8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES 
EXCHANGE ACT OF 1934


Date of Report (date of earliest event)   January 28, 1994

Harsco Corporation
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction)

1-3970
(Commission File Number)

23-1483991
(I.R.S. Employer Identification Number)

Camp Hill, Pennsylvania                           17001-8888
(Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code:  (717) 763-7064

ITEM 2.  Acquisition or Disposition of Assets.

On January 28, 1994, FMC Corporation and Harsco Corporation completed 
the formation of the joint venture, which was first announced in 
December 1992, to combine FMC's Defense Systems Group and Harsco's 
BMY-Combat Systems Division.  The joint venture, which has an effective 
date of January 1, 1994, operates as a limited partnership known as 
United Defense, L.P. (the "Partnership"), and is jointly owned, with FMC 
holding an interest of 60 percent and Harsco holding 40 percent.  FMC is 
the managing general partner, and Harsco is a limited partner.

The Partnership has an Advisory Committee, comprised of ten individuals, 
six appointed by FMC and four appointed by Harsco, which considers and 
discusses Partnership issues.  FMC, as the managing general partner, 
exercises management control over the Partnership subject to Harsco's 
right to consent to certain actions delineated in the Partnership 
Agreement.  Additionally, the Partnership Agreement contains certain 
exit rights for both partners at any time more than 25 months after 
January 1, 1994, including the right of Harsco to sell its interest to 
the Partnership (payable by a senior promissory note from the 
Partnership) based upon a calculation of 95% of appraised value, and the 
right of FMC or the Partnership to buy Harsco's interest (payable in 
cash) based upon a calculation of 110% of appraised value.  Appraised 
value is substantially the fully distributed public equity trading value 
of the Partnership as determined by three investment banking firms in 
accordance with certain contractual stipulations, multiplied by Harsco's 
percentage interest in the Partnership.  The Partnership Agreement 
provides for certain special capital account allocations and cash 
distributions and otherwise allocates and distributes income in 
proportion to the partners' percentage ownership.

Harsco contributed to the Partnership substantially all of the assets 
and liabilities of its BMY-Combat Systems Division (other than accounts 
receivable of $38,506,000), and $5,200,000 in cash, in return for its 
40% interest in the Partnership.  In addition to the excluded accounts 
receivable, Harsco retained the rights and any liabilities associated 
with certain pending major claims between Harsco and the U.S. 
Government, and Harsco and the government of Iran.  The book value of 
the net assets contributed by Harsco as of December 31, 1993 was 
$29,600,000.  FMC contributed substantially all of the assets and 
liabilities of its Defense Systems Group and $14,800,000 in cash in 
return for its 60% interest in the Partnership.  The book value of the 
net assets contributed by FMC as of December 31, 1993 was $125,237,000 
(net of the LIFO Reserve of $13,363,000).

BMY-Combat Systems Division was a material part of Harsco Corporation in 
1993.  The Division accounted for approximately 25% of revenues 
($347,958,000), 47% of income before taxes and the cumulative effect of 
accounting changes ($64,642,000), and 6% of the net book value of the 
Company ($29,600,000).  The Partnership is expected to achieve annual 
sales of about $1 billion in 1994 with Harsco holding a 40% interest.  
Harsco Corporation will account for its 40% interest in the Partnership 
on the equity method of accounting.

The Partnership will primarily produce the Bradley Fighting Vehicle, 
Armored Gun System, M109 Paladin self-propelled howitzer, Multiple 
Launch Rocket System, M88A1 and M88IRV Recovery Vehicles, M9 Armored 
Combat Earthmover, M992 Field Artillery Ammunition Support Vehicle, the 
Breacher and M113 Armored Personnel Carrier.  The Partnership will also 
make naval guns and launching systems, military track for armored 
vehicles, and provide overhaul and conversion, as well as coproduction, 
training and logistics support.

ITEM 5.  Other Events.

In January 1992, the Board of Directors authorized the purchase over a 
two-year period of up to 4,000,000 shares of the Company's common stock 
in unsolicited open market or privately negotiated transactions at 
prevailing market prices.  This authorization expired in January 1994.  
In the course of that two year program, the Company repurchased 
2,064,555 shares of its common stock.  Following the expiration of this 
program, the Board on January 25, 1994 authorized the repurchase of 
additional shares of common stock from time to time during the next year 
at management's discretion in unsolicited open market or privately 
negotiated transactions at prevailing market prices, but not to exceed 
500,000 shares in the aggregate.

ITEM 7.  Financial Statements and Exhibits

(a)  Consolidated Financial Statements of FMC's Defense Systems Group

It is impracticable to provide the required financial statements at the 
time of filing this Form 8-K.  The required financial statements will be 
filed under cover of Form 8-K/A as soon as practicable, but not later 
than April 15, 1994.

(b)  Pro Forma Financial Information (unaudited) to reflect Harsco's 
acquisition of an interest in United Defense, L.P., formed to hold FMC's 
Defense Systems Group and Harsco's BMY-Combat Systems Division.

It is impracticable to provide the required financial information at the 
time of filing this Form 8-K because the financial statements for FMC's 
Defense Systems Group are not available yet.  The required financial 
information will be filed on Form 8-K/A as soon as practicable, but not 
later than April 15, 1994.

(c)  Pro Forma Financial Information (unaudited) to reflect Harsco's 
material disposition of assets resulting from its contribution to United 
Defense, L.P. of its BMY-Combat Systems Division.

It is not meaningful to provide the required financial information at 
the time of filing this Form 8-K because the pro forma financial 
information should also reflect the acquisition by Harsco of a 40% 
interest in United Defense, L.P.  The required financial information 
will be filed under the cover of Form 8-K/A as soon as practicable, but 
not later than April 15, 1994.

(d)  Exhibits

2.1  Participation Agreement, dated as of January 1, 1994, among FMC, 
Harsco, Harsco Defense Holding, Inc. and United Defense, L.P. (with a 
list of omitted Exhibits and Schedules thereto).

2.2  Partnership Agreement, dated as of January 1, 1994, among FMC, 
Harsco Defense Holding, Inc. and United Defense, L.P. (with a list of 
omitted Exhibits and Schedules thereto).

2.3  Annex A (Definitions relating to Participation Agreement and 
Partnership Agreement) dated as of January 1, 1994.

2.4  Registration Rights Agreement, dated as of January 1, 1994, among 
FMC, Harsco Defense Holding, Inc. and United Defense, L.P.

                             HARSCO CORPORATION
                             (Registrant)

Date:  February 14, 1994      By:  /S/ Leonard A. Campanaro
                                  Leonard A. Campanaro
                                  Senior Vice President
                                  and Chief Financial Officer

EX-2.1

PARTICIPATION AGREEMENT

AMONG

FMC CORPORATION,

HARSCO CORPORATION,

HARSCO DEFENSE HOLDING, INC.

AND

UNITED DEFENSE, L.P.

DATED AS OF JANUARY 1, 1994

This PARTICIPATION AGREEMENT (this "Agreement") is made as of January 1, 
1994, by and among FMC CORPORATION, a Delaware corporation ("FMC"), 
HARSCO CORPORATION, a Delaware corporation ("Harsco"), HARSCO DEFENSE 
HOLDING, INC., a Delaware corporation ("Harsco L.P.") and UNITED 
DEFENSE, L.P., a Delaware limited partnership ("Partnership").

WHEREAS, FMC and Harsco each possess distinctive competencies relating 
to the manufacturing, marketing, selling, and servicing of defense 
products and systems; and  

WHEREAS, FMC and Harsco desire to create a limited partnership for the 
manufacture and sale of defense-related products as generally provided 
for in this enabling agreement and as further described in the Operative 
Documents (as defined herein).

NOW, THEREFORE, in consideration of the mutual covenants, and subject to 
the terms and conditions, contained herein, the parties hereby agree 
that:

ARTICLE I

SECTION 1.1  DEFINITIONS.  Except as otherwise defined herein, terms 
used herein in capitalized form shall have the meanings attributed to 
them in Annex A to this Agreement.

ARTICLE II

SECTION 2.0  CLOSING.

2.1  Actions at Closing.  At or prior to the Closing, in reliance upon 
the representations and warranties set forth herein and subject to the 
satisfaction (or waiver by the applicable party) of the conditions set 
forth herein, FMC and Harsco shall (or shall cause their respective 
Affiliates to) accomplish the following actions and consummate the 
following transactions:

2.1.1  A Certificate of Good Standing shall have issued by the Delaware 
Secretary of State with respect to FMC.  An appropriate Certificate of 
Incorporation for Harsco L.P. shall have been filed with the Secretary 
of State of the State of Delaware.  A Certificate of Good Standing shall 
have issued by the Delaware Secretary of State with respect to Harsco 
L.P. and appropriate By-Laws shall have been adopted.  FMC and Harsco 
L.P. shall have executed and filed in the Office of the Secretary of 
State of Delaware a Certificate of Limited Partnership, thereby forming 
a Delaware limited partnership to be known as United Defense, L.P.; and

2.1.2  Except for the Novation Agreement, the Operative Documents not 
theretofore executed and delivered shall be executed and delivered.  
Those agreements which have been attached hereto as Exhibits at the 
Signing Date shall be executed and delivered substantially in the 
respective forms attached to this Agreement, and those agreements which 
have not been attached hereto as Exhibits at the Signing Date shall be 
in form and substance satisfactory to the parties when executed; and 

2.1.3  Except as otherwise agreed by the parties in writing, FMC shall 
transfer, or cause to be transferred, to the Partnership the FMC Assets 
and the FMC Liabilities (provided, that FMC may elect not to transfer 
accounts receivable equal to its estimate of the excess, if any, of the 
Net Book Value of the FMC Assets and FMC Liabilities (with such accounts 
receivable included) over FMC's Target Net Asset Value); and

2.1.4  Except as otherwise agreed by the parties in writing, Harsco 
shall transfer, or cause to be transferred, to the Partnership the 
Harsco Assets and the Harsco Liabilities (provided, that Harsco may 
elect not to transfer accounts receivable equal to its estimate of the 
excess, if any, of the Net Book Value of the Harsco Assets and Harsco 
Liabilities (with such accounts receivable included) over Harsco L.P.'s 
Target Net Asset Value); and

2.1.5  If the estimated Net Book Value of the transfer under 2.1.3 or 
2.1.4 above is less than the Target Net Asset Value for the affected 
party, such party shall transfer or cause to be transferred to the 
Partnership an amount of additional cash or a demand note in the form of 
Exhibit A equal to the difference between such estimated Net Book Value 
and such Target Net Asset Value.  The aggregate transfers by or on 
behalf of each of FMC and Harsco L.P. pursuant to Sections 2.1.3, 2.1.4 
and 2.1.5 shall constitute each party's Initial Capital Contribution 
subject to adjustment pursuant to Section 2.3.3; and

2.1.6  The Partnership shall execute the Assumption Agreement (or 
Agreements), substantially in the form of Exhibit B hereto, necessary to 
assume the Liabilities.

2.2  Time and Place of Closing.  The Closing shall take place at the 
offices of FMC, 200 East Randolph Drive, Chicago, Illinois.  The parties 
intend to Close effective as of 12:01 A.M. Chicago time on January 1, 
1994.  The parties agree that if the Closing has not occurred by 
February 1, 1994 or such later date as the parties mutually agree, 
either Parent may by written notice to the other Parent, advise the 
other Parent of its intention not to proceed with the transactions 
contemplated herein and in the other Operative Documents, without any 
penalty or any obligation of any sort owed to any other party other than 
any ongoing obligations of confidentiality contained in the 
Confidentiality Agreement, attached hereto as Exhibit C, other than any 
liability for prior breach of this Agreement and other than any 
liability under Section 5.17 or Section 7.11.

In order to effectuate the foregoing intent to Close effective as of 
12:01 A.M. Chicago time on January 1, 1994 if all conditions to Closing 
(other than those set forth in Sections 3.2, 3.5, 3.7 and 3.14 to 3.18) 
have not been met or waived by such date, each Parent agrees (i) to 
close the financial books of its Defense Business as of December 31, 
1993 and (ii) to calculate, within fifteen Business Days following the 
actual date of Closing, the amount of cash flow of its Defense Business 
from January 1, 1994 to the actual date of Closing and to remit such 
amount to the Partnership by such fifteenth Business Day; provided, 
however, that if either Parent's Defense Business has negative cash flow 
during such period, the Target Net Asset Value of such Parent's Partner 
shall be reduced by the amount of such negative cash flow.  It is the 
parties' intention (i) to close on January 28, 1994, (ii) that the 
Partnership will assume all Liabilities and the Parents will transfer 
all Assets on the actual date of Closing and (iii) that the Preliminary 
Closing Balance Sheets will be audited as of January 1, 1994 based on 
the Assets and Liabilities that would have been contributed or 
transferred to the Partnership if the actual date of Closing had been 
January 1, 1994.  The Accountants shall review the Partners' respective 
cash flow calculations to determine whether such calculations are 
consistent with the cash flow that the Partnership would have received 
had the Closing occurred on January 1, 1994.  In the event that the 
Accountants determine that there is an inconsistency in any Partner's 
calculation, such Partner shall make an adjustment to the amount of cash 
flow remitted by it in accordance with the Accountants' determination.

2.3  Post-Closing Adjustments.

2.3.1  Preliminary Closing Balance Sheets.  As soon as practicable, but 
in no event more than 45 days, after the actual date of Closing, each 
Parent will prepare (and the Partnership will assist and cooperate in 
such preparation at no cost to the Parents) a balance sheet as of 
January 1, 1994 for its Defense Business which reflects the Assets and 
Liabilities which would have been contributed or transferred to the 
Partnership at the Closing had the Closing occurred on January 1, 1994 
(the "Preliminary Closing Balance Sheet").  Each of the Preliminary 
Closing Balance Sheets (i) will be audited and reported on by such 
Parent's certified public accountants as being in accordance with GAAP 
and the Principal Accounting Procedures, prepared on a basis consistent 
with the appropriate Pro Forma Balance Sheet, except as set forth on 
Schedule 2.3.1 and (ii) will reflect the types of Assets and Liabilities 
reflected on the Pro Forma Balance Sheet and the cash and any demand 
note contributed or transferred to the Partnership by such Parent and 
its Affiliates (and no other assets or liabilities).  Each Parent and 
its representatives will be entitled to review such Preliminary Closing 
Balance Sheet and all relevant books, records and workpapers of the 
other Parent and its accountants.

2.3.2  Final Closing Balance Sheets.  Within 30 days after its receipt 
of the other Parent's Preliminary Closing Balance Sheet, each Parent 
shall notify the other whether it accepts or disputes the accuracy of 
the Preliminary Closing Balance Sheet.  If such reviewing Parent accepts 
the preparing Parent's Preliminary Closing Balance Sheet, such 
Preliminary Closing Balance Sheet shall be deemed to be the final 
balance sheet as of the end of business on the Closing Date ("Final 
Closing Balance Sheet").  If the reviewing Parent disputes the accuracy 
of the Preliminary Closing Balance Sheet, it will in the notice of such 
dispute set forth in reasonable detail those items that it believes are 
not fairly presented and the reasons for its opinion.  The parties shall 
then meet and in good faith use all reasonable efforts to resolve their 
disagreements over the disputed items on such Preliminary Closing 
Balance Sheet.  If the parties resolve their disagreements in accordance 
with the foregoing sentence, the Preliminary Closing Balance Sheets with 
those modifications to which the parties will have agreed shall be 
deemed to be the Final Closing Balance Sheets.  If the parties have not 
resolved their disagreements over the disputed items on the Preliminary 
Closing Balance Sheets within 20 days after notice of the dispute was 
given, the parties shall jointly select an independent accounting firm 
of national reputation, and such firm will make, within 30 days after 
its engagement, a binding determination of those disputed items in 
accordance with the terms of this Participation Agreement.  The 
Preliminary Closing Balance Sheets with such modifications as determined 
by such independent accounting firm to be appropriate will be deemed to 
be the Final Closing Balance Sheets.  The fees and expenses of each 
Parent in connection with the preparation of its Preliminary and Final 
Closing Balance Sheets will be paid by such Parent, and the fees and 
expenses of any independent accounting firm will be shared equally by 
the Parents.

2.3.3  Post-Closing Payment  If either Partner's estimated Initial 
Capital Contribution pursuant to Sections 2.1.3, 2.1.4 and 2.1.5 as 
shown on its Final Closing Balance Sheet is less than such Partner's 
Target Net Asset Value, then FMC or Harsco L.P., or both, as the case 
may be, will, within three Business Days of the final determination of 
such Final Closing Balance Sheet, pay to the Partnership cash or assign 
to the Partnership accounts receivable of its Defense Business equal to 
such difference.  Any such payment or assignment required to be made to 
the Partnership by FMC or Harsco L.P. shall bear interest at the rate of 
three month LIBOR at the actual date of Closing, plus 100 basis points, 
from the actual date of Closing through the date such payment is made.  
If accounts receivable are assigned in lieu of cash, the assigning 
Partner shall pay interest, at the rate of three month LIBOR at the 
actual date of Closing, plus 100 basis points, on such receivables from 
the actual date of Closing to the earlier of the date on which such 
account receivable is collected in full or the date on which such 
account receivable is repurchased in its entirety by the assigning 
Partner pursuant to Section 5.14.  If either Partner's estimated Initial 
Capital Contribution pursuant to Sections 2.1.3, 2.1.4 and 2.1.5 as 
shown on its Final Closing Balance Sheet is greater than such Partner's 
Target Net Asset Value, then the Partnership will within three Business 
Days of the final determination of such Final Closing Balance Sheets 
transfer to FMC or Harsco L.P., as the case may be, an amount in 
accounts receivable or demand notes contributed by such Partner equal to 
such excess.  If there are insufficient accounts receivable and demand 
notes for this purpose, the Partnership shall issue a one-year 
promissory note to such Partner for the remainder of such excess 
estimated Initial Capital Contribution.  Such Promissory Note shall be 
in the form attached hereto as Exhibit D and shall be repaid in full 
prior to making any distributions to any Partner other than 
distributions pursuant to Sections 6.1, 6.2 and 6.3 of the Partnership 
Agreement.  Any such payment in accounts receivable or demand notes 
required to be made by the Partnership to FMC or Harsco L.P. shall bear 
interest at the rate of one year LIBOR at the actual date of Closing, 
plus 100 basis points, from the actual date of Closing through the date 
such payment is made.  Any one-year promissory note delivered by the 
Partnership to either FMC or Harsco L.P. shall bear interest from the 
actual date of Closing at the rate of one year LIBOR at the actual date 
of Closing, plus 100 basis points.

ARTICLE III

SECTION 3.0  CONDITIONS PRECEDENT TO CLOSING.  The obligation of a party 
hereto (a "Closing Party") to complete the transactions contemplated 
hereunder ("Close") is subject to the fulfillment or waiver at or before 
the Closing of the conditions set forth in this Article III.  The 
Closing of the transactions contemplated hereby constitutes a waiver by 
each party hereto of any nonfulfillment of a condition set forth below 
solely for purposes of its obligation to Close.

3.1  Performance.  Each other Closing Party and each other party to any 
other Operative Documents which is not an Affiliate of such other 
Closing Party (the "Condition Party") shall have performed and complied 
with each agreement and condition in each Operative Document required to 
be performed or complied with by such Condition Party at or before the 
Closing, except for the Novation Agreement which will be entered into 
following the Closing and except to the extent that such noncompliance 
by any other Condition Party would not have a Material Adverse Effect on 
the Partnership.

3.2  Authorization, Execution and Delivery of Operative Documents.  
Except for the Novation Agreement, each Operative Document shall have 
been duly authorized, executed and delivered by each Condition Party 
which is a party thereto and executed and delivered by the Partnership 
and an executed counterpart shall have been delivered to such Closing 
Party.  The Partnership Agreement shall have been duly authorized, 
executed and delivered by the Partners, a Certificate of Limited 
Partnership shall have been filed with the Secretary of State of 
Delaware and the Registration Rights Agreement shall have been duly 
authorized, executed and delivered by the respective parties thereto.

3.3  Governmental and Private Actions; Burdensome Governmental 
Conditions.  There shall be no pending or threatened Burdensome 
Governmental Condition with respect to the transactions contemplated 
hereby and no known DOJ or FTC antitrust investigation pending or in 
progress with respect to such transactions.  Except for execution and 
delivery of the Novation Agreement, all Governmental Actions (other than 
routine qualifications and permits to do business intended to be 
obtained as needed and other than employee pension and thrift plan 
approvals) and all Private Actions (except for third-party Consents to 
Restricted Contracts, which are governed by Section 5.11 hereof) 
required to be taken, given or obtained that are necessary in connection 
with the transactions contemplated by any Operative Document shall (i) 
have been taken, given or obtained on terms reasonably satisfactory to 
each Parent, (ii) be in full force and effect as of the Closing and 
(iii) not be subject to any Burdensome Governmental Condition.

3.4  Governmental Rules.  No Governmental Rule shall have been 
instituted or issued to set aside, restrain, enjoin or prevent the 
consummation of the transactions contemplated by any Operative Document. 
No change shall have occurred since the Signing Date in any Governmental 
Rule that, in such Closing Party's reasonable opinion, would make it 
illegal for such Closing Party, any Affiliate of such Closing Party or 
the Partnership to consummate the transactions contemplated by the 
Operative Documents or subject such Closing Party, any Affiliate of such 
Closing Party or the Partnership to any substantial penalty or other 
substantial liability under or pursuant to any existing Governmental 
Rule.

3.5  Standard Closing Documents.  Such Closing Party shall have 
received, with respect to each other Closing Party:

3.5.1  a certificate or certificates dated the Closing Date of a senior 
corporate officer, secretary or other appropriate authorized signatory 
of such Closing Party certifying as to:

3.5.1.1  the corporate charter and bylaws, recently certified, in the 
case of the charter, by the secretary of state or similar Governmental 
Authority of the jurisdiction in which such Closing Party is 
incorporated, or the equivalent for a partnership, to the extent that 
such certification legally exists;

3.5.1.2  the absence of amendments since the date of the last amendment 
shown on the official evidence as to such charter furnished pursuant to 
this Section 3.5.1;

3.5.1.3  resolutions, delegations or other written evidence of corporate 
or other action of the appropriate authority within such Closing Party 
and, if applicable, the stockholders or partners of such Closing Party 
duly authorizing or ratifying its execution, delivery and performance of 
each Operative Document to which it is or is to be party and the absence 
of other resolutions, delegations or such other corporate action 
relating thereto;

3.5.1.4  the absence of proceedings for the merger, consolidation, sale 
of all or substantially all assets, dissolution, liquidation or similar 
proceedings with respect to such Closing Party; and

3.5.1.5  the incumbency and signatures of the individuals authorized to 
execute and deliver documents on such Closing Party's behalf;

3.5.2  recent official evidence from appropriate Governmental 
Authorities as to (A) charter documents on file and good standing in 
such Closing Party's jurisdiction of organization and (B) in the case of 
the Partners, qualification to do business in each jurisdiction in which 
its Defense Business is required to be qualified, which shall be at 
least one jurisdiction; and

3.5.3  an opinion of counsel to such Closing Party with respect to the 
matters set forth in Exhibit E hereto, dated as of the actual date of 
Closing.

3.6  Representations and Warranties.  The representations and warranties 
of each Closing Party in Article IV shall be true and correct at and as 
of the Signing Date and the actual date of Closing, in each case in all 
material respects, except as otherwise contemplated by this Agreement.

3.7  Officer's Certificates.

3.7.1  Each Closing Party shall have received an officer's certificate 
(or a similar certificate) from the Secretary (or more senior officer) 
of each of the other Closing Parties (other than the Partnership) dated 
the Closing Date certifying that the conditions set forth in Sections 
3.1, 3.2, 3.3, 3.4, 3.6 and 3.8 have been satisfied as to such Closing 
Party.

3.7.2  FMC shall have received a Secretary's Certificate from the 
Corporate Secretary of Harsco certifying to the fact that as of both the 
Signing Date and the actual date of Closing, Harsco L.P. was and is a 
wholly-owned Subsidiary of Harsco.

3.8  No Material Adverse Change.  Since the Signing Date, there shall 
not have occurred any material adverse change in (i) the assets, 
liabilities, operations, financial condition or prospects of either 
Defense Business or (ii) the financial condition of either Parent, on a 
consolidated basis together with its Affiliates.

3.9  Insurance.  All insurance policies and programs reflected on 
Exhibit A to the Partnership Agreement shall be in full force and effect 
on the actual date of Closing and all premiums, commissions and fees 
then due thereon shall have been paid (or arrangements, reasonably 
satisfactory to Harsco, shall have been made for such payment).

3.10  Due Diligence.  The results of any due diligence investigation by 
each Closing Party shall not have revealed any event or condition not 
disclosed to such Closing Party prior to the Signing Date that would 
have a Material Adverse Effect on the Partnership.

3.11  Proceedings, Opinions and Documents.  All opinions, certificates 
and other documents to be delivered to such Closing Party pursuant to 
Section 2.0 and this Article III and all proceedings in connection with 
the transactions contemplated by Section 2.0 and this Article III shall 
be reasonably satisfactory to such Closing Party. Such Closing Party 
shall have received (i) evidence reasonably satisfactory to it that each 
condition set forth in this Article III has been satisfied and (ii) 
copies of all other documents and other evidence as it may reasonably 
request, in form and substance reasonably satisfactory to it, with 
respect to such transactions and the taking of all necessary corporate 
or other proceedings in connection therewith.

3.12  Partnership Capitalization.  The Parents shall have paid or caused 
to be paid their respective portions of initial cash contributions 
required to be made by the Closing Date pursuant to Sections 2.1.3, 
2.1.4 and 2.1.5 of this Agreement as of the actual date of Closing.

3.13  Novation Agreement.  There shall have been no written statements 
from DOD that it will only novate the Contracts to which it is a party 
on terms that would have an adverse effect on the Partnership or any 
Parent or that it will not approve novation of such Contracts.

3.14  Intellectual Property Agreements.  FMC and Harsco shall have each 
entered into Intellectual Property Agreements with the Partnership, 
substantially in the forms of Exhibits F-1 and F-2 hereto, and Limited 
Non-Exclusive Licenses with the Partnership.

3.15  Lease Agreement.  FMC and the Partnership shall have entered into 
the Lease Agreement, substantially in the form of Exhibit G hereto.

3.16  Management Services Agreement.  FMC shall have entered into a 
Management Services Agreement with the Partnership, substantially in the 
form of Exhibit H hereto.

3.17  Partnership Agreement.  FMC and Harsco L.P. shall have entered 
into the Partnership Agreement, substantially in the form of Exhibit I.

3.18  Registration Rights Agreement.  FMC, Harsco and the Partnership 
shall have entered into the Registration Rights Agreement, substantially 
in the form of Exhibit J hereto.

