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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT) OCTOBER 6, 1997
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HARSCO CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-3970 23-1483991
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(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S. EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION
NUMBER)
CAMP HILL, PENNSYLVANIA 17001-8888
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (717) 763-7064
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This Current Report on Form 8-K/A amends Form 8-K (dated October 6, 1997 and
filed by the Registrant on October 16, 1997) by providing the full text of two
exhibits with respect to which Registrant had previously sought confidential
treatment.
ITEM 7(c) Exhibit Index
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Document
Pages
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2b. Supplemental Agreement No. 1 To Purchase Agreement. 1 - 9
2c. Allocation and Contribution Agreement. 1 - 16
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SIGNATURE
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 thereunto duly authorized.
HARSCO CORPORATION
(Registrant)
Date: January 5, 1998 By: /s/ Salvatore D. Fazzolari
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Salvatore D. Fazzolari
Senior Vice President and
Chief Financial Officer
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(c) Exhibit Index Document
Pages
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2b. Supplemental Agreement No. 1 To Purchase Agreement. 1 - 9
2c. Allocation and Contribution Agreement. 1 - 16
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SUPPLEMENTAL AGREEMENT NO.1 TO PURCHASE AGREEMENT
THIS SUPPLEMENTAL AGREEMENT NO. 1 TO PURCHASE AGREEMENT (this
"Agreement"), dated as of August 25, 1997, is entered into by and among FMC
Corporation, a Delaware corporation, Harsco Corporation, a Delaware corporation,
Harsco UDLP Corporation, a Pennsylvania business corporation (together with FMC
Corporation and Harsco Corporation, "Sellers"), and Iron Horse Acquisition
Corp., a Delaware corporation ("Buyer"). Capitalized terms used and not
otherwise defined in Section 6 below or otherwise herein have the meaning
ascribed to such terms in the Purchase Agreement (as defined below).
WHEREAS, Sellers and Buyer are parties to a Purchase Agreement
(the "Purchase Agreement"), dated as of the date hereof;
WHEREAS, this Agreement contemplates the issuance of a
Special Note under certain specified circumstances, which Special Note is
intended to provide Buyer security against any Loss resulting from a Call
Election, a Liquidation Election, a Purported Turkish Termination, a Joint
Venture Termination, a License Agreement Termination or other Adverse Legal
Consequences (collectively, "Loss Events" and each, a "Loss Event") as
applicable, but which is not intended to provide any compensation or security
with respect to any Losses resulting from any other factors, including the
performance of UDLP or FNSS, changes within SSM and/or the government of Turkey
and the scheduled expiration of the Turkish Procurement Contract; and
WHEREAS, Sellers and Buyer intend this Agreement to supplement
and modify the terms of the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
1. Modification of the Initial Purchase Price. Pursuant to
Section 1(b) of the Purchase Agreement, the Initial Purchase Price is
$850,000,000 payable in immediately available funds at the Closing.
Notwithstanding the terms of Section 1(b) of the Purchase Agreement, and any
other provision of the Purchase Agreement to the contrary, Sellers and Buyer
hereby agree that unless Sellers have obtained a Nurol Waiver and a Turkish
Acknowledgement prior to the Closing the Initial Purchase Price shall be
modified to consist of (i) $800,000,000 payable in immediately available funds
at the Closing and (ii) a note in the aggregate principal amount of $50,000,000,
in form and substance reasonably satisfactory to Sellers and Buyer, containing
the terms and conditions specified on Exhibit A hereto (the "Special Note")
deliverable to Sellers at the Closing.
2. Mandatory Prepayment of Special Note. Upon the first to
occur of any of the following events, the aggregate principal amount outstanding
under the Special Note and all accrued and unpaid interest thereon will become
immediately due and payable, subject to the rights of set-off in Section 3:
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(a) the occurrence of both (i) a Nurol Waiver or a Nurol
Revocation and (ii) a Turkish Acknowledgment;
(b) the consummation of an initial public offering of shares
of common equity interests or other securities equivalent thereto of
UDLP;
(c) the consummation of (i) the sale of UDLP to one or more
parties pursuant to which such party or parties acquire greater than
50% of the equity interests, capital stock or other securities of UDLP
(whether by merger, consolidation, sale or transfer of equity
interests, capital stock or other securities or otherwise) or (ii) the
sale of all or substantially all of UDLP's assets, in either case
whether in one transaction or a series of related transactions;
(d) the consummation of a sale of all or substantially all of
UDLP's Turkish business or UDLP's interests in FNSS not pursuant to a
Call or a Liquidation;
(e) the consummation of the Call pursuant to the terms of
Section 11.4 of the Joint Venture Agreement; and
(f) the substantial completion of the Liquidation pursuant to
the terms of Section 11.4 of the Joint Venture Agreement.
3. Right of Set-Off. Upon the maturity of the Special Note,
whether at scheduled maturity or pursuant to the mandatory prepayment provisions
of Section 2 or pursuant to acceleration (the "Set-Off Date"), Buyer shall have
the right to assert a set-off against any and all amounts due under the Special
Note the amount of any Loss that Buyer shall have incurred as a result of a Loss
Event. If Buyer desires to assert such a Loss, Buyer shall provide to Sellers
(as soon as possible, and in any event within 30 days after the Set-Off Date in
the case of a mandatory prepayment of the Special Note or acceleration and on or
before the Set-Off Date in the case of scheduled maturity) a written statement
(a "Set-Off Statement") setting forth in reasonable detail the amount of any
asserted Loss, the basis of Buyer's asserted right to set-off of any such Loss
and a detailed statement of how any such Loss is a result of a Loss Event.
Sellers may contest the amount or validity and propriety of any item of Loss set
forth on the Set-Off Statement by giving written notice thereof to Buyer within
60 days after receipt of the Set-Off Statement. No amount of Loss specified on
any Set-Off Statement shall be valid or proper unless it is set forth in
reasonable detail on such Set-Off Statement, and the amount of any Loss on any
such Set-Off Statement not contested by Sellers in such a written notice of
Sellers shall be conclusively deemed to be valid and proper. The amount of any
Loss specified in a Set-Off Statement which is so contested shall be resolved
pursuant to the arbitration provisions set forth on Schedule 29(b) of the
Purchase Agreement. In determining the existence or amount of a Loss, the
arbitrators will be entitled to take into account any substituted business of
UDLP or its Affiliates in Turkey which in reality offsets or compensates UDLP
for any Loss resulting from a Loss Event. Interest shall continue to accrue on
the principal amount of the Special Note which was not paid based on any Loss
specified in a Set-Off Statement which is subject to arbitration as provided
above and shall be payable to Sellers if and when such amount is determined to
have not been properly set-off but shall not be payable with respect to any such
amount which is determined to have been properly set-off.
