Asset Transfer Agreement

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. 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. 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 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 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 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 A ...