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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): June 16, 1997
MOLTEN METAL TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21042 52-1659959
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
400-2 Totten Pond Road, Waltham, Massachusetts 02154
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (617) 487-9700
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Item 2. Acquisition or Disposition of Assets
In August 1994, Molten Metal Technology, Inc. (the "Company" or "MMT")
entered into a series of related agreements with Martin Marietta Corporation to
form M4 Environmental L.P. ("M4"), a 50/50 joint venture. Martin Marietta has
since merged into Lockheed Martin Corporation ("LMC"), with LMC as the surviving
entity. Pursuant to these agreements, the Company and LMC formed M4, a Delaware
limited partnership, to commercialize the Company's proprietary Catalytic
Extraction Processing ("CEP") technology to service the environmental
remediation, waste management, decontamination and decommissioning needs of the
U.S. Department of Defense ("DoD"), the U.S. Department of Energy ("DOE") and
the United States Enrichment Corporation. In April 1996, the Company and LMC
expanded M4 through the acquisition by M4 of the Retech division of Lockheed
Environmental Systems & Technologies Co., a wholly-owned subsidiary of LMC. The
Retech division designs and manufactures metallurgical equipment and waste
processing systems that utilize a plasma technology. In June 1997, the Company
and LMC completed a restructuring of their relationship with respect to M4's
market.
The restructuring entailed five principal changes in the relationship
between LMC and MMT: (1) LMC has the exclusive right to lead and pursue
contracts for the Hanford radioactive tanked waste cleanup project described
below, and MMT will provide directly to LMC certain construction and development
services with respect to Quantum-CEP(R) ("Q-CEP(R)"); (2) MMT and LMC formed a
new limited liability company to be their exclusive vehicle to deliver
processing services to customers in the chemical demilitarization market
worldwide; (3) MMT has the exclusive right to lead and pursue worldwide
opportunities for processing depleted uranium hexafluoride ("DUF(6)"); (4) MMT
has become the sole owner of M4, which will continue to own and operate its
primary remaining asset, the M4 Technology Center; and (5) the Retech division
of M4 has been transferred to LMC.
Hanford Project. As part of the LMC team for the Hanford project, LMC
offered to purchase and MMT has agreed to deliver a pilot-scale, demonstration
CEP plant in 1997 for a fixed price of $5 million. This plant will be used to
process surrogate Hanford tank waste. Additionally, LMC has agreed to fund
certain development work with respect to Q-CEP for possible application to the
Hanford project. LMC has informed the DOE that LMC currently intends to propose
an alternative technology, vitrification, as its baseline processing technology
for Phase 1B of the Hanford contract. However, in connection with the
development work to be performed by MMT, LMC and MMT have agreed to develop a
technology insertion plan for the possible inclusion of Q-CEP in the Hanford
project if such development work is successful. LMC has informed the DOE of its
intention to develop this technology insertion plan. If the LMC team is awarded
a contract under Phase 1B of the Hanford cleanup program and Q-CEP is used in
the Phase 1B performance, LMC has agreed to pay MMT a fee of $15 million. $5
million of this fee will be payable on award of the contract and the remaining
$10 million will be payable upon timely delivery and acceptance of a CEP
production plant pursuant to terms to be agreed upon by LMC and MMT. MMT also is
entitled to an on-going royalty of 3.5% of all revenues generated from the
processing of waste in equipment supplied by MMT under the Hanford contract.
There can be no assurances that LMC will include Q-CEP in any proposal for
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any Phase 1B contract or that LMC will submit a bid for Phase 1B. There also can
be no assurances that DOE will award a Phase 1B contract to the LMC team or
that, even if it does so, Q-CEP will prove to be satisfactory to the DOE for
processing the Hanford waste.
Chemical Weapons Demilitarization. The limited liability company
formed by MMT and LMC has exclusive worldwide rights to commercialize CEP for
the chemical weapons demilitarization market. The limited liability company is
owned 50/50 by subsidiaries of LMC and MMT. MMT is entitled to success fees of
up to an aggregate of $25 million in connection with the successful deployment
of CEP systems to process chemical weapons, each success fee to be paid from
revenues generated by the CEP plant to which it relates. The limited liability
company has an initial term of five years.
M4 Technology Center. As sole owner of M4, MMT is responsible for the
future operations of the M4 Technology Center, and is entitled to all future
revenues from such operations. The $38 million aggregate principal amount of
bonds issued by the Industrial Development Board of Oak Ridge relating to the M4
Technology Center remain outstanding, LMC's guarantee of these bonds remains in
place, and each of LMC and MMT is responsible for 50% of the principal, interest
and other costs relating to these bonds.
DUF(6). MMT and LMC have agreed that MMT will have the exclusive right to
lead and pursue worldwide opportunities for processing DUF(6). LMC has agreed
not to pursue this market for five years except that, at the request of MMT, LMC
will consider participating in this market jointly with MMT on a case-by-case
basis, subject to mutual agreement of the parties.
LMC and MMT also have established a strategic alliance committee, in the
form of a limited liability company governed by three directors from each
company, to review and monitor the relationships created by the restructuring
and to evaluate new market opportunities within the DOE and DoD markets. Prior
to pursuing any such opportunity alone, each of LMC and MMT will be obligated to
first offer such opportunity to the other party by presenting it to the
strategic alliance committee. The committee would determine whether such
opportunity would be pursued jointly by the parties and the terms thereof. If
the committee does not elect to pursue the opportunity jointly, either party
would be free to pursue it alone.
In connection with the restructuring, (i) LMC terminated its line of
credit with M4 and deemed the approximately $15.8 million aggregate principal
and accrued interest outstanding thereunder to have been paid in full, and (ii)
MMT contributed $14.6 million in outstanding accounts receivable to the capital
of M4. LMC and MMT generally will share equally in substantially all of the
costs of the restructuring.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired.
The required financial statements will be filed by an amendment to this
Report within 60 days after the date hereof.
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(b) Pro Forma Financial Information.
The required pro forma financial information will be filed by an amendment
to this Report within 60 days after the date hereof.
(c) Exhibits. The following are filed as exhibits to this Report:
*Exhibit 2.1 Master Restructuring Agreement dated as of June 16, 1997
between the Company and Lockheed Martin Corporation.
*Exhibit 10.1 Limited Liability Company Agreement of Lockheed Martin
Chemical Demilitarization Systems LLC dated as of June 16,
1997.
*Exhibit 10.2 License Agreement dated as of June 16, 1997 between the
Company, Lockheed Martin Chemical Demilitarization Systems
LLC, and Lockheed Martin Corporation.
*Exhibit 10.3 Transfer Agreement dated as of June 16, 1997 between the
Company, Lockheed Martin Advanced Environmental Systems, Inc.,
M4 Environmental L.P., and Lockheed Martin Corporation.
Exhibit 10.4 Press Release dated June 18, 1997 issued by the Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MOLTEN METAL TECHNOLOGY, INC.
Date: June 25, 1997 By: /s/ Benjamin T. Downs
------------------------
Benjamin T. Downs
Executive Vice President of Finance and
Administration
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* Confidential treatment has been requested for certain portions of Exhibits
2.1, 10.1, 10.2 and 10.3.
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Exhibit 2.1*
MASTER RESTRUCTURING AGREEMENT
between
MOLTEN METAL TECHNOLOGY, INC.
and
LOCKHEED MARTIN CORPORATION
Dated as of June 16, 1997
* Confidential treatment has been requested for certain portions of this Exhibit
2.1.
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MASTER RESTRUCTURING AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE PAGE
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<S> <C> <C>
ARTICLE 1 DEFINED TERMS......................................... 2
ARTICLE 2 CLOSING............................................... 8
2.1. Time and Place........................................ 8
2.2. Transactions at Closing............................... 8
ARTICLE 3 SAC AGREEMENT......................................... 9
ARTICLE 4 TWRS.................................................. 9
4.1. Tanked Waste Contract................................. 9
4.2. Delivery of CEP System................................ 9
4.3 Existing Contracts.................................... 9
4.4. Tanked Waste Services Contract........................ 9
4.5 Regulatory and Community Affairs...................... 10
4.6. Success Fee........................................... 10
4.7. Royalty............................................... 10
4.8. Termination by DOE.................................... 11
4.9. Assistance by LMAES................................... 11
ARTICLE 5 DUF6.................................................. 11
5.1. Processing............................................ 11
5.2. LMC Involvement....................................... 11
ARTICLE 6 Chemical Weapons Demilitarization..................... 12
6.1. Formation of New LLC.................................. 12
6.2. License............................................... 12
6.3. Sale of Equipment or Technology....................... 12
ARTICLE 7 QUAMTUM-200........................................... 12
</TABLE>
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<TABLE>
<S> <C> <C>
ARTICLE 8 M4.................................................... 12
8.1. Transfer of Retech Assets............................. 12
8.2. Transfer of M4 Ownership.............................. 13
8.3. Responsibility for M4................................. 13
8.4. Indemnity............................................. 14
8.5. Claims................................................ 15
8.6. Method and Manner of Paying Claims.................... 15
ARTICLE 9 FINANCIAL MATTERS..................................... 16
9.1. M4-MMT Receivables.................................... 16
9.2. Outstanding Line of Credit............................ 16
9.3. Oak Ridge Debt........................................ 16
9.4. Restructuring and Other Costs......................... 17
ARTICLE 10 OTHER TRANSITIONAL MATTERS............................ 18
10.1. Additional Equity Funding............................. 18
ARTICLE 11 NON-COMPETITION AND RELATED ISSUES.................... 18
11.1. Tanked Waste Non-Competition Obligations.............. 18
11.2. DUF6 Non-Competition Obligations...................... 18
11.3. Chem Demil Non-Competition Obligations................ 18
11.4. Ownership of Voting Securities........................ 19
11.5. First Offer........................................... 19
11.6. Sale of Subsidiary.................................... 19
ARTICLE 12. TITLE TO MMT LICENSED PROPERTY;
CONFIDENTIALITY AND RELATED MATTERS................... 20
12.1. Title to MMT Licensed Property........................ 20
12.2. Confidentiality Obligations of LMC.................... 20
12.3. Confidentiality Obligations of MMT.................... 21
ARTICLE 13 INTELLECTUAL PROPERTY................................. 22
ARTICLE 14 ACQUISITION OF VOTING SECURITIES...................... 22
14.1. Acquisition of Voting Securities of MMT............... 22
14.2. Acquisition of Voting Securities of LMC............... 22
</TABLE>
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<TABLE>
<S> <C> <C>
ARTICLE 15 TERMINATION OR AMENDMENT OF
EXISTING AGREEMENTS................................... 23
15.1. Existing Agreements................................... 23
ARTICLE 16 EXCLUSIVE REMEDY FOR BREACH........................... 24
ARTICLE 17 DISCLOSURE AND PUBLICITY.............................. 24
ARTICLE 18 REPRESENTATIONS AND WARRANTIES........................ 24
ARTICLE 19 GENERAL............................................... 25
19.1. Expenses.............................................. 25
19.2. Public Statements or Releases......................... 25
19.3. Notices............................................... 25
19.4. Entire Agreement...................................... 26
19.5. Governing Law, Etc.................................... 26
19.6. Waiver of Jury Trial.................................. 26
19.7. Waiver of Certain Damages............................. 27
19.8. Sections and Section Headings......................... 27
19.9. Assigns............................................... 27
19.10. No Implied Rights or Remedies......................... 27
19.11. Counterparts.......................................... 27
19.12. Dispute Resolution.................................... 27
19.13. Construction.......................................... 27
19.14. Severability.......................................... 27
</TABLE>
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SCHEDULES AND EXHIBITS*
SCHEDULES:
Schedule 4.3 TWRS Subcontracts
Schedule 9.4(a) HR Plan
Schedule 9.4(b) Other Costs
EXHIBITS:
Exhibit A SAC LLC Agreement
Exhibit B Pilot Plant Purchase Agreement
Exhibit C Tanked Waste Services Agreement
Exhibit D New LLC Agreement
Exhibit E License Agreement
Exhibit F Asset Transfer Agreement
Exhibit G Assignment of Interest Agreement
Exhibit H Second Amended and Restated Dispute Resolution Agreement
Exhibit I Second Amended and Restated Limited Partnership Agreement
* Pursuant to Item 601(b)(2) of Regulation S-K, certain of the foregoing
schedules and exhibits to this Master Restructuring Agreement have not been
included as part of this Current Report on Form 8-K. The registrant hereby
agrees to furnish supplementally to the Commission copies of any of the
foregoing schedules and exhibits upon request.
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MASTER RESTRUCTURING AGREEMENT
This is a Master Restructuring Agreement, dated as of June 16, 1997 (as in
effect from time to time, the "Agreement"), between Molten Metal Technology,
Inc., a Delaware corporation ("MMT"), and Lockheed Martin Corporation, a
Maryland corporation ("LMC").
WHEREAS, Martin Marietta Corporation, a Maryland corporation ("MMC"), and
MMT entered into a Master Agreement for Government Market Development and
Commercialization of CEP Technology, dated as of August 9, 1994 (as in effect
from time to time, the "Original Agreement"), pursuant to which they formed M4
Environmental L.P., a Delaware limited partnership ("M4"), in order to
effectively commercialize CEP (as hereinafter defined) by selling, engineering,
constructing and operating CEP Plants, and sublicensing CEP technology to
appropriate third parties to permit them to engineer, construct and operate CEP
Plants, to service the environmental remediation, waste management,
decontamination, decommissioning, chemical and biological demilitarization,
pollution prevention and waste minimization needs of the United States
Department of Energy ("DOE") and the United States Department of Defense
("DoD");
WHEREAS, pursuant to an Agreement and Plan of Reorganization, dated as of
August 29, 1994, between MMC and Lockheed Corporation, a Delaware corporation
("Lockheed"), MMC and Lockheed effected a business combination whereby MMC and
Lockheed became wholly-owned subsidiaries of LMC, a new publicly-held
corporation (the "LMC Merger");
WHEREAS, subsequent to the LMC Merger, Lockheed and MMC merged with and
into LMC, with LMC as the surviving corporation;
WHEREAS, pursuant to an Agreement for Additional Market Segment, dated as
of December 13, 1994, MMT and M4 expanded M4's exclusive license to utilize CEP
to include certain materials generated by the United States Enrichment
Corporation;
WHEREAS, pursuant to a Commercial Mixed Waste Processing Agreement, dated
December 12, 1995, between MMT and M4, MMT granted to M4 a limited license to
utilize CEP Technology for processing commercial mixed waste at M4's processing
facility in Oak Ridge, Tennessee; and
WHEREAS, MMT, LMC and M4 entered into a Partnership Restructuring
Agreement, dated as of March 15, 1996 (the "Partnership Restructuring
Agreement"), whereby, among other things, M4 acquired substantially all of the
assets of the Retech Division of LMC's wholly-owned subsidiary, Lockheed
Environmental Systems &
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Technologies Co., and M4 and LMC, acting through its Energy and Environmental
Sector ("Sector"), agreed to enter into teaming agreements for certain major
contracts;
WHEREAS, pursuant to the Agreement For Expansion of License Japanese
Chemical Weapons among M4, MMT and LMC, dated September 26, 1996 ("Japanese
Extension Agreement"), MMT expanded M4's exclusive license to utilize CEP to
include the processing of certain chemical weapons agent for the Japanese
government;
WHEREAS, M4 has to date developed its technological resources, including
its licensed CEP technology, the Retech plasma technology and additional
technologies, and is pursuing several major markets (collectively, the
"Markets") for these technologies. However, in order to more effectively capture
and penetrate these Markets LMC, through its wholly-owned Subsidiary, Lockheed
Martin Advanced Environmental Systems, Inc., a Delaware corporation ("LMAES"),
and MMT (each of LMC and MMT being sometimes referred to herein as a "Party"
and, collectively, as the "Parties") desire to become more directly involved in
the delivery of these technologies to the Markets in order to most effectively
exploit the core competencies and resources of the Parties, reduce redundancies
arising in connection with the M4 relationship, establish a clearer definition
of the roles and responsibilities of the Parties, and deliver goods and services
to the Markets more efficiently and economically.
NOW, THEREFORE, the Parties agree as follows:
Article 1
Defined Terms
In addition to the defined terms found elsewhere in this Agreement, as
used in this Agreement the following terms shall have the following meanings:
"1996 License Agreement" has the meaning set forth in Section 11.5.
"Advisors" means, with respect to any Person, any of such Person's
attorneys, accountants, lenders or consultants.
"Affiliate" means, with respect to any specified Person, any other Person
controlling, controlled by or under common control with, such specified Person.
As used in this definition and Article 11, "control" (including, with its
correlative meanings, "controlled by" and "under common control with") means the
possession, directly or indirectly, of power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of Voting
Securities, by contract or otherwise.
"Agreement" has the meaning set forth in the preamble.
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"Amended and Restated Dispute Resolution Agreement" has the meaning
set forth in Section 15.1.
"Asset Transfer Agreement" has the meaning set forth in Section 2.2.
"Assignment of Interest Agreement" has the meaning set forth in
Section 2.2.
"Catalytic Extraction Processing" or "CEP" means the processes, methods
and systems (including all Intellectual Property and other intangible and
tangible property associated therewith, and including all aspects of accepting
Feedstocks, reactions within a CEP Plant, and handling Recovered Resources),
owned or used by MMT, directed to the processing of Feedstocks by introducing
the Feedstocks to a processing vessel containing liquified metal.
"CEP Plant" means the plant, equipment and other facilities necessary to
perform, operate and maintain CEP on a commercial basis (or, in the case of any
so-called "demonstration" CEP Plant, on the basis generally provided in the
applicable demonstration program).
"Chem Demil Market" has the meaning set forth in Section 6.1.
"Chem Weapons Feedstocks" means (i) bombs, rockets, artillery shells,
mortar shells, explosives and other munitions, containing (or formerly
containing) one or more "chemical weapons agents" as defined in the Chemical
Weapons Convention (formally known as the Convention on the Prohibition of the
Development, Production, Stockpiling and Use of Chemical Weapons and their
Destruction, adopted September 3, 1992 at the Conference on Disarmament at
Geneva, and opened for signature on January 13, 1993 in Paris) and (ii) bulk
stockpiles of such chemical weapons agents.
"Claim" has the meaning set forth in Section 8.5.
"Closing" means the closing of the transfer and delivery of all documents
and instruments necessary to consummate the transactions contemplated by this
Agreement.
"Competing Activities" has the meaning set forth in Section 11.4.
"Competing Business" has the meaning set forth in Section 11.4.
"DoD" has the meaning set forth in the preamble.
"DOE" has the meaning set forth in the preamble.
"DUF6" means depleted uranium hexafluoride.
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"Encumbrance" has the meaning set forth in Section 8.2.
"Feedstocks" means, with respect to any CEP Plant, the wastes, industrial
by-products and other materials to be processed by such CEP Plant.
"GP Shares" has the meaning set forth in Section 8.2.
"General Partner" means M4 Environmental Management Inc., a
Delaware corporation.
"HR Plan" has the meaning set forth in Section 9.4.
"Improvements" means any improvements, developments, updates, upgrades,
enhancements, additions, revisions, corrections, fixes and other modifications
to the MMT Licensed Property as it then exists that MMT, LMC, LMAES, M4 or the
New LLC may acquire, discover, invent, originate, conceive or have a right to
develop or manufacture, whether or not the same is patentable, commercially
useful or reducible to writing or practice.
"Indemnified Party" has the meaning set forth in Section 8.5.
"Indemnifying Party" has the meaning set forth in Section 8.5.
"Intellectual Property" means all patents, inventions, patent
applications, patent rights, trademarks, trademark registrations, trade names,
brand names, all other names and slogans embodying business or product goodwill
(or both), copyright registrations, copyrights (including those in computer
programs, software, including all source code and object code, development
documentation, programming tools, drawings, specifications and data), software,
trade secrets, know-how, mask works, industrial designs, formulae, processes and
technical information, including confidential and proprietary information,
whether or not subject to statutory registration or protection.
"LC Guaranty" means the Guaranty Agreement, dated January 1, 1996, made by
LMC, MMC and Lockheed in favor of SunTrust Bank, Atlanta.
"LC Reimbursement Agreement" means the Letter of Credit Agreement dated as
of January 1, 1996 between M4 and SunTrust Bank, Atlanta, as in effect from time
to time.
"License Agreement" has the meaning set forth in Section 2.2.
"LLFW Revenues" has the meaning set forth in Section 4.7(a).
"LMAES" has the meaning set forth in the preamble.
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"LMC" has the meaning set forth in the preamble.
"LMC Confidential Information" means any confidential or proprietary
information of LMC or its Affiliates (other than the New LLC), including but not
limited to any confidential or proprietary portion of the Intellectual Property
conveyed to LMAES pursuant to the Asset Transfer Agreement.
"LMC Merger" has the meaning set forth in the preamble.
"LMC Subsidiary" means Martin Marietta Environmental Holdings Inc.,
a Delaware corporation.
"Lockheed" has the meaning set forth in the preamble.
"Losses" has the meaning set forth in Section 8.4.
"M4" has the meaning set forth in the preamble.
"M4 Interest" has the meaning set forth in Section 8.2.
"Markets" has the meaning set forth in the preamble.
"Master Agreement" has the meaning set forth in the preamble.
"MMC" has the meaning set forth in the preamble.
"MMT" has the meaning set forth in the preamble.
"MMT Confidential Information" means any confidential or proprietary
information of MMT or any of its Affiliates (including M4, but not including any
confidential or proprietary portion of the Intellectual Property conveyed to
LMAES pursuant to the Asset Transfer Agreement).
"MMT Licensed Property" means all Intellectual Property that was subject
to the license granted pursuant to the 1996 License Agreement.
"MMT Subsidiary" means MMT Federal Holdings, Inc., a Delaware
corporation.
"New LLC" has the meaning set forth in Section 6.1.
"New LLC Agreement" has the meaning set forth in Section 2.2.
"Oak Ridge Bonds" has the meaning set forth in Section 9.3(a).
"Oak Ridge Loan" has the meaning set forth in Section 9.3(a).
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"Original Agreement" has the meaning set forth in the preamble.
"Party" and Parties" have the meanings set forth in the preamble.
"Person" means any individual, partnership, corporation, association,
trust, limited liability company, joint venture, unincorporated organization and
any government, governmental department or agency or political subdivision
thereof.
"Pilot Plant Purchase Agreement" has the meaning set forth in
Section 2.2.
"Q-200 Project" has the meaning set forth in Article 7.
"Recovered Resources" means the elements and compounds produced by a CEP
Plant (whether or not produced through the use of reactants) that are suitable
for use or sale.
"Recycling" means the return of resources recovered or produced from waste
or other similar materials for use or sale.
"Related Agreements" means this Agreement, the Pilot Plant Purchase
Agreement, the Tanked Waste Services Agreement, the New LLC Agreement, the SAC
Agreement, the License Agreement, the Asset Transfer Agreement, the Amended and
Restated Dispute Resolution Agreement, the Assignment of Interest Agreement and
the Second Amended and Restated Limited Partnership Agreement and any other
agreement between the parties or their Affiliates that specifies that it is a
Related Agreement for purposes of this Agreement.
"Revolving Credit Agreement" means the Revolving Credit Agreement, dated
as of April 30, 1996, between LMC and M4.
"Revolving Credit Debt" has the meaning set forth in Section 8.1.
"Restructuring" means the transactions contemplated by this
Agreement and the Related Agreements.
"SAC Agreement" has the meaning set forth in Section 2.2.
"SAC LLC" means LMC-MMT Strategic Alliance Committee, LLC, the limited
liability company formed pursuant to the SAC Agreement.
"Second Amended and Restated Limited Partnership Agreement" has the
meaning set forth in Section 15.1.
"Sector" has the meaning set forth in the preamble.
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"Subsidiary" means a corporation, company or other entity:
(i) more than fifty percent (50%) of whose outstanding shares or
securities (representing the right to vote for the election of
directors or other managing authority) are, now or hereafter, owned
or controlled, directly or indirectly, by a party hereto, but such
corporation, company or other entity shall be deemed to be a
Subsidiary only so long as such ownership or control exists; or
(ii) which does not have outstanding shares or securities, as may be the
case in a limited liability company, partnership, joint venture or
unincorporated association, but more than fifty percent (50%) of
whose ownership interests representing the right to make the
decisions for such corporation, company or other entity is now or
hereafter, owned or controlled, directly or indirectly, by a party
hereto, but such corporation, company or other entity shall be
deemed to be a Subsidiary only so long as such ownership or control
exists.
"Tanked Waste Contract" has the meaning set forth in Section 4.1.
"Tanked Waste Services Agreement" has the meaning set forth in
Section 2.2.
"Tech Center" means M4's Technical Center located at 1000 Clearview
Court, Oak Ridge, Tennessee 37830.
"Technology Plan" has the meaning set forth in Section 4.4.
"Third Party Claim" has the meaning set forth in Section 8.4.
"Treatment" means, with respect to any material, any physical, mechanical,
thermal and/or chemical actions which, individually or in concert, alter the
chemical composition of such materials.
"TWRS Subcontract" has the meaning set forth in Section 4.3.
"TWRS Technical Team" has the meaning set forth in Section 4.4.
"Voting Securities" means, with respect to any Person, all securities
issued by such Person having the ordinary power to vote in the election of
directors or other managing authority of such Person, other than securities
having such power only upon the occurrence of a default or any other
extraordinary contingency.
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Article 2
Closing
2.1. Time and Place. The closing of the transfer and delivery of all
documents and instruments necessary to consummate the transactions contemplated
by this Agreement (the "Closing") shall be held at the offices of Bingham, Dana
& Gould LLP, 150 Federal Street, Boston, Massachusetts, immediately after the
execution and delivery of this Agreement. The date on which the Closing is
actually held hereunder is sometimes referred to herein as the "Closing Date".
2.2. Transactions at Closing. At the Closing:
(a) Pursuant to Article 3, LMAES and the MMT Subsidiary shall enter into
the Limited Liability Company Agreement in the form of Exhibit A
hereto (the "SAC Agreement");
(b) Pursuant to Section 4.2, MMT and Sector shall enter into a CEP Plant
Purchase Agreement in the form of Exhibit B hereto (the "Pilot Plant
Purchase Agreement");
(c) Pursuant to Section 4.4, MMT and LMAES shall enter into a Tanked
Waste Services Contract in the form of Exhibit C hereto (the "Tanked
Waste Services Agreement");
(d) Pursuant to Section 6.1, LMAES and the MMT Subsidiary shall enter
into the Limited Liability Company Agreement in the form of Exhibit
D hereto (the "New LLC Agreement");
(e) Pursuant to Section 6.2, LMC, MMT and the New LLC shall enter into
the License Agreement in the form of Exhibit E hereto (the "License
Agreement");
(f) Pursuant to Section 8.1, MMT, M4, LMAES and LMC shall enter into the
Asset Transfer Agreement in the form of Exhibit F hereto (the "Asset
Transfer Agreement");
(g) Pursuant to Section 8.2, the General Partner, the MMT Subsidiary
and the LMC Subsidiary shall enter into the Assignment of Limited
Partner Interest and First Amendment to the Amended and Restated
Limited Partnership Agreement of M4 in the form of Exhibit G
attached hereto. (the "Assignment of Interest Agreement");
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(h) Pursuant to Section 8.2, the LMC Subsidiary shall transfer to
the MMT Subsidiary its interest in the General Partner; and
(i) The Parties, the LMC Subsidiary, the MMT Subsidiary, M4, LMAES and
the General Partner will deliver the other documents to be delivered
at the Closing and take the other actions to be taken at the Closing
as described elsewhere in this Agreement or the other Related
Agreements referred to above.