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4. Limitations on Right of Set-Off. Notwithstanding anything
to the contrary in Section 3 above, the right of Buyer to a set-off as specified
in Section 3 above is subject to the following limitations. If there has
occurred a Purported Turkish Termination and subsequently, in any final and
non-appealable adjudication, it is determined by a court, agency or other
tribunal of competent jurisdiction that such Purported Turkish Termination was
impermissible, wrongful, unlawful or otherwise improper, then the amount of Loss
set-off in connection with the applicable Set-Off Statement shall be
redetermined by the arbitrators pursuant to the arbitration provisions set forth
on Schedule 29(b) of the Purchase Agreement and any reduction shall be paid
(with accrued interest thereon) to Sellers.
5. Covenants.
(a) In anticipation of or in the event of a Loss Event,
Sellers shall have the right to participate in any and all
negotiations, discussions, meetings and other communications relating
to the Loss Event or potential Loss Event, as applicable, and shall
have the right to approve of any and all settlements, agreements or
other arrangements made in connection therewith (such approval not to
be unreasonably withheld or delayed).
(b) In anticipation of or in the event of a Loss Event,
subject to Seller's rights pursuant to clause (a) above, Buyer shall
and shall cause its Affiliates to use all commercially reasonable
efforts to (a) obtain a Nurol Revocation in the most cost-effective and
expeditious manner practicable (provided that the costs thereof to UDLP
or Buyer shall constitute a loss subject to rights of set-off) and (b)
otherwise act in good faith to minimize any Loss in respect of any such
Loss Event.
(c) Buyer and UDLP will use all commercially reasonable
efforts to maximize the value (exclusive of any rights of set-off under
this Agreement) of UDLP's Turkish business and FNSS, whether or not in
connection with either a Call or a Liquidation, as applicable,
including (if required under appropriate circumstances) permitting the
assignment of FNSS's rights under the Manufacturing License Agreement
(other than to a competitor of UDLP) and/or extending the term of the
Manufacturing License Agreement on commercially reasonable terms.
(d) Buyer shall deliver to Sellers at Buyer's sole cost and
expense (so long as Sellers hold any portion of the outstanding
principal amount of the Special Note or so long as any arbitration
proceeding contemplated by Section 3 above is not finally resolved,
whichever is later, and in the form regularly prepared in the ordinary
course):
(i) as soon as available after the end of each
monthly accounting period in each fiscal year, unaudited
statements of income and cash flows of FNSS for such monthly
period and for the period from the beginning of the fiscal
year to the end of such month, and unaudited balance sheets of
FNSS as of the end of such monthly period;
(ii) within 90 days after the end of each fiscal
year, statements of income and cash flows of FNSS for such
fiscal year, and balance sheets of UDLP's Turkish business
and/or FNSS as of the end of such fiscal year;
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(iii) promptly upon receipt thereof, any additional
reports, management letters or other detailed information
concerning significant aspects of FNSS' operations or
financial affairs given to Buyer or UDLP by their independent
accountants (and not otherwise contained in other materials
provided hereunder);
(iv) an annual budget with respect to FNSS for each
fiscal year as and when prepared in the ordinary course, and
promptly upon preparation thereof any other significant
budgets prepared by UDLP with respect thereto;
(v) with reasonable promptness, such other
information and financial data concerning FNSS as Sellers may
reasonably request.
(e) So long as Sellers hold any portion of the outstanding
principal amount of the Special Note or so long as any arbitration
proceeding contemplated by Section 3 above is not finally resolved,
whichever is later, Sellers shall be entitled at their election to
designate one person to serve as an observer at meetings of the board
of directors of FNSS and Buyer shall use its reasonable best efforts to
permit such person to attend all meetings of the board of directors of
FNSS.
6. Definitions. As used in this Agreement (including the
Exhibits hereto), the following definitions shall apply:
"Adverse Legal Consequences" shall mean Losses to Buyer or
UDLP, under Turkish law or the Turkish Contracts, resulting from or
caused by the change of control and ownership at Closing without the
prior consent of SSM or Nurol.
"Call" means the sale by UDLP of all of the shares of FNSS
owned by it to Nurol pursuant to the provisions of Section 11.4(iii)
and 11.4(A) of the Joint Venture Agreement.
"Call Election" means the delivery of written notice within
the time periods permitted by the Joint Venture Agreement by Nurol to
UDLP indicating that Nurol has exercised its rights under Section
11.4(iii) and Section 11.4(A) of the Joint Venture Agreement with
respect to the Call.
"FNSS" means FMC-Nurol Savunma Sansyii A.S. and its
successors.
"Joint Venture Agreement" means the Restated Joint Venture
Agreement of FMC-Nurol Savunma Sansyii A.S., as amended by Amendment 1
to the Restated Joint Venture Agreement dated July 1, 1997.
"License Agreement Termination" shall mean the termination of
the Manufacturing License Agreement pursuant to Article IX.A thereof as
a result of the change of control and ownership effected by Closing (it
being understood that UDLP will not permit FNSS to terminate the
Manufacturing License Agreement so long as UDLP remains in control of
FNSS).
"Liquidation" means the liquidation and dissolution of FNSS
pursuant to the provisions of Section 11.4(iii) and 11.4(B) of the
Joint Venture Agreement.
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"Liquidation Election" means the delivery of written notice
within the time periods permitted by the Joint Venture Agreement by
Nurol to UDLP indicating that Nurol has exercised its rights under
Section 11.4(iii) and Section 11.4(B) of the Joint Venture Agreement
with respect to the Liquidation.
"Loss" means a diminution in value, if any, of UDLP's equity
interest in FNSS or other Turkish business interests, taking into
account any related royalties, management fees or other payments or
distributions received or to be received, including as a result of a
Call or a Liquidation, taken as a whole and on a going-concern basis,
from the date hereof to the applicable measurement date, as a result of
a Loss Event, and any diminution in value of UDLP's Turkish business
interests due to a License Agreement Termination, and any costs or
expenses incurred by UDLP or Buyer to obtain a Nurol Waiver, Nurol
Revocation or Turkish Acknowledgment or to avoid or mitigate Loss from
a Loss Event, but shall not include any Losses as a result of any other
unrelated factors, including the performance of UDLP or FNSS, changes
within SSM and/or the government of Turkey and the scheduled expiration
of the Turkish Procurement Contract.
"Manufacturing License Agreement" means the Manufacturing
License Agreement, dated August 3, 1989, by and between UDLP and FNSS,
as amended.
"Nurol" means Nurol Inasaat ve Ticaret A.S. and its
successors.