3.19  Effects Bargaining.  To the best of each Closing Party's 
Knowledge, any "effects bargaining" by Harsco and FMC with their 
respective Defense Business collective bargaining representatives shall 
not have resulted in claims or demands by either collective bargaining 
representative which would have a reasonable likelihood of resulting in 
a Material Adverse Effect on the Partnership.

3.20  Title Insurance.  Each of FMC and Harsco shall have delivered to 
the Partnership (i) at least ten Business Days prior to the actual date 
of Closing, a commitment, issued by a title insurance company reasonably 
acceptable to the other Parent, to insure the Owned Property contributed 
by it to the Partnership, showing title to such property in such 
contributing Parent, (ii) an ALTA owner's title insurance policy (4-6-90 
version or the most recent version in use in the state where any 
particular parcel of Owned Property is located) in the amount of 
$7,821,000 in the case of FMC's Owned Property and $12,700,000 in the 
case of Harsco's Owned Property, containing no exceptions other than 
those listed (or not required to be listed) on Schedule 4.8.2A or 4.8.2B 
and insuring fee simple title to all Owned Property contributed by it to 
the Partnership (the cost of which policy shall be paid for or 
reimbursed by the Partnership after the Closing) and (iii) limited 
warranty deeds in recordable form conveying to the Partnership such 
Owned Property.

ARTICLE IV

SECTION 4.0  REPRESENTATIONS AND WARRANTIES.  Each of the Parents 
represents and warrants to the other Parent and the Partnership, and, 
with respect to Sections 4.1 through 4.4, the Partnership represents and 
warrants to both Parents, at and as of the Signing Date and the actual 
date of Closing that:

4.1  Organization; Ownership; Interest, Etc.  It and each of its Defense 
Affiliates is, or will be by the actual date of Closing, in the case of 
its Defense Affiliates, duly organized or established, validly existing 
and in good standing under the laws of its jurisdiction of organization 
or establishment and it and each of its Defense Affiliates has, or will 
have by the actual date of Closing, in the case of its Defense 
Affiliates, the power and authority to carry on its business as then 
conducted, to own or hold under lease its properties and to enter into 
and perform its obligations under each Operative Document to which it is 
or is to be a party.

It and each of its Defense Affiliates is or, in the case of its Defense 
Affiliates, will be in timely fashion duly organized, qualified to own 
or lease its properties and generally to conduct business as currently 
or proposed to be conducted in each jurisdiction necessary for purposes 
of the transactions contemplated by the Operative Documents.  All of the 
ownership interest in Harsco L.P. will be held by Harsco free from any 
Liens on the actual date of Closing.

4.2  Authorization; No Conflict.  It and each of its Defense Affiliates 
has or, in the case of its Defense Affiliates, will have by the actual 
date of Closing, duly authorized by all necessary action the execution, 
delivery and performance of each Operative Document to which it is or is 
to be a party, and, except as set forth on Schedule 4.2, neither its 
execution and delivery thereof nor its consummation of the transactions 
contemplated thereby nor its compliance therewith does or will (i) 
require any approval of its stockholders not theretofore obtained or any 
approval or consent of any trustee or holders of any of its Debt or 
obligations, (ii) contravene any Governmental Rule applicable to or 
binding on it or any of its properties, (iii) contravene or result in 
any breach of or constitute any default under, or result in the creation 
of any Lien (other than Permitted Liens) upon any of its property under, 
any indenture, mortgage, chattel mortgage, deed of trust, conditional 
sales contract, loan or credit agreement, charter, bylaw or other 
agreement or document to which it is a party or by which it or any of 
its properties is bound or affected or (iv) require the taking of any 
Governmental Action or any Private Action, in each case except such as 
have been, or by the actual date of Closing will be, duly obtained, 
made, taken or waived (except, in the cases of clauses (ii), (iii) and 
(iv), as would not have a Material Adverse Effect on such Parent, its 
Defense Business or the Partnership).

4.3  Enforceability.  It and each of its Affiliates, as applicable, have 
duly executed and delivered this Agreement, and this Agreement 
constitutes, and each other Operative Document to which it and each of 
its Defense Affiliates, as applicable, are or are to be parties upon 
execution and delivery thereof by it or the applicable Defense Affiliate 
will constitute, its or the applicable Defense Affiliate's legal, valid 
and binding obligation, enforceable against it or the applicable Defense 
Affiliate in accordance with its terms, except as may be limited by 
bankruptcy, insolvency, reorganization and similar laws affecting 
creditors generally and by the availability of equitable remedies.

4.4  Proceedings.  Except as set forth on Schedule 4.4, there are no 
actions or proceedings pending or, to its Knowledge, threatened, before 
any Governmental Authority that, if adversely determined against it, 
would have a Material Adverse Effect on such Parent, its Defense 
Business or the Partnership.

4.5  Special Purpose Representation as to Partners.  In the case of any 
Affiliate that will become a Partner in the Partnership, such Partner on 
the actual date of Closing:  (i) will be duly incorporated and 
sufficiently capitalized to meet its then current obligations to make 
contributions to the Partnership; (ii) will not have conducted any 
business other than to enter into and perform its obligations under the 
Operative Documents; (iii) will have no outstanding Debt or other 
obligations other than Debt owed to its Parent or pursuant to the 
Operative Documents and Contracts to which it is a party; and (iv) will 
not be a party to or be bound by any contract or other document other 
than such Operative Documents to which it is a party, its organizational 
documents, and such other documents, agreements and contracts between 
it, its Parents and Affiliates of its Parents necessary and desirable to 
enable it fully to perform the functions and activities contemplated by 
this Agreement and the other Operative Documents. 

4.6  No Defaults; Operative Documents and Contracts.  It has not 
received any notification to the effect that any material Contract is 
not in full force and effect or will not be immediately after the 
Closing, and it has not received any notification of default, 
repudiation or disaffirmance from any other party thereto and has no 
reason to believe that any material Contract will not be in full force 
and effect immediately after the Closing, except to the extent that such 
event or condition as would not have a Material Adverse Effect on such 
Parent, its Defense Business or the Partnership.

4.7  No Outstanding Rights.  There are no outstanding rights, options, 
agreements or other commitments and on the actual date of Closing, 
except as provided in the Operative Documents or the Schedules attached 
thereto, there will be no outstanding rights, options, agreements or 
other commitments, giving any Person any current or future right to 
require such Partner, its Parent or any of their Affiliates (or, 
following the actual date of Closing, the Partnership) to transfer to 
any Person any ownership or possessory interests in any Assets, 
Contracts and Liabilities of such Partner, its Parent or any of their 
Affiliates. 

4.8  Title and Liens.

4.8.1  Title to Assets Other Than Real Property.  Such Partner or one of 
its Affiliates has, and at the Closing, the Partnership shall receive, 
good title to all tangible Assets other than Real Property that are 
purportedly owned, free and clear of all Liens, other than Permitted 
Liens.

4.8.2  Title to Real Property.  Schedules 4.8.2A and 4.8.2B set forth a 
complete list of all real property and interests in real property owned 
in fee by the FMC Defense Business and the Harsco Defense Business, 
respectively,  that will be transferred to the Partnership at Closing 
(individually, an "Owned Property").  Schedules 4.8.2A and 4.8.2B also 
set forth a complete list of all real property and interests in real 
property owned or leased by the FMC Defense Business and the Harsco 
Defense Business, respectively, that will be leased by the Partnership 
as the tenant or lessee thereof after the Closing (individually, a 
"Leased Property") and identify any material leases relating thereto.  
Except as set forth on Schedule 4.8.2A or 4.8.2B, each Parent has (i) 
good and marketable fee title to all Owned Property and (ii) good and 
valid title to the leasehold estates in all Leased Property, including 
subleases, in each case free and clear of all mortgages, liens, leases, 
security interests, easements, covenants, rights-of-way and other 
similar restrictions or encumbrances of any nature whatsoever, except 
(a) Permitted Liens, (b) easements, covenants, rights-of-way and other 
similar restrictions or encumbrances of record and (c) (i) zoning, 
building and other similar restrictions, (ii) mortgages, liens, leases, 
security interests or encumbrances that have been placed by any 
developer, landlord or other third party on property over which either 
Defense Business has easement rights appurtenant to or used in 
connection with any Owned Property or on any Leased Property and 
subordination or similar agreements relating thereto and (iii) 
unrecorded easements and rights-of-way, encroachments and discrepancies 
in area or boundary lines, none of which items set forth in clauses (b) 
and (c) above, individually or in the aggregate, materially impair the 
continued use and operation in either Defense Business, as presently 
conducted, of the property to which they relate and the improvements 
located on such property.

4.9  Assets in Good Condition and Working Order.  To its Knowledge, all 
property, plant, equipment and inventories included in each Parent's 
Assets are in normal working order, except for ordinary wear and tear, 
retirements in the ordinary course of business, normal maintenance and 
repair and breakdowns that do not significantly affect normal 
operations.  All inventories included in each Parent's Assets are 
accurately valued and carried on an average cost basis and, except for 
such inventories that constitute Slow-Moving Inventory (i) are usable or 
saleable in the normal course of the Parent's Defense Business; (ii) at 
the actual date of Closing, will not be excessive in kind or amount in 
light of prior inventory levels at comparable periods and anticipated 
sales; and (iii) are reasonably adequate and sufficient in kind and 
amount with respect to actual sales commitments as of the date hereof 
and anticipated sales commitments, in light of historic rates of 
inventory turnover.  Except as shown on Schedules 4.9A and 4.9B, there 
is not, with respect to such Partner's accounts receivable, any known 
existing default or any receivable that such Partner does not reasonably 
expect to collect within six months of the actual date of Closing, 
except as would not, individually or in the aggregate, have a Material 
Adverse Effect on the Partnership.  Attached hereto as Schedules 4.9A 
and 4.9B are schedules of aged accounts receivable of the FMC Defense 
Business and the Harsco Defense Business, respectively.  On the actual 
date of Closing, each Parent will submit to the Partnership an updated 
list of aged receivables being transferred to the Partnership.

4.10  Contracts, Etc.  Set forth on Schedule 4.10 are lists of all 
contracts, agreements, licenses and commitments relating to its Defense 
Business which:  (a) provide for the sale or other disposition of 
products or services to customers of, or for the purchase of raw 
materials, products or services from suppliers to, such Defense Business 
(excluding consulting contracts, sales representative agreements, 
marketing agreements and lobbying agreements), other than contracts, 
agreements, licenses and commitments which individually (i) do not 
involve future payments or receipts of more than $1,000,000 or (ii) 
permit cancellation by either Parent or any Defense Affiliate thereof 
upon 90 or fewer days' notice without any liability, penalty or premium 
in excess of $100,000; (b) provide the terms and conditions pursuant to 
which distributors, distributor branches, service dealers and direct 
dealers (foreign and domestic) provide Defense Business products, 
service and parts to end user customers or relating to the compensation 
of or termination of arrangements with such persons or entities by 
either Defense Business; (c) set forth the terms of any material 
subcontracts, joint ventures, teaming arrangements, collective 
bargaining agreements, leases, employment, confidentiality or 
non-competition agreements, related party transactions or arrangements, 
guarantees, debt instruments, off-sets with foreign governments or 
intellectual property agreements; (d) are otherwise material to the 
business, operations, financial condition or prospects of the 
Partnership; or (e) provide for the procurement by either Parent of 
consulting, sales representative, marketing or lobbying services, 
regardless of the amount involved in each such contract.  The list of 
Contracts set forth on Schedule 4.10 shall indicate those Contracts for 
which a novation agreement or consent to assignment of contract may be 
required and shall be separated into the following categories:  (i) 
government contracts; (ii) consulting contracts; (iii) sales 
representative contracts; (iv) lobbying contracts; (v) supply, services, 
and vendor contracts; and (vi) other contracts.  True and complete 
copies (or originals, if available) of all Contracts that are listed on 
Schedule 4.10 shall be made available, as requested, to the other Parent 
for review as soon as practically possible.  There are no known 
liabilities in excess of $100,000 in the aggregate with regard to all 
classified U.S. Government contracts to which such Partner is a party.  
Each contract providing for the provision of products and services to 
customers by either Parent shall be designated as either an Active 
Contract or an Inactive Contract on Schedule 4.10.  Except as set forth 
in Schedule 4.10, to its Knowledge, there is not, with respect to the 
Contracts, any existing default, or an event of default, or event which 
with due notice or lapse of time or both would constitute a default or 
an event of default, on the part of FMC or Harsco, as the case may be, 
or the other party thereto, except such defaults, events of default and 
other events which would not, individually or in the aggregate, have a 
Material Adverse Effect on the Partnership.  Except as disclosed in 
Schedule 4.10 (or as not required to be disclosed), no other contract 
exists which would bind the Partnership or which would restrict the 
ability of the Partnership to consummate the transactions contemplated 
hereby or engage in any business within its Scope of Activity.

4.11  Legal Matters.  Except as set forth on Schedule 4.11 and except 
for provisions in any contract with the U.S. Government that permit the 
U.S. Government to terminate such contract for its convenience, neither 
Parent nor any Subsidiary thereof is subject to any Governmental Rule, 
Private Action or contract or agreement that may have a Material Adverse 
Effect on the Partnership.  There are no material legal impediments to 
the operation of such business activity within the Scope of Activity in 
the ordinary course.  Except as set forth in Schedule 4.11, there is no 
governmental or private litigation, arbitration or other proceeding or 
investigation by any Governmental Authority pending or, to the Knowledge 
of such Parent, threatened against such Parent or any Subsidiary thereof 
that would materially and adversely affect the Assets or Contracts 
(including their transfer to or use by the Partnership), the Liabilities 
or the continued operation of such Assets or Contracts by the 
Partnership in the manner in which they have been operated by each of 
the Parents to date or have a Material Adverse Effect on the 
Partnership.  Further, except as set forth on Schedule 4.11, there 
currently exist no judgments unsatisfied against either Parent or any of 
its Affiliates in connection with its Defense Business, nor any consent 
decree or injunction to which it is subject.  Except as set forth in 
Schedule 4.11, neither FMC nor Harsco is aware of any unfair labor 
practice on its part or any acts or omissions on its part which are 
reasonably expected to constitute an unfair labor practice under the 
National Labor Relations Act.

4.12  Liabilities.  Except for liabilities of the types and in the 
amounts set forth on the Pro Forma Balance Sheet or the Final Closing 
Balance Sheet and liabilities otherwise disclosed on Schedule 4.12 or on 
any other Schedule to this Agreement, there are no liabilities or 
obligations of any kind (absolute, accrued, contingent or otherwise), 
including, but not limited to, liabilities or obligations relating to or 
arising out of the operation of either Defense Business, that are 
reasonably expected, individually or in the aggregate, to have a 
Material Adverse Effect on such Parent's Defense Business or the 
Partnership.

4.13  No Broker's or Finder's Fees.  Neither Parent nor any Subsidiary 
has incurred any liability for any broker's or finder's fees or 
commissions or similar payments in connection with any of the 
transactions contemplated hereby which will, directly or indirectly, 
become the responsibility of, or be borne by, the Partnership or the 
other Parent or any Affiliate thereof.

4.14  Financial Information.  Attached hereto as Schedule 4.14A or 
4.14B, as the case may be, is such Partner's good faith estimate at the 
time of preparation thereof, based on reasonable assumptions, of the 
projected September 30, 1993 balance sheets (each a "Pro Forma Balance 
Sheet") of its Defense Business, except as noted therein.  Each Pro 
Forma Balance Sheet has been prepared in accordance with GAAP and such 
Parent's historical accounting procedures with respect to its Defense 
Business, except as noted therein.

4.15  Events Subsequent to December 31, 1992.  Except as indicated in 
Schedule 4.15 with respect to it, from and after December 31, 1992, 
neither Parent, with respect to its Defense Business, has:  (i) suffered 
or experienced any material adverse change in its financial condition, 
Assets, Liabilities, business, results of operations, net worth or 
prospects, other than changes in the ordinary course of business, none 
of which (individually or in the aggregate) has been materially adverse 
to its financial condition, Assets, Liabilities, business, results of 
operation, net worth or prospects; (ii) suffered any damage, destruction 
or loss, whether or not covered by insurance, which adversely affects 
its properties, Assets or business in any material respect; (iii) made 
or granted any increase in the compensation payable or to become payable 
to any employees, or any increase in any bonus, insurance, pension or 
other employee benefit arrangement to, for or with any such employees, 
other than in the ordinary course of business or terminated, given 
notice of termination to or received notice of the resignation of any 
key employee; (iv) mortgaged, pledged, hypothecated or otherwise 
encumbered any of its material assets; (v) sold, licensed or 
transferred, or agreed to sell, license or transfer, any of its assets, 
other than in the ordinary course of business; (vi) sold or transferred, 
or agreed to sell or transfer, any material patents, trademarks, trade 
names, copyrights, licenses, rights to special processes or other 
intangible assets previously used in its operations; (vii) agreed to any 
material amendment to or termination of a Contract, or entered into, 
accelerated, terminated or modified any Contract, lease, sublease, 
rental agreement or license, in any such case involving more than 
$1,000,000; (viii) incurred any new commitment (through negotiations or 
otherwise) or liability to any labor organization; (ix) entered or 
agreed to enter into any agreement or arrangement granting preemptive 
rights, preferential rights or rights of first refusal with respect to 
its Assets; (x) delayed or postponed beyond its normal and usual 
practice the payment of any accounts payable and other liabilities; (xi) 
canceled, compromised, waived, settled or released outside of the 
ordinary course of business any right or claim (or series of related 
rights and claims) involving more than $1,000,000; or (xii) entered into 
any other material transaction other than in the ordinary course of 
business as theretofore conducted.

4.16  Consents.  No consent, authorization, order or approval of, or 
filing or registration with, any Governmental Authority is required for 
or in connection with the consummation by each Parent of the 
transactions contemplated hereby, except for:  (i) those that have been 
obtained, (ii) the Novation Agreement, (iii) circumstances where the 
failure to obtain such consent, authorization, order or approval would 
not have a Material Adverse Effect on such Parent's Defense Business or 
the Partnership and (iv) those set forth in Schedule 4.16. 

4.17  Notice of Governmental Authorization and Compliance With Laws.  
Since January 1, 1988, except as set forth on Schedule 4.17, with 
respect to its Assets and its Defense Business, it has not received any 
written notification of any asserted present or past failure to comply 
in any material respect with any applicable laws, regulations or other 
requirements of any Governmental Authority having jurisdiction over it, 
except for such noncompliance as would reasonably be expected not to 
have a Material Adverse Effect on such Parent's Defense Business or the 
Partnership.  With respect to its Assets and its Defense Business, it 
has obtained all material permits, certificates, licenses, approvals and 
other authorizations (other than pursuant to the Novation Agreement) 
required in connection with its present operations, none of which will 
lapse, expire, terminate, be revoked or rescinded or otherwise become 
lost or unavailable to the Partnership by reason of the transactions 
contemplated by this Agreement.  To the best of its Knowledge, the 
Assets and the Defense Business have been operated in compliance in all 
material respects with all terms and conditions of any and all material 
permits, licenses and authorizations.  Since January 1, 1988, except as 
set forth on Schedule 4.17, there has been no (a) criminal proceeding 
(whether regarding a felony or misdemeanor offense) threatened in 
writing or commenced with respect to its Defense Business, however 
resolved, (b) suspension or debarment proceeding threatened in writing 
or commenced by any Governmental Authority, (c) civil proceeding under 
the False Claims Act, as amended, commenced with respect to its Defense 
Business, however resolved, or (d) claim made or threatened in writing 
by any Governmental Authority under the Truth in Negotiations Act or 
under the Foreign Corrupt Practices Act of 1977, each as amended.

4.18  Government Contracts.  Except as set forth in Schedule 4.18, it 
has not received, with respect to its Assets, notice of any default 
under or notice of any violation of the terms of any government contract 
which relates to its Defense Business, either directly or as a 
subcontractor, consultant or otherwise.  Except for routine audits in 
the ordinary course of business and as set forth in Schedule 4.18, it is 
not participating in any investigation by any Governmental Authority 
relating to its government contracts, billings, claims or business 
practices that could lead to criminal or civil penalties, and, to its 
Knowledge, it is not the subject of any such investigation relating to 
its Defense Business.  Except as set forth in Schedule 4.18, since 
January 1, 1983 it has not been and is not debarred or suspended by any 
Governmental Authority from bidding for or obtaining any government 
contract (including as a result of any listing proceeding under 40 
C.F.R. Part 15), and no such proceeding is pending, or to its Knowledge, 
threatened, which could result in the debarment or suspension of it or 
any part of its Defense Business.

4.19  Capital Stock and Equity Interests of Defense Affiliates and 
Defense Subsidiaries.  Schedule 4.19 sets forth for each Defense 
Affiliate and Defense Subsidiary, as applicable, the amount of its 
authorized capital stock, the amount of its outstanding capital stock, 
the record owners of its outstanding capital stock, or the record owners 
of its partnership interests and such record owners' percentage 
ownership.  All the outstanding shares of capital stock of each Defense 
Affiliate and Defense Subsidiary have been duly authorized and validly 
issued and are fully paid and nonassessable.  Except as set forth on 
Schedule 4.19, the shares of capital stock or partnership interests of 
any Defense Affiliate or Defense Subsidiary have not been issued in 
violation of, and none of such shares of capital stock or partnership 
interests is subject to, any preemptive or subscription rights.  Except 
as set forth on Schedule 4.19, there are no shares of capital stock or 
other equity securities or partnership interests of any Defense 
Affiliate or Defense Subsidiary outstanding.  Except as set forth on 
Schedule 4.19, there are no outstanding warrants, options, "phantom" 
stock rights, agreements, convertible or exchangeable securities or 
other commitments (other than this Agreement or any other Operative 
Document) pursuant to which the Partnership is or may become obligated 
to issue, sell, purchase, return or redeem any shares of capital stock 
or other securities of any Defense Affiliate or Defense Subsidiary, and 
there are not any equity securities of any Defense Affiliate or Defense 
Subsidiary reserved for issuance for any purpose.  Except as set forth 
on Schedule 4.19, each Parent directly or through one or more 
wholly-owned subsidiaries has good and valid title to all the 
outstanding shares of capital stock or partnership interests of each 
Defense Subsidiary, free and clear of any liens, claims, encumbrances, 
security interests, options, charges and restrictions whatsoever, and 
all outstanding shares of capital stock are duly authorized and validly 
issued and outstanding, fully paid and nonassessable.  Except as set 
forth on Schedule 4.19, neither Defense Business directly or indirectly 
owns any capital stock of or other equity interests in any corporation, 
partnership or other entity.

4.20  Intellectual Property Rights.

4.20.1  The Transferred Intellectual Property Rights, Licensed 
Intellectual Property and Licensed Third Party Rights comprise all of 
the intellectual property rights necessary for the operation of its 
Defense Business as currently conducted or proposed to be conducted; it 
owns, possesses with the right to use or has a valid and enforceable 
license with respect thereto free and clear of all liens, security 
interests, encumbrances and other restrictions and no claim by any third 
party contesting the validity, enforceability, use, possession or 
ownership of any of the Transferred Intellectual Property Rights or 
Licensed Intellectual Property is currently outstanding or known to be 
threatened.

4.20.2  Schedule 4.20 sets forth a complete and correct list of its 
Statutory Rights and Marks constituting Transferred Intellectual 
Property Rights and Licensed Intellectual Property and all licenses or 
other agreements (including teaming agreements) to which it is a party 
relating to Licensed Third Party Rights and/or Transferred Intellectual 
Property Rights or Licensed Intellectual Property.  The Transferred 
Intellectual Property Rights will be transferred and/or assigned to the 
Partnership at the Closing.

4.20.3  The loss or expiration of any Statutory Right or Mark or related 
group of Statutory Rights or Marks would not have a Material Adverse 
Effect and no such loss or expiration is threatened, pending or 
reasonably foreseeable; neither Parent (or any of its Defense 
Affiliates) has received any notice of, nor is aware of any facts which 
indicate a likelihood of, any infringement or misappropriation by, or 
conflict with, any third party with respect to any of its Data Rights, 
Statutory Rights, Marks or Licensed Third Party Rights (including, 
without limitation, any demand or request that such Parent or its 
Defense Affiliates license any rights from a third party).

4.20.4  The transactions contemplated by this Agreement will have no 
material adverse impact on the right, title and interest in the 
Transferred Intellectual Property Rights or Licensed Intellectual 
Property or the licenses and other agreements relating to the Licensed 
Third Party Rights.  It has taken the necessary action to maintain and 
protect the Statutory Rights and Marks prior to Closing.

4.21  Employee Benefits and Contracts.  With respect to employee benefit 
programs and contracts applicable to Plan Participants or other persons:

4.21.1  Except as set forth on Schedule 4.21.1, neither Parent, with 
respect to its Defense Business, maintains, contributes to or is a party 
to any (i) nonqualified deferred compensation, bonus or retirement plans 
or arrangements, (ii) qualified defined contribution or defined benefit 
plans or arrangements which are employee pension benefit plans (as 
defined in Section 3(2) of ERISA), (iii) employee welfare benefit plans 
(as defined in Section 3(1) of ERISA) or fringe benefit plans or 
programs, (iv) invention and disclosure agreements and secrecy 
agreements, or (v) employment contracts, letters of employment, 
competition agreements, compensation, commission, bonus, fee or profit 
sharing agreements or stock purchase agreements.  Unless stated 
otherwise, when used in this Section 4.21, the terms "Pension Plan" and 
"Welfare Plan" refer to such respective pension and welfare plans of 
Harsco and FMC as listed on Schedule 4.21.1.

4.21.2  Neither Parent, with respect to its Defense Business, within the 
last five years, has contributed to any multiemployer pension plan (as 
defined in Section 3(37) of ERISA).  Neither Parent, with respect to its 
Defense Business, is aware of any circumstances which would or could 
subject it or any successor to withdrawal liability pursuant to the 
Multiemployer Pension Plan Amendments Act.

4.21.3  Neither Parent, with respect to its Defense Business, maintains 
or contributes to any plan which provides health, accident or death 
benefits to former employees, their spouses or dependents, other than in 
accordance with Section 4980B of the Code or as disclosed on Schedule 
4.21.1.

4.21.4  To each Parent's Knowledge, each Pension Plan and Welfare Plan 
(and related trust and insurance contract) complies in form and in 
operation in all material respects with the applicable requirements of 
ERISA, the Code and Federal securities laws; and, with the exception of 
the Nonqualified Plans listed on Schedule 4.21.1 and identified as such, 
the Pension Plans meet the requirements of "qualified plans" under 
Section 401(a) of the Code, each trust related thereto has been 
determined to be exempt from tax pursuant to section 501(a) of the Code, 
each such Pension Plan has received a favorable determination letter 
from the Internal Revenue Service, and neither FMC nor Harsco is aware 
of any event that has occurred since the date of such determination, 
including changes in laws or regulations or modifications to such 
Pension Plans, that would adversely affect such qualification or tax 
exempt status with respect to their respective Pension Plans.

