REGISTRATION RIGHTS AGREEMENT
among
FMC CORPORATION,
HARSCO DEFENSE HOLDING, INC.
and
UNITED DEFENSE, L.P.
Dated as of January 1, 1994
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is made as of January 1, 1994, by and among FMC
Corporation, a Delaware corporation ("FMC"), Harsco Defense Holding,
Inc., a Delaware corporation ("Harsco L.P.") and United Defense, L.P., a
Delaware limited partnership ("UD").
FMC and Harsco L.P. desire to form UD pursuant to the terms of a
Partnership Agreement, dated as of the date hereof, by and among FMC,
Harsco L.P. and UD (the "Partnership Agreement"). The execution and
delivery of this Agreement is a condition to the obligations of FMC,
Harsco Corporation, a Delaware corporation ("Harsco") and Harsco L.P.
under the Participation Agreement dated as of the date hereof (the
"Participation Agreement"), to which this Agreement is attached as
Exhibit J.
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. Certain Definitions.
Unless otherwise defined below, capitalized terms used herein will have
the meanings set forth in Annex A to the Participation Agreement.
"Demand Registration" has the meaning set forth in Section 3(a).
"Included Securities" has the meaning set forth in Section 3(a).
"IPO" has the meaning set forth in Section 4(e).
"Net Public Price" has the meaning set forth in Section 3(c).
"Piggyback Registration" has the meaning set forth in Section 4(a).
"Public Price" has the meaning set forth in Section 3(c).
"Registrable Securities" means all shares of UD's common stock, issued
to FMC or Harsco L.P. (i) upon the incorporation of UD pursuant to
Section 2 hereof and (ii) as a dividend or other distribution with
respect to or in exchange for or in replacement of the shares referenced
in (i) above. As to any particular Registrable Securities, such
securities will cease to be Registrable Securities when they have been
distributed to the public pursuant to an offering registered under the
Securities Act or sold to the public through a broker, dealer or market
maker in compliance with Rule 144 or Rule 144A under the Securities Act
(or any similar rule then in force). For purposes of this Agreement, a
Person will be deemed to be a holder of Registrable Securities on any
given date whenever such Person has the right to acquire directly or
indirectly such Registrable Securities (upon conversion or exercise in
connection with a transfer of securities or otherwise within six months
of such date, but disregarding any restrictions or limitations upon the
exercise of such right), whether or not such acquisition has actually
been effected.
"Registration Expenses" has the meaning set forth in Section 7(a).
"Requesting Party" has the meaning set forth in Section 2(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Total Common Equity Value" has the meaning set forth in Section 2(b).
2.Incorporation of UD.
(a) At any time after the eighteen-month anniversary of the Closing
Date, either FMC or Harsco L.P. (the "Requesting Partner") may request
in a written notice to the non-requesting Partner and UD that UD be
incorporated or organized as a corporation in the State of Delaware. UD
will thereafter make all filings required and take all other reasonable
steps to effect such incorporation under the Delaware General
Corporation Law; provided that (i) such incorporation is subject to UD's
receipt of all required government approvals (including any approval
required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, but excluding any novation agreement that is required between
UD and the U.S. Government) and any third-party consent which if not
received would have a Material Adverse Effect on UD, which the parties
hereto agree to use their reasonable best efforts to obtain and (ii) the
effectiveness of such incorporation need not take place until
immediately prior to the effectiveness of a registration statement (or,
if required by the SEC as a condition to such effectiveness, the day
prior to the anticipated effectiveness of such registration statement)
pursuant to a request for registration under Section 3(a) below by a
Requesting Partner. Effective as of the date of such incorporation,
shares of common stock in the new corporation will be issued to each of
FMC and Harsco L.P. in proportion to their respective Share Percentages
immediately prior to incorporation.