"Nurol Revocation" means, after delivery by Nurol to UDLP of a
Call Election or a Liquidation Election, (i) a written agreement of
Nurol that it will not pursue the Call or the Liquidation, as
applicable, and (ii) the earlier of the expiration or waiver of any
rights to make a Termination Election or the passage of 365 days after
Closing where Nurol has not made a Termination Election.
"Nurol Waiver" means either (i) a written agreement of Nurol
that it will make neither a Call Election nor a Liquidation Election
nor a Termination Election or (ii) (x) the passage of one hundred
twenty days after Closing without Nurol having made a Call Election or
a Liquidation Election and (y) the earlier of the expiration or waiver
of any rights to make a Termination Election or the passage of 365 days
after Closing where Nurol has not made a Termination Election.
"Purported Turkish Termination" means a written notice
delivered to UDLP by SSM or its agent stating that SSM has canceled the
Turkish Procurement Contract pursuant to Section 19.1.3 of the Turkish
Procurement Contract as a result of the change of control and ownership
effected at Closing.
"SSM" means the Under Secretariat for Defense Industries of
Turkey.
"Termination Election" shall mean an election by Nurol to
terminate the Joint Venture Agreement pursuant to Article 18 thereof as
a result of the change of control and ownership effected by the
Closing.
"Turkish Acknowledgment" means either (i) a letter or other
writing from SSM acknowledging the transaction between Sellers and
Buyer that evidences the intention of SSM to continue the Turkish
Production Contract despite the change of ownership and control
effected by
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the Closing or (ii) the passage of 365 days after Closing
where SSM has not made a Purported Turkish Termination.
"Turkish Contracts" shall mean the Turkish Procurement
Contract, the Manufacturing License Agreement and the Joint Venture
Agreement, collectively.
"Turkish Procurement Contract" means the Contract between the
Under Secretariat for Defense Industries and FNSS.
"UDLP" means United Defense, L.P. and its successors.
7. Amendment and Waiver. No modification, amendment or waiver
of any provision of this Agreement shall be effective against any party hereto
unless such modification, amendment or waiver is approved in writing by such
party. The failure of any party hereto to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
8. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of
this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect the validity, legality or
enforceability of any other provision of this Agreement in such jurisdiction or
affect the validity, legality or enforceability of any provision in any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
9. Entire Agreement. Except as otherwise expressly set forth
herein, this Agreement embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
10. Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
the respective successors and assigns of each of the parties hereto.
11. Counterparts. This Agreement may be executed in multiple
counterparts (including by means of telecopied signature pages), each of which
shall be an original and all of which taken together shall constitute one and
the same agreement.
12. Notices. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, or mailed first class
mail (postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to any party hereto at the address indicated in the Purchase Agreement,
or at such address or to the attention of such other person as the recipient
party has specified by prior written notice to the sending party. Notices shall
be deemed to have been
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given hereunder when delivered personally, three days after deposit in the U.S.
mail and one day after deposit with a reputable overnight courier service.
13. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Illinois, without
giving effect to any choice of law or conflict of law rules or provisions
(whether of the State of Illinois or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Illinois.
14. Descriptive Headings; Interpretation. The descriptive
headings and captions of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement. The use of the word "including" herein
shall mean "including without limitation."
15. Sole Remedy. The rights of set-off as provided in this
Agreement shall be the exclusive right and remedy of Buyer for any alleged Loss
resulting from any Loss Event (it being understood, however, that Buyer shall
only be entitled to a set-off under the circumstances, in the events
contemplated by and pursuant to the provisions of Sections 3 and 4 above). Other
than as set forth in this Agreement, Sellers shall have no liability whatsoever
for any amount claimed to be set-off pursuant to the terms of this Agreement or
in excess of the amount, if any, available to be set-off hereunder from time to
time.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement as of the date first written above.
FMC CORPORATION
By: /s/ J. Paul McGrath
---------------------------------
Its: Senior Vice President
HARSCO CORPORATION
By: /s/ Leonard A. Campanaro
---------------------------------
Its: Senior Vice President and C.F.O.
HARSCO UDLP CORPORATION
By: /s/ Leonard A. Campanaro
---------------------------------
Its: Treasurer
IRON HORSE ACQUISITION CORP.
By: /s/ Allan M. Holt
---------------------------------
Its: President
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EXHIBIT A -- TERMS OF THE SPECIAL NOTE
Borrower: The entity that issues the Senior Debt and Senior
Notes.
Principal Amount: $50,000,000
Maturity: The final maturity of the Special Note shall be 3
years from the Closing Date.
Ranking: The payment of principal of, premium, if any, and
interest on the Special Note will be subordinate
and subject in right of payment to all existing
and future Senior Indebtedness (to be defined) and
pari passu in right of payment with all other
senior subordinated or subordinated indebtedness
of Borrower. Initially Senior Indebtedness will
consist principally of Borrower's bank facility
and subordinated indebtedness will consist
principally of $225 million of senior subordinated
notes (the "Senior Notes"), and the parties will
agree to appropriate protections to preserve
equivalent type of ranking in connection with
future debt incurrences.
Guaranties: Each person who guarantees Borrower's Senior Notes
(each a "Guarantor" and, collectively, the
"Guarantors") shall be required to provide a
guaranty of all amounts owing under the Special
Note (the "Guaranties"), equivalent in ranking and
terms to the Guarantees of the Sub Debt.
Interest Rates: Outstanding principal on the Special Note shall
bear interest at the same rate per annum as the
Senior Notes, and shall be payable quarterly in
arrears on the last business day of each calendar
quarter. Interest will also be payable at the time
of repayment of the Special Note and at maturity.
Covenants: The Special Note will have substantially the same
covenants and default provisions as the Senior
Notes; provided, however, that the maturity of the
Special Note may be accelerated only in the event
of acceleration of the Senior Debt and the Senior
Notes.
Subordination: As required by senior lenders (equivalent to the
Senior Notes).
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ALLOCATION AND CONTRIBUTION AGREEMENT
This ALLOCATION AND CONTRIBUTION AGREEMENT (this "Agreement")
is entered into as of August 25, 1997, by and among FMC Corporation ("FMC") and
Harsco Corporation and Harsco UDLP Corporation (collectively, the "Harsco
Indemnitors"). FMC and the Harsco Indemnitors are hereafter sometimes
collectively referred to as the "Indemnitors", and each individually as an
"Indemnitor," and FMC and the Harsco Indemnitors (collectively as one party) are
each referred to herein as a "Party". Capitalized terms used herein but not
defined herein shall have the respective meanings given to such terms in the
Purchase Agreement (defined below).
