<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995 Commission File No. 0-21042
MOLTEN METAL TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1659959
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
400-2 Totten Pond Road,
Waltham, MA 02154
(Address of principal executive offices) (Zip Code)
Area Code (617) 487-9700
(Registrant's telephone number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT
Common Stock, $.01 par value
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
---
The aggregate market value of Registrant's voting stock held by non-affiliates
of the Registrant at March 11, 1996 was approximately $550 million, based on the
closing bid price of such stock on such date as reported by the NASDAQ National
Market ($35.00 per share). On March 11, 1996, 22,898,890 shares of the
Registrant's Common Stock, $.01 par value, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement for the 1996 Annual Meeting of Stockholders of the Registrant to
be held on May 8, 1996. Certain information therein is incorporated by reference
into Part III hereof.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
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(a) Financial Statements
1. The financial statements set forth in the list below are filed as part of
this report on pages F-1 through F-18.
Report of Independent Accountants
Consolidated Balance Sheet at December 31, 1995 and 1994
Consolidated Statement of Operations for the years ended December 31,
1995, 1994 and 1993
Consolidated Statement of Changes in Stockholders' Equity for the years
ended December 31, 1995, 1994 and 1993
Consolidated Statement of Cash Flows for the years ended December 31,
1995, 1994 and 1993
Notes to Consolidated Financial Statements
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter ended
December 31, 1995.
(c) Exhibits
3.1 - Amended and Restated Certificate of Incorporation of the
Registrant. *4* (3.1).
3.2 - Amended and Restated By-Laws of Registrant. *4* (3.2)
4.1 - Specimen Certificate for Shares of the Registrant's Common
Stock, $.01 par value. *1* (4.1)
u 10.1 - Pilot Plant Agreement dated as of October 25, 1991 between the
Registrant and E.I. du Pont de Nemours and Company, as amended
by the Pilot Plant Funding Agreement Addendum dated as of
February 10, 1992. *1* (10.2)
10.2 - Agreement dated as of December 20, 1991 between the Registrant
and L'Air Liquide S.A. *1* (10.4)
* 10.3 - Lease dated as of March 4, 1996 for 400-2 Totten Pond Road,
Waltham, Massachusetts.
10.4 - Lease dated as of July, 1993 for Two University Office Park,
Waltham, Massachusetts. #2# (10.8)
10.5 - Lease dated as of June 29, 1992 between the Greater Fall River
Development Corporation and the Registrant for the property
located at 421 Current Road, Fall River, Massachusetts. *1*
(10.6)
10.6 - Strategic Alliance and Investment Agreement dated as of May 3,
1993 between the Registrant and Am-Re Services, Inc. #1#
(19(a))
10.7 - Environmental Impairment Insurance Common Stock Warrant issued
by the Registrant to Am-Re Services, Inc. #1# (19(b))
10.8 - Project Financing Common Stock Warrant issued by the Registrant
to Am-Re Services, Inc. #1# (19(c))
10.9 - Registration Rights Agreement dated as of May 3, 1993 among the
Registrant, Am-Re Services, Inc. and American Reinsurance
Company. #1# (19(d))
u 10.10 - Asset Purchase Agreement dated as of July 7, 1992 between the
Registrant and IPS Interproject Service AB and IPS Interproject
Processteknik AB. *2* (10.8)
10.11 - Technology Assignment Agreement dated as of May 31, 1990 between
the Registrant and Christopher J. Nagel and Robert D. Bach, as
clarified by the Clarification Agreement dated as of May 31,
1990 and as amended by the Amendment to Technology Assignment
Agreement dated as of October 12, 1990. *1* (10.9)
[CARET]10.12 - Employment Agreement dated as of June 30, 1990 between the
Registrant and William M. Haney, III. *1* (10.11)
[CARET]10.13 - Letter Agreement dated as of October 1, 1991 from the Registrant
to William M. Haney, III regarding employment. *1* (10.12)
2
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[CARET]10.14 - Employment Agreement dated as of May, 1993 between the
Registrant and Eugene Berman. *4* (10.16)
[CARET]10.15 - Registrant's Amended and Restated 1989 Long Term Incentive
Compensation Plan, as amended effective March 2, 1995.
[CARET]10.16 - Registrant's 1993 Employee Stock Purchase Plan. *3* (28.2)
[CARET]10.17 - Registrant's 1992 Restricted Common Stock Award Plan. *1*
(10.14)
10.18 - Form of Employee Non-Disclosure, Development and
Non-Competition Agreement of the Registrant. *1* (10.16)
10.19 - Loan Agreement dated February 4, 1993 between the Registrant
and Jobs for Fall River, Inc. *1* (10.18)
10.20 - $1,800,000 Promissory Note, dated February 4, 1993, made by the
Registrant in favor of Jobs for Fall River, Inc. *1* (10.19)
10.21 - $50,000 Promissory Note, dated February 4, 1993, made by the
Registrant in favor of Jobs for Fall River, Inc. *1* (10.20)
10.22 - $150,000 Promissory Note, dated February 4, 1993, made by the
Registrant in favor of Jobs for Fall River, Inc. *1* (10.21)
10.23 - Security Agreement dated February 4, 1993 between the
Registrant and Jobs for Fall River, Inc. *1* (10.22)
10.24 - Letter Agreement dated February 4, 1993 between the Registrant
and Jobs for Fall River, Inc. regarding security for loan made
by Jobs for Fall River, Inc. to the Registrant. *1* (10.23)
10.25 - Contract No. DE-AC21-9MC30171 dated September 30, 1993
between the Registrant and the United States Department of
Energy, Morgantown Energy Technology Center. *4* (10.31)
v 10.26 - Modification to Contract No. DE-AC21-9MC30171 dated March 24,
1994 between the Registrant and the United States Department of
Energy, Morgantown Energy Technology Center. #3# (10.32)
10.27 - First Amendment to Lease, dated September 21, 1994, between the
Registrant and Connecticut General Life Insurance Company. #5#
(10.1)
10.28 - Lease dated as of July 1, 1994 by and between the Registrant
and the Greater Fall River Development Corporation. #5# (10.2)
w 10.29 - Master Agreement For Government Market Development and
Commercialization of CEP Technology, dated as of August 9,
1994, between the Registrant and Martin Marietta Corporation.
