Partnership Restructuring Agreement

PARTNERSHIP RESTRUCTURING AGREEMENT


This is a Partnership Restructuring Agreement, dated as of March 15, 1996 (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"), as successor by merger to Martin Marietta Corporation, a Maryland corporation ("MMC"). In addition, M4 Environmental L.P., a Delaware limited partnership (the "PARTNERSHIP"), is entering into this Agreement solely for the purposes of Article 5.


WHEREAS, 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 "MASTER AGREEMENT"), pursuant to which they formed the Partnership 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 service the environmental remediation, waste management, decontamination, decommissioning, chemical and biological demilitarization, pollution prevention and waste minimization needs of the Department of Energy or the Department of Defense;


WHEREAS, MMT and the Partnership have entered into an Agreement for Additional Market Segment -- United States Enrichment Corporation, dated as of December 13, 1994 (the "USEC AGREEMENT");


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, LMC directly or indirectly owns 100% of Lockheed Environmental Systems & Technologies Co., a Nevada corporation ("LESAT"), which engages in businesses that fall within the scope of LMC's non-competition obligations under Section 5.3(d) of the Master Agreement;


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WHEREAS, the parties have been in discussions regarding


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the most appropriate means of resolving the issues raised by the LESAT acquisition, and have concluded that it is in the best interests of all parties to contribute certain LESAT business operations to the Partnership and to restructure their relationship in order to expand the Partnership's resource base through additions of technology, capital and staffing, and also to maximize the Partnership's opportunities for successfully winning business by teaming with LMC's Energy and Environmental Sector ("LMC/EES") in the pursuit and execution of certain major contracts and opportunities.


NOW, THEREFORE, the parties hereto agree as follows:


Article 1
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Defined Terms
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In addition to the defined terms found elsewhere in this Agreement, as used in this Agreement the following terms shall have the following meanings:


"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 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.


"Additional Market Segments" has the meaning set forth in Section 7.2.


"Asset Acquisition Agreement" has the meaning set forth in Section 2.1.


"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


- ------------------ *Confidential treatment has been requested for portions of this Exhibit 10.2.


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making by such Person of any 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 an 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 that 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.


"Business Plan" means the Business Plan of the Partnership as currently in effect, as such Business Plan may be amended from time to time by unanimous consent of the Executive Committee.


"By-Law Amendment" has the meaning set forth in Section 3.3.


"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 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).


"Charter Amendment" has the meaning set forth in Section 3.3.


"Commercial Shortfall" has the meaning set forth in Section 10.3.


"Competing Activity" has the meaning set forth in Section 7.3.


"Competing Business" has the meaning set forth in Section 7.3.


"Designated Period" means (i) in the case of any termination of this Agreement by LMC pursuant to Section 10.2 or 10.4, the * after the effective date


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of such termination and (ii) in the case of any other termination of this Agreement the * after the effective date of such termination.


"Dispute Resolution Agreement" has the meaning set forth in Section 3.5.


"DoD" means the United States Department of Defense and, where the context so requires, any Successor Agency.


"DOE" means the United States Department of Energy and, where the context so requires, any Successor Agency.


"EPA" means the United States Environmental Protection Agency and any successor agency.


"Executive Committee" has the meaning set forth in Section 6.2.


"Feedstocks" means, with respect to any CEP Plant, the wastes, industrial by-products and other materials to be processed by such CEP Plant.


"General Manager" has the meaning set forth in Section 6.5.


"General Partner" means M4 Environmental Management, Inc., a Delaware corporation.


"GOCO" means a government-owned, contractor-operated facility and/or activity, with respect to which the U.S. Government owns the property and facilities, and a private-sector contractor provides the staff and performs the management and/or operations functions for the facilities and associated programs on a facility-wide or program-wide basis. Direction is provided by U.S. Government employees, and, in general, all costs incurred by the contractor are reimbursed by the U.S. Government. Various GOCO contract forms are possible, including "M&O" (Management and Operating) contracts, "M&I" (Management & Integration) contracts, and such Performance-Based Management Contract Vehicles contemplated within the current DOE contract reform initiative contained in "Making Contracting Work Better and Cost Less", REPORT OF THE CONTRACT REFORM TEAM, United States Department of Energy, DOE/S/0107 (February 1994).


"GP Stockholder Agreement" has the meaning set forth in Section 3.3.