WHEREAS, FMC is the sole owner and holder of 100% of the
outstanding general partnership interests of United Defense, L.P., a Delaware
limited partnership ("UDLP") and Harsco UDLP Corporation is the sole owner and
holder of 100% of the outstanding limited partnership interests of UDLP;
WHEREAS, as the general partner of UDLP, FMC has had the
principal responsibility for the management and operation of UDLP;
WHEREAS, the Indemnitors have determined that it is in their
respective best interests, and in the best interests of UDLP, to sell the
general partnership and limited partnership interests together and to give joint
and several representations, warranties and covenants to the buyer of such
interests in connection therewith;
WHEREAS, contemporaneously herewith the Indemnitors are
entering into a Purchase Agreement (the "Purchase Agreement") dated as of August
25, 1997 with Iron Horse Acquisition Corp. (the "Buyer") pursuant to which the
Buyer is agreeing to acquire all of the partnership interests in UDLP;
WHEREAS, pursuant to certain provisions of the Purchase
Agreement, the Indemnitors are required to make certain payments to the Buyer
and/or UDLP and the Indemnitors have agreed, subject to the terms and conditions
set forth therein, to jointly and severally indemnify, defend and hold the Buyer
Indemnitees harmless from and in respect of certain Losses;
WHEREAS, to induce each Party to enter into the Purchase
Agreement and to consummate the transactions contemplated thereby, the other
Party is making herein certain representations, warranties and covenants, on
which the Party benefitting from such representations, warranties and covenants
is and will be relying in entering into the Purchase Agreement and consummating
the transactions contemplated thereby;
WHEREAS, without limiting the generality of the foregoing
recital, the Harsco Indemnitors are joining with FMC in certain joint and
several representations, warranties and
<PAGE> 2
covenants in the Purchase Agreement and the other Ancillary Agreements in
reliance on the representations, warranties and covenants of FMC contained in
this Agreement;
WHEREAS, pursuant to certain provisions of the Purchase
Agreement, the Indemnitors make certain representations, warranties and
covenants to the Buyer, and the Indemnitors have agreed, subject to the terms
and conditions set forth therein, to indemnify, defend and hold the Buyer
Indemnitees (as defined below) harmless from and in respect of certain Losses;
WHEREAS, pursuant to certain provisions of the Purchase
Agreement, Buyer and/or UDLP is required to make certain payments to Sellers,
and Buyer has agreed, subject to the terms and conditions set forth therein, to
indemnify, defend and hold the Seller Indemnitees (as defined below) harmless
from and in respect of certain Losses; and
WHEREAS, in connection with the sale of UDLP pursuant to the
Purchase Agreement and the consequent termination of their relationship as
partners of UDLP, the Indemnitors wish to make certain agreements among
themselves relating to the past conduct of UDLP's business.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual promises made herein and for other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the Indemnitors agree as follows:
1. Certain Definitions.
"Buyer Indemnitees" shall mean the Buyer Indemnified Parties.
"FMC Covenants" means the covenants contained in the following
Sections of the Purchase Agreement: Section 2(b)(iv), Section 5 (but excluding
Sections 5(c), 5(e), 5(f) and 5(j)), Sections 8(a), 8(d), 8(e), 8(h), 10(d),
10(i)(i), 10(j) and, except to the extent that the context otherwise clearly
requires and except to the extent that the performance of such covenant is
peculiarly within the control of Harsco (as opposed to FMC), all other covenants
in the Purchase Agreement (other than the Several Covenants) that make reference
to Sellers or a Seller but which do not identify either FMC or Harsco by name.
"FMC Representations" means (i) all representations and
warranties relating to FMC's Corporate Technology Center ("CTC") and (ii) the
representations and warranties contained in Sections 4A and 23 (as it relates to
FMC and its affiliates) and all other representations of a Seller in the
Purchase Agreement (other than the Shared Representations) that make reference
to Sellers or a Seller but which do not identify either FMC or Harsco by name.
"Harsco Representations" means the representations and
warranties contained in Sections 4B and 23 (as it relates to Harsco and its
affiliates).
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"Pro Rata Portion" means 60% in the case of FMC and 40% in the
case of the Harsco Indemnitors.
"Seller Indemnitees" shall mean each Indemnitor, each of its
Affiliates and each of their respective officers, directors and employees.
"Several Covenants" means the covenants contained in the
following Sections of the Purchase Agreement: Sections 1(b), 1(c), 2(a),
2(b)(ii), 5(c), 5(e), 5(f), 5(j), 7(f), 8(b), 8(c), 8(f)(iii), 8(g)(ii), 8(i),
8(n), 8(p), 9, 10(a), 10(b), 10(e), 10(f), 10(h), 10(j)(ii), 10(k) (to the
extent required in the case of Harsco), 12, 16 and 29.
"Shared Representations" means the representations and
warranties contained in Section 4C(a)(i), 4C(b), 4C(d) (excluding those relating
to the Latest Financials), 4C(e), 4C(f), 4C(g), 4C(l) and 4C(n) (excluding those
matters subject to Section 8(f) of the Purchase Agreement) of the Purchase
Agreement.
2. Representations and Warranties of the Harsco Indemnitors. Each of
the Harsco Indemnitors jointly and severally represents and warrants to FMC as
of the date of this Agreement as follows:
2.1 Authorization. This Agreement constitutes the valid and
legally binding obligation of such Harsco Indemnitor, enforceable against such
Harsco Indemnitor in accordance with its terms and conditions, except as may be
limited by (a) applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights generally from
time to time in effect and (b) the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
2.2 Non-contravention. Neither the execution and the delivery
of this Agreement by such Harsco Indemnitor, nor the performance by such Harsco
Indemnitor of its obligations hereunder, will (i) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge
or other restriction of any government, governmental agency or court to which
the Harsco Indemnitor is subject or any provision of its organizational
documents or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, or create in any party the right to
accelerate, terminate, modify, cancel or require any notice under any agreement,
contract, lease, license, instrument or other arrangement to which the Harsco
Indemnitor is a party or by which such Harsco Indemnitor is bound or to which
any of such Harsco Indemnitor's assets are subject except for such conflicts,
breaches, defaults, or rights that would not, individually or in the aggregate,
be reasonably likely to have a material adverse effect upon the financial
condition of such Harsco Indemnitor.
2.3 Consents. No consent, authorization, approval, permit or
license of, or filing with, any governmental or public body or authority, any
lender or lessor or any other person or entity is required to be obtained or
made by any Harsco Indemnitor to authorize, or is required to be obtained or
made by any Harsco Indemnitor in connection with, the execution, delivery and
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performance of this Agreement or the agreements contemplated hereby on the part
of such Harsco Indemnitor (other than those that have been obtained or made).
