EXHIBIT 10.1
SUPPLEMENTAL AGREEMENT NO.1 TO PURCHASE AGREEMENT
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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;
* * */1/
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 * * * 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:
(a) * * *
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/1/ Omitted text indicated herein by three asterisks (* * *) is the subject of a
Confidential Treatment Request filed with the Securities and Exchange Commission
(the "Commission"). The text for which confidential treatment has been requested
has been filed separately with the Commission.
(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) * * *
(e) * * *
(f) * * *
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. * * * 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.
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
* * * and subsequently, in any final and non-appealable adjudication, it is
determined by a court, agency or other tribunal of competent jurisdiction that
* * * 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.
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5. Covenants.
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(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
* * * 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) * * *
(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):
* * *
(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, * * *.
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
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* * *.
* * *
"UDLP" means United Defense, L.P. and its successors.
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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
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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 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
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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
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Its: Senior Vice President
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HARSCO CORPORATION
By: /s/ Leonard A. Campanaro
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Its: Senior Vice President and C.F.O.
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HARSCO UDLP CORPORATION
By: /s/ Leonard A. Campanaro
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Its: Treasurer
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IRON HORSE ACQUISITION CORP.
By: /s/ Allan M. Holt
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Its: President
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EXHIBIT A -- TERMS OF THE SPECIAL NOTE
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Borrower: The entity that issues the Senior Debt and Senior
- -------- Notes.
Principal Amount: $50,000,000
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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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