(b) Upon the effectiveness of the incorporation of UD, the parties will
continue to be governed, to the fullest extent possible (but subject to
the stockholders' agreement referred to below), by the terms of the
Participation Agreement and all rights and obligations thereunder
(including those relating to indemnification) will remain in full force
and effect. Effective as of the date of such incorporation, (i) the
Limited Partner Allocation to be distributed by UD in accordance with
Section 6.1 of the Partnership Agreement shall be terminated and (ii)
the incorporated UD shall authorize and issue to Harsco L.P. all of the
shares of a series of preferred stock having the terms outlined on Annex
A hereto and having an aggregate par value determined by calculating the
Capitalized Limited Partner Allocation as of the date of issuance of the
preferred stock; provided that, for purposes of determining the Earnings
Multiple in connection therewith, the "Total Common Equity Value" shall
be used in lieu of the Appraised Value, where Total Common Equity Value
equals the product of (i) the gross public offering price per share of
the UD common stock being sold in the offering and (ii) the number of
shares of UD common stock issued to the partners of UD upon its
incorporation pursuant to this Agreement. In connection with the
incorporation of UD, the parties hereto will, pursuant to Section 3.1(a)
of the Partnership Agreement, negotiate in good faith to adopt an
appropriate certificate of incorporation and by-laws and to enter into
(i) all amendments to the Operative Documents necessary to effect the
conversion of UD from a partnership to a corporation and otherwise to
give effect to the provisions contemplated by the Operative Documents
after such incorporation and (ii) a stockholders' agreement having the
terms outlined on Annex B hereto. In addition, the actions contemplated
by Section 7.3 of the Partnership Agreement will be taken upon
incorporation of UD.
3. Demand Registrations.
(a) Requests for Registration. Each Partner may request a total of two
registrations under the Securities Act, in which UD will pay all
Registration Expenses, of all or a part of its Registrable Securities on
Form S-1 or other form permitted by the rules of the SEC, to be
effective at any time after the twenty-five month anniversary of the
Closing Date, upon at least 90 days' (180 days' in the case of an
initial public offering) prior notice; provided, that any such request
must be in writing and delivered to UD and must specify such number of
Registrable Securities as is reasonably anticipated by the Requesting
Partner to yield a minimum aggregate price to public of $50,000,000,
unless such request relates to all of the Registrable Securities then
held by the Requesting Partner. Within five (5) Business Days after
receipt of such request, UD will give written notice of such requested
registration to all other holders of Registrable Securities. UD will
include in such registration (i) the number of Registrable Securities
requested to be included by the Requesting Partner (the "Included
Securities") and (ii) that number of Registrable Securities, held by
other holders who have delivered to UD (within ten (10) Business Days
after receipt of UD's notice) a written request for inclusion, which the
lead managing underwriter advises UD in writing does not exceed the
number that can be sold in an orderly manner in such offering within a
price range acceptable to the Requesting Partner. A registration
requested pursuant to this Section 3(a) is referred to herein as a
"Demand Registration," and the Registrable Securities registered thereby
will be offered and sold to the public in an underwritten offering.
(b) Selection of Underwriters. At the time of requesting a Demand
Registration, the Requesting Partner will select the lead managing
underwriter of such Demand Registration from among the following three
investment banking firms: (1) Morgan Stanley & Co. Incorporated, (2)
Salomon Brothers Inc and (3) Goldman, Sachs & Co. UD may then select
one or two nationally recognized investment banking firms to act as
co-manager of such Demand Registration.
(c) Determination of Public Price. In connection with any Demand
Registration by Harsco L.P., and prior to the filing of any registration
statement, UD will select a nationally recognized investment banking
firm from among the co-managers selected by UD which, together with the
lead managing underwriter, will promptly select a third nationally
recognized investment banking firm. Each of the three firms will
provide to UD, within thirty (30) days of its engagement, a good faith
estimate of the initial public market voting listed common equity
offering value of the Included Securities (or, if applicable, the
partnership interests that are intended to be Included Securities). The
three estimates will be averaged, and the estimate that deviates from
the average by the greatest amount will be ignored, and the average of
the two remaining values will be the "Public Price." The Public Price
less the actual proposed underwriting discount (which shall be
comparable to that charged by the proposed managing underwriter in
similar offerings) will be the "Net Public Price."