Article 3
SAC Agreement
In order to establish a mechanism for overseeing certain aspects of the
relationship created as a result of the Restructuring, at the Closing LMAES and
the MMT Subsidiary shall enter into the SAC Agreement.
Article 4
TWRS
4.1. Tanked Waste Contract. LMC, acting through Sector or other
Subsidiaries, shall perform, control and directly pursue the processing of
radioactive and mixed waste at Hanford, Washington, in connection with the
performance of the existing Tanked Waste Remediation Systems -- Privatization
Contract DE-ACO6-96RL13309 and future extensions or modifications to, or
enhancements or replacements of, such contract(s) (collectively, the "Tanked
Waste Contract").
4.2. Delivery of CEP System. At the Closing the Parties shall enter into
the Pilot Plant Purchase Agreement.
4.3. Existing Contracts. To the extent not completed prior to the Closing,
promptly after the Closing the Parties and M4 shall cause the novation of any
subcontracts, relating to the Tanked Waste Contract, between M4 and the
subcontractors listed on Schedule 4.3 hereto (the "TWRS Subcontracts"). In
addition, M4 and LMAES agree that all existing contracts or subcontracts, if
any, between them relating to the Tanked Waste Contract shall be considered
terminated, effective upon the Closing.
4.4. Tanked Waste Services Agreement.
(a) In order to address certain development and design services to be
provided by MMT in connection with the Tanked Waste Contract, MMT
and LMAES will enter into the Tanked Waste Services Agreement.
<PAGE> 15
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(b) As provided in the Tanked Waste Services Agreement, in connection
with the design and development activities contemplated by the
Tanked Waste Services Agreement, the LMAES TWRS Technical Team (the
"TWRS Technical Team") and MMT will develop a technology insertion
plan (the "Technology Plan") to optimize the opportunity for the
participation of CEP technology in the Tanked Waste Contract,
subject to the consideration of the best interests of the customer
under the Tanked Waste Contract. The Parties agree that any required
costs to implement the Technology Plan will be allocated as they may
agree at the time; in the event that the Parties are unable to agree
on the allocation of such costs, then MMT's non-competition
obligations under Section 11.1 shall terminate effective at such
time.
4.5. Regulatory and Community Affairs. In connection with any use of CEP
technology for the Tanked Waste Contract, MMT shall provide LMC support for
regulatory and community affairs for low level fraction waste processing efforts
if requested in writing by LMC and project financing efforts for appropriate
mutually agreeable compensation. For each of these activities LMAES and MMT
shall agree on the level of effort to be provided by MMT and, where applicable,
the compensation to be paid to MMT.
4.6. Success Fee. Upon the DOE's extension of the Tanked Waste Contract
for the performance of Part B of the Tanked Waste Contract, as contemplated by
the current Phase 1A portion of the Tanked Waste Contract and provided that CEP
has been incorporated by LMAES in its Part A deliverables and proposal to DOE
for the performance of the Part B low level fraction waste processing, LMC shall
pay MMT a success fee of $15.0 million, of which $5.0 million shall be payable
in cash at the time of award of the Part B of the Tanked Waste Contract and
$10.0 million shall be payable upon delivery and acceptance of the CEP Plant for
low level fraction waste processing pursuant to terms mutually agreed upon by
the Parties. Pursuant to the terms of the Technology Plan, if MMT is not
entitled to receive such success fee as provided above, MMT shall be entitled to
receive a $15 million success fee upon later introduction of CEP to the Tanked
Waste Contract. The timing and conditions of payment of this success fee will be
determined as provided in the Technology Plan.
4.7. Royalty.
(a) LMC shall pay to MMT an ongoing royalty (the "TWRS Royalty") in the
amount of 3.5% on all revenues generated by processing through
<PAGE> 16
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MMT-supplied equipment of low level fraction waste in connection
with the Tanked Waste Contract (the "LLFW Revenues"). MMT and the
TWRS Technical Team shall prepare, as an amendment to the Technology
Plan, a methodology for determining that portion of the total
revenues generated by the Tanked Waste Contract that will constitute
LLFW Revenues for purposes of calculating the TWRS Royalty. Such
methodology shall be consistent with the intent of the Parties
expressed in the first sentence of this paragraph (a).
(b) The TWRS Royalty shall be paid on a quarterly basis. Within thirty
(30) days after a calendar quarter, LMC shall deliver to MMT a
written statement showing the LLFW Revenues generated in such
quarter and a calculation of the TWRS Royalty payable with respect
to such quarter. LMC shall permit MMT and its authorized Advisors to
inspect, on a confidential basis, the relevant books and records of
LMC in order to verify the accuracy of LMC's calculation of the TWRS
Royalty. Any payment or acceptance of the TWRS Royalty shall be
without prejudice to MMT's right to dispute the calculation or
amount of any TWRS Royalty. If MMT disputes any such amount, then
the Parties shall resolve such dispute pursuant to the Amended and
Restated Dispute Resolution Agreement.
4.8. Termination By DOE. In the event that the DOE cancels or otherwise
terminates the initiative represented by the Tanked Waste Contract prior to the
award of the Phase 1B portion of the Tanked Waste Contract, then the
relationship contemplated by this Article 4 shall terminate. In the event that
the DOE effects any such cancellation or termination after the award of the
Phase 1B portion of the Tanked Waste Contract, the Parties' rights and
obligations as against each other and DOE upon the occurrence of such event will
be defined by the definitive agreements described above in this Article 4.
4.9
*
* Confidential treatment has been requested for this portion of Exhibit 2.1.
<PAGE> 17
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Article 5
DUF6
5.1. Processing. As between LMC and MMT, MMT will lead and directly pursue
the worldwide market for the processing of DUF6.
5.2. LMC Involvement. At the request of MMT, LMC will consider future
involvement with MMT in the processing of DUF6 on a case by case basis, with
factors to be considered including investment opportunity and fee
considerations. Any such involvement shall be evaluated by the SAC.
Article 6
Chemical Weapons Demilitarization
6.1. Formation of New LLC. At the Closing, the Parties shall cause their
Subsidiaries to enter into the New LLC Agreement, to form Lockheed Martin
Chemical Demilitarization Systems, LLC (the "New LLC") to pursue the processing
of Chem Weapons Feedstocks worldwide (the "Chem Demil Market").
6.2. License. At the Closing, MMT, LMC and the New LLC shall enter into
the License Agreement granting to the New LLC an exclusive license for CEP
technology for the Chem Demil Market.
6.3. Sale of Equipment or Technology. Until the dissolution of the New LLC
pursuant to Article X of the New LLC Agreement, to the extent that either Party
or its Affiliates owns or controls equipment or technology that can be sold or
licensed in the Chem Demil Market, in the event that such Party or its
Affiliates determines to sell or license such equipment or technology for use in
the Chem Demil Market for the Treatment or Recycling of Chem Weapons Feedstocks,
such Party shall appoint the New LLC as its exclusive distributor for sale or
license to third parties of such equipment or technology. Any profits realized
by the New LLC in connection with such distribution activities shall be shared
on the basis provided in Section 3.1(c) of the New LLC Agreement.
Article 7
Quantum-200
The Parties shall jointly pursue business development efforts to establish
procurement opportunities whereby MMT will deliver to LMAES as soon as
practicable a Quantum-200 CEP Plant for installation at a DOE site to be
designated (the "Q-200 Project"). Any such decision regarding such efforts shall
be made by the SAC. The SAC shall also determine the specific terms of the Q-200
Project. All efforts of the
<PAGE> 18
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Parties with respect to the Q-200 Project shall be subject to the approval of
the appropriate part of DOE.
Article 8
M4
8.1. Transfer of Retech Assets. At the Closing, LMC, M4, MMT and LMAES
shall enter into the Asset Transfer Agreement, pursuant to which all of the
assets relating to M4's Retech operations (including all related Intellectual
Property) shall, at the direction of LMC, be transferred by M4 to LMAES, and
LMAES shall assume all of M4's liabilities relating to the Retech operations, in
full payment and satisfaction of M4's indebtedness to LMC under and pursuant to
the Revolving Credit Agreement, including all accrued interest and other amounts
accrued on such indebtedness (the "Revolving Credit Debt").
8.2. Transfer of M4 Ownership. At the Closing, pursuant to the Assignment
of Interest Agreement, LMC shall cause the LMC Subsidiary to transfer (i) to the
MMT Subsidiary all of the LMC Subsidiary's 49.5% interest as a limited partner
in M4 (the "M4 Interest"), free and clear of any mortgage, lien, pledge, charge,
security interest, encumbrance, title retention agreement, option, equity or
other adverse claim thereto (each an "Encumbrance") and (ii) the 500 shares of
Class A Common Stock, par value $.01 per share, of the General Partner held by
the LMC Subsidiary (the "GP Shares"), free and clear of any Encumbrance, in
exchange for the payment by the MMT Subsidiary to the LMC Subsidiary of $1.00
and the MMT Subsidiary's commitment to be responsible, jointly with MMT, under
Section 9.3 of this Agreement for the payment of 50% of M4's indebtedness
relating to the Oak Ridge Bonds and the Oak Ridge Loan and related letter of
credit.
8.3. Responsibility For M4.
(a) LMC and MMT agree that, except (i) for those liabilities and
obligations of M4 to be assumed by LMC or its Affiliates pursuant to
the Asset Transfer Agreement and paragraph (e) below, (ii) for those
liabilities and obligations of M4 for which LMC has agreed to be
responsible as provided in paragraphs (b) and (e) below, (iii) for
those liabilities and obligations of M4 relating to the Tech Center
for which MMT has agreed to be responsible as provided in paragraphs
(c), (d) and (e) below, and (iv) as specifically provided otherwise
in this Agreement (including, without limitation, Sections 9.3 and
9.4) or one of the Related Agreements, as between LMC and its
Affiliates, on the one hand, and MMT and its Affiliates, on the
other hand, each of LMC and MMT shall be responsible for 50% of all
liabilities and obligations of M4 and the General Partner relating
to or arising out of the operation of M4's and the
<PAGE> 19
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General Partner's businesses prior to the Closing, whether known or
unknown or fixed or contingent.
(b) LMC agrees that, as between LMC and its Affiliates, on the one hand,
and MMT and its Affiliates, on the other hand, LMC and the LMC
Subsidiary shall be responsible for (A) the liabilities and
obligations of M4 and the General Partner relating to or arising out
of the Tanked Waste Contract prior to the Closing, whether known or
unknown or fixed or contingent, including the performance by M4 of
the Letter Subcontract Number LMAES-TWRSP-LTRSUBK-004 and the TWRS
Subcontracts, and (B) the performance by LMAES of the TWRS
Subcontracts after the Closing (whether or not the novation of such
contracts has been completed as of the Closing).
(c) MMT agrees that, as between LMC and its Affiliates, on the one hand,
and MMT and its Affiliates, on the other hand, MMT and the MMT
Subsidiary shall be responsible for the liabilities and obligations
of M4 and the General Partner relating to or arising out of the
operation of their businesses after the Closing, whether known or
unknown or fixed or contingent, except as specifically provided
otherwise in this Agreement or one of the Related Agreements. In
addition, LMC agrees that MMT and the MMT Subsidiary will be
entitled to all M4 revenues accruing after the Closing.
(d) MMT agrees that, as between LMC and its Affiliates, on the one hand,
and MMT and its Affiliates, on the other hand, MMT and the MMT
Subsidiary shall be responsible for all liabilities and obligations
relating to or arising out of the operation of the Tech Center prior
to the Closing, except as specifically provided otherwise in this
Agreement or one of the Related Agreements.
(e) MMT agrees that, as between LMC and its Affiliates, on the one hand,
and MMT and its Affiliates, on the other hand, MMT and the MMT
Subsidiary shall be responsible for all expenses or other
liabilities arising out of the operation of the Tech Center between
March 26, 1997 and the Closing. LMC agrees that, as between MMT and
its Affiliates, on the one hand, and LMC and its Affiliates, on the
other hand, LMC and the LMC Subsidiary shall be responsible for all
expenses and liabilities arising out of the operation of M4's Retech
operations between March 26, 1997 and the Closing.
8.4. Indemnity.
(a) MMT agrees to indemnify and hold LMC and its Affiliates harmless
from and with respect to any and all claims, liabilities, losses,
damages, costs
<PAGE> 20
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and expenses, including without limitation the reasonable fees and
disbursements of counsel (collectively, the "Losses"), related to or
arising out of any claim, liability, obligation or damage for which
MMT and/or its Affiliates have agreed to be responsible pursuant to
Section 8.3.
(b) LMC agrees to indemnify and hold MMT and its Affiliates harmless
from and with respect to any and all Losses related to or arising
out of any claim, liability, obligation or damage for which LMC
and/or its Affiliates (including, without limitation, LMAES) have
agreed to be responsible pursuant to Section 8.3 or pursuant to
Article 3 of the Asset Transfer Agreement.
8.5. Claims.
(a) Notice. Either Party seeking indemnification hereunder (the
"Indemnified Party") shall promptly notify the other Party hereto
(the "Indemnifying Party") of any action, suit, proceeding, demand
or breach (a "Claim") with respect to which the Indemnified Party
claims indemnification hereunder, provided that failure of the
Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations under this Article 8 except to
the extent, if at all, that such Indemnifying Party shall have been
prejudiced thereby.
(b) Third Party Claims. If a Claim relates to any action, suit,
proceeding or demand instituted against the Indemnified Party by a
third party (a "Third Party Claim"), the Indemnifying Party shall be
entitled to participate in the defense of such Third Party Claim
after receipt of notice of such claim from the Indemnified Party.
Within thirty (30) days after receipt of notice of a particular
matter from the Indemnified Party, the Indemnifying Party may assume
the defense of such Third Party Claim, in which case the
Indemnifying Party shall have the authority to negotiate, compromise
and settle such Third Party Claim, if and only if the following
conditions are satisfied:
(i) the Indemnifying Party shall have confirmed in writing that it
is obligated hereunder to indemnify the Indemnified Party with
respect to such Third Party Claim; and
(ii) the Indemnified Party shall not have given the Indemnifying
Party written notice that it has determined, in the exercise
of its reasonable discretion, that matters of corporate or
management policy or a conflict of interest make separate
representation by the Indemnified Party's own counsel
advisable.
<PAGE> 21
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The Indemnified Party shall retain the right to employ its own counsel and to
participate in the defense of any Third Party Claim, the defense of which has
been assumed by the Indemnifying Party pursuant hereto, but the Indemnified
Party shall bear and shall be solely responsible for its own costs and expenses
in connection with such participation. In the event of any Third Party Claim for
which each of the Parties is responsible for 50% pursuant to Sections 8.3(a),
9.3 or 9.4, the SAC LLC will discuss and agree on a joint defense of such Third
Party Claim.
8.6. Method and Manner of Paying Claims. In the event of any claims for
indemnification under this Article 8, the claimant shall advise the Party that
is required to provide indemnification therefor in writing of the amount and
circumstances surrounding such claim. With respect to a liquidated claim, if
within thirty (30) days the other Party has not contested such claim in writing,
the other Party shall pay the full amount thereof within ten (10) days after the
expiration of such 30-day period. Any amount owed by an Indemnifying Party
hereunder with respect to any Claim may be set-off by the Indemnified Party
against any amounts owed by the Indemnified Party to the Indemnifying Party. The
unpaid balance of a claim for indemnification under this Article 8 shall bear
interest at a rate per annum equal to the lowest prime rate published in the
Wall Street Journal in its "Money Rates" column on the date notice thereof is
given by the Indemnified Party to the Indemnifying Party.
Article 9
Financial Matters
9.1. M4-MMT Receivables.
(a) Immediately prior to the Closing, the LMC Subsidiary shall
contribute to M4 cash in the amount of $4,960,000 to fund the
payment by M4 of a portion of certain outstanding accounts payable
owed by M4 to MMT relating to amounts previously paid by MMT to its
subcontractor, Fluor Daniel.
(b) MMT agrees that, upon payment of the amount referred to in paragraph
(a) above and consummation of the other transactions to be completed
at the Closing, after the Closing neither LMC nor the LMC Subsidiary
shall bear any responsibility for any accounts payable of M4 owed to
MMT.
9.2. Revolving Credit Debt. LMC agrees that immediately prior to the
Closing it and M4 will terminate the Revolving Credit Agreement and that the
Revolving Credit Debt will be fully paid and satisfied in exchange for the
transfer of Retech assets referred to in Section 8.1.
<PAGE> 22
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9.3. Oak Ridge Debt.
(a) With respect to the outstanding $38,000,000 aggregate principal
amount of Solid Waste Facility Bonds (M4 Environmental L.P. Project
Series 1996) issued by The Industrial Development Board of the City
of Oak Ridge (the "Oak Ridge Bonds") and the related $38,000,000
loan made to M4 by The Industrial Development Board of the City of
Oak Ridge (the "Oak Ridge Loan"), the Parties agree that after the
Closing M4 shall remain as obligor on the Oak Ridge Loan. However,
until the Oak Ridge Loan has been paid in full, each Party agrees
that it will be responsible for 50% of the Oak Ridge Loan and Oak
Ridge Bonds, including the payment of principal, interest and any
letter of credit fees payable pursuant to the LC Reimbursement
Agreement or any agreement relating to a substitute letter of
credit. LMC agrees to provide funds on a timely basis to MMT or, at
MMT's direction, M4 as required to cover LMC's 50% share of the
required debt service on the Oak Ridge Bonds and the Oak Ridge Loan;
provided, however, LMC may determine in its sole and absolute
discretion to pay over such funds directly to the Person(s) entitled
to the receipt of such funds. MMT shall provide evidence to LMC of
the prompt and timely payment in full by MMT or M4 of all amounts
payable relating to the Oak Ridge Loan or the Oak Ridge Bonds.
(b) Notwithstanding any other provisions of this Agreement or the
Related Agreements, neither LMC nor MMT shall have any right to
withhold any amounts payable by it pursuant to this Section 9.3 in
satisfaction or set-off of any obligation of the other Party.
(c) LMC agrees to keep in place the LC Guaranty until the Oak Ridge Loan
and Oak Ridge Bonds have been paid in full. In addition, if
requested by MMT in connection with obtaining a substitute letter of
credit for the letter of credit issued pursuant to the LC
Reimbursement Agreement, LMC will enter into a substitute guaranty
agreement on substantially the same terms as the LC Guaranty.
(d) LMC acknowledges that, in connection with the amendment and
restatement of M4's limited partnership agreement contemplated by
Section 15.1, LMC will not after Closing be entitled to a 2%
guaranty fee for providing a guaranty in connection with the Oak
Ridge Loan and Oak Ridge Bonds.
9.4. Restructuring and Other Costs.
(a) Attached to this Agreement as Schedule 9.4(a) is a description of
the human resources policies and procedures adopted by M4 in
connection with the transactions contemplated by this Agreement (the
"HR Plan").
<PAGE> 23
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LMC and MMT agree that, consistent with Section 8.3(a), except as
expressly set forth in Schedule 9.4(a) they shall each bear 50% of
the costs provided for in the HR Plan. In addition, LMC agrees that
it shall be solely responsible for any severance costs beyond those
contemplated in the HR Plan.
*
(b) Attached as Schedule 9.4(b) is a description of the procedures and
allocations of responsibility agreed to by the Parties relating to
certain liabilities and obligations of M4 and the General Partner
arising prior to March 26, 1997. Each of the Parties agree to be
responsible for those liabilities and obligations assigned to it in
Schedule 9.4(b).
Article 10
Other Transitional Matters
10.1. Additional Equity Funding. MMT, on behalf of itself and the MMT
Subsidiary, acknowledge that LMC and the LMC Subsidiary have satisfied the
requirements to fund M4 and the General Partner with a total of $75,000,000 in
equity funding pursuant to the 1996 Restructuring Agreement and the agreements
entered into pursuant thereto.
Article 11
Non-Competition and Related Issues
11.1. Tanked Waste Non-Competition Obligations. Until the earlier of (i)
the termination of the Tanked Waste Contract, (ii) the decision of LMC to
proceed under the Tanked Waste Contract without using CEP technology, as
contemplated by Section 4.4, (iii) the cancellation by the DOE of the Tanked
Waste Contract effort as contemplated by Article 4 and (iv) the election by MMT
to terminate its obligations under this Section 11.1 as provided in Articles V
and XVI of the Pilot Plant Purchase Agreement, neither MMT nor any Affiliate
controlled (which, as used in this Article 11, has the meaning set forth in the
definition of "Affiliate") directly or indirectly by MMT
* Confidential treatment has been requested for this portion of Exhibit 2.1.
<PAGE> 24
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shall directly or indirectly (whether through its Affiliates, as a shareholder,
partner or consultant) engage in the Treatment or Recycling of tanked waste
materials to be processed under the Tanked Waste Contract except through the
relationship described in Article 4.
11.2. DUF6 Non-Competition Obligations. LMC agrees that until June 16,
2002 neither it nor any Affiliate controlled directly or indirectly by it shall
directly or indirectly (whether through its Affiliates, as a shareholder,
partner or consultant) engage in the Treatment or Recycling of DUF6, except for
any participation with MMT as contemplated by Article 5.
11.3 Chem Demil Non-Competition Obligations. Until the dissolution of the
New LLC pursuant to Article X of the New LLC Agreement, neither Party nor any
Affiliate controlled directly or indirectly by such Party shall directly or
indirectly (whether through its Affiliates, as a shareholder, partner or
consultant) engage in or otherwise pursue any opportunity for the Treatment or
Recycling of Chem Weapons Feedstocks anywhere in the world except through the
New LLC. If the Parties (or their Affiliates) are unable to agree on the terms
on which they will pursue a particular opportunity in the Chem Demil Market
neither Party nor any Affiliate controlled directly or indirectly by a Party
shall be permitted to directly or indirectly pursue that project individually or
with others.
11.4. Ownership of Voting Securities. (a) The provisions of Sections 11.1
through 11.3 above shall not restrict LMC, MMT or their Affiliates from owning
any Voting Securities or other equity interests in a business that engages in
any activities within the scope of any of Sections 11.1 through 11.3 above
("Competing Activities"), provided that LMC, MMT or such Affiliate does not
control the Person engaging in such business and does not otherwise engage in an
activity prohibited by any of Sections 11.1 through 11.3 above.
*
* Confidential treatment has been requested for this portion of Exhibit 2.1.
<PAGE> 25
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11.5. First Offer. Until the dissolution of the SAC LLC pursuant to
Article X of the SAC Agreement, if either of the Parties wishes to pursue a
market opportunity that falls within the scope of the exclusive license relating
to DOE or DoD granted by MMT to M4 pursuant to the April 30, 1996 Amended and
Restated License Agreement (as amended to date, the "1996 License Agreement"),
other than any opportunity that is within the scope of the matters addressed in
Articles 4, 5 or 6, it shall comply (or cause the applicable Subsidiary to
comply) with the procedures set forth in Section 3.1(b) of the SAC Agreement.
11.6. Sale of Subsidiary. Until the later of (i) the dissolution of the
New LLC pursuant to Article X of the New LLC Agreement and (ii) the dissolution
of the SAC LLC pursuant to Article X of the SAC Agreement, neither Party shall
sell, transfer any interest in or take any other action that would cause any
change of control of any member of the New LLC or SAC LLC controlled by such
Party, without the prior written consent of the other Party.
Article 12
Title to MMT Licensed Property;
Confidentiality and Related Matters
12.1. Title to MMT Licensed Property. LMC agrees that title to all MMT
Licensed Property shall at all times remain and vest solely with MMT. LMC agrees
that it and its Affiliates will not claim or assert any right, title or interest
in or to any such MMT Licensed Property as a result of or in connection with the
relationships created under the Original Agreement and Partnership Restructuring
Agreement and the agreements entered into in connection therewith.
12.2. Confidentiality Obligations of LMC.
(a) LMC agrees that it will use MMT Confidential Information only in
connection with the activities contemplated by this Agreement and
the Related Agreements, and it will not disclose any MMT
Confidential Information to any Person except as expressly permitted
by this Section 12.2.
(b) LMC may disclose MMT Confidential Information:
(i) to its directors, officers and employees, its Subsidiaries and
their directors, officers and employees, in each case to the
extent they have a reasonable need to know the contents
thereof and who have agreed in writing with MMT to be bound by
the provisions of this Article 12;
<PAGE> 26
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(ii) on a confidential basis to those Advisors of LMC who have a
reasonable need to know the contents thereof;
(iii) to the extent required by applicable statute, rule or
regulation or any court of competent jurisdiction; provided
that LMC has made reasonable efforts to conduct its relevant
business activities in a manner such that the disclosure
requirements of such statute, rule or regulation or court of
competent jurisdiction do not apply, and provided further that
MMT is given notice and an adequate opportunity to contest
such disclosure or to use any means available to minimize such
disclosure (e.g., the "confidential treatment" provisions of
Rule 24b-2 promulgated under the Securities Exchange Act of
1934, as amended); and
(iv) to the extent such MMT Confidential Information has become
generally available publicly through no fault of LMC or its
Subsidiaries or their directors, officers, employees, Advisors
or sublicensees of the New LLC.
12.3. Confidentiality Obligations of MMT.
(a) MMT agrees that it will use LMC Confidential Information only in
connection with the activities contemplated by this Agreement and
the Related Agreements, and it will not disclose any LMC
Confidential Information to any Person except as expressly permitted
by this Section 12.3.
(b) MMT may disclose LMC Confidential Information:
(i) to its directors, officers and employees, its Subsidiaries and
their directors, officers and employees, in each case to the
extent they have a reasonable need to know the contents
thereof and who have agreed in writing with LMC to be bound by
the provisions of this Article 12;
(ii) on a confidential basis to those Advisors of MMT who have a
reasonable need to know the contents thereof;
(iii) to the extent required by applicable statute, rule or
regulation or any court of competent jurisdiction; provided
that MMT has made reasonable efforts to conduct its relevant
business activities in a manner such that the disclosure
requirements of such statute, rule or regulation or court of
competent jurisdiction do not apply, and provided further that
LMC is given notice and an adequate opportunity to contest
such disclosure or to use any means
<PAGE> 27
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available to minimize such disclosure (e.g., the "confidential
treatment" provisions of Rule 24b-2 promulgated under the
Securities Exchange Act of 1934, as amended);
(iv) to the extent such LMC Confidential Information has become
generally available publicly through no fault of MMT or its
Subsidiaries or their directors, officers, employees, Advisors
or sublicensees or the New LLC.
Article 13
Intellectual Property
All Intellectual Property (including all Improvements) relating to CEP or
necessary or useful to any application of CEP conceived, created, made,
developed or reduced to practice by or for MMT or M4 personnel, or LMC personnel
previously assigned to work on M4 activities (other than LMC or M4 personnel
assigned exclusively to work on matters relating to M4's Retech division), will
be owned by MMT and title to all such Intellectual Property, including patents,
patent applications and copyrights filed or granted, patents issued with respect
thereto will be issued solely in MMT's name.
Article 14
Acquisition of Voting Securities
14.1. Acquisition of Voting Securities of MMT. LMC agrees with MMT that,
until three (3) years after the termination of the SAC Agreement in accordance
with its terms, without the prior written consent of MMT, it will not directly
or indirectly (through an Affiliate or otherwise) acquire beneficial ownership
of any Voting Securities of MMT or any of its Subsidiaries, any securities
convertible into or exchangeable for Voting Securities of MMT or any of its
Subsidiaries, or any other right to acquire Voting Securities of MMT or any of
its Subsidiaries, without the consent of MMT if the effect of such acquisition
would be to increase the percentage of Voting Securities of MMT or such
Subsidiary then beneficially owned directly or indirectly by LMC and its
Affiliates to more than 4.9% of the Voting Securities of MMT or such Subsidiary
then issued and outstanding.