4.21.5  To each Parent's Knowledge, all required reports and 
descriptions (including, but not limited to, Form 5500 Annual Reports, 
Summary Annual Reports, PBGC-1s and Summary Plan Descriptions) with 
respect to each Pension Plan and Welfare Plan have been properly filed 
with the appropriate Governmental Authority and/or distributed to 
participants or other interested parties, and each of FMC and Harsco has 
complied with the requirements of Section 4980B of the Code.

4.21.6  With respect to each Pension Plan, all contributions which are 
due (including all employer contributions and employee salary reduction 
contributions) have been paid to such Pension Plan and benefits which 
are payable from such Pension Plan have been paid or adequate provision 
therefore has been made.  With respect to each Welfare Plan, all 
premiums, contributions or other payments and all benefits which are due 
have been paid.

4.21.7  No Pension Plan has been completely or partially terminated nor 
has it been the subject of a "reportable event" as that term is defined 
in Section 4043 of ERISA as to which notices would be required to be 
filed with the PBGC; and no proceeding by the PBGC to terminate any such 
Pension Plan has been instituted or threatened.  To its Knowledge, 
neither FMC nor Harsco has incurred any liability to the PBGC, the IRS, 
the Department of Labor, any multiemployer plan or otherwise with 
respect to any Pension Plan or Welfare Plan currently or previously 
maintained by members of their respective controlled group or their 
affiliated service group of companies (as defined in Sections 414(b) and 
(c) and (m) of the Code, the "Controlled Group")that has not been 
satisfied in full, and no condition exists under any Pension Plan or 
Welfare Plan that presents a material risk to either FMC or Harsco or 
any member of FMC's or Harsco's respective Controlled Group of incurring 
such a liability, other than liability for premiums due the PBGC.

4.21.8  The Accumulated Benefit Obligation (as defined in Statement of 
Financial Accounting Standards No. 87 as to (i), (ii), (iii) and (iv) 
below) and the Accumulated Postretirement Benefit Obligation (as defined 
in Statement of Accounting Standards No. 106 as to (v) and (vi) below) 
as of December 31, 1993 associated with Plan Participants under the (i) 
Qualified Pension Plans maintained by FMC is estimated to be 
$154,472,000 using FMC's actuarial assumptions shown on Schedule 4.21.8, 
and the corresponding Fair Market Value of assets (determined in 
accordance with Section 5.9.5.2 is estimated to be $216,118,000; (ii) 
Qualified Pension Plans maintained by Harsco is estimated to be 
$34,700,000 using Harsco's actuarial assumptions shown on Schedule 
4.21.8, and the corresponding Fair Market Value of assets (determined in 
accordance with Section 5.9.5.2 is estimated to be $44,783,000; 
(iii) Nonqualified Plans maintained by FMC is estimated to be $1,375,000 
using FMC's actuarial assumptions shown on Schedule 4.21.8, and the 
corresponding Fair Market Value of assets (determined in accordance with 
Section 5.9.8) is estimated to be $0; (iv) Postretirement Benefit Plans 
maintained by FMC is estimated to be $60,858,000 using FMC's actuarial 
assumptions shown on Schedule 4.21.8, and the corresponding Fair Market 
Value of assets (determined in accordance with Section 5.9.7) is 
estimated to be $20,795,000; and (v) Postretirement Benefit Plans 
maintained by Harsco is estimated to be $4,330,000, using Harsco's 
actuarial assumptions shown on Schedule 4.21.8, and the corresponding 
Fair Market Value of assets (determined in accordance with Section 
5.9.7) is estimated to be $0.  The assets of each Pension Plan described 
in clauses (i) and (ii) above will on the actual date of Closing exceed 
the respective Accumulated Benefit Obligation (as defined in Statement 
of Financial Accounting Standards No. 87) under such plan.

4.21.9  With respect to each Pension Plan and each Welfare Plan, (i) 
there have been no known prohibited transactions as defined in Section 
406 of ERISA or Section 4975 of the Code, (ii) there has not been 
asserted against any fiduciary (as defined in Section 3(21) of ERISA) or 
any disqualified person (as defined in Section 4975 of the Code) any 
claim for liability for breach of fiduciary duty or any other failure to 
act or comply in connection with the administration of the plan or the 
investment of the assets of such plan, and (iii) no actions, 
investigations, suits, claims or any similar matters (other than routine 
claims for benefits) are pending or threatened against such plan or its 
respective sponsor, and neither FMC nor Harsco has Knowledge of any 
facts which would give rise to or could reasonably be expected to give 
rise to any such actions, suits or claims.

4.21.10  With respect to each Pension Plan and each Welfare Plan, each 
of FMC and Harsco has furnished to the other true and complete copies of 
(i) the most recent plan documents, summary plan descriptions and 
summaries of material modifications, (ii) the most recent determination 
letter received from the Internal Revenue Service, where applicable, 
(iii) the most recent Form 5500 Annual Report, actuarial valuation 
report, and accountant's opinion where applicable, (iv) any related 
trust agreements, insurance contracts or other funding agreements which 
implement such plans and (v) Part VII of the most recent CASB Disclosure 
Statement.

4.21.11  Except as set forth on Schedule 4.21.11 or otherwise disclosed 
in writing on January 24, 1994, (i) there are no employee benefit cost 
disallowances pending or threatened by any agency of the U.S. Government 
and neither FMC nor Harsco has Knowledge of any facts which would give 
rise to or could reasonably be expected to give rise to any such actions 
and (ii) all employee benefit costs have been properly determined and, 
with respect to Qualified Pension Plans, funded in a timely manner in 
accordance with any applicable CAS or FAR and any such determination is 
consistent with the CASB Disclosure Statement and established practices 
of FMC or Harsco.

4.22  Bargaining Agents.  Schedule 4.22 lists each bargaining agent 
representing or purporting to represent any Transferred Employees 
(whether or not recognized by such Parent as the recognized collective 
bargaining agent) and each collective bargaining agreement currently 
applicable to any Transferred Employee to which such Parent is a party, 
and such Parent has furnished to the other Parent and to the Partnership 
true and complete copies of each such agreement.

4.23  Impact of Transaction.  To its Knowledge, except as contemplated 
by this Agreement, no Transferred Employee of such Parent will become 
entitled to any compensation, bonus, retirement, severance, job security 
or similar benefit or enhanced benefit solely as a result of the 
transactions contemplated by this Agreement, including the transfer of 
Transferred Employees hereunder.

4.24  Employment Contracts and Benefits.  Except as set forth on 
Schedule 4.24, neither such Parent nor its directors, officers, 
shareholders or employees has made any binding commitments, promises or 
representations, including in connection with any "effects bargaining" 
required by Section 8(a)(5) of the National Labor Relations Act, to the 
employees of its Defense Business with respect to any change in the 
terms and conditions of employment, either before or after the Closing.

4.25  Labor Controversies; Affirmative Action.  There are no 
controversies, pending or threatened, between such Parent and any 
employees or any employee benefit plan which may have a Material Adverse 
Effect on such Parent's Defense Business and, to such Parent's 
Knowledge, no action has been taken, or has failed to have been taken, 
which would provide a reasonable basis for such a controversy.  To its 
Knowledge, such Parent has complied in all material respects with all 
laws relating to the employment of labor, including any provisions 
relating to wages, hours, collective bargaining, occupational safety and 
health, affirmative action and the payment of vacations, retirement, 
social security and similar taxes or benefits with respect to their 
respective Defense Businesses.  Such Parent has no Knowledge of any 
activities or proceedings of any labor union (or representatives of 
labor unions) to organize any unorganized employees of its Defense 
Business, or of any work stoppages, or threats thereof, by or with 
respect to those employees.  During the twelve month period preceding 
the date of this Agreement, there has not been any significant labor 
dispute involving employees of its Defense Business except as listed in 
Schedule 4.25.  Such Parent does not have has any affirmative action 
plans and is not operating under any compliance commitments with any 
equal employment opportunity governmental agency or bureau with respect 
to its Defense Business, except those listed on Schedule 4.25.

4.26  Disclosure.  The representations and warranties contained in this 
Article IV, and all written information given by it or any of its 
Affiliates to another party pursuant to the terms of this Agreement, do 
not contain any untrue statement of a material fact or omit to state any 
material fact necessary to make the statements made, in the light of the 
circumstances under which they were made, not misleading.

4.27  Operation of Schedule Disclosures.  To the extent that an item is 
disclosed on one of the Schedules hereto, and the applicability of such 
item to another Schedule is reasonably apparent by reference to the 
provisions of this Agreement and/or such other Schedule, such item shall 
be deemed to be incorporated into such other Schedule and disclosed 
thereon.

4.28  Postemployment Benefits.  Harsco's obligations with respect to its 
Defense Business for postemployment benefits, as defined in SFAS 112 but 
as modified below, on the actual date of Closing will not exceed $2 
million in the aggregate and FMC's obligations with respect to its 
Defense Business for postemployment benefits, as defined in SFAS 112 but 
as modified below, will not exceed $3 million.  For purposes of this 
Section 4.28, obligations for postemployment benefits as defined in SFAS 
112 exclude severance and salary continuation benefits and exclude 
workers' compensation benefits and obligations; provided, however, that, 
as to FMC, such severance and salary continuation benefits satisfy the 
following conditions:  (i) FMC has currently on reserve approximately 
$525,000 for severance and salary continuation benefits with respect to 
its Armament Systems Division and such reserve will be reflected in 
FMC's Final Closing Balance Sheet and (ii) substantially all severance 
and salary continuation benefits that do not constitute Consolidation 
Costs with respect to the Ground Systems Division's Bradley contract 
are, to FMC's knowledge, reimbursable by the U.S. Government.

ARTICLE V

SECTION 5.0  COVENANTS.

5.1  Covenants of Parents.  Each Parent covenants to the other Parent, 
on behalf of itself and its Defense Affiliates, that:

5.1.1  Conduct of Businesses.  Until the Closing:

5.1.1.1  Ordinary Course.  It shall carry on, or cause to be carried on, 
its normal and usual activities and business in connection with the 
design, development, manufacture, marketing, sale, maintenance and 
support of FMC Assets or Harsco Assets, as the case may be, in the 
usual, regular and ordinary course and, except in connection with any 
reversal of reserves which will not be reflected on the Final Closing 
Balance Sheets, shall refrain from taking any action to accelerate the 
receipt of revenues or the recognition of income beyond its usual, 
regular and ordinary practices as engaged in prior to September 30, 
1993; use, or cause to be used, efforts no less diligent than heretofore 
conducted to preserve intact the activities of its Defense Business; use 
all reasonable efforts to keep available the services of present 
officers and key employees employed in its Defense Business; and use all 
reasonable efforts to preserve relationships with customers, suppliers 
and others having business dealings with such Business consistent with 
its obligations hereunder.  It shall not engage in (i) any activities 
outside the ordinary course of the its Defense Business, including, but 
not limited to, the acquisition of, merger with or into or consolidation 
with another business operating in the defense industry and (ii) any 
activity described in Section 4.15 above.  

5.1.1.2  Access to Information.  It shall provide the other Parent, as 
reasonably requested, financial information relating to its Assets and 
Liabilities and will provide the other Parent with reasonable 
opportunities to physically inspect its books and records and principal 
properties and facilities, to review permits and licenses, 
correspondence and other documents issued by or submitted to any 
Governmental Authority, including any agency with jurisdiction relative 
to Environmental Requirements, and to interview and obtain information 
from current employees, provided that such inspection and information 
relate primarily to its Defense Business.

5.1.1.3  Advice of Changes.  It shall promptly notify the other Parent 
of any change or event having, or which, insofar as can reasonably be 
foreseen, would have, a Material Adverse Effect on the Partnership, or 
which would result in any material inaccuracy in any representation or 
warranty at Closing.

5.1.1.4  Revisions to Contracts.  In the event that it or its 
Subsidiaries enters into contracts in the ordinary course of business 
after the Signing Date and prior to Closing and such contracts are of 
the type which would have constituted Contracts if held by such Parent 
(or any Defense Affiliate or Defense Subsidiary) on the Signing Date, 
Schedule 4.10 will be amended on or prior to the actual date of Closing 
to include such contracts as Contracts.  In addition, such Schedules 
shall be amended to delete Contracts completed or terminated after the 
Signing Date in the ordinary course of business in connection with the 
business.  If there are any contracts which are to be added to Schedule 
4.10 pursuant to this Section, it shall use reasonable efforts to cause 
such additional contracts to be freely transferable to its appropriate 
Defense Affiliate and then to the Partnership.

5.1.2  Other Agreements.  Prior to or at the Closing, it will enter 
into, or cause its Defense Subsidiaries that will be parties to any 
Operative Document to enter into, the other Operative Documents.

5.1.3  Planning Information.  Subject to any restrictions set forth in 
this Agreement or in the Partnership Agreement, it recognizes the need 
for on-going communication with the Partnership.  Therefore, from time 
to time in its sole discretion, it intends to disclose to the 
Partnership planning and product trend information which may be relevant 
and reasonably necessary to the Scope of Activity of the Partnership.

5.1.4  Taxes; Charges; Laws.  It shall, and shall cause its Defense 
Subsidiaries that are parties to Operative Documents to (i) unless being 
contested by appropriate proceedings, promptly pay all applicable Taxes 
and other governmental charges allocable and taxable to it or them under 
applicable federal, foreign, state and local tax laws, which relate to 
the business of the Partnership; (ii) report, subject to any obligations 
of notification and consultation set forth in the Partnership Agreement, 
its allocable share of income, loss or other Partnership items 
consistent with the manner in which such items are reported by the 
Partnership to such Partner on Federal Form 1065, Schedule K-1, or 
disclose any inconsistency in the treatment of such items on its Federal 
income Tax returns; (iii) use all reasonable efforts to comply with all 
Governmental Rules; (iv) preserve and keep, free of charge, all books, 
papers and records, which relate to the Assets and Liabilities 
contributed by such Parent or its Partner to the Partnership (which 
Parent or Partner shall provide access to the Partnership to such books 
and records as reasonably requested by the Partnership); and 
(v) cooperate with and provide such information to the Partnership, as 
reasonably requested by the Partnership.

5.1.5  Liens.  Prior to the Closing, it shall not create or otherwise 
allow any Lien to attach to or otherwise to affect any of its Assets or 
Contracts to be transferred by it or its Subsidiaries, except Permitted 
Liens and those otherwise permitted or required pursuant to the 
Operative Documents.

5.1.6  No Solicitation.  Except as permitted under Section 5.1.1.1, 
prior to the Closing or the earlier termination of this Agreement, none 
of the Parents and their Affiliates will, directly or indirectly, 
through any officer, director, employee, agent or otherwise, solicit, 
initiate or encourage submission of proposals, offers or other 
indications of interest from any Person relating to any acquisition, 
purchase, new joint venture or other extraordinary transaction involving 
the disposition of either Defense Business or participate in any 
negotiations or other discussions regarding, or furnish to any other 
Person any information with respect to, or otherwise cooperate in any 
way with, or assist, participate in, facilitate or encourage, any effort 
or attempt by any other Person to do or seek any of the foregoing.

5.1.7  Environmental Permits, Licenses and Other Authorizations.  Prior 
to or after Closing, each Parent shall, at its own cost, use all 
reasonable efforts to arrange transfer or reissuance, as necessary and 
appropriate, of any permits, licenses and other authorizations issued 
pursuant to Environmental Requirements with respect to the Real Property 
and other Assets transferred to the Partnership by such Parent.  Such 
Parent shall use all reasonable efforts to complete such transfer or 
reissuance in a manner which maximizes the operational flexibility of 
the Partnership and minimizes ongoing capital and operating costs and 
other burdens.  In the event such transfer or reissuance could, in the 
judgment of such Parent, result in material impediments to ongoing 
operations, in material capital or operating costs to the Partnership or 
in the existence of any Burdensome Governmental Condition, such Parent 
shall so notify the other Parent promptly.

5.2  Transfer and Deliveries at Closing; Deferrals of Transfer and 
Assumption.

5.2.1  Transfer and Deliveries.  At or before the Closing, FMC shall 
transfer or cause to be transferred to the Partnership and Harsco shall 
transfer or cause to be transferred to the Partnership, their respective 
Assets, Liabilities, Active Contracts and, subject to Sections 5.3.2 and 
6.1(c), Inactive Contracts.  Such transfers shall be pursuant to the 
applicable Operative Documents and other duly executed deeds, 
assignments of leases, bills of sale and other documents of transfer, in 
form and substance reasonably satisfactory to the other Parent.  Without 
limiting the foregoing, deeds conveying Owned Property shall, pursuant 
to Section 3.20 above, be limited warranty deeds containing covenants of 
warranty of title against the claims of all persons claiming by, through 
or under the grantor but not claiming otherwise.

5.2.2  Deferrals.  Notwithstanding any other provision in any Operative 
Document, the transfer of any Assets and Contracts and the assumption of 
related Liabilities for which a Consent is required shall be deferred 
until such Consent is legally obtained pursuant to the procedures set 
forth in Section 5.11.

5.3  Further Assurances.

5.3.1  Pre-Closing.  Prior to Closing, each party shall take all 
reasonable actions necessary to obtain (and shall cooperate with the 
others in obtaining) any Governmental Action (including preliminary 
arrangements to obtain the Novation Agreement) or Private Action 
(including Consents, but subject to Section 5.11) required to be 
obtained or made by it in connection with any of the transactions 
contemplated by this Agreement, except that it shall not be required to 
accept any Burdensome Governmental Condition.

5.3.2  Post-Closing.  From and after Closing, except as otherwise 
provided herein or in the other Operative Documents, each party shall, 
at its own cost, do, execute and perform all such other acts, deeds and 
documents as the other parties or the Partnership may from time to time 
reasonably require in order to consummate the transactions contemplated 
by this Agreement, including using its best efforts to enter into the 
Novation Agreement as soon as practicable following the Closing 
(provided, that no party shall be required to novate any Inactive 
Contract if the conditions of such novation would, in the judgment of 
such party, impose an unacceptable financial burden on such party).

5.4  Parent Undertaking as to Partner Obligations.  Each Parent agrees 
with the other Parent that it shall take no action which would interfere 
with the full and faithful performance or observance by such Parent's 
Affiliates of all covenants, conditions, representations, warranties and 
agreements under the Operative Documents to which such Parent's 
Affiliates are parties.  Each Parent will exercise, and will cause its 
affiliate Partner to exercise, good faith, fairness and integrity either 
in connection with, or in the conduct of, the business and affairs of 
the Partnership.

5.5  Transfer of or Liens on Ownership Interests of Partners.

5.5.1  General Rule.  For so long as the Partnership Agreement (or any 
successor agreement or agreements) is in effect, a Parent may not 
transfer or subject to any Liens (other than Permitted Liens), or suffer 
to exist any such Liens on, all or any part of its ownership interest in 
any of its Affiliates which is a Partner or all or any part of the 
partnership interest held by such Parent or its Partner, as applicable, 
except with the consent of the other Parent (which may be withheld in 
its sole discretion) or as otherwise permitted by this Agreement, the 
Partnership Agreement or the Registration Rights Agreement, and any 
attempt to do so shall be void.

5.5.2  Intra-Parent Exception.  Without being deemed to have violated 
Section 5.5.1, a Parent may, upon 30 days' prior written notice to the 
other Parent, transfer all, but not less than all, of its ownership 
interest in the Partnership held by the Partner or by it, as applicable, 
or in any Affiliate which is a Partner to another corporation (i) 
incorporated in a domestic jurisdiction and (ii) 100% directly or 
indirectly owned by such Parent, provided that such transfer does not 
have a Material Adverse Effect on the Partnership, and provided further 
that such Parent shall not thereafter transfer or permit to be 
transferred the stock of such transferee corporation to a third party, 
except as otherwise permitted under this Agreement, the Partnership 
Agreement or the Registration Rights Agreement.  In no event shall the 
transferring Parent or Partner be relieved of any obligations for which 
such transferring Parent or Partner would otherwise be liable hereunder 
in the absence of such a transfer.

5.6  Public Announcements.  No party shall, without the consent of the 
other Parent prior to the actual date of Closing, issue any press 
release or make any written public announcement with respect to this 
Agreement and the transactions contemplated hereby, except as may be 
required by Governmental Rule (and, if so required, such party shall 
give such Parent a reasonable opportunity to comment thereon).  For 
purposes of the foregoing, no periodic report filed with the U.S. 
Securities and Exchange Commission shall be deemed to be a public 
announcement.  After the actual date of Closing, each Parent shall use 
reasonable endeavors to coordinate the dissemination of material public 
information concerning the Partnership and its business.

5.7  Certain Taxes.  The Partnership will pay up to $400,000 per Parent 
in any Transfer Taxes payable in connection with the formation of the 
Partnership with respect to the Assets and Liabilities transferred by 
either Parent to its Partner and by either Parent or its Partner to the 
Partnership.  The Partnership will not assume or pay any other Taxes of 
a Parent or its Partner except to the extent such Taxes are accrued on 
such Parent's Final Closing Balance Sheet or otherwise provided for in 
the Partnership Agreement.

5.8  Confidential Information.  No employee of the Partnership or 
employee made available to the Partnership while remaining an employee 
of a Parent or an Affiliate shall be obligated to reveal confidential or 
proprietary information belonging to either Parent (or either Parent's 
Affiliates) without the consent of such Parent.  All secrecy agreements 
between Harsco and employees of Harsco who, as of the Closing Date, will 
become Transferred Employees and all secrecy agreements between FMC and 
employees of FMC who, as of the Closing Date, will become Transferred 
Employees will, if necessary and to the extent feasible, be amended by 
the actual date of Closing so as to protect the confidentiality of 
information relating to the businesses of Harsco, FMC and the 
Partnership.  Each Parent will use all reasonable efforts to cause any 
such agreement necessary to be entered into in order to protect such 
information to be entered into by the actual date of Closing.

Subject to the Intellectual Property Agreements, Harsco shall, and shall 
cause its Affiliates, directors, officers, employees, advisors and 
agents to, keep all proprietary or confidential information in its 
possession from and after the Closing which in any way relates to the 
business or properties of the Partnership confidential and not use any 
such information which is proprietary in nature for any commercial 
purpose other than as is required to monitor its investment in the 
Partnership, to familiarize any prospective purchaser of all or any 
portion of Harsco L.P.'s partnership interest in the Partnership upon 
such prospective purchaser's signing a form of confidentiality agreement 
reasonably acceptable to the Partnership, in connection with the 
preparation of Harsco's periodic reports filed with the SEC or in the 
defense or prosecution of litigation (so long as Harsco uses reasonable 
efforts to obtain a protective court order relating to such 
information); provided, however, that (i) this covenant shall not apply 
to any information which (A) is or shall come into the public domain 
other than by reason of a breach of this Section 5.8, (B) becomes 
available on a non-confidential basis from a source that, to the 
Knowledge of Harsco, is not bound by a confidentiality agreement 
protecting such information, (C) is or was independently developed by 
Harsco without violating this Section 5.8 or other confidentiality 
agreement which, to the Knowledge of Harsco, protects such information, 
(D) is required to be disclosed to a Governmental Authority under any 
applicable Governmental Rule or (E) is disseminated to the public in the 
manner contemplated by Section 5.6; and (ii) the right of any 
prospective purchaser of all or any portion of Harsco L.P.'s partnership 
interest in the Partnership which competes with the Partnership or any 
of its Subsidiaries in any material way within the Scope of Activity to 
receive (and the right of Harsco to provide), upon, after or prior to 
such purchase of such interest, any proprietary or confidential 
information required to be provided or made available pursuant to the 
terms of this Agreement or the Partnership Agreement shall be subject to 
such prospective purchaser's signing of a separate form of 
confidentiality agreement, which shall be reasonably satisfactory to the 
Partnership and which shall contain appropriate restrictions on 
disclosure of competitively sensitive information to such prospective 
purchaser (which will permit disclosure of such information to an 
independent third party agent of such prospective purchaser in lieu of 
such prospective purchaser to permit such agent to evaluate and monitor 
the investment characteristics of the Partnership).

5.9  Employee and Employee Benefits Matters.

5.9.1  Offers of Employment.  Upon consummation of the Closing and 
effective as of the Closing Date, the Partnership will make employment 
available to all people listed on Schedule 5.9.1 (which Schedule shall 
be updated by each Parent on the first day of every month between the 
Signing Date and the actual date of Closing and delivered to the other 
Parent promptly thereafter).  Schedule 5.9.1 shall include those people 
employed by FMC in the FMC Defense Business and those people employed by 
Harsco in the Harsco Defense Business, but shall exclude any employee of 
either Parent with the consent of the other Parent.  FMC or Harsco may 
with the consent of the other list additional people on Schedule 5.9.1.  
All people listed on Schedule 5.9.1 who accept employment with the 
Partnership will be deemed the "Transferred Employees."  The Transferred 
Employees shall include all employees on approved leaves of absence, 
including those on long-term or short-term disability or on lay-off, and 
Schedule 5.9.1 shall identify those employees on leave of absence, 
disability or lay-off.  Unless otherwise provided in this Agreement or 
otherwise agreed by the Parents prior to the Closing, the Partnership 
will make employment available to the Transferred Employees at the 
salaries and other compensation, with the benefits (excluding the stock 
option and long term incentive plans described in Sections 5.9.14 and 
5.9.15), and subject to the terms of all contracts (including collective 
bargaining agreements) applicable to them, and under the employment 
practices and policies applicable to them, agreed to or provided or 
adopted by the respective Parent immediately prior to the Closing Date; 
provided, however, that this provision is not intended to create any 
contractual right to employment or to any term of employment for any 
Transferred Employee, except as otherwise expressly provided in 
applicable collective bargaining agreements.  Notwithstanding the 
foregoing, the unwillingness of any collective bargaining representative 
to concur in the applicability of the terms of any collective bargaining 
agreement to any Transferred Employees after the Closing shall not be 
construed as a failure by either Parent to fulfill its obligations under 
this Section 5.9.1.  After the Closing Date, the Partnership shall have 
the same rights as the respective Parent would have had, should 
employment of Transferred Employees have continued with the Parent, to 
change or terminate such salaries and compensation, benefits, contracts 
and employment practices and policies and all employees of the 
Partnership, whether employed pursuant to this provision or otherwise, 
will be employed at will by the Partnership.