(d) Right of First Refusal. Notwithstanding the foregoing, FMC (or any
of its Affiliates) may, in its discretion at any time after Harsco L.P.
has given notice of any of its Demand Registrations but before the
filing of the registration statement relating to such Demand
Registration with the SEC, purchase all of the Included Securities (or,
in the event that UD is not yet a corporation, then all of the
partnership interests to be included in the public offering to which
such Demand Registration applies) pursuant to such Demand Registration
at a purchase price in cash equal to the Net Public Price; provided,
however, that FMC (or any of its Affiliates) shall not be entitled to
purchase any such Included Securities (or corresponding partnership
interests) if, within three (3) Business Days after receipt of notice
from FMC (or one of its Affiliates) of its intent to exercise its right
of first refusal pursuant to this sentence, Harsco L.P. withdraws its
request for Demand Registration. In addition, if a registration
statement is filed pursuant to a Demand Registration initiated by Harsco
L.P. and Harsco L.P. intends to sell the Included Securities for an
aggregate price (net of underwriting commissions) equal to less than 90%
of the Net Public Price, Harsco L.P. will so promptly notify FMC and FMC
will have the right to purchase, within two (2) Business Days after
receiving such notice, all of the Included Securities for an aggregate
price in cash equal to that set forth in such notice. In the event that
FMC (or any of its Affiliates) exercises its right of first refusal to
purchase, and does so purchase, Included Securities of Harsco L.P.
pursuant to this Section 3(d), UD will pay all Registration Expenses
applicable to the Included Securities, all reasonable expenses
customarily paid out of the underwriter's discount, with such reasonable
expenses not to exceed $100,000 and any fees of underwriters which
Harsco L.P. is obligated to pay, not to exceed $250,000.
(e) Restrictions on Demand Registrations. UD may postpone for up to
three months the filing or the effectiveness of a registration statement
for the Demand Registration if UD determines in good faith that such
filing or effectiveness of a registration statement (i) would have a
material adverse effect on any current proposal or plan by UD or any of
its Subsidiaries to engage in any acquisition of assets (other than in
the ordinary course of business), any merger, consolidation, tender
offer or similar material transaction, any financing or any other
material transaction or (ii) would require public disclosure of
information, the public disclosure of which would materially and
adversely affect UD's business or financial position; provided that in
such event, the Requesting Partner will be entitled to withdraw its
request for such Demand Registration and, if such request is withdrawn,
such Demand Registration will not count as a permitted Demand
Registration hereunder and UD will pay all Registration Expenses in
connection with such withdrawn registration. In the event that the
Requesting Partner withdraws its request for a Demand Registration other
than as provided in the foregoing sentence, such Requesting Partner may
elect either to treat such withdrawn registration as a permitted Demand
Registration or to pay all Registration Expenses and other expenses
(including any fees and expenses of underwriters) in connection with
such withdrawn registration.
(f) Other Registration Rights. Except as provided in this Agreement,
UD will not grant to any Person the right to request UD to register any
equity securities of UD, or any securities convertible or exchangeable
into or exercisable for such securities, without the prior written
consent of the holders of at least eighty percent (80%) of the
Registrable Securities; provided that UD may grant rights to other
Persons to request UD to register any equity securities of UD, or any
securities convertible or exchangeable into or exercisable for such
securities, on a basis which is pari passu with (or less favorable than)
rights given to holders of Registrable Securities hereunder, including
with respect to priorities under Sections 3(a), 4(c) and 4(d), so long
as it complies with the provisions of the Shareholder Agreement
described in Section 4 of Annex A to this Agreement and Section 3.1(g)
of the Partnership Agreement, whichever is applicable, or in the event
that UD issues such securities in a transaction that does not require
compliance with any of such Sections.
4. Piggyback Registrations.
(a) Right to Piggyback. Whenever UD proposes to register any of its
equity securities under the Securities Act (otherwise than on Form S-4,
Form S-8 or any successor form), including pursuant to a Demand
Registration by FMC or Harsco L.P., UD will give prompt written notice
(in any event within three (3) Business Days after its receipt of notice
of any exercise of demand registration rights other than under this
Agreement) to all holders of Registrable Securities of its intention to
effect such a registration (a "Piggyback Registration") and, subject to
the provisions of Sections 4(c), 4(d) and 4(e) below, will include in
such registration all Registrable Securities with respect to which UD
has received written requests for inclusion therein within ten (10)
Business Days after the receipt of UD's notice.
(b) Piggyback Expenses. The Registration Expenses of the holders of
Registrable Securities will be paid by UD in all Piggyback
Registrations.