14.2. Acquisition of Voting Securities of LMC. MMT agrees with LMC that,
until three (3) years after the termination of the SAC Agreement in accordance
with its terms, without the prior written consent of LMC, it will not directly
or indirectly (through an Affiliate or otherwise) acquire beneficial ownership
of any Voting Securities of LMC or any of its Subsidiaries, any securities
convertible into or exchangeable for Voting Securities of LMC or any of its
Subsidiaries, or any other right
<PAGE> 28
-23-
to acquire Voting Securities of LMC or any of its Subsidiaries, without the
consent of LMC if the effect of such acquisition would be to increase the
percentage of Voting Securities of LMC or such Subsidiary then beneficially
owned directly or indirectly by MMT and its Affiliates to more than 4.9% of the
Voting Securities of LMC or such Subsidiary then issued and outstanding.
Article 15
Termination or Amendment of Existing Agreements
15.1. Existing Agreements.
(a) The Parties agree that each of the following documents shall
terminate effective upon consummation of the Closing:
(i) The Original Agreement;
(ii) The Partnership Restructuring Agreement;
(iii) The Asset Acquisition Agreement, dated as of March 15, 1996,
among LESAT, M4, the Parties and the MMT Subsidiary;
(iv) The 1996 License Agreement;
(v) The Amended and Restated Stockholders Agreement, dated as of
April 30, 1996, among the General Partner, the LMC Subsidiary
and the MMT Subsidiary; and
(vi) The Limited Guaranties delivered by MMT and LMC in connection
with the Restructuring Agreement.
*
* Confidential treatment has been requested for this portion of Exhibit 2.1.
<PAGE> 29
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(b) The Parties agree that at the Closing they and their Affiliates
shall enter into a Second Amended and Restated Dispute Resolution
Agreement (the "Amended and Restated Dispute Resolution Agreement")
in the form of Exhibit G hereto. The Parties agree that immediately
after consummation of the Closing MMT shall cause the MMT Subsidiary
and the General Partner to enter into a Second Amended and Restated
Limited Partnership Agreement (the "Second Amended and Restated
Limited Partnership Agreement") in the form of Exhibit H hereto.
Article 16
*
Article 17
Disclosure and Publicity
LMC and MMT agree that the initial public disclosures concerning the
transactions contemplated by this Agreement shall require mutual prior approval.
Article 18
Representations and Warranties
Each of LMC and MMT represents and warrants to the other that: (i) it or
its applicable Subsidiary, as the case may be, has the corporate power and
authority to enter into this Agreement and the Related Agreements to which it or
such Subsidiary is a party and perform the obligations required to be performed
by it or such Subsidiary hereunder and thereunder; (ii) the execution and
delivery by it or such Subsidiary of this Agreement and the Related Agreements
to which it or such Subsidiary is a party and the
* Confidential treatment has been requested for this portion of Exhibit 2.1.
<PAGE> 30
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performance by it of the obligations required to be performed by it or such
Subsidiary hereunder and thereunder have been duly authorized by the Board of
Directors of it or such Subsidiary and no consent of its stockholders or those
of such Subsidiary, as the case may be, is required, (iii) this Agreement
represents, and the Related Agreements to which it or such Subsidiary, as the
case may be, is a party when executed and delivered by it or such Subsidiary
will represent, the valid and binding obligation of it or such Subsidiary,
enforceable against it or such Subsidiary, as the case may be, in accordance
with its terms; and (iv) the execution and delivery of this Agreement and each
of the Related Agreements to which it or such Subsidiary, as the case may be, is
a party by it or its applicable Subsidiary and the performance by it or such
Subsidiary of the obligations required to be performed by them hereunder or
thereunder will not conflict with, violate or otherwise breach, or require a
consent under, any agreement or instrument to which it or such Subsidiary, as
the case may be, is a party or by which it or such Subsidiary, as the case may
be, or their property is bound. The foregoing representations and warranties
shall survive the execution and delivery of this Agreement and the Related
Agreements.
Article 19
General
19.1. Expenses. Except as expressly set forth in this Agreement or the
other Related Agreements, all expenses of the preparation, execution and
consummation of this Agreement and the Related Agreements and of the
transactions contemplated hereby, including, without limitation, attorneys',
accountants and outside advisers' fees and disbursements, shall be borne by the
party incurring such expenses.
19.2. Public Statements or Releases. Each of the parties hereto agrees
that prior to the consummation of the Closing no party to this Agreement will
make, issue or release any public announcement, statement or acknowledgment of
the existence of, or reveal the status of, this Agreement or the transactions
provided for herein, without first obtaining the consent of the other party
hereto. Nothing contained in this Section 19.2 shall prevent either party from
making such disclosures as such party may consider necessary to satisfy such
party's legal or contractual obligations.
19.3. Notices. All notices, demands and other communications hereunder
shall be in writing or by written telecommunication, and shall be deemed to have
been duly given if delivered personally or if mailed by certified mail, return
receipt requested, postage prepaid or if sent by overnight courier or sent by
written telecommunication, as follows:
If to MMT:
Molten Metal Technology, Inc.
400-2 Totten Pond Road
Waltham Massachusetts 02154
<PAGE> 31
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Attention: William M. Haney, III,
President and Chief Executive Officer
Ethan E. Jacks, Esq., Vice President
and General Counsel
with a copy sent contemporaneously to:
Bingham, Dana & Gould LLP
150 Federal Street
Boston, Massachusetts 02110
Attention: John R. Utzschneider, Esq.
If to LMC to:
Lockheed Martin Corporation
Energy and Environment Sector
1155 University Boulevard
Albuquerque, NM 87106-4320
Attention: President
General Counsel
with a copy sent contemporaneously to:
Richards, Layton & Finger
One Rodney Square
Wilmington, DE 19801
Attention: James G. Leyden, Jr., Esq.
19.4. Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) together with the Related Agreements contains the entire
understanding of the parties hereto and thereto supersedes all prior agreements
and understandings relating to the subject matter hereof and thereof and shall
not be amended except by a written instrument hereafter signed by all of the
parties hereto or thereto, as applicable. No waiver of any provision of this
Agreement shall be effective unless evidenced by a written instrument signed by
the waiving party. The parties further acknowledge and agree that, in entering
into this Agreement and entering or causing their Subsidiaries to enter into the
Related Agreements, they have not in any way relied upon any oral or written
agreements, statements, promises, information, arrangements, understandings,
representations or warranties, express or implied, not specifically set forth in
this Agreement or the Related Agreements.
<PAGE> 32
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19.5. Governing Law, Etc. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
all rights and remedies being governed by such laws, without regard to its
conflict of laws rules, and, to the extent applicable, federal laws of the
United States of America. As provided in the Amended and Restated Dispute
Resolution Agreement, the parties hereto have submitted to the exclusive
jurisdiction of state and federal courts located in Delaware.
19.6. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY RIGHTS THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY OF THE RELATED
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF
ANY OF THEM RELATING THERETO.
19.7. Waiver of Certain Damages. EACH OF THE PARTIES HERETO TO THE FULLEST
EXTENT PERMITTED BY LAW IRREVOCABLY WAIVES ANY RIGHTS THAT IT MAY HAVE TO
PUNITIVE, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY
LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY RELATED
AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF
ANY OF THEM RELATING THERETO.
19.8. Sections and Section Headings. The headings of sections and
subsections are for reference only and shall not limit or control the
meaning thereof.
19.9. Assigns. This Agreement and the Related Agreements shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns. Neither this Agreement and the Related
Agreements nor the obligations of any party hereunder or thereunder shall be
assignable or transferable by such party without the prior written consent of
the other party hereto or thereto.
19.10. No Implied Rights or Remedies. Except as otherwise expressly
provided herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or to give any Person, except LMC and MMT, any rights
or remedies under or by reason of this Agreement.
19.11. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19.12. Dispute Resolution. All disputes or claims arising under or in any
way relating to this Agreement shall be subject to the Amended and Restated
Dispute Resolution Agreement.
<PAGE> 33
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19.13. 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.
19.14. Severability. The invalidity or unenforceability of any particular
provision of this Agreement or any Related Agreement shall not affect the other
provisions hereof or thereof, and this Agreement and the Related Agreements
shall be construed in all respects as if such invalid or unenforceable provision
was omitted.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Agreement to be duly executed and delivered as of the
date and year first above written.
MOLTEN METAL TECHNOLOGY, INC.
By: /s/ Victor E. Gatto, Jr.
----------------------------------------
Name: Victor E. Gatto, Jr.
Title:Vice President, Government
and Nuclear Sector
LOCKHEED MARTIN CORPORATION
By: /s/ James A. Goltz
----------------------------------------
Name: James A. Goltz
Title:Vice President - Finance,
Energy and Environment Sector
<PAGE> 1
Exhibit 10.1*
LIMITED LIABILITY COMPANY AGREEMENT OF
LOCKHEED MARTIN CHEMICAL
DEMILITARIZATION SYSTEMS, LLC
This Limited Liability Company Agreement (this "Agreement") of Lockheed
Martin Chemical Demilitarization Systems, LLC, a Delaware limited liability
company (the "Company"), is made as of June 16, 1997, by and between Lockheed
Martin Advanced Environmental Systems, Inc., a Delaware corporation (the "LMC
Subsidiary"), and MMT Federal Holdings Inc., a Delaware corporation (the "MMT
Subsidiary"), as members of the Company, and the Persons who become members of
the Company in accordance with the provisions hereof and whose names are set
forth as Members on Exhibit A attached hereto.
WHEREAS, in accordance with the Master Restructuring Agreement, dated
as of June 16, 1997 (the "Master Restructuring Agreement"), by and between
Lockheed Martin Corporation, a Maryland corporation ("LMC"), and Molten Metal
Technology, Inc., a Delaware corporation ("MMT"), the LMC Subsidiary and the MMT
Subsidiary desire to form a Delaware limited liability company pursuant to the
Delaware Limited Liability Company Act, 6 Del. C. Section 18-101, et seq., as
amended from time to time (the "Delaware Act") by filing a Certificate of
Formation of the Company with the office of the Secretary of State of the State
of Delaware and by entering into this Agreement; and
WHEREAS, the parties hereto desire that the Company be governed by the
Delaware Act and this Agreement.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereby agree as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1. DEFINITIONS. As used in this Agreement, the following
capitalized terms have the following meanings:
"Additional Capital Contribution" means any Capital Contribution
effected after the date hereof by any Member pursuant to Section 4.2.
"Affiliate" means, with respect to any Person, any other Person
controlling, controlled by or under common control with, such Person. As used in
this definition and in Section 3.1(c), the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
- --------
* Confidential treatment has been requested for certain portions of this Exhibit
10.1.
-1-
<PAGE> 2
securities, by contract or otherwise with respect to any Person, and any other
Person controlling, controlled by or under common control with such Person.
"Agreement" means this Limited Liability Company Agreement of the
Company, including all exhibits and schedules hereto, as amended, restated or
supplemented from time to time.
"Bankruptcy" means, with respect to any Person (i) the filing by such
Person of a voluntary petition seeking liquidation, reorganization, arrangement
or readjustment, in any form, of its debts under Title 11 of the United States
Code, or corresponding provisions of future laws (or any other federal or state
insolvency law), (ii) the filing by such Person of an answer consenting to or
acquiescing in any such petition, (iii) the making by such Person of an
assignment for the benefit of its creditors or the admission by such Person in
writing of its inability to pay its debts as they mature, (iv) the filing of any
involuntary petition against such Person under Title 11 of the United States
Code (or corresponding provisions of future laws), an application for the
appointment of a receiver for the assets of such Person, or an involuntary
petition seeking liquidation, reorganization, arrangement or readjustment of its
debts under any other federal or state insolvency law, provided the same shall
not have been vacated, set aside or stayed within a 60-day period after the
occurrence of such event, or (v) the entry against such Person of a final
non-appealable order for relief under any bankruptcy, insolvency or similar law
now or hereafter in effect.
"B&P Costs" has the meaning set forth in Section 3.1(b).
"Board" means the Board of Directors of the Company with such powers
and duties as are described in Article V of this Agreement.
"Capital Account" means a separate account maintained for each Member
in the manner described in this paragraph. There shall be credited to each
Member's Capital Account (i) its Capital Contributions; (ii) its allocable share
of Company profits, including any income or gain that is exempt from federal
income taxation; (iii) the amount of any Company liabilities that are assumed by
such Member or that are secured by any Company property distributed to such
Member; and (iv) any other items required by Treasury Regulations
Section 1.704-l(b)(2)(iv). There shall be charged against each Member's Capital
Account (i) the amount of cash and the fair market value of other property
distributed to it from the Company; (ii) its allocable share of Company losses,
including expenditures that are neither deductible nor properly chargeable to
capital account under Section 705(a)(2)(B) of the Code or are treated as such
expenditures under Treasury Regulations Section 1.704-1(b)(2)(iv)(i); (iii) the
amount of any liabilities of such Member that are assumed by the Company or that
are secured by any property contributed by such Member to the Company; and (iv)
any other items required by Treasury Regulations Section 1.704-l(b)(2)(iv). In
connection therewith, the Board may make adjustments to the Capital Accounts of
the Members in a manner consistent with Treasury Regulations Section
1.704-l(b)(2)(iv)(f) upon the occurrence of any event described in subparagraph
(5) of such Regulations. Any reference in this Agreement to the Capital Account
of a then Member shall include the Capital Account of any prior Member in
respect of the Interest of such then Member.
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<PAGE> 3
"Capital Contribution" means the amount of cash and the fair market
value of all other property contributed to the Company by a Member in its
capacity as such at any point in time, including any Additional Capital
Contributions. All such amounts contributed shall be reflected on the books and
records of the Company. Any reference in this Agreement to the Capital
Contribution of a then Member shall include a Capital Contribution previously
made by any Member in respect of the Interest of such then Member. The licenses
granted by MMT pursuant to the MMT License Agreement shall not constitute a
Capital Contribution by the MMT Subsidiary (or be credited to the Capital
Account of the MMT Subsidiary) for purposes of this Agreement. However, the
immediately preceding sentence shall not prevent the Company, MMT or the MMT
Subsidiary from treating such licenses as a capital contribution for accounting
purposes to the extent required by generally accepted accounting principles.
"Catalytic Extraction Processing" or "CEP" means the processes, methods
and systems (including all intellectual and intangible and tangible property
associated therewith and including all aspects of accepting Feedstocks,
reactions within a CEP Plant, and handling Recovered Resources), owned or used
by MMT, directed to the processing of Feedstocks by introducing the Feedstocks
to a processing vessel containing at least one liquefied metal.
"CEP Plant" means the plant, equipment and other facilities necessary
to perform, operate and maintain CEP on a commercial basis (or, in the case of
any so-called "demonstration" facility, on the basis generally provided in the
applicable demonstration program).
"Certificate" means the Certificate of Formation of the Company and any
and all amendments thereto and restatements thereof filed on behalf of the
Company with the office of the Secretary of State of the State of Delaware.
"Chem Demil Market" has the meaning set forth in Section 3.1(a).
"Chem Weapons Feedstocks" means (i) bombs, rockets, artillery shells,
mortar shells, explosives and other munitions containing (or formerly
containing) one or more "chemical weapons agents" as defined in the Chemical
Weapons Convention (formally known as the Convention on the Prohibition of the
Development, Production, Stockpiling and Use of Chemical Weapons and their
Destruction), adopted September 3, 1992 at the Conference on Disarmament at
Geneva, and opened for signature on January 13, 1993 in Paris), and (ii) bulk
stockpiles of such chemical weapons agents.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any corresponding federal tax statute enacted after the date of this
Agreement. A reference herein to a specific Section of the Code refers not only
to such specific Section but also to any corresponding provision of any federal
tax statute enacted after the date of this Agreement, as such specific Section
or such corresponding provision is in effect on the date of application of the
provisions of this Agreement containing such reference.
"Company" means Lockheed Martin Chemical Demilitarization Systems, LLC,
the limited liability company governed by the Delaware Act and this Agreement.
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<PAGE> 4
"Covered Person" means any Member, any Affiliate of a Member, or any
Director, or any officers, directors, shareholders, partners, employees,
representatives or agents of a Member or their respective Affiliates, or any
employee or agent of the Company or its Affiliates.
"Delaware Act" means the Delaware Limited Liability Company Act, 6 Del.
C. Section 18-101, et seq., as amended from time to time and any successor
statute.
"Director" means any natural person designated by the LMC Subsidiary or
the MMT Subsidiary, as the case may be, as a member of the Board pursuant to the
provisions of this Agreement. Unless otherwise unanimously agreed in writing by
the LMC Subsidiary and the MMT Subsidiary, the LMC Subsidiary shall designate
three (3) Directors and the MMT Subsidiary shall designate three (3) Directors.
A Director shall be deemed to be a "manager" of the Company within the meaning
of the Delaware Act.
"Dispute Resolution Agreement" means the Second Amended and Restated
Dispute Resolution Agreement, dated as of June 16, 1997, by and among LMC, MMT,
the MMT Subsidiary, the LMC Subsidiary, Martin Marietta Environmental Holdings
Inc., M4 Environmental L.P., M4 Environmental Management Inc., LMC-MMT Strategic
Alliance Committee, LLC, and the Company, as in effect from time to time.
"Feedstocks" means, with respect to any CEP Plant, the wastes,
industrial by-products and other materials to be processed by such CEP Plant.
"Fiscal Year" means (i) the period commencing on the effective date of
this Agreement and ending on December 31, 1997, (ii) any subsequent twelve (12)
month period commencing on January 1 and ending on December 31, and (iii) the
period commencing on the immediately preceding January 1 and ending on the date
on which all Company assets have been distributed to the Members pursuant to
Article X.
"Intellectual Property" has the meaning set forth in the MMT License
Agreement.
"Interest" means a Member's limited liability company interest in the
Company, which represents such Member's share of the profits and losses of the
Company and a Member's right to receive distributions of the Company's assets in
accordance with the provisions of this Agreement and the Delaware Act.
"Liquidator" has the meaning set forth in Section 10.1(b).
"LMC" has the meaning set forth in the preamble.
"LMC Subsidiary" has the meaning set forth in the preamble.
"Master Restructuring Agreement" has the meaning set forth in the
preamble.
"Member" means each of the LMC Subsidiary and the MMT Subsidiary and
includes any Person admitted as an additional Member or a substitute Member
pursuant to the provisions of
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<PAGE> 5
this Agreement, in such Person's capacity as a member of the Company, and
"Members" means two (2) or more such Persons when acting in their capacities as
members of the Company. For purposes of the Delaware Act, the Members shall
constitute one (1) class or group of Members.
"MMT" has the meaning set forth in the preamble.
"MMT License Agreement" means the License Agreement, dated as of June
16, 1997, by and among LMC, MMT and the Company, as in effect from time to time.
"MMT Subsidiary" has the meaning set forth in the preamble.
"Officer" means an officer of the Company.
"Percentage Interest" means the Interest of a Member in the Company
expressed as a portion of one hundred percent, as set forth on Exhibit A
attached hereto. The Percentage Interest of a Member may be adjusted from time
to time with the unanimous written consent of all of the Members and the,
adoption, with the Members' unanimous consent, of amendments to appropriate
provisions of this Agreement, including, without limitation, Articles VIII, IX
and X. Without limiting the generality of the immediately preceding sentence, as
contemplated by Section 3.1(b), the Members may, as a result of a particular
Company project, unanimously consent to adjust their respective Percentage
Interests, either with respect to such project only or with respect to the
Company as a whole, but any such adjustment shall be conditioned upon the
Members' unanimous consent to amend appropriate provisions of this Agreement,
including, without limitation, Articles VIII, IX and X.
"Person" means any individual, partnership, corporation, association,
trust, limited liability company, joint venture, unincorporated organization or
any government, governmental department or agency or political subdivision
thereof.
"Recovered Resources" means the element and compounds produced by a CEP
Plant (whether or not produced through the use of reactants) that are suitable
for use or sale.
"Related Agreements" means this Agreement and any other agreement that
specifies that it is a Related Agreement for purposes of this Agreement or the
Master Restructuring Agreement.
"Secretary" means the natural person appointed by the Board as the
Secretary of the Company, who shall perform the duties described in Section 6.2.
"Section 704(c) Difference" has the meaning set forth in Section 9.4.
"Subsidiary" has the meaning set forth in the Master Restructuring
Agreement.
"Treasury Regulations" means the income tax regulations, including
temporary regulations, promulgated under the Code, as amended and in effect from
time to time.
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<PAGE> 6
SECTION 1.2. HEADINGS. The headings and subheadings in this Agreement
are included for convenience and identification only and in no way are intended
to describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.
ARTICLE II
FORMATION OF COMPANY, ETC.
SECTION 2.1. FORMATION.
(i) The Members hereby agree to form the Company as a limited
liability company under and pursuant to the provisions of the Delaware Act and
agree that the rights, duties and liabilities of the Members shall be as
provided in the Delaware Act, except as otherwise provided herein.
(ii) Upon the execution of this Agreement or a counterpart of
this Agreement and the filing of the Certificate pursuant to Section 2.1(iv),
each of the LMC Subsidiary and the MMT Subsidiary shall be admitted as Members.
(iii) The name and mailing address of each Member, the agreed
value of the amount contributed to the Company and the Percentage Interest of
each Member shall be as listed on Exhibit A attached hereto. The Secretary shall
be required to update Exhibit A from time to time as necessary to accurately
reflect the information therein. Any amendment or revision to Exhibit A made in
accordance with this Agreement shall not be deemed an amendment to this
Agreement. Any reference in this Agreement to Exhibit A shall be deemed to be a
reference to Exhibit A as amended and in effect from time to time.
(iv) James G. Leyden, Jr., as an authorized person, within the
meaning of the Delaware Act, shall execute, deliver and file the Certificate
with the Secretary of State of the State of Delaware. Upon the filing of the
Certificate with the Secretary of State of the State of Delaware, his powers as
an authorized person shall cease and the Secretary of the Company shall
thereafter be designated as an authorized person within the meaning of the
Delaware Act.
SECTION 2.2. NAME. The name of the Delaware limited liability company
formed hereby is Lockheed Martin Chemical Demilitarization Systems, LLC. The
business of the Company may be conducted upon compliance with all applicable
laws under any other name designated by the Board.
SECTION 2.3. PRINCIPAL PLACE OF BUSINESS. The principal place of
business of the Company shall be located at 201 Third Street, N.W., Suite 1600,
Albuquerque, New Mexico 87102. The Board may, at any time, change the principal
place of business of the Company and shall give notice thereof to the Members.
SECTION 2.4. REGISTERED AGENT AND OFFICE. The registered agent for
service of process on the Company in the State of Delaware shall be The
Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801, and the
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<PAGE> 7
registered office of the Company in the State of Delaware shall be c/o The
Corporation Trust Company at the same address. The Board may, at any time,
change the registered agent of the Company or the location of such registered
office and shall give notice thereof to the Members.
SECTION 2.5. TERM. The term of the Company shall commence upon the
filing of the Certificate with the Secretary of State of the State of Delaware
and shall continue until April 30, 2002, unless the Company is sooner dissolved
before such date in accordance with the provisions of this Agreement. The
Members may extend the term of the Company by the unanimous written consent of
the Members, which consent may be granted or withheld in the sole and absolute
discretion of each Member. The existence of the Company as a separate legal
entity shall continue until the cancellation of the Company's Certificate in the
manner required by the Delaware Act.
SECTION 2.6. QUALIFICATION IN OTHER JURISDICTIONS. The Board shall
cause the Company to be qualified, formed or registered to the extent required
in any jurisdiction in which the Company transacts business including under
assumed or fictitious name statutes if deemed advisable. The Secretary or a
member of the Board as an "authorized person" within the meaning of the Delaware
Act, shall execute, deliver and file any certificates (and any amendments and/or
restatements thereof) necessary for the Company to be qualified to do business
in a jurisdiction in which the Company may wish to conduct business.
ARTICLE III
PURPOSES AND POWERS OF THE COMPANY
SECTION 3.1. PURPOSES.
(a) GENERAL PURPOSES. The purposes of the Company are (i)
directly, or indirectly through the ownership of interests in other entities, to
engage in the processing of Chem Weapons Feedstocks worldwide (the "Chem Demil
Market"), and (ii) to engage in all related activities arising therefrom or
relating thereto or necessary, desirable, advisable, convenient, incidental or
appropriate in connection therewith as the Board may from time to time
determine.
(b) INTENTION OF MEMBERS. The LMC Subsidiary shall take the
lead in marketing and business development opportunities, and shall have final
approval over which projects the Company elects to bid. The Company shall pursue
the Chem Demil Market using multiple technologies to offer the best value to the
customer. The Company may utilize CEP or any other technology. The Company shall
pursue particular market opportunities either directly or through separate
project entities created by the Company or the Members for particular projects
or through prime/subcontract relationships created for particular projects. Each
Member shall be responsible for its own personnel costs and marketing costs,
including bid and proposal costs ("B&P Costs"), it being understood that B&P
Costs may be recovered in whole or in part if a contract is awarded to the
Company, subject to the mutual advance agreement of the Members and final audit.
Except as provided in the two (2) immediately following sentences, ownership,
funding, profits and losses with respect to each project of the Company shall be
shared on a
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<PAGE> 8
50/50 basis, all Capital Contributions shall be made in equal shares by the LMC
Subsidiary and the MMT Subsidiary and the Percentage Interest of each of the LMC
Subsidiary and the MMT Subsidiary shall be fifty percent (50%). However, in
connection with a particular Company project the Members may decide to vary this
50/50 relationship in one or more respects based on the technology selected for
such project, the respective financial commitments made for such project by the
Members and the amount of the Capital Contribution each Member is willing to
make for such project. In the event that either the LMC Subsidiary or the MMT
Subsidiary proposes any such variation in the 50/50 relationship as a result of
a project to be performed by the Company (as distinguished from a project to be
performed by a separate project entity created by the Company or the Members or
a project to be performed through a prime/subcontract relationship), before the
Company may undertake such a project, this Agreement shall be amended with the
unanimous consent of the Members so as to reflect the understanding and
agreement of the Members with respect to such variation in the 50/50
relationship, including, without limitation, appropriate amendments to Articles
VIII, IX and X, and, as provided in the definition of "Percentage Interest"
contained in Section 1.1, to reflect adjustments in the respective Percentage
Interests of the Members, either with respect to such project only or with
respect to the Company as a whole. The Members acknowledge that their intent is
to structure these relationships so as to maximize the competitive position of
the Company and its projects and the likelihood of Company success.
(c) CHEM DEMIL EQUIPMENT AND TECHNOLOGY. To the extent that
either LMC or MMT or any Affiliate controlled by either of them owns or controls
equipment or technology that can be sold in the Chem Demil Market, in the event
that such Person or such Affiliate determines to sell or license such equipment
or technology for use in the Chem Demil Market for the Treatment (as defined in
the Master Restructuring Agreement) or Recycling (as defined in the Master
Restructuring Agreement) of Chem Weapons Feedstocks, such Person shall, or cause
its applicable Affiliate to, appoint the Company to act as the exclusive
distributor for sale to third parties of such equipment or technology. Any
profits realized by the Company in connection with such distribution activity
shall be shared equally by the Members unless they agree otherwise.