#5# (10.3)
10.30 - Loan Agreement, dated as of August 1, 1994, between the
Registrant and the Massachusetts Industrial Finance Agency.
#5# (10.4)
10.31 - Underwriting Agreement dated as of August 26, 1994, between
the Massachusetts Industrial Finance Agency and CS First Boston
Corporation, and approved by the Registrant. #5# (10.5)
10.32 - Letter of representation dated as of August 26, 1994 from
Molten Metal Technology, Inc. to the Massachusetts Industrial
Finance Agency and CS First Boston Corporation. #5# (10.6)
x 10.33 - Master Services Agreement, dated November 30, 1994 between the
Registrant and Fluor Daniel Environmental Services, Inc. #6#
(10.43)
x 10.34 - Master Agreement, dated December 2, 1994 between the Registrant
and Scientific Ecology Group, Inc. #6# (10.44)
y 10.35 - Development Agreement dated as of May 3, 1995 between the
Registrant and Hoechst Celanese Chemical Group, Inc. ("HCC").
#7# (10.1)
y 10.36 - Feedstock Supply Agreement dated as of May 3, 1995 between the
Registrant and HCC. #7# (10.2)
y 10.37 - Synthesis Gas Purchase and Sale Agreement dated as of May 3,
1995 between the Registrant and HCC. #7# (10.3)
*z10.38 - Commercial Mixed Waste Processing Agreement dated as of
December 12, 1995 between the Registrant and M4 Environmental
L.P.
*11 - Computation of Primary, Fully Diluted and Supplementary Net
Income (Loss) Per Share
*21 - Subsidiaries of the Registrant.
3
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* 23.1 - Consent of Price Waterhouse LLP
* 23.2 - Consent of Coopers & Lybrand L.L.P.
- ----------
* Filed herewith.
[CARET] Management contract or compensatory plan filed pursuant to item 14(c)
of Form 10-K.
u An unexpired order granting confidential treatment to deleted portions
of Exhibits 10.1 and 10.10 was issued on February 9, 1993.
v An unexpired order granting confidential treatment to deleted portions
of Exhibit 10.26 was issued on May 11, 1994.
w An unexpired order granting confidential treatment to deleted portions
of Exhibit 10.29 was issued on January 6, 1995.
x An unexpired order granting confidential treatment to deleted portions
of Exhibits 10.33 and 10.34 was issued on May 22, 1995.
y An unexpired order granting confidential treatment to deleted portions
of Exhibits 10.35, 10.36 and 10.37 was issued on October 20, 1995.
z Confidential treatment has been requested for deleted portions of
Exhibit 10.38.
*1* Incorporated by reference to the designated exhibit to the Registration
Statement on Form S-1 of the Registrant (Registration No. 33-56392)
filed on December 24, 1992.
*2* Incorporated by reference to the designated exhibit to Amendment No. 3
to the Registration Statement on Form S-1 of the Registrant
(Registration No. 33-56392) filed on February 8, 1993.
*3* Incorporated by reference to the designated exhibit to the Registration
Statement on Form S-8 of the Registrant (Registration No. 33-65688)
filed on July 6, 1993.
*4* Incorporated by reference to the designated exhibit to Amendment No. 1
to the Registration Statement on Form S-1 of the Registrant
(Registration No. 33-70210) filed on November 30, 1993.
#1# Incorporated by reference to the designated exhibit to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1993.
#2# Incorporated by reference to the designated exhibit to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1993.
#3# Incorporated by reference to the designated exhibit to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1993.
#4# Incorporated by reference to the designated exhibit to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1994.
#5# Incorporated by reference to the designated exhibit to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1994.
#6# Incorporated by reference to the designated exhibit to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1994.
#7# Incorporated by reference to the designated exhibit to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995.
(d) Financial Statement Schedules
1. The financial statements of M4 Environmental L.P. set forth in the list
below are filed as part of this report on pages F-19 through F-29.
Report of Independent Accountants
Balance Sheet at December 31, 1995 and 1994
Statements of Operations for the period from inception (August 8, 1994)
through December 31, 1995 and at December 31, 1995 and 1994
Statements of Changes in Partners' Capital for the period from inception
(August 8, 1994) through December 31, 1995 and at December 31, 1995
and 1994
Statements of Cash Flows for the period from inception (August 8, 1994)
through December 31,
4
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1995 and at December 31, 1995 and 1994
Notes to Financial Statements
5
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Amendment to its Annual Report
to be signed on its behalf by the undersigned, thereunto duly authorized.
MOLTEN METAL TECHNOLOGY, INC.
By: /s/ Benajmin T. Downs
----------------------------------------------------
Benjamin T. Downs
Executive Vice President and Chief Financial Officer
Date: June 13, 1996
6
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Exhibit 10.38* Page 1
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COMMERCIAL MIXED WASTE PROCESSING AGREEMENT
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THIS AGREEMENT is made and entered into as of the 12th day of December,
1995, by and between M4 Environmental L.P., a Delaware limited partnership with
its principal office at 151 Lafayette Drive, Oak Ridge, Tennessee ("M4"), and
Molten Metal Technology, Inc., a Delaware corporation with its principal office
at 51 Sawyer Road, Waltham, Massachusetts ("MMT").