5.9.2  Transition Benefit Plans.  The Partnership shall establish and 
administer certain benefit plans for the Transferred Employees and other 
Plan Participants.  The Partnership intends to adopt competitive 
compensation plans for its executive and senior management personnel to 
replace the stock option plans and long term incentive plans (described 
in Sections 5.9.14 and 5.9.15) which shall not form a part of the 
Transition Plans described herein.  Subject to the preceding sentence 
and Section 5.9.1 hereof, as of the Closing Date, the Partnership shall, 
to the extent permitted by applicable law, establish or adopt, and 
assume obligations under, the same benefit plans for the Transferred 
Employees and other Plan Participants which their respective Parent 
maintained for and applied to them immediately prior to the Closing Date 
("Transition Benefit Plans"), each of such plans to be identified on 
Schedule 4.21.1.  Such obligations shall include, without limitation, 
obligations which a Parent may have relating or attributable to periods 
of service prior to the Closing Date (but excluding severance 
obligations for employees who terminated prior to the Closing Date), but 
only if such obligations are reflected on the Final Closing Balance 
Sheet of the Parent or are not so reflected and would be considered 
obligations for postemployment benefits (other than pre-closing workers' 
compensation obligations described in Section 5.15) of the type 
described in SFAS 112.  For purposes of this entire Section 5.9 and 
Section 6.3, where any such reflected item represents the Parent's 
estimate of its obligation, such Parent shall have no further liability 
with respect to such obligation once it is assumed by the Partnership; 
provided, however, that the estimate was based upon reasonable actuarial 
assumptions consistent where applicable with those set forth on Schedule 
4.21.8 and calculated in recognition of all material facts.  Harsco and 
FMC shall each transfer to the Transition Benefit Plans, as hereinafter 
described, assets to fund certain obligations assumed by the Partnership 
under the Transition Benefit Plans.  Unless otherwise indicated herein, 
the Transition Benefit Plans shall, to the extent permitted by 
applicable law, credit Transferred Employees and other Plan Participants 
with years of service with FMC or Harsco, as the case may be, and with 
predecessor employers to the extent recognized by FMC or Harsco, as the 
case may be, for the purpose of vesting, accrual of benefits and meeting 
eligibility or other service requirements.  All employees, other than 
the Transferred Employees, hired by the Partnership following the 
Closing Date and prior to the Partnership's establishment of the 
Partnership Benefit Plans described in Section 5.9.3 will be eligible 
for coverage under the Transition Benefit Plans applicable to employees 
at the location of the employment of such new hires.

5.9.3  Partnership Benefit Plans.  The Partnership shall use its 
reasonable best efforts to adopt, on or before July 1, 1994, benefit 
plans ("Partnership Benefit Plans") which shall be effective as of the 
Closing Date or as soon as practicable thereafter in the discretion of 
the Partnership.  Subject to the Partnership's right to change or 
terminate the Transition Benefit Plans, as described in Section 5.9.1 
hereof, the Partnership Benefit Plans shall replace the Transition 
Benefit Plans in any reasonable manner deemed appropriate by the 
Partnership; provided, however, that the Partnership, in establishing 
the Partnership Benefit Plans, shall not cause any Plan Participant to 
lose or be denied any vested benefit, right or feature with respect to 
benefits accrued under any Transition Benefit Plan which is the 
successor to a Pension Plan (as defined in Section 4.21.1).  The 
Partnership shall establish one or more Qualified Pension Plans for all 
employees not covered under a collective bargaining agreement 
("Partnership Nonunion Pension Plans") and such Partnership Nonunion 
Pension Plans shall provide comparable levels of future benefit accruals 
for all covered employees, making no distinction with respect to any 
such employee on the basis of his or her former employment, except as 
otherwise required by applicable law.  The preceding sentence shall be 
interpreted in a manner consistent with any applicable example in 
Schedule 5.9.3 which provides for future benefit accruals based on past 
and future benefit service.  The Partnership shall fund all of the 
Partnership Nonunion Pension Plans in accordance with reasonably similar 
funding policies and fund earnings assumptions, except to the extent 
different policies or assumptions may be necessitated by government 
contract cost reimbursement considerations; provided, however, that such 
plans shall be merged into one Partnership Nonunion Pension Plan at such 
time as the Partnership decides that such a merger will not result in a 
material disadvantage to the Partnership or its Parents.

5.9.4  Development of Partnership Benefit Plans and Policies.  As soon 
as practicable after the Closing Date, the Parents shall use reasonable 
efforts to provide the Partnership with such information as may 
reasonably be required in connection with the Partnership's development 
or implementation of the Partnership Benefit Plans, employment practices 
and policies.  The Parents shall make available to the Partnership their 
human resources staffs and other employees, agents and representatives 
to assist in such planning, development and implementation.  The 
Partnership shall take into consideration the differences in benefit 
structures and policies of each of the Parents and shall endeavor to 
reconcile those differences, wherever possible, including the offering 
of Harsco stock as an ongoing investment option under 401(k) plans; 
provided, however, that no additional purchases of Harsco stock shall be 
made under the Transition Benefit Plans or the Partnership Benefit Plans 
unless a favorable interpretive letter ruling is obtained from the 
Department of Labor to the effect that Harsco stock is not an employer 
security or is a qualifying employer security with respect to such plans 
or unless an opinion is received from legal counsel selected by the 
Partnership indicating that such purchases would not be a prohibited 
transaction.  Where appropriate or required to fulfill the terms of this 
Agreement, FMC, Harsco and the Partnership shall each make such filings 
and submissions in connection with the Partnership Benefit Plans to the 
appropriate governmental agencies.

5.9.5  Qualified Pension Plans.  As described herein, each of FMC and 
Harsco shall transfer all Qualified Pension Plan assets and obligations 
associated with its Defense Business to the appropriate Transition 
Benefit Plans designated by the Partnership, which assets shall be 
invested in the FMC Master Trust.  The Partnership shall take all 
necessary action to ensure that each such Transition Benefit Plan 
satisfies the applicable provisions of the Code.  Assets segregated 
pursuant to Section 401(h) of the Code are not considered as Qualified 
Pension Plan assets for purposes of this Section 5.9.5.

5.9.5.1  Transfer of Obligations.  Obligations associated with the 
accrued benefits of each Plan Participant in any Qualified Pension Plan 
maintained by FMC or Harsco in connection with its respective Defense 
Business shall be assumed by a Transition Benefit Plan designated by the 
Partnership, and assets with respect to such obligations shall be 
transferred in accordance with the provisions hereunder.

5.9.5.2  Amount of Pension Assets to be Transferred.  Qualified Pension 
Plan assets associated with the accrued benefit obligations transferred 
to a Transition Benefit Plan pursuant to Section 5.9.5.1 shall be 
transferred to the FMC Master Trust, which shall form a part of such 
Transition Benefit Plan.  If an entire Qualified Pension Plan of FMC or 
Harsco is adopted by the Partnership as a Transition Benefit Plan, then 
all assets associated with such Qualified Pension Plan shall likewise be 
transferred to the FMC Master Trust with respect to such Transition 
Benefit Plan.  If a portion of a Qualified Pension Plan of FMC or Harsco 
is adopted by the Partnership as a Transition Benefit Plan, the amount 
of assets to be transferred shall be determined in accordance with, and 
shall equal the minimum amount necessary to satisfy, the applicable 
provisions of CAS 413 and any other CAS and FAR provisions which the 
government may deem applicable; provided, however, that if the 
requirements of Code section 414(l) require that a greater amount of 
assets be transferred, then such greater amount shall be transferred.  
With regard to the Harsco Employees Pension Plan, FMC and Harsco agree 
that based on the information provided to both parties prior to the 
Closing, the amount of assets allocated to the Harsco Defense Business 
under the applicable provisions of CAS 413 is estimated to be 
approximately $22,000,000 and such amount of assets, when transferred, 
will be in excess of the amount required under Code section 414(l); 
provided, however, that such agreement shall not alter the 
responsibility of the Harsco Employees Pension Plan to transfer any 
additional amount which, pursuant to a final non-appealable decision, 
may be required under Code section 414(l).

5.9.5.3  Investment of Pension Assets.  FMC and Harsco intend that 
assets transferred with respect to the Transition Benefit Plans 
designated by the Partnership in accordance with Section 5.9.5.2 shall 
be commingled for investment purposes in the FMC Master Trust; however, 
separate accounting shall be maintained within the FMC Master Trust for 
all such Transition Benefit Plans.  Such separate accounting shall also 
apply to any Partnership Benefit Plan which replaces a Transition 
Benefit Plan.

5.9.5.4  Initial Asset Transfers.  As of the Closing Date, FMC and 
Harsco shall cause the trustees of their respective Qualified Pension 
Plans to take the following steps:

(i)  All assets associated with the following plans shall continue to be 
held under the FMC Master Trust, and the sponsorship of such plans shall 
be transferred from FMC to the Partnership:  Retirement Plan for Hourly 
Employees of FMC Corporation, San Jose, California; Retirement Plan for 
Hourly Employees of FMC Corporation, Steel Products Divisions, Anniston, 
Alabama; FMC Corporation Northern Ordnance Division Pension Plan for 
Hourly Employees; and FMC Corporation Northern Ordnance Division Pension 
Plan for Certain Employees.

(ii)  In conjunction with the change of sponsorship of the portion of 
the plan allocable to the obligations to FMC Transferred Employees under 
the FMC Corporation Salaried Employees' Retirement Plan, FMC shall cause 
the trustee of the FMC Corporation Salaried Employees' Retirement Plan 
to continue to hold in cash or in securities with a readily determinable 
market value an amount equal to $74,851,000 in the FMC Master Trust with 
respect to such portion of such plan.  An additional amount, if 
necessary, shall be allocated to such portion at a later time as 
described below.

(iii)  All assets associated with the Bowen-McLaughlin-York Hourly 
Employees Pension Plan shall be transferred to the FMC Master Trust, and 
sponsorship of such Plan shall be transferred from Harsco to the 
Partnership.  Such assets shall be in the form of cash or securities 
with a readily determinable market value.

(iv)  In conjunction with the transfer of pension obligations from the 
Harsco Employees Pension Plan to a Transition Benefit Plan designated by 
the Partnership, Harsco shall cause the trustee of such Plan to transfer 
to the FMC Master Trust in cash or in securities with a readily 
determinable market value an amount equal to $21,889,000 with respect to 
the Harsco Employees Pension Plan.  An additional amount, if necessary, 
shall be transferred at a later time as described below.

5.9.5.5  Follow-up Asset Transfers.  As soon as practical after the 
Closing Date, but in no event later than six months after said Closing 
Date, FMC and Harsco shall complete the asset transfers described in 
Sections 5.9.5.4(ii) and 5.9.5.4(iv) above with regard to the FMC 
Corporation Salaried Employees' Retirement Plan and the Harsco Employees 
Pension Plan.  The parties shall determine the difference, if any, 
between (A) the assets which should have been Transferred as of the 
Closing Date pursuant to Section 5.9.5.2 and (B) the amounts that were 
transferred on the Closing Date pursuant to Sections 5.9.5.4(ii) and 
5.9.5.4(iv).  FMC and Harsco will cause such difference to be 
transferred in the same manner described in Section 5.9.5.4 or, if the 
amount transferred exceeded the amount which should have been 
transferred, FMC and Harsco shall cause such difference to be returned 
to the transferror that transferred an excess amount; provided that the 
amount so transferred shall reflect an adjustment for any interim 
benefit payments as appropriate and shall include interest from the 
Closing Date to the date of the final transfer at the 90-day Treasury 
Bill rate on the auction date immediately preceding the Closing Date.

5.9.5.6  Verification.  FMC and Harsco each agrees to provide an actuary 
designated by the other party with all information necessary to verify 
the calculations required by this Section 5.9.

5.9.6  401(k) Plans.  The Partnership shall establish, as one of its 
Partnership Benefit Plans, a 401(k) Plan which shall be a qualified plan 
under Section 401(a) of the Code ("Partnership 401(k) Plan").  As soon 
as practicable after the establishment of the Partnership 401(k) Plan, 
subject to the receipt of all appropriate Governmental Actions, FMC and 
Harsco respectively shall cause the trustee of its 401(k) Plan(s) to 
transfer to a Partnership Master Trust established in connection with 
the Partnership 401(k) Plan (i) the number of shares of FMC or Harsco 
stock held under its 401(k) Plan for Plan Participants and (ii) cash, 
cash equivalents or other securities with a readily determinable market 
value such that the total of (i) and (ii) shall equal the Fair Market 
Value of the assets of the respective FMC and Harsco 401(k) Plans 
representing the account balances of Plan Participants as of the date 
such assets are transferred.  The Partnership 401(k) Plan shall provide 
or arrange for the proper procedures to continue the status of 
"securities of the employer corporation" of the FMC and Harsco stock 
transferred hereunder so as to preserve certain tax advantages to Plan 
Participants when such stock is distributed to them.  Subject to Section 
5.9.4, the Partnership 401(k) Plan shall also allow Plan Participants 
the right to invest their before- and after-tax contributions in any 
investment option offered under the plan (including FMC or Harsco 
stock), and to have their Partnership matching contributions (which 
shall be made in cash) invested in FMC or Harsco stock, to the extent 
such rights are in accordance with applicable law. 

5.9.7  Postretirement Benefit and Other Plans.  As described herein, FMC 
and Harsco shall transfer all Postretirement Benefit Plan assets and 
obligations associated with Plan Participants to the Partnership.  FMC 
and Harsco plan assets segregated pursuant to Section 401(h) of the Code 
are considered Postretirement Benefit Plan assets for purposes of this 
Section 5.9.7.

5.9.7.1  Transfer of Obligations.  Obligations associated with each Plan 
Participant in any Postretirement Benefit Plan maintained by FMC or 
Harsco in connection with its respective Defense Business shall be 
assumed by the Partnership, but only to the extent such obligations are 
reflected on FMC's or Harsco's Final Closing Balance Sheet, as 
applicable.

5.9.7.2  Postretirement Benefit Plan Assets Segregated under Code 
Section 401(h).  All assets accumulated pursuant to Section 401(h) of 
the Code under Postretirement Benefit Plans sponsored by FMC or Harsco 
that are attributable to Plan Participants shall be transferred to the 
FMC Master Trust; provided that such amounts shall be accounted for 
separately.  If the amount of such assets attributable to Plan 
Participants has not been separately accounted for historically, FMC and 
Harsco will agree on a reasonable allocation basis.

5.9.7.3  Postretirement Benefit Plan and Other Trusts Described in Code 
Section 501(c)(9) to be Transferred in their Entirety.  All trusts 
described in Section 501(c)(9) of the Code under Postretirement Benefit 
Plans or other plans sponsored by FMC or Harsco maintained solely for 
the benefit of Plan Participants shall be transferred to a trustee 
designated by the Partnership on the Closing Date.

5.9.7.4  Postretirement Benefit Plan and Other Trusts Described in Code 
Section 501(c)(9) not to be Transferred in their Entirety.  The portion 
of the assets held in trusts described in Section 501(c)(9) of the Code 
that are attributable to Plan Participants under Postretirement Benefit 
Plans or other plans sponsored by FMC or Harsco that also cover 
individuals other than Plan Participants shall be transferred to a 
trustee designated by the Partnership on the Closing Date.  If the 
amount of such assets attributable to Plan Participants has not been 
separately accounted for historically, FMC and Harsco will agree on a 
reasonable allocation basis.

5.9.8  Nonqualified Plans.  FMC and Harsco shall transfer to the 
Partnership all obligations with respect to Plan Participants under 
Nonqualified Plans maintained by FMC or Harsco in connection with its 
respective Defense Business, but only to the extent such obligations are 
reflected on FMC's or Harsco's Final Closing Balance Sheet, as 
applicable.  FMC and Harsco shall transfer to the Partnership any assets 
associated with such Nonqualified Plans.

5.9.9  Other Benefit Plans.  FMC and Harsco shall transfer to the 
Partnership all obligations with respect to Plan Participants under all 
other benefit plans not described in Sections 5.9.5 - 5.9.8 hereof 
maintained by FMC or Harsco in connection with its respective Defense 
Business, but only to the extent such obligations are reflected on FMC's 
or Harsco's Final Closing Balance Sheet, as applicable, or are not so 
reflected and would be considered obligations for post employment 
benefits (other than pre-closing workers' compensation obligations 
described in Section 5.15) of the type described in SFAS 112.  FMC and 
Harsco shall transfer to the Partnership any assets associated with such 
other benefit plans.

5.9.10  Collective Bargaining Agreements.  The Partnership shall 
expressly recognize any collective bargaining representative recognized 
by FMC or Harsco as of the Closing Date for those units that include 
Transferred Employees and shall expressly assume any and all of FMC's 
and Harsco's obligations under any collective bargaining agreements 
existing on the Closing Date with respect to the Transferred Employees; 
provided, however, that neither FMC nor Harsco shall have any liability 
after the actual date of Closing for any claims by any such collective 
bargaining representative arising as a result of the consummation of the 
transactions contemplated hereby.

5.9.11  No Rights.  Except with respect to any assumed collective 
bargaining agreements, nothing herein expressed or implied shall confer 
upon any of the employees of the Partners or their Affiliates or legal 
representatives thereof, any rights or remedies, including, without 
limitation, any right to employment or continued employment for any 
specified period of any nature or kind whatsoever or to any specific 
kind or level of compensation or benefit under or by reason of this 
Agreement.

5.9.12  FICA.  The standard procedure established in Section 4 of 
Revenue Procedure 84-77, 1984-2 C.B. 753, relating to employment tax 
returns and statements shall be adopted by FMC, Harsco and the 
Partnership for Transferred Employees.  In timely fashion, FMC and 
Harsco will furnish the Partnership with information they have which the 
Partnership needs to comply with this procedure.  The Partnership, as to 
each Parent, will be the "successor employer" for FICA/FUTA purposes.

5.9.13  NSD Decree.  The Partnership shall be bound by the terms of the 
Settlement Agreement and Consent Decree entered into by FMC with respect 
to its Naval Systems Division in the so-called Smith/Cappellupo 
litigation, Civil Action Nos. 4-85-1239, 4-86-945, and 4-89-1044 in the 
United States District Court for the District of Minnesota.

5.9.14  Stock Option Plans.  The Partnership shall not assume any 
responsibility or obligation to any former employee of either Parent 
with respect to stock options held by any such employees, including, 
without limitation, options which may terminate or expire as a 
consequence of leaving the employment of such Parent and becoming an 
employee of the Partnership.

5.9.15  Long-term Incentive Compensation.  The Partnership shall not 
assume any responsibility or obligation to any former employee of either 
Parent with respect to any long-term incentive compensation or 
multi-year cash bonus.

5.10  Lack of Consents.  To the extent that it is either legally or 
factually impossible or impracticable for one party to assign or 
otherwise transfer either a Contract or any Asset to the Partnership, 
such transferring party hereby undertakes to otherwise provide the 
Partnership with a substantially similar economic benefit, which, in the 
case of Assets, shall require the transferring party to contribute in 
lieu of the Asset additional cash in an amount equal to the net Book 
Value of such Asset and, in the case of Contracts, shall require the 
transferring party to comply with the provisions of Section 5.11.

5.11  Third Party Consent Procedures.  To the extent that any rights 
under any Contract (other than a Contract with the U.S. Government to be 
novated pursuant to the terms of the Novation Agreement) to be assigned 
under the Operative Documents may not be assigned without the consent of 
another Person which such Person will not provide, this Agreement shall 
not constitute an agreement to assign such Contract if such assignment 
would constitute a breach thereof or be unlawful or impracticable.  Such 
Contracts are referred to herein as the "Restricted Contracts."  The 
Partner with an obligation to transfer a Restricted Contract (the 
"Transferring Partner") shall take the following actions with respect 
thereto:

5.11.1  At the Partnership's request, such Partner shall, with the 
cooperation of the Partnership, take the actions described in Schedule 
5.11 to obtain all required Consents to all Restricted Contracts as soon 
as practical after the execution and delivery hereof and shall promptly 
notify the Partnership as such consents are received.  Upon receipt of 
such Consents, such Restricted Contracts shall be deemed assigned to the 
Partnership on the Closing Date, regardless of whether any 
subcontracting arrangement has been entered into pursuant to Section 
5.11.2 below.  If a subcontracting arrangement has been entered into 
with respect to a Restricted Contract for which a Consent to assignment 
is received, such subcontracting arrangement shall, unless otherwise 
agreed between the Partners, terminate automatically without further 
action by the Partner or the Partnership.

5.11.2  As soon as practical after the Closing, a Transferring Partner 
shall enter into a subcontracting relationship with the Partnership with 
respect to each of such Partner's Restricted Contracts for which the 
required Consent to assignment has not been received and which do not, 
by their terms, require consent to subcontracting.  Such subcontracting 
arrangements shall provide for terms which will reasonably achieve for 
the Partnership the economic benefit which it would have achieved 
through an assignment of such Restricted Contract.  As between the 
Transferring Partner and the Partnership, the Restricted Contract shall 
be treated to the maximum extent possible as if it had been assigned to 
the Partnership, i.e., all terms and conditions, including price, of 
such Restricted Contracts shall be binding on the Partnership, and the 
Partnership shall bear any liabilities arising from events occurring 
after the Closing Date thereunder, and with respect to such Restricted 
Contracts, all revenues invoiceable for work performed after the Closing 
Date shall be for the account of the Partnership and the risk of 
uncollectibility shall be borne solely by the Partnership.  The 
Partnership and the Transferring Partner shall cooperate and use all 
reasonable efforts to achieve the above-described results.  In addition, 
the Partnership agrees that if, as a condition to securing the Consent 
to the assignment of any Contract, a Parent is required to guarantee the 
performance by the Partnership of any obligation under that Contract, 
the Partnership shall indemnify and defend such Parent against, and hold 
such Parent harmless from, any liability with respect to the failure by 
the Partnership, for whatever reason, to perform any such obligation.  
At the Closing, each Partner shall advise the Partnership in writing as 
to such Partner's Restricted Contracts and the steps which each Partner 
proposes to take with respect thereto.  Notwithstanding the foregoing 
provisions of this Section 5.11.2 relating to subcontracting 
arrangements, unless objected to by the other Partner, a Partner may 
propose to become subject to the terms of this Section 5.11.2 with 
respect to any or all of such Restricted Contracts and to dispense with 
any further subcontracting arrangements with respect to each such 
designated Restricted Contracts, so long as such Partner fully complies 
with the obligations on its part set forth herein with respect to such 
Restricted Contracts.

5.11.3  If any Restricted Contract also requires a Consent of a third 
party to the valid subcontracting of all rights and obligations of the 
Transferring Partner thereunder and if a Consent to assignment has been 
refused by such third party, then after the Closing, the Transferring 
Partner shall, with the cooperation of the Partnership, take the actions 
described on Schedule 5.11 to obtain all such Consents to subcontracting 
as soon as practical after the Closing and shall promptly notify the 
Partnership upon receipt of such Consent.  If such Consent is so 
received, the Restricted Contract shall be subcontracted by the 
Transferring Partner to the Partnership as contemplated by Section 
5.11.2 above.

5.11.4 In the event that a Transferring Partner is unable to secure any 
required Consent to assignment or subcontracting with respect to a 
Restricted Contract, the Parent of the Transferring Partner and the 
Partnership shall negotiate and enter into such agreements as are 
necessary so that as closely as possible the result will be to 
reasonably provide the equivalent economic benefit which the Partnership 
would have enjoyed had such Restricted Contract been assigned to the 
Partnership.  In order to effect this, such agreements may call for the 
Transferring Partner to contract with the Partnership for the provision 
of personnel and/or services of the Partnership.  It is expected that 
all benefits and obligations under such Restricted Contract which would 
have been transferred to the Partnership (including, without limitation, 
the obligation to perform all work and services required under such 
Restricted Contract and to provide all materials, equipment and products 
required pursuant to such contracts), shall be assumed and performed by 
the Partnership.  The Partnership shall provide the personnel to perform 
the work and services under such Restricted Contract to the Transferring 
Partner, and the Partnership shall receive all revenues paid to the 
Transferring Partner by such customers as consideration for the 
provision of the Partnership's personnel.

5.12  Non-Dissolution.  Neither Parent shall, or shall allow its 
Subsidiaries to, petition any court for the involuntary dissolution of 
the Partnership in the event that any party to the Operative Documents 
defaults on its obligations under an Operative Document, and the 
remedies for any such default shall be solely those set forth in the 
Partnership Agreement, or other Operative Document, as the case may be.

5.13  Santa Clara Properties.  Notwithstanding that FMC is expressly not 
transferring to the Partnership its title to and ownership interest in 
the Santa Clara Properties, FMC shall lease the Santa Clara Properties 
to the Partnership for the Partnership's exclusive use, on the terms set 
forth in the Lease Agreement, attached hereto as Exhibit G.  To the 
extent that the Fair Market Value (excluding any costs relating to the 
remediation of any FMC Environmental Liability Event) of the Santa Clara 
Properties to FMC at the termination of the Lease Agreement shall have 
increased from the Fair Market Value (excluding any costs relating to 
the remediation of any FMC Environmental Liability Event) of such 
properties to FMC as of the Closing Date as a result of capital 
improvements made thereon by the Partnership, FMC shall, upon the 
termination of the Lease Agreement, reimburse the Partnership for the 
unamortized, unrecovered and unrecoverable cost to the Partnership of 
such capital improvements (to the extent such costs have not been 
otherwise recovered by the Partnership through insurance proceeds).  
Upon termination of the Lease Agreement, the Partnership shall indemnify 
FMC and hold FMC harmless from and against any unpaid taxes relating to 
such properties which the Partnership is obligated to pay under the 
Lease Agreement and which accrued during the lease term.  As used in 
this Section 5.13, "capital improvements" shall not include any 
expenditure, however characterized elsewhere, regarding environmental 
matters, it being the parties' intention that their respective rights 
and obligations regarding environmental expenditures be governed solely 
by Sections 5.22 and 6.2 below.

5.14  Buyback of Accounts Receivable.  In the event that any account 
receivable (including all VLS Receivables, the due dates of which are 
set forth on Schedule 5.14) assigned to the Partnership by either Parent 
is not fully paid within ninety (90) days after its due date, the Parent 
that assigned such account receivable covenants and agrees promptly to 
repurchase such account receivable for cash, and the Partnership shall, 
upon the request of the repurchasing Parent, act as the Parent's agent 
for collection of the repurchased receivable.  Neither Parent will 
contribute at Closing any receivable that is more than 90 days past due.

5.15  Pre-Closing Workers' Compensation.  Except as provided in the 
following paragraph, it is agreed that subsequent to the Closing each 
Parent will be responsible for, and will reimburse the Partnership with 
respect to, all payments made by the Partnership to any of such Parent's 
former employees for workers' compensation relating to pre-closing 
occurrences.  These obligations on the part of FMC and Harsco to make 
such payments shall continue for as long as any such payments become due 
to any former employee of either Parent.  With respect to any workers' 
compensation claim based upon conditions arising out of facts and 
circumstances occurring both before and after the Closing, the 
obligations of FMC or Harsco, as the case may be, shall be determined in 
accordance with applicable Governmental Rules governing the 
apportionment of responsibility for workers' compensation between 
predecessor and successor employers.

5.16  Slow-Moving Inventory.  The Partnership shall use reasonable 
efforts to use all Assets contributed at the Closing which are 
Slow-Moving Inventory (as identified on Schedule 5.16 hereto) in the 
ordinary course of the Partnership's business.  All such Slow-Moving 
Inventory that is held by the Partnership on the second anniversary of 
the Closing Date shall as soon thereafter as practicable be disposed of 
by the Partnership.  At such time, the Parent that contributed such 
Slow-Moving Inventory will make a payment to the Partnership equal to 
the excess, if any, of the book value of such Slow-Moving Inventory, as 
reflected on the applicable Final Closing Balance Sheet, over the sum of 
any reserve on such Final Closing Balance Sheet which was applicable to 
such Slow-Moving Inventory and any amounts realized upon disposition of 
such Slow-Moving Inventory.