(d) ABILITY OF MEMBERS TO ACQUIRE COMPETING BUSINESSES. The
intent of the Members is that either initial Member or its Affiliates will be
free to acquire other businesses at any time even if any such acquired business
would include a chemical weapons demilitarization line of business. However, as
required in Section 11.3 of the Master Restructuring Agreement, such acquired
business will be required to pursue the Chem Demil Market through the Company
for the term of the Company, as provided in Section 2.5.
(e) EXCLUSIVITY. Each of the Members shall comply with the
provisions of Section 11.3 of the Master Restructuring Agreement.
SECTION 3.2. POWERS.
(a) SPECIFIC POWERS OF COMPANY. Subject to Section 5.14, the
Company, and the Board on behalf of the Company, shall have the power and
authority to take any and all
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actions necessary, appropriate, proper, advisable, incidental or convenient to
or for the furtherance of the purposes set forth in Section 3.1, including, but
not limited to, the power:
(i) to conduct its business, carry on its operations
and have and exercise the powers granted to a limited
liability company by the Delaware Act in any state, territory,
district or possession of the United States, or in any foreign
country, that may be necessary, convenient or incidental to
the accomplishment of the purposes of the Company;
(ii) to enter into, perform and carry out contracts
of any kind, including, without limitation, contracts with any
Member, any Affiliate thereof, or any agent or Affiliate of
the Company necessary to, in connection with, convenient to,
or incidental to the accomplishment of the purposes of the
Company;
(iii) to lend money to, borrow money from, act as
surety, guarantor or endorser for, provide collateral for, and
transact other business with third parties including Members
and Affiliates of the Company and the Members;
(iv) to purchase, take, receive, subscribe for or
otherwise acquire, own, hold, vote, use, employ, sell,
mortgage, lend, pledge, or otherwise dispose of, and otherwise
use and deal in and with, shares or other interests in or
obligations of domestic or foreign corporations, associations,
general or limited partnerships (including, without
limitation, the power to be admitted as a partner thereof and
to exercise the rights and perform the duties created
thereby), trusts, limited liability companies (including,
without limitation, the power to be admitted as a member or
appointed as a manager thereof and to exercise the rights and
perform the duties created thereof), or individuals or direct
or indirect obligations of the United States or of any
government, state, territory, governmental district or
municipality or of any instrumentality of any of them;
(v) to lend money for its proper purpose, to invest
and reinvest its funds, to take and hold real and personal
property for the payment of funds so loaned or invested;
(vi) to sue and be sued, complain and defend, and
participate in administrative or other proceedings, in its
name;
(vii) to appoint employees and agents of the Company,
including Officers, and define their duties and fix their
compensation;
(viii) to employ or retain such agents, employees,
managers, accountants, attorneys, consultants and other
Persons necessary or appropriate to carry out the business and
affairs of the Company, and to pay such fees, expenses,
salaries and wages and other compensation as the Board shall
determine;
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(ix) to indemnify any Person in accordance with the
Delaware Act and to obtain any and all types of insurance;
(x) to cease its activities and cancel its
Certificate;
(xi) to negotiate, enter into, renegotiate, extend,
renew, terminate, modify, amend, waive, execute, acknowledge
or take any other action with respect to any lease, contract
or security agreement in respect of any assets of the Company;
(xii) to borrow money and issue evidences of
indebtedness, and to secure the same by a mortgage, pledge or
other lien on the assets of the Company;
(xiii) to pay, collect, compromise, litigate,
arbitrate or otherwise adjust or settle any and all other
claims or demands of or against the Company or to hold such
proceeds against the payment of contingent liabilities; and
(xiv) to make, execute, acknowledge and file any and
all documents or instruments necessary, convenient or
incidental to the accomplishment of the purposes of the
Company.
(b) CERTAIN RELATED AGREEMENTS. The Company may enter into and
perform the MMT License Agreement, the Master Restructuring Agreement and the
Dispute Resolution Agreement without any further act, vote or approval of any
Member, Director or Officer, notwithstanding any other provision of this
Agreement, the Delaware Act or other applicable law, rule or regulation.
ARTICLE IV
MEMBERS
SECTION 4.1 MEMBERS; CAPITAL. Each Member has contributed or is deemed
to have contributed to the Company as its initial Capital Contribution the
amount of money set forth opposite such Member's name on Exhibit A attached
hereto. The agreed value of the Capital Contributions made or deemed to have
been made by each Member shall be set forth on Exhibit A. No Member shall have
any personal liability for the repayment of the Capital Contribution of any
other Member, and no Member shall have any obligation to fund or restore any
deficit in its Capital Account.
SECTION 4.2. ADDITIONAL CAPITAL CONTRIBUTIONS. No Member shall be
required to make any Additional Capital Contribution to the Company. However, a
Member may, subject to the provisions of Section 3.1(b), make Additional Capital
Contributions to the Company with the written consent of all of the other
Members. The provisions of this Agreement, including without limitation, this
Section 4.2, are intended solely to benefit the Members and, to the fullest
extent permitted by law, shall not be construed as conferring any benefit upon
any creditor of the Company other than the Members, and no such creditor of the
Company other than the Members
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shall be a third-party beneficiary of this Agreement, and no Member or Director
shall have any duty or obligation to any creditor of the Company to issue any
call for capital pursuant to this Agreement.
SECTION 4.3. BORROWINGS AND LOANS. If any Member shall lend any monies
to the Company, the amount of any such loan shall not (i) constitute an increase
in the amount of such Member's Capital Contributions, (ii) affect in any way
such Member's share of the profits, losses, and distributions of the Company, or
(iii) be reflected in such Member's Capital Account. No Member shall be required
to lend any monies to the Company without its written consent, which consent may
be given or withheld in the sole and absolute discretion of such Member.
SECTION 4.4. NO LIABILITY OF MEMBERS FOR OBLIGATIONS OF THE COMPANY.
Except as otherwise provided by the Delaware Act, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of the Company, and no
Member, Director, Officer or Affiliate of a Member shall be obligated personally
for any such debt, obligation or liability of the Company solely by reason of
being a Member, Director, Officer or Affiliate of a Member.
SECTION 4.5. NO REQUIREMENT FOR ANNUAL MEETINGS. There is no
requirement that an annual meeting of the Members be held unless requested in
writing by the Board or any Member.
SECTION 4.6. SPECIAL MEETINGS. Meetings of Members for any purpose or
purposes may be called at any time by the Board or any Member.
SECTION 4.7. NOTICE OF MEETINGS. Whenever Members are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given that shall state the place, date and hour of the meeting and the
purpose or purposes for which the meeting is called. Unless otherwise provided
by law or this Agreement, the written notice of any meeting shall be given not
less than ten (10) nor more than sixty (60) days before the date of the meeting
to each Member. If mailed, such notice shall be deemed to be given when received
by the Member at its address as it appears on the records of the Company.
SECTION 4.8. ADJOURNMENTS. Any meeting of Members may adjourn from time
to time to reconvene at the same or some other place, and notice need not be
given of any such adjourned meeting if the time and place thereof are announced
at the meeting at which the adjournment is taken. At the adjourned meeting the
Company may transact any business that might have been transacted at the
original meeting. If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given to each Member of record entitled
to vote at the meeting.
SECTION 4.9. QUORUM. Except as otherwise provided by law or this
Agreement, at each meeting of Members the presence in person or by proxy of the
holders of all Percentage Interests at the meeting shall be necessary to
constitute a quorum. In the absence of a quorum, the Members so present may, by
majority vote, adjourn the meeting from time to time in the manner provided in
Section 4.8 until a quorum shall attend.
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SECTION 4.10. UNANIMOUS VOTE OF MEMBERS REQUIRED. Except for the
designation of Directors as provided in Section 5.2, all matters voted on by the
Members shall require the unanimous affirmative vote of all of the Members.
SECTION 4.11. VOTING; PROXIES. Except as otherwise provided by this
Agreement, each Member entitled to vote at any meeting of Members shall be
entitled to vote its entire Percentage Interest. Each Member entitled to vote at
a meeting of Members or to express consent or dissent to action by the Company
in writing without a meeting may authorize another person or persons to act for
it by proxy. A Member may revoke any proxy that is not irrevocable by attending
the meeting and voting in person or by filing an instrument in writing revoking
the proxy or by delivering a proxy in accordance with applicable law bearing a
later date to the Secretary of the Company.
SECTION 4.12. ACTION BY WRITTEN CONSENT OF MEMBERS. Unless otherwise
provided in this Agreement, any action required or permitted to be taken at any
meeting of the Members (including the designation by the LMC Subsidiary and the
MMT Subsidiary of Directors) may be taken without a meeting, without prior
notice and without a vote, if a consent or consents in writing, setting forth
the action so taken, shall be signed by the holders of outstanding Interests (or
by the LMC Subsidiary and the MMT Subsidiary in connection with the designation
of Directors) having not less than the minimum number of votes or Percentage
Interests that would be necessary to authorize or take such action at a meeting
at which all Interests entitled to vote thereon were present and voted and shall
be delivered (by hand or by certified or registered mail, return receipt
requested, or by overnight courier service such as Federal Express or via
telecopier) to a Director designated by the LMC Subsidiary and a Director
designated by the MMT Subsidiary. Prompt notice of the taking of the action by
the Company or any Member without a meeting by less than unanimous written
consent of the Members shall be given to those Members who have not consented in
writing.
SECTION 4.13. CONDUCT OF MEETINGS. The Board may adopt by resolution
such rules and regulations for the conduct of the meeting of Members as it shall
deem appropriate. Members may participate in a meeting of the Members by means
of conference telephone or similar communications equipment, provided all
persons participating in the meeting can hear each other, and such participation
in a meeting shall constitute presence in person at the meeting. If all the
participants are participating by conference telephone or similar communications
equipment, the meeting shall be deemed to be held at the principal place of
business of the Company.
SECTION 4.14. POWERS OF MEMBERS. The Members shall have the power to
exercise any and all rights or powers granted to the Members pursuant to the
express terms of this Agreement. The Members shall also have the power to
authorize the Board, by unanimous vote of the Members, to possess and exercise
any right or power not already vested in the Board pursuant to Article V or any
other provision of this Agreement. Except as otherwise specifically provided
herein, the Members shall have no power or authority or right to bind the
Company.
SECTION 4.15. PARTITION. Each Member waives any and all rights that it
may have to maintain an action for partition of the Company's property.
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SECTION 4.16. RESIGNATION. Except as provided herein, a Member may not
resign from the Company prior to the dissolution and winding up of the Company.
SECTION 4.17. MEMBERS' LACK OF AUTHORITY TO BIND THE COMPANY. The
Members hereby consent to the exercise by the Board of the powers conferred by
this Agreement. Except as otherwise specifically provided herein, no Member
shall have any power or authority or right to act for or bind the Company.
Without limiting the generality of the foregoing, no Member shall have any power
or authority or right to act for or bind the Company with respect to any matter
unless previously authorized by the Board or, where required pursuant to Section
5.14, by the Members.
ARTICLE V
MANAGEMENT
SECTION 5.1. BOARD OF DIRECTORS. Subject to the rights of the Members
as set forth herein, including Section 5.14, the business and affairs of the
Company shall be managed by or under the direction of the Board. The Board shall
have full and complete authority, power and discretion to manage and control the
business and affairs of the Company, to make all decisions affecting the
business and affairs of the Company and to take all such actions as it deems
necessary or appropriate to accomplish the purposes of the Company as set forth
herein, including, without limitation, Article III.
SECTION 5.2. NUMBER; QUALIFICATIONS. The Board shall consist of six (6)
Directors. Directors need not be Members. Unless otherwise unanimously agreed by
all of the Members, the LMC Subsidiary shall designate three (3) Directors and
the MMT Subsidiary shall designate three (3) Directors, each of whom shall hold
office until his or her successor is designated by the Member that designated
such Director. The Board shall initially consist of the persons named as
Directors by the Members on Exhibit B attached hereto. Each Director shall serve
at the pleasure of the Member that designated such Director and may be replaced
or removed at any time, with or without cause, by the Member that designated
such Director. Any Director may resign at any time upon written notice to the
Company. Any vacancy occurring in the Board for any cause shall promptly be
filled by the Member that designated the Director who is no longer serving.
SECTION 5.3. FIDUCIARY DUTIES OF DIRECTORS. To the fullest extent
permitted by law, including Section 18-1101(c) of the Delaware Act, each
Director shall be deemed an agent of the Member that designated such Director
and shall have no duty (fiduciary or otherwise) to the Company or to any other
Member. Each Member, by execution of this Agreement, agrees to, consents to, and
acknowledges the delegation of powers and authority to the Directors, and to
actions and decisions of the Directors within the scope of the Directors'
authority as provided herein.
SECTION 5.4. REGULAR MEETINGS. Regular meetings of the Board may be
held at such places within or without the State of Delaware and at such times as
the Board may from time to time determine, and if so determined notices thereof
need not be given. The Board shall meet as
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often as the Directors deem necessary, presently contemplated to be four (4)
times per year. Meetings may be conducted in person or by telephone or in any
other manner agreed to by the Board. Meetings of the Board may be attended by
other representatives of the Members and their Affiliates and other persons
related to the Company as agreed to from time to time by the Board.
SECTION 5.5. SPECIAL MEETINGS. Special meetings of the Board may be
held at any time or place within or without the State of Delaware whenever
called by any Member or any Director. Notice of a special meeting of the Board
shall be given by the person or persons calling the meeting at least twenty-four
(24) hours before such meeting.
SECTION 5.6. TELEPHONIC MEETINGS PERMITTED. Directors, or any committee
of Directors designated by the Board, may participate in a meeting thereof by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at such meeting.
If all the participants are participating by conference telephone or similar
communications equipment, the meeting shall be deemed to be held at the
principal place of business of the Company.
SECTION 5.7. QUORUM; VOTE REQUIRED FOR ACTION. At all meetings of the
Board a quorum for the transaction of business shall be the presence of an equal
number of Directors elected by the LMC Subsidiary and the MMT Subsidiary. Except
in cases in which this Agreement otherwise provides, the vote of a majority of
the Directors present at a meeting at which a quorum is present shall be the act
of the Board. Each Director shall have one (1) vote.
SECTION 5.8. ORGANIZATION. The Secretary shall act as secretary of each
meeting of the Board, but in the Secretary's absence the Board may appoint any
person to act as secretary of the meeting.
SECTION 5.9. ACTION BY THE BOARD WITHOUT A MEETING. Unless otherwise
restricted by this Agreement, any action required or permitted to be taken at
any meeting of the Board, or of any committee thereof, may be taken without a
meeting if all Directors, or all members of such committee of Directors, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or such committee, as the case may
be.
SECTION 5.10. COMMITTEES. The Board may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of two (2) or more of the Directors. The Board may designate one (1) or
more Directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the Director or Directors thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another Director to act at the
meeting in place of such absent or disqualified member of such committee. Any
such committee, to the extent permitted by law and to the extent provided in the
resolution of the Board creating such committee, shall have and may exercise all
the powers and authority of the Board in the management of the business and
affairs of the Company. On all committees of the Board there shall be an equal
number of
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Directors designated by the LMC Subsidiary and an equal number of Directors
designated by the MMT Subsidiary.
SECTION 5.11. COMMITTEE RULES. Unless the Board otherwise provides,
each committee designated by the Board may make, alter and repeal rules for the
conduct of such committee's business. In the absence of such rules, each
committee shall conduct its business in the same manner as the Board conducts
its business pursuant to this Agreement.
SECTION 5.12. BOARD COMPENSATION. Directors shall not be entitled to
any compensation for their services as members of the Board.
SECTION 5.13. DIRECTOR'S POWER TO BIND. No Director shall have any
power or authority or right to act for or bind the Company with respect to any
matter unless previously authorized by the Board or, where required pursuant to
Section 5.14, by the Members.
SECTION 5.14. MATERIAL TRANSACTIONS/DUTIES OF MEMBERS.
(a) CERTAIN MATTERS REQUIRING UNANIMOUS APPROVAL OF THE
MEMBERS. Notwithstanding any other provision of this Agreement, the following
matters shall require the unanimous written approval of the Members, and no such
action shall be taken by the Company, the Board, any Director or Officer on
behalf of the Company, unless, until, and to the extent that, the unanimous
written approval of all of the Members is obtained:
(i) amending this Agreement;
(ii) increasing the amount of Capital Contributions
required of any Member or changing any Member's Percentage
Interest;
(iii) admitting any new Member upon the issuance of
new Interests in the Company;
(iv) permitting the transfer by a Member of its
Interest in the Company;
(v) pursuing an initial public offering in connection
with the Company or its assets;
(vi) any acquisitions (whether by purchase, merger or
otherwise) of capital stock or other equity interests of any
Person or any acquisition (whether by purchase of assets or
otherwise) of assets of any Person, other than the acquisition
of assets (not constituting a business, division or line of
business of any Person) in the ordinary course of the
Company's business;
(vii) dissolving the Company pursuant to Section
10.1(a)(iv);
(viii) selling all or any substantial part of the
assets of the Company;
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(ix) causing the Company to merge with or consolidate
into another limited liability company or other business
entity (as defined in Section 18-209(a) of the Delaware Act);
(x) causing the Company to convert into any other
business entity (as defined in Section 18-214 of the Delaware
Act);
(xi) commencing a voluntary proceeding seeking
reorganization or other relief with respect to the Company
under any bankruptcy or similar law; or
(xii) causing the Company to engage in any material
transaction between the Company and any Member not
contemplated by the Master Restructuring Agreement.
(b) DUTIES OF MEMBERS. Each Member and its Affiliates, in
connection with the business and affairs of the Company, and in exercising such
Member's discretion under this Agreement, including Section 5.14(a), shall to
the fullest extent permitted by Section 18-1101(c) of the Delaware Act, be
entitled to consider such interests and factors as such Member desires,
including its own interest and the interest of its Affiliates, and shall have no
duty or obligation to give any consideration to any interest of, or factors
affecting, the Company or any other Member.
ARTICLE VI
OFFICERS
SECTION 6.1. OFFICERS. The Officers of the Company shall be chosen by
the Board, except as otherwise provided herein. Except as otherwise provided
herein, the Officers shall have such powers and duties in the management of the
Company as may be prescribed in a resolution by the Board and, to the extent not
so provided, as generally pertain to their respective offices as if the Company
were a corporation governed by the General Corporation Law of the State of
Delaware, subject to the control of the Board. The Board may require any
Officer, agent or employee to give security for the faithful performance of his
or her duties. Each Officer shall hold office until his or her successor is
elected and qualified or until his or her earlier resignation or removal. Any
Officer may resign at any time upon written notice to the Company. The Board may
remove any Officer with or without cause at any time. Any number of offices may
be held by the same person. Any vacancy occurring in an office of the Company by
death, resignation, removal or otherwise may be filled for the unexpired portion
of the term by the Board at any regular or special meeting of the Board.
SECTION 6.2. THE SECRETARY AND ASSISTANT SECRETARY. The Secretary shall
attend all meetings of the Board and all meetings of the Members and record all
of the proceedings of the meetings of the Company and of the Board in a book to
be kept for that purpose and shall perform like duties for the standing
committees when required. The Secretary shall give, or cause to be given, notice
of all meetings of the Members and special meetings of the Board, and shall
perform such other duties as may be prescribed by the Board, or the President if
any, under whose supervision the Secretary shall be. The Assistant Secretary or,
if there be more than one,
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the Assistant Secretaries in the order determined by the Board (or if there be
no such determination, then in the order of their election) shall, in the
absence of the Secretary, or in the event of the Secretary's inability to act,
perform the duties and exercise the powers of the Secretary and shall perform
such other duties and have such other powers as the Board, or the President if
any, may from time to time prescribe.
SECTION 6.3. THE TREASURER AND ASSISTANT TREASURER. The Treasurer, if
any, shall have the custody of the Company's funds and securities and shall keep
full and accurate accounts of receipts and disbursements and books belonging to
the Company and shall deposit all monies and other valuable effects in the name
and to the credit of the Company in such depositories as may be designated by
the Board. The Treasurer shall disburse the funds of the Company as may be
ordered by the Board or the President, taking proper vouchers for such
disbursements, and shall render to the Board, at its regular meetings, or when
the Board so requires, an account of all the Treasurer's transactions and of the
financial condition of the Company. The Assistant Treasurer or, if there shall
be more than one, the Assistant Treasurers in the order determined by the Board
(or if there be no such determination, then in the order of their election),
shall, in the absence of the Treasurer, or in the event of the Treasurer's
inability to act, perform the duties and exercise the powers of the Treasurer
and shall perform such other duties and have such other powers as the Board, or
the President if any, may from time to time prescribe.
SECTION 6.4. OFFICERS AS AGENTS. The Officers, to the extent of their
powers set forth in this Agreement, are agents of the Company for the purpose of
the Company's business, and the actions of the Officers taken in accordance with
their respective powers set forth in this Agreement shall bind the Company.
Without limiting the generality of the foregoing, no Officer shall have any
power or authority or right to act for or bind the Company with respect to any
matter unless previously authorized by the Board or, where required pursuant to
Section 5.14, by the Members.
SECTION 6.5. EXECUTION OF INSTRUMENTS; RELIANCE BY THIRD PARTIES. Any
Person dealing with the Company or any Member, Director or Officer in connection
with the business of the Company, may rely upon a certificate signed by at least
one Director designated by the LMC Subsidiary and one Director designated by the
MMT Subsidiary as to:
(i) the identify of a Member, Director or Officer;
(ii) the existence or non-existence of any fact or
facts that constitute a condition precedent to acts by the
Board, the Members or the Officers, or in any other matter
relating to the affairs of the Company;
(iii) the Persons who are authorized to execute and
deliver any instrument or document of, or on behalf of, the
Company; or
(iv) any act or failure to act by the Company or as
to any other matter whatsoever involving the Company or any
Member, Director or Officer.
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ARTICLE VII
TRANSFERABILITY OF MEMBER INTERESTS
SECTION 7.1. RESTRICTIONS ON TRANSFER.
(a) No Member shall have the right to dispose of, sell,
alienate, assign, participate, subparticipate, encumber, or otherwise transfer
all or any part of its Interest (other than an assignment by operation of law,
such as a merger), unless prior to such transfer the transferee is approved in
writing by all of the other Members acting in their sole and absolute
discretion.
(b) The transferee of the Interest of a Member may become a
substituted Member only upon the terms and conditions set forth in this Article
VII. Each Member shall have the power, in its sole discretion, to admit or to
refuse to admit as substituted Members transferees who acquire the Interest, or
any part thereof, of a Member hereunder. Except as otherwise provided in this
Article VII, the failure or refusal of the Members to admit an assignee as a
substituted Member shall not affect the right of such assignee to receive the
share of distributions of the Company to which its predecessor in interest would
have been entitled; however, the assignee of the assigned Interest shall not be
entitled to exercise any rights of a Member of the Company, including without
limitation the right to vote or consent with respect to any proposed action of
the Company as to which such vote or consent is required, unless and until the
assignee is admitted as a substituted Member. From and after the assignment of
any Interest or portion thereof, the assignor shall not be entitled to exercise
any rights of a Member of the Company in respect of the Interest or portion
thereof assigned, including without limitation the right to vote or consent with
respect to any proposed action of the Company, regardless of whether its
assignee becomes a substituted Member. An assignee of a Member's Interest who
does not become a substituted Member as provided herein and who desires to make
a further assignment of its Interest shall be subject to all of the provisions
of this Article VII to the same extent as any Member desiring to make an
assignment.
(c) In addition to the foregoing requirements, the admission
of an assignee as a substituted Member shall be conditioned upon the assignee's
written acceptance of the terms and provisions of this Agreement and its written
assumption of the obligations hereunder of its assignor. Whether or not a
transferee who acquired any Interest in the Company has accepted in writing the
terms and provisions of this Agreement and assumed in writing the obligations
hereunder of its predecessor in interest, such transferee shall be deemed, by
the acquisition of such Interest, to have agreed to be subject to and bound by
all the obligations of this Agreement with the same effect and to the same
extent as any predecessor in interest of such transferee.
(d) All costs incurred by the Company in connection with the
admission to the Company of a substituted Member pursuant to this Article VII
shall be borne by the transferor Member (and if not timely paid, by the
substituted Member), including, without limitation, costs of any necessary
amendment hereof, filing fees, if any, and reasonable attorneys' fees.
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SECTION 7.2. ADDITIONAL RESTRICTIONS. Anything contained in the
foregoing provisions of this Article VII expressed or implied to the contrary
notwithstanding:
(a) In no event shall a sale, transfer, assignment, exchange,
or other disposition of any Member's Interest take place if such sale transfer,
assignment, exchange, or other disposition would, in the opinion of tax counsel
to the Company, cause a termination of the Company within the meaning of Section
708 of the Code.
(b) The Members may, in addition to any other requirement that
the Members may impose, require as a condition of any sale, transfer,
assignment, exchange, or other disposition of any Interest in the Company that
the transferor furnish to the Company an opinion of counsel satisfactory (both
as to such opinion and as to such counsel) to counsel to the Company that such
sale, transfer, assignment, exchange, or other disposition complies with
applicable federal and state securities laws.
(c) Any sale, transfer, assignment, exchange, or other
disposition in contravention of any of the provisions of this Article VII shall
be void and ineffectual and shall not bind or be recognized by the Company.
ARTICLE VIII
DISTRIBUTIONS
SECTION 8.1. DISTRIBUTIONS. If at any time and from time to
time (other than in connection with the dissolution and termination of the
Company pursuant to Article X) the Board determines that the Company has cash
that is not required for the operations of the Company, the payment of
liabilities or expenses of the Company, or the setting aside of reserves to meet
the anticipated cash needs of the Company, the Board shall distribute all or any
portion of that excess cash to the Members in proportion to their Percentage
Interests.
SECTION 8.2. RESTRICTED DISTRIBUTIONS. The Company, and the
Board on behalf of the Company, shall not be required to make a distribution to
any Member on account of its Interest if and to the extent that such
distribution would violate (i) Section 18-607 of the Delaware Act, (ii) Section
2.4(d) of the MMT License Agreement, or (iii) other applicable law.
ARTICLE IX
ALLOCATIONS OF PROFITS AND LOSSES
SECTION 9.1. ALLOCATIONS OF PROFITS. Except as provided in Section 9.4,
all net profits and credits of the Company (for both accounting and tax
purposes) for each Fiscal Year shall be allocated to the Members from time to
time (but no less often than annually and before making any distribution to the
Members) in proportion to their Percentage Interests.
SECTION 9.2. ALLOCATIONS OF LOSSES. Except as provided in Section 9.4,
all net losses of the Company for each Fiscal Year (for both accounting and tax
purposes) shall be allocated to the
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<PAGE> 20
Members from time to time (but no less often than annually and before making any
distribution to the Members) in proportion to their Percentage Interests.
SECTION 9.3. CALCULATION OF PROFITS AND LOSSES. For all purposes
hereof, the Company's profits and losses shall be determined by taking into
account all of the Company's items of income and gain (including items not
subject to federal income tax) and all items of loss, expense, and deduction, in
each case determined under federal income tax principles. For both accounting
and tax purposes, the books and records of the Company shall be kept on the
accrual method of accounting applied in a consistent manner.