WHEREAS, MMT and M4 are parties to a series of agreements including that
certain License Agreement dated as of August 9, 1994 (the "License Agreement")
pursuant to which MMT licensed to M4 certain rights to MMT's proprietary
processing technology known as Catalytic Extraction Processing ("CEP") with
respect to certain designated feedstocks; and
WHEREAS, although Commercial Mixed Wastes (as herein defined) are not
included in the market of wastes for CEP processing licensed to M4 by MMT under
the License Agreement, M4 and MMT desire to enter into a commercial arrangement
with respect to the processing of Commercial Mixed Wastes using CEP ("CMW
Processing") at the M4 Technology Center in Oak Ridge, Tennessee (the "M4
Facility").
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth below and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, M4 and MMT agree as
follows:
ARTICLE I. DEFINITIONS
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In addition to the defined terms found elsewhere in this Agreement, as
used in this Agreement the following terms shall have the following meanings:
"AEA" means the Atomic Energy Act of 1954, 42 U.S.C. [Section]1101 et
seq., and the federal regulations implementing such Act.
"Catalytic Extraction Processing" or "CEP" means the processes, methods
and systems (including all intellectual, intangible and tangible property
associated therewith and all aspects of accepting Feedstocks, reactions within a
CEP plant and handling Recovered Resources) directed to the processing of
Feedstocks by introducing the Feedstocks to a processing vessel containing at
least one liquefied metallic compound in a molten metal bath.
"CMW Feedstocks" means Feedstocks comprising Commercial Mixed Wastes.
"CMW Processing" means the processing of CMW Feedstocks using CEP.
"Commercial Mixed Wastes" means materials that (i) contain both
Radioactive materials and Hazardous and/or Toxic materials, (ii) are at the
relevant time regulated
*Confidential Treatment has been requested for certain portions of this
Exhibit 10.38.
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as a mixed waste by the U.S. Nuclear Regulatory Commission ("NRC") or an NRC
Agreement State under Section 274 of the AEA; (iii) are at the relevant time
regulated as a mixed waste by the EPA or an EPA authorized Government Authority
under RCRA or TSCA; and (iv) are generated in the United States by commercial
nuclear power plants, medical facilities, industrial facilities, universities,
Government Authorities or any other generator. However, Commercial Mixed Wastes
do not include (i) materials owned by, generated by, stored by or under the
jurisdiction or control of the Department of Defense, the Department of Energy
or the United States Enrichment Corporation or any successor Person, (ii) ion
exchange resins that have become spent due to usage in nuclear power plants, and
(iii) other materials that may, by mutual agreement of MMT and M4, be included
within the exclusive license from MMT to M4 pursuant to the License Agreement.
"Conforming Feedstocks" has the meaning set forth in Section 4.1 hereof.
"Customer" means any customer that contracts with M4 to deliver Commercial
Mixed Wastes to M4 for CMW Processing, including but not limited to MMT
Customers.
"Dispute Resolution Agreement" means that certain Dispute Resolution
Agreement dated as of August 9, 1994 between MMT, M4 and the other parties named
therein.
"Environmental Laws" means all applicable present and future statutes,
regulations, rules, ordinances, codes, licenses, permits, orders, approvals,
plans, authorizations, concessions, franchises, and similar items, promulgated
or administered by any Government Authority, and all applicable judicial,
administrative and regulatory decrees, judgments, and orders relating to the
protection human health or the environment, including, without limitation, (i)
all requirements pertaining to reporting, licensing, permitting, investigation
and remediation of emissions, discharges, releases or threatened releases of
Hazardous, Radioactive or Toxic materials, substances or wastes, chemical
substances, pollutants or contaminants, whether solid, liquid or gaseous in
nature, into the air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous, Radioactive or Toxic materials, substances
or wastes, chemical substances, pollutants or contaminants, whether solid,
liquid or gaseous in nature; and (ii) all requirements pertaining to the
protection of the health and safety of employees or the public. Without limiting
the generality of the foregoing, the term "Environmental Laws" shall encompass
each of the following statutes, and all present and future regulations
promulgated thereunder, and all amendments and successors to such statutes and
regulations, as may be enacted and promulgated from time to time: (a) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. [Section]9601 et seq. ("CERCLA); (b) RCRA; (c) TSCA; (d) AEA; (e) the
Occupational Safety and Health Act of 1970, 29 U.S.C. [Section]651 et seq.; and
(f) any applicable state statutes analogous to any of the foregoing.
"License Fee" has the meaning set forth in Section 3.2 hereof.
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"M4 Confidential Information" means any confidential or proprietary
information of M4.
"MMT Customer" means any customer that has been solicited by MMT on behalf
of M4 or has been identified by MMT to M4 and that contracts with M4 to deliver
Commercial Mixed Wastes to M4 for CMW Processing.
"Nonconforming Feedstocks" has the meaning set forth in Section 4.1
hereof.
"Processing Order" means a purchase order between M4 and a Customer with
respect to CMW Processing on behalf of such Customer, in the form of EXHIBIT A
attached hereto.
"Processing Revenues" means all amounts received from a Customer to M4 in
respect of CMW Processing.
"Waste Acceptance Criteria" means the criteria established by MMT and M4
with respect to the characteristics, chemical and radiological composition,
physical properties, quantity and regulatory category (e.g. listed, mixed,
derivative, etc.) of Commercial Mixed Waste to be processed by M4 with CEP
pursuant to this Agreement.
