit of both companies;
WHEREAS, GTSD and BNFL desire to establish a collaborative business
relationship and to support each other in the pursuit of potential business
opportunities for the treatment and handling of wastes at DOE sites;
WHEREAS, it is in the interest of the parties to use their reasonable
best efforts to apply marketing, contractual and technical resources in the most
effective manner in pursuing potential business opportunities for the treatment
and handling of wastes for the DOE;
WHEREAS, it is the desire of the parties to develop a total program
workshare that offers a satisfactory business opportunity for each while placing
the GTSD/BNFL team in the best competitive position;
WHEREAS, pursuant to the teaming arrangement provided herein, BNFL will
invest $10.0 million in GTSD in the form of a convertible subordinated debenture
(the "Convertible Debenture"), convertible into the common stock of GTSD, $.01
par value per share (the "Common Stock"), as provided herein;
WHEREAS, pursuant to the teaming arrangement provided herein, BNFL will
provide research and development funding to GTSD for five (5) years, as provided
herein; and
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<PAGE>
WHEREAS, pursuant to the teaming arrangement provided herein, GTSD shall
grant to BNFL a sublicense with respect to the vitrification technology for use
in the United Kingdom, as provided herein.
NOW, THEREFORE, in consideration of the promises and mutual covenants
provided herein, and other good and sufficient consideration, the receipt of
which is acknowledged by each party hereto, the parties agree as follows:
ARTICLE I
DEFINITIONS
-----------
In addition to those terms defined elsewhere herein, when used herein,
the following capitalized terms shall have the meanings indicated:
"Affiliate" of a specified person means a person that directly, or
---------
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the person specified.
"Contract" means any contract awarded to GTSD, BNFL or a Project
--------
Organization by the DOE in response to a Proposal.
"DOE" means the United States Department of Energy, its successor, or any
---
other agency or Person administering or operating the United States Department
of Energy sites around the United States and its territories and possessions.
"Person" or "person" means an individual, corporation, partnership,
------ ------
limited liability company, firm, association, joint venture, trust,
unincorporated organization, government, governmental body, agency, political
subdivision or other entity.
"Project" means a project for the treatment and handling of radioactive,
-------
hazardous and other wastes at a particular DOE site by means of vitrification
and the related services in connection therewith. A Project will involve
services to be provided by GTSD, BNFL and/or a Project Organization in
accordance with the scope of work to be determined by the Steering Committee, on
a project by project basis, and which may include technologies and services
other than vitrification.
"Project Organization" means a newly formed corporation, partnership,
--------------------
limited liability company, firm, joint venture, trust or other form of business
organization that is jointly owned, directly or indirectly, by GTSD, BNFL and
possibly other third parties, and was formed for the specific and limited
purpose of undertaking a Project.
"Proposal" means a proposal submitted by either GTSD, BNFL or a Project
--------
Organization, as agreed, in response to an RFP.
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<PAGE>
"RFP" means any request for proposal issued by the DOE for the treatment
---
and handling of radioactive, hazardous and other wastes at a DOE site and the
related services in connection therewith.
"Steering Committee" means the Vitrification Technology Steering
------------------
Committee established pursuant to Article VI hereof.
"Subcontract" means any subcontract entered into by and between any of
-----------
GTSD, BNFL and a Project Organization relating to work to be performed under a
Contract.
ARTICLE II
SCOPE OF ACTIVITIES
-------------------
2.1. GTSD and BNFL agree to collaboratively seek and pursue five (5)
Projects with the DOE for the treatment and handling of radioactive, hazardous
and other wastes at various DOE sites throughout the United States.
2.2. The decision to pursue a Project will be determined by the Steering
Committee. To the extent that the Steering Committee identifies and decides that
GTSD and BNFL shall jointly pursue a Project, the Steering Committee shall
acknowledge in writing the pursuit of such Project in accordance with the terms
of this Agreement and a copy of such written acknowledgment shall be provided to
both GTSD and BNFL. The written acknowledgment shall also contain the date, or
the basis for determining the date, by which the Article XII and Non-Competition
Fee (as hereinafter defined) is required to be paid pursuant to Section 3.2.
2.3 Once the DOE has issued an RFP for a Project that the Steering
Committee has determined that the parties should jointly pursue, the parties
shall collaborate in preparing and submitting a Proposal in response to the RFP.
At such time that such an RFP is issued, the Steering Committee shall determine
which party is to serve as the prime contractor (the "Prime Contractor") with
the DOE and which party shall serve as the subcontractor (the "Subcontractor").
The parties shall regulate their relationship on a particular Project through
the issuance of subcontracts and agree to work together in an exclusive prime
contractor/subcontractor relationship as per Article III herein. The scope of
work shall be decided upon by the parties in accordance with Article V below.
Alternatively, the Steering Committee may elect in its sole discretion to form a
Project Organization to pursue the Project and shall determine the structure and
ownership of such entity and the contribution of each party to such entity.
-3-
<PAGE>
ARTICLE III
EXCLUSIVITY; PAYMENT OF CERTAIN FEES
------------------------------------
3.1. For Projects which the Steering Committee has determined that the
parties shall jointly pursue, upon such determination and the receipt by each
party of the written acknowledgment of such determination, each party hereto
shall: (i) not participate in any manner in the preparation or submission of
proposals to the DOE by itself or with a third party to the exclusion of the
other party; and (ii) not participate in any manner in furtherance of the
preparation of proposals to the DOE by or with any third party for opportunities
related to the Project, without the written consent of the other party, which
consent may be withheld in such other party's sole discretion. Nothing herein
shall be deemed to confer any right or impose any obligation or restriction on
either party with respect to any other project other than a Project which the
Steering Committee has determined to pursue. Each party hereto shall not be
precluded from its normal marketing and business efforts in connection with the
sale of standard products or services not covered by this Agreement. Each party
hereto shall not be precluded from participating in a DOE project, as a
subcontractor or otherwise, once the DOE has awarded the project to a party
other than BNFL, GTSD or a Project Organization, provided that such party uses
its best efforts to participate in such DOE project with the other party hereto,
unless the types of goods or services required to be provided for such project
or the economics of the party's participation in such project do not make it
commercially reasonable, as determined in the reasonable discretion of the
Steering Committee, to jointly participate in such project.
3.2 Unless otherwise agreed upon by the Steering Committee, upon the
earlier of (i) three (3) business days after the issuance of an RFP by the DOE
for a Project that the Steering Committee has determined that the parties should
jointly pursue or (ii) the determination by the Steering Committee to jointly
pursue a Project and the determination by the Steering Committee to commence
work in earnest to prepare a Proposal for such Project (but in any event not
later than the submission of a Proposal pursuant to this provision (ii)), BNFL
shall pay to GTSD, subject to Section 3.6, the sum of $1.0 million (the "Article
XII and Non-Competition Fee") in consideration of GTSD's agreement to, (i)
exclusively pursue the Project with BNFL, (ii) provide the technology required
under Article XII, and (iii) not compete with BNFL and to exclusively team with
BNFL and mutually acceptable third parties with respect to preparing a proposal
for the stabilization of radioactive waste contained in the underground tanks of
the DOE's Hanford Washington site.