(c) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of UD, and the lead
managing underwriter advises UD in writing that the number of securities
requested to be included in such registration exceeds the number which
can be sold in an orderly manner in such offering within a price range
acceptable to UD, then UD will include in such registration (i) first,
the securities UD proposes to sell, (ii) second (but subject to Section
3(f)), the Registrable Securities requested to be included in such
registration by FMC and Harsco L.P., pro rata on the basis of the number
of shares owned by each and (iii) third, other securities requested to
be included in such registration, pro rata on the basis of the number of
shares owned by the holders thereof.
(d) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of UD's
securities (including a holder of Registrable Securities), and the
managing underwriter advises UD in writing that the number of securities
requested to be included in such registration exceeds the number which
can be sold in an orderly manner in such offering within a price range
acceptable to the holders initially requesting such registration, then
UD will include in such registration (i) first (but subject to Section
3(f)), the Registrable Securities requested to be included in such
registration by FMC and Harsco L.P., pro rata on the basis of the number
of shares owned by each and (ii) second, other securities requested to
be included in such registration, pro rata on the basis of the number of
shares owned by the holders thereof.
(e) Other Registrations. If UD has previously received a request for a
Demand Registration pursuant to Section 3 to file a registration
statement or has filed a registration statement with respect to
Registrable Securities pursuant to Section 3, and if such request for
Demand Registration or previous registration has not been withdrawn or
abandoned, UD will not file or cause to be effected any other
registration of any of its equity securities or securities convertible
or exchangeable into or exercisable for its equity securities under the
Securities Act (except on Form S-4, Form S-8 or any successor form),
whether on its own behalf or at the request of any holder or holders of
such securities, until a period of at least ninety (90) days (or, in the
case of the initial public offering by UD (the "IPO"), one hundred
eighty (180) days) has elapsed from the effective date of such previous
registration unless the managing underwriters of the previous registered
public offering otherwise agree in writing.
5. Holdback Agreements.
(a) Each holder of Registrable Securities agrees not to effect any
public sale or distribution (including sales pursuant to Rule 144 or
Rule 144A under the Securities Act) of equity securities of UD, or any
securities convertible into or exchangeable or exercisable for such
securities, during the thirty (30) days prior to and the 90-day period
(or, in the case of the IPO, 180-day period) beginning on the effective
date of any underwritten Demand Registration or any underwritten
Piggyback Registration in which Registrable Securities are (or could
have been) included (except as part of such underwritten registration),
unless the underwriters managing the registered public offering
otherwise agree.
(b) UD agrees not to effect any public sale or distribution of its
equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the thirty (30) days prior to
and during the 90-day period (or, in the case of the IPO, 180-day
period) beginning on the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration (except as part
of such underwritten registration or pursuant to registrations on Form
S-4, Form S-8 or any successor form), unless the underwriters managing
the registered public offering otherwise agree.
6. Registration Procedures. Whenever any Requesting Partner has
requested that any Registrable Securities be registered pursuant to this
Agreement, UD will, subject to the provisions of this Agreement, use its
reasonable best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto UD will as expeditiously as
reasonably possible:
(a) prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its reasonable best efforts to
cause such registration statement to become effective (provided that
before filing a registration statement or prospectus or any amendments
or supplements thereto, UD will furnish to the counsel selected by the
Requesting Partner and the counsel selected by the lead managing
underwriter copies of all such documents proposed to be filed, which
documents will be subject to the review of such counsel);
(b) (1) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for a period of not more than nine months and (2) comply with
the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement during such period
in accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as such
seller may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such seller;
(d) use its reasonable best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of
such jurisdictions as any seller reasonably requests and do any and all
other acts and things which may be reasonably necessary or advisable to
enable such seller to consummate the disposition in such jurisdictions
of the Registrable Securities owned by such seller (provided that UD
will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this Section, (ii) subject itself to taxation in any such jurisdiction
or (iii) consent to general service of process in any such
jurisdiction);
(e) notify each seller of such Registrable Securities, at any time when
a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits any material fact necessary to
make the statements therein not misleading in light of the circumstances
then existing, and, at the request of any such seller, UD will prepare
and furnish to such seller a reasonable number of copies of a supplement
or amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading in
light of the circumstances then existing;
(f) use its reasonable best efforts to cause all such Registrable
Securities to be listed on each securities exchange on which similar