Capitalized terms used herein without definition shall have the meaning
ascribed to such terms in the License Agreement.
ARTICLE II. RIGHTS GRANTED; MARKETING OBLIGATIONS
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2.1 SCOPE OF AGREEMENT. Subject to the terms and conditions of this
Agreement, MMT grants to M4 the right to use CEP to process Commercial Mixed
Wastes at the M4 Facility. Such processing will be performed only in accordance
with Processing Orders between M4 and the applicable Customer. The form of
Processing Order which the parties anticipate using is attached hereto as
Exhibit A. In the event that changes to the form of Processing Order are
required in order to conform such form of Processing Order to the prevailing
terms and conditions of commercial practice in the processing industry, M4 and
MMT shall revise such form of Processing Order accordingly and, if necessary,
amend this Agreement to conform the provisions hereof to such revised form of
Processing Order. Further, in the event that a particular Customer requires
changes to such form of Processing Order (in addition to any changes that may be
required by the preceding sentence) and M4 and MMT agree that it is desirable to
process CMW Feedstocks for such Customer, M4 and MMT shall revise such
Processing Order accordingly and, if necessary, amend this Agreement to conform
the provisions hereof to such revised Processing Order.
2.2 GRANT. Upon the conditions set forth herein, MMT designates M4
as its representative to process Commercial Mixed Wastes using CEP. Subject
to the terms
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and conditions of this Agreement, MMT hereby grants to M4 *
to use the MMT Licensed Property solely to perform M4's obligations
under this Agreement. M4 expressly acknowledges that the provisions of Sections
3.1 and 3.2 of the License Agreement are inapplicable to the license grant set
forth in this Section 2.2.
2.3 OBLIGATIONS OF M4. M4 will use its best efforts to enter into
Processing Orders with Customers and process in accordance with the applicable
Processing Schedule (as defined in Section 4.5 hereof) all Commercial Mixed
Waste delivered to M4 by any such Customers or their respective agents.
*
2.4 OBLIGATIONS OF MMT. MMT will use its best efforts to vigorously
promote, market and solicit orders for CMW Processing and, subject to Section
2.3, agrees to treat M4 as its priority vendor with respect to the processing of
Commercial Mixed Wastes. MMT shall be primarily responsible for negotiating
Processing Orders with Customers and preparing and finalizing processing
proposals, pricing arrangements, Processing Orders and related documentation.
2.5 COOPERATION BY M4 AND MMT. M4 and MMT shall cooperate and provide
reasonable assistance to the other in connection with the marketing of CMW
Processing to potential Customers.
*
MMT, its sales force and senior management and potential MMT Customers will have
reasonable access to the M4 Facility during regular business hours to observe
the operation of such facility. Unless authorized in advance by MMT, M4 shall
not meet
*Confidential Treatment has been requested for this portion of Exhibit 10.38.
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with Customers or potential Customers without a representative of MMT
being present at such meeting.
ARTICLE III. INVOICING; PAYMENTS TO MMT; REPORTS
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3.1 INVOICING. M4 shall be responsible for preparing and delivering
invoices to Customers in respect of charges for CMW Processing by M4. All fees
with respect to CMW Processing by M4 shall be paid by the Customer directly to
M4.
*
3.3 REPORTS. In connection with any payment of License Fees or Sales
Commissions to MMT, M4 will provide a statement setting forth the names of the
Customers for which such payment is being made, the amount of Processing
Revenues received from such Customers in respect of CMW Processing by M4, and
the calculation of the applicable License Fees and Sales Commissions. At the
reasonable request of MMT, M4 shall provide to MMT copies of all relevant
documentation evidencing such License Fees and Sales Commissions.
*Confidential Treatment has been requested for this portion of Exhibit 10.38.
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3.4 PAYMENTS AFTER TERMINATION. Notwithstanding any termination of this
Agreement, M4 will pay to MMT all License Fees and Sales Commissions received
from Customers in respect of Processing Orders accepted by M4 prior to any such
termination.
3.5 PAYMENTS IN RESPECT OF RECOVERED RESOURCES. Unless otherwise
agreed to in writing by M4 and MMT pursuant to Section 4.10 hereof, revenues
received by M4 or MMT from the sale of Recovered Resources shall be
*
3.6 CHANGES TO REGULATORY REQUIREMENTS. In the event that after the date
of this Agreement there are material changes in the regulatory requirements
governing M4's or MMT's obligations under this Agreement which result in
material changes to M4's or MMT's costs under this Agreement, M4 and MMT will
meet to discuss and make an equitable adjustment for the effects of such changes
on this Agreement.
ARTICLE IV. CMW PROCESSING
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4.1 WASTE ACCEPTANCE CRITERIA. From time to time after the date of this
Agreement, M4 and MMT shall work together to establish mutually acceptable Waste
Acceptance Criteria for the types of CMW Feedstocks to be processed by M4
pursuant to this Agreement, it being understood that such Waste Acceptance
Criteria shall be in conformance with all applicable Environmental Laws and all
applicable permits and licenses held by M4. The parties acknowledge that M4
currently has in place Waste Acceptance Criteria as set forth on EXHIBIT B
attached hereto. As contemplated by Section 4.5 hereof, M4 and MMT shall meet
regularly to discuss and agree upon any necessary changes to the Waste
Acceptance Criteria. In connection with the Waste Acceptance Criteria for any
particular Feedstock, M4 and MMT will prepare and sign a specification sheet in
a form to be mutually agreed upon from time to time (a "Specification Sheet")
setting forth the agreed upon Waste Acceptance Criteria for any particular CMW
Feedstock. Among other things, the Specification Sheets will specify the
characteristics, chemical and radiological composition, physical properties,
physical form and regulatory category of particular CMW Feedstocks. A
Specification Sheet for any particular CMW Feedstock may be amended from time to
time by mutual agreement of M4 and MMT. Any CMW Feedstock that conforms to the
applicable Specification Sheet is referred to in this Agreement as a "Conforming
Feedstock." Any CMW Feedstock that does not conform to the applicable
Specification Sheet is referred to in this Agreement as a "Nonconforming
Feedstock."