3. Representations and Warranties of FMC. FMC represents and warrants
to the Harsco Indemnitors as of the date of this Agreement as follows:
3.1 Authorization. This Agreement constitutes the valid and
legally binding obligation of FMC, enforceable against FMC in accordance with
its terms and conditions, except as may be limited by (a) applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally from time to time in effect and (b)
the effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
3.2 Non-contravention. Neither the execution and the delivery
of this Agreement by FMC, nor the performance by FMC of its obligations
hereunder, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency or court to which FMC is subject or any
provision of its organizational documents or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, or create
in any party the right to accelerate, terminate, modify, cancel or require any
notice under any agreement, contract, lease, license, instrument or other
arrangement to which FMC is a party or by which FMC is bound or to which any of
FMC's assets are subject except for such conflicts, breaches, defaults, or
rights that would not, individually or in the aggregate, be reasonably likely to
have a material adverse effect upon the financial condition of FMC.
3.3 Consents. No consent, authorization, approval, permit or
license of, or filing with, any governmental or public body or authority, any
lender or lessor or any other person or entity is required to be obtained or
made by FMC to authorize, or is required to be obtained or made by FMC in
connection with, the execution, delivery and performance of this Agreement or
the agreements contemplated hereby on the part of FMC (other than those that
have been obtained or made).
3.4 Purchase Agreement. FMC has provided to the Harsco
Indemnitors all agreements and understandings between or among the Buyer and FMC
and UDLP relating to the sale of UDLP.
3.5 Representations and Warranties Relating to the Purchase
Agreement. Certain of the representations and warranties contained in the
Purchase Agreement and other Ancillary Agreements are given jointly and
severally by the Sellers, including without limitation certain representations
and warranties relating to FMC's Corporate Technology Center. Notwithstanding
anything in the Purchase Agreement or in any Ancillary Agreement to the
contrary, the Parties agree that as an inducement to the Harsco Indemnitors to
enter into the Purchase Agreement and the Ancillary Agreements, FMC will be
solely responsible for the truth, correctness and completeness of the FMC
Representations and the Shared Representations except to the extent any Harsco
Indemnitor is responsible pursuant to Section 6.2(a) hereof and except to the
extent any Harsco
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<PAGE> 5
Indemnitor had actual knowledge of the breach of such representation or warranty
prior to the date hereof.
4. Additional Covenants of FMC.
4.1 Covenants in the Purchase Agreement and Ancillary
Agreements. Certain of the covenants contained in the Purchase Agreement and
other Ancillary Agreements are given jointly and severally by the Sellers on
behalf of UDLP. Notwithstanding anything in the Purchase Agreement or in any
Ancillary Agreement to the contrary, it is the intention of the Parties, and is
an inducement to the Harsco Indemnitors to enter into the Purchase Agreement and
the Ancillary Agreements, that FMC be solely responsible for performing,
satisfying, discharging and complying with, or for causing UDLP to perform,
satisfy, discharge and comply with all of the FMC Covenants. FMC hereby agrees
that it will be solely responsible for performing, satisfying, discharging and
complying with, or for causing UDLP to perform, satisfy, discharge and comply
with all of the FMC Covenants.
4.2 Intercompany Loans. FMC shall repay in full all
outstanding intercompany obligations between it and UDLP or any of the
Subsidiaries at or prior to the Closing, except as otherwise provided in Section
5(h) of the Purchase Agreement.
4.3 Representations and Warranties; Performance of
Obligations. On the Closing Date, FMC shall deliver a certificate to the Harsco
Indemnitors to the same effect as the certificate required to be delivered by
FMC to the Buyer pursuant to Section 3(a) of the Purchase Agreement (if such
certificate is delivered).
4.4 File Plan. FMC will include in any File Plan delivered
pursuant to Section 8(g)(ii) of the Purchase Agreement any items requested by
Harsco.
5. Additional Covenants of the Harsco Indemnitors.
5.1 Representations and Warranties; Performance of
Obligations. On the Closing Date, the Harsco Indemnitors shall deliver a
certificate to FMC to the effect that all of the representations and warranties
of the Harsco Indemnitors contained in this Agreement are true, correct and
complete on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date and that all
of the terms, covenants, agreements and conditions of this Agreement to be
complied with, performed or satisfied by the Harsco Indemnitors on or before the
Closing Date have been duly complied with performed or satisfied in all material
respects.
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6. Contribution.
6.1 Payments in Respect of San Jose/Santa Clara Remediation
Costs, Stock Options and Restricted Stock and CTC and Transferred Employees;
Buyer Note.
(a) At or before the Closing, FMC shall pay to the Harsco
Indemnitors $2,492,160 to pay certain Remediation Costs relating to the
Sites covered by the Settlement and Advance Agreement, which costs are
likely to be incurred and payable by FMC and reimbursable by the Buyer
pursuant to the terms of the Purchase Agreement.
(b) Within two business days after the Closing, the Harsco
Indemnitors shall pay FMC 40% of the Agreed Value of (i) the
unexercised FMC stock options issued to UDLP executives and employees
in 1994 and 1995 which are either currently vested or scheduled to vest
on or prior to January 31, 1998 (all of which options are listed on
Exhibit A hereto, which listing includes as to each such option, the
name of the optionee, the year of grant, the exercise price and the
number of Shares subject thereto) and (ii) certain shares of the FMC
restricted stock issued to UDLP executives and employees subsequent to
January 1, 1994 (which will become unrestricted upon the Closing) (all
of which shares are listed on Exhibit A hereto, which listing includes
as to each recipient, the name of the recipient, the date of grant, the
closing trading price of FMC common stock on the date of grant, and the
number of shares granted, and provided that FMC represents that such
listing does not include, as to Mr. Rabaut, any shares granted on
account of his position at FMC). For purposes of the foregoing, "Agreed
Value" means the market value of the shares of FMC common stock
issuable under such options less the aggregate exercise price and the
market value of the shares of restricted stock (without restriction),
in each case as calculated based on the closing trading price of the
FMC common stock on the Closing Date or, in the case of restricted
stock, on the date of grant as reported in the Wall Street Journal.
(c) The net effect upon the net worth adjustment contained in
Section 2(b) of the Purchase Agreement of the impact of including CTC
and the Transferred Employees as part of the accounts reflected in the
Adjusted Net Worth Amount as of both June 30, 1997 and the Closing Date
(the "CTC Adjustment Amount") shall be separately calculated by FMC in
connection with the preparation of the Closing Statement and provided
to Harsco with the Closing Statement. Harsco shall have the right, with
FMC's full cooperation, to review and audit FMC's calculation of the
CTC Adjustment Amount. If the CTC Adjustment Amount is negative, FMC
shall pay 40% of such amount to Harsco. If the CTC Adjustment is
positive, Harsco shall pay 40% of such amount to FMC. Any such payments
shall be made as soon as possible after they are determined and shall
be appropriately adjusted if the relevant accounts are adjusted in
connection with the finalization of the Closing Statement. Amounts
payable hereunder shall bear interest from the Closing Date at the rate
provided in Section 2(b)(ii) of the Purchase Agreement.