3.3 GTSD shall be deemed to have earned the Article XII and Non-
Competition Fee simply by its agreement to the items specified in Section 3.2
and no further conditions or obligations shall be required to be satisfied after
the payment of the Article XII and Non-Competition Fee.
3.4 In the event that GTSD has not received the Article XII and Non-
Competition Fee within thirty (30) calendar days of when the obligation of BNFL
to pay such Article XII and Non-Competition Fee arose pursuant to Section 3.2
above, then, in addition to its right to
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<PAGE>
receive the Article XII and Non-Competition Fee, GTSD shall be free to pursue
the Project with another party and shall not be subject to the exclusivity
provisions of Section 3.1 herein with respect to that Project.
3.5 For purposes of this Agreement, the Steering Committee has
determined to pursue the Project for the stabilization of the radioactive waste
contained in the underground tanks at the DOE's Hanford, Washington site and all
of the conditions of Section 3.2 herein shall be deemed to have been satisfied
as of the date hereof. Accordingly, BNFL shall pay to GTSD $1.0 million upon the
execution and delivery of this Agreement.
3.6 The maximum aggregate amount of Article XII and Non-Competition
Fees to be paid by BNFL to GTSD pursuant to this Agreement shall be $5.0
million. In the event that BNFL, GTSD or a Project Organization is not awarded
any one or more of the Projects that the Steering Committee has determined to
pursue, GTSD agrees to exclusively team with BNFL on one (1) additional Project
for no additional Article XII and Non-Competition Fee, provided that GTSD has
received an aggregate of $5.0 million in Article XII and Non-Competition Fees
from BNFL.
3.7 Notwithstanding anything contained herein to the contrary, in the
event that BNFL is (i) debarred or suspended from doing business with the DOE or
the United States Government or (ii) legally prohibited in any way from being
involved in a Project, then the exclusivity provisions contained in this Article
III shall be suspended until such time as BNFL is legally permitted do business
with the DOE and to be involved in a Project.
3.8 Notwithstanding anything herein to the contrary, in the event that
GTSD has defaulted on any of its payment obligations under the Convertible
Debenture, BNFL shall be entitled to offset the amounts owed to GTSD as Article
XII and Non-Competition Fees until such time as the payment default has been
cured or the payment default has been waived by BNFL. All amounts so offset
shall be applied in whole toward the cure of the payment default under the
Convertible Debenture.
ARTICLE IV
PREPARATION AND SUBMISSION OF PROPOSALS
---------------------------------------
4.1. The parties agree that the Prime Contractor shall serve as the
primary interface with the DOE in the pursuit of a Contract for a Project.
4.2. The Subcontractor shall submit in a timely manner an offer to the
Prime Contractor for the Subcontractor's respective scope of work to be
integrated into the Proposal to be submitted to the DOE by the Prime Contractor.
The offer to be submitted by the Subcontractor to the Prime Contractor shall
include the necessary technical and price information for the goods and/or
services to be provided by the Subcontractor, and support and backup
-5-
<PAGE>
therefor, so that the Prime Contractor can complete the Proposal in an
appropriate manner. The Subcontractor shall bear all of the costs and expenses
associated with preparing the offer that is submitted to the Prime Contractor.
The Prime Contractor shall incorporate the relevant offer by the Subcontractor
in the Proposal and shall submit the Proposal to the DOE.
4.3 The Prime Contractor shall have the overall responsibility for the
preparation and submission of a Proposal, including the document preparation
cost for the Proposal. The parties agree to submit the Proposal for review by
the Steering Committee before submission to the DOE and the Steering Committee
shall have approved the Proposal prior to its submission. In no event shall the
Prime Contractor be entitled to modify or amend the offer from the Subcontractor
to be incorporated in the Proposal without the prior written consent of the
Subcontractor. Each party shall bear its own risks, costs, fees and other
expenses incurred in connection with the preparation and submission of a
Proposal. After submission of a Proposal to the DOE, the parties shall provide
such services and information as are reasonably required for evaluation of the
Proposal and negotiation of the resulting Contract.
4.4. The Prime Contractor shall be responsible for carrying out all
negotiations with the DOE. If requested by the Prime Contractor, the
Subcontractor, at its own expense, shall participate in presenting and
negotiating with the DOE with a view to obtaining an award to the Prime
Contractor of the Contract. The Prime Contractor shall keep the Subcontractor
informed of the progress and content of the negotiations with the DOE. The Prime
Contractor shall not agree to any amendment to the Proposal which affects the
rights and obligations of the Subcontractor without the prior written consent of
the Subcontractor, which consent shall not be unreasonably withheld or delayed.
4.5. The parties hereby undertake to provide each other with prompt
notification in the event either party determines that it may not be in its best
interest, or the best interest of both parties, to pursue the Project and enter
into a Contract with the DOE.
ARTICLE V
SUBCONTRACTS
------------
5.1 In the event that a Contract is awarded to the Prime Contractor
based on a Proposal, the Prime Contractor shall, as soon as practicable, place a
subcontract (the "Subcontract") with the Subcontractor for its respective scope
of work consistent with the terms of the offer submitted by the Subcontractor to
the Prime Contractor and included in the Proposal.
5.2 It is understood by the parties that the Prime Contractor may enter
into an agreement with other potential subcontractors in support of
opportunities in which the parties hereto are jointly pursuing provided that
such potential subcontractor shall not provide goods or services which the
Subcontractor is capable of providing and willing to provide on commercially
reasonable terms. Subcontractor shall be permitted (as a subcontractor) to enter
into a
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subcontract with a third party provided that the Steering Committee has approved
such third party subcontractor and the terms and conditions of the subcontract
with such third party.
5.3 The parties agree that the proportion and content of work to be
undertaken by each party in respect of each Project shall be generally
consistent with the scope of work as determined by the Steering Committee. The
parties recognize that as the RFP and as a Project are more clearly defined,
changes to the scope of work to be performed by each party may be necessary to
meet the requirements of the DOE. In such cases the parties shall agree upon
reasonable variations to the scope of work for each party for that particular
Project in such a way so that the final scope of work for each party for that
particular Project shall be as close as possible to the proportion and content
of its scope of work initially determined by the Steering Committee.