4.2 PROCESSING ORDERS. Subject to Section 2.4 hereof, M4 will be
responsible for entering into Processing Orders with Customers to deliver
Commercial Mixed Wastes to the M4 Facility for CMW Processing.
*Confidential Treatment has been requested for this portion of Exhibit 10.38.
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4.3 Staging and Processing of Feedstocks.
-------------------------------------
(a) Unless otherwise agreed to by the parties in writing, as between
MMT and M4, M4 will be responsible for all activities relating to inspecting,
receiving, processing and disposing CMW Feedstocks, including without
limitation: (i) the inspection of CMW Feedstocks to ensure that such feedstocks
are Conforming Feedstocks; (ii) the staging of CMW Feedstocks prior to
processing in conformance with all Environmental Laws; (iii) the processing of
Conforming Feedstocks in accordance with the applicable Specification Sheet and
in conformance with all Environmental Laws; and (iv) the disposal of any wastes
or other materials remaining after CMW Processing in conformance with all
Environmental Laws. In addition to M4's obligation to ensure that all CMW
Feedstocks are Conforming Feedstocks, M4 shall record and retain, and upon
request of MMT deliver to MMT, copies of all manifest information with respect
to any CMW Feedstock, the source and customer for such CMW Feedstock, and such
other information as MMT may reasonably request with respect to such CMW
Feedstock. MMT shall provide to M4 all manifest information with respect to any
CMW Feedstock provided to MMT by an MMT Customer. Each of M4 and MMT hereby
represents and warrants that all information provided by it to the other
pursuant to this Section 4.3 will be true and correct in all respects and in
compliance with all applicable governmental laws, rules, regulations, ordinances
and orders. M4 also represents and warrants that it has or will have all
necessary licenses, permits, and approvals from the appropriate regulatory
agencies for receiving, staging and processing CMW Feedstocks under this
Agreement. To the extent that M4 does not currently possess all licenses,
permits and approvals which are or may be necessary with respect to M4's
obligations under this Agreement, M4 shall use its best efforts to promptly
apply for and obtain such licenses, permits and approvals. M4 also will be
responsible for all packages and containers it supplies, and represents and
warrants that such containers and packages, and the labels and other markings
thereon, do and will comply with all rules, regulations, laws and/or ordinances
which apply to the safety, packaging, storage, or transportation of such
containers.
(b) M4 shall have the right to have all CMW Feedstocks inspected
prior to shipment to M4 and/or prior to acceptance by M4 to ensure that such CMW
Feedstocks conform to the applicable Waste Acceptance Criteria and all
applicable laws, rules, regulations, permits or licenses. If prior to shipment
to M4 or acceptance by M4, any CMW Feedstocks are found by M4 to vary in
characteristics, composition, physical properties, quantity or regulatory
category from the Waste Acceptance Criteria or the applicable shipment manifest
or to otherwise constitute Nonconforming Feedstocks, M4 shall give MMT prompt
written notice of such variance. Both M4 and MMT shall have the right, prior to
shipment or acceptance, as the case may be, to reject any and all CMW Feedstocks
subject to such variance or which otherwise, in the judgment of M4 or MMT, may
result in a violation of any applicable laws, rules, regulations, permits or
licenses, including but not limited to any permits or licenses held by M4.
Notwithstanding the foregoing, in the event that M4 accepts any Nonconforming
Feedstocks, such Nonconforming Feedstocks will be promptly staged, processed,
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stored and/or prepared for lawful transportation by M4, subject to any and all
constraints placed on such action through license or permit conditions, or any
law, regulation, ordinance, or government order, and, subject to Article V
hereof, will be promptly returned to the applicable Customer unless M4 and such
Customer agree to, or the appropriate regulatory authorities direct, an
alternative lawful disposition of such Nonconforming Feedstocks. In addition to
all other rights and remedies, M4 may, in its discretion but consistent with
industry practice, charge a handling fee to Customers in respect of handling,
loading, preparing, transporting, storing or disposing of such Nonconforming
Feedstocks pursuant to this Section 4.3(b). Costs incurred by M4 pursuant to the
preceding sentence shall not be included in the determination of Processing
Revenues.
4.4 Disposal of Residual Waste.
--------------------------
(a) If the applicable Processing Order does not include disposal of
any materials (other than Recovered Resources) remaining after CMW Processing
("Residual Waste") from the M4 Facility, M4 will return such Residual Waste to
the Customer from the M4 Facility. Any such return of Residual Waste shall be in
compliance with all applicable laws, rules and regulations and all permits and
licenses held by M4. If a Customer has informed M4 that such customer cannot
accept the return of such Residual Waste, M4 will store or dispose of such
Residual Waste in accordance with Article V hereof.
(b) If disposal of Residual Waste from CMW Feedstocks is included in
the services to be provided under a Processing Order, then after processing such
CMW Feedstocks, M4 will dispose of any such Residual Waste at a site designated
by the applicable Customer and approved by the proper governmental authorities.