SECTION 9.4. SECTION 704(C) OF THE CODE AND CAPITAL ACCOUNT REVALUATION
ALLOCATIONS. The Members agree that to the full extent possible with respect to
the allocation of depreciation, amortization or any other cost recovery
deduction, loss and gain, solely for federal income tax purposes, Section 704(c)
of the Code shall apply with respect to non-cash property contributed to the
Company by any Member. Accordingly, (i) if the tax basis of any property
contributed differs from its agreed fair market value for purposes of
determining Capital Accounts (the "Section 704(c) Difference"), on the sale of
all or a portion of such property, any tax gain or loss resulting, up to the
dollar amount of the Section 704(c) Difference as adjusted by any prior
allocations under this clause (i) and prior allocations of depreciation,
amortization or other cost recovery deduction as provided under clause (ii)
below, shall be specially allocated to the contributing Member; and (ii), to the
extent of the Section 704(c) Difference, any remaining tax depreciation,
amortization or other cost recovery deductions with respect to such property
shall, for each Fiscal Year, be specially allocated to the other Members, up to
an amount equal to the amount of depreciation, amortization or other cost
recovery deductions with respect to such property allocated to such other
Members for purposes of determining Capital Accounts, and the balance of such
tax depreciation, amortization or other cost recovery deduction with respect to
such property shall be allocated to the contributing Member, and the Section
704(c) Difference shall be reduced by an amount equal to the difference between
the amount of tax depreciation, amortization or other cost recovery deduction
with respect to such property for such Fiscal Year so allocated to the Members
and the amount allocated to the Members for purposes of determining Capital
Accounts. For purposes hereof, any allocation of income, loss, gain or any item
thereof to a Member pursuant to Section 704(c) of the Code shall be for income
tax purposes only and shall not affect its Capital Account in the Company. In
addition to the foregoing, if Company assets are reflected in the Capital
Accounts of the Members at a book value that differs from the adjusted tax basis
of such assets (e.g., because of a revaluation of the Members' Capital Accounts
under Treasury Regulations 1.704-l(b)(2)(iv)(f)), allocations of depreciation,
amortization, or other cost recovery deduction, income, gain or loss with
respect to such property shall be made among the Members in a manner consistent
with the principles of Section 704(c) of the Code and this Section 9.7.
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<PAGE> 21
ARTICLE X
DISSOLUTION AND WINDING UP
SECTION 10.1. GENERAL.
(a) The Company shall be dissolved and its affairs shall be
wound up:
(i) upon the expiration of the term of the Company as
set forth in Section 2.5;
(ii) in the event of the Bankruptcy of MMT or the MMT
Subsidiary, upon the written election by the LMC Subsidiary,
in its sole and absolute discretion, within ninety (90) days
of such Bankruptcy to dissolve the Company;
(iii) in the event of the Bankruptcy of LMC or the
LMC Subsidiary, upon the written election by the MMT
Subsidiary, in its sole and absolute discretion, within ninety
(90) days of such Bankruptcy to dissolve the Company;
(iv) in the event of any material breach of any
provision of this Agreement by the LMC Subsidiary or the MMT
Subsidiary, any material breach of Section 11.3 of the Master
Restructuring Agreement by LMC or MMT or any material breach
of the MMT License Agreement by the Company, LMC or MMT, and
the failure to cure such breach within ninety (90) days after
receipt of notice of such breach from the non-breaching party,
upon the subsequent election to dissolve by the LMC Subsidiary
(in the case of a breach of this Agreement by the MMT
Subsidiary, a breach of Section 11.3 of the Master
Restructuring Agreement by MMT or a breach of the MMT License
Agreement by MMT) or by the MMT Subsidiary (in the case of a
breach of this Agreement by the LMC Subsidiary, a breach of
Section 11.3 of the Master Restructuring Agreement by LMC or a
breach of the MMT License Agreement by the Company or LMC)
made within thirty (30) days after the end of such ninety (90)
day cure period;
(v) upon the unanimous written consent of the Members
pursuant to Section 5.14(a)(vii); or
(vi) upon the entry of a decree of judicial
dissolution pursuant to Section 18-802 of the Delaware Act.
(b) (i) Upon dissolution of the Company, the business of the
Company shall continue for the sole purpose of winding up its
affairs. The winding up process shall be carried out by the
Board unless the Members (including any Member that is the
subject of a Bankruptcy as provided in Section 10.1(a)(ii) or
(iii) and a breaching Member as provided in Section
10.1(a)(iv)) unanimously agree to appoint a liquidating
trustee (the Board or such liquidating trustee, as the case
may be, being referred to herein as the "Liquidator"). In
winding up the
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Company's affairs, every effort shall then be made to dispose
of the assets of the Company in an orderly manner, having
regard to the liquidity, divisibility and marketability of the
Company's assets and consistent with the considerations set
forth in paragraph (ii) of this subsection (b). If the
Liquidator determines that it would be imprudent to dispose of
any non-cash assets of the Company, such assets may be
distributed in kind to the Members, in lieu of cash,
proportionately to their rights to receive cash distributions
hereunder; provided, that the Liquidator shall in its sole
discretion determine the relative shares of the Members of
each kind of those assets that are to be distributed in kind.
The Liquidator shall not be entitled to be paid by the Company
any fee for services rendered in connection with the
liquidation of the Company, but shall be reimbursed by the
Company for all third-party costs and expenses incurred by it
in connection therewith and shall be indemnified by the
Company with respect to any action brought against it in
connection therewith by applying, mutatis mutandis, the
provisions of Article XII.
(ii) In winding up the business of the Company, the
Liquidator shall wind up the Company in an orderly and prudent
manner consistent with the Company's then-existing obligations
(including with respect to developed CEP Plants or other
projects) and the Company's pending and prospective projects,
with the goals of fulfilling the Company's contractual
obligations, protecting customer goodwill and assuring
customer service, limiting any residual liability to the
Members and effecting a division of assets consistent with the
relative Capital Account balances of the Members. The Members
may elect to wind up the relationship contemplated by this
Agreement by causing the sale by one Member of its Interest or
one or more CEP Plants or other projects owned by the Company
or sublicensed by the Company to the other Member.
(c) The occurrence of the Bankruptcy of a Member shall not
cause a Member to cease to be a member of the Company, and,
except as expressly provided in Section 10.1(a)(ii), (iii),
(iv) or Section 10.1(b), upon the occurrence of such an event,
the business of the Company shall be continued without
dissolution.
SECTION 10.2. APPLICATION AND DISTRIBUTION OF COMPANY ASSETS. The
assets of the Company in winding up shall be applied or distributed as follows:
first, to creditors of the Company (including Members that are creditors),
whether by payment or the making of reasonable provision for the payment
thereof, and including any contingent, conditional and unmatured liabilities of
the Company, taking into account the relative priorities thereof, and second, to
the Members in proportion to their respective Percentage Interests. A reasonable
reserve for contingent, conditional and unmatured liabilities in connection with
the winding up of the business of the Company shall be retained by the Company
until such winding up is completed or such reserve is otherwise deemed no longer
necessary by the Liquidator.
SECTION 10.3. CAPITAL ACCOUNT ADJUSTMENTS. For purposes of determining
a Member's Capital Account, if, on liquidation and dissolution of the Company,
some or all of the assets of the Company are distributed to the Members in kind,
Company profits (or losses) shall be
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<PAGE> 23
increased by the profits (or losses) that would have been realized had such
assets been sold for their respective fair market values on the date of
dissolution of the Company, as determined by the Liquidator. Any such increase
pursuant to the preceding sentence (i) shall be allocated to the Members in
accordance with Article IX, and (ii) shall increase (or decrease) the Members'
Capital Account balances accordingly.
SECTION 10.4. TERMINATION OF COMPANY. The Company shall terminate when
all assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to the
Members in the manner provided for in this Article X, and the Certificate shall
have been canceled in the manner required by the Delaware Act.
ARTICLE XI
BOOKS, RECORDS AND ACCOUNTING
SECTION 11.1. COMPANY BOOKS OF ACCOUNT. The Board shall cause to be
entered in appropriate books, kept at the Company's principal place of business,
all transactions of or relating to the Company. Each Member shall have access to
and the right, at such Member's sole cost and expense, to inspect and copy such
books and all other Company records during normal business hours; provided that
the inspecting Member shall be responsible for any out-of-pocket costs or
expenses incurred by the Company in making such books and records available for
inspection. The Board shall not have the right to keep confidential from the
Members any information that the Board would otherwise be permitted to keep
confidential pursuant to Section 18-305(c) of the Delaware Act.
SECTION 11.2. DEPOSITS OF COMPANY FUNDS. All funds of the Company shall
be deposited in the Company's name in such checking, money market, or other
account or accounts as the Board may from time to time designate; withdrawals
shall be made therefrom on such signature or signatures as the Board shall
determine.
SECTION 11.3. FINANCIAL STATEMENTS; REPORTS TO MEMBERS. The Board shall
cause the Company, at its cost and expense, to prepare and furnish to each of
the Members, within ninety (90) days after the close of each Fiscal Year,
audited financial statements of the Company, and all other information necessary
to enable such Member to prepare its tax returns, including, without limitation,
from time to time a statement showing the balance in such Member's Capital
Account as of the close of such Fiscal Year, and changes therein during such
Fiscal Year.
SECTION 11.4. TAX MATTERS PARTNER. The LMC Subsidiary shall be the tax
matters partner of the Company within the meaning of Section 6231(a)(7) of the
Code. However, as the tax matters partner, the LMC Subsidiary shall not make any
filing with the Internal Revenue Service or other tax authority, settle any tax
matter, make any election (including but not limited to elections relating to
depreciation and elections pursuant to Section 754 of the Code) or take any
other action that could have an effect on any other Member, without the prior
written consent of each other Member. The tax matters partner shall not be
entitled to be paid by the Company any fee for services rendered by it in
connection with any tax proceeding, but shall be reimbursed by the Company for
all out-of-pocket costs and expenses incurred by it in connection with any
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<PAGE> 24
such proceeding and shall be indemnified by the Company with respect to any
action brought against it in connection with the settlement of any such
proceeding by applying, mutatis mutandis, the provisions of Article XII.
SECTION 11.5. TAX CLASSIFICATION. It is the intention of the Members
that the Company be classified as a partnership for federal income tax purposes,
and the provisions of this Agreement shall be interpreted in a manner consistent
with such intention. No election shall be filed by or on behalf of the Company
to have the Company classified as other than a partnership for federal tax
purposes without the prior unanimous consent of all Members.
ARTICLE XII
LIABILITY, EXCULPATION AND INDEMNIFICATION
SECTION 12.1. LIABILITY. Except as otherwise provided by the Delaware
Act, the debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Covered Person shall be obligated personally
for any such debt, obligation or liability of the Company solely by reason of
being a Covered Person.
SECTION 12.2. EXCULPATION.
(i) No Covered Person shall be liable to the Company or any
other Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Covered Person in
good faith on behalf of the Company and in a manner reasonably believed
to be within the scope of authority conferred on such Covered Person by
this Agreement, except that a Covered Person shall be liable for any
such loss, damage or claim incurred by reason of such Covered Person's
gross negligence or willful misconduct.
(ii) A Covered Person shall be fully protected in relying in
good faith upon the records of the Company and upon such information,
opinions, reports or statements presented to the Company by any Person
as to matters the Covered Person reasonably believes are within such
other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Company, including
information, opinions, reports or statements as to the value and amount
of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
distributions to Members might properly be paid.
SECTION 12.3. DUTIES AND LIABILITIES OF COVERED PERSONS.
(i) To the extent that, at law or in equity, a Covered Person
has duties (including fiduciary duties) and liabilities relating
thereto to the Company or to any other Covered Person, a Covered Person
acting under this Agreement shall not be liable to the Company or to
any other Covered Person for its good faith reliance on the provisions
of this Agreement. The provisions of this Agreement, to the extent that
they restrict the
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<PAGE> 25
duties and liabilities of a Covered Person otherwise existing at law or
in equity, are agreed by the parties hereto to replace such other
duties and liabilities of such Covered Person.
(ii) Unless otherwise expressly provided herein, (a) whenever
a conflict of interest exists or arises between Covered Persons, or (b)
whenever this Agreement or any other agreement contemplated herein or
therein provides that a Covered Person shall act in a manner that is,
or provides terms that are, fair and reasonable to the Company or any
Member, the Covered Person shall resolve such conflict of interest,
taking such action or providing such terms, considering in each case
the relative interest of each party (including its own interest) to
such conflict, agreement, transaction or situation and the benefits and
burdens relating to such interests, any customary or accepted industry
practices, and any applicable generally accepted accounting practices
or principles. In the absence of bad faith by the Covered Person, the
resolution, action or term so made, taken or provided by the Covered
Person shall not constitute a breach of this Agreement or any other
agreement contemplated herein or of any duty or obligation of the
Covered Person at law or in equity or otherwise.
(iii) Whenever in this Agreement a Covered Person is permitted
or required to make a decision (a) in its "discretion" or under a grant
of similar authority or latitude, the Covered Person shall be entitled
to consider such interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Company or
any other Person, or (b) in its "good faith" or under another express
standard, the Covered Person shall act under such express standard and
shall not be subject to any other or different standard imposed by this
Agreement or other applicable law.
SECTION 12.4. INDEMNIFICATION. To the fullest extent permitted by
applicable law, a Covered Person shall be entitled to indemnification from the
Company for any loss, damage or claim incurred by such Covered Person by reason
of any act or omission performed or omitted by such Covered Person in good faith
on behalf of the Company and in a manner reasonably believed to be within the
scope of authority conferred on such Covered Person by this Agreement, except
that no Covered Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Covered Person by reason of gross
negligence or willful misconduct with respect to such acts or omissions;
provided, however, that any indemnity under this Section 12.4 shall be provided
out of and to the extent of Company assets only, and no Covered Person shall
have any personal liability on account thereof.
SECTION 12.5. EXPENSES. To the fullest extent permitted by applicable
law, expenses (including legal fees) incurred by a Covered Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Company prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Company of an undertaking by or
on behalf of the Covered Person to repay such amount if it shall be determined
that the Covered Person is not entitled to be indemnified as authorized in
Section 12.4.
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<PAGE> 26
SECTION 12.6. INSURANCE. The Company may purchase and maintain insurance, to the
extent and in such amounts as the Board shall, in its sole discretion, deem
reasonable, on behalf of Covered Persons and such other Persons as the Board
shall determine, against any liability that may be asserted against or expenses
that may be incurred by any such Person in connection with the activities of the
Company or such indemnities, regardless of whether the Company would have the
power to indemnify such Person against such liability under the provisions of
this Agreement. The Board and the Company may enter into indemnity contracts
with Covered Persons and adopt written procedures pursuant to which arrangements
are made for the advancement of expenses and the funding of obligations under
Section 12.5 and containing such other procedures regarding indemnification as
are appropriate.
SECTION 12.7.
*
ARTICLE XIII
MAINTENANCE OF SEPARATE BUSINESS
The Company shall at all times (a) maintain the Company's books,
financial statements, accounting records and other Company documents and records
separate from those of an Affiliate or any other Person, (b) not commingle the
Company's assets with those of any Affiliate or any other Person, (c) maintain
the Company's books of account, bank accounts and payroll separate from those of
any Affiliate, (d) act solely in its name and through its own authorized agents,
and in all respects hold itself out as a legal entity separate and distinct from
any other Person, (e) make investments directly or by brokers engaged and paid
by the Company or its agents (provided that if any agent is an Affiliate of the
Company, such agent shall be compensated at a fair market rate for its
services), (f) manage the Company's liabilities separately from those of any
Affiliate and pay the Company's own liabilities, including all administrative
expenses and compensation to employees, consultants or agents, and all operating
expenses, from its own separate assets, except that an Affiliate may pay (or
contribute funds to the Company to effect the Company's payment of) the
organizational expenses of the Company, and (g) pay from
- --------
* Confidential treatment has been requested for this portion of Exhibit 10.1.
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<PAGE> 27
the Company's assets all obligations and indebtedness of any kind incurred by
the Company. The Company shall abide by all limited liability company
formalities as required under the Delaware Act, including the maintenance of
current records of Company affairs, and the Company shall cause its financial
statements to be prepared in accordance with generally accepted accounting
principles (except to the extent such principles are inconsistent with Section
9.6) in a manner that indicates the separate existence of the Company. The
Company shall (i) pay all its liabilities, and (ii) not assume the liabilities
of any Affiliate.
ARTICLE XIV
INDEMNIFICATION RELATING TO CHEM DEMIL PLANTS
SECTION 14.1. INDEMNIFICATION. The Company agrees to indemnify and hold MMT,
LMC, the LMC Subsidiary and the MMT Subsidiary and their directors,
stockholders, officers and employees (also referred to herein as "Indemnitees")
harmless from and with respect to any and all claims, liabilities, losses,
damages, costs and expenses, including without limitation the reasonable fees
and disbursements of counsel (collectively, the "Losses") relating to or arising
directly or indirectly out of any action, suit, proceeding or demand against any
Indemnitee by any third party related to the ownership, construction, start-up
or operation of any CEP Plant or other facility developed by the Company or any
sublicensee of the Company (a "Third Party Claim"), including any claim against
an Indemnitee as a supplier of goods or services to the Company or any claim
against MMT in its capacity as licensor to the Company pursuant to the MMT
License Agreement.
*
The Company shall have the
obligation to take all actions reasonably necessary to oppose or defend any
Third Party Claim. In the course of defending any such Third Party Claim, the
Company shall consult with the Indemnitees in connection with all material
issues relating to such defense and shall consult the Indemnitees prior to
commencing the same and shall consider any recommendations by the Indemnitees
with respect to the conduct and settlement or compromise thereof and any
reasonable alternative resolutions of the Third Party Claim. In the event that
the Company does not undertake to oppose or defend any such action within ninety
(90) days after the Company becomes aware of such Third Party Claim, the
Indemnitees will have the right to undertake the defense of such claim. In the
event that an Indemnitee undertakes the defense of such claim, such Indemnitee
shall consult with the Company in connection with all material issues relating
to such opposition or defense and shall consult with the Company prior to
commencing the same and shall consider any recommendations by the Company with
respect to the conduct and settlement or compromise thereof and any reasonable
alternative resolutions of the Third Party Claim. If the Indemnitees undertake
to oppose or defend any Third Party Claim pursuant to the
- --------
* Confidential treatment has been requested for this portion of Exhibit 10.1.
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<PAGE> 28
procedure provided for in this Article XIV, the Company shall bear all costs of
such defense. Any indemnifications pursuant to this Article XIV shall be solely
out of the assets of the Company and shall not be a personal obligation of any
Member.
ARTICLE XV
GENERAL
SECTION 15.1. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the
Related Agreements contain the sole and entire agreement of the parties hereto
and thereto with respect to the subject matter hereof and thereof. This
Agreement may only be changed or terminated by a written agreement signed by all
of the Members. No waiver of any provision of this Agreement shall be effective
unless evidenced by a written instrument signed by the waiving Member. The LMC
Subsidiary and the MMT Subsidiary further acknowledge and agree that, in
entering into 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 or the Exhibits hereto or the Related
Agreements.
SECTION 15.2. BINDING AGREEMENT. The covenants and agreements herein
contained shall inure to the benefit of and be binding upon the parties hereto
and their respective successors in interest and permitted assigns.
SECTION 15.3 DISPUTES. Any disputes arising under this Agreement shall
be resolved in accordance with the provisions of the Dispute Resolution
Agreement.
SECTION 15.4. NOTICES. Any and all notices contemplated by this
Agreement shall be deemed adequately given if in writing and delivered in hand,
or upon receipt when sent by telecopy confirmed by one of the other methods for
providing notice set forth herein, or one (1) business day after being sent,
postage prepaid, by nationally recognized overnight courier (e.g., Federal
Express), or five (5) days after being sent by certified or registered mail,
return receipt requested, postage prepaid, to the party or parties for whom such
notices are intended. All such notices to Members shall be addressed to the last
address of record on the Company's books; all such notices to the Company shall
be addressed to the Company at the address set forth in Section 2.3 or at such
other address as the Board may have designated for the Company by notice given
in accordance with the terms of this Section 15.4.
SECTION 15.5. GOVERNING LAW, ETC. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of
Delaware, all rights and remedies being governed by such laws, without regard to
its conflict of laws rules.
SECTION 15.6. WAIVER OF JURY TRIAL. EACH OF THE MEMBERS AND THE COMPANY
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 AGREEMENT OR ANY
OF THE RELATED AGREEMENTS OR ANY
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<PAGE> 29
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF ANY OF THEM
RELATING THERETO.
SECTION 15.7. WAIVER OF CERTAIN DAMAGES. EACH OF THE MEMBERS AND THE
COMPANY, TO THE FULLEST EXTENT PERMITTED BY LAW, IRREVOCABLY WAIVES ANY RIGHTS
THAT THEY MAY HAVE TO PUNITIVE, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES IN
RESPECT OF ANY LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY
RELATED AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR
ACTIONS OF ANY OF THEM RELATING THERETO.
SECTION 15.8. EXCLUSIVE JURISDICTION. The parties hereto hereby agree
to the exclusive jurisdiction of state and federal courts located in the State
of Delaware to resolve all disputes relating to the Company, this Agreement or
any Related Agreement.
SECTION 15.9. NO IMPLIED RIGHTS OR REMEDIES. Except as otherwise
expressly provided herein, nothing herein expressed or implied is intended or
shall be construed to confer upon or to give any Person, except the Members, any
rights or remedies under or by reason of this Agreement.
SECTION 15.10. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 15.11. 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.
SECTION 15.12. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement or any Related Agreement shall not affect
the other provisions hereof or thereof, and this Agreement shall be construed in
all respects as if such invalid or unenforceable provision were omitted.
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<PAGE> 30
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of June 16, 1997.
MEMBERS:
MMT FEDERAL HOLDINGS INC.
By: /s/ Victor E. Gatto, Jr.
--------------------------
Name: Victor E. Gatto, Jr.
Title: Vice President
LOCKHEED MARTIN ADVANCED
ENVIRONMENTAL SYSTEMS, INC.
By: /s/ James Tegnelia
--------------------------
Name: James Tegnelia
Title: President
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<PAGE> 1
Exhibit 10.2*
LICENSE AGREEMENT
This is a License Agreement dated as of June 16, 1997 (as in effect from
time to time, the "Agreement"), by and among Lockheed Martin Chemical
Demilitarization Systems, LLC, a Delaware limited liability company (the "LLC"),
Molten Metal Technology, Inc., a Delaware corporation ("MMT"), and Lockheed
Martin Corporation, a Maryland corporation ("LMC").
WHEREAS, MMT is an environmental technology company engaged in the
commercialization and continued development of its innovative, proprietary
processing technology known as Catalytic Extraction Processing or CEP;
WHEREAS, a wholly-owned subsidiary of MMT and a wholly-owned subsidiary of
LMC have formed the LLC in order to effectively commercialize CEP by selling,
engineering, constructing and operating CEP Plants, and sublicensing CEP
technology to appropriate third parties to permit them to engineer, construct
and operate CEP Plants, to pursue the processing of Chem Weapons Feedstocks
worldwide;
WHEREAS, MMT and LMC have entered into a Master Restructuring Agreement,
dated as of June 12, 1997 (as in effect from time to time, the "Restructuring
Agreement"), pursuant to which they agreed to restructure certain aspects of
their business relationship; and
WHEREAS, in the Restructuring Agreement LMC and MMT agreed enter into, and
cause the LLC to enter into, this Agreement;
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, MMT, LMC and the LLC
agree as follows:
* Confidential treatment has been requested for certain portions of this Exhibit
10.2.
<PAGE> 2
-2-
Article 1
Defined Terms
Defined terms used and not otherwise defined herein shall have the
meanings ascribed thereto in the Restructuring Agreement. In addition, as used
in this Agreement the following terms shall have the following meanings:
"Advisors" means, with respect to any Person, any of such Person's
attorneys, accountants, lenders or consultants.
"Affiliate" means, with respect to any Person, any other Person
controlling, controlled by or under common control with, such Person. As used in
this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") means the possession, directly
or indirectly, of power to direct or cause the direction of management or
policies of a Person, whether through ownership of securities or partnership or
other ownership interests, by contract or otherwise (but, in the case of MMT or
LMC, not including the LLC and, in the case of the LLC, not including MMT or
LMC).
"Agreement" has the meaning set forth in the preamble.
"Asset Transfer Agreement" means the Asset Transfer Agreement entered into
pursuant to the Restructuring Agreement, as in effect from time to time.
"Catalytic Extraction Processing" or "CEP" means the processes, methods
and systems (including all intellectual and intangible and tangible property
associated therewith and including all aspects of accepting Feedstocks,
reactions within a CEP Plant, and handling Recovered Resources), owned or used
by MMT, directed to the processing of Feedstocks by introducing the Feedstocks
to a processing vessel containing liquefied metal.
"CEP Plant" means the plant, equipment and other facilities necessary to
perform, operate and maintain CEP on a commercial basis (or, in the case of any
so-called "demonstration" CEP Plant, on the basis generally provided in the
applicable demonstration program).
"Chem Demil Market" means the worldwide market for the processing of
Chem Weapons Feedstocks worldwide
"Chem Weapons Feedstocks" means (i) bombs, rockets, artillery shells,
mortar shells and explosives and other munitions, containing (or formerly
containing) one or more "chemical weapons agents" (as defined in the Chemical
Weapons Convention (formally known as the Convention on the Prohibition of the
Development, Production, Stockpiling and Use of Chemical Weapons and their
Destruction), adopted
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September 3, 1992 at the Conference on Disarmament at Geneva, and opened for
signature on January 13, 1993 in Paris) and (ii) bulk stockpiles of such
chemical weapons agents.
"Dispute Resolution Agreement" means the Second Amended and Restated
Dispute Resolution Agreement, dated as of June 12, 1997 by and among LMC, MMT,
M4, the LLC and their Affiliates named therein.
"Employee Non-Disclosure Agreement" has the meaning set forth in
Section 4.7.
"Failure Notice" has the meaning set forth in Section 4.8.
"Feedstocks" means, with respect to any CEP Plant, the wastes, industrial
by-products and other materials to be processed by such CEP Plant.
"Government Authority" means any federal, national, state, municipal,
local, territorial or other governmental department, commission, board, bureau,
agency, regulatory authority, instrumentality, judicial or administrative body,
domestic or foreign.
"Improvements" means any improvements, developments, updates, upgrades,
enhancements, additions, revisions, corrections, fixes and other modifications
to the MMT Licensed Property as it then exists that MMT, LMC or the LLC may
acquire, discover, invent, originate, conceive or have a right to develop or
manufacture, whether or not the same is patentable, commercially useful or
reducible to writing or practice.
"Infringements" has the meaning set forth in Section 7.1.
"Intellectual Property" means all patents, inventions, patent
applications, patent rights, trademarks, trademark registrations, trade names,
brand names, all other names and slogans embodying business or product goodwill
(or both), copyright registrations, copyrights (including those in computer
programs, software, including all source code and object code, development
documentation, programming tools, drawings, specifications and data), software,
trade secrets, know-how, mask works, industrial designs, formulae, processes and
technical information, including confidential and proprietary information,
whether or not subject to statutory registration or protection.
"Japanese Extension Agreement" means the Agreement for Expansion of
License - Japanese Chemical Weapons, dated as of September 20, 1996, between M4
and MMT.
"JCW Market" means the processing of any Chem Weapons Feedstocks for which
any Japanese Government Authority has accepted, or in the future accepts,
responsibility.
"JCW Task Order" has the meaning set forth in Section 2.4.
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"Licensed Copyrights" means any and all copyright protection of MMT
covering any of the Licensed Software Programs, the Licensed Know-How or any
Improvements thereto.