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(d) FMC shall pay to the Harsco Indemnitors 40% of any amounts
collected in respect of the FNSS royalty dispute (as more specifically
described in Schedule 7(f) to the Purchase Agreement the "FNSS Royalty
Dispute"), to the extent such amounts are attributable to periods
following the formation of UDLP.
(e) Notwithstanding anything to the contrary in the
Supplemental Agreement No. 1 to Purchase Agreement, dated as of August
25, 1997, by and among FMC Corporation, Harsco Corporation, Harsco UDLP
Corporation and Iron Horse Acquisition Corp. (the "Supplemental
Agreement") or in the provisions of the Special Note (as defined
therein), as between the Harsco Indemnitors and FMC, (i) the Harsco
Indemnitors shall receive from the Buyer $340,000,000 plus 40% of the
Adjustment Amount (whether positive or negative), in immediately
available funds, at and upon the Closing and FMC shall receive from the
Buyer a total of $510,000,000 plus 60% of the Adjustment Amount
(whether positive or negative), in immediately available funds, and, if
issued, the Special Note and (ii) for all purposes of the Supplemental
Agreement, the term "Sellers" shall mean FMC, except in the case of
Section 5(a) thereof, in which "Sellers" shall mean FMC and the Harsco
Indemnitors. The Harsco Indemnitors shall pay to FMC in immediately
available funds, within three business days following the later of (A)
the maturity of the Special Note (whether at scheduled maturity or
pursuant to the mandatory prepayment provisions of Section 2 of the
Supplemental Agreement or pursuant to acceleration) or (B) the final
determination of any dispute regarding the amount to be finally paid to
FMC under the Special Note, 40% of the first $25,000,000 of any Payment
Deficiency. For purposes of this Section 6.1(e), "Payment Deficiency"
means the difference between (A) $50,000,000 and (B) the principal
amount of the Special Note actually paid to FMC after set-off, if any,
by Buyer. For example, if the amount collected by FMC on the Special
Note is $40,000,000, then the amount that the Harsco Indemnitors shall
pay to FMC pursuant to this Section 6.1(e) shall be $4,000,000, and if
the amount collected by FMC on the Special Note is $20,000,000, then
the amount that the Harsco Indemnitors shall pay to FMC pursuant to
this Section 6.1(e) shall be $10,000,000. FMC will use its
commercially reasonable best efforts to obtain the Nurol Waiver and
the Turkish Acknowledgement (each as defined in the Supplemental
Agreement), and the Harsco Indemnitors will have the right to
participate in such efforts led by FMC. In the event of any dispute
between FMC and the Buyer with respect to payment on the Special Note,
FMC shall not agree to any settlement of any such dispute that would
have an adverse effect on the Harsco Indemnitors without first
consulting with the Harsco Indemnitors and obtaining the written
consent of the Harsco Indemnitors (which consent shall not be
unreasonably withheld or delayed). In addition, in the event of any
litigation concerning any such dispute, FMC will keep the Harsco
Indemnitors advised of all material developments in such litigation,
and the Harsco Indemnitors shall have the right to join with FMC in
such litigation at the sole expense of the Harsco Indemnitors.
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6.2 Payments in Respect of Indemnification.
(a) Each Party will contribute its Pro Rata Portion of all
joint obligations under the Purchase Agreement, as defined in clauses
(i) through (ix) below, in accordance with the following sentence (the
"Joint Obligations"). Each Party's contribution obligations under this
paragraph 6.2(a) shall be limited to such Party's Pro Rata Portion of
the aggregate Loss suffered or sustained by both Parties, after taking
into account any indemnifiable Loss suffered by such Party, in order
that both Parties ultimately bear their Pro Rata Portion of such
aggregate Loss. Each Party agrees to indemnify and hold harmless the
other Party against the amount of any Loss which the other Party may
suffer, sustain or become subject to in excess of such Party's Pro Rata
Portion of such Loss, in the event that the other Party becomes (or any
third party asserts that such other Party is) liable or otherwise
responsible. For the purposes of this Agreement, Joint Obligations
means:
(i) any obligation of the Sellers under Section
8(f)(iii) of the Purchase Agreement, to the extent that it
relates to:
(A) post-1993 operation of UDLP,
(B) subject to clause (iii)(A) of Section 6.2(b)
below, environmental conditions which are discovered at
York subsequent to December 31, 1998 and not proven by
FMC to have been a Harsco Environmental Liability Event
(as defined in the Participation Agreement) or
(C) properties acquired or first used by UDLP
subsequent to its formation,
(ii) any indemnification obligation of Sellers:
(A) under Section 10(b) (tax indemnification) of
the Purchase Agreement or
(B) under Section 11(a)(i) of the Purchase
Agreement which is based on breach of a Shared
Representation; provided that, any indemnification
obligation under Section 11(a)(i) of the Purchase
Agreement which is based on a Shared Representation
shall be a Joint Obligation only to the extent that the
aggregate of all Losses suffered and paid by FMC as a
result of breaches of Shared Representations on a
cumulative basis as a result of the indemnification
obligations under Section 11(a)(i) of the Purchase
Agreement exceed $10,000,000.
(iii) any obligation of Sellers to pay their portion of
the fees and expenses of Ernst & Young L.L.P. and the
Accounting Firm pursuant to Section 2(b) of the Purchase
Agreement or the escrow agent pursuant to the Escrow
Agreement,
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<PAGE> 9
(iv) any obligation of Sellers under Section 2(b) of
the Purchase Agreement to pay any amount by which the
Estimated Final Purchase Price exceeds the Final Purchase
Price,
(v) any obligation of Sellers to pay their portion of
intellectual property recordation costs pursuant to Section
8(o) of the Purchase Agreement,
(vi) any obligation of Sellers to pay their portion of
certain taxes pursuant to Section 10(h) of the Purchase
Agreement,
(vii) any obligation of Sellers to pay a portion of any
insurance recovery pursuant to Section 8(f)(v) of the Purchase
Agreement;
(viii)any obligation of Sellers to pay the amount of
any negative Cash Balance to the Buyer pursuant to Section
8(p) of the Purchase Agreement, or
(ix) any obligation or liability relating to UDLP
listed on Schedule 7(f) to the Purchase Agreement which is
retained or assumed on a joint basis, except for amounts
payable in connection with the FNSS Royalty Dispute which are
attributable to the period prior to formation of UDLP.