securities issued by UD are then listed and, if not so listed, to become
listed on either (as UD determines) a national securities exchange or
the NASD automated quotation system and, if listed on the NASD automated
quotation system, use its reasonable best efforts to secure designation
of all such Registrable Securities covered by such registration
statement as a NASDAQ "national market system security" or, failing
that, to secure NASDAQ authorization for such Registrable Securities
and, without limiting the generality of the foregoing, to arrange for at
least two market makers to register as such with respect to such
Registrable Securities with the NASD;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form consistent with this Agreement) and take
all such other actions customary for such offerings as the Requesting
Partner or the underwriters reasonably request in order to expedite or
facilitate the disposition of the UD securities being sold (including,
without limitation, effecting a stock split or a combination of shares);
(i) use its reasonable best efforts to make available for inspection by
any seller of Registrable Securities, any underwriter participating in
any disposition pursuant to such registration statement and any attorney
retained by any such seller or underwriter, an executed copy of (i) an
opinion of counsel for UD addressed to such seller and such underwriter
and (ii) a "comfort" letter from the independent public accountants who
have reported on UD's financial statements included or incorporated by
reference in such registration statement addressed to such seller and
such underwriter, covering substantially the same matters with respect
to such registration statement, and the prospectus included therein
(including, in the case of the accountants' comfort letter, with respect
to events subsequent to the date of such financial statements), as are
customarily covered in opinions of issuer's counsel and in accountants'
comfort letters delivered to the underwriters in underwritten public
offerings of securities (and dated the dates such opinions and comfort
letters are customarily dated) and, in the case of the accountants'
comfort letter, such other financial matters, and in the case of the
legal opinion, such other legal matters, as such seller or such
underwriter may reasonably request;
(j) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months beginning with
the first day of UD's first full calendar quarter after the effective
date of the registration statement, which earnings statement will
satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder;
(k) permit any holder of Registrable Securities which holder is or
might be deemed to be an underwriter or a controlling person of UD, to
participate in the preparation of such registration or comparable
statement;
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any common stock included in such registration
statement for sale in any jurisdiction, use its reasonable best efforts
promptly to obtain the withdrawal of such order; and
(m) use its reasonable best efforts to cause such Registrable
Securities covered by such registration statement to be registered with
or approved by such other governmental agencies or authorities as may be
necessary to enable the sellers thereof to consummate the disposition
of such Registrable Securities.
If any such registration or comparable statement refers to any holder by
name or otherwise as the holder of any securities of UD and if such
holder is or might be deemed to be a controlling person of UD, such
holder will have the right to require (i) the insertion therein of
language, in form and substance satisfactory to such holder and
presented to UD in writing, to the effect that the holding by such
holder of such securities is not to be construed as a recommendation by
such holder of the investment quality of UD's securities covered thereby
and that such holding does not imply that such holder will assist in
meeting any future financial requirements of UD, or (ii) in the event
that such reference to such holder by name or otherwise is not required
by the Securities Act or any similar Federal statute then in force, the
deletion of the reference to such holder; provided that with respect to
this clause (ii) such holder will furnish to UD an opinion of counsel to
such effect, which opinion of counsel will be reasonably satisfactory to
UD. In the event of a Demand Registration under this Agreement, the
Requesting Party will furnish any information, execute any customary
agreements (including a customary underwriting agreement) and take any
other action in connection with such Demand Registration that is
reasonably requested by UD or the managing underwriter of such Demand
Registration.
7. Registration Expenses.
(a) All expenses incident to UD's performance of or compliance with
this Agreement, including without limitation all registration,
qualification and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger and delivery
expenses, fees and disbursements of counsel for UD and of all
independent certified public accountants and of other Persons retained
by UD (all such expenses being herein called "Registration Expenses"),
will be borne by UD, except as provided in this Agreement. In addition,
UD will pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review
and the expenses and fees for listing the securities to be registered on
each securities exchange on which similar securities issued by UD are
then listed or on the NASD automated quotation system. Holders of
Registrable Securities included in any proposed public offering will in
any event pay all fees and expenses of counsel and underwriters retained
by them, except as otherwise provided in Section 3(d) above.
(b) Except as provided in Sections 3(a), 3(d), 3(e), 4(b) or 7(a)
above, each holder of securities included in any registration hereunder
will pay those Registration Expenses allocable to the registration of
such holder's securities so included, and any Registration Expenses not
so allocable will be borne by all sellers of securities included in such
registration in proportion to the aggregate selling price of the
securities to be so registered.