ARTICLE VI
STEERING COMMITTEE
------------------
6.1 A Steering Committee shall be established by the parties. The
Steering Committee shall consist of one representative of GTSD and one
representative of BNFL (each a "Representative" and collectively the
"Representatives"). The initial Representative designated by GTSD shall be
Robert E. Prince and the initial Representative designated by BNFL shall be
Richard H. Peebles. Replacement of the designated Representative, either
permanently or at any time, by a particular party shall require the written
consent of the other party, which consent shall not be unreasonably withheld or
delayed.
6.2 Meetings of the Steering Committee shall be held at least once
every three (3) months upon five (5) business days notice to the Representatives
and such notice shall be accompanied by an agenda determined by the
Representatives. Should circumstances so require, a meeting shall be held at any
time at the request of either of the parties. The meeting shall only be held
with the presence of both of the Representatives. Decisions of the Steering
Committee shall be made by mutual agreement with each Representative acting and
negotiating in good faith. The Steering Committee cannot act or make any
determination without the approval of both Representatives.
6.3 The Representatives shall, prior to the commencement of each
meeting, elect a secretary to take minutes of the meeting. The secretary of a
Steering Committee meeting need not be one of the Representatives. The secretary
shall distribute copies of the minutes of the meeting to both of the parties
within ten (10) calendar days after the meeting. Such minutes shall be deemed to
have been accepted by the parties unless comments are made in writing within ten
(10) calendar days of their receipt by said parties.
6.4 The Steering Committee shall have the following responsibilities
and shall be empowered to take the following actions:
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(i) Overall governance of the collaborative relationship of the
parties as contemplated by this Agreement;
(ii) Determine the Projects to be pursued jointly by the parties
and provide written acknowledgment of such determination to each of the parties;
(iii) Determine which party shall serve as the Prime Contractor
and which shall serve as the Subcontractor on a particular Project or,
alternatively, determine to form a Project Organization to undertake a
particular Project and the structure, ownership and contribution of each of the
parties to such Project Organization;
(iv) Determine when to commence work on a particular Project;
(v) Determine the scope of work to be provided by each of the
parties and any appropriate modifications or amendments thereto;
(vi) Review the final Proposal to be submitted to the DOE in
response to an RFP and have final approval over such Proposal;
(vii) Approve the appointment of any agents engaged or retained by
any of the parties in connection with the pursuit of a Project;
(viii) Act in an advisory capacity concerning the negotiation of
Contracts and the performance of such Contracts and resulting Subcontracts;
(ix) Interpret the meanings of "most favored nation" and
"preferred partner," as such terms are used in Article VIII, and set forth such
meanings in a memorandum submitted to each of the parties;
(x) Determine the total capital cost of a Project and the
capital cost of the Project related to the verification portion and provide
written notice to each of the parties of such determination;
(xi) Determine the budget for the expenditure of research and
development funds and provide authorization to expend such funds pursuant to
Article XIV;
(xii) Attempt to solve expeditiously any conflict between the
parties related to this Agreement; and
(xiii) Delegate any of the authority of the Steering Committee to
appropriate individuals or groups as may be determined unanimously by the
Steering Committee, provided that such delegation can be revoked by either
Representative upon written notice.
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6.5 Each Representative has an obligation to inform the other
Representative of any possible projects or business opportunities which may be
contemplated by this Agreement, and the Representatives will make a decision
whether to jointly pursue such projects or business opportunities in a timely
fashion in light of all relevant and appropriate business considerations.
6.6 Each Representative shall designate a deputy (each a "Deputy
Representative" and collectively the "Deputy Representatives") who shall act on
his behalf only in the event that the Representative is unavailable and action
of the Steering Committee is to be taken. Each Deputy Representative may attend
all meetings of the Steering Committee and may participate in such meetings but
shall not vote at such meetings unless the Deputy Representative is acting on
behalf of his Representative pursuant to the preceding sentence. The initial
Deputy Representative designated by Robert E. Prince shall be Robert F. Shawver
and the initial Deputy Representative designated by Richard H. Peebles shall be
determined at a later time provided that such initial Deputy Representative is
subject to the approval of Robert E. Prince. Replacement of the designated
Deputy Representative, either permanently or at any time, by a particular
Representative shall require the written consent of the other Representative,
which consent shall not be unreasonably withheld or delayed.
6.7 In the event that the Representatives cannot agree on a matter
under the authority of the Steering Committee and such inability to reach an
agreement continues for sixty (60) calendar days or such other period of time
that causes the interests of one or both of the parties to be adversely
affected, then the Representatives shall consider in good faith either (i)
delegating the authority of the Steering Committee to such other members of
their respective organizations who may be appropriate to assume such authority
or (ii) adopting such other appropriate means for resolving the disagreement.
ARTICLE VII
CLASSIFIED INFORMATION
----------------------
Access to classified information may be required in the performance
of the services hereunder and both parties shall use their best efforts to meet
the applicable security clearance requirements of the DOE and the United States
Government at all times relevant to this Agreement.
ARTICLE VIII
OTHER COVENANTS AND AGREEMENTS BETWEEN THE PARTIES
--------------------------------------------------
8.1 Unless otherwise agreed, until the later of (i) the termination of
this Agreement or (ii) BNFL no longer owns an interest in GTSD, BNFL hereby
agrees to perform, directly or through a subcontractor or other party,
vitrification of any substance only with GTSD, provided that BNFL and GTSD can
agree on mutually acceptable terms and conditions.
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8.2 BNFL and GTSD agree to extend to each other a "most favored nation"
approach for working jointly on any projects.
8.3 (a) BNFL and GTSD intend to jointly pursue vitrification
projects on a "preferred partner" basis.
(b) The parties will meet at least once every six (6) months to
discuss potential opportunities and strategies for pursuing projects outside of
the United States.
8.4 The parties will use their reasonable efforts to cause their
respective Affiliates to comply with the provisions of Sections 8.1, 8.2 and
8.3(a).
8.5 If GTSD is intending to borrow funds from a lender whereby it is
contemplated that such lender would have a security interest in the GTSD
Technology (as hereinafter defined), then GTSD covenants and agrees that it
shall use its best efforts to cause such lender (the "Lender") to execute as
part of the loan documents (the "Loan") a non-disturbance agreement, or similar
provision having like effect, granting to GTSD, BNFL or their Affiliates, as
appropriate, the limited, non-exclusive right to continue using the GTSD
Technology on any projects jointly undertaken by GTSD and BNFL or by a Project
Organization with terms substantially similar to those given by First Fidelity
Bank, N.A. to GTSD and BNFL in its non-disturbance agreement of even date
herewith (as determined in the reasonable discretion of the Steering Committee)
(any such agreement or provision referred to herein as a "Non-Disturbance
Agreement"). If, after GTSD uses such best efforts for a reasonable time and the
Lender will not agree to give a Non-Disturbance Agreement, BNFL shall join the
negotiations with GTSD and the Lender solely on the issue of the Non-Disturbance
Agreement and BNFL shall use its best efforts to persuade the Lender to give a
Non-Disturbance Agreement. If, after BNFL uses such best efforts for a
reasonable time, the Lender will not agree to give a Non-Disturbance Agreement,
GTSD shall be permitted to enter into the Loan arrangement only if BNFL first
consents in writing to the Loan (the "Consent"); provided, however, that the
Consent shall be required only for the portions of the Loan which are required
in order to protect continuing access to the GTSD Technology as such GTSD
Technology relates to any Project. The Consent shall not be unreasonably
withheld by BNFL; and, in determining whether to grant such Consent, the sole
consideration of BNFL shall be whether the withholding of such Consent is
necessary in order to protect access to the GTSD Technology covered by the
Sublicense Agreement or BNFL's continuing access to the GTSD Technology as such
access is contemplated under this Agreement.