(b) FMC agrees to indemnify and hold harmless the Harsco
Indemnitors against the amount of any Loss which Harsco may suffer,
sustain or become subject to in the event that Harsco becomes (or the
Buyer or any third party asserts that any Harsco Indemnitor is) liable
or otherwise responsible for:
(i) any Losses suffered or incurred by any Harsco
Indemnitor to the extent arising from:
(A) any breach of any representation or warranty
of FMC contained herein or of any FMC Representation,
except to the extent any Harsco Indemnitor is
responsible pursuant to Section 6.2(a) hereof and
except to the extent any Harsco Indemnitor had actual
knowledge of the breach of such representation or
warranty prior to the date hereof,
(B) any breach of any Shared Representation, but
only to the extent that the aggregate of all Losses
suffered and paid by FMC as a result of a breach of a
Shared Representation on a cumulative basis as a result
of the indemnification obligation under Section
11(a)(i) of the Purchase Agreement does not exceed
$10,000,000 or
(C) any breach of any covenant of FMC contained
herein, any breach of any FMC Covenant or any breach by
FMC of any Several Covenant,
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<PAGE> 10
(ii) any Losses suffered or incurred by any Harsco
Indemnitor arising from:
(A) any wrongful, self-dealing, grossly
negligent, reckless or bad faith conduct by FMC in
connection with its conduct on behalf of UDLP or any
Harsco Indemnitor, including in connection with the
sale of FMC's Partnership Interest in UDLP or Harsco's
Partnership Interest in UDLP pursuant to the Purchase
Agreement or
(B) any failure by FMC to observe any applicable
duty or obligation to UDLP or any Harsco Indemnitor
arising out of any wrongful, self-dealing, grossly
negligent, reckless or bad faith conduct by FMC;
provided that, in the event of any claim under this clause
(ii) relating to the consideration payable or the terms and
conditions of the sale of UDLP, FMC's conduct shall be
reviewed on a comparable basis to that provided to a Delaware
corporation and its directors under the business judgment
rule,
(iii) subject to clause (i)(A) of Section 6.2(a) above,
any obligation of Sellers under Section 8(f)(iii) of the
Purchase Agreement to the extent that it relates to:
(A) the first $1,000,000 that relates to
environmental conditions at UDLP's York property that
Harsco would otherwise be responsible for under clause
(i) of Section 6.2(c) below,
(B) the pre-1994 operation of FMC's defense
business, or
(C) properties contributed by FMC to UDLP upon
its formation and
(iv) any obligation or liability relating to UDLP which
is retained or assumed by FMC as specifically set forth in the
Purchase Agreement, including those items listed on Schedule
7(f) thereto and all amounts payable in connection with the
FNSS Royalty Dispute which are attributable to periods prior
to formation of UDLP.
For purposes of this Agreement, the actual knowledge of the Harsco Indemnitors
shall be deemed to refer only to the actual present knowledge of Derek Hathaway
and Leonard Campanaro, without such individual having conducted any inquiry or
review.
(c) The Harsco Indemnitors agree to indemnify and hold
harmless FMC against the amount of any Loss which FMC may suffer,
sustain or become subject to in the event that FMC becomes (or Buyer or
any third party asserts that FMC is) liable or otherwise responsible
for:
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<PAGE> 11
(i) subject to clauses (i)(A) and (i)(B) of Section
6.2(a) above and subject to clause (iii)(A) of Section 6.2(b)
above, any obligation of Sellers under Section 8(f)(iii) to
the extent that it relates to:
(A) the pre-1994 operation of Harsco's defense
business or
(B) properties contributed by Harsco to UDLP
upon its formation,
(ii) any Losses suffered or incurred by FMC to the
extent arising from:
(A) any breach of any Harsco Representation or
any representation or warranty of any Harsco entity
contained herein or
(B) any breach by Harsco of any Several Covenant
or any covenant of any Harsco entity contained herein
and
(iii) any obligation or liability relating to UDLP
which is retained or assumed by Harsco as specifically set
forth in the Purchase Agreement, including those items listed
on Schedule 7(f) thereto.
(d) Each Party further agrees to indemnify and hold harmless
the other Party against the amount of any Loss which the other Party
may suffer, sustain or become subject to in respect of any obligation
of such Party which is, pursuant to the terms of the Purchase
Agreement, a several obligation of such Party alone and not a joint and
several obligation of the Parties.
6.3 Indemnity Procedures.
(a) Indemnity Dispute Costs. Following the Closing, the
Parties will cooperate in a commercially reasonable manner in
connection with any indemnification or other claim made by the Buyer or
any third party under the Purchase Agreement or otherwise relating to
UDLP, but subject to the provisions of the Purchase Agreement,
including the provisions contained in Section 2(b), Section 10 and
Section 11(f) of the Purchase Agreement relating to the control of the
defense and management of certain indemnification and other claims and
matters by FMC. In the event that FMC determines to dispute, defend or
otherwise manage any such claim or any other claim made by the Buyer or
any third party, then FMC shall be responsible for all of the costs,
fees and expenses incurred on behalf of FMC in connection with such
dispute, defense or management (the "Indemnity Dispute Costs"). The
Harsco Indemnitors shall be responsible for all of the costs, fees and
expenses of their participation in such dispute, defense or management.
(b) Third Party Claims. With respect to any indemnification
under this Section 7 in respect of, arising out of or involving a claim
by any Person, including the Buyer (a "Third Party Claim"), against a
Party hereto (the "Indemnified Party"), FMC must notify the
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<PAGE> 12
Harsco Indemnitors of the Third Party Claim within a reasonable time
after receipt by FMC of written notice of the Third Party Claim.
Thereafter, FMC shall, within ten days of receipt thereof, deliver
copies of all notices and documents (including court papers) received
by them relating to the Third Party Claim to the Harsco Indemnitors.
(c) Defense of Third Party Claims. If a Third Party Claim is
made against an FMC Indemnified Party for a claim relating to the
breach of a representation, warranty or covenant made jointly by the
Parties in the Purchase Agreement, the Harsco Indemnitors shall be
entitled to participate in the defense thereof (a "Joint Third Party
Claim"). FMC shall cooperate in all reasonable respects with the Harsco
Indemnitors in connection with such defense, including by permitting
the Harsco Indemnitors to appoint counsel and to have such counsel
observe and participate in the defense of the Joint Third Party Claim
if the Harsco Indemnitors choose at the sole expense of the Harsco
Indemnitors. In connection with all such matters, FMC shall be
available to consult with the Harsco Indemnitors as reasonably
requested concerning the management of such matters and shall consider
in good faith any comments, suggestions or proposals made by the Harsco
Indemnitors in connection therewith. FMC shall not admit any liability
with respect to, or settle, compromise or discharge, any Joint Third
Party Claim without the prior written consent of the Harsco Indemnitors
(which will not be unreasonably withheld or delayed). The management
of, and all decisions regarding (including decisions regarding
settlement of) any dispute or defense of a claim for which either FMC
or the Harsco Indemnitors are solely responsible pursuant to the terms
of the Purchase Agreement shall at all times be at the direction of and
otherwise made by the Party who bears responsibility for the claim.