8. Indemnification.
(a) UD agrees to indemnify, to the extent permitted by law, each holder
of Registrable Securities included in a registration under the terms of
this Agreement, its officers and directors and each Person who controls
such holder (within the meaning of Section 15 of the Securities Act) and
its officers and directors against all losses, claims, damages,
liabilities and expenses arising out of or based on any untrue or
alleged untrue statement of a material fact contained in any
registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the
circumstances then existing, and will reimburse each such holder, its
officers and directors and each Person who controls such holder (within
the meaning of Section 15 of the Securities Act) and its officers and
directors for any legal and other expenses reasonably incurred by them
in connection with investigating, defending or settling any such losses,
claims, damages, liabilities and expenses, except insofar as the same
arise out of or are based on any untrue statement or omission contained
in any information furnished in writing to UD by such holder expressly
for use therein or by such holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements
thereto after UD has furnished such holder with a sufficient number of
copies of the same. In connection with an underwritten offering, UD
will indemnify such underwriters, their officers and directors and each
Person who controls such underwriters (within the meaning of Section 15
of the Securities Act) and its officers and directors to the same extent
as provided above with respect to the indemnification of the holders of
Registrable Securities.
(b) In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder will furnish
to UD in writing such information and affidavits as UD reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, agrees to indemnify UD,
its directors and officers and each Person who controls UD (within the
meaning of Section 15 of the Securities Act) and its officers and
directors against any losses, claims, damages, liabilities and expenses
resulting from any untrue or alleged untrue statement of a material fact
contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, but only to the extent that
such untrue or alleged untrue statement or omission or alleged omission
is contained in any information or affidavit so furnished in writing by
such holder expressly for use therein; provided that the obligation to
indemnify pursuant to this Section 8(b) will be individual to each
holder and will be limited to the net amount of proceeds received by
such holder from the sale of Registrable Securities pursuant to such
registration statement.
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party unless in such
indemnified party's reasonable judgment representation of both parties
by the same counsel would be inappropriate due to actual or potential
differing interests between them. In any event, the indemnifying party
will not be subject to any liability for any settlement made by the
indemnified party without its consent (which consent will not be
unreasonably withheld). An indemnifying party who is not entitled to,
or elects not to, assume the defense of a claim will not be obligated to
pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and will survive the transfer of
securities. UD also agrees to make such provisions, as are reasonably
requested by any indemnified party, for contribution to such party in
the event UD's indemnification is unavailable for any reason.
9. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless
such Person (a) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Person or
Persons initiating such registration and (b) completes and executes all
questionnaires, powers of attorney, indemnities, customary underwriting
agreements and other documents required under the terms of such
underwriting arrangements for persons in comparable positions.
10. Rule 144. For so long as either Partner holds any Registrable
Securities, UD will use its reasonable best efforts to (i) make and keep
adequate current public information (within the meaning of Rule 144(c)
under the Securities Act) with respect to UD available at all times from
and after ninety (90) days following the effective date of the first
registration under the Securities Act filed by UD for an offering of
securities to the general public; (ii) file with the SEC in a timely
manner all reports and other documents required of UD under the
Securities Act and the Securities Exchange Act of 1934 at any time after
it has become subject to such reporting requirements; and (iii) upon
request by either Partner, deliver to such Partner a written statement
as to whether it has complied with the requirements referred to in (i)
and (ii) above.
11. Miscellaneous.
(a) No Inconsistent Agreements. UD will not hereafter enter into any
agreement with respect to its securities which is inconsistent with or
violates the rights granted to the holders of Registrable Securities in
this Agreement.
(b) Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to
recover damages caused by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. The parties
hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that any
party may apply to any court of law or equity of competent jurisdiction
for specific performance and for other injunctive relief in order to
enforce or prevent violation of the provisions of this Agreement.
(c) Amendments and Waivers. No term or provision of this Agreement may
be amended or waived unless in writing signed by the party against which
such amendment or waiver is sought to be enforced, provided that Harsco
L.P. will not unreasonably withhold or delay its consent to any such
amendment or waiver proposed by FMC in order to effect the granting of
registration rights to a third party in a transaction which complies
with Section 3(f) hereof.
