Jump to main content.

Prospective Purchaser Agreement

Prospective purchaser agreement with Northrop Grumman Systems Corporation:

On August 2, 2001 EPA Region 9 signed a Prospective Purchaser Agreement (PPA) with Northrop Grumman Systems Corporation, which plans to acquire the business and assets of Aerojet-General Corporation in Azusa, California, including its 70-acre electronics plant located in the Baldwin Park Operable Unit of the San Gabriel Valley Superfund Site. The PPA settles any federal Superfund liability Northrop might incur by its purchase from Aerojet, identified as a potentially responsible party for the groundwater contamination at the site.

After signature by the U.S. Department of Justice, the Agreement was noticed in the Federal Register on August 10, 2001 (Vol. 66, Pg. 42227). Finalization of the PPA was subject to a 30-day public comment period. The PPA provides that after review of the public comments, EPA may modify or withdraw its consent to the Agreement if comments received disclose facts or considerations which indicate that the Agreement is inappropriate, improper or inadequate. The public comment period ran from August 10, 2001 through September 10, 2001, during which time EPA received comments from various entities and individuals. Based on a review of the comments and EPA's independent analysis of all of the facts and circumstances surrounding this matter, EPA has decided to modify the PPA.

The primary modifications relate to Section IV "Consideration: Payments and Guaranty." EPA has significantly increased the amount of consideration required in exchange for the covenant not to sue granted to Northrop. Specifically, in addition to the $34,325,000 required by the original document, the PPA now requires Aerojet to provide an additional $40 million in cash for deposit into a third-party escrow account at the closing of the sale to Northop. Subject to EPA approval, the cash in the escrow may be used to fund in part Aerojet's share of the costs of construction of the remedy selected by EPA for the cleanup at the site.

EPA executed the modified Agreement on September 25, 2001. The U.S. Department of Justice and Northrop have also signed the modified PPA, and it is now final and effective. The document available here includes the full text of the modified Prospective Purchaser Agreement, followed by all exhibits, including maps.

For comparison, the document available here includes the full text of the original Prospective Purchaser Agreement prior to modification.

Email questions to:

Lewis Maldonado (maldonado.lewis@epa.gov)
Senior Counsel, Office of Regional Counsel

Region 9 Topics and Programs | A-Z Index

Local Navigation

Jump to main content.