6.4 Survival of Representations. The representations and
warranties in this Agreement shall survive the Closing to the same extent set
forth in the Purchase Agreement.
7. Escrow Deposit. If and when the Escrow Deposit, referred to
in the Escrow Agreement attached as Exhibit 6(c) to the Purchase Agreement is to
be paid to FMC and Harsco, it shall be allocated on a Pro Rata Basis to the
Parties.
8. Prepayment of Intercompany Debt; Allocation of Cash
Distributions and Payments. Immediately prior to the Closing, FMC shall repay
all intercompany debt owed to UDLP, together with interest accrued through the
date of repayment. Promptly following the Closing Date, FMC shall pay to the
Harsco Indemnitors (i) 100% of any amounts attributable to limited partner
allocations that accrue through the Closing (to the extent not directly
distributed to Harsco) and (ii) 40% of any other distribution or payment made by
UDLP to FMC at Closing for the ratable benefit of both partners (to the extent
not directly distributed to Harsco). The Harsco Indemnitors hereby acknowledge
and agree that any distribution or payment made by UDLP to FMC at Closing in
respect of "B" service fees that accrue through the Closing shall be retained
solely by FMC.
9. Limited Partner Consent. The Harsco Indemnitors hereby consent and
agree to the terms and provisions of the Transition Services Agreement, the
Technology and Environmental
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Services Agreement, the Amended and Restated FMC Intellectual Property
Agreement, the Amended and Restated Lease Agreement and the FMC Resource
Transfer.
10. Allocation of Expenses. Each Party hereby agrees to pay its Pro
Rata Portion of the following out-of-pocket expenses incurred by the Indemnitors
in connection with the transactions contemplated by the Purchase Agreement: (i)
costs of the preparation and filing of all UDLP Tax Returns relating to Taxes
incurred in connection with the pre-closing business and operations of UDLP or
the transactions contemplated by the Purchase Agreement and (ii) costs of the
preparation of financial statements of UDLP incurred in connection with the
transactions contemplated by the Purchase Agreement. Each Party hereby agrees to
pay its own respective costs for legal services, filing fees and regulatory
expenses incurred in order to comply with United States and foreign antitrust
and competition laws.
11. Miscellaneous.
11.1 No Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Indemnitors and
their respective successors and permitted assigns.
11.2 Entire Agreement. This Agreement, together with the
Purchase Agreement (and the exhibits and schedules thereto) constitute the
entire agreement among the Indemnitors with respect to the subject matter hereof
and supersedes any prior understandings, agreements, or representations by or
among the Indemnitors, written or oral, to the extent they related in any way to
the subject matter hereof.
11.3 Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the Indemnitors and their respective
successors and permitted assigns. No Indemnitor may assign either this Agreement
or any of such Indemnitor's rights, interest or obligations hereunder without
the prior written approval of the other Indemnitors.
11.4 Counterparts. This Agreement may be executed in one or
more counterparts (including by means of telecopied signature pages), each of
which shall be deemed an original but all of which together will constitute one
and the same instrument.
11.5 Headings. The section headings and captions contained in
this Agreement are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
11.6 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given by a reputable
and recognized overnight delivery service (e.g. Federal Express, etc.), against
receipt thereof, by telex, by telecopier against a confirmed receipt therefor or
by mail (registered or certified mail, postage prepaid, return receipt
requested) to the respective parties as follows:
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if to FMC:
FMC Corporation
200 East Randolph Drive
Chicago, Illinois 60601
Telecopy No.: (312) 861-6012
Attention: J. Paul McGrath
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Telecopy No.: (312) 861-2200
Attention: Glen E. Hess, P.C.
if to the Harsco Indemnitors:
Harsco Corporation
350 Poplar Church Road
Camp Hill, PA 17011
Telecopy No.: (717) 763-6402
Attention: Paul C. Coppock
with a copy to:
Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, D.C. 20036
Telecopy No.: (202) 467-7176
Attention: Lloyd H. Feller
or to such other address as any Indemnitor hereto may, from time to time,
designate in a written notice given in like manner. Any notice given in
accordance with the requirements of this Section 11.6 shall be deemed to have
been received when delivered in person or via telecopier against receipt
thereof, five business days after deposit in the U.S. mail against receipt
thereof, and one business day after deposit with a reputable express overnight
courier service against receipt therefor.
11.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.
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11.8 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement shall be valid unless the same shall be in writing
and signed by all of the Indemnitors.
11.9 Severability. Any provision of this Agreement which is
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining provisions hereof
in such jurisdiction or rendering that or any other provision of this Agreement
invalid, illegal or unenforceable in any other jurisdiction. Furthermore, in
lieu of such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
11.10 Construction. The Indemnitors have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Indemnitors and no presumption or burden of proof
shall arise favoring or disfavoring any Indemnitor by virtue of the authorship
of any of the provisions of this Agreement. The word "including" shall mean
including without limitation. Section references used herein, unless otherwise
specified, refer to Sections of this Agreement.
11.11 Exclusive Remedy; Waiver. Subject to Section 11.2 above,
the indemnification and contribution arrangements set forth in this Agreement
constitute the exclusive arrangement among the parties with respect to the
matters set forth herein and are in lieu of any common law rights or remedies
any party may have as a joint and several indemnitor or otherwise (except with
respect to claims for fraud). Accordingly, each party expressly waives any right
it may have, and agrees not to assert any claim for, contribution or indemnity
with respect to the matters set forth herein except as set forth herein.
* * * * *
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<PAGE> 16
IN WITNESS WHEREOF, the undersigned have executed this
Allocation and Contribution Agreement as of the date first above written.
FMC CORPORATION
By: /s/ J. Paul McGrath
-------------------------------
Name: J. Paul McGrath
Title: Senior Vice President
HARSCO CORPORATION
By: /s/ Leonard A. Campanaro
-------------------------------
Name: L.A. Campanaro
Title: Senior Vice President and CFO
HARSCO UDLP CORPORATION
By: /s/ Leonard A. Campanaro
-------------------------------
Name: L.A. Campanaro
Title: Treasurer
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