(d) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and
inure to the benefit of the respective successors and permitted assigns
of the parties hereto whether so expressed or not. In addition, whether
or not any express assignment has been made, the provisions of this
Agreement which are for the benefit of purchasers or holders of
Registrable Securities are also for the benefit of, and enforceable by,
any permitted subsequent holder of Registrable Securities. No sale of
Registrable Securities hereunder will relieve the holder of its
obligations under this Agreement or under any other Operative Document.
The right of Harsco L.P. to request incorporation of UD pursuant to
Section 2(a) may not be assigned, directly or indirectly, unless in
connection with the assignment of a Share Percentage in excess of 20%.
(e) Severability. Whenever possible, each provision of this Agreement
will 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
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of this Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures
of more than one party, but all such counterparts taken together will
constitute one and the same Agreement.
(g) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the domestic laws of the State of Delaware, without
giving effect to any choice of law 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. In furtherance of the foregoing, the internal law of
the State of Delaware will control the interpretation and construction
of this Agreement, even though under that jurisdiction's choice of law
or conflict of law analysis, the substantive law of some other
jurisdiction would ordinarily apply.
(i) Liability of UD. Any liability under this Agreement of UD to
Harsco L.P. or to any underwriter or other Person retained by Harsco
L.P. or to any Person who controls any of the foregoing (within the
meaning of Section 15 of the Securities Act) arising out of the
transactions contemplated hereby shall be the sole obligation of UD and
shall be explicitly nonrecourse to FMC, Harsco, Harsco L.P. and the
Affiliates (other than UD) of each of them.
(j) Notices. Any notice provided for in this Agreement will be in
writing and will be either personally delivered, or mailed first class
mail (postage prepaid) or sent by reputable overnight courier service
(charges prepaid) to UD, FMC and Harsco L.P. at the addresses set forth
below and to any subsequent holder of UD securities subject to this
Agreement at such address as indicated by UD's records, 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
will be deemed to have been given hereunder when delivered personally,
three (3) days after deposit in the U.S. mail and one day after deposit
with a reputable overnight courier service.
To UD:
United Defense, L.P.
1525 Wilson Boulevard
Suite 700
Arlington, VA 22209
Attn: Chief Executive Officer
Telephone:(703) 312-6100
Telecopy:(703) 312-6111
To FMC:
FMC Corporation
200 East Randolph Drive
Chicago, IL 60601
Attn: Corporate Secretary
Telephone: (312) 861-5923
Telecopy: (312) 861-7127
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attn: Michael G. Timmers
Telephone: (312) 861-2224
Telecopy: (312) 861-2200
To Harsco L.P.:
Harsco Defense Holding, Inc.
P.O. Box 8888
Camp Hill, PA 17011
Attn: President (with a copy to the General Counsel)
Telephone: (717) 763-6406
Telecopy: (717) 763-6402
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
UNITED DEFENSE, L.P.
By: FMC CORPORATION,
a Delaware corporation,
Its Managing General Partner
By /S/ Robert L. Day
Its Secretary
FMC CORPORATION
By /S/ Robert L. Day
Its Secretary
HARSCO DEFENSE HOLDING, INC.
By /S/ Paul C. Coppock
Its Secretary
ANNEX A
Terms of Senior Preferred Stock
Designation Senior Preferred Stock, par
value
$100 per share
Dividend Rights Equal to Limited Partner
Allocation,
subject to annual adjustment
Payable quarterly
Cumulative, whether or not
earned
Preferential: no dividends
may be paid
on any other capital stock and
no other
distribution may be made while
any
accumulated dividend is unpaid
No stock may be acquired for
value while
any accumulated dividend is
unpaid and
no capital stock pari passu
with or
junior to the Senior Preferred
may be
acquired for value while any
Senior
Preferred is outstanding
Redemption Redeemable at par plus
accumulated
dividends
Must be redeemed before any
other
capital stock is redeemed or
acquired
for value by issuer
At any time while shares of
Senior
Preferred are outstanding, UD
has the
right, at its option, to call
for
redemption any or all shares
of the
Senior Preferred for an amount
equal to
their par value plus accrued
but unpaid
dividends. Upon any sale of
shares of
UD common stock by Harsco L.P.
to an
unrelated third party
(including the
initial public offering), UD
shall be
required to call for
redemption (for the
amount set forth in the
preceding
sentence) that number of
shares of
Senior Preferred held by
Harsco L.P.