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ARTICLE IX
PROPRIETARY AND CONFIDENTIAL INFORMATION
----------------------------------------
9.1 Proprietary or confidential information (relating to technical and
non-technical matters) may be transferred between the parties during the term of
this Agreement, subject to the confidentiality and use restrictions provided
herein. Notwithstanding any other provisions herein, the parties agree that
during the term of this Agreement and for a period of five (5) years thereafter,
any proprietary or confidential information exchanged during the performance of
this Agreement shall be used by the receiving party for the exclusive purpose of
performing this Agreement, of preparing a Proposal hereunder or performing a
Contract pursuant hereto.
9.2 Each of the parties hereto agrees that during the term of this
Agreement and for a period of five (5) years thereafter, it shall not, and it
shall use reasonable efforts to cause its Affiliates, directors, officers,
employees, agents and advisors not to, reveal, divulge or make known to any
person (other than the other party hereto or the Project Organization) or use
for its own account or for the account of any person any proprietary or
confidential information. For purposes of this Agreement, "proprietary or
confidential information" includes, without limitation, any method, record,
data, report, trade secret, pricing policy, bid amount, bid strategy, rate
structure, personnel policy, method or practice of soliciting or obtaining or
doing business by a party or any other information regarding a party, other than
information that can be demonstrated to have (i) been publicly known prior to
the date of this Agreement, (ii) become well known by publication or otherwise
not due to the unauthorized act or omission on the part of a party hereto or
(iii) been obtained by a party hereto from a source other than the other party
hereto, provided that such source was not bound by an obligation of
confidentiality.
9.3 Notwithstanding anything herein to the contrary, a party may
disclose proprietary or confidential information regarding the other party to
one of its Affiliates provided that such Affiliate executes and delivers a
confidentiality agreement reasonably satisfactory to the other party.
9.4 In addition to the confidentiality provisions provided in the
preceding paragraph, BNFL shall ensure that in any project undertaken by it or
an Affiliate of BNFL within a period of five (5) years beyond the later of (i)
the termination of this Agreement, or (ii) the termination of BNFL's right to
designate a member or observer to GTSD's Board of Directors pursuant to Article
XVI hereto, which involves the performance of vitrification of any substance
other than high level radioactive waste, and which does not involve GTSD, all
intellectual property, including know-how, technical data, designs and the like
relating to the GTSD vitrification technology and any other proprietary or
confidential information of GTSD, is protected and not made available to that
project, without the written consent of GTSD.
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ARTICLE X
INTELLECTUAL PROPERTY RIGHTS
----------------------------
10.1 Each party shall remain the sole owner of its intellectual property
rights, technical data, know-how, designs, specifications and the like generated
or acquired prior to the execution of this Agreement, and any transfer of such
information from one party to another (or to a Project Organization) under this
Agreement is to be used only for the express purpose for which it was
transferred. Any additional use of that information would be the subject of a
separate license or other agreement to be entered into between the parties.
10.2 No license to the other party (or to a Project Organization) under
any intellectual property rights is granted or implied by conveying proprietary
or confidential information to that party (or to a Project Organization) for any
purpose whatsoever other than the limited purposes of the parties permitted
under this Agreement. None of such information which may be transmitted or
exchanged by the respective parties (or by a Project Organization) shall
constitute any representation, warranty, assurance, guaranty or inducement by
either party to the other (or to a Project Organization) with respect to the
infringement of patents or other rights of others.
10.3 Subject to the right, if any, of the DOE and to any express
provisions contained in any Subcontract between the parties hereto (which said
provisions shall prevail in the event of any conflict with this clause) and
subject to the provisions herein contained, all intellectual property produced
pursuant to this Agreement shall vest in and at all times remain vested in the
party originating that intellectual property; provided that if the parties
jointly produce material pursuant to this Agreement then unless the parties
previously agree in writing to the contrary, all intellectual property rights in
such jointly produced material shall vest jointly in each of the parties without
accounting to the other. The parties undertake to enter into good faith
negotiations to agree upon such measures of protection as patents and like
instruments and the establishment thereof, as the parties agree to be
appropriate.
10.4 In this regard, it is recognized that the parties may be required
under provisions contained in the Contract to grant licenses or other rights to
the DOE and, in that event they shall by reasonable agreement do so. Any such
granting of licenses or other rights shall be mutually agreed by the parties.
ARTICLE XI
LOAN FROM BNFL TO GTSD
----------------------
In connection with the teaming arrangement contemplated by this
Agreement and contemporaneous with the execution of this Agreement, BNFL shall
loan to GTSD $10.0 million. Such loan shall be evidenced by a Convertible
Debenture, a form of which Convertible Debenture is attached hereto as Appendix
I. All of the terms and conditions with respect to the loan by BNFL to GTSD are
included in the Convertible Debenture.
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ARTICLE XII
PROVIDING TECHNOLOGY TO JOINT PROJECTS
--------------------------------------
12.1 With respect to any Projects jointly undertaken by GTSD and BNFL or
by a Project Organization pursuant to the terms of this Agreement, GTSD shall
provide to such Projects through its involvement in such Projects all of the
rights and know-how in the technology currently owned by GTSD, or owned by GTSD
in the future, or in which GTSD has rights of use now or in the future,
including without limitation all of the Intellectual Property as defined in
Section 19.1 and all improvements and enhancements thereto for the vitrification
of worldwide radioactive and mixed waste (excluding Germany) (all such
technologies are collectively referred to herein as the "GTSD Technology"). The
contribution of the GTSD Technology to a Project shall be undertaken through
GTSD and shall not be deemed in any way to constitute an assignment or
sublicense of such technology to any other party.