If the site(s) so designated rejects such Residual Waste, for reasons not solely
attributable to M4, then M4 will promptly notify MMT and such Customer of such
fact, specifying the particulars of such rejection and presenting to MMT and the
Customer alternative disposal plans together with an estimate of any cost
adjustments. If the Customer accepts M4's alternative plan, the Customer shall
pay for any and all burdened costs, direct and indirect, including but not
limited to handling, loading, preparation, transportation, storage and disposal
costs, associated with taking the appropriate corrective action. If no
alternative site(s) is available to accept the Customer's Residual Waste, then
M4 shall promptly notify MMT and the Customer of such fact, and, subject to
Article V hereof, said Residual Waste shall be returned to the Customer at such
customer's expense, and control and risk of loss with respect to such Residual
Waste shall revert to the Customer upon shipment from the M4 Facility.
(c) In the event that any CMW Feedstocks which have been processed
under this Agreement are not acceptable to any Governmental Authority having
jurisdiction over such waste or the operator of the disposal site utilized by
the applicable Customer, due solely to the failure of M4 to properly process
and/or package such CMW Feedstocks in accordance with this Agreement, then all
reasonable and necessary expenses and costs related to rerouting, reloading and
repackaging such
<PAGE> 9
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CMW Feedstocks will be borne by M4.
4.5 PROCESSING SCHEDULE. In order to ensure that the M4 Facility is
operated efficiently and with a minimum of downtime, M4 and MMT will confer
monthly to prepare an integrated processing schedule for the M4 Facility which
will show the anticipated types and amounts of Conforming Feedstocks to be
processed during the month following such monthly conference (the "Processing
Schedule"). To the extent practicable, M4 and MMT also will produce a tentative
processing schedule showing the anticipated types and amounts of Conforming
Feedstocks to be processed during the month subsequent to such monthly period.
M4 and MMT agree that the Processing Schedule will take into account anticipated
scheduled downtime required each year for maintenance and repairs of the M4
Facility and the processing at the M4 Facility of Feedstocks other than CMW
Feedstocks. At such monthly meetings, M4 and MMT also will review the existing
Waste Acceptance Criteria and make such changes or additions as may be required
from time to time.
4.6 DELIVERY OF FEEDSTOCKS. M4 will use its best efforts to enter into
Processing Orders with Customers such that M4 will have sufficient Conforming
Feedstocks to comply with the Processing Schedule then in effect. M4 shall
notify MMT in the event of any impending shortage of Conforming Feedstocks. M4
also shall notify MMT if for any reason M4 will not be able to process
Conforming Feedstocks in compliance with the applicable Processing Schedule or
will not be able to process Conforming Feedstocks for one or more MMT Customers,
in which case MMT shall have the right to process such Conforming Feedstocks at
another facility pursuant to Section 4.9.
4.7 MEASURING AMOUNT OF FEEDSTOCKS PROCESSED. MMT and M4 agree to develop
mutually acceptable methods for measuring and keeping track of the number of
pounds of Conforming Feedstocks accepted and processed by M4.
4.8 PROVISION OF PROCESSING INFORMATION. M4 shall make available to MMT
upon request copies of all information and data generated by M4 with respect to
CMW Processing of CMW Feedstocks pursuant to this Agreement.
4.9 CMW PROCESSING AT OTHER FACILITIES. During periods that the M4
Facility is not operating (whether due to scheduled maintenance and repairs, a
Force Majeure Event (as defined in Section 8.3), or otherwise) ("Downtime") and
such Downtime has not been accounted for in the applicable Processing Schedule,
MMT may process or arrange to have processed all Commercial Mixed Wastes subject
to such Processing Schedule at such other facilities and on such terms as MMT
may determine in its sole discretion. In such event, M4 shall not be entitled to
receive any portion of the revenues payable to MMT in respect of the processing
of such Commercial Mixed Wastes.
4.10 RECOVERED RESOURCES. Unless otherwise specified in a Processing
Order, MMT and M4 shall jointly control all decisions relating to the
marketing and disposition
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of all Recovered Resources generated from CMW Processing. Unless otherwise
agreed by the parties, all rights and obligations with respect to such marketing
and disposition, as well as the division of proceeds generated from the sale of
Recovered Resources, shall be on the terms set forth in this Agreement,
including but not limited to Section 3.5 hereof.
ARTICLE V. RETURN AND DISPOSAL OF CERTAIN WASTES
- -------------------------------------------------
5.1 RIGHT TO RETURN WASTE. MMT acknowledges that M4, consistent with the
requirements set forth in M4's radiological materials license, retains the right
to reject and return any CMW Feedstocks (processed or unprocessed) to the
applicable Customer so long as such Customer holds all approvals, permits or
licenses as are necessary for such Customer to accept the return of such CMW
Feedstocks. Notwithstanding the foregoing, M4 agrees that any such return of CMW
Feedstocks that otherwise meets the Waste Acceptance Criteria will occur only in
the event that (i) a Government Authority exercises its regulatory authority to
require the return of such CMW Feedstocks under any permit or license held by M4
or (ii) a regulatory change or development outside of M4's control would not
permit M4 to process such CMW Feedstocks without violating a permit, approval,
license, law or regulation. MMT acknowledges and agrees that any CMW Feedstocks
which do not conform with the Waste Acceptance Criteria automatically will be
rejected by M4 and returned to the applicable Customer, unless otherwise
determined by M4 on a case-by-case basis.
ARTICLE VI. CONTROL AND RISK OF LOSS
- ------------------------------------
6.1 ASSUMPTION OF CONTROL BY M4. M4 will assume control and risk of loss
with respect to all CMW Feedstocks and the containers of such CMW Feedstocks
upon acceptance of Conforming Feedstocks at the applicable M4 Facility. M4 shall
provide, on forms mutually acceptable to M4 and MMT and signed by an authorized
representative of M4, all information reasonably required in accordance with
industry practice to effect the assumption by M4 of control and risk of loss
with respect to CMW Feedstocks in accordance with this Section 6.1.