which bears the same
proportion to the
total number of shares of
Senior
Preferred issued to Harsco
L.P. upon
incorporation of UD pursuant
to the
Registration Rights Agreement
as the
number of shares of common
stock sold by
Harsco L.P. bears to the total
number of
shares of common stock issued
to Harsco
L.P. upon such incorporation
Voting Rights If UD defaults in the timely
and full
payment of any quarterly
dividend on the
Senior Preferred Stock, then
the amount
of each of the next three
monthly
payments of Annual Fees to be
paid to
FMC under the Management
Services
Agreement shall be reduced by
an amount
equal to one twelfth of the
difference
between the Annual Fee in
effect and
$5,000,000, multiplied by the
fraction,
the numerator of which is the
amount of
the quarterly dividend paid
and the
denominator of which is the
amount of
the dividend payable
If UD (i) defaults in the
timely and
full payment of a total of
four
quarterly dividends on the
Senior
Preferred Stock and (ii) has
failed to
reduce the monthly payments of
Annual
Fees to FMC (as provided for
above) for
each such default in the
timely and full
payment of quarterly
dividends, then
until all arrearages of all
accumulated
dividends have been paid, the
Senior
Preferred voting separately,
as a single
class, shall have the sole
right to
elect a majority of the full
board of
directors of UD
When all arrearages are paid,
the Senior
Preferred right to vote, if
any, shall
terminate and the terms of
directors
elected by the Senior
Preferred shall
expire
Any vacancy in the office of
any
director elected by the Senior
Preferred
shall be filled by the Senior
Preferred
Consents Required from Senior Preferred Creation of any class of
capital stock
ranking pari passu with or
senior to the
Senior Preferred with respect
to either
payment of dividends or
distributions or
in the event of voluntary or
involuntary
liquidation, dissolution or
winding up
Amendment or alteration of or
change in
the powers, preferences or
special
rights of the Senior Preferred
Merger into or consolidation
with any
other entity or disposition of
all or
substantially all of UD's
assets
Liquidation Senior Preferred entitled to
receive out
of assets of UD cash in an
amount equal
to par value plus all
accumulated
dividends before any payment
or
distribution shall be made on
any other
capital stock
ANNEX B
Terms of Stockholders' Agreement
1. Parties: UD, FMC and Harsco L.P.
<F1> 2. Board representation: FMC agrees to vote for four Harsco
L.P.-nominated directors if Harsco L.P. has maintained a Share
Percentage of 40%. Upon any adjustment of the Share Percentages, FMC
agrees to vote for the number of Harsco L.P.-nominated directors closest
to one-tenth of Harsco L.P.'s Share Percentage, provided that if Harsco
L.P.'s Share Percentage is a whole number ending in five, then FMC
agrees to vote for the number of such directors closest to one-tenth of
such Share Percentage rounded down to the next lowest multiple of ten.
For purposes of this item 2, in the event that UD has been incorporated,
"Share Percentage" means Harsco's percentage ownership of UD's
outstanding common stock. The provisions of this item 2 shall be
proportionately adjusted in the event that the Board of UD has a number
of directors which is more or less than ten.
<F1> 3. Corporate governance provisions substantially the same as in
Section 3.1 of the Partnership Agreement (other than Section 3.1(k))
<F1> 4. Harsco L.P. to have preemptive right with respect to issuances
of common stock for cash (except employee stock options for up to 5% of
the total outstanding number of shares of common stock of UD)
5. Prohibition on transfer of Harsco L.P. stock except pursuant to
underwritten registered offering (subject to FMC right of first refusal)
as provided in Registration Rights Agreement or private sale (subject to
FMC right of first refusal) as provided in Partnership Agreement.
6. Put/call provisions in Harsco L.P. stock substantially the same as
in Section 7.2 of the Partnership Agreement.
7. UD assumes all of Partnership's rights and obligations under the
Partnership Agreement and Participation Agreement, including
indemnification provisions.
[FN]
<F1> These terminate at such time as Harsco L.P.'s ownership of UD
common stock is less than 20% of total UD outstanding common stock.
Stock issued or issuable pursuant to employee stock options is ignored
for purposes of determining Harsco L.P.'s percentage ownership of UD
stock.