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"Hazardous" means, with respect to Feedstocks, Feedstocks that are defined as "hazardous" within the meaning of RCRA.


"Inside Directors" has the meaning set forth in Section 6.2.


"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.


"LESAT" has the meaning set forth in the preamble.


"Limited Feedstocks" means, at any time, Feedstocks (other than Market Feedstocks of the type referred to in clause (I) of the definition thereof) for which the annual amount generated in the United States at such time is * , as determined by MMT and confirmed in writing to the Partnership.


"Limited Guaranty" has the meaning set forth in Section 3.4.


"LMC" has the meaning set forth in the preamble.


"LMC Directors" means LMC's designees to the Executive Committee.


"LMC Merger" has the meaning set forth in the preamble.


"LMC Subsidiary" means Martin Marietta Environmental Holdings, Inc., a Delaware corporation.


"Loan Agreement" means the Revolving Credit Agreement between LMC and the Partnership entered into pursuant to the Asset Acquisition Agreement, as in effect from time to time.


"Lockheed" has the meaning set forth in the preamble.


"Market" means the environmental remediation, waste management, decontamination, decommissioning, chemical and biological demilitarization (including


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disposal of unexploded ordnance), pollution prevention and waste minimization needs of the DoD, DOE or USEC anywhere in the world with respect to Market Feedstocks.


"Market Feedstocks" means USEC Feedstocks and any of the following Feedstocks:


(I) any of the Feedstocks described in the following clauses (i)-(iv), to
the extent such Feedstocks are owned by, generated by or stored by DOE
or DoD, pursuant to the legal authority given to DoD or DOE under
applicable law as of the date of the Original Master Agreement:


(i) any Hazardous, Toxic or Radioactive Feedstocks;


(ii) any Mixed Feedstocks;


(iii) any Medical Waste; and


(iv) any Scrap Material for Recycling;


(II) any Superfund, Hazardous or Toxic Feedstocks, other than Limited
Feedstocks, which DoD or DOE specifically requests to be processed
through an existing CEP Plant of the Partnership, but only to the
extent such Superfund, Hazardous or Toxic Feedstocks represent a minor
portion of the Feedstocks processed at the applicable CEP Plant in any
year; and


(III) any Feedstocks for which: (a) the processing of such Feedstocks is
funded by U.S. governmental appropriations; (b) the processing of
such Feedstocks is pursuant to a designated program initiative for
which DoD or DOE is the responsible U.S. agency for implementation of
such initiative, such as the Soviet Nuclear Threat Reduction Act of
1991, 22 U.S.C.[Section]2551 note, the Cooperative Threat Reduction
("CTR") program, or a government-to-government Agreement for
Cooperation under the Peaceful Use of Atomic Energy program of the
Atomic Energy Act, 42 U.S.C.[Section]2153; and (c) the processing of
such Feedstocks is associated with environmental restoration, waste
management, decontamination and decommissioning, pollution
prevention, waste management or chemical or biological
demilitarization at sites and facilities within the former Soviet
Union.


Notwithstanding the foregoing, Market Feedstocks do not, however,
include any Municipal Waste or waste or other materials from commercial
nuclear power plants.


"Master Agreement" has the meaning set forth in the preamble.


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"Medical Waste" means, with respect to any Feedstocks, Feedstocks that constitute "medical waste" as defined in 40 C.F.R. [Section]259.10.


"Mixed Feedstocks" means, with respect to Feedstocks, Feedstocks that contain Radioactive materials in combination with Hazardous and/or Toxic materials.


"MMC" has the meaning set forth in the preamble.


"MMT" has the meaning set forth in the preamble.


"MMT Directors" means MMT's designees to the Executive Committee.


"MMT License Agreement" has the meaning set forth in Section 3.2.


"MMT Subsidiary" means MMT Federal Holdings, Inc., a Delaware corporation.


"Municipal Waste" means solid waste, other than Hazardous, Toxic, Radioactive or Mixed Feedstocks, that is typically generated by households, retail facilities or business offices.


"OCI" has the meaning set forth in Article 8.


"Offer Trigger Date" has the meaning set forth in Section 5.2(b).


"Original Business Plan" means the business plan of the Partnership, dated as of August 9, 1994.


"Original Master Agreement" means the Master Agreement, dated as of August 9, 1994, between MMC and MMT.