12.2 In the event that GTSD is (i) debarred or suspended from doing
business with the DOE or the United States Government, (ii) legally prohibited
in any way from being involved in a Project and providing the GTSD Technology to
the Project pursuant to Section 12.1 or (iii) unwilling or unable to provide the
GTSD Technology to any Project pursuant to Section 12.1 for any reason, then
GTSD shall license or sublicense, as applicable, such technology to the Project
Organization or take such other action as is determined by the Steering
Committee to enable either BNFL or the Project Organization that continues to be
engaged in the Project to continue to use the GTSD Technology until completion
of such Project. In the event that GTSD shall be required to provide a license
or sublicense pursuant to this Section 12.2, such license or sublicense shall be
provided on terms which enable GTSD to receive the same economic benefit it
would have received had it been able to participate in the Project and GTSD will
not be entitled to receive any additional consideration above such amount for
the granting of the license or sublicense hereunder.
12.3 GTSD hereby covenants and agrees that it will not take any action,
or fail to take a required action, either of which results in the termination of
the license agreement by and between GTSD and Drs. Pedro B. Macedo and Theodore
A. Litovitz (collectively the "Inventors") dated August 17, 1992 (the "License
Agreement") prior to the expiration of its natural term. GTSD hereby covenants
and agrees that it will use its best efforts to maintain the License Agreement
and the underlying Intellectual Property (as hereinafter defined) in full force
and effect so long as GTSD and BNFL are jointly pursuing a Project or
participating jointly in a Project, however, GTSD shall have the right to amend
the License Agreement or enter into a new license agreement with the Inventors
provided that the terms of such new license agreement would not adversely affect
GTSD's performance of its obligations hereunder.
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ARTICLE XIII
SHARING OF PROJECT FEES
-----------------------
13.1 Notwithstanding any other arrangement for the sharing of fees with
respect to a Project or the compensation for goods or services provided to a
Project by each of the parties, which shall be determined by Steering Committee
for each particular Project, the parties hereby covenant and agree that they
will share a portion of the fees from each Project in the following manner:
(a) A fee (the "Project Fee") equal to three percent (3%) of the
total revenues related to the vitrification portion of a Project will be shared
equally by GTSD and BNFL until such time as BNFL has received an amount
(including amounts previously distributed to BNFL pursuant to this paragraph)
equal to a twelve percent (12%) cumulative annual yield on the amount of the
Article XII and Non-Competition Fee paid by BNFL to GTSD pursuant to Article III
for the particular Project. Thereafter, such Project Fee will be distributed
eighty percent (80%) to GTSD and twenty percent (20%) to BNFL.
(b) In order to determine the total revenues related to the
vitrification portion of a given Project, the total revenues from such Project
shall be multiplied by a fraction, the numerator of which is the capital cost of
the Project related to the vitrification portion and the denominator of which is
the total capital cost of the Project. For purposes of this Section 13.1, the
term "total revenues from a Project" shall mean all amounts or proceeds received
by GTSD, BNFL or a Project Organization on a Project, less the following
deductions: (i) discounts allowed and taken for prompt payment, (ii) allowances
for returns or other trade credits, (iii) all sales, use and other taxes
imposed, (iv) packaging and transportation costs and (v) the cost of services
contracted to other subcontractors providing technologies and services
complimentary to the Technology. The total capital cost of the Project and the
capital cost of the Project related to the vitrification portion will be
determined by the Steering Committee prior to commencement of the Project.
(c) In the event that GTSD, in order to provide the GTSD
Technology, must obtain from a third party a license or other authorization
under such third party's valid patent or other proprietary rights and must pay a
license or other fees thereunder to such third party in order to use any portion
of the GTSD Technology, then in such event, GTSD shall be entitled to recover
such license or other fees payable to such third party out of the Project Fee
prior to the distribution arrangement contemplated by paragraph (a) of this
Section 13.1 and such license or other fees payable to such third party shall
reduce on a dollar for dollar basis the amount of the Project Fee distributable
to each of GTSD and BNFL pursuant to paragraph (a) of this Section 13.1.
(d) The Project Fee provided for in this Article XIII shall be
based on Project revenues received by GTSD, BNFL or a Project Organization
during each calendar year and shall be paid by March 31st of the following year.
All payments required to be made under this
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Agreement shall be made in United States funds. At the time of payment of the
Project Fee, the Steering Committee shall render to the parties hereto a
statement in writing showing computation of such Project Fee payable for such
year.
(e) Notwithstanding anything herein to the contrary, in the event
that GTSD has defaulted on any of its payment obligations under the Convertible
Debenture, BNFL shall be entitled to receive the entire Project Fee, less
amounts owed to GTSD pursuant to paragraph (c) of this Section 13.1, until such
time as the payment default has been cured or the payment default has been
waived by BNFL. All of GTSD's portion of the Project Fee directed to BNFL
pursuant to this paragraph shall be applied in whole toward the cure of the
payment default under the Convertible Debenture.
13.2 All other fees and compensation for goods and services provided by
the parties to a Project shall be determined by the Steering Committee prior to
the commencement of the Project and shall be reflected in an appropriate
Subcontract.
ARTICLE XIV
RESEARCH AND DEVELOPMENT COST SHARING ARRANGEMENT
-------------------------------------------------
14.1 In connection with the teaming arrangement contemplated by this
Agreement, BNFL hereby covenants and agrees to provide research and development
funding to GTSD of at least $500,000 per year commencing on the date hereof and
continuing until the fifth anniversary of the date of this Agreement in order to
develop, enhance and improve the GTSD Technology and to develop related
technologies.
14.2 The budget for the expenditure of the research and development
funds and the authorization to expend such funds shall be determined by the
Steering Committee. Within thirty (30) calendar days of when the budget for the
expenditure of the research and development funds and the authorization to
expend such funds has been established by the Steering Committee, BNFL shall
provide such funds to GTSD for the research and development efforts. The budget
for the expenditure of the research and development funds and the authorization
to expend such funds for the one year period commencing on the date hereof shall
be determined within thirty (30) calendar days of the date hereof. For each
successive year, the budget for the expenditure of the research and development
funds and the authorization to expend such funds shall be determined by the
Steering Committee at least thirty (30) calendar days prior to the commencement
of such one year period.
14.3 GTSD will administer and manage the research and development
efforts performed in the United States and an Affiliate of BNFL will administer
and manage the research and development efforts performed in the United Kingdom,
but GTSD shall participate in such research and development activities in the
United Kingdom and shall provide any necessary technology rights that it owns to
such activities. The Steering Committee shall determine who is to administer and
manage the research and development efforts performed outside of the
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United States and the United Kingdom. Any party other than GTSD that is to
administer and manage the research and development efforts relating to the GTSD
Technology will be required to execute an appropriate confidentiality agreement,
prior to its commencement of research and development efforts, containing
restrictions on the disclosure and use by such party of such technology.
14.4 All goods and services provided by each of the parties in
furtherance of the research and development efforts contemplated by this Article
XIV shall be at such party's cost, including an allocation of reasonable
overhead costs and expenses (including without limitation general and
administrative expenses), without any markup or built-in profit to such party.