5.17  Consultant and Audit Costs.  Whether or not the transaction 
contemplated hereby shall be consummated, FMC shall bear 60% and Harsco 
shall bear 40% of (i) the costs, not to exceed $1,700,000, of the study 
performed prior to December 31, 1993 in connection with the combination 
of the FMC Defense Business and the Harsco Defense Business by Booz, 
Allen & Hamilton and (ii) the costs for the audits referred to in the 
last sentence of Section 5.3 of the Partnership Agreement, not to exceed 
$400,000 in the case of the FMC audit and $70,000 in the case of the 
Harsco audit.  If either party's audit costs exceed the amount above 
stated, such party shall be responsible for such excess.

5.18  Post-Closing Cash Advances.  After the Closing Date and prior to 
the second anniversary of the Closing Date, FMC and Harsco agree to make 
to the Partnership at any time and from time to time, upon 3 Business 
Days' notice, such cash advances, pro rata in accordance with their 
respective Share Percentages, as the Managing General Partner deems 
necessary or advisable to meet the Partnership's short-term cash 
requirements; provided, however, that (i) such cash advances be in the 
aggregate amount of not less than $1,000,000, (ii) in no event shall the 
aggregate amount of such advances outstanding at any time from any 
Parent exceed $12,000,000 in the case of FMC and $8,000,000 in the case 
of Harsco, (iii) in no event shall such cash advances be used to finance 
business activities outside the Scope of Activity and (iv) in no event 
shall such cash advances be available to the Partnership until the 
credit facility described in the following sentence is exhausted or 
otherwise unavailable in accordance with its terms.  In addition, from 
and after the Closing Date, FMC agrees to make to the Partnership at any 
time and from time to time, upon 3 Business Days' notice, such cash 
advances as the Managing General Partner deems necessary or advisable to 
meet the Partnership's short-term cash requirements; provided, however, 
that such cash advances shall not at any one time exceed an amount equal 
to the difference between (i) the aggregate amount of VLS Receivables 
and (ii) the aggregate amount, if any, of such VLS Receivables that have 
at such time been collected by the Partnership or repurchased by FMC in 
accordance with the terms of this Agreement.  As such accounts 
receivable are collected or repurchased, the Partnership shall promptly 
repay to FMC the portion, if any, of such cash advances which exceeds 
the aggregate amount of such accounts receivable that have at such time 
not been collected or repurchased in accordance with the terms of this 
Agreement, and such amounts repaid shall not be subject to reborrowing.  
Such advances will be evidenced by a senior promissory note maturing on 
the second anniversary of the Closing Date (or, in the case of advances 
pursuant to the immediately preceding sentence, as and when the VLS 
Receivables are repurchased or collected) and bearing interest at a 
floating rate (to be recalculated monthly) equal to the one year LIBOR 
in effect on the first Business Day of such month plus 100 basis points 
and may be repaid (pro rata in the case of advances pursuant to the 
first sentence of this Section) at any time (subject to reborrowing) 
without penalty or premium.  The Parents acknowledge that these 
facilities are intended to be available to provide for short-term 
working capital and are not intended to provide a two-year financing 
source.  The Partnership shall repay any cash advance made pursuant to 
this Section 5.18 before it makes any voluntary or optional prepayment 
on any other debt outstanding.

5.19  Responsibility for Inactive Contracts.  Upon the final close-out 
or other settlement and any interim settlements with the U.S. Government 
of any Partner's Inactive Contract (which settlement shall be subject to 
the approval of such Partner), (i) if such settlement requires a payment 
by the Partnership to the U.S. Government, the Parent which contributed 
such Inactive Contract to the Partnership shall promptly deliver to the 
Partnership an amount in cash equal to the amount of such payment or 
(ii) if such settlement results in a payment from the U.S. Government to 
the Partnership, the Partnership shall promptly deliver to the Parent 
which contributed such Inactive Contract an amount in cash equal to such 
payment.  The Partnership shall be responsible for the administration of 
the settlement of such Inactive Contracts.

5.20  Accounts Receivable.  Except in respect of accounts receivable (i) 
withheld from the Partnership pursuant to Section 2.1.3 or Section 2.1.4 
(and not subsequently assigned to the Partnership pursuant to Section 
2.3.3), (ii) transferred to a  Parent pursuant to Section 2.3.3 and 
(iii) withheld or repurchased from the Partnership by a Parent pursuant 
to Section 5.14, each Parent shall promptly forward or cause to be 
forwarded to the Partnership any and all proceeds from accounts 
receivable relating to its Defense Business that are received by such 
Parent after the Closing Date and that were outstanding as of the 
Closing Date.  With respect to accounts receivable (i) withheld from the 
Partnership pursuant to Section 2.1.3 or 2.1.4 (and not subsequently 
assigned to the Partnership pursuant to Section 2.3.3), (ii) transferred 
to a Parent pursuant to Section 2.3.3 and (iii) withheld or repurchased 
from the Partnership by a Parent pursuant to Section 5.14, the 
Partnership shall promptly forward to the appropriate Parent any and all 
proceeds relating to such accounts receivable received by the 
Partnership after the Closing Date.

5.21  Responsibility for Pre-Closing Letters of Credit, Etc.  The 
parties hereto agree that any letter of credit, performance bond or bid 
bond relating to any Active Contract that is issued by either Parent 
prior to the Closing Date shall be the responsibility of the Partnership 
after the Closing Date and shall be assumed by the Partnership on the 
Closing Date.  The Partnership agrees to reimburse the appropriate 
Parent in cash within three Business Days for any draw or claim against 
any such letter of credit, performance bond or bid bond made on or after 
the Closing Date.

5.22  Environmental Matters.

5.22.1  Payments by Parents to Account for Losses Resulting from 
Remedial Expenditures.  The parties believe that each of them, with 
respect to its Defense Business as conducted prior to the Closing, and 
the Partnership, with respect to its business conducted after the 
Closing, is legally entitled to include all Remedial Expenditures in its 
pricing under customer contracts arising in such business.  However, in 
the event that circumstances result in an inability on the part of the 
Partnership to obtain inclusion of such Remedial Expenditures in the 
ordinary course of business in conjunction with the incurrence of such 
Remedial Expenditures, the parties agree that a mechanism should exist 
to limit the degree to which returns otherwise payable to either Parent 
from the operations of the Partnership would be impaired as a result of 
the Partnership's inability at any point in time to obtain such 
inclusion with respect to the other Parent's prior conduct of its 
Defense Business.  In furtherance of the foregoing, each Parent agrees 
that:

(i)  in the event that an Environmental Realization Status Report 
delivered pursuant to Section 5.22.3.1 shows that, during the relevant 
Fiscal Quarter, the Partnership has incurred any FMC Unrealized Remedial 
Expenditures or Harsco Unrealized Remedial Expenditures (including as a 
result of any FRA determination during such Fiscal Quarter), then a 
special allocation (an "Environmental Special Allocation") of such 
incurrences shall be made in accordance with Section 4.3(c)(vi) of the 
Partnership Agreement to the Partner of the Parent to which such 
Unrealized Remedial Expenditures relate in an amount equal to 100% of 
such Unrealized Remedial Expenditures;

(ii)  in the event that an Environmental Realization Status Report 
delivered pursuant to 5.22.3.1 shows that, during the relevant Fiscal 
Quarter, the Partnership has Realized (including as a result of any FRA 
determination during such Fiscal Quarter) FMC Qualifying Realized 
Remedial Expenditures or Harsco Qualifying Realized Remedial 
Expenditures which were previously reported under Section 5.22.3.1 as 
Unrealized Remedial Expenditures, then an Environmental Special 
Allocation of such Realization shall be made in accordance with Section 
4.3(c)(iv) and (v) of the Partnership Agreement to the Partner of the 
Parent to which such Realized Remedial Expenditure relates in an amount 
equal to 100% of such Realized Remedial Expenditure.

5.22.2  Presumptions Regarding Environmental Liability Events.

5.22.2.1  It shall be conclusively presumed for purposes of this Section 
5.22 that all environmental matters set forth on Schedule 5.22.2 are FMC 
Environmental Liability Events or Harsco Environmental Liability Events 
as indicated on such Schedule.

5.22.2.2  There shall be a rebuttable presumption, for purposes of this 
Section 5.22, that any Environmental Liability Event not set forth on 
Schedule 5.22.2 and pertaining either to the past conduct by FMC of its 
Defense Business or to the ownership, operation or use of any facility 
or property now or previously owned, operated or used in FMC's Defense 
Business is an FMC Environmental Liability Event.

5.22.2.3  There shall be a rebuttable presumption, for purposes of this 
Section 5.22, that any Environmental Liability Event (i) not set forth 
on Schedule 5.22.2, (ii) pertaining either to the past conduct by Harsco 
of its Defense Business or the ownership, operation or use of any 
facility or property now or previously owned, operated or used in 
Harsco's Defense Business and (iii) discovered and reported in writing 
to the Advisory Committee on or before the first to occur of the fifth 
anniversary of the Closing Date or the date on which FMC purchases 
Harsco's ownership interest in the Partnership under its call option 
pursuant to Section 7.2(a) of the Partnership Agreement is a Harsco 
Environmental Liability Event.  Any Environmental Liability Event 
pertaining to the ownership, operation or use of any facility or 
property now or previously owned, operated or used in Harsco's Defense 
Business which is not subject to the conclusive presumption established 
by Section 5.22.2.1 or the rebuttable presumption established by the 
preceding sentence of this Section 5.22.2.3 (including any Environmental 
Liability Event discovered and reported in writing to the Advisory 
Committee after the date on which FMC purchases Harsco's ownership 
interest in the Partnership under its call option pursuant to Section 
7.2(a) of the Partnership Agreement) shall not be presumed to be a 
Harsco Environmental Liability Event.

5.22.2.4  If the Partnership believes any environmental matter, which is 
not subject either to a conclusive or a rebuttable presumption, to be a 
Harsco Environmental Liability Event, the Partnership shall provide 
Harsco with a reasonably detailed written notice setting forth the facts 
and circumstances pertaining to such matter, the reasons leading the 
Partnership to conclude that such environmental matter constitutes a 
Harsco Environmental Liability Event and the data relied upon by the 
Partnership in reaching such conclusion.  The Partnership shall promptly 
provide any additional information related to such environmental matter 
as Harsco may reasonably request.  Within sixty (60) days after receipt 
of such notification and information, Harsco shall notify the 
Partnership in writing whether Harsco agrees with the Partnership's 
conclusion or disagrees in whole or in part with such conclusion.  If 
Harsco disagrees in whole or in part with the Partnership's conclusion, 
Harsco shall set forth in its notification the reasons for its 
conclusion and any data relied upon by Harsco in reaching such 
conclusion.

5.22.2.5  Any rebuttable presumption under Section 5.22.2.2 or 5.22.2.3 
can be rebutted on the basis of clear and convincing evidence to the 
contrary in a judicial proceeding culminating in a final, non-appealable 
order (unless otherwise resolved by the parties).  Until any such 
rebuttable presumption has been so rebutted, the Environmental Liability 
Event that is subject to such presumption shall be treated, for purposes 
of this Section 5.22, as an FMC Environmental Liability Event or a 
Harsco Environmental Liability Event, as appropriate.

5.22.3  Quarterly Status Reports.

5.22.3.1  On or before the 30th day after the end of each Fiscal 
Quarter, the Partnership shall send to each Parent an "Environmental 
Realization Status Report."  The Environmental Realization Status Report 
shall set forth, in reasonable detail, all Remedial Expenditures (i) 
planned, (ii) accrued as a liability or (iii) expended, in each case 
during such Fiscal Quarter.  Such Environmental Realization Status 
Report shall also set forth in reasonable detail all Realizations of 
Remedial Expenditures during such Fiscal Quarter.  For purposes of such 
Environmental Realization Status Reports, a planned Remedial Expenditure 
shall be any such expenditure included in the forward pricing with 
respect to any contract with a vendee.

5.22.3.2  The Partnership shall diligently pursue its right to cost 
inclusion under customer contracts and to reimbursement from all other 
Persons (except the Parents, the Partners and the directors, officers 
and employees of each of them) having liability under applicable law 
(whether pursuant to CERCLA or otherwise) with respect to all Qualifying 
Remedial Expenditures, in each case together with any legally available 
interest thereon.  The Partnership shall have sole control and 
management authority over any claim, litigation or other proceeding or 
matter covered by the preceding sentence or the Partnership 
indemnification set forth in Section 6.2, including the right to 
negotiate and enter into settlements with interested Persons with 
respect thereto and to defend or prosecute with counsel of its selection 
any claim, litigation or other proceeding with respect thereto; 
provided, however, that the Partnership shall not enter into any such 
settlement which would give rise to Qualifying Remedial Expenditures 
without the prior consent of the Parent to which such Qualifying 
Remedial Expenditures relate (which will not be unreasonably withheld or 
delayed).

5.22.4  Recordkeeping; Resolution of Amount of Realization.

5.22.4.1  The Partnership shall maintain, and make available to each 
Parent for inspection as reasonably requested, books and records which 
present in reasonable detail (i) information pertaining to the past 
conduct by each Parent of its Defense Business (including forward 
pricing rates) and the ownership, operation or use by each such Parent 
of any facility or property now or previously owned, operated or used in 
its Defense Business, as such information would bear on any 
determination of whether a Remedial Expenditure is a Qualifying Remedial 
Expenditure, a Realized Remedial Expenditure or an Unrealized Remedial 
Expenditure; (ii) all relevant supporting data in connection with 
contract-based claims or requests for reimbursement of Remedial 
Expenditures; and (iii) all U.S. Government and other customer reports, 
letters, requests for information or other pertinent information 
submitted to the Partnership by the U.S. Government and other customers 
regarding the Partnership's inclusion of Remedial Expenditures in its 
contract pricing.  In addition, the Partnership shall establish not less 
frequently than annually and periodically submit to the DOD forward 
pricing rates with respect to its costs, including Remedial Expenditures 
to be incurred by the Partnership, which costs shall be identified in 
sufficient detail to permit the Partnership to calculate FMC Qualifying 
Remedial Expenditures, Harsco Qualifying Remedial Expenditures and other 
Remedial Expenditures.  Subject to applicable Governmental Rules, such 
forward pricing rates, as they relate to Remedial Expenditures, will be 
determined on the basis of the Partnership's best judgment as to the 
Remedial Expenditures the Partnership will incur and the volume of 
business the Partnership will transact during the relevant period.  
These forward pricing rates will also be used (and appropriate records 
shall be maintained by the Partnership) to identify Realized Remedial 
Expenditures attributable to contracts with commercial customers 
(including Major SPD Contracts) which are not subject to government 
accounting and auditing procedures.

5.22.4.2  The Partnership shall maintain, and make available quarterly 
to each Parent for inspection, a memo account (and sub-accounts for each 
of FMC, Harsco and the Partnership) reflecting all Remedial Expenditure 
costs and Realizations (the "Remedial Costs Account") to which shall be 
charged or credited, as applicable, the following:  (i) all 
environmental reserves for Remedial Expenditures reflected on the Final 
Closing Balance Sheets of FMC and Harsco, which reserves shall be 
allocated as a credit to the Parent that contributed the reserve; (ii) 
all receipts from vendees of either Parent or the Partnership (including 
commercial customers as contemplated by Section 5.22.4.1 above) 
attributable to the Realization of Remedial Expenditures pursuant to 
Existing Contracts, which receipts shall be allocated as a credit to the 
Parent that contributed the Existing Contracts; (iii) all receipts from 
vendees of either Parent or the Partnership (including commercial 
customers as contemplated by Section 5.22.4.1 above) attributable to the 
Realization of Remedial Expenditures pursuant to New Contracts, which 
receipts shall be allocated as a credit among FMC, Harsco and the 
Partnership sub-accounts in accordance with Section 5.22.4.3 below; (iv) 
receipts, if any, from such vendees attributable to the Realization by 
the Partnership of FMC Qualifying Remedial Expenditures or Harsco 
Qualifying Remedial Expenditures by means other than the Realization 
thereof under procurement contracts between the Partnership and its 
vendees, and all receipts from sources other than vendees, which 
receipts shall be allocated as a credit to the sub-account of FMC or 
Harsco, as the case may be, and all such receipts attributable to 
post-Closing Environmental Liability Events, which receipts shall be 
allocated as a credit to the Partnership; (v) all FMC Qualifying 
Remedial Expenditures or Harsco Qualifying Remedial Expenditures 
incurred by the Partnership (including, for this purpose, Remedial 
Expenditures that are reflected in reserves assumed by the Partnership), 
which Qualifying Remedial Expenditures shall be allocated as a charge to 
the sub-account of FMC or Harsco, as the case may be, and all other 
Remedial Expenditures attributable to post-Closing Environmental 
Liability Events, which Remedial Expenditures shall be allocated as a 
charge to the sub-account of the Partnership; (vi) all Environmental 
Special Allocations under Section 4.3(c)(vi) of the Partnership 
Agreement to each Parent's Partner of Unrealized Remedial Expenditures, 
which Environmental Special Allocations shall be reflected as a charge 
to the sub-account of the Parent to which such allocations were made; 
(vii) all Environmental Special Allocations under Section 4.3(c)(iv) and 
(v) of the Partnership Agreement to each Parent's Partner of 
Realizations of Remedial Expenditures previously reported under Section 
5.22.3.1 as Unrealized Remedial Expenditures, which Environmental 
Special Allocations shall be reflected as a credit in the sub-account of 
the Parent to which such allocations were made; (viii) any special 
capital contributions made by a Parent to the Partnership pursuant to 
Section 5.22.5, which capital contribution shall be reflected as a 
credit in the sub-account of such Parent; (ix) any adjustment calculated 
as a result of a rebuttal of a presumption with respect to a presumed 
Qualifying Remedial Expenditure, which adjustment shall be reflected as 
a credit to the sub-account of the Parent that rebutted the presumption; 
(x) any special distribution made by the Partnership to a Parent's 
Partner pursuant to Section 6.4 of the Partnership Agreement, which 
distribution shall be reflected as a charge in the sub-account of such 
Parent; (xi) any payment under Section 6.2 in respect of Qualifying 
Remedial Expenditures shall be reflected as a charge to the sub-account 
of the Parent with respect to which such payment is made; (xii) Major 
Contract FRAs, which shall be allocated as a credit or a charge to the 
sub-account of the Partnership, FMC and Harsco in accordance with 
Section 5.22.4.4 below; (xiii) any Environmental Cash Flow Loan made by 
a Parent to the Partnership pursuant to Annex B, which loan shall be 
reflected as a credit in the sub-account of such Parent; and (xiv) any 
repayment of an Environmental Cash Flow Loan to a Partner pursuant to 
Annex B, which repayment shall be reflected as a charge in the 
sub-account of such Parent.

5.22.4.3  With respect to each Fiscal Quarter of the Partnership in 
which receipts from vendees under New Contracts attributable to 
Realization of Remedial Expenditures are received, such receipts shall 
be allocated among the Parents and the Partnership in proportion to the 
actual expenditures by the Partnership for Remedial Expenditures 
attributable to FMC, Harsco or the Partnership since the inception of 
the Partnership on a cumulative basis.  By way of example, if 50% of the 
Remedial Expenditures of the Partnership in its first Fiscal Quarter 
were expended with respect to FMC Environmental Liability Events, 25% 
with respect to Harsco Environmental Liability Events and 25% with 
respect to post-Closing Environmental Liability Events, all receipts 
representing Realizations from vendees under New Contracts of Remedial 
Expenditures in that Fiscal Quarter would be allocated 50% to the FMC 
sub-account, 25% to the Harsco sub-account and 25% to the Partnership 
sub-account.  In each subsequent Fiscal Quarter of the Partnership, 
these percentages will be recomputed on a cumulative basis of actual 
expenditures since the Closing Date, and all Realizations from vendees 
of Remedial Expenditures during such Fiscal Quarter will be allocated to 
the three sub-accounts in accordance with the then applicable cumulative 
percentage factors.

5.22.4.4  The amount of Realization of Remedial Expenditures from 
purchasers of goods and services from the Partnership shall be 
determined as follows:  (i) with respect to each production contract 
other than a Major Contract, and each other contract other than a Major 
Contract, regardless of amount, the amount of Realization of Remedial 
Expenditures shall be the amount provided for Remedial Expenditures in 
the contract price based upon the Parent's or Partnership's forward 
pricing rate used in such bid or proposal as determined in accordance 
with Section 5.22.4.1 and shall be allocated to the appropriate 
sub-account of the Remedial Costs Account proportionately as each unit 
of production or other deliverable is paid for by the vendee as provided 
in Section 5.22.4.3 above, and no further adjustment shall be made with 
respect to any such contract, irrespective of any payments made to or by 
the vendee in connection with contract close-out; (ii) with respect to 
each Major Contract, the Tentative Remedial Expenditure Realization 
shall be the Remedial Expenditure amount included in the data used by 
the Partnership in its forward pricing rate to establish the contract 
price as determined in accordance with Section 5.22.4.1 and the 
Tentative Remedial Expenditure Realization shall be allocated to the 
appropriate sub-account of the Remedial Costs Account proportionately as 
each unit of production or other deliverable is paid for by the vendee 
as provided in Section 5.22.4.3 above.  The Tentative Remedial 
Expenditure Realizations with respect to each Major Contract shall be 
adjusted to reconcile any previously recorded Realization with a revised 
Realization calculated in accordance with the following methodology:

A "Normative Fee" is hereby established for each category of Major 
Contracts as follows:

                                               Normative Fee

Major Contract Category              GSD/CSD        ASD             SPD

Competitive Contract
   (U.S., FMS and direct foreign)    8%             7%              7%
Sole source negotiated contract
   (U.S. and FMS)                    12%            10%             10%
Direct foreign sole source contract  15%            15%             15%

The Actual Fee (determined in the manner provided below) shall be 
compared to the Normative Fee.  If the Actual Fee exceeds or is less 
than the Normative Fee applicable to the Major Contract, then the 
Tentative Remedial Expenditure Realization shall be adjusted as follows 
(such adjustment being referred to hereinafter as the Final Remedial 
Adjustment or "FRA"):

ARER = AF x TRER
          NF

where      ARER = Adjusted Remedial Expenditure Realization;

           AF   = Actual Fee;

           TRER = Tentative Remedial Expenditure Realization; and

           NF   = Normative Fee;

provided, that no such adjustment shall cause the final adjusted 
Remedial Expenditure Realization to be less than zero or more than 200% 
of the tentative Remedial Expenditure Realization.

For purposes of the foregoing calculations, the "Contract Price" shall 
be the total revenues payable to the Partnership under the Major 
Contract, the "Actual Cost" of performing the Major Contract shall be 
the total costs incurred by the Partnership in the performance of the 
Major Contract, including all direct costs and a fully allocated portion 
of the Partnership's general and administrative and other indirect 
costs, in each case determined in accordance with government contract 
accounting policies and procedures applicable to the Partnership and the 
"Actual Fee" shall be determined as follows:

Actual Fee = Contract Price - 1
                 Actual Cost

The following examples are intended to be illustrative:

Assume the Contract Price is $108, the Normative Fee is 8% and the 
tentative Remedial Expenditure recognition is $4.

(1)  If the Actual Cost of performing the Major Contract is $102, TRER 
shall be
     adjusted to $2.94.
     (i.e., ARER = (((108/102) - 1)/.08) x 4 = $2.94.)

(2)  If the Actual Cost of performing the Major Contract is $98, TRER 
shall be 
     increased to $5.10.
     (i.e., ARER = (((108/98) - 1)/.08) x 4 = $5.10.)

(3)  If the Actual Cost of performing the Major Contract is $100, there 
is no
     adjustment.
     (i.e., ARER = (((108/100) - 1)/.08) x 4 = $4.00.)

The Partnership shall make a FRA determination with respect to a Major 
Contract within ninety days after the end of the Fiscal Year in which 
the last deliverable under such contract has been received by the 
customer or the billing has been sent to the customer with respect to 
such last deliverable, whichever is later, and shall include the results 
of such determination in the next Environmental Realization Status 
Report delivered to the Parents pursuant to Section 5.22.3.1.

5.22.5  Contributions to Capital.  The provisions hereof and of the 
Partnership Agreement providing for Environmental Special Allocations 
are based upon the Partnership's anticipated levels of Qualifying 
Remedial Expenditures and Realizations.  In order to protect the 
Partnership against extraordinary cash flow disruptions, the Parents 
agree that, in the event that the Cumulative Remedial Balance of FMC at 
any time exceeds $10,000,000 or the Cumulative Remedial Balance of 
Harsco at any time exceeds $6,666,667, then such Parent shall promptly 
contribute or cause its Partner to contribute to the capital of the 
Partnership an amount in cash equal to such excess; provided, however, 
that during any period in which there shall be outstanding any cash 
advances to the Partnership pursuant to the first sentence of Section 
5.18, then FMC shall make such contribution to the capital of the 
Partnership at any time that its Cumulative Remedial Balance exceeds 
$5,000,000 and Harsco shall make such contribution to the capital of the 
Partnership at any time that its Cumulative Remedial Balance exceeds 
$3,333,333.

The parties intend that the obligation to make contributions to capital 
pursuant to this Section 5.22.5 shall be recognized as a contractual 
obligation treated as an account receivable included as an asset 
(matched as to the current or long term status of the related liability) 
in the financial statements prepared by the Partnership and reported on 
by the Accountants to the extent that the Partnership determines that it 
is required by GAAP to accrue for Remedial Expenditures.  Each Parent 
agrees that it shall take such steps as may be reasonably required by 
the Accountants, including as to the Managing General Partner obtaining 
a standby letter of credit with rights of enforcement vested in the 
Limited Partner (as long as the Limited Partner has a 20% or greater 
Share Percentage) and as to the Limited Partner obtaining a standby 
letter of credit with rights of enforcement vested in the Managing 
General Partner (provided that all such rights of enforcement are 
available only to the extent required to make contributions to capital 
under this Section 5.22.5), to support the contractual obligation set 
forth in this Section 5.22.5 and to permit the recognition by the 
Partnership of this contractual obligation as set forth above.

For GAAP purposes, accrued Qualifying Remedial Expenditures will be 
specially allocated to the earnings share of the responsible Partner.