6.2 ASSUMPTION OF CONTROL BY CUSTOMER OR DISPOSAL SITE. Upon the return of
any CMW Feedstocks (whether processed or unprocessed) or Residual Waste to a
Customer for any reason under this Agreement, control and risk of loss with
respect to such CMW Feedstocks or Residual Waste shall revert to such Customer
upon shipment from the M4 Facility. Upon the ultimate disposal of any Residual
Waste, control and risk of loss with respect to such Residual Waste shall be
assumed by the disposal site upon acceptance.
*
*Confidential Treatment has been requested for this portion of Exhibit 10.38.
<PAGE> 11
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ARTICLE VIII. TERM AND TERMINATION
- --------------------------------------
8.1 INITIAL AND RENEWAL TERMS. The initial term of this Agreement shall
commence on the date first set forth above and continue for a period of two (2)
years thereafter.
*
*Confidential Treatment has been requested for this portion of Exhibit 10.38.
<PAGE> 12
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*
8.2 TERMINATION. This Agreement shall terminate upon the earliest to
occur of:
(a) the mutual written consent of M4 and MMT;
(b) the election by M4 within ninety (90) days after the occurrence
of any Bankruptcy of MMT, or the election by MMT within ninety (90) days after
the occurrence of any Bankruptcy of M4;
(c) the election by either party in the event of any material breach
of this Agreement by the other party, provided that the non-breaching party has
given notice to the breaching party of such breach and the breaching party has
not cured the breach described in such notice within ten (10) days from the date
of receipt of such notice; and
(d) the election by MMT if M4 has not obtained all approvals,
permits and licenses necessary to process any CMW Feedstocks proposed to be
delivered by an MMT Customer or a potential MMT Customer to M4 within three (3)
months from the date that MMT provides written notice to M4 of such proposed
delivery.
8.3 FORCE MAJEURE. Neither party will be deemed in default of this
Agreement to the extent that any delay or failure in the performance of its
obligations (except for the payment of money) results, without its fault or
negligence, from any cause beyond its reasonable control including but not
limited to acts of God, war, fire, explosion, accident, flood, sabotage, lack of
adequate fuel, power, raw materials, labor, containers or transportation
facilities, compliance with governmental laws, regulations, requests, orders, or
action, breakage or failure of machinery or apparatus, national defense
requirements, or, in the event of labor trouble, strike, lockout or injunction
(provided that neither party will be required to settle a labor dispute against
its own best judgment) (any of the foregoing, a "Force Majeure Event"). The
party effected by a Force Majeure Event shall provide written notice to the
other party as soon as practicable after such Force Majeure Event occurs or is
discovered, and shall exert all reasonable efforts to mitigate the effects of
such Force Majeure Event.
ARTICLE IX. INSURANCE
- ---------------------
9.1 REQUIRED INSURANCE. M4 will maintain, at its expense during the
term of this Agreement the following insurance:
Coverage Limits
- -------- ------
*Confidential Treatment has been requested for this portion of Exhibit 10.38.
<PAGE> 13
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<TABLE>
<CAPTION>
Workman's Compensation Statutory
<S> <C>
Employer's Liability $ 500,000 each occurrence
General Liability $1,000,000 each occurrence
Automotive Liability $1,000,000 each occurrence
Umbrella Liability $5,000,000
Environmental Impairment $3,000,000
</TABLE>
9.2 NUCLEAR LIABILITY INSURANCE. MMT acknowledges that certain
radionuclides are covered by M4's environmental impairment insurance. M4 agrees
that in the event that a Customer proposes to enter into a Processing Order in
respect of CMW Feedstocks that would not be covered by such insurance, M4 shall
use reasonable efforts to obtain insurance that would cover such CMW Feedstocks,
provided that such insurance is available to M4 at commercially reasonable
premiums and on commercially reasonable terms and conditions. M4 and MMT may
agree to restructure the fees payable from a Customer to M4 in the event that
such Customer's CMW Feedstocks require such additional insurance.
<TABLE>
9.3 REQUIRED INSURANCE. MMT will maintain, at its expense during the
term of this Agreement the following insurance:
<CAPTION>
Coverage Limits
- -------- ------
Workman's Compensation Statutory
<S> <C>
General Liability $1,000,000 each occurrence
Umbrella Liability $5,000,000
</TABLE>
ARTICLE X. CONFIDENTIALITY
- ---------------------------
10.1 CONFIDENTIALITY OBLIGATIONS. The parties' confidentiality obligations
shall be governed in all respects by [Section]6 of the License Agreement. For
such purposes, it is expressly agreed that all confidential or proprietary
information of any type regarding CMW Processing provided to M4 pursuant to this
Agreement shall be deemed to be MMT Confidential Information.
10.2 SURVIVAL OF OBLIGATIONS. The obligations contained in this Article X
shall survive any termination of this Agreement.
<PAGE> 14
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ARTICLE XI. INTELLECTUAL PROPERTY
- ---------------------------------
11.1 OWNERSHIP OF INTELLECTUAL PROPERTY. All Intellectual Property
(including all Improvements) relating to CEP or CMW Processing or necessary or
useful to any application of CEP or CMW Processing conceived, created, made,
developed or reduced to practice by or for M4 or MMT personnel will be owned by
MMT and title to all such Intellectual Property, including patents, patent
applications and copyrights filed or granted, and patents issued with respect
thereto will be issued solely in MMT's name.