14.5 As to the research and development efforts which are the subject of
this Article XIV, each party shall remain the sole owner of its technologies
(including any enhancements or improvements thereto) resulting from the research
and development efforts contemplated by this Article XIV, and the ownership and
access rights of the parties with respect to any such intellectual property
regarding any such technologies, other than each party's respective
technologies, shall be determined on a case by case basis by the Steering
Committee in its reasonable discretion either (i) at the time the budget for the
expenditure of the research and development funds and the authorization to
expend such funds is determined or (ii) at the time such intellectual property
is developed.
14.6 In consideration of its agreement to provide the research and
development funding commitment specified herein, BNFL shall receive the benefit
of such enhancements or improvements to the GTSD Technology through its
sublicense arrangement pursuant to Article XV below and shall also receive all
information, data and know-how that are the product of the research and
development activities under the arrangement specified by this Article XIV.
14.7 The research and development funding provided by BNFL pursuant to
this Article XIV is to be used solely for research and development of the GTSD
Technology and is not in any way to be construed as part of the consideration
for the sublicense granted by GTSD to BNFL pursuant to Article XV.
14.8 The obligations of each of the parties pursuant to this Article XIV
shall be a material obligation of this Agreement.
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ARTICLE XV
GRANT OF SUBLICENSE TO BNFL
---------------------------
In connection with the teaming arrangement contemplated by this
Agreement and contemporaneous with the execution of this Agreement, GTSD and
BNFL shall enter into a sublicense agreement (the "Sublicense Agreement"), a
form of which is attached hereto as Appendix II, pursuant to which GTSD shall
grant to BNFL a sublicense to the GTSD Technology for the United Kingdom,
subject to such other terms, conditions, limitations and conditions as are
contained in the Sublicense Agreement.
ARTICLE XVI
BNFL REPRESENTATION ON GTSD BOARD OF DIRECTORS
----------------------------------------------
16.1 As long as the Convertible Debenture is outstanding, BNFL shall
have the right to designate an observer to GTSD's Board of Directors who shall
have visitation rights on GTSD's Board of Directors, but no right to vote on any
matter that comes before GTSD's Board of Directors. The observer designated by
BNFL pursuant to this Section 16.1 shall not be considered a member of GTSD's
Board of Directors for any purpose. As long as the observer rights provided
herein are in effect, the observer designated by BNFL shall be notified in
writing of any action taken by written consent of the Board of Directors without
a meeting having been held. The visitation rights provided in this Section 16.1
shall be subject to the sole discretion of GTSD's Board of Directors who may
suspend such rights for a portion of a meeting, for an entire meeting, for any
action taken by written consent of the Board of Directors of GTSD or terminate
such rights altogether. BNFL shall be promptly notified of any action taken by
written consent of the Board of Directors.
16.2 GTSD covenants and agrees that it shall take all action that may be
required of it in order to effect the terms of the agreement by and between BNFL
and The Carlyle Group of even date herewith relating to the rights of BNFL to
designate a member or an observer to GTSD's Board of Directors under certain
circumstances.
ARTICLE XVII
TERM OF THE AGREEMENT
---------------------
This Agreement shall commence on the date hereof and remain in effect for
a period of five (5) years thereafter, unless terminated prior thereto in
accordance with Article XVIII.
ARTICLE XVIII
TERMINATION EVENTS
------------------
18.1 This Agreement may be terminated prior to the end of its natural
term as provided in Article XVII at any time by mutual agreement of both
parties.
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18.2 A party hereto shall have the right to terminate this Agreement by
giving prior written notice upon the occurrence of any of the following events
involving the other party hereto:
(i) A material breach of this Agreement by the other party,
including without limitation the representations and warranties contained in
Article XIX, which if capable of remedy, has not been remedied by such breaching
party within thirty (30) calendar days of written notice by the non-breaching
party;
(ii) The filing of any petition under the United States
Bankruptcy Code, in effect from time to time, or any similar Federal or state
statute by or against the other party if such petition is not dismissed within
120 days after service upon the other party, or the failure of the other party
generally to pay its debts as such debts become due;
(iii) The filing of an application for the appointment of a
receiver for, the making of a general assignment for the benefit of creditors
by, or the insolvency of, the other party; or
(iv) The other party's liquidation, dissolution, termination of
existence or cessation of the conduct of its business operations.
18.3 The following provisions shall survive termination of this
Agreement:
SECTION 8.1
ARTICLE IX - PROPRIETARY AND CONFIDENTIAL INFORMATION
ARTICLE X - INTELLECTUAL PROPERTY RIGHTS
ARTICLE XII - PROVIDING TECHNOLOGY TO JOINT PROJECTS
ARTICLE XVI - BNFL REPRESENTATION ON GTSD BOARD OF DIRECTORS
ARTICLE XX - PUBLIC DISCLOSURE
ARTICLE XXIII - RESPONSIBILITY FOR COSTS INCURRED
ARTICLE XXIV - COMPLIANCE WITH LAWS
ARTICLE XXX - ARBITRATION
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ARTICLE XIX
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
---------------------------------------------
19.1 GTSD hereby represents and warrants to BNFL as of the date hereof
as follows:
(i) GTSD is a corporation duly incorporated and validly existing
under the laws of the State of Delaware.
(ii) GTSD has all requisite corporate power and authority to enter
into this Agreement, the Convertible Debenture and the Sublicense Agreement and
carry out and perform its obligations under the terms of such agreements.
(iii) The execution, delivery and performance of this Agreement,
the Convertible Debenture and the Sublicense Agreement have been duly authorized
and approved by all necessary corporate action and this Agreement, the
Convertible Debenture and the Sublicense Agreement, when duly executed and
delivered by GTSD, will constitute valid and legally binding obligation of GTSD,
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to the rights of
creditors generally.
(iv) The execution and performance of this Agreement, the
Convertible Debenture and the Sublicense Agreement do not and will not (i)
violate GTSD's certificate of incorporation or bylaws, or the terms of any
judgment, decree or order of any court or administrative authority or the terms
of any material agreement to which it is a party or by which it is bound or (ii)
require the filing, declaration or registration with, or permit, consent or
approval of, or the giving of any notice to, any governmental authority or third
party, excluding those that have already been obtained prior to the date hereof.
(v) There is no litigation, arbitration, mediation or other
investigation or proceeding pending or, to the best of GTSD's knowledge,
threatened or in prospect, against GTSD with respect to the transactions
contemplated by this Agreement.