5.22.6  Monitoring by Harsco.  Harsco shall have the right to inspect, 
sample and monitor at the premises formerly utilized by the Harsco 
Defense Business at all reasonable times and without unreasonable 
interference with the Partnership's operations for a period of five 
years following the Closing Date or the date on which FMC purchases 
Harsco's ownership interest in the Partnership under its call option 
pursuant to Section 7.2(a) of the Partnership Agreement, whichever is 
the first to occur.  The Partnership shall promptly undertake and 
diligently pursue to conclusion such further environmental studies with 
respect to the premises formerly utilized by the Harsco Defense Business 
as Harsco may specify; provided, however that (i) except as required by 
law or by any Governmental Authority, the Partnership shall not be 
obligated to proceed with any aspect of such further studies at a time 
and place which would unreasonably interfere with the Partnership's 
conduct of its business and (ii) such obligation shall not limit the 
Partnership's right to undertake such environmental studies of such 
premises as the Partnership shall determine.

5.22.7  Examples.  Attached hereto as Schedule 5.22.7 are examples 
intended to illustrate the manner in which the foregoing provisions of 
this Section 5.22 would operate in practice.  In the event of any 
discrepancy, or conflict in interpretation, between Schedule 5.22.7 and 
the provisions of this Agreement and the Partnership Agreement, the 
provisions of Schedule 5.22.7 shall control.

In the event of any of (i) the incorporation of the Partnership pursuant 
to the Registration Rights Agreement, (ii) the acquisition by FMC  of 
the entire interest of Harsco L.P. in the Partnership as a result of the 
exercise by FMC of its right of first refusal pursuant to Section 7.1(a) 
of the Partnership Agreement, (iii) the closing pursuant to the exercise 
by FMC of the call option pursuant to Section 7.2(a) of the Partnership 
Agreement, (iv) the closing pursuant to the exercise by Harsco L.P. of 
the put option pursuant to Section 7.2(b) of the Partnership Agreement, 
(v) the sale by Harsco L.P. of its entire interest in the Partnership as 
a result of and in conjunction with the sale by FMC of its entire 
interest in the Partnership pursuant to Section 7.1(a) of the 
Partnership Agreement or (vi) the sale by Harsco L.P. of its entire 
interest in the Partnership in a private sale pursuant to Section 7.1(a) 
of the Partnership Agreement, the parties hereto shall be subject to the 
terms of Annex B hereto.

5.23  Goodyear Litigation.

5.23.1  The Partnership agrees to perform after the Closing under the 
terms of the contract that is the subject of the Goodyear Litigation.  
FMC shall continue to prosecute the Goodyear Litigation, at its own 
expense, with counsel of its choice, and shall, on a quarterly basis, 
reimburse the Partnership for any and all legal and other expenses 
incurred by the Partnership in connection with such litigation.  FMC 
shall indemnify the Partnership against, and shall hold it harmless 
from, any Loss as incurred (payable promptly upon request), for or on 
account of or arising from or in connection with or otherwise with 
respect to the Goodyear Litigation.  The Partnership will provide 
assistance to FMC in connection with the Goodyear Litigation in the 
manner, and subject to the terms and conditions, set forth in Section 
5.8 of the Partnership Agreement.

5.23.2  In the event that a resolution of the Goodyear Litigation 
(whether by settlement agreement or judicial determination) determines 
that the price to be paid to The Goodyear Tire & Rubber Company 
("Goodyear") under such contract is lower than the price set forth in 
the provisional agreement under which Goodyear and FMC are currently 
operating, the parties hereto agree that the amount to be repaid by 
Goodyear under such contract shall be remitted to FMC and not to the 
Partnership.  In the event that such resolution determines that the 
price to be paid to Goodyear under such contract is higher than the 
price set forth in such provisional agreement, FMC, and not the 
Partnership, shall be responsible for remitting to Goodyear an amount 
equal to such excess.  The parties agree that, to the extent that 
notwithstanding the above any remittances referred to in the preceding 
two sentences are made by or to the Partnership, such remittances shall 
be deemed to have been made to or by the Partnership as agent for FMC, 
and the benefits and burdens of such remittances shall at all times 
remain with FMC.

ARTICLE VI

SECTION 6.0  INDEMNITIES.

6.1  General.  Subject to this Article, each Parent shall indemnify the 
other Parent, such other Parent's Partner, the Partnership and their 
officers, directors and employees (collectively the "Indemnified 
Parties") against, and shall hold them harmless from, any Loss as 
incurred (payable promptly upon request), for or on account of or 
arising from or in connection with or otherwise with respect to any (a) 
breach on the part of the indemnifying party or any of its Affiliates of 
any surviving representation or warranty contained in any Operative 
Document, (b) breach on the part of the indemnifying party or any of its 
Affiliates of any covenant contained in this Agreement requiring 
performance after the Closing Date, (c) Excluded Liability or any other 
liability of such Parent or any of its Affiliates other than its Defense 
Affiliates not expressly assumed by the Partnership under any of the 
Operative Documents, (d) liability of any Defense Affiliate of such 
indemnifying party listed on Schedule B to Annex A hereto that is not 
taken into account in determining the amount by which such indemnifying 
party's investment in such Defense Affiliate is recorded on such 
indemnifying party's Final Closing Balance Sheet or (e) accrued 
pre-Closing Liabilities of the types set forth for such Parent on its 
Final Closing Balance Sheet (excluding those Liabilities of the types 
set forth on Schedule 6.1) in excess of the amount reflected for such 
Liabilities on such Parent's Final Closing Balance Sheet, provided no 
Parent or its Partner shall recover any amount for any diminution in 
value of its interest in the Partnership to the extent that the 
Partnership is entitled to be indemnified and obtains full 
indemnification for the underlying Loss.

Indemnification under clauses (a) and (e) of this Section 6.1 shall be 
unavailable to any Indemnified Party until all amounts to which such 
Indemnified Party is entitled exceed $1 million in the aggregate, 
whereupon only the amount of such excess shall be available.  
Indemnification shall be unavailable with respect to any claim for a 
breach of a representation or warranty made in any applicable agreement 
between the parties hereto and their Affiliates, as of a date on or 
prior to Closing, if the claim is made or notice of possible claim of 
reasonable specificity is received after the survival period for such 
representation or warranty set forth in Section 7.12.

6.2  Liability for Environmental Matters.

Pursuant to the Assumption Agreement referred to in Section 2.1.6, the 
Partnership shall assume all liabilities and obligations relating to 
Environmental Liability Events.  Subject to Section 6.1, the Partnership 
shall be solely responsible for post-Closing compliance with 
Environmental and Safety Requirements applicable to its operations and 
facilities.  Subject to the procedures, limitations and qualifications 
set forth in Sections 6.5, 6.6, 6.7 and 6.8, the Partnership shall 
indemnify and defend each Parent, such Parent's Partner, and their 
officers, directors and employees against, and hold them harmless from, 
any Loss as incurred (payable promptly upon request) for or on account 
of or arising from or in connection with or otherwise with respect to 
any Environmental Liability Event, whenever arising or caused, but only 
to the extent that such Loss, or any portion thereof, is not paid by 
such Parent's insurers under general liability insurance policies (or 
any other applicable insurance policy).  Notwithstanding anything to the 
contrary in this Section 6.2, each Parent shall be obligated to seek 
payment under its general liability policies only for all such Losses 
and shall retain any liability or obligation relating to Environmental 
Liability Events to the extent necessary to maintain its right to pursue 
and obtain payment under its general liability policies.  The 
Partnership shall be entitled to receive all sums reimbursed to, 
Realized by or otherwise paid to each Parent under its general liability 
policies (or any other applicable insurance policy) for costs incurred 
by the Partnership in connection with Environmental Liability Events 
pursuant to this Section 6.2, less the cost of collection (including 
attorneys' and consultants' fees).  It is acknowledged by the parties 
that the inclusion of costs incurred in connection with Environmental 
Liability Events in pricing customer contracts are (i) in advance of 
potential Realization from a Parent's general liability insurers, (ii) 
not in lieu of such Realization and (iii) not designed to permit double 
payment for costs to the Partnership or either Parent.  This Section 6.2 
is not intended to limit, reduce, define or otherwise restrict either 
Parent's rights to recovery under its general liability policies in 
connection with Environmental Liability Events.

6.3  Indemnification for Pension, Retiree Medical and Other Employee 
Benefits  Subject to the procedures and limitations set forth in 
Sections 6.5, 6.6, 6.7 and 6.8, each Parent agrees to indemnify and 
defend the Indemnified Parties against, and hold them harmless from, any 
Loss for or on account of or arising from or in connection with or 
otherwise with respect to any liability relating to a pension benefit 
plan, retiree medical benefit plan or any other employee benefit plan 
caused by or attributable to employment service with or the funding of 
such plans by the Parent prior to the Closing Date, and not as part of 
this transaction, either (i) funded through the transfer of assets or 
(ii) assumed by the Partnership as an unfunded liability either (A) 
reflected on the Parent's Final Closing Balance Sheet or (B) not so 
reflected if such liability is an obligation for post employment 
benefits (other than pre-closing workers' compensation) of the type 
described in SFAS 112; provided, however, that no such indemnity shall 
apply to any pension, retiree medical or other employee benefit provided 
for in a Partnership benefit plan to the extent that such plan confers 
different or greater benefits than the predecessor plans of either 
Parent (it being understood that neither Parent assumes any 
responsibility for any Partnership benefit attributable to pre-Closing 
employment service in an amount greater than such Parent would have been 
responsible for under the terms of its pre-Closing benefit plans); and 
provided further that (i) FMC shall indemnify the Indemnified Parties to 
the extent that the proviso in Section 4.28 above is inaccurate and (ii) 
Harsco shall indemnify the Indemnified Parties to the extent that the 
representation in Section 4.21.11 is inaccurate with respect to Harsco, 
disregarding the information disclosed pursuant to the exception to such 
Section 4.21.11.  Each such Parent further agrees to indemnify and 
defend the Indemnified Parties against, and hold them harmless from, any 
Loss on account of any final non-appealable decision that the transfer 
(or failure to transfer) of pension assets from such Parent's Qualified 
Pension Plan to the Qualified Pension Plan of the Partnership as 
described in Section 5.9.5 does not comply with applicable Governmental 
Rules.  In such event, the legally-required amount of additional assets 
shall be transferred to the appropriate Qualified Pension Plan of the 
Partnership, increased by the actuarial rate of earnings from the period 
since the Closing Date.  In addition, and subject to the foregoing 
procedures and limitations, FMC agrees to indemnify and defend Harsco or 
the Partnership, as applicable, and to hold it harmless, for any Loss 
for or on account of or arising from or in connection with or otherwise 
with respect to any liability relating to (a) benefit reductions 
continued through the Partnership's adoption and implementation of a 
retiree medical benefit plan which continues certain benefit reductions, 
with respect to former FMC employees, initiated by FMC in 1993 
(including, without limitation, an employer cost limitation scheduled to 
take effect in 1996) and (b) the Partnership's being part of the 
"controlled group" which includes FMC or under "common control" with FMC 
as those terms are defined or used in ERISA and/or the Code.  
Notwithstanding the foregoing provisions of Section 6.3, no Parent or 
its Partner shall recover any amount for any diminution in value of its 
interest in the Partnership to the extent that the Partnership is 
entitled to be indemnified and obtains full indemnification for the 
underlying Loss.

6.4  Indemnification for Demolition Costs.  FMC shall indemnify the 
Partnership against, hold it harmless from, and promptly reimburse it 
with respect to any and all liability for costs and expenses relating 
to, arising out of or incurred in connection with the demolition of any 
buildings located on the Santa Clara Properties ("Demolition Costs"), 
but only to the extent that such Demolition Costs were not incurred in 
furtherance of a valid business purpose of the Partnership.

6.5  Procedures.  With respect to any indemnification under this Article 
VI in respect of, arising out of or involving a claim made by any Person 
against an Indemnified Party (the "Third Party Claim"), such Indemnified 
Party must notify the indemnifying party of the Third Party Claim within 
a reasonable time after receipt by such Indemnified Party of written 
notice of the Third Party Claim; provided, however, that the failure of 
any Indemnified Party to give such notice shall not relieve the 
indemnifying party of its obligations under this Article VI except to 
the extent that the indemnifying party is actually prejudiced by such 
failure to give notice.  Thereafter, the Indemnified Party shall deliver 
to the indemnifying party, within ten (10) Business Days after the 
Indemnified Party's receipt thereof, copies of all notices and documents 
(including court papers) received by the Indemnified Party relating to 
the Third Party Claim.

6.6  Defense of Third Party Claims.  If a Third Party Claim is made 
against an Indemnified Party, the indemnifying party shall be entitled 
to participate in the defense thereof and, if it so chooses, to assume 
the defense thereof with counsel selected by the indemnifying party, if 
(a) such counsel is not reasonably objected to by the Indemnified Party 
within five days of the Indemnified Party's having knowledge of such 
counsel's identity and (b) the indemnifying party first admits in 
writing that the claim is of the kind that is covered by this Article.  
Should the indemnifying party so elect to assume the defense of a Third 
Party Claim, the indemnifying party shall not be liable to the 
Indemnified Party for any legal expenses subsequently incurred by the 
Indemnified Party in connection with the defense thereof.  If the 
indemnifying party elects to assume the defense of a Third Party Claim, 
the Indemnified Party shall (a) cooperate in all reasonable respects 
with the indemnifying party in connection with such defense and (b) not 
admit any liability with respect to, or settle, compromise or discharge 
("Settle"), such Third Party Claim without the indemnifying party's 
prior written consent.  If the indemnifying party assumes the defense of 
any Third Party Claim, the Indemnified Party shall be entitled to 
observe such defense with its own counsel at its own expense.  If the 
indemnifying party does not assume the defense of any such Third Party 
Claim, the Indemnified Party may defend the same in such manner as it 
may deem appropriate, including Settling such claim or litigation after 
giving reasonable notice to the indemnifying party of the terms of such 
settlement, and the indemnifying party shall promptly, upon request of 
the Indemnified Party, advance funds to the Indemnified Party in the 
amount of any legal and other expenses reasonably incurred by the 
Indemnified Party in connection with investigating, defending or 
settling any such Third Party Claim unless there is a bona fide question 
of whether the claim in question is one requiring the indemnifying party 
in fact to indemnify the other.  However, the indemnifying party shall 
not be entitled to assume the defense of any Third Party Claim if the 
Third Party Claim seeks an order, injunction or other specific equitable 
relief or specific relief for other than money damages against the 
Indemnified Party; but in its defense of such Third Party Claim, the 
Indemnified Party shall neither Settle any portion thereof that seeks 
money damages without the indemnifying party's prior written consent, 
which shall not be unreasonably withheld, nor Settle any other portion 
thereof that seeks a remedy against the Indemnified Party without such 
prior written consent.

6.7  Indemnification Payments.

(a)  Indemnification payments under this Article VI shall be reduced by 
(i) any insurance payments or judgments against or settlements with 
third parties that have been recovered by the Indemnified Party and (ii) 
any Tax Benefits.  For purposes of this Section 6.7, "Tax Benefits" 
shall mean the present value of any tax benefits available to the 
Indemnified Party (or any consolidated, combined or unitary group of 
which it is a member) under federal, state, local or foreign Tax law 
attributable to any indemnified loss, liability, claim, damage, or 
expense.  For purposes of determining Tax Benefits (i) present value 
shall be determined using a discount rate equal to the appropriate 
Applicable Federal Rate under Section 1274 of the Code in effect for the 
month in which the indemnification payment is made, (ii) all deductions 
and losses shall be determined on the assumption that all such items are 
useable at the maximum Federal marginal income Tax rate applicable to a 
corporation under Section 11 of the Code in effect for the taxable year 
in which such deduction or loss may be claimed, plus 5 percentage 
points, and (iii) no benefit shall be taken into account for any item 
that increases the basis of property not subject to depreciation or 
amortization.  If the Indemnified Party is the Partnership, no Tax 
Benefit shall be taken into account to the extent that any Tax loss or 
deduction attributable to any indemnified loss, liability, claim, 
damage, or expense is allocated to the indemnifying Parent or its 
Partner under Sections 4.3(c)(iii) and 4.4 of the Partnership Agreement.

(b)  The indemnifying party shall indemnify the Indemnified Party (and 
the other Parent if the Indemnified Party is the Partnership) against 
any Taxes imposed on any payment under this Article VI (including any 
payment pursuant to this sentence).

(c)  The Indemnified Party shall make repayments to the indemnifying 
party with respect to indemnification payments received by the 
Indemnified Party pursuant to this Article VI hereof but only to the 
extent that the Indemnified Party has received (A) any insurance 
payments or the proceeds of judgments against or settlements with third 
parties ("Recovery Items") or (B) Tax Benefits not taken into account 
pursuant to Section 6.7(a).  The repayments hereunder shall not exceed 
the excess, if any, of the sum of the indemnification payments, the 
Recovery Items received by the Indemnified Party and such Tax Benefits, 
over the liability imposed on the Indemnified Party.  For purposes of 
such calculation, Recovery Items shall not be taken into account to the 
extent that Recovery Items have been allocated or distributed to the 
indemnifying party or its affiliate pursuant to Article IV or Article VI 
of the Partnership Agreement, or otherwise.  Tax Benefits shall be 
calculated by taking into account any tax liability associated with the 
receipt of any indemnification payments or Recovery Items.  Tax Benefits 
shall not include any item that increases the basis of property not 
subject to depreciation or amortization.  Repayments, if any, under this 
Section 6.7(c) shall be made promptly after the Indemnified Party's 
receipt of a Recovery Item and, in the case of Tax Benefits, promptly 
after the closing of the period of limitations on assessments with 
respect to the Indemnified Party's taxable year to which the Tax 
Benefits pertain.  Such repayment with respect to Tax Benefits shall 
bear interest at the rate of twelve month LIBOR prevailing on the 
repayment date, plus 100 basis points, for the period between the filing 
date of the Indemnified Party's federal income tax return on which such 
Tax Benefits are claimed and the date of the repayment.

6.8  Limitations and Exclusions.  All losses, damages, claims and 
expenses subject to indemnification under this Article VI shall be 
limited to actual, direct damages, losses, expense, or costs.  ALL 
CONSEQUENTIAL AND PUNITIVE DAMAGES ARE HEREBY EXCLUDED.

Third party claims subject to indemnification shall not be deemed to be 
consequential or punitive damages but shall be considered actual damages 
once liquidated and the subject of a court enforced judgment, provided 
that the indemnifying party has been offered a reasonable opportunity to 
defend such third party claim.

6.9  Liability of Partnership.  Any liability of the Partnership under 
any Operative Document to any party hereto shall be the sole obligation 
of the Partnership and shall be explicitly nonrecourse to FMC, Harsco, 
Harsco L.P. and the Affiliates (other than the Partnership) of each of 
them.

ARTICLE VII

SECTION 7.0  MISCELLANEOUS.

7.1  Notices.  All notices, demands and other communications required or 
permitted by the terms of this Agreement to be given to any Person shall 
be in writing, and shall be given by personal delivery, by mail or 
overnight courier or by electronic means of communication.  Any such 
item shall deemed effective (i) five Business Days after being deposited 
in the mails, certified or registered, with appropriate postage prepaid 
and return receipt requested, (ii) when received, if delivered by hand 
or courier or overnight service that provides for a signed receipt upon 
delivery or (iii) when received, in the form of a telex, telegram or 
telecopy.  Such item shall be directed to the address, telex number or 
telecopy number of such Person set forth in Schedule 7.1 to this 
Agreement, or at such other address, telex number or telecopy number as 
such Person shall designate by like notice to the other parties.

7.2  Severability.  In case any one or more of the provisions contained 
in this Agreement or any Annex or Exhibit hereto shall, for any reason, 
be held to be invalid, illegal, or unenforceable in any respect, all 
other provisions of this Agreement or any Annex or Exhibit hereto shall 
nevertheless remain in full force and effect, but if the economic or 
legal substance of the transactions contemplated hereby is affected in a 
manner materially adverse to either party as a result of the 
determination that a provision is invalid, illegal or unenforceable, the 
parties hereto agree to negotiate in good faith to modify this Agreement 
and, if appropriate the Annexes and Exhibits hereto, so as to effect the 
original intent of the parties as closely as possible in an acceptable 
manner to the end that the transactions contemplated hereby are 
fulfilled to the fullest extent possible.

7.3  Entire Agreement; Amendment and Waiver; Remedies.  This Agreement, 
together with the other Operative Documents and other documents referred 
to herein, constitutes the entire agreement of the parties hereto or 
thereto with respect to the subject matter hereof or thereof and 
supersedes all prior written and oral agreements (including the parties' 
letter of understanding dated November 23, 1992) and understandings with 
respect to such subject matter. Neither this Agreement nor any of the 
terms hereof may be terminated, amended, supplemented, waived or 
modified orally, but only by a document in writing signed by the party 
against which the enforcement of the termination, amendment, supplement, 
waiver or modification is sought. No failure or delay of any party 
hereto in exercising any power or right under this Agreement shall 
operate as a waiver thereof, nor shall any single or partial exercise of 
any such right or power, or any abandonment or discontinuance of steps 
to enforce such a right or power, preclude any other or further exercise 
thereof or the exercise of any other right or power.  Except as 
otherwise provided herein, neither party hereto may assign this 
Agreement without the prior written consent of the other party.

7.4  Limitations.  IN ANY ACTION FOR DAMAGES OR ENFORCEMENT RELATING TO 
THIS AGREEMENT, NO PARTY HERETO SHALL BE ENTITLED TO CONSEQUENTIAL OR 
PUNITIVE DAMAGES, BUT THE PREVAILING PARTY IN ANY SUCH PROCEEDING SHALL 
BE ENTITLED TO RECEIVE ALL OF ITS COSTS AND EXPENSES (INCLUDING 
REASONABLE COUNSEL FEES).  THIS PROVISION IS INTENDED EXCLUSIVELY FOR 
THE BENEFIT OF THE PARTIES HERETO AND SHALL NOT BE CONSTRUED TO GIVE 
RISE TO ANY THIRD PARTY BENEFICIARY RIGHTS.

Third party claims subject to indemnification shall not be deemed to be 
consequential or punitive damages but shall be considered actual damages 
once liquidated and the subject of a court enforced judgment, provided 
that the indemnifying party has been offered a reasonable opportunity to 
defend such third party claim.

7.5  Table of Contents; Headings.  The table of contents and headings of 
the articles, sections and other subdivisions of this Agreement are for 
convenience of reference only and shall not modify, define or limit any 
of the terms or provisions of this Agreement.

7.6  Parties in Interest; Limitation on Rights of Others.  The terms of 
this Agreement shall be binding upon and inure to the benefit of the 
parties hereto and their successors and permitted assigns. Nothing in 
this Agreement, whether express or implied, shall be construed to give 
any Person (other than the parties hereto and their successors and 
assigns and as expressly provided herein) any legal or equitable right, 
remedy or claim under or in respect of this Agreement or any covenants, 
conditions or provisions contained herein.  No assignment or transfer of 
this Agreement or a party's interest in the Partnership or its Partner 
shall relieve such party from its obligations hereunder or under any 
other Operative Document.

7.7  Binding Effect.  Although the parties intend that each of the 
Partnership and Harsco L.P. shall duly authorize, execute and deliver 
this Agreement upon its formation on or before the Closing Date, this 
Agreement shall be binding upon the Parents when executed and delivered 
by each Parent.

7.8  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 shall 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.

7.9  Jurisdiction; Court Proceedings.  Any suit, action or proceeding 
against any party hereto arising out of or relating to this Agreement or 
under any other Operative Document, any transaction contemplated hereby 
or any judgment entered by any court in respect of any such suit, action 
or proceeding may be brought in any Federal or State court located in 
the state of the principal place of business of the Partnership or such 
other district as may contain the Partnership's principal place of 
business, and each party hereto hereby submits to the jurisdiction of 
such courts for the purpose of any such suit, action or proceeding.  To 
the extent that service of process by mail is permitted by applicable 
law, each such party irrevocably consents to the service of process in 
any such suit, action or proceeding in such courts by the delivery of 
such process by mail, at its address for process provided for in 
Schedule 8.1 to this Agreement, and no such service shall be effective 
until such delivery is made.  Each such party irrevocably agrees not to 
assert any objection which it may ever have to the laying of venue of 
any such suit, action or proceeding in any Federal or State court 
located in any state which contains the Partnership's principal place of 
business, and any claim that any such suit, action or proceeding brought 
in any such court has been brought in an inconvenient forum.

7.10  Termination.  This Agreement may be terminated at any time before 
Closing:

(a)  by consent of both Parents;

(b)  by either Parent if there has been a material breach of any 
representation, warranty, covenant or agreement on the part of the other 
Parent or its Affiliates set forth in this Agreement and material to the 
transactions contemplated hereby and, if it is susceptible of cure, it 
is not cured within 10 days after written notice to such Parent; or

(c)  by either Parent if the Closing has not occurred by February 1, 
1994, subject to Section 2.2 hereof.

7.11  Expenses.  Except as otherwise stated herein, each party shall 
bear its own expenses incurred prior to Closing in connection herewith.

7.12  Survival.  All of the representations and warranties of the 
parties contained in this Agreement shall survive until the close of 
business on March 31, 1996, regardless of whether such party continues 
to hold an ownership interest in the Partnership or any corporate 
successor (other than Section 4.8, which shall survive indefinitely).  
All of the indemnities and covenants of the parties contained in this 
Agreement shall, unless otherwise provided herein, survive indefinitely 
or for the period set forth in any applicable statute of limitations; 
provided, however, that upon the purchase of Harsco's interest in the 
Partnership under the call provided for in Section 7.2 of the 
Partnership Agreement, the indemnity set forth in Section 6.1(a) and, in 
the event of a Change in Control of FMC, the covenants set forth in 
Sections 5.6 and 5.12 on the part of Harsco shall be extinguished.

7.13  Advice of Legal Counsel.  Each party hereto acknowledges and 
represents that, in executing this Agreement, it has had the opportunity 
to seek advice as to its legal rights from legal counsel and that the 
person signing on its behalf has read and understood all of the terms 
and provisions of this Agreement.  This Agreement shall not be construed 
against any party hereto by reason of the drafting or preparation 
thereof.

7.14  Noncompetition.  Each Parent agrees that, until such time as the 
Share Percentage of such Parent's Partner (or equivalent common equity 
interest in any corporate successor to the Partnership) falls below 20% 
and for an additional period of three (3) years thereafter, it will not 
engage, directly or indirectly, anywhere in the world in any line of 
business within the Scope of Activity; provided, however, that (i) 
Harsco shall be entitled to continue to engage in the development, 
manufacture, retrofit, installation, repair, overhaul, engineer, design, 
service, sale and marketing of wheeled trucks (whether armed or 
unarmed), trailers, busses, armor and armor kits for sale to the 
military and other customers and (ii) either Parent shall be entitled to 
continue to engage in the development, manufacture, retrofit, 
installation, repair, overhaul, engineer, design, service, sale and 
marketing of any component part or subsystem of military vehicle systems 
or weapon stations which are similar to classes of products or services 
that primarily are commercially sold by such Parent for non-military 
uses.  If any court of competent jurisdiction shall finally hold that 
the time, territory or any other provision set forth in this Section 
7.14 constitutes an unreasonable restriction, such provision shall not 
be rendered void, but shall apply as to such time, territory or to such 
other extent as such court may determine constitutes a reasonable 
restriction under the circumstances involved.  Each Parent acknowledges 
that the restrictions contained in this Section 7.14 are reasonable and 
necessary to protect the legitimate interests of the Parents and the 
Partnership and that any breach by either Parent of any provision hereof 
will result in irreparable injury to the Partnership.  Each Parent 
acknowledges that, in addition to all remedies available at law, the 
Partnership or a Parent shall be entitled to equitable relief, including 
injunctive relief, and an equitable accounting of all losses and 
damages, including consequential damages, arising from such breach.  Any 
Parent and any of its Affiliates may engage in other business ventures 
and dealings within or without the Partnership's Scope of Activity, 
except to the extent that such ventures and dealings are prohibited by 
this Section 7.14.