"Licensed Know-How" means any information possessed by MMT or, subject to
Section 2.2, licensed to MMT, relating to CEP, whether or not considered
proprietary and whether or not subject to statutory registration or protection,
including, without limitation, inventions disclosed by MMT's existing Patent
Applications, invention records, research records and reports, development
reports, experimental and other engineering reports, pilot plant designs,
production plant designs, production specifications, raw material
specifications, quality control reports and specifications, drawings and
photographs, models, tools and parts, manufacturing and production techniques,
processes, methods and marketing surveys. If any information or material
qualifies for purposes of this Agreement both as Licensed Know-How and as any of
the Licensed Patents, Licensed Copyrights, Licensed Software Programs or
Licensed Trademarks for purposes of this Agreement, such information or material
shall not be treated as Licensed Know-How for purposes of this Agreement but
shall be treated, as applicable, as part of the Licensed Patents, Licensed
Copyrights, Licensed Software Programs or Licensed Trademarks for purposes of
this Agreement.
"Licensed Patent Applications" means any U.S. or foreign patent
applications currently owned by, filed or acquired by or, subject to the
restrictions set forth in Section 2.2 relating to patent applications licensed
to MMT, licensed to MMT during the term of this Agreement, to the extent such
patent applications relate to CEP.
"Licensed Patents" means any U.S. or foreign patents currently owned by,
granted to, acquired by, or, subject to the restrictions set forth in Section
2.2 relating to patents licensed to MMT, licensed to MMT during the term of this
Agreement, to the extent such patents relate to CEP.
"Licensed Software Programs" means any computer programs the copyrights to
which are owned by or, subject to Section 2.2, licensed after the date of this
Agreement to MMT relating to CEP.
"Licensed Trademarks" means any Trademarks currently owned by, developed
or acquired by or, subject to Section 2.2, licensed to MMT during the term of
this Agreement, to the extent such Trademarks relate to CEP and do not relate to
MMT's corporate identity.
"LLC" has the meaning set forth in the preamble.
"LLC Agreement" means the Limited Liability Company Agreement of the LLC,
as in effect from time to time.
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"LLC Confidential Information" means any confidential or proprietary
information of the LLC.
"LLC Infringement Claim" has the meaning set forth in Section 7.4.
"LLC Services" has the meaning set forth in Section 4.8.
"LMC" has the meaning set forth in the preamble.
"LMC Confidential Information" means any confidential or proprietary
information of LMC.
"MMT" has the meaning set forth in the preamble.
"MMT Confidential Information" means any confidential or proprietary
information of MMT, including but not limited to any confidential or proprietary
portion of the MMT Licensed Property.
"MMT Infringement Claim" has the meaning set forth in Section 7.3.
"MMT Licensed Property" means the Licensed Patents, the Licensed Patent
Applications, the Licensed Trademarks, the Licensed Software Programs, the
Licensed Copyrights and the Licensed Know-How.
"M4" means M4 Environmental L.P., a Delaware limited partnership.
"Person" means any individual, corporation, association, trust, limited
liability company, joint venture, partnership (whether general or limited),
unincorporated organization and any government, governmental department or
agency or political subdivision thereof.
"Project Acceptance" means, with respect to any application of CEP that is
the subject of a fee payable pursuant to Section 2.4(a), that the CEP Plant has
achieved mechanical completion and passed a performance test to be created by
the Board of Directors of the LLC at the time it determines to proceed with the
applicable project.
"Quality Standard" has the meaning set forth in Section 4.8.
"Recycling" means the return of resources recovered or produced from waste
or other similar materials for use or sale.
"Recovered Resources" means the elements and compounds produced by a CEP
Plant (whether or not produced through the use of reactants) that are suitable
for use or sale.
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"Related Agreements" means this Agreement, the Restructuring Agreement,
the LLC Agreement, the Related Agreements referred to in the Restructuring
Agreement and any other agreement between MMT or the LLC or their Affiliates
which specifies that it is a Related Agreement for purposes of this Agreement.
"Related Technology" has the meaning set forth in Article 5.
"Restructuring Agreement" has the meaning set forth in the preamble.
"SAC" means LMC-MMT Strategic Alliance Committee, LLC, the limited
liability company formed pursuant to the SAC LLC Agreement.
"SAC LLC Agreement" means the Limited Liability Company Agreement pursuant
to which SAC was formed.
"Subsidiary" means a corporation, company or other entity:
(i) more than fifty percent (50%) of whose outstanding shares or
securities (representing the right to vote for the election of
directors or other managing authority) are, now or hereafter,
owned or controlled, directly or indirectly, by a party
hereto, but such corporation, company or other entity shall be
deemed to be a Subsidiary only so long as such ownership or
control exists; or
(ii) which does not have outstanding shares or securities, as may
be the case in a partnership, joint venture or unincorporated
association, but more than fifty percent (50%) of whose
ownership interests representing the right to make the
decisions for such corporation, company or other entity is now
or hereafter, owned or controlled, directly or indirectly, by
a party hereto, but such corporation, company or other entity
shall be deemed to be a Subsidiary only so long as such
ownership or control exists.
"Technical Liaison" has the meaning set forth in Section 3.1.
"Trademarks" shall mean:
(i) all of the trademarks, service marks, trade names, designs,
logos, indicia, corporate names (other than the corporate
names of MMT and its Subsidiaries), company names, business
names, fictitious names, trade styles, elements of package or
trade dress, and/or other source and/or other service
identifiers and general intangibles of like nature, used or
associated with CEP, which are currently or in the future
adopted, acquired, owned, held and/or used by MMT in its
business; and
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(ii) all past, present or future federal, state, local and foreign
registrations or recordations of any of the foregoing
enumerated in clause (i), all renewals and extensions of such
registrations or recordations, all past, present and future
applications for any such registrations or recordations of any
of the foregoing enumerated in clause (i) (and any such
registrations or recordations thereof upon approval of such
applications).
"Treatment" means, with respect to any material, any physical, mechanical,
thermal and/or chemical actions that, individually or in concert, alter the
chemical composition of such materials.
Article 2
Technology License; Certain Related Matters
2.1. Grant of License. Subject to the terms and conditions of this
Agreement, MMT hereby grants to the LLC:
(i) a non-transferable, non-royalty-bearing exclusive license
(including the fact that MMT, its Affiliates and licensees are
likewise excluded) under the MMT Licensed Property (other than
the Licensed Trademarks) to: establish, own, permit, finance,
design, engineer, construct, start-up and operate CEP Plants
anywhere in the world that process Chem Weapons Feedstocks;
(ii) a non-transferable, non-royalty-bearing exclusive license
(including the fact that MMT, its Affiliates and licensees are
likewise excluded) to sublicense the MMT Licensed Property,
subject to and in accordance with the requirements of Article
6, to third parties (including Affiliates and Subsidiaries of
MMT) in order to permit them to establish, own, permit,
finance, construct, start-up and operate CEP Plants located
anywhere in the world that process Chem Weapons Feedstocks;
(iii) a non-transferable, non-royalty-bearing non-exclusive license
to use the Licensed Trademarks in connection with activities
permitted under subparagraph (i) or subparagraph (ii) above;
and
(iv) a non-transferable, non-royalty-bearing non-exclusive license
to use the MMT Licensed Property for its own internal use in
connection with the activities contemplated by subparagraphs
(i)-(iii) above.
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2.2. Third Party Limitations on License Grants. The licenses granted by
MMT pursuant to Section 2.1 above, insofar as they relate to technology,
property or rights that are developed or acquired with or from any third party
in the future, may become subject to any applicable restrictions and consents
relating to such technology, property or rights under any license or similar
agreement to which MMT may in the future become a party. In the event that any
such license or other agreement imposes restrictions that may apply to the
transactions contemplated by this Agreement, MMT will make reasonable efforts to
obtain license rights as contemplated by this Agreement for the LLC. If MMT is
unable to so obtain such rights, it will cooperate to make available to the LLC
such rights as the third party is willing to grant to or for the LLC. As part of
the foregoing, MMT shall use reasonable efforts to assure that the LLC enjoys
license or other rights no less favorable with respect to the applicable
Intellectual Property acquired from such third parties than other licensees of
MMT generally.
2.3. Extension of License to Subsidiaries. The licenses granted in Section
2.1 shall include the right of the LLC to sublicense its Subsidiaries. Any such
sub-license shall be on terms and conditions satisfactory to each of MMT and the
LLC.
2.4. Success Fees.
(a) For any project undertaken by the LLC employing CEP in the
Chem Demil Market, the LLC shall pay MMT a success fee in an
amount between 5% and 10% of the project's total installed
costs, up to a maximum of $5 million per project; provided
that no such success fee shall be payable with respect to any
project deployed for the JCW Market. The amount of any success
fee payable for any particular project shall be determined by
the Board of Directors of the LLC at the time the Board of
Directors of the LLC decides to proceed with the applicable
project.
(b) The LLC's obligations under this Section 2.4 shall terminate
upon MMT's receipt from the LLC of a total of $25 million in
cumulative success fees pursuant to this Section 2.4. There
shall be no limit on the number of projects for which success
fees are payable. All success fees shall become payable to MMT
upon Project Acceptance of the applicable CEP system, and
shall be in addition to any other compensation payable to MMT
by any Person. Any particular fee payable to MMT pursuant to
paragraph (a) above and this paragraph (b) shall be paid on a
quarterly basis to MMT from all revenues generated by the
particular CEP Plant for the particular quarter.
(c) The LLC and MMT shall negotiate and prepare a Task Order for
the technical demonstration by MMT of CEP processing for
surrogates of "Japanese Chemical Weapons" as contemplated by
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Section 5 of the Japanese Extension Agreement (the "JCW Task
Order"). At the time MMT completes a successful technical
demonstration, as determined by the criteria to be set forth
in the JCW Task Order, a $3,500,000 fee shall become payable
by the LLC. This fee shall be paid, in no event prior to
January 2, 1998, on a quarterly basis out of all LLC Cash Flow
for the applicable quarter. For purposes of this paragraph (c)
"LLC Cash Flow" means, with respect to any period, the LLC's
cash flows from operations for such period, with all of the
foregoing determined in accordance with GAAP (subject to the
establishment by the Board of Directors of the LLC of
reasonable reserves to meet liabilities of the LLC (including
contingent, conditional and unmatured liabilities)).
(d) The LLC will not make any cash distributions to its members at
any time when any fee referred to in this Section 2.4 has
become payable but has not yet been paid in full.
Article 3
Technical Liaison; Access to Technology
3.1. Technical Liaisons. MMT and the LLC have designated one or more
employees to serve as technical liaison (the "Technical Liaison") for them under
this Agreement and have notified the other party of the identity and address of
such Technical Liaison. The Technical Liaison will continue to be the primary
interface for all issues under this Agreement relating to technology, including
the access to MMT Licensed Property referred to in Section 3.2 below, the
ongoing program referred to in Section 4.7 relating to confidentiality concerns,
the treatment of Improvements and Related Technology pursuant to Article 5 and
the sublicensing program referred to in Article 6. However, no Technical Liaison
shall be authorized to amend or waive any provision of this Agreement or any
Related Agreement. Each of MMT and the LLC may change its Technical Liaison at
any time and from time to time during the term of this Agreement by notifying
the other party and its Technical Liaison in writing. Each Technical Liaison may
nominate a designee to act on its behalf by giving a similar notification.
3.2. Access to Technology.
(a) In order to ensure that the LLC has sufficient access to and
familiarity with the MMT Licensed Property, the Technical Liaisons
shall meet from time to time to review and discuss the MMT Licensed
Property. The Technical Liaisons shall, as appropriate, cause
appropriate MMT and LLC employees to attend such meetings. The MMT
Technical Liaison shall provide the LLC Technical Liaison with such
writings, documents, instruments,
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programs (in object code form), information, data, and recordations
of or other tangible embodiments or manifestations of any portion of
the MMT Licensed Property as is reasonably requested by the LLC
Technical Liaison.
(b) All information furnished to the LLC pursuant to paragraph (a) above
shall be subject to the confidentiality and other obligations of
Article 4 and shall be furnished or made available to the LLC in a
manner consistent with the procedures contemplated by Article 4.
Article 4
Title to MMT Licensed Property;
Confidentiality and Related Matters
4.1. Title to MMT Licensed Property. Title to all MMT Licensed Property
shall at all times remain and vest solely with MMT. Each of LMC and the LLC
agrees that it will not claim or assert any right, title or interest in or to
any such MMT Licensed Property as a result of or in connection with the
relationships created under the Restructuring Agreement. Nothing in this Section
4.1 shall effect the rights of MMT, LMC or the LLC to assert a claim under this
Agreement for any breach by any other party of any representation or warranty in
this Agreement.
4.2. Confidentiality Obligations of the LLC and LMC.
(a) Each of the LLC and LMC agrees that it will use MMT Confidential
Information only in connection with the activities contemplated by
this Agreement and the Related Agreements, and it will not disclose
any MMT Confidential Information to any Person except as expressly
permitted by this Section 4.2.
(b) The LLC may disclose MMT Confidential Information:
(i) to LMC;
(ii) to the LLC's officers and employees who have a reasonable need
to know the contents thereof and who have signed an Employee
Non-Disclosure Agreement;
(iii) on a confidential basis to those Advisors of the LLC who have
a reasonable need to know the contents thereof, so long as
such disclosure is made pursuant to the procedures referred to
in Section 4.7(c);
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(iv) to any other Person if the MMT Technical Liaison consents to
such disclosure and such disclosure is made pursuant to the
procedures referred to in Section 4.7(c);
(v) to any sublicensee pursuant to any sublicense granted by the
LLC pursuant to Article 6;
(vi) to the extent required by applicable statute, rule or
regulation or any court of competent jurisdiction; provided
that the LLC has made reasonable efforts to conduct its
relevant business activities in a manner such that the
disclosure requirements of such statute, rule or regulation or
court of competent jurisdiction do not apply, and provided
further that MMT (through the MMT Technical Liaison) is given
notice and an adequate opportunity to contest such disclosure
or to use any means available to minimize such disclosure
(e.g., the "confidential treatment" provisions of Rule 24b-2
promulgated under the Securities Exchange Act of 1934, as
amended); and
(vii) to the extent such MMT Confidential Information has become
generally available publicly through no fault of the LLC, LMC
or their directors, officers, employees, Advisors or
sublicensees.
(c) LMC may disclose MMT Confidential Information:
(i) to its directors, officers and employees, its Subsidiaries and
their directors, officers and employees, in each case to the
extent they have a reasonable need to know the contents
thereof and who have agreed in writing with MMT to be bound by
the provisions of this Article 4;
(ii) on a confidential basis to those Advisors of LMC who have a
reasonable need to know the contents thereof, so long as such
disclosure is made pursuant to the procedures referred to in
Section 4.7(c);
(iii) to the extent required by applicable statute, rule or
regulation or any court of competent jurisdiction; provided
that LMC has made reasonable efforts to conduct its relevant
business activities in a manner such that the disclosure
requirements of such statute, rule or regulation or court of
competent jurisdiction do not apply, and provided further that
MMT (through the MMT Technical Liaison) is given notice and an
adequate opportunity to contest such disclosure or to use any
means available to minimize such disclosure (e.g., the
"confidential treatment" provisions of Rule
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24b-2 promulgated under the Securities Exchange Act of 1934,
as amended); and
(iv) to the extent such MMT Confidential Information has become
generally available publicly through no fault of the LLC, LMC
or their Affiliates or their directors, officers, employees,
Advisors or sublicensees.
4.3. Confidentiality Obligations of the LLC and MMT.
(a) Each of the LLC and MMT agrees that it will use LMC Confidential
Information only in connection with the activities contemplated by
this Agreement and the Related Agreements, and it will not disclose
any LMC Confidential Information to any Person except as expressly
permitted by this Section 4.3.
(b) The LLC may disclose LMC Confidential Information:
(i) to MMT;
(ii) to the LLC's officers and employees who have a reasonable need
to know the contents thereof and who have signed an Employee
Non-Disclosure Agreement;
(iii) on a confidential basis to those Advisors of the LLC who have
a reasonable need to know the contents thereof, so long as
such disclosure is made pursuant to the procedures referred to
in Section 4.7(c);
(iv) to any other Person if LMC consents to such disclosure and
such disclosure is made pursuant to the procedures referred to
in Section 4.7(c);
(v) to any sublicensee pursuant to any sublicense granted by the
LLC pursuant to Article 6;
(vi) to the extent required by applicable statute, rule or
regulation or any court of competent jurisdiction; provided
that the LLC has made reasonable efforts to conduct its
relevant business activities in a manner such that the
disclosure requirements of such statute, rule or regulation or
court of competent jurisdiction do not apply, and provided
further that LMC is given notice and an adequate opportunity
to contest such disclosure or to use any means available to
minimize such disclosure (e.g., the "confidential treatment"
<PAGE> 13
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provisions of Rule 24b-2 promulgated under the Securities
Exchange Act of 1934, as amended); and
(vii) to the extent such LMC Confidential Information has become
generally available publicly through no fault of the LLC, MMT
or their directors, officers, employees, Advisors or
sublicensees.
(c) MMT may disclose LMC Confidential Information:
(i) to its directors, officers and employees, its Subsidiaries and
their directors, officers and employees, in each case to the
extent they have a reasonable need to know the contents
thereof and who have agreed in writing with LMC to be bound by
the provisions of this Article 4;
(ii) on a confidential basis to those Advisors of MMT who have a
reasonable need to know the contents thereof, so long as such
disclosure is made pursuant to the procedures referred to in
Section 4.7(c);
(iii) to the extent required by applicable statute, rule or
regulation or any court of competent jurisdiction; provided
that MMT has made reasonable efforts to conduct its relevant
business activities in a manner such that the disclosure
requirements of such statute, rule or regulation or court of
competent jurisdiction do not apply, and provided further that
LMC is given notice and an adequate opportunity to contest
such disclosure or to use any means available to minimize such
disclosure (e.g., the "confidential treatment" provisions of
Rule 24b-2 promulgated under the Securities Exchange Act of
1934, as amended); and
(iv) to the extent such LMC Confidential Information has become
generally available publicly through no fault of the LLC, MMT
or their Affiliates, their directors, officers, employees,
Advisors or sublicensees.
4.4. Confidentiality Obligations of MMT and LMC.
(a) Each of MMT and LMC agrees that it will use LLC Confidential
Information only in connection with the activities contemplated by
this Agreement and the Related Agreements, and it will not disclose
any LLC Confidential Information to any Person except as expressly
permitted by this Section 4.4.
(b) MMT may disclose LLC Confidential Information:
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(i) to LMC;
(ii) to MMT's officers and employees who have a reasonable need to
know the contents thereof and who have agreed in writing with
the LLC to be bound by the provisions of this Article 4;
(iii) on a confidential basis to those Advisors of MMT who have a
reasonable need to know the contents thereof, so long as such
disclosure is made pursuant to the procedures referred to in
Section 4.7(c);
(iv) to the extent required by applicable statute, rule or
regulation or any court of competent jurisdiction; provided
that MMT has made reasonable efforts to conduct its relevant
business activities in a manner such that the disclosure
requirements of such statute, rule or regulation or court of
competent jurisdiction do not apply, and provided further that
the LLC is given notice and an adequate opportunity to contest
such disclosure or to use any means available to minimize such
disclosure (e.g., the "confidential treatment" provisions of
Rule 24b-2 promulgated under the Securities Exchange Act of
1934, as amended); and
(v) to the extent such LLC Confidential Information has become
generally available publicly through no fault of MMT or LMC or
their directors, officers, employees, Advisors or
sublicensees.
(c) LMC may disclose LLC Confidential Information:
(i) to MMT;
(ii) to its directors, officers and employees, its Subsidiaries and
their directors, officers and employees, in each case to the
extent they have a reasonable need to know the contents
thereof and who have agreed in writing with the LLC to be
bound by the provisions of this Article 4;
(iii) on a confidential basis to those Advisors of LMC who have a
reasonable need to know the contents thereof, so long as such
disclosure is made pursuant to the procedures referred to in
Section 4.7(c);
(iv) to the extent required by applicable statute, rule or
regulation or any court of competent jurisdiction; provided
that LMC has made reasonable efforts to conduct its relevant
business activities in a
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manner such that the disclosure requirements of such statute,
rule or regulation or court of competent jurisdiction do not
apply, and provided further that the LLC is given notice and
an adequate opportunity to contest such disclosure or to use
any means available to minimize such disclosure (e.g., the
"confidential treatment" provisions of Rule 24b-2 promulgated
under the Securities Exchange Act of 1934, as amended); and
(v) to the extent such LLC Confidential Information has become
generally available publicly through no fault of MMT or LMC or
their directors, officers, employees, Advisors or
sublicensees.
4.5. Treatment of Licensed Software Programs. Any Licensed Software
Programs furnished by MMT to the LLC shall be furnished in object code form only
(i.e., in magnetic or electronic binary form on software media, which are
readable and usable by machines, but not generally readable by humans without
reverse assembly, reverse compiling or reverse engineering). The LLC agrees that
it will not attempt to modify, disassemble, decompile, reverse-engineer or
otherwise endeavor to discover or disclose the methods and concepts embodied in
the Licensed Software Programs. All Licensed Software Programs shall be marked
with such copyright, patent, proprietary legends, restrictions or other notices
as MMT may request, and the LLC agrees not to remove or destroy any such mark or
notice on any of the Licensed Software Programs.
4.6. Disclosure to Government Authorities. The Technical Liaisons shall
promptly establish and implement all procedural safeguards required or advisable
in connection with the performance of government contracts to protect the
confidentiality and value of the MMT Licensed Property and the assets of the
LLC. Each of LMC, MMT and the LLC agree to comply, and cause their employees to
comply, with such procedural safeguards.
4.7. Ongoing Confidentiality Program; Patent Markings.
(a) In order to ensure that each of the LLC, LMC and MMT complies with
its obligations in Sections 4.1 through 4.6, the Technical Liaisons
shall meet from time to time as required to discuss issues relating
to confidentiality and disclosure and other matters addressed by
this Article 4.
(b) With respect to any disclosure by the LLC to any of its officers or
employees permitted pursuant to Section 4.2(b)(ii) or Section
4.3(b)(ii), the LLC shall cause each of its officers and employees
to sign employee non-disclosure and invention agreements in the form
attached as Annex A hereto or in such other form as is approved from
time to time by the MMT Technical Liaison ("Employee Non-Disclosure
Agreements").
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(c) With respect to any disclosure by the LLC, MMT or LMC to any of its
Advisors or by the LLC to any prospective customers, vendors,
suppliers or other third Persons as permitted in Sections 4.2-4.4,
the Technical Liaison will institute procedures designed to maintain
the confidentiality of MMT Confidential Information, the LLC
Confidential Information and LMC Confidential Information while
facilitating the LLC's business activities. These procedures shall
include the preparation of standard forms of confidentiality
agreements to be used by the LLC in connection with its business.
(d) The Technical Liaisons will implement a program for the use of
patent markings by the LLC as appropriate to fully protect the
Licensed Patents and Licensed Patent Applications in each applicable
country where they exist.
4.8. Quality Control. The LLC shall provide to MMT a reasonable
opportunity to inspect the CEP Plants using the MMT Licensed Property and the
services provided by the LLC under the Licensed Trademarks (collectively, the
"LLC Services"), upon MMT's reasonable request from time to time, no more
frequently than four times per year (or more often as is required in the event
that MMT determines in good faith that an emergency condition exists), in order
to enable MMT to maintain an appropriately high level of quality commensurate
with the valuable goodwill associated with the Trademarks (the "Quality
Standard"). If MMT reasonably determines that the applicable CEP Plants or the
LLC Services being performed by the LLC do not meet the Quality Standard, MMT
shall provide the LLC with written notice (the "Failure Notice") of such
failure, specifying the particular aspect of the applicable CEP Plants or the
LLC Services which MMT claims does not meet the Quality Standard and the
particular failure, together with any supporting documentation of such failure.
If the LLC shall not have met such Quality Standard for such LLC Services and
does not (i) take appropriate action to diligently commence to cure such failure
within thirty (30) days after receipt of the Failure Notice and (ii) cure such
failure by causing such LLC Services to meet such Quality Standard and provide
documentation of such cure reasonably acceptable to MMT within sixty (60) days
after the receipt of the Failure Notice (or, if such failure is not reasonably
susceptible to cure within such 60-day period, within 120 days after the receipt
of the Failure Notice), MMT may pursue any available remedies pursuant to the
Dispute Resolution Agreement.
4.9. Corporate Names. The LLC shall be entitled to refer to MMT and LMC in
its advertising and other promotional materials, subject to compliance with
guidelines, to be adopted by the Board of Directors of the LLC, addressing the
need to maintain a separate legal identity for the LLC, to identify the LLC as a
licensee of the MMT Licensed Property and similar concerns.
<PAGE> 17
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Article 5
Improvements and Inventions
(a) All Intellectual Property (including all Improvements) relating to
CEP or necessary or useful to any application of CEP conceived,
created, made, developed or reduced to practice by or for MMT or LLC
personnel, or LMC personnel assigned to work on LLC activities
("Related Technology"), will be owned by MMT and title to all such
Intellectual Property, including patents, patent applications,
patents issued with respect thereto and copyrights filed or granted,
will be issued solely in MMT's name.
(b) LLC agrees to give the MMT Technical Liaison prompt notice of any
Related Technology, using a standard form of invention disclosure
form to be approved from time to time by the Technical Liaisons. LLC
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
Related Technology, and the LLC 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
5.1. MMT shall be solely responsible for all decisions relating to
seeking or maintaining patent or copyright or other protection for
any Improvement or Related Technology, and shall be responsible for
all expenses incurred in obtaining and maintaining any such
protection.
(c) All Improvements and Related Technology, to the extent that they
come within the definition of MMT Licensed Property, will be subject
to the licenses granted by MMT pursuant to Section 2.1, and LLC
shall not be required to pay any royalties or other fees for the
license of such Improvements and Related Technology. MMT shall have
the unrestricted right to license any of the Improvements or Related
Technology to any third parties without notice or accounting to the
LLC.
Article 6
Sublicensing
6.1. Obligations To Sublicense. In order to commercialize CEP technology
for Chem Weapons Feedstocks, the LLC shall create and implement a comprehensive
program to promote sublicensing of the MMT Licensed Property to appropriate
third parties in order to permit them to establish, own, permit, finance,
construct, start-up and operate CEP Plants located anywhere in the world that
process Chem Weapons Feedstocks.
<PAGE> 18
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6.2. Form of Sublicensing Agreements. As part of the comprehensive
sublicensing program referred to in Section 6.1, the Technical Liaisons shall
develop various forms of sublicense agreements to be used by the LLC. With
respect to any sublicense agreement to be used by the LLC, MMT shall have the
right to approve the sublicensee to the extent that the past practices of the
sublicensee raise quality control issues, and MMT shall have the right to
approve those terms of the sublicense agreement relating to the MMT Licensed
Property, the confidentiality and other safeguards to be required and any
operating requirements designed to promote quality control.
Article 7
Infringements
7.1. Detection of Infringements, Etc.
(a) MMT and the LLC shall use their respective reasonable efforts to
detect any infringement, misappropriation, violation, dilution or
unauthorized or improper use of the MMT Licensed Property or unfair
competition related to the Licensed Trademarks (collectively,
"Infringements", and individually an "Infringement"). In the event
that either MMT or the LLC shall become aware of any such
Infringement, or of any claim that the use of the MMT Licensed
Property infringes, misappropriates, violates or dilutes any
proprietary right or property of any third Person, or of any product
liability claim or action based on or arising out of the use of the
MMT Licensed Property by either MMT or the LLC, such party shall
promptly give written notice thereof to the other parties.