11.2 NOTICE AND ASSISTANCE. M4 agrees to give MMT prompt notice of any
Intellectual Property or Improvements using the standard invention disclosure
form then in use under the License Agreement. M4 agrees to give MMT all
reasonable assistance in obtaining patent, copyright or other protection and in
preparing and prosecuting any patent application or copyright application filed
by MMT for any such Intellectual Property or Improvements, and M4 will cause to
be executed all assignments and other instruments and documents as MMT may
consider necessary or appropriate to carry out the intent of this Section 11.2,
subject to reimbursement by MMT for all of M4's reasonable out-of-pocket
expenses incurred in connection with such assistance. MMT shall be solely
responsible for all decisions relating to seeking or maintaining patent or
copyright or other protection for any Intellectual Property or Improvements, and
shall be responsible for all expenses incurred in obtaining and maintaining any
such protection.
ARTICLE XII. MISCELLANEOUS
- ---------------------------
12.1 RELATIONSHIP OF PARTIES. MMT and M4 have the relationship of
independent contractors and neither party shall be authorized to act as agent of
the other except as specifically set forth herein.
12.2 ASSIGNMENT. This Agreement may not be assigned/ conveyed, or
transferred without the prior written consent of both parties. Any attempted
assignment without such consent will be null and void.
12.3 NO WAIVER. The failure of either party to insist, in any one or more
instances, upon the strict performance of any provision of this Agreement shall
not be construed as a waiver or other relinquishment of such party's right to
insist upon such strict performance of said provision or any other provision of
this Agreement. Any waiver by either party of any provision of this Agreement
shall be in writing signed by an authorized representative of the party to be
bound and shall not be construed or deemed to be a waiver of a subsequent breach
of the same provision or of any other provision unless such a waiver is
expressed in writing as aforesaid.
12.4 NOTICES. Any notice, communication, or statement required or
permitted to be given under this Agreement will be in writing and deemed to have
been sufficiently given: (1) on the date of delivery when delivered in person,
(2) on the date of confirmed
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transmission when sent by facsimile (with original sent by regular U.S. mail,
postage prepaid, the same date) or (3) on the date of receipt (as shown on the
return receipt) if sent by prepaid commercial overnight mail or registered or
certified U.S. mail, postage prepaid, return receipt requested, to the address
of the respective party below or such other address as the parties shall
designate in writing.
M4: M4 Environmental L.P.
151 Lafayette Road
Oak Ridge, Tennessee 37830
Attention: J. Robert Merriman,
President
Phillip M. Kannan, Esq.
General Counsel
MMT: Molten Metal Technology, Inc.
51 Sawyer Road
Waltham, MA 02154
Attention: William M. Haney, III,
President and Chief Executive Officer
Ethan E. Jacks, Esq.,
Vice President and General Counsel
12.5 DISPUTE RESOLUTION. All disputes or claims arising under or in
any way relating to this Agreement shall be subject to the Dispute Resolution
Agreement.
12.6 WAIVER OF JURY TRIAL. EACH OF MMT AND M4 HEREBY IRREVOCABLY WAIVES
ANY RIGHTS THAT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED UPON, OR ARISING OUT OF, THIS AMENDMENT OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS OR ACTIONS OF ANY OF THEM RELATING THERETO.
12.7 WAIVER OF CERTAIN DAMAGES. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, UNDER NO CIRCUMSTANCE WILL EITHER PARTY BE LIABLE TO THE OTHER
PARTY UNDER THIS AGREEMENT, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND
STRICT LIABILITY) OR OTHERWISE, FOR INCIDENTAL, INDIRECT, SPECIAL, CONSEQUENTIAL
OR PUNITIVE DAMAGES WHATSOEVER, INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS OR
REVENUE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
12.8 GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, all rights and
remedies being governed by such laws, without regard to its conflict of laws
rules. As
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provided in the Dispute Resolution Agreement, the parties hereto have submitted
to the exclusive jurisdiction of the state and federal courts located in
Delaware.
12.9 ENTIRE AGREEMENT. This Agreement, including the Annexes hereto,
together with the License Agreement and the Related Agreements (as applicable),
contains the entire understanding of the parties hereto and thereto, supersedes
all prior agreements relating to the subject matter hereof and thereof, and
shall not be amended except by a written instrument hereafter signed by all of
the parties hereto or thereto, as applicable. M4 and MMT acknowledge and agree
that, in entering this Agreement, they have not in any way relied upon any oral
or written agreements, statements, promises, information, arrangements,
understandings, representations or warranties, express or implied, not
specifically set forth in this Agreement, the License Agreement or the Related
Agreements.
12.10 CONFLICTS. In the event of any conflict or inconsistency between the
terms and conditions of this Agreement and the provisions of any purchase order
or other document or instrument, the terms and conditions of this Agreement
shall control. In the event of any conflict between the provisions of this
Agreement and the License Agreement or the Related Agreements, the provisions of
this Agreement shall control.
12.11 CONSTRUCTION. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and no
rule of strict construction will be applied against any party.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their duly authorized representatives as of the date first set forth
above.
M4 ENVIRONMENTAL L.P.
By: M4 Environmental Management Inc.
as General Partner
By: /s/ J. Robert Merriman
-----------------------------------
Name: J. Robert Merriman
-----------------------------------
Title: General Manager
-----------------------------------
MOLTEN METAL TECHNOLOGY, INC.
By: /s/ Victor E. Gatto, Jr.
-----------------------------------
Name: Victor E. Gatto, Jr.
-----------------------------------
Title: Vice President of Government Sector
-----------------------------------