IN WITNESS WHEREOF, this Agreement has been executed and delivered as of 
the date first above written.

FMC CORPORATION

By: /S/ Robert N. Burt
Its: Chairman & CEO

HARSCO CORPORATION

By: /S/ Derek C. Hathaway
Its: President & Chief Executive Officer

HARSCO DEFENSE HOLDING, INC.

By:    /S/ Leonard A. Campanaro_
Its:    Treasurer

With respect only to the obligations of it
expressly set forth herein:

UNITED DEFENSE, L.P.

By:    FMC CORPORATION
  its general partner

  By:  /S/ Robert N. Burt
  Its:  Chairman & CEO

List of Omitted Exhibits and Schedules to Participation Agreement

Annex B              Terms of Contingent Rights and Obligations of FMC 
and Harsco

Schedule 2.3.1       Adjustments

Schedule 4.2         Authorization; No Conflict

Schedule 4.4         Proceedings

Schedule 4.8.2A      Real Property Transferred or Leased by FMC

Schedule 4.8.2B      Real Property Transferred or Leased by Harsco

Schedule 4.9A        FMC Aged Receivables

Schedule 4.9B        Harsco Aged Receivables

Schedule 4.10        Certain Existing Contracts and Defaults

Schedule 4.11        Litigation, Investigations and/or Other Proceedings

Schedule 4.12        Liabilities

Schedule 4.14A       FMC Pro Forma Balance Sheet

Schedule 4.14B       Harsco Pro Forma Balance Sheet

Schedule 4.15        Events Subsequent to December 31, 1992

Schedule 4.16        Consents

Schedule 4.17        Notice of Governmental Authorizations and 
Compliance
                     with Laws

Schedule 4.18        Government Contracts

Schedule 4.19        Capital Stock and Equity Interests of Defense
                     Affiliates and Defense Subsidiaries

Schedule 4.20        Intellectual Property

Schedule 4.21.1      Employee Benefits and Contracts

Schedule 4.21.8      Actuarial Assumptions

Schedule 4.21.11     Employee Benefit Cost Disallowances

Schedule 4.22        Bargaining Agents

Schedule 4.24        Binding Commitments, Promises and Representations
                     to Employees

Schedule 4.25        Labor Controversies; Affirmative Action

Schedule 5.9.1       Transferred Employees

Schedule 5.9.3       Partnership Nonunion Pension Plans

Schedule 5.11        Procedure for Obtaining Consents

Schedule 5.14        VLS Receivables

Schedule 5.16        Slow-Moving Inventory

Schedule 5.22.2      Environmental Liability Events

Schedule 5.22.7      Examples

Schedule 6.1         Accrued Liabilities

Schedule 7.1         Notices, Addresses, Fax Numbers, Etc.

Exhibit A            Demand Note

Exhibit B            Assumption Agreement

Exhibit C            Confidentiality Agreement

Exhibit D            Promissory Note

Exhibit E            Opinions of Counsel

Exhibit F            Intellectual Property Agreements

Exhibit G            Lease Agreement

Exhibit H            Management Services Agreement

Harsco Corporation will furnish supplementally a copy of any omitted 
exhibit or schedule to the Commission upon request.

EX-2.2

PARTNERSHIP AGREEMENT

BY AND AMONG

FMC CORPORATION,

HARSCO DEFENSE HOLDING, INC.

AND

UNITED DEFENSE, L.P.

DATED AS OF JANUARY 1, 1994

THIS PARTNERSHIP AGREEMENT is entered into as of January 1, 1994 by and 
among FMC Corporation, a Delaware corporation ("Managing General 
Partner"), Harsco Defense Holding, Inc., a Delaware corporation 
("Limited Partner"), which is a direct wholly-owned subsidiary of Harsco 
Corporation, a Delaware corporation ("Harsco"), and United Defense, 
L.P., a Delaware limited partnership ("the Partnership").  Each of 
Managing General Partner and Limited Partner is sometimes referred to 
herein as "Partner," and collectively they are sometimes referred to as 
"Partners" or "Parties."

WHEREAS, the Managing General Partner and Harsco have entered into a 
Participation Agreement dated as of January 1, 1994, as amended from 
time to time in accordance with its terms (the "Participation 
Agreement"), setting forth certain representations and warranties, 
conditions and agreements dealing with their relationships and certain 
relationships of their Affiliates and Subsidiaries and the establishment 
and operation of this Partnership;

NOW, THEREFORE, in consideration of the mutual covenants, and subject to 
the terms and conditions, contained herein, the Partners hereby form and 
create the Partnership under and pursuant to the Delaware Revised 
Uniform Limited Partnership Act, as amended or its successor, Title 6, 
Chapter 17 of the Civil Code of the State of Delaware, for the purposes 
and upon the terms, provisions and conditions as hereinafter set forth.

ARTICLE I

DEFINITIONS

1.1  Definitions.  Except as otherwise defined herein, terms used herein 
in capitalized form shall have the meanings attributed to them in Annex 
A to this Partnership Agreement.

ARTICLE II

ORGANIZATION

2.1  Formation and Term of the Partnership.

(a)  Formation; Compliance.  As of the date hereof, the Partners enter 
into and form the Partnership as a limited partnership under the laws of 
the State of Delaware.  The Partnership shall promptly file with the 
appropriate Governmental Authorities all documents in connection with 
the formation and operation of the Partnership as may be required or 
appropriate under the laws of the State of Delaware (including, but not 
limited to, the Delaware Revised Uniform Limited Partnership Act) or any 
other jurisdiction in which the Partnership proposes to carry on 
business.  The Partnership shall provide to each Partner upon request a 
copy of each such document as filed.

(b)  Business Names.  The activities and business of the Partnership 
shall be conducted under the name United Defense, L.P.  The Partnership 
may also do business under other names agreed to by both of the 
Partners.  If required by an applicable Governmental Rule, (i) the 
Partnership shall cause appropriate partnership certificates or 
fictitious business name certificates to be filed with the appropriate 
Governmental Authorities and (ii) the Managing General Partner shall as 
expeditiously as reasonably possible register the Partnership to do 
business as a foreign limited partnership in all appropriate 
jurisdictions.

(c)  Principal Office.  The "Principal Office" of the Partnership shall 
be in or around Arlington, Virginia.  Other offices may be established, 
and the location of any office of the Partnership (including the 
Principal Office) may be changed by the Managing General Partner or, if 
other than the Principal Office, by the CEO, at any time and from time 
to time.

(d)  Partnership Term.  The term of the Partnership shall commence as of 
the date hereof and shall continue until dissolved as hereinafter 
provided in Article IX hereof.

2.2  Scope of Activity.  The "Scope of Activity" of the Partnership 
shall be to engage in the development, manufacture, retrofit, 
installation, overhaul, repair, engineering, design, service, sale and 
marketing of any military vehicle system (excluding trucks and busses) 
or weapon station, including any component part or subsystem thereof.

2.3  Property Ownership.  Except as provided in the Operative Documents 
or any other contract to which the Partnership is or becomes a party, 
(i) all assets and property, whether real, personal or mixed, tangible 
or intangible, including contractual rights, owned or possessed by the 
Partnership shall be held or possessed in the name of the Partnership, 
(ii) all such assets, property and rights shall be deemed to be owned or 
possessed by the Partnership as an entity and (iii) none of the Partners 
individually shall have any separate ownership in such assets, property 
or rights.

2.4  Business Dealings with the Partnership.  Subject to any approvals 
required pursuant to Sections 3.1 or 3.3 and subject to Section 3.4(b) 
hereof, whichever may apply, a Partner or any Affiliate thereof may 
enter into contracts or agreements with the Partnership on an 
arms-length and commercially reasonable basis and derive and retain 
profits therefrom.  Subject to the requirements of Section 3.1 hereof, 
the validity of any such contract, agreement, transaction or dealing or 
any payment or profit related thereto or derived therefrom shall not be 
affected by any relationship between the Partnership and such Partner or 
any of its Affiliates.

2.5  Confidential Information.  No member of the Advisory Committee, 
employee of the Partnership or employee made available to the 
Partnership by a Partner or an Affiliate of such Partner shall be 
obligated to reveal confidential or proprietary information belonging to 
either Partner, or either Partner's Affiliate, without the consent of 
such Partner or Partner's Affiliate.

2.6  Powers.  Subject to and modified by the terms, conditions and 
stipulations provided in Sections 3.1 and 3.3 below and any other terms, 
conditions and stipulations of this Agreement, the Participation 
Agreement or any other Operative Document, as applicable, the 
Partnership may exercise all of the powers and privileges granted by 
this Agreement and by law, together with any other powers incidental 
thereto, including, but not limited to, the power and privilege to:

(a)  Receive by contribution, purchase, lease or otherwise acquire, 
employ, use or otherwise deal in and with real or personal property, or 
any interest therein, wherever situated, and subject to the terms of 
this Agreement, sell, convey, lease, exchange, transfer or otherwise 
dispose of, mortgage or pledge, all or any of its property and assets, 
or any interest therein, wherever situated;

(b)  Appoint such managers, employees and agents as deemed appropriate 
and pay or otherwise provide for them suitable compensation;

(c)  Participate with others in any transaction, undertaking or 
arrangement which the Partnership by itself would have the power to 
conduct within the Scope of Activity, whether or not such participation 
involves sharing or delegation of control of such activity with or to 
others;

(d)  Make contracts, including contracts of guaranty and suretyship, 
incur liabilities, borrow money, issue its notes, bonds and other 
obligations, and secure any of its obligations by mortgage, pledge or 
other encumbrance of all or part of its property, franchises and income;

(e)  Lend money for Partnership purposes, invest and reinvest its funds, 
and take, hold and deal with real and personal property as security for 
the payment of funds so loaned or invested;

(f)  Sue and be sued in all courts and participate, as a party or 
otherwise, in any judicial, administrative, arbitrative or other 
proceedings, in its Partnership name;

(g)  Establish and carry out employment policies, including, but not 
limited to, policies regarding hours of work, vacation, discipline and 
termination, and pension, profit sharing, retirement, benefit, incentive 
and compensation plans and trusts; 

(h)  Establish and maintain a risk management program (including 
insurance) for (i) all assets and properties of the Partnership, (ii) 
all potential legal liabilities arising out of Partnership activities, 
(iii) all statutory responsibilities regarding employees, and (iv) any 
other possible exposures of the Partnership;

(i)  Execute and deliver the Operative Documents to which it is to be a 
party;

(j)  Adopt: (i) forms of agreements and employment policies with respect 
to the protection of confidential information and (ii) business plans; 
and

(k)  Exercise such additional powers and privileges as are otherwise 
permitted to be exercised by the Delaware Revised Uniform Limited 
Partnership Act.

ARTICLE III

GOVERNANCE AND ADMINISTRATION

3.1  Matters Requiring the Consent of the Limited Partner.  The 
following is a list of actions which may not be taken by the Partnership 
without the written consent of the Limited Partner, so long as the 
Limited Partner's Share Percentage is at least 20%:

(a)  Subject to Section 12.1, any changes to or amendments of this 
Agreement; or in the event of the incorporation of the Partnership 
pursuant to Section 2 of the Registration Rights Agreement, the adoption 
of the initial certificate of incorporation and by-laws of the successor 
corporation and any subsequent amendments to its certificate of 
incorporation and by-laws;

(b)  (i) Except as otherwise expressly permitted by this Agreement, the 
Registration Rights Agreement or any other Operative Document, the 
voluntary winding up, dissolution or liquidation of the Partnership, the 
filing of a petition in bankruptcy, or for the reorganization or 
rehabilitation under the Federal bankruptcy law or any state law, for 
the relief of debtors, consenting to an order for relief entered against 
it under any Federal bankruptcy law or otherwise consenting to having 
the Partnership adjudicated bankrupt or insolvent, the making of an 
assignment for the benefit of creditors or the suffering beyond 90 days 
of the appointment of a receiver, trustee or custodian for a substantial 
portion of its business or properties by virtue of an allegation of 
insolvency, (ii) any similar action under any foreign law or (iii) the 
decision not to oppose any filing or petition which seeks to have the 
Partnership declared bankrupt or insolvent under any such law; 

(c)  The sale of all or a substantial part of the assets of the 
Partnership;

(d)  The making of any distribution to a Partner by the Partnership in 
contravention of Article VI hereof, or any repurchase, redemption or 
acquisition of the equity of the Partnership not in proportion to the 
Partners' respective Share Percentages;

(e)  The entry by the Partnership into any business activity outside the 
Scope of Activity, except that the Partnership shall be entitled to 
engage in the business of developing, manufacturing, retrofitting, 
overhauling, repairing, engineering, designing, servicing, selling and 
marketing of forgings, castings and fabrications for commercial 
customers as such business is engaged in by the FMC Defense Business 
immediately prior to the Closing Date and as such business may be 
subsequently modified, extended or developed by the Partnership so long 
as such modification, extension or development is financed solely with 
internally generated funds and does not occasion a capital call;

(f)  The replacement of the Accountants for the Partnership;

(g)  (i) The issuance of additional general Partnership interests to any 
Person other than the Managing General Partner pursuant to Section 4.5 
or clause (ii) below and (ii) the issuance for cash of additional 
limited or general Partnership interests unless the Partnership shall 
first have offered to sell to each holder of Partnership interests, on 
the same terms (which terms shall be reasonably determined by the 
Managing General Partner), a percentage portion of such newly issued 
limited Partnership interests (or general Partnership interests if 
offered to the Managing General Partner) equal to such holder's Share 
Percentage;

(h)  Any dilution of the Limited Partner's Share Percentage below 20%;

(i)  Any change in the name of the Partnership;

(j)  Any Related Party Transaction consisting of (i) the provision of 
management services for value (other than management services covered by 
Section 4(b) of the Management Services Agreement) by the Managing 
General Partner or any of its Affiliates to the Partnership; (ii) all 
sales of products or services (other than services covered by clause (i) 
above) by the Managing General Partner or any of its Affiliates to the 
Partnership in any Fiscal Year in excess of an aggregate of $500,000; or 
(iii) the purchase of products by the Managing General Partner or any of 
its Affiliates from the Partnership or the entry into any other 
agreements between the Partnership and the Managing General Partner or 
any of its Affiliates which, in any such case, involves the payment of 
money or the assumption or release of any reasonably estimable liability 
that individually exceeds $100,000 or collectively in any Fiscal Year 
exceeds $1,000,000 in the aggregate.  The "A Services" performed 
pursuant to Section 4(a) of the Management Services Agreement by FMC and 
its Affiliates will be subject to the annual consent of the Limited 
Partner under this Section 3.1(j), which annual consent has been given 
with respect to Fiscal Year 1994.  Such annual consent shall constitute 
the Limited Partner's consent with respect to such A Services.  If the 
Limited Partner's consent is not obtained with respect to any such A 
Services to be obtained from FMC in any Fiscal Year subsequent to the 
Fiscal Year ended December 31, 1994, no such A Services shall be 
provided unless and until an arbitration proceeding pursuant to Section 
3.12 shall have been concluded; provided, however, that any such 
nonapproved A Services may continue to be provided only to the extent 
permitted by Section 4(d) of the Management Services Agreement.  
Thereafter any such A Services shall be provided only if the Arbitrator 
has determined that Harsco's consent to the provision of such services 
was unreasonably withheld.  All Related Party Transactions shall be 
generally consistent with normal commercial practices by providers of 
similar products and services in arm's-length transactions and all sales 
of products and services pursuant to clause (ii) above shall be 
consistent with the normal profit margins of the Managing General 
Partner or its Affiliates. The parties hereby agree that (i) any 
subcontract between the Partnership and FMC's Corporate Technology 
Center providing for work which relates to any Partnership engineering 
contract or other contract which requires the submission of certified 
cost or pricing data, (ii) any cash advances made to the Partnership 
pursuant to Section 5.18 of the Participation Agreement, (iii) any 
transaction that is limited to a direct pass-through of amounts billed 
by an unaffiliated third party and (iv) any capital contributed to the 
Partnership pursuant to Section 4.5 of this Agreement or Sections 2.1.3, 
2.1.4, 2.1.5 or 2.3.3 or Article VI of the Participation Agreement shall 
not constitute Related Party Transactions for purposes of this Section 
3.1(j).  

(k)  Determining the share of Profits and Losses under Section 
4.3(c)(vii); and

(l)  Any amendment to the Lease Agreement.

Whenever the Managing General Partner wishes to propose any action by 
the Partnership requiring the consent of the Limited Partner, the 
Managing General Partner shall provide such a proposal to the Designated 
Representative of the Limited Partner not less than ten Business Days in 
advance of the proposed implementation of such proposal.  The proposal 
shall be in writing and shall set forth, in reasonable detail, the 
reasons for the proposed action, the anticipated consequences thereof 
and any appropriate background information needed by the Limited Partner 
to evaluate the proposal.  If the Limited Partner reasonably concludes 
that additional information is needed in order to reach its conclusion, 
the Designated Representative of the Limited Partner shall so advise the 
Managing General Partner, in a writing specifying in reasonable detail 
the requested additional information, within ten Business Days after 
receipt of the Proposal and the Managing General Partner shall provide 
the requested information as expeditiously as reasonably possible.  If 
no request is made for additional information, the Limited Partner 
through its Designated Representative shall advise the Managing General 
Partner in writing whether the consent is given within ten Business Days 
after receipt of the proposal.  If additional information is requested, 
the Designated Representative of the Limited Partner shall respond 
within ten Business Days after receipt of the requested information.  
Nothing herein shall require the Managing General Partner to provide 
information that cannot be obtained with reasonable effort.

Because the breach by the Managing General Partner of any of its 
obligations under this Section 3.1 would cause irreparable harm to the 
Limited Partner that would be difficult to quantify and would not be 
compensable by damages alone and because the Limited Partner would not 
have entered into this agreement in the absence of Section 3.1, the 
Managing General Partner expressly agrees that the Limited Partner will 
have the right to enforce Section 3.1 by injunction, specific 
performance or other equitable relief without prejudice to any other 
rights and remedies the Limited Partner may have with respect to the 
breach of any provision of Section 3.1 by the Managing General Partner.  
The reference to specific performance in this Section is not a waiver of 
either party's rights to seek equitable relief for breaches of other 
sections of this Agreement.

3.2  Reports to the Limited Partner.  The Partnership shall deliver to 
the Limited Partner on a timely basis such information as is reasonably 
requested by the Limited Partner in order to fulfill financial reporting 
and other legal requirements, in addition to that information listed on 
Schedule 3.2.

3.3  Restrictions on Partners.  Except as specified in this Agreement, 
neither Partner may, without the written consent of the other Partner:

(a)  make any agreement with any third party on behalf of or otherwise 
purport to bind the other Partner or do any act in contravention of this 
Agreement; or

(b)  release a Partner from any obligation under this Agreement or, to 
the extent it relates to the Partnership, any Operative Document.

3.4  Managing General Partner.

(a)  The Managing General Partner will act as Managing General Partner 
of the Partnership.  The Managing General Partner shall have the right 
to exercise, on behalf of the Partnership, all the powers not requiring 
the consent of the Limited Partner pursuant to Section 3.1 above.  
Subject to the provisions of this Agreement, the Managing General 
Partner shall have the sole power and authority to represent and to act 
for the Partnership and to bind the Partnership with respect to 
Partnership property and affairs.  Without limiting the foregoing, the 
Managing General Partner, acting through those of its officers, 
employees and agents as it shall designate in writing from time to time, 
shall, in addition to the officers of the Partnership, have the 
authority to certify claims against the U.S. Government on behalf of UDS 
for purposes of Section 6(c) of the Contract Dispute Act, 41 U.S.C. 
Subsection 605(c), as amended.  The Limited Partner will take no part in 
the control, management, direction or operation of the affairs of the 
Partnership and will have no power to bind the Partnership.  The Limited 
Partner will not be personally liable for any obligations of the 
Partnership and will have no obligation to make contributions to the 
Partnership in excess of those specified in this Agreement or Articles 
II, and VI and Section 5.22.5 of Article V of the Participation 
Agreement except to the extent set forth under the laws of the State of 
Delaware.

(b)  The Managing General Partner shall at all times act in a fiduciary 
manner with respect to the Partnership and the Partners, shall have 
fiduciary responsibility for the safekeeping and use of all funds and 
assets of the Partnership, whether or not in its immediate possession or 
control, and shall exercise good faith and integrity in all aspects of 
its handling of the affairs of the Partnership; provided, however, that, 
except as expressly provided in the Management Services Agreement, in no 
event shall the Managing General Partner have any liability to the 
Partnership or any other Partner for simple negligence in an action for 
an alleged breach of the duty of care.  The Managing General Partner 
shall not employ, or allow any other Person to employ, such funds or 
assets, in any manner except in any manner which the Managing General 
Partner reasonably believes in good faith to be in or not opposed to the 
best interests of the Partnership.  Notwithstanding any Delaware 
judicial precedent to the contrary and without in any way limiting its 
rights under Delaware law, the Limited Partner shall be entitled to 
bring an action against the Managing General Partner, its Affiliates or 
the directors, officers or employees of any of them in the right of the 
Partnership under Section 17-1001 of the Delaware Corporation Law or any 
other applicable provision of Delaware law to recover a judgment in the 
Partnership's favor if the Managing General Partner has refused to bring 
the action within ninety (90) days after the receipt by the Partnership 
of the Limited Partner's demand that such action be commenced.

(c)  Except as caused by actions which are otherwise expressly 
contemplated by this Agreement, the Registration Rights Agreement or any 
other Operative Document, while conducting the business of the 
Partnership, the Managing General Partner will use all reasonable 
efforts not to act in any manner which will (i) cause the termination of 
the Partnership for federal income tax purposes or (ii) cause the 
Partnership to be treated for federal income tax purposes as an 
association taxable as a corporation.

(d)  The Managing General Partner shall use reasonable efforts to cause 
to be prepared and timely filed with appropriate Governmental 
Authorities all material reports required to be filed with such entities 
under then current applicable laws, rules and regulations and to cause 
such reports to be prepared on substantially the accounting or reporting 
basis required by such Governmental Authorities.  Upon request, the 
Managing General Partner shall promptly provide the Limited Partner with 
a copy of any such report.

(e)  The Managing General Partner shall use reasonable efforts to take 
all actions reasonably required by the Limited Partner and necessary, 
appropriate or desirable for the continuation of the Partnership's valid 
organization and existence as a limited partnership affording limited 
liability to the Limited Partner under the laws of the State of 
Delaware.  The Managing General Partner shall not be responsible or 
liable for any action taken by the Limited Partner that is deemed to be 
or interpreted as an action on behalf of the Partnership or involving 
participation in the control or management of the Partnership's 
business.

3.5  The Advisory Committee.

(a)  General.  To facilitate the exercise by the Managing General 
Partner of its powers and responsibilities under this Agreement, the 
Partnership shall have a committee, comprised of ten individuals 
designated in the manner described below (the "Advisory Committee" or 
"Committee"), which will consider and discuss any or all matters 
regarding the direction and control of the Partnership.

(b)  Members, etc.  The Managing General Partner shall designate six 
members of the Advisory Committee and the Limited Partner shall 
designate four members of the Advisory Committee.  Upon any adjustment 
of the Share Percentages, the number of members of the Advisory 
Committee designated by each Partner shall, if necessary, also be 
adjusted so that such number shall be the whole number closest to 
one-tenth of such Partner's Share Percentage; provided, that, if the 
Share Percentages are whole numbers ending in five, then the General 
Partner shall round its Share Percentage to the next highest multiple of 
ten, and the Limited Partner shall round its Share Percentage to the 
next lowest multiple of ten, to determine their respective numbers of 
Designees.  Each such Designee shall serve at the pleasure of the 
Partner which designated such Designee.  Each Partner may appoint one or 
more alternate Designees to replace at any meeting of the Committee any 
of its Designees who may be disqualified or absent.  Each Partner shall 
bear the cost incurred by its Designees in their capacities as such, and 
no Committee member or alternate shall be entitled to compensation from 
the Partnership for serving in such capacity.  Subject to applicable 
Governmental Rules, each member of the Advisory Committee shall be 
entitled to review classified information of the Partnership.

(c)  Initial Committee Members.  The initial Committee Designees are:

(i)  for the Managing General Partner:

          Robert N. Burt
          Larry D. Brady
          Francis A. Riddick
          Randy S. Ellis
          Edward C. Meyer
          Robert L. Day

(ii)  for the Limited Partner:

           Leonard A. Campanaro
           Derek C. Hathaway
           Barrett W. Taussig
           Robert L. Kirk

(d)  Changes to Members.  Each Partner shall notify the Partnership and 
the other Partner of any change to the business address and business 
telephone and telecopy numbers of each Designee designated by such 
Partner.  Each Partner shall promptly notify the Partnership and the 
other Partner of any change in such Partner's Designees to the Committee 
which notice shall include the name of the Designee being replaced with 
a new Designee and the name, address, telephone and telecopy numbers for 
the such new Designee.  Each Partner's Designees to the Committee shall 
remain in effect until the Partner making such appointment notifies the 
Partnership and the other Partner of a change in such appointment in 
accordance with (b) above or such Designee notifies the Partnership of 
his or her resignation as a member of the Committee.

(e)  Meetings, etc.  Meetings of the Advisory Committee shall be held at 
the Principal Offices of the Partnership or at such other place as may 
be determined by the Advisory Committee.  Regular meetings of the 
Advisory Committee shall be held six times per year (including within a 
reasonable period of time after the end of each Fiscal Quarter) until 
the second anniversary of the Closing Date and four times per year 
thereafter on such dates and at such times as shall be determined by the 
Advisory Committee.  Special meetings of the Advisory Committee may be 
called by the CEO or either Partner for any reason on at least (i) five 
Business Days' prior written notice by U.S. first class mail, (ii) three 
Business Days' actual telephonic notice to each Designee personally for 
a meeting other than a telephonic meeting or (iii) 36 hours' prior 
written or telephonic notice for a telephonic meeting.  The actions 
taken by the Advisory Committee at any meeting, however called and 
noticed, shall be as valid as though taken at a meeting duly held after 
regular call and notice if (but not until), either before, at or after 
such meeting, the Designee as to whom it was improperly noticed, if any, 
signs, (i) a written waiver of notice, (ii) a consent to the holding of 
such meeting or (iii) an approval of the minutes thereof.  A meeting of 
the Advisory Committee may be held by conference telephone or similar 
communications equipment by means of which all individuals participating 
in the meeting can be heard simultaneously by all other participants and 
each can speak to all others.