(b) As part of the Technical Liaisons' regular meetings referred to in
Article 3, the Technical Liaisons shall discuss any issues related
to Infringement or the other matters referred to in paragraph (a)
above.
7.2. Infringements of MMT Licensed Technology. In the event of any
Infringement of the MMT Licensed Property which is materially and adversely
affecting the Chem Demil Market, MMT shall undertake all actions reasonably
required to redress, oppose, prevent, or restrain such Infringement. In the
event that MMT does not take appropriate actions with a view to addressing such
Infringement within ninety (90) days of MMT becoming aware of such Infringement
(as evidenced by the written notice thereof given by MMT or the LLC to the other
party as provided in Section 7.1 above), the LLC will have the right to commence
such a legal action or proceeding to the extent reasonably required to redress,
oppose, prevent, or restrain such Infringement. Either party bringing any such
legal action or proceeding shall consult with the other party prior to
commencing the same and shall consider any recommendations by the other party
with respect to the conduct and settlement or compromise thereof and any
reasonable alternative resolutions of the Infringement matter. Each party shall
cooperate as may be
<PAGE> 19
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reasonably necessary or appropriate in the prosecution, settlement or compromise
of any such legal action or proceeding commenced by the other party in respect
of any Infringement of the MMT Licensed Property, and agrees to be joined as a
party to any such action or proceeding if it is deemed to be necessary or
desirable by counsel retained by the other party for the prosecution of such
action or proceeding. If either party proceeds to bring any legal action or
proceeding pursuant to the procedure provided for in this Section 7.2, MMT will
bear all reasonable costs of such action or proceeding and will be entitled to
receive and retain all proceeds realized as a result of any settlement thereof
or any judgment thereon ("Proceeds"). However, in the event that MMT receives
any Proceeds, and any portion of such Proceeds is directly attributable to
Infringement that adversely affected the Chem Demil Market, MMT shall remit to
the LLC, after reimbursement of MMT's costs of such action or proceeding, such
portion of such Proceeds.
7.3. MMT Infringement Claims. Except for any claim to be defended by the
LLC pursuant to Section 7.4, in the event of any claim that any MMT Licensed
Property, or any equipment, material or process based on or utilizing MMT
Licensed Property, infringes, misappropriates, violates or dilutes any
proprietary right or property of any third Person (each an "MMT Infringement
Claim"), then, subject to Section 7.5 below MMT shall have the obligation to
take all actions reasonably necessary to oppose or defend such claims and to pay
any judgment or settlement amount awarded or obtained with respect to such MMT
Infringement Claim. In the course of opposing or defending any such MMT
Infringement Claim, MMT shall consult with the LLC in connection with all
material issues relating to such opposition or defense and shall consult with
the LLC prior to commencing the same and shall consider any recommendations by
the LLC with respect to the conduct and settlement or compromise thereof and any
reasonable alternative resolutions of the MMT Infringement Claim. In the event
that MMT does not undertake to oppose or defend any such action within ninety
(90) days after MMT becomes aware of such MMT Infringement Claim, the LLC will
have the right to undertake the opposition or defense of such claim in MMT's
name. In the event that the LLC undertakes the opposition or defense of such
claim, the LLC shall consult with MMT in connection with all material issues
relating to such opposition or defense and shall consult with MMT prior to
commencing the same and shall consider any recommendations by MMT with respect
to the conduct and settlement or compromise thereof and any reasonable
alternative resolutions of the MMT Infringement Claim. The LLC shall not settle
any MMT Infringement Claim without MMT's prior written consent. If the LLC
undertakes to oppose or defend any MMT Infringement Claim pursuant to the
procedures provided for in this Section 7.3, MMT shall bear all costs of such
action or proceeding and shall pay any judgment or settlement amount awarded or
obtained with respect to such MMT Infringement Claim.
7.4. LLC Infringement Claims. In the event of any claim that any
combination by the LLC of any non-infringing MMT Licensed Property, or any
non-infringing equipment, material or process based on or utilizing MMT Licensed
Property, with any Intellectual Property not furnished by MMT or any claim that
the use by the LLC of the
<PAGE> 20
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MMT Licensed Property, or any equipment, material or process based on or
utilizing MMT Licensed Property, in a manner not contemplated by this Agreement
infringes, misappropriates, violates or dilutes any proprietary right or
property of any third Person (each a "LLC Infringement Claim"), then, subject to
Section 7.5 below, the LLC shall have the obligation to take all actions
reasonably necessary to oppose or defend such claims and to pay any judgment or
settlement amount awarded or obtained with respect to such LLC Infringement
Claim. In the course of opposing or defending any such LLC Infringement Claim,
the LLC shall consult with MMT in connection with all material issues relating
to such opposition or defense and shall consult with MMT prior to commencing the
same and shall consider any recommendations by MMT with respect to the conduct
and settlement or compromise thereof and any reasonable alternative resolutions
of the LLC Infringement Claim. In the event that the LLC does not undertake to
oppose or defend any such action within ninety (90) days after the LLC becomes
aware of such LLC Infringement Claim, MMT will have the right to undertake the
opposition or defense of such claim in the LLC's name. In the event that MMT
undertakes the opposition or defense of such claim, MMT shall consult with the
LLC in connection with all material issues relating to such opposition or
defense and shall consult with the LLC prior to commencing the same and shall
consider any recommendations by the LLC with respect to the conduct and
settlement or compromise thereof and any reasonable alternative resolutions of
the LLC Infringement Claim. MMT shall not settle any LLC Infringement Claim
without the LLC's prior written consent. If MMT undertakes to oppose or defend
any LLC Infringement Claim pursuant to the procedure provided for in this
Section 7.4, the LLC shall bear all costs of such action or proceeding and shall
pay any judgment or settlement amount awarded or obtained with respect to such
LLC Infringement Claim.
7.5. Mixed Claims. In the event of any claim of infringement,
misappropriation, violation or dilution of any proprietary right or property of
any third Person based solely on the MMT Licensed Property, or any equipment,
material or process based on or utilizing MMT Licensed Property, such claim will
be treated as an MMT Infringement Claim and governed by the defense,
indemnification and other provisions of Section 7.3. In the event of any such
claim based solely on the combination by the LLC of any non-infringing MMT
Licensed Property, or any non-infringing equipment, material or process based on
or utilizing MMT Licensed Property, with any Intellectual Property not furnished
by MMT or any such claim based solely on the use by the LLC of the MMT Licensed
Property, or any equipment, material or process based on or utilizing MMT
Licensed Property, in a manner not contemplated by the applicable conceptual
design package approved by or at the direction of the Board of Directors of the
LLC with respect to the particular CEP Plant, such claim will be treated as a
LLC Infringement Claim and governed by the defense, indemnification and other
provisions of Section 7.4. In the event of any claim which combines elements of
both an MMT Infringement Claim and a LLC Infringement Claim, MMT and the LLC
shall defend such claim jointly, with the costs of such defense and any judgment
or settlement amount awarded or obtained to be shared between them based on the
damages
<PAGE> 21
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attributable to the MMT Infringement Claim versus the damages attributable to
the LLC Infringement Claim.
Article 8
Representations and Warranties of the LLC
The LLC represents and warrants to MMT as follows:
8.1. Power and Authority. The LLC has full power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
8.2. Approval; Binding Effect. The LLC has obtained all necessary
authorizations and approvals required for the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the LLC and constitutes the
legal, valid and binding obligation of the LLC, enforceable against the LLC in
accordance with its terms.
8.3. Non-Contravention; Approvals. Neither the execution and delivery of
this Agreement by the LLC nor the consummation by the LLC of the transactions
contemplated hereby constitutes a violation of, or conflicts with, constitutes
or creates a default under, or results in the creation or imposition of any
liens upon any property of the LLC pursuant to (a) the LLC Agreement; (b) any
agreement or commitment to which the LLC is a party or by which the LLC or any
of its properties is bound or to which the LLC or any of its properties is
subject; or (c) any statute, regulation, rule, judgment, order, decree,
stipulation, injunction, charge or other restriction of any government,
governmental agency or court or other tribunal to which the LLC or any of its
properties is subject. No consent, approval or authorization of, or
registration, qualification or filing by the LLC with, any governmental agency
or authority is required for the execution and delivery of this Agreement by the
LLC or for the consummation by the LLC of the transactions contemplated hereby
and thereby.
8.4. Absence of Liens. The LLC shall keep all of the MMT Licensed
Property and all of its rights under this Agreement free and clear of any
lien, charge, security interest or other encumbrance.
Article 9
Representations and Warranties of MMT
MMT represents and warrants to the LLC as follows:
9.1. Power and Authority. MMT has full power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
<PAGE> 22
-22-
9.2. Approval; Binding Effect. MMT has obtained all necessary
authorizations and approvals required for the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by MMT and constitutes the legal,
valid and binding obligation of MMT, enforceable against MMT in accordance with
its terms.
9.3. Non-Contravention; Approvals. Neither the execution and delivery of
this Agreement by MMT nor the consummation by MMT of the transactions
contemplated hereby constitutes a violation of, or conflicts with, constitutes
or creates a default under, or results in the creation or imposition of any
liens upon any property of MMT pursuant to (a) its charter or by-laws; (b) any
agreement or commitment to which MMT is a party or by which MMT or any of its
properties is bound or to which MMT or any of its properties is subject; or (c)
any statute, regulation, rule, judgment, order, decree, stipulation, injunction,
charge or other restriction of any government, governmental agency or court or
other tribunal to which MMT or any of its properties is subject. Except for any
filing required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
no consent, approval or authorization of, or registration, qualification or
filing by MMT with, any governmental agency or authority is required for the
execution and delivery of this Agreement by MMT or for the consummation by MMT
of the transactions contemplated hereby and thereby.
Article 10
Export Controls
The LLC agrees that it will comply with all United States and foreign laws
regarding the import or export of any of the MMT Licensed Property or any
embodiment thereof.
Article 11
Termination
11.1. Events of Termination. Except as provided in Section 11.2
below, this Agreement shall terminate upon the earliest to occur of:
(a) the mutual written consent at any time of the LLC and MMT; and
(b) the dissolution of the LLC in accordance with the provisions of
Section 10.1 of the LLC Agreement unless MMT and the LLC agree prior
to such date to renew this Agreement for an additional term.
<PAGE> 23
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11.2. Effects of Termination.
(a) In the event of any termination of this Agreement pursuant to
Section 11.1, (i) the licenses and sublicenses granted pursuant to
Article 2 and Article 6 shall terminate except as provided in
paragraph (b) below and (ii) the provisions of Section 2.4 and
Articles 1, 4, 5, 7, 10, 11, 12 and 13 shall survive such
termination.
(b) In the event of any termination of this Agreement pursuant to
Section 11.1, the licenses granted pursuant to Article 2 shall
remain in effect with respect to (i) all CEP Plants previously
constructed by the LLC, (ii) any CEP Plants under contract
which have not yet commenced commercial operation, to the
extent the Board of Directors of the LLC or the "Liquidator",
pursuant to the procedures referred to in Article 10 of the
LLC Agreement, elects to complete the development of such CEP
Plants, and (iii) any sublicense in effect at the time of
termination. Any fees that have become or thereafter become
payable pursuant to Section 2.4 of this Agreement shall remain
payable by the LLC. The licenses granted in Article 2 and any
sublicense granted pursuant to Article 6 shall remain in
effect with respect to any such CEP Plant for the life of such
CEP Plant.
Article 12
*
Article 13
General
13.1. Disclosure and Publicity. The LLC agrees to provide prior
notice of any material press releases to MMT.
13.2. Expenses. Except as expressly set forth in this Agreement, all
expenses of the preparation, execution and consummation of this Agreement and
the Related Agreements and of the transactions contemplated hereby, including,
without limitation,
* Confidential treatment has been requested for this portion of Exhibit 10.2.
<PAGE> 24
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attorneys', accountants and outside advisers' fees and disbursements, shall be
borne by the party incurring such expenses.
13.3. Notices. All notices, demands and other communications thereunder
shall be in writing or by written telecommunication, and shall be deemed to have
been duly given if delivered personally or if mailed by certified mail, return
receipt requested, postage prepaid or if sent by overnight courier or sent by
written telecommunication, as follows:
If to MMT:
Molten Metal Technology, Inc.
400-2 Totten Pond Road
Waltham Massachusetts 02154
Attention: William M. Haney, III,
President and Chief Executive
Officer
Ethan E. Jacks, Esq., Vice President
and General Counsel
with a copy sent contemporaneously to:
Bingham, Dana & Gould LLP
150 Federal Street
Boston, Massachusetts 02110
Attention: John R. Utzschneider, Esq.
If to the LLC to:
201 Third Street, N.W.
Suite 1600
Albuquerque, New Mexico 87102
Attention: Board of Directors
with a copy sent contemporaneously to
MMT and LMC.
If to the LMC to:
Lockheed Martin Corporation
Energy and Environment Sector
<PAGE> 25
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1155 University Boulevard
Albuquerque, NM 87106-4320
Attention: President
General Counsel
with a copy sent contemporaneously to:
Richards, Layton & Finger
One Rodney Square
Wilmington, DE 19801
Attention: James G. Leyden, Jr., Esq.
13.4. Entire Agreement. This Agreement (including the Annex hereto) and
the Related Agreements contains the entire understanding of the parties,
supersedes all prior agreements and understandings relating to the subject
matter hereof and shall not be amended or waived except by a written instrument
hereafter signed by all of the parties hereto. The LLC, LMC and MMT further
acknowledge and agree that, in entering into this Agreement and the Related
Agreements, they have not in any way relied upon any oral or written agreements,
statements, promises, information, arrangements, understandings, representations
or warranties, express or implied, not specifically set forth in this Agreement
or the Related Agreements.
13.5. Governing Law, Etc. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
all rights and remedies being governed by such laws, without regard to its
conflict of laws rules. As provided in the Dispute Resolution Agreement, the
parties hereto have submitted to the exclusive jurisdiction of state and federal
courts located in Delaware.
13.6. Waiver of Jury Trial. EACH OF MMT, LMC AND THE LLC HEREBY
IRREVOCABLY WAIVES ANY RIGHTS THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY OF THE
RELATED AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR
ACTIONS OF ANY OF THEM RELATING THERETO.
13.7. Waiver of Certain Damages. EACH OF MMT, LMC AND THE LLC TO THE
FULLEST EXTENT PERMITTED BY LAW, IRREVOCABLY WAIVES ANY RIGHTS THAT IT MAY HAVE
TO PUNITIVE, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY
LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY RELATED
AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF
ANY OF THEM RELATING THERETO.
<PAGE> 26
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13.8. Sections and Subsection Headings. The headings of sections
and subsections are for reference only and shall not limit or control the
meaning thereof.
13.9. Assigns. This Agreement and the Related Agreements shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns. Neither this Agreement and the Related
Agreements nor the obligations of any party hereunder or thereunder shall be
assignable or transferable by such party without the prior written consent of
the other parties hereto.
13.10. No Implied Rights or Remedies. Except as otherwise expressly
provided herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or to give any person, firm or corporation, except MMT,
LMC and the LLC, any rights or remedies under or by reason of this Agreement.
13.11. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.12. Dispute Resolution. All disputes or claims arising under or in any
way relating to this Agreement shall be subject to the Dispute Resolution
Agreement.
13.13. 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.
13.14. Severability. The invalidity or unenforceability of any particular
provision of this Agreement or any Related Agreement shall not affect the other
provisions hereof or thereof, and this Agreement and Related Agreements shall be
construed in all respects as if such invalid or unenforceable provision was
omitted.
[signature page to follow]
<PAGE> 27
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Agreement to be duly executed and delivered as of the
date and year first above written.
MOLTEN METAL TECHNOLOGY, INC.
By: /s/ Victor E. Gatto, Jr.
-------------------------------------
Name: Victor E. Gatto, Jr.
Title: Vice President
LOCKHEED MARTIN CHEMICAL
DEMILITARIZATION SYSTEMS, LLC
By: /s/ Victor E. Gatto, Jr.
-------------------------------------
Name: Victor E. Gatto, Jr.
Title: Director (designated by MMT)
By: /s/ James Tegnelia
-------------------------------------
Name: James Tegnelia
Title: Director (designated by LMC)
LOCKHEED MARTIN CORPORATION
By: /s/ James Goltz
-------------------------------------
Name: James Goltz
Title: Vice President
<PAGE> 1
Exhibit 10.3*
ASSET TRANSFER AGREEMENT
THIS ASSET TRANSFER AGREEMENT (this "Agreement") is dated as of the 16th
day of June, 1997 and is by and among Lockheed Martin Corporation, a Maryland
corporation ("LMC"), Lockheed Martin Advanced Environmental Systems, Inc., a
Delaware corporation and a wholly owned subsidiary of LMC ("LMAES"), M4
Environmental L.P., a Delaware limited partnership ("M4"), and Molten Metal
Technology, Inc., a Delaware corporation ("MMT").
WHEREAS, under the Revolving Credit Agreement between LMC and M4 dated as
of April 30, 1996 (the "Revolving Credit Agreement"), M4 is indebted to LMC in
the principal amount of $15 million and for accrued interest and other amounts
outstanding under the Revolving Credit Agreement.
WHEREAS, as of the date hereof, LMC and MMT have entered into a Master
Restructuring Agreement (the "Restructuring Agreement") relating to the
restructuring of M4 pursuant to which, inter alia, M4, at the direction of LMC,
shall convey to LMAES all of the assets of M4 relating to M4's ReTech division
("ReTech"), including all related Intellectual Property (as defined in the
Restructuring Agreement), and LMAES shall assume all of M4's liabilities
relating to ReTech, in full payment and satisfaction of all of M4's indebtedness
to LMC under the Revolving Credit Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, LMC, LMAES, MMT and M4 hereby agree as follows:
Article 1
Definitions
Defined terms used and not otherwise defined herein shall have the
meanings ascribed thereto in the Restructuring Agreement. In addition, as used
herein the following terms not otherwise defined have the following respective
meanings:
"1996 License Agreement" means the Amended and Restated License Agreement,
dated as of April 30, 1996, by and among M4, MMT and LMC.
* Confidential treatment has been requested for certain portions of this Exhibit
10.3.
<PAGE> 2
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"Asset Acquisition Agreement" means the Asset Acquisition Agreement, dated
as of March 15, 1996, between M4 and Lockheed Environmental Systems &
Technologies Co., a Nevada corporation, and joined in by LMC, MMT Federal
Holdings, Inc., a Delaware corporation, and MMT.
"Affiliate" means, with respect to any specific Person, any other Person
controlling, controlled by or under common control with such specific Person
(but, with respect to LMC, not including M4). As used in this context, "control"
(including, with its correlative meanings, "controlled by" and "under common
control with") means the possession, directly or indirectly, or power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of Voting Securities (as defined in the Restructuring
Agreement), by contract or otherwise.
"Filtering Technology" means *
"Person" means any corporation, association, partnership, trust, limited
liability company, organization, business, individual, government or political
subdivision thereof or governmental agency.
"Restructuring Agreement" has the meaning set forth in the preamble.
"Revolving Credit Amount" means the sum of (i) $15,552,850.14, which
represents the total principal and accrued interest and other amounts
outstanding and owed by M4 to LMC under the Revolving Credit Agreement as of
April 27, 1997, plus (ii) all additional interest and other amounts accrued
under the Revolving Credit Agreement from April 27, 1997 through June 11, 1997.
"ThermUHex Technology" means a thermal process for producing uranium oxide
and hydrogen fluoride by reacting uranium hexafluoride with a gaseous mixture
including hydrogen and an oxygen-containing compound.
Article 2
Purchase And Sale
2.1. Acquired Assets. Subject to the terms and conditions set forth in
this Agreement, at the Closing referred to in Article 4 hereof, and pursuant to
the direction of
* Confidential treatment has been requested for this portion of Exhibit 10.3.
<PAGE> 3
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LMC (in payment and satisfaction of the Revolving Credit Amount
and in order to avoid multiple conveyances of assets from M4 to LMC and then
from LMC to LMAES), M4 shall assign, transfer and deliver to LMAES, and LMAES
shall acquire and take assignment and delivery of, all of the assets of M4
relating to ReTech but excluding the Excluded Assets (as defined in Section 2.2)
(all of which assets are hereinafter referred to collectively as the "Acquired
Assets"), including, without limitation:
(a) all accounts receivable relating to ReTech, including, without
limitation, those set forth on Schedule 2.1(a) hereto;
(b) all contracts, agreements, purchase orders, leases and other
commitments and obligations relating to ReTech, including, without limitation,
those set forth on Schedule 2.1(b) hereto;
(c) all furniture, fixtures, machinery, equipment and other tangible
personal property relating to ReTech, including, without limitation, those set
forth on Schedule 2.1(c) hereto;
(d) all raw materials, work-in-process, manufacturing supplies,
packaging materials, purchased products and finished product inventories
relating to ReTech, including, without limitation, those set forth on Schedule
2.1(d) hereto;
(e) all permits, approvals, certificates, franchises, licenses and
other authorizations of any federal, state, local or foreign governmental or
regulatory body relating to ReTech, including, without limitation, those set
forth on Schedule 2.1(e) hereto;
(f) all trade names, trademarks or service marks, copyrights,
pending or issued registrations for any of the foregoing, patents, patent
applications (including, without limitation, the patents listed on Schedule
2.1(f) hereto), unpatented inventions, and trade secrets and other confidential
or proprietary information relating to ReTech, including, without limitation,
the Intellectual Property set forth on Schedule 2.1(f) hereto; and
(g) all cash and cash equivalents relating to ReTech, including
without limitation the deposits listed on Schedule 2.1(g) hereto.
2.2. Excluded Assets. Notwithstanding the foregoing, M4 is not
transferring and LMAES is not acquiring pursuant to this Agreement, and the
term "Acquired Assets" shall not include, any of the following assets
(collectively, the "Excluded Assets"):
(a) any of M4's Intellectual Property relating to the ThermUHex
Technology;
(b) any of M4's Intellectual Property relating to the Filtering
Technology; and
<PAGE> 4
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(c) any of M4's Intellectual Property (including any of the "MMT
Licensed Property" that was subject to the 1996 License Agreement) that relates
to CEP.
2.3. Mixed Assets. In the event that any assets of M4 are used in
connection with ReTech and are also used in connection with any other business
of M4, then M4 and LMAES will discuss in good faith whether such assets are used
primarily in ReTech's business or primarily in such other business of M4 and
accordingly whether or not such assets should constitute Acquired Assets or
Excluded Assets for purposes of this Agreement. The foregoing sentence shall not
apply to any of the Excluded Assets identified in Section 2.2.
Article 3
Assumption of Obligations; Termination of
Revolving Credit Agreement; Cash Adjustments
3.1. Assumption of Obligations. Except as set forth on Schedule 3.1(a)
hereto, effective upon consummation of the Closing (as defined in Article 4),
LMAES hereby agrees to pay, perform, fulfill and discharge all obligations of M4
of any nature, known or unknown, fixed or contingent, relating to ReTech,
including, without limitation, any and all Assumed Liabilities as defined in the
Asset Acquisition Agreement (collectively, the Assumed Obligations") and those
liabilities listed on Schedule 3.1(b) hereto.
3.2. Termination of Revolving Credit Agreement. As partial consideration
for the transfer of the Acquired Assets by M4 to LMAES, LMC agrees that,
effective upon the Closing, the Revolving Credit Agreement shall be considered
terminated for all purposes and all amounts owed thereunder shall be considered
paid in full.
3.3. Cash Adjustment.
Prior to the Closing, representatives of M4 and LMC established the
fair market value of the Acquired Assets, net of the Assumed Liabilities, as of
the Closing Date (as defined in Article 4), to be $17,000,000 ("Net Transferred
Value"). In addition, these representatives determined that the Revolving Credit
Amount was $15,760,000. As the Net Transferred Value exceeds the Revolving
Credit Amount, LMC will pay cash to M4 at the Closing in the amount of
$1,240,000.
Article 4
Closing
4.1. Time and Place. The closing of the transfer and delivery of all
documents and instruments necessary to consummate the transactions contemplated
by this Agreement (the "Closing") shall be held at the offices of Bingham, Dana
& Gould LLP, 150 Federal Street, Boston, Massachusetts, immediately after the
execution and delivery of this Agreement. The
<PAGE> 5
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date on which the Closing is actually held hereunder is sometimes referred to
herein as the "Closing Date".
4.2. Transactions at Closing. At the Closing:
(a) M4 shall duly execute and deliver to LMAES or its nominee or
nominees such deeds, certificates of title or other instruments of assignment
and transfer with respect to the Acquired Assets as LMC may reasonably request
and as may be necessary to vest in LMAES all of M4's title to and interest in
all of the Acquired Assets, in each case subject to no Encumbrance (as defined
in Section 5.3) except for the Encumbrances specified in Schedule 4.2(a) hereto
(the "Permitted Encumbrances"). These transfer instruments will include a Bill
of Sale and Assignment in the form of Exhibit A hereto, Patent Assignments in
the form of Exhibit B-1 and Exhibit B-2 hereto, and a Trademark Assignment in
the form of Exhibit C hereto.
(b) M4 shall deliver or cause to be delivered to LMAES all of the
contracts and agreements of M4 included in the Acquired Assets, and all of the
business records, tax returns, books and other data of M4 relating to the
Acquired Assets; provided, however, that M4, after consultations with LMC, may
take such action as M4 deems reasonably appropriate to separate or redact
information unrelated to any of the Acquired Assets from business records, tax
returns, books and other data of M4 to be delivered to LMAES at the Closing
pursuant to this Section 4.2(b).
Article 5
Representations and Warranties of M4 and MMT
M4 and MMT jointly and severally represent and warrant to each of LMC and
LMAES as follows:
5.1. Organization; Authority. MMT is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
all requisite power and authority to execute and deliver this Agreement and to
carry out all of the actions required of it pursuant to the terms of this
Agreement.
5.2. Approvals; Binding Effect. M4 has obtained all necessary
authorizations and approvals from its general partner and limited partners
required for the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by M4 and constitutes the legal, valid and binding obligation of
M4 enforceable against it in accordance with its terms, except to the extent the
enforceability of this Agreement may be limited by any applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors' rights generally
or by general principles of equity. MMT has obtained all necessary
authorizations and approvals from its Board of Directors and stockholders
required for the execution and delivery of this
<PAGE> 6
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Agreement and the consummation of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by MMT and constitutes the legal,
valid and binding obligation of MMT enforceable against it in accordance with
its terms, except to the extent the enforceability of this Agreement may be
limited by any applicable bankruptcy, reorganization, insolvency or other laws
affecting creditors' rights generally or by general principles of equity.
5.3. Non-Contravention. Except for any consents to transfer referred to in
Section 5.4, the execution and delivery by M4 of this Agreement and the
consummation by M4 of the transactions contemplated hereby will not (a) violate
or conflict with any provision of the Certificate of Limited Partnership or
Limited Partnership Agreement of M4, each as amended as of the date hereof; or
(b) constitute a violation of, or be in conflict with, or constitute or create a
default under, or result in the creation or imposition of any Encumbrance upon
any property of M4 (including without limitation any of the Acquired Assets)
pursuant to (i) any agreement or instrument to which M4 is a party or by which
M4 or any of its properties (including, without limitation, any of the Acquired
Assets) is bound or to which M4 or any of such properties is subject, or (ii)
any statute, judgment, decree, order, regulation or rule of any court or
governmental or regulatory authority. Except for any consents to transfer
referred to in Section 5.4, the execution and delivery by MMT of this Agreement
and the consummation by MMT of the transactions contemplated hereby will not (a)
violate or conflict with any provision of the Certificate of Incorporation or
By-Laws of MMT, each as amended as of the date hereof; or (b) constitute a
violation of, or be in conflict with, or constitute or create a default under,
or result in the creation or imposition of any Encumbrance upon any property of
MMT pursuant to (i) any agreement or instrument to which MMT is a party or by
which MMT or any of its properties is bound or to which MMT or any of such
properties is subject, or (ii) any statute, judgment, decree, order, regulation
or rule of any court or governmental or regulatory authority.