(vi) SCHEDULE 19.1 attached hereto sets forth, as of the date
hereof, a true, complete and accurate list of all (i) United States and foreign
patents and patent applications, (ii) unpatented technology, including trade
secrets, know-how, proprietary rights and information, and expertise, (iii)
United States, state and foreign trademark applications and registrations, trade
names and material common-law marks, (iv) United States and foreign registered
and material unregistered copyrighted works, including any computer programs and
(v) any license, joint venture or other material agreements relied on, related
to, used or enjoyed by GTSD in connection with its business of vitrifying
radioactive and mixed wastes (collectively, the "Intellectual Property").
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(vii) Except as set forth in SCHEDULE 19.1, GTSD either (a) owns or
(b) holds adequate, enforceable, valid and binding licenses to use, transfer,
sublicense and otherwise grant rights to third parties in, all of the
Intellectual Property.
(viii)Except as set forth in SCHEDULE 19.1, GTSD has no knowledge
nor any basis to believe that (a) any of the Intellectual Property or (b) any
past operations or currently planned operations, activities or products of GTSD,
infringe on any intellectual property, proprietary, contract or other rights of
any third party.
(ix) Except as set forth in SCHEDULE 19.1, to the best of GTSD's
knowledge, no entity or person is infringing the rights of GTSD with respect to
the Intellectual Property and GTSD has no reasonable basis to claim such
infringement.
(x) Except as set forth in SCHEDULE 19.1 and other than the
rights of the Inventors, (a) the Intellectual Property is free and clear of any
liens, pledges, assignments, obligations or any other encumbrances of any
nature, and (b) no consents or approvals of any person or entity are necessary
to sell, convey, transfer, assign, deliver or sublicense any of the Intellectual
Property to any third party.
(xi) The patents, registered trademarks and registered copyrights
listed on SCHEDULE 19.1 are subsisting, valid and enforceable, and have been
maintained by the Company.
(xii) Except as set forth in SCHEDULE 19.1, none of (a) the
Catholic University, (b) the Vitreous State Laboratory of the Catholic
University, (c) the United States Government or any United States government
agency, (d) any foreign government or foreign government agency or (e) any other
person or entity (other than GTSD, the Inventors and First Fidelity Bank, N.A.)
have any rights whatsoever in any of the Intellectual Property.
19.2 BNFL hereby represents and warrants to GTSD as of the date hereof
as follows:
(i) BNFL is a corporation duly incorporated and validly existing
under the laws of the State of Delaware.
(ii) BNFL has all requisite corporate power and authority to enter
into this Agreement and the Sublicense Agreement and carry out and perform its
obligations under the terms of such agreements.
(iii) The execution, delivery and performance of this Agreement and
the Sublicense Agreement have been duly authorized and approved by all necessary
corporate action and this Agreement and the Sublicense Agreement, when duly
executed and delivered by BNFL, will constitute valid and legally binding
obligation of BNFL, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to the rights of creditors generally.
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(iv) The execution and performance of this Agreement and the
Sublicense Agreement do not and will not (i) violate BNFL's certificate of
incorporation or bylaws, or the terms of any judgment, decree or order of any
court or administrative authority or the terms of any material agreement to
which it is a party or by which it is bound or (ii) require the filing,
declaration or registration with, or permit, consent or approval of, or the
giving of any notice to, any governmental authority or third party, excluding
those that have already been obtained prior to the date hereof.
(v) There is no litigation, arbitration, mediation or other
investigation or proceeding pending or, to the best of BNFL's knowledge,
threatened or in prospect, against BNFL with respect to the transactions
contemplated by this Agreement.
19.3 Each of the parties hereto covenants and agrees to indemnify the
other party and its Affiliates, directors, officers, employees, agents,
successors and assigns and hold such other person harmless against any and all
liabilities, losses, damages, claims, deficiencies, costs and expenses,
interest, awards, judgments and penalties (including, without limitation,
reasonable legal costs and expenses) actually suffered or incurred by such other
person (hereinafter a "Loss"), arising out of or resulting from the breach of
any representation or warranty by such party contained herein.
19.4 Promptly after the assertion by any third party of any claim
against any party entitled to be indemnified under this Article XIX (the
"Indemnitee") that, in the judgment of such Indemnitee, may result in the
incurrence by such Indemnitee of Losses for which such Indemnitee would be
entitled to indemnification pursuant to this Agreement, such Indemnitee shall
deliver to the other party who has indemnified such Losses hereunder
("Indemnitor") a written notice describing such claim. Such Indemnitor may
participate in and, at its option upon acknowledgment of Indemnitee's right to
indemnification for such matter, assume the defense of the Indemnitee against
such claim, including the employment of counsel, who shall be reasonably
satisfactory to such Indemnitee. In such case, any Indemnitee shall have the
right to employ separate counsel in any such action or claim and to participate
in the defense thereof, but the fees and expenses of such counsel shall not be
at the expense of the Indemnitor unless (i) the Indemnitor shall have failed,
within a reasonable time after having been notified by the Indemnitee of the
existence of such claim as provided in the preceding sentence, to assume the
defense of the such claim, (ii) the employment of such counsel has been
specifically authorized in writing by the Indemnitor or (iii) the named parties
to any such action (including impleaded parties) include both such Indemnitee
and the Indemnitor and such Indemnitee shall have been advised in writing by
Indemnitor's counsel that there may be conflicting interests between Indemnitee
and the Indemnitor in the legal defense thereof. No Indemnitor shall be liable
to indemnify any Indemnitee for any compromise or settlement of any such action
or claim effected without the consent of the Indemnitor.
19.5 In the event that GTSD is required under Section 19.3 to make any
indemnification to BNFL, and GTSD cannot or does not make such required payment
when
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required, for whatever reason, BNFL or the Project Organization, as applicable,
shall be entitled to offset any such unpaid amounts against any payment
otherwise due to GTSD under this Agreement. In the event that BNFL is required
under Section 19.3 to make any indemnification to GTSD, and BNFL cannot or does
not make such required payment when required, for whatever reason, GTSD or the
Project Organization, as applicable, shall be entitled to offset any such unpaid
amounts against any payment otherwise due to BNFL under this Agreement or under
the Convertible Debenture. In the event the Project Organization withholds
amounts otherwise due a party pursuant to this Section 19.5, the Project
Organization will promptly forward such amounts to the other party.
19.6 All representations and warranties made pursuant to or in
connection with this Agreement shall survive the date hereof, but shall
terminate three (3) years after the date hereof; provided, that there shall be
no such termination with respect to any representation or warranty as to which a
bona fide claim has been asserted prior to such date.
19.7 Notwithstanding anything herein to the contrary, each party hereto
shall not be liable as Indemnitor for any Losses of the other party under this
Article XIX unless and until the aggregate amount of all Losses hereunder by
such other party equals or exceeds $50,000, in which case the indemnifying party
shall be liable for all such losses of the other party equal to or greater than
$50,000, up to a maximum aggregate amount of $10,000,000.