"Outside Directors" has the meaning set forth in Section 6.2.


"Partnership" has the meaning set forth in the preamble.


"Partnership Agreement" has the meaning set forth in Section 3.1.


"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.


"Pit 9 Contract" means Subcontract No. C91-133136 effective August 26, 1994 between Lockheed Idaho Technologies Company and LESAT, as modified by Modification No 1 effective November 15, 1994 and Modification No. 2 effective February 20, 1995.


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"Radioactive" means, with respect to Feedstocks, Feedstocks that contain disintegrating isotopes, either natural or man-made, that have been either added to or enhanced in the material that make up such Feedstock.


"RCRA" means the Resource Conservation and Recovery Act (42 U.S.C. [SECTION]6901 ET SEQ.), and the federal regulations implementing such Act.


"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.


"Registration Rights Agreement" has the meaning set forth in Section 2.2.


"Related Agreements" means this Agreement, the Master Agreement, the Asset Acquisition Agreement, the Loan Agreement, the Registration Rights Agreement, the Partnership Agreement, the GP Stockholder Agreement, the MMT License Agreement, the Certificate of Incorporation of the General Partner (as in effect from time to time), the By-Laws of the General Partner (as in effect from time to time), the Dispute Resolution Agreement and the Limited Guaranties, and any other agreement between any of the Partnership, LMC, MMT, LESAT, the General Partner, the LMC Subsidiary or the MMT Subsidiary relating to the Partnership which specifies that it is a Related Agreement for purposes of this Agreement.


"Retech" means the division of LESAT operating assets purchased in 1995 from Retech, Inc., a California corporation.


"Retech Technology" means Retech's plasma systems.


"RFP" has the meaning set forth in Section 5.1.


"Scrap Materials for Recycling" means any bits and pieces of plastic, metal or other parts (e.g., bars, turnings, rods, sheets, wire) or metal, plastic or other pieces that may be combined together with bolts or soldering (e.g. radiators, scrap automobiles, railroad box cars), which when worn or superfluous can be recycled.


"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


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(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.


"Successor Agency" has the meaning set forth in Section 7.1.


"Superfund" means, with respect to any Feedstocks, Feedstocks that are being treated, remediated or cleaned up pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. [SECTION]9601 ET SEQ.


"Teamed Project" has the meaning set forth in Section 5.1.


"Toxic" means, with respect to Feedstocks, Feedstocks that are chemical substances or mixtures that are regulated under Section 6 of TSCA, 15 U.S.C. [SECTION]2605.


"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.


"TSCA" means the Toxic Substance Control Act, 15 U.S.C., [SECTION]2601 ET SEQ., and the federal regulations implementing such Act.


"USEC" means the United States Enrichment Corporation and, where the context so requires, any Successor Agency thereto.


"USEC Feedstocks" means any of the Feedstocks described in the following clauses (i)-(iv), to the extent such Feedstocks are owned by, generated by or stored by USEC from and after July 1, 1993, pursuant to legal authority given to USEC under applicable law as of August 9, 1994:


(i) any Hazardous, Toxic or Radioactive Feedstocks;


(ii) any Mixed Feedstocks;


(iii) any Medical Waste; and


(iv) any Scrap Material for Recycling.


"Voting Securities" mean, with respect to any Person, all securities issued by such Person having the ordinary power to vote in the election of directors of such Person,


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other than securities having such power only upon the occurrence of a default or any other extraordinary contingency.


Article 2
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Asset Contribution
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2.1. ASSET ACQUISITION AGREEMENT. (a) LMC and MMT agree to enter into, and to cause the Partnership to enter into, an Asset Acquisition Agreement in the form of EXHIBIT A hereto (as in effect from time to time, the "ASSET ACQUISITION AGREEMENT"), pursuant to which LMC will cause LESAT to contribute to the Partnership certain assets and liabilities, and transfer to MMT certain assets, relating to LESAT's Retech operations. In exchange for the assets transferred to MMT by LESAT, MMT will issue to LESAT 307,735 shares of MMT's Common Stock, par value $.01 per share (the "MMT STOCK"). MMT will transfer the assets acquired from LESAT to the MMT Subsidiary, which will in turn transfer the applicable Retech assets to the Partnership as a capital contribution.