5.4. Title to Acquired Assets. Except for any consents to transfer
required with respect to the contracts and other agreements included in the
Acquired Assets (the "Assumed Contracts") and except for Permitted Encumbrances,
M4 is the lawful owner of and has good and valid title to all of the Acquired
Assets, and has the full right to sell, convey, transfer, assign and deliver the
Acquired Assets, without the need to obtain the consent or approval of any third
party. Except for Permitted Encumbrances, all of the Acquired Assets are
entirely free and clear of any security interests, liens, claims, charges,
options, mortgages, debts, leases (or subleases), conditional sales agreements,
title retention agreements, encumbrances of any kind, material defects as to
title or restrictions against the transfer or assignment thereof (collectively,
"Encumbrances"). At and as of the Closing, M4 will convey the Acquired Assets to
LMAES by deeds, bills of sale, certificates of title and other instruments of
assignment and transfer effective in each case to vest in LMAES, and LMAES will
have, good and valid record and marketable title to all of the Acquired Assets,
free and clear of all Encumbrances.
<PAGE> 7
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Article 6
Representations And Warranties
of LMC and LMAES
LMC and LMAES jointly and severally represent and warrant to each of M4
and MMT as follows:
6.1. Organization of Buyer; Authority. LMAES is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite power and authority to execute and deliver this
Agreement and to carry out all of the actions required of it pursuant to the
terms of this Agreement. LMC is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland, and has all
requisite power and authority to execute and deliver this Agreement and to carry
out all of the actions required of it pursuant to the terms of this Agreement.
6.2. Corporate Approvals; Binding Effect. LMAES has obtained all necessary
authorizations and approvals from its Board of Directors and stockholder
required for the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by LMAES and constitutes the legal, valid and binding obligation
of LMAES enforceable against LMAES in accordance with it terms, except to the
extent enforceability of this Agreement may be limited by any applicable
bankruptcy, reorganization, insolvency or other laws affecting creditors' rights
generally or by general principles of equity. LMC has obtained all necessary
authorizations and approvals from its Board of Directors required for the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by LMC and constitutes the legal, valid and binding obligation of LMC
enforceable against LMC in accordance with its terms, except to the extent
enforceability of this Agreement may be limited by any applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors' rights generally
or by general principles of equity.
6.3. Non-Contravention. The execution and delivery by LMC and LMAES of
this Agreement and the consummation by LMC and LMAES of the transactions
contemplated hereby will not (a) violate or conflict with any provisions of the
Certificate of Incorporation or By-Laws of LMC or LMAES, each as amended to
date; or (b) constitute a violation of, or be in conflict with, constitute or
create a default under, or result in the creation or imposition of any lien upon
any property of LMC or LMAES pursuant to (i) any agreement or instrument to
which LMC or LMAES is a party or by which LMC or LMAES or any of their
respective properties are bound or to which LMC or LMAES or any of their
respective properties are subject, or (ii) any statute, judgment, decree, order,
regulation or rule of any court or governmental authority to which LMC or LMAES
is subject.
<PAGE> 8
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Article 7
Certain Transitional and Other Matters
7.1. Nonassignable Contracts.
(a) To the extent that any Assumed Contract is not capable of being
transferred by M4 to LMAES pursuant to this Agreement without the consent,
approval or waiver of a third Person, and such consent, approval or waiver is
not obtained prior to the Closing, or if such transfer or attempted transfer
would constitute a breach thereof or a violation of any law, rule or regulation,
nothing in this Agreement will constitute a transfer or an attempted transfer
thereof. Notwithstanding anything contained in this Agreement to the contrary,
M4 shall not be obligated to transfer to LMAES any of its rights and obligations
in and to any of the Assumed Contracts referred to in this Section 7.1 without
first having obtained any consents, approvals and waivers necessary for the
transfer of such Assumed Contract.
(b) In the event that such consents, approvals and waivers referred
to in subparagraph (a) above are not obtained, then, in the case of any such
Assumed Contract, LMC, MMT, LMAES and M4 shall continue to cooperate and use
their best efforts to obtain the necessary consents, approvals and waivers (to
the extent that it is reasonably likely that such efforts will be successful),
and unless and until any such necessary consent, approval or waiver is obtained,
M4 will use its best reasonable efforts, to the extent permitted by applicable
law, the terms of the Assumed Contract and the directions of the customer, to
(a) cooperate in any reasonable arrangement designed to provide to LMAES the
benefits and burdens of any Assumed Contract referred to in subparagraph (a)
above without incurring any obligation to any other Person other than to provide
such benefits to LMAES, including, without limitation, the appointment of LMAES
as M4's agent for purposes of such Assumed Contract, and (b) enforce, at LMC's
and LMAES' request for LMAES' account and at LMAES' cost, any rights of M4
arising from any such Assumed Contract (including, without limitation, the right
to elect to terminate such Assumed Contract in accordance with the terms thereof
upon the advice of LMC or LMAES).
7.2. Hiring Employees and Related Matters.
(a)(i) At the Closing, LMAES will offer employment to the employees
of M4 listed on Schedule 7.2(i) hereto at wages (excluding incentive
compensation programs) and benefits comparable in the aggregate to the wages and
benefits currently provided to such employees by M4. The employees accepting
such offer are referred to below as the "LMAES Assumed Employees." LMAES shall
have all responsibility for severance to any LMAES Assumed Employee. LMAES shall
recognize for each LMAES Assumed Employee who accepts an offer of employment and
commences work with LMAES service with M4 prior to the Closing Date under any
Welfare Benefit Plan (as defined in the Employee Retirement Security Act of
1974, as amended) maintained by LMAES to the extent such service was recognized
under a comparable M4 plan.
<PAGE> 9
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(ii) At the Closing, MMT will offer employment to the employees of
M4 listed on Schedule 7.2(ii) hereto at wages (excluding incentive compensation
programs) and benefits comparable in the aggregate to the wages and benefits
currently provided to such employees by M4. The employees accepting such offer
are referred to below as the "MMT Assumed Employees." MMT shall have all
responsibility for severance to any MMT Assumed Employee. MMT shall recognize
for each MMT Assumed Employee who accepts an offer of employment and commences
work with MMT service with M4 prior to the Closing Date under any Welfare
Benefit Plan (as defined in the Employee Retirement Security Act of 1974, as
amended) maintained by MMT to the extent such service was recognized under a
comparable M4 plan.
(iii) After giving effect to the offers of employment referred to in
subparagraphs (i) and (ii) above, M4 will continue to employ those transitional
employees referred to in Exhibit 11 of the HR Plan. As provided in Exhibit 11 of
the HR Plan and Section 9.4 of the Restructuring Agreement, the cost of these
transitional employees will be shared equally by LMC and MMT.
(b)(i) Nothing in this Agreement shall obligate LMAES to make any
offer of employment to anyone other than a LMAES Assumed Employee or, except as
provided in paragraph (c) below, to provide continued employment to any employee
of M4, whether or not the subject of an employment offer from LMAES, for any
specified period of time following the Closing Date, or to maintain the same
terms of employment (including, without limitation, compensation and benefits)
for any specified period of time following the Closing Date. LMAES will not be
obligated to offer employment to anyone other than the persons listed on
Schedule 7.2(i) hereto. Each LMAES Assumed Employee offered a position at LMAES
will be considered an employee at will whose employment may be terminated at any
time and for any reason.
(ii) Nothing in this Agreement shall obligate MMT to make any offer
of employment to anyone other than an MMT Assumed Employee or, except as
provided in paragraph (c) below, to provide continued employment to any employee
of M4, whether or not the subject of an employment offer from MMT, for any
specified period of time following the Closing Date, or to maintain the same
terms of employment (including, without limitation, compensation and benefits)
for any specified period of time following the Closing Date. MMT will not be
obligated to offer employment to anyone other than the persons listed on
Schedule 7.2(ii) hereto. Each MMT Assumed Employee offered a position at MMT
will be considered an employee at will whose employment may be terminated at any
time and for any reason.
(c) LMAES agrees that, for a period of 60 days after the Closing
Date, it will not cause any of the LMAES Assumed Employees hired by it to suffer
"employment loss," excluding any employment loss in connection with the
completion of a project as contemplated by 29 U.S.C. Section 2103, for purposes
of the Worker Adjustment and Retraining Notification Act, 29 U.S.C.
Sections 2101-2109, and related regulations (the "WARN Act") if such
<PAGE> 10
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employment loss could create any liability for M4, unless LMAES delivers notices
under the WARN Act in such a manner and at such a time that M4 bears no
liability with respect thereto. MMT agrees that, for a period of 60 days after
the Closing Date, it will not cause any of the MMT Assumed Employees to suffer
an "employment loss," excluding any employment loss in connection with the
termination of a project as contemplated by 29 U.S.C. Section 2103, for purposes
of the WARN Act if such employment loss could result in any liability for M4
unless MMT delivers notices under the WARN Act in such a manner and at such a
time that M4 bears no liability with respect thereto.
(d)(i) M4 agrees to provide reasonable cooperation to LMAES in
connection with the transition by the LMAES Assumed Employees and their
dependents and beneficiaries to the medical and dental benefits coverage offered
by LMAES. To the extent not prohibited by applicable laws or any confidentiality
obligations of M4, this cooperation will include the provision by M4 to LMAES or
LMAES' insurers of information regarding any pre-existing conditions of the
LMAES Assumed Employees or any of their dependents or beneficiaries.
(ii) M4 agrees to provide reasonable cooperation to MMT in
connection with the transition by the MMT Assumed Employees and their dependents
and beneficiaries to the medical and dental benefits coverage offered by MMT. To
the extent not prohibited by applicable laws or any confidentiality obligations
of M4, this cooperation will include the provision by M4 to MMT or MMT's
insurers of information regarding any pre-existing conditions of the MMT Assumed
Employees or any of their dependents or beneficiaries.
(e) Following the Closing, M4 shall remain the sponsor of the 401(k)
Savings Plan and the Capital Accumulation Plan (the "Frozen Plans") in which the
LMAES Assumed Employees and MMT Assumed Employees currently participate. No
further contributions will be made to the Frozen Plans with respect to service
on or after the Closing Date and no new participants will be added to the Frozen
Plans on or after the Closing Date. All participants shall become 100% vested in
their account balances as of the Closing Date. M4 shall take all actions
reasonably necessary, including amending the Frozen Plans, to obtain favorable
determination letters from the IRS for the Frozen Plans. Promptly following the
receipt of such favorable determination letters, the then existing account
balances in the Frozen Plans relating to LMAES Assumed Employees shall be
transferred in cash or in the form of the particular LMAES Assumed Employee's
promissory note(s) (evidencing loans to the particular LMAES Assumed Employee
under the Frozen Plans), to a qualified defined contribution plan (or plans)
designated by LMAES. The parties shall reasonably cooperate in connection with
administering loan repayments by participants to the Frozen Plans prior to the
transfer of account balances as described above. As soon as practicable
following the Closing, M4 shall designate a nationally recognized bank that is
acceptable to LMAES to serve as trustee of the Frozen Plans.
(f) As contemplated by Section 9.4 of the Restructuring Agreement,
M4 will be responsible for the administration and winding up of its employee
benefit plans (including the Frozen Plans) until they are terminated. LMC and
MMT shall each be
<PAGE> 11
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responsible for one-half of M4's out-of-pocket costs incurred in connection with
the foregoing. M4 shall bear its own internal costs.
(g) Except as expressly provided above in this Section 7.2,
responsibility between LMC and MMT regarding the employment by M4 of any of its
employees prior to the Closing Date and its benefit plans shall be allocated as
provided in Sections 8.3 and 9.4 of the Restructuring Agreement.
Article 8
Indemnification
8.1. Indemnity by M4 and MMT. M4 and MMT jointly and severally hereby
agree to indemnify and hold LMC and LMAES and their respective Affiliates
harmless from and with respect to any and all claims, liabilities, losses,
damages, costs and expenses, including without limitation the reasonable fees
and disbursements of counsel (collectively, the "Losses"), related to or arising
directly or indirectly out of any failure or any breach by M4 or MMT of any
representation or warranty, covenant, obligation or undertaking made by M4 or
MMT in this Agreement (including the Schedules and Exhibits hereto).
8.2. Indemnity by LMC and LMAES. LMC and LMAES jointly and severally
hereby agree to indemnify and hold each of M4 and MMT and their respective
Affiliates harmless from and with respect to any and all Losses related to or
arising directly or indirectly out of any failure or breach by LMC or LMAES of
any representation or warranty, covenant, obligation or undertaking (including
any failure of LMAES to perform, fulfill and discharge all of the Assumed
Liabilities) made by LMC or LMAES in this Agreement (including the Schedules and
Exhibits hereto).
8.3. Restructuring Agreement. In the event of any conflict between this
Article 8 and the provisions of Section 8.3 of the Restructuring Agreement,
which provides, among other things, that except as otherwise provided therein
MMT and LMC are each to bear responsibility for fifty percent (50%) of all
liabilities and obligations of M4 and its general partner attributable to the
period prior to the Closing, the provisions of Section 8.3 of the Restructuring
Agreement shall prevail.
8.4.
*
* Confidential treatment has been requested for this portion of Exhibit 10.3.
<PAGE> 12
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8.5. Claims.
(a) Notice. Any party seeking indemnification hereunder (the
"Indemnified Party") shall promptly notify the other party hereto (the
"Indemnifying Party") of any action, suit, proceeding, demand or breach (a
"Claim") with respect to which the Indemnified Party claims indemnification
hereunder, provided that failure of the Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations under this Article 8
except to the extent, if at all, that such Indemnifying Party shall have been
prejudiced thereby.
(b) Third Party Claims. If a Claim relates to any action, suit,
proceeding or demand instituted against the Indemnified Party by a third party
(a "Third Party Claim"), the Indemnifying Party shall be entitled to participate
in the defense of such Third Party Claim after receipt of notice of such claim
from the Indemnified Party. Within thirty (30) days after receipt of notice of a
particular matter from the Indemnified Party, the Indemnifying Party may assume
the defense of such Third Party Claim, in which case the Indemnifying Party
shall have the authority to negotiate, compromise and settle such Third Party
Claim, if and only if the following conditions are satisfied:
(i) the Indemnifying Party shall have confirmed in writing
that it is obligated hereunder to indemnify the Indemnified Party with
respect to such Third Party Claim; and
(ii) the Indemnified Party shall not have given the
Indemnifying Party written notice that it has determined, in the exercise
of its reasonable discretion, that matters of corporate or management
policy or a conflict of interest make separate representation by the
Indemnified Party's own counsel advisable.
The Indemnified Party shall retain the right to employ its own counsel and to
participate in the defense of any Third Party Claim, the defense of which has
been assumed by the Indemnifying Party pursuant hereto, but the Indemnified
Party shall bear and shall be solely responsible for its own costs and expenses
in connection with such participation.
8.6. Method and Manner of Paying Claims. In the event of any Claims under
this Article 8, the claimant shall advise the party or parties who are required
to provide indemnification therefor in writing of the amount and circumstances
surrounding such claim. With respect to liquidated Claims, if within thirty (30)
days the other party has not contested such Claim in writing, the other party
will pay the full amount thereof within ten (10) days after the expiration of
such 30-day period. Any amount owed by an Indemnifying Party hereunder with
respect to any Claim may be set-off by the Indemnified Party against any amounts
owed by the Indemnified Party to any Indemnifying Party. The unpaid balance of a
Claim shall bear interest at a rate per annum equal to the lowest prime rate
published in the
<PAGE> 13
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Wall Street Journal in its "Money Rates" column on the date notice thereof is
given by the Indemnified Party to the Indemnifying Party.
Article 9
General
9.1. Survival of Representations and Warranties. The representations and
warranties of the parties hereto contained in this Agreement or otherwise made
in writing in connection with the transactions contemplated hereby (in each case
except as affected by the transactions contemplated by this Agreement) shall be
deemed material and, notwithstanding any investigation by LMC or LMAES, shall be
deemed to have been relied on by LMC or LMAES and shall survive the Closing and
the consummation of the transactions contemplated hereby.
9.2. Expenses. All transfer and sales taxes payable with respect to the
conveyance of the Acquired Assets by M4 to LMAES shall be paid fifty percent
(50%) by M4 and fifty percent (50%) by LMAES. All expenses of the preparation,
execution and consummation of this Agreement and of the transactions
contemplated hereby, including without limitation attorneys', accountants' and
outside advisers' fees and disbursements, shall be borne by the party incurring
such expenses.
9.3. Notices. All notices, demands and other communications hereunder
shall be in writing or by written telecommunication, and shall be deemed to have
been duly given if delivered personally or if mailed by certified mail, return
receipt requested, postage prepaid or if sent by overnight courier or sent by
written telecommunication, as follows:
If to M4 to:
M4 Environmental L.P.
c/o Molten Metal Technology, Inc.
400-2 Totten Pond Road
Waltham Massachusetts 02154
Attention: William M. Haney, III,
President and Chief Executive Officer
Ethan E. Jacks, Esq., Vice President
and General Counsel
with a copy sent contemporaneously to:
Bingham, Dana & Gould LLP
150 Federal Street
Boston, Massachusetts 02110
<PAGE> 14
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Attention: John R. Utzschneider, Esq.
IF to MMT: as provided in the Restructuring Agreement.
If to LMC: as provided in the Restructuring Agreement.
If to LMAES to:
Lockheed Martin Advanced
Environmental Systems, Inc.
201 Third Street, N.W.
Suite 1600
Albuquerque, NM 87102
Attention: James A. Tegnelia, President
Schuyler L. Bradley, Esq., General Counsel
with a copy sent contemporaneously to:
Richards, Layton & Finger
One Rodney Square
Wilmington, DE 19801
Attention: James G. Leyden, Jr., Esq.
9.4. Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) together with the Related Agreements (as defined in the
Restructuring Agreement) contains the entire understanding of the parties hereto
and thereto, except as provided below supersedes all prior agreements and
understandings relating to the subject matter hereof and thereof and shall not
be amended except by a written instrument hereafter signed by all of the parties
hereto or thereto, as applicable. No waiver of any provision of this Agreement
shall be effective unless evidenced by a written instrument signed by the
waiving party. The parties further acknowledge and agree that, in entering into
this Agreement and entering or causing their Subsidiaries to enter into the
Related Agreements, they have not in any way relied upon any oral or written
agreements, statements, promises, information, arrangements, understandings,
representations or warranties, express or implied, not specifically set forth in
this Agreement or the Related Agreements.
9.5. Governing Law, Etc. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
all rights and remedies being governed by such laws, without regard to its
conflict of laws rules, and, to the extent applicable, federal laws of the
United States of America. As provided in the Amended and
<PAGE> 15
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Restated Dispute Resolution Agreement (as defined in the Restructuring
Agreement), the parties hereto have submitted to the exclusive jurisdiction of
state and federal courts located in Delaware.
9.6. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY RIGHTS THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY OF THE RELATED
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF
ANY OF THE PARTIES HERETO RELATING THERETO.
9.7. Waiver of Certain Damages. EACH OF THE PARTIES HERETO TO THE FULLEST
EXTENT PERMITTED BY LAW IRREVOCABLY WAIVES ANY RIGHTS THAT IT MAY HAVE TO
PUNITIVE, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY
LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY RELATED
AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS OR ACTIONS OF
ANY OF THE PARTIES HERETO RELATING THERETO.
9.8. Tax Treatment. LMC, LMAES and M4 shall treat and report the
transactions contemplated by this Agreement in all respects consistently for
purposes of any federal, state or local tax, including, without limitation, with
respect to the calculation of the amount of gain or loss, if any, realized by M4
on the transactions contemplated by this Agreement and the basis of the Acquired
Assets in the hand of LMAES, (i) as the sale, exchange and conveyance by M4 of
the Acquired Assets in exchange for the sum of (a) the Revolving Credit Amount,
(b) LMAES' assumption of the Assumed Obligations, and (c) LMC's cash adjustment
pursuant to Section 3.3; and (ii) as M4's payment of the Net Transferred Value
(net of LMC's cash adjustment payment pursuant to Section 3.3) in full payment
and satisfaction of the Revolving Credit Amount. The parties hereto shall not
take any actions or positions inconsistent with the obligations set forth
herein. To the extent required, both LMAES and M4 agree to file with the
Internal Revenue Service an IRS Form 8594 (Asset Acquisition Statement under
Section 1060) with respect to the acquisition by LMAES of the Acquired Assets,
with their respective federal income tax returns for the year in which the
Closing Date occurs.
9.9. Sections and Section Headings. The headings of sections and
subsections of this Agreement are for reference only and shall not limit or
control the meaning thereof.
9.10. Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
permitted assigns. Neither this Agreement nor the obligations of any party
hereunder shall be assignable or transferable by such party without the prior
written consent of each of the other parties hereto.
9.11. No Implied Rights or Remedies. Except as otherwise expressly
provided herein, nothing herein expressed or implied is intended or shall be
construed to confer upon
<PAGE> 16
-16-
or to give any Person, except the parties hereto, any rights or remedies under
or by reason of this Agreement.
9.12. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.13. Dispute Resolution. All disputes or claims arising under or in
any way relating to this Agreement shall be subject to the Amended and
Restated Dispute Resolution Agreement (as defined in the Restructuring
Agreement).
9.14. Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and
no rule of strict construction will be applied against any party.
9.15. Severability. The invalidity or unenforceability of any
particular provision of this Agreement or any Related Agreement shall not
affect the other provisions hereof or thereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provision was
omitted.
9.16. Nature of Obligations. All obligations of LMC and LMAES in this
Agreement are joint and several, whether or not so expressed. All obligations
of MMT and M4 in this Agreement are joint and several, whether or not so
expressed.
[signature page to follow]
<PAGE> 17
-17-
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Agreement to be duly executed and delivered as a sealed
instrument as of the date and year first above written.
M4 ENVIRONMENTAL L.P.
By: M4 Environmental Management, Inc.,
as general partner
By: /s/ Victor E. Gatto, Jr.
--------------------------------
Name: Victor E. Gatto, Jr.
Title: Vice President
MOLTEN METAL TECHNOLOGY, INC.
By: /s/ Victor E. Gatto, Jr.
--------------------------------
Name: Victor E. Gatto, Jr.
Title: Vice President
LOCKHEED MARTIN COOPERATION
By: /s/ James Goltz
--------------------------------
Name: James Goltz
Title: Vice President
LOCKHEED MARTIN ADVANCED
ENVIRONMENTAL SYSTEMS, INC.
By: /s/ James Tegnelia
--------------------------------
Name: James Tegnelia
Title: President
<PAGE> 1
Exhibit 10.4
NEWS RELEASE
[Molten Metal Technology Letterhead]
FOR IMMEDIATE RELEASE
MOLTEN METAL FORMS NEW STRATEGIC ALLIANCE
WITH LOCKHEED MARTIN CORPORATION
COMPLETES RESTRUCTURING OF LIMITED PARTNERSHIP
WALTHAM, Massachusetts - June 18, 1997 - Molten Metal Technology, Inc.
(NASDAQ:MLTN) today announced completion of definitive agreements for a new
strategic alliance with Lockheed Martin Corporation (NYSE:LMT). The new
agreements are designed to enhance the ability of the corporations to more
efficiently access target markets.
The two corporations have established a strategic alliance committee, comprised
of three representatives from each corporation, to review and monitor the
business relationships created by the restructuring of the former M4
Environmental limited partnership. The strategic alliance committee will also
evaluate new market opportunities for joint efforts within the Department of
Energy (DOE) and Department of Defense markets.
The two corporations formed a new limited liability corporation (LLC) to
deliver processing services to customers in the worldwide chemical
demilitarization market. This LLC, Lockheed Martin Chemical Demilitarization
Systems, L.L.C., is an exclusive relationship that will enable the corporations
to pursue chemical demilitarization opportunities around the world.
In addition to the new LLC for the chemical demilitarization market, the two
companies will continue to work together on the DOE's Hanford tank waste
project. Under the new relationship, Molten Metal Technology will deliver a $5
million pilot Quantum-CEP(R) system to the Lockheed Martin team for processing
surrogate Hanford tank waste. Lockheed Martin leads one of two corporate teams
that recently won the first phase of a DOE bid to begin efforts toward the
cleanup of radioactive tank waste at the DOE site in Hanford, Washington. The
Quantum-CEP plant will support Lockheed Martin's efforts to use Quantum-CEP in
addition to or in place of its currently proposed baseline technology for the
second phase of the Hanford project. The DOE is scheduled to announce plans for
the second phase of the Hanford cleanup in 1998, an award estimated to be worth
several billion dollars.
-more-
<PAGE> 2
As a part of the restructuring, the RETECH division of M4 that provides plasma
arc technology to the specialty metal and environmental industry has been
transferred to Lockheed Martin, while Molten Metal Technology has become sole
owner of M4, which will continue to own and operate its primary asset, the
Technology Center in Oak Ridge, Tennessee. The Center contains two commercial
Quantum-CEP systems. One of the commercial systems began operating in December
of 1995. The second and much larger system is currently in start-up operations
and is expected to begin commercial operations later this year.
Operation of the Technology Center through M4 should enable Molten Metal
Technology to continue to expand its presence in several key market sectors,
such as commercial mixed (radioactive and hazardous) waste.
Based in Waltham, Massachusetts, Molten Metal Technology, Inc. is an
environmental technology company commercializing pollution prevention and waste
recycling methods that are broadly applicable to a wide variety of hazardous,
non-hazardous, and radioactive wastes. The company's patented core technology,
CEP, takes waste and transforms it into reusable industrial products using a
molten metal bath. The first commercial Quantum-CEP plant constructed by the
company began operating in 1995. A second commercial Quantum-CEP plant is now
processing waste from commercial nuclear customers. A third commercial
Quantum-CEP facility is currently in the start-up phase. Quantum-CEP is the
application of CEP developed specifically to process radioactive waste. Two more
commercial CEP plants are under construction.
Certain statements contained in this press release regarding future events are
"forward-looking statements" within the meaning of the federal securities laws,
including statements concerning the company's expectations regarding the future
performance of its relationship with Lockheed Martin, the use of Quantum-CEP in
the Hanford cleanup project, future operations at the M4 Technology Center, and
the construction and start-up of CEP facilities. These forward-looking
statements are based largely on Molten Metal Technology's expectations and are
subject to a number of risks and uncertainties, many of which are beyond the
company's control. Accordingly, actual results could differ materially from
those contemplated by these forward-looking statements. Among the risks and
uncertainties which could affect actual results are that potential customers
will not accept the company's CEP technology as an economically and
environmentally acceptable means of disposing of wastes and by-products; that
the company will be unable to build its CEP plants on time and under budget; and
that the company will not be able to commercially operate CEP plants on a
sustained and profitable basis. Additional factors which may cause actual
results to differ are described in the company's Annual Report on Form 10-K for
the year ended December 31, 1996, as well as the company's other filings with
the Securities and Exchange Commission and are incorporated herein by reference.
###
MOLTEN METAL TECHNOLOGY CONTACTS:
Jay Woodruff (617) 768-6580 (Media)
Brian Payea (617) 487-7648 (Investors)