ARTICLE XX
PUBLIC DISCLOSURE
-----------------
Any news release, public announcement, advertising, publicity or
discussion with any other contractor or vendor whatsoever pertaining to the
performance or the nature of the work related to this Agreement shall be subject
to the express prior written approval of all of the parties hereto.
ARTICLE XXI
WAIVER AND SEVERABILITY
-----------------------
21.1 The waiver by any of the parties of any breach of any provision
hereof by another shall not be construed to be a waiver of any succeeding breach
of such provision or a waiver of the provision itself.
21.2 If one or more of the provisions of the Agreement shall be found to
be illegal, invalid or unenforceable under any applicable law, then such
contravention or invalidity shall not invalidate the entire Agreement. Such
provision shall be deemed to be modified consistent with the intent of the
parties to the extent necessary to render it legal, valid and enforceable, and
if no such modification shall render it legal, valid and enforceable, then this
Agreement shall be construed as if not containing the provision held to be
invalid, and the rights and obligations of the parties shall be construed and
enforced accordingly.
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ARTICLE XXII
RELATIONSHIP OF THE PARTIES
---------------------------
Nothing contained in this Agreement shall be construed to create
any joint venture, pooling arrangement or partnership, whether statutory or
otherwise, and the rights and obligations of the parties hereto shall be limited
to those expressly recited herein. Nothing in this Agreement shall be construed
to grant to either of the parties hereto any right to make commitments of any
kind for or on behalf of the other party hereto without the prior written
consent of said other party.
ARTICLE XXIII
RESPONSIBILITY FOR COSTS INCURRED
---------------------------------
Each party shall bear all of the costs and expenses entailed in its
own performance of its activities contemplated by this Agreement, excluding any
work to be performed pursuant to any Subcontract resulting from this Agreement.
ARTICLE XXIV
COMPLIANCE WITH LAWS
--------------------
Each party agrees to comply with applicable provisions of all laws,
ordinances, orders, rules and regulations of the United States as they relate to
the parties' performance of this Agreement and each of the parties agrees to
require any and all consultants, vendors and agents retained in conjunction with
the activities described in this Agreement to do likewise; and such compliance
shall be a material obligation of this Agreement.
ARTICLE XXV
NOTICES
-------
Except as otherwise expressly stated, all notices required to be given or
which may be given under this Agreement shall be in writing and shall be deemed
given upon the earlier of (i) when it is personally delivered, (ii) three (3)
days after having been mailed by certified mail, postage prepaid, return receipt
requested, (iii) two (2) days after having been sent by recognized overnight
delivery service or (iv) one (1) day after having been sent by facsimile
transmission, addressed as follows:
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If to:
(a) GTSD:
GTS DURATEK, INC.
8955 Guilford Road, Suite 200
Columbia, MD 21046
Attn: Robert E. Prince, President and Chief Executive Officer
Telecopy No.: (301) 621-8211
(b) BNFL:
BNFL INC.
9302 Lee Highway, Suite 950
Fairfax, Virginia 22031
Attn: K. Edward Newkirk, General Counsel
Telecopy No.: (703) 359-0442
ARTICLE XXVI
COMPLETE AGREEMENT
------------------
This Agreement together with the other agreements referenced herein
to be entered into between the parties contains the complete agreement and
understanding between the parties concerning the subject matter hereof and shall
supersede all other agreements, understandings or commitments between the
parties as to such subject matter.
ARTICLE XXVII
ASSIGNMENT
----------
The obligations and rights of each party hereunder shall not be
assignable without the prior written consent of the other party; provided,
however, that a party hereto may without the consent of the other party assign
this Agreement to any successor owner of such party or its business resulting
from merger, consolidation, sale of the business or otherwise so long as such
successor agrees in writing to assume the party's obligations under this
Agreement in a form and manner reasonably acceptable to the other party.
Notwithstanding anything herein to the contrary, BNFL may assign its obligations
and rights hereunder to an Affiliate upon the written consent of GTSD, which
consent will not be unreasonably withheld or delayed. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of the parties'
respective heirs, legal representatives, successors and assigns.
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ARTICLE XXVIII
WAIVER, MODIFICATION OR AMENDMENT
---------------------------------
No waiver, modification or amendment of any provision of this
Agreement shall be effective, binding or enforceable unless in writing and
signed by all of the parties hereto.
ARTICLE XXIX
GOVERNING LAW
-------------
The validity of this Agreement and of any of the terms or
provisions as well as the rights and duties of the parties hereunder shall be
governed by the laws of the State of Maryland, without reference to any conflict
of law or choice of law principles in the State of Maryland that might apply the
law of another jurisdiction.
ARTICLE XXX
ARBITRATION
-----------
Any disputes between the parties relating to the terms of this
Agreement, or the breach thereof, shall be submitted to binding arbitration in
Baltimore, Maryland, in accordance with the rules of the American Arbitration
Association. In the event that either party desires to arbitrate any such
dispute, such party shall so notify the other party and the parties shall
endeavor, for a period of thirty (30) days, to resolve such dispute without
arbitration. In the event that the parties cannot resolve the dispute within
such thirty (30) day period, then within ten (10) days thereafter, the parties
shall jointly designate an arbitrator to hear the dispute, or, if the parties
are unable to jointly select an arbitrator, an arbitrator shall be chosen by the
President of the American Arbitration Association from lists of candidates
provided by each of the parties. The decision of the arbitrator shall be final
and binding upon the parties, their successor and assigns, and they shall comply
with such decision in good faith, and each party hereby submits itself to the
jurisdiction of the courts of the place where the arbitration is held, but only
for the entry of judgment with respect to and to enforce the decision of the
arbitrator hereunder. The arbitrator may order specific performance or other
equitable relief or remedies to the extent it deems it appropriate, in any
situation in which a court could so order. Each party shall pay all of its own
expenses in connection with such arbitration and one-half of the arbitrator's
fees and expenses.
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ARTICLE XXXI
CONSTRUCTION
------------
Headings or captions of this Agreement are for reference only and
are not to be construed in any way as part of this Agreement, nor in the
interpretation of this Agreement. The masculine pronoun shall include the
feminine and neuter, and vice versa, where the context so requires.
ARTICLE XXXII
COUNTERPARTS
------------
This Agreement may be executed in multiple original counterparts, each of
which shall be deemed an original and all of which together shall constitute but
one and the same document.
[Balance of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
WITNESS/ATTEST: GTS DURATEK, INC.
_________________________ By:________________________________
Diane R. Brown, Secretary Name: Robert E. Prince
Title: President and Chief Executive
Officer
BNFL INC.
________________________ By:________________________________
Name: Rolland A. Langley
Title: President
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APPENDIX I
FORM OF CONVERTIBLE DEBENTURE
-----------------------------
<PAGE>
APPENDIX II
FORM OF SUBLICENSE AGREEMENT
----------------------------