(b)


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The Partnership shall also have the right to make offers to
employ certain LESAT sales and marketing personnel it designates.


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2.2. REGISTRATION RIGHTS AGREEMENT. In connection with the shares of MMT Stock issued to LMC pursuant to the Asset Acquisition Agreement, LMC and MMT agree to enter into a Registration Rights Agreement in the form of EXHIBIT B hereto (as in effect from time to time, the "REGISTRATION RIGHTS AGREEMENT"). As provided in the Registration Rights Agreement, MMT hereby agrees (i) to file a registration statement with the Securities and Exchange Commission ("SEC") within seven days after the Closing (as defined in the Asset Acquisition Agreement), (ii) to cause the MMT Stock to be available for quotation through the NASDAQ National Market System and (iii) in the


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event that the above-referenced registration statement is not declared effective by the SEC within either (y) thirty (30) days after its filing date, if the registration statement is not reviewed by the SEC, or (z) ninety (90) days after its filing date, if the registration statement is reviewed by the SEC, if requested by LMC at such time, to repurchase the MMT Stock for a cash purchase price of $23.72 per share.


2.3. Satisfaction of Section 5.3(d).
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Article 3
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Restructuring of the Partnership
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3.1. PARTNERSHIP AGREEMENT. LMC and MMT agree to cause the General Partner, MMT Subsidiary, LMC Subsidiary and LESAT, as applicable, to enter into, and LMC agrees to cause LESAT to enter into, an amendment and restatement of the Partnership Agreement in the form of EXHIBIT C hereto (as in effect from time to time, the "PARTNERSHIP AGREEMENT").


3.2. LICENSE AGREEMENT. MMT and LMC agree to enter into, and agree to cause the Partnership to enter into, an amendment and restatement of the License Agreement in the form of EXHIBIT D hereto (as in effect from time to time, the "MMT LICENSE AGREEMENT").


3.3. GENERAL PARTNER AMENDMENTS. MMT and LMC agree to cause MMT Subsidiary and LMC Subsidiary, respectively, to enter into the Amended and Restated GP Stockholder Agreement in the form of EXHIBIT E-1 hereto (as in effect from time to time, the "GP STOCKHOLDER AGREEMENT"), to amend the General Partner's Certificate of Incorporation as set forth in EXHIBIT E-2 hereto (the "CHARTER AMENDMENT") and to amend the General Partner's By-Laws as set forth in EXHIBIT E-3 hereto (the "BY-LAW AMENDMENT").


3.4. LIMITED GUARANTIES. MMT and LMC agree to execute and deliver Amended and Restated Limited Guaranties in the form of EXHIBITS F-1 and F-2 hereto (as in effect from time to time, the "LIMITED GUARANTIES").


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3.5. DISPUTE Resolution Agreement. LMC and MMT agree to enter into, and to cause, as applicable, the LMC Subsidiary, the MMT Subsidiary, the General Partner, the Partnership and LESAT to enter into, an Amended and Restated Dispute Resolution Agreement in the form of EXHIBIT G hereto (as in effect from time to time, the "DISPUTE RESOLUTION AGREEMENT").


3.6. CONVERSION TO LLC STATUS. LMC and MMT acknowledge that they wish to cause MMT Subsidiary and LMC Subsidiary to take all actions required to convert the Partnership from a Delaware limited partnership to a Delaware limited liability company, provided that there are no material adverse tax, accounting, liability or operational consequences to the parties as a result of converting to a limited liability company. This conversion would take place within 90 days after the Closing referred to in Article 4. The documentation to be prepared in connection with such conversion must be in mutually acceptable form, will be consistent with the Related Agreements and will provide that the Executive Committee will have final responsibility for approving all business matters relating to the Partnership within the normal purview of corporate boards of directors, including items under the Related Agreements which now require separate approvals of one or more of the parties to this Agreement; PROVIDED that those items set forth on SCHEDULE 3.6 would still require the approval of LMC or MMT or its designated subsidiary, as applicable. In the event that LMC and MMT elect not to cause the conversion of the Partnership to a Delaware limited liability company, this Agreement and the other Related Agreements shall remain in effect in the form provided for in this Agreement.


Article 4
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Closing
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The closing of the restructuring contemplated by Articles 2 and 3 will take place at the time and place referred to in the Asset Acquisition Agreement.


Article 5
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