(f)  Meeting Rules.  The Managing General Partner shall prepare and 
provide to the Limited Partner a proposed agenda not less than ten 
Business Days before each regularly scheduled meeting of the Advisory 
Committee.  Upon the written request of the Limited Partner made at 
least five Business Days before a regularly scheduled meeting of the 
Advisory Committee, the proposed agenda shall be expanded to include any 
additional agenda items suggested by the Limited Partner.  At each 
regular meeting of the Advisory Committee, officers of the Partnership 
shall update the Committee with respect to financial and operational 
matters and the status of all material claims and indemnification 
matters.  Such officers shall also report on such other matters as may 
be reasonably requested by the Limited Partner.  The Advisory Committee 
may establish reasonable rules and regulations to (i) require the 
Partnership to call meetings and perform other administrative duties, 
(ii) place reasonable limits on the number and participation of 
observers and to require such observers to observe confidentiality 
obligations and (iii) otherwise provide for the keeping of minutes.

(g)  Discussion of Matters Requiring the Limited Partner's Consent.  At 
the request of either the Managing General Partner or the Limited 
Partner, any proposed action by the Partnership requiring the consent of 
the Limited Partner may be considered and discussed at a regular or 
special meeting of the Advisory Committee, but no such action may be 
taken without the consent of the Limited Partner.

(h)  Dispute Resolution.  At the request of either the Managing General 
Partner or the Limited Partner, the Advisory Committee shall attempt in 
good faith to resolve any dispute between such Partners (other than 
matters covered by Sections 3.1 or 3.12 hereof) before either such party 
may invoke the dispute resolution mechanism set forth in Section 12.11.  
If the Advisory Committee does not resolve the dispute to the 
satisfaction of both parties within 60 days after the Advisory Committee 
receives notice of such dispute, then either party may invoke the 
dispute resolution mechanism set forth in Section 12.11.

(i)  Notwithstanding anything to the contrary herein provided, the 
Advisory Committee shall have no responsibility or authority to manage 
the affairs of the Partnership.

3.6  Officers.

(a)  General.  The officers of the Partnership shall be a Chief 
Executive Officer (sometimes referred to as the "CEO") and such other 
officers as may be set forth in this Agreement or any other Operative 
Document or determined by the Managing General Partner from time to time 
to be necessary or advisable for the conduct of the business and affairs 
of the Partnership.  All officers of the Partnership shall be appointed 
by the Managing General Partner and shall be subject to removal with or 
without cause by the Managing General Partner.  Any individual may hold 
more than one office.  All officers of the Partnership shall (i) report 
to the Chief Executive Officer, who shall report to the Managing General 
Partner, (ii) have the powers and duties set forth in this Section 3.6 
or as otherwise prescribed by the Managing General Partner or, in the 
case of officers other than the CEO, the CEO and (iii) serve for the 
term designated by this Agreement or the Managing General Partner, 
subject to removal as provided above.

(b)  Chief Executive Officer.  The initial Chief Executive Officer shall 
be Thomas W. Rabaut.  Subsequent CEOs shall be selected by the Managing 
General Partner.  Subject to the powers of the Managing General Partner 
and the provisions of Section 3.1 hereof, he or she shall be in the 
general and active charge of the entire business, affairs and property 
of the Partnership, shall be its chief policy making officer and have 
control over its officers, agents and employees; and shall see that all 
orders and resolutions of the Managing General Partner or the Partners 
are carried into effect, including compliance with the terms and 
conditions of any consent by the Limited Partner pursuant to Section 
3.1.  Subject to Sections 3.1 and 3.3 above, he or she may execute 
bonds, mortgages and other contracts within the powers set forth in 
Section 2.6 above or as delegated by the Managing General Partner, as 
appropriate, except where required or permitted by law to be otherwise 
signed and executed and except where the signing and execution thereof 
shall be expressly delegated by the Managing General Partner or the CEO 
to some other officer or agent of the Partnership.  The Chief Executive 
Officer may vote or execute written consents with respect to the capital 
stock of each Subsidiary of the Partnership in accordance with this 
Agreement.

(c)  Chief Financial Officer.  The Chief Financial Officer shall be 
selected by the CEO, subject to the approval of the Managing General 
Partner.  The Chief Financial Officer of the Partnership shall, under 
the direction of the Managing General Partner and the Chief Executive 
Officer, be responsible for all financial and accounting matters and for 
the direction of the office of treasurer.  The Chief Financial Officer 
shall have such other powers and perform such other duties as may be 
prescribed by the Chief Executive Officer or the Managing General 
Partner or as may be provided in this Agreement.

(d)  Vice-Presidents.  The vice-president, or if there shall be more 
than one, the vice-presidents shall act with all of the powers and be 
subject to all the restrictions as authorized by the CEO and approved by 
the Managing General Partner.  The vice-presidents shall also perform 
such other duties and have such other powers as the Managing General 
Partner, the Chief Executive Officer or this Agreement may, from time to 
time, prescribe.

(e)  The Secretary.  The Secretary shall attend all meetings of the 
Advisory Committee and record all the proceedings of the meetings in a 
book or books to be kept for that purpose.  Under the Chief Executive 
Officer's supervision, the Secretary shall give, or cause to be given, 
all notices required to be given by the Partnership under this 
Agreement; shall have such powers and perform such duties as the 
Managing General Partner, the Chief Executive Officer or this Agreement 
may, from time to time, prescribe.  

(f)  Other Officers and Agents.  Officers, assistant officers and 
agents, if any, other than those whose duties are provided for in this 
Agreement, shall have such authority and perform such duties as may from 
time to time be prescribed by the CEO or the Managing General Partner.

3.7  Insurance.  The Partnership's initial insurance coverages shall be 
substantially as set forth in Exhibit A hereto.  The Partnership may 
change any such coverages in any manner (and may self-insure as the 
Managing General Partner reasonably determines) and may maintain 
insurance coverages against such other liabilities and risks associated 
with the conduct by the Partnership of its operations and in such 
amounts as are generally maintained by companies engaged in a business 
similar to that of the Partnership.

3.8  Employee and Officer Confidentiality Agreements.  Each officer of 
the Partnership and each member of the Advisory Committee, upon assuming 
office, shall enter into a confidentiality agreement in the form of 
Exhibit B hereto.  Each Partner shall assign to the Partnership, if 
assignable, any confidentiality agreements with its employees who accept 
employment by the Partnership.  Each prospective employee of the 
Partnership not otherwise bound by a confidentiality agreement, whose 
job exposes such employee to confidential information shall, upon 
accepting employment by the Partnership, enter into a confidentiality 
agreement in the form of Exhibit C hereto.

3.9  Consolidation Costs.  No material Consolidation Cost shall be 
incurred, and no commitment for the incurrence of a material 
Consolidation Cost shall be entered into, by the Partnership unless the 
Managing General Partner shall have made a good faith determination and 
reported in writing to the Limited Partner that:

(i)  a projection of the cost savings to be achieved as a result of the 
incurrence of the Consolidation Cost in question reflects that such 
Consolidation Cost will be offset by cost savings which will be realized 
by the Partnership in the twenty-four month period following the 
incurrence of such Consolidation Cost; or 

(ii)  the Partnership has entered into an Advance Agreement with the DOD 
(or any agency or department thereof) which permits future recognition 
or recovery of the Consolidation Cost in question as an allowable cost 
or retention by the Partnership of at least equivalent future cost 
savings resulting from the consolidation; or

(iii)  such Consolidation Cost can be recognized or recovered as an 
allowable cost under one or more of the Partnership's customer 
contracts; or

(iv)  such Consolidation Cost can be offset, recognized or recovered 
through a combination of the sources referred to in clauses (i) through 
(iii) above.

3.10  Other Business.  Each Partner's interest in the business endeavor 
of the other Partner is limited to its interest in the Partnership, and, 
except as provided in Section 7.14 of the Participation Agreement, no 
Partner's future business activities are restricted.  Accordingly, in 
addition to the business of the Partnership, each Partner may, subject 
to Section 7.14 of the Participation Agreement, invest or engage in any 
other business activity for which it is lawfully organized.

3.11  Revolving Credit.  Notwithstanding anything in Section 5.18 of the 
Participation Agreement, the Partnership will use reasonable efforts to 
establish an independent revolving line of credit sufficient to meet the 
liquidity requirements of the Partnership as soon as practicable after 
the Closing Date (it being understood that the obligations of the 
Partnership under such line of credit shall be nonrecourse to the 
Managing General Partner).

3.12  Dispute Resolution on A Services.  In the event that the Managing 
General Partner believes that the Limited Partner has unreasonably 
withheld its consent to the Partnership's procurement of A Services from 
the Managing General Partner in any Fiscal Year subsequent to the Fiscal 
Year ending December 31, 1994, then, in lieu of the dispute mechanism 
set forth in Section 12.11, the following provision shall apply.  The 
Managing General Partner may commence arbitration hereunder within forty 
(40) Business Days after the Managing General Partner's receipt of 
written notice of the Limited Partner's withholding of its consent to 
the Partnership's procurement of A Services from the Managing General 
Partner for the given year by delivering to the Limited Partner a notice 
of arbitration (a "Notice of Arbitration"), and any failure by the 
Managing General Partner to commence an arbitration within such period 
shall constitute an absolute bar to the commencement of any such 
arbitration proceeding and a waiver of all claims relating to the 
reasonableness of such withholding of consent.  Such Notice of 
Arbitration shall specify the matters as to which arbitration is sought, 
the nature of any dispute and any other matters required to be included 
therein by the Rules and Commentary for Non-Administered Arbitration of 
Business Disputes, as in effect from time to time (the "Rules"), of the 
Center for Public Resources, Inc. ("CPR").  A partner of Ernst & Young 
or Price Waterhouse, whichever is not the Accountants, to be selected by 
such accounting firm and not by either Partner, shall be the arbitrator 
(the "Arbitrator"); provided, however, that, in the event that the 
Arbitrator for any reason withdraws or is disqualified from serving in 
that capacity and cannot be replaced by another qualified partner of 
such accounting firm because of such accounting firm's withdrawal or 
disqualification, CPR shall select as a substitute Arbitrator a person 
who is or has been actively employed in an executive or managerial 
capacity in the private-sector defense industry or with an independent 
public accounting firm having expertise in that area.

The Arbitrator will determine the allocation of the costs and expenses 
of arbitration (except for fees and expenses of legal counsel, if any, 
selected by a party, which shall be borne by such party) as well as the 
resolution of any dispute governed by this Section 3.12.  The 
arbitration shall be conducted in Arlington, Virginia under the Rules, 
except as modified by the agreement of all of the parties to this 
Agreement.  In any arbitration under this Section 3.12, there shall be a 
rebuttable presumption that the withholding of consent by the Limited 
Partner to the Partnership's procurement of A Services from the General 
Managing Partner was reasonable, and the Managing General Partner shall 
have the burden of rebutting that rebuttable presumption by a 
preponderance of the evidence.  The pendency of any arbitration under 
this Section 3.12 shall not in any way relieve the Managing General 
Partner or the Partnership of the obligation to discontinue, within the 
transition periods set forth on Schedule A to the Management Services 
Agreement, the provision of any A Service or Services not consented to 
by the Limited Partner.

Evidentiary hearings, if any, shall not exceed 3 Business Days.  The 
Arbitrator shall conduct the arbitration so that a final result, 
determination, finding or judgment (the "Final Determination") is made 
or rendered as soon as practicable, but in no event later than 50 
Business Days after the receipt by the Limited Partner of the Notice of 
Arbitration nor later than 10 Business Days following the completion of 
all other aspects of the arbitration.

The Final Determination shall be signed by the Arbitrator, and shall be 
limited to a decision that the withholding by the Limited Partner of its 
consent to the Partnership's procurement of A Services from FMC for the 
given year was either reasonable or unreasonable.  In the event that the 
Final Determination states that the Limited Partner's consent was 
unreasonably withheld, the Managing General Partner may provide such A 
Services on the terms originally proposed by it.  The Final 
Determination shall be final and binding on all parties (but shall have 
no bearing upon any withholding of consent by the Limited Partner in or 
with respect to any subsequent year), and there shall be no appeal or 
reexamination of the Final Determination, except as provided in Sections 
10 and 11 of the Federal Arbitration Act, 9 U.S.C. Subsection 1 et seq.  
Either Partner may enforce any Final Determination in any state or 
federal court having jurisdiction over the dispute.  For the purpose of 
any action or proceeding instituted with respect to any Final 
Determination, each party hereto irrevocably consents to the service of 
process by registered mail or personal service and hereby irrevocably 
waives, to the fullest extent permitted by law, any objection which it 
may have or hereafter have as to personal jurisdiction, the laying of 
the venue of any such action or proceeding brought in any such court and 
any claim that any such action or proceeding brought in any court has 
been brought in an inconvenient forum.

ARTICLE IV

CONTRIBUTIONS, CAPITAL ACCOUNTS, ALLOCATIONS

Except as otherwise provided in this Article IV, the provisions of this 
Article IV relate solely to allocations of income, gain, loss, 
deduction, and credit for Federal income tax purposes and to the 
maintenance of capital accounts for purposes of Section 704(b) of the 
Code and corresponding Treasury Regulations (and do not relate to 
accounts maintained for GAAP or other purposes).

4.1  Capital Accounts.  (a) The Partnership shall maintain a capital 
account ("Capital Account") for each Partner.  The Managing General 
Partner agrees to contribute capital to the Partnership as provided in 
Article II of the Participation Agreement.  The Limited Partner agrees 
to contribute capital to the Partnership as provided in Article II of 
the Participation Agreement.  The Partners agree that, based on their 
arm's-length negotiations (i) the Fair Market Value of the contribution 
agreed to be made by the Managing General Partner is $138,600,000 and 
(ii) the Fair Market Value of the contribution agreed to be made by the 
Limited Partner is $92,400,000.  The Partners have agreed that the Fair 
Market Value of the contribution of the Managing General Partner shall 
be allocated among the FMC Assets, the FMC Liabilities and cash in the 
manner prescribed on Schedule 4.1 and that the Fair Market Value of the 
contribution of the Limited Partner shall be allocated among the Harsco 
Assets, the Harsco Liabilities and cash in the manner prescribed on 
Schedule 4.1.

(b)  After giving effect to the contributions and distributions 
described in Section 4.1(a), the Capital Accounts shall be

(i)  increased by:

(A)  any amount of cash transferred to the Partnership by such Partner 
as a capital contribution;

(B)  the Fair Market Value (determined in accordance with Section 12.16 
below) of any property (other than cash) transferred to the Partnership 
by the Partner as a capital contribution (net of liabilities secured by 
such property); and

(C)  the amount of any Profits allocated to such Partner pursuant to 
Section 4.3; and 

(ii)  decreased by:

(A)  the amount of cash distributed to the Partner by the Partnership 
pursuant to this Agreement;

(B)  the Fair Market Value (determined in accordance with Section 12.16 
below) of any property (other than cash) distributed to the Partner by 
the Partnership pursuant to this Agreement (net of liabilities secured 
by such property); and

(C)  the amount of any Losses allocated to such Partner pursuant to 
Section 4.3.

(c)  Any indemnification payment made by a Partner or a Parent of the 
Partner to the Partnership pursuant to Article VI of the Participation 
Agreement shall be treated as cash transferred to the Partnership by 
such Partner as a capital contribution.

(d)  (i)  Subject to the provisions of clause (ii) of this Section 
4.1(d), the Managing General Partner may cause the Capital Accounts to 
be increased or decreased in accordance with Treasury Regulations 
Section 1.704-1(b)(2)(iv)(f) based on the Fair Market Value of the 
Partnership's property (determined in accordance with Section 12.16 
below).

(ii)  In the case of a Significant Event, the Managing General Partner 
shall cause the Capital Accounts to be increased or decreased in 
accordance with Treasury Regulations Section 1.704(b)(2)(iv)(f) based on 
the Fair Market Value of the Partnership's property (determined in 
accordance with Section 12.16 below).  For purposes of this Section 
4.1(d), the term "Significant Event" means the contribution by a new or 
existing Partner of more than $10 million in the form of money or 
property to the Partnership in exchange for a Partnership interest or 
the distribution by the Partnership of more than $10 million in the form 
of money or property to a Partner in exchange for a Partnership 
interest.

(iii)  Any adjustments to Capital Accounts pursuant to this Section 
4.1(d) shall reflect the manner in which any income, gain, loss or 
deduction inherent in such property would have been allocated to the 
Partners if such property had been sold at such time in a taxable 
transaction at Fair Market Value.

(e)  A transferee of a Partnership Interest shall succeed to that 
portion of the Capital Account of the transferor relating to the 
Partnership Interest transferred to the extent provided in Treasury 
Regulation Section 1.704-1(b)(2)(iv)(1).  However, if the transfer 
causes a termination of the Partnership under Section 708(b)(1)(B) of 
the Code, the Partnership properties shall, except for purposes of 
distributions made pursuant to Article VI, be deemed to have been 
distributed in liquidation of the Partnership to the Partners (including 
the transferee of a Partnership Interest) and deemed recontributed by 
such Partners and transferees in reconstitution of the Partnership.

(f)  The amount of any reserve for contract closeouts shall, for 
purposes of this Section 4.1, be treated as a liability with a Fair 
Market Value equal to the amount of such reserve.

(g)  The amount of any environmental reserves contributed by a Partner 
shall, for purposes of this Section 4.1, be treated as a liability with 
a Fair Market Value equal to the amount of such reserve.

(h)  The provisions of this Agreement relating to Capital Accounts are 
intended to comply with Treasury Regulation Section 1.704-1(b)(2)(iv).  
With respect to the treatment of liabilities under Treasury Regulation 
Section 1.704-1(b)(2)(iv), the amount of any liability shall be its Fair 
Market Value.

(i)  Any distribution or transfer required by Section 6.3 hereof shall 
be treated as cash transferred to the Partner by the Partnership as a 
distribution.

4.2  Partnership Profits and Losses.

(a)  "Profits" shall mean items of Partnership income and gain 
determined according to Section 4.2(b).  "Losses" shall mean items of 
Partnership loss and deduction determined according to Section 4.2(b).

(b)  For purposes of computing the amount, character and source of any 
item of income, gain, deduction, loss, credit and basis included in 
Profits or Losses, the determination, recognition and classification of 
any such item shall be the same as its determination, recognition and 
classification for Federal income tax purposes; provided that:

(i)  Depreciation, amortization and cost recovery shall be calculated 
using the Partnership's method for Federal income tax purposes; 
provided, however, that if an asset has a zero adjusted tax basis, the 
Partnership shall select a method of depreciation, amortization or cost 
recovery recommended by the Accountants as a method which will not 
disproportionately advantage or disadvantage either Partner.  Any 
deductions for depreciation, cost recovery or amortization attributable 
to property contributed to the Partnership by a Partner shall be 
determined as if the adjusted basis of such property on the date it was 
acquired by the Partnership were equal to the Fair Market Value 
(determined in accordance with Section 12.16 below) of such property at 
such time.  If Capital Accounts are restated pursuant to Section 4.1(d), 
subsequent deductions for depreciation, cost recovery or amortization 
attributable to property owned by the Partnership at the time of the 
restatement shall be determined as if the adjusted basis of such 
property on the date of such restatement were equal to the Fair Market 
Value of such property at such time.

(ii)  Any income, gain or loss attributable to the taxable disposition 
of any property shall be determined as if the adjusted basis of such 
property as of the date of such disposition were equal in amount to the 
Partnership's Carrying Value with respect to such property as of such 
date.

(iii)  If the Partnership's adjusted basis in a depreciable or cost 
recovery property is reduced for Federal income tax purposes pursuant to 
Section 50(c) of the Code (or any analogous provisions), the amount of 
such reduction shall, solely for purposes hereof, be deemed to be an 
additional item of depreciation or cost recovery deduction in the year 
such property is placed in service.  Any restoration of such basis 
pursuant to Section 50(a) (or any analogous provisions) of the Code 
shall be allocated in the same manner as the deemed deduction was 
allocated.

(iv)  All fees and other expenses incurred by the Partnership to promote 
the sale of (or to sell) a Partnership interest that can neither be 
deducted nor amortized under Section 709 of the Code shall be treated as 
an item of deduction and shall be allocated pursuant to Section 4.3.

(v)  Except as otherwise provided in Treasury Regulation Section 
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss 
and deduction shall be made without regard to any election under Section 
754 of the Code which may be made by the Partnership.

(vi)  Items of income and gain exempt from Federal income tax shall be 
included as items of income and gain.

(vii)  Partnership expenditures that are not deductible for Federal 
income tax purposes and are not chargeable to capital and any losses on 
Partnership property sold to a related person that are disallowed for 
Federal income tax purposes shall be treated as items of loss or 
deduction.

(viii)  If Partnership property is distributed to a Partner, such 
property shall be treated as if it were first sold for an amount equal 
to its Fair Market Value (determined in accordance with Section 12.16 
below).  Any income, gain, loss or deduction resulting from such deemed 
sale shall be allocated to the Partners pursuant to Section 4.3.

(ix)  To the extent that any payment described in Section 4.1(c) relates 
to a loss, liability, claim, damage or expense for which a Partner or 
the Partner's Parent makes, has made or is obligated to make an 
Indemnification Payment to the Partnership under Article VI of the 
Participation Agreement that does not otherwise result in an item of 
loss or deduction or capitalized basis or cost to be allocated under 
Section 4.3(c)(iii), such payment shall be treated as an item of loss or 
deduction under Section 4.2(b)(vii) at the time it is made.

(x)  Losses shall not include any items of loss or deduction which 
result from the satisfaction of a liability (including any contributed 
environmental reserves) that reduced a Partner's Capital Account under 
Section 4.1 except to the extent that the amount of such items exceeds 
such reduction.

(xi)  Any Qualifying Remedial Expenditure of the Partnership which has 
not been charged against any environmental reserves (which reserves were 
contributed by a Partner to the Partnership as part of its Initial 
Capital Contribution) shall be treated as an item of loss or deduction 
in computing Losses in accordance with the preceding provisions of this 
Section 4.2(b).  Notwithstanding the foregoing, to the extent that a 
Qualifying Remedial Expenditure results in the capitalization of an 
asset for Federal Income Tax purposes, then the amount which shall be 
treated as an item of loss or deduction in computing Losses pursuant to 
this Section 4.2(b)(xi) shall be equal to the amount of depreciation, 
amortization or other basis recovery which is allowed or allowable for 
such Fiscal Year with respect to such asset.

(xii)  The amount of Realization of Qualifying Remedial Expenditures (as 
determined under Section 5.22.4.4(i) of the Participation Agreement) 
shall be treated as an item of income in computing Profits in accordance 
with the preceding provisions of this Section 4.2(b).

(xiii)  An amount equal to the TRER on each Major Contract shall be 
treated as an item of income in computing Profits in accordance with the 
preceding provisions of this Section 4.2(b).

4.3  Allocation of Profits and Losses.

(a)  Except as otherwise provided herein, the Profits of the Partnership 
for each Fiscal Year shall be allocated as follows:

(i)  First, to the Limited Partner, an amount equal to the sum of (x) 
the lesser of the Limited Partner Allocation or the Profits of the 
Partnership for such Fiscal Year plus (y) the Carryover Amount.  In the 
case of a Fiscal Year (other than Fiscal Year 1994) consisting of less 
than 365 days, the dollar amount specified in the preceding sentence 
shall be equal to the product of the Limited Partner Allocation times a 
fraction, the numerator of which is the number of days in the Fiscal 
Year and the denominator of which is 365.  For purposes of this Section 
4.3(a)(i), the term "Carryover Amount" shall be the sum of (x) the 
amount, if any, by which the aggregate amount of Profits allocated to 
the Limited Partner for all prior Fiscal Years under this Section 
4.3(a)(i) is less than the aggregate amount of Profits that would have 
been allocated to the Limited Partner had the Profits of the Partnership 
in each fiscal period been equal to or greater than the Limited Partner 
Allocation for such fiscal period plus (y) interest on such amount for 
the period of time beginning on the last day of the earliest prior 
Fiscal Year for which the Carryover Amount allocated in the present 
Fiscal Year could not be allocated because of insufficient Profits and 
ending on the last day of the Fiscal Year for which the Carryover Amount 
is allocated, such interest to be calculated at rate of twelve month 
LIBOR prevailing on the first day of such period of time plus 100 basis 
points; provided, however, that in calculating such product the dollar 
amount specified in this sentence for any short Fiscal Year shall be 
equal to the product of the Limited Partner Allocation times a fraction, 
the numerator of which is the number of days in the Fiscal Year and the 
denominator of which is 365.  Notwithstanding the foregoing provisions 
of this clause (i) or any other provision of the Operative Documents, 
the Limited Partner shall not be entitled to any further allocations 
under this clause (i) or otherwise in respect of the Limited Partner 
Allocation (except to the extent of any remaining Carryover Amounts) 
with respect to any period in which FMC or its permitted successor in 
interest is not entitled, whether due to termination, resignation or 
replacement as Managing General Partner, breach or any other cause, to 
receive its Annual Fee under Section 4(b) of the Management Services 
Agreement.  In the event that the Limited Partner is entitled to a 
distribution of Limited Partner Allocation Late Payment Interest under 
Section 6.1 hereof, then the allocation of Profits under this Section 
4.3(i) shall be increased by an amount equal to the amount of such 
Limited Partner Allocation Late Payment Interest.

(ii)  Second, to the Limited Partner and the Managing General Partner, 
an amount equal to the sum of (x) the product of (1) the quotient of (A) 
such Partner's Share Percentage and (B) 1 minus such Partner's Share 
Percentage and (2) the other Parent's respective CRB Carrying Costs for 
such Fiscal Year and (y) the CRBCC Carryover Amount, pro rata based on 
each Partner's percentage of the aggregate amount allowable to both 
Partners.  For purposes of this Section 4.3(a)(ii), the term "CRBCC 
Carryover Amount" shall be the amount, if any, by which the aggregate 
amount of Profits allocated to either Partner for all prior Fiscal Years 
under this Section 4.3(a)(ii) is less than the aggregate amount of 
Profits that would have been allocated to such Partner had the Profits 
of the Partnership in each fiscal period been equal to or greater than 
the sum of the Limited Partner Allocation and all CRB Carrying Costs 
allocable hereunder for such fiscal period.

(iii)  Third, the balance of the Profits to the Partners in proportion 
to the Share Percentages in effect for the Fiscal Year, as adjusted from 
time to time, in which such Profits are recognized.

(b)  Except as otherwise provided herein, the Losses of the Partnership 
for each Fiscal Year shall be allocated to the Partners in proportion to 
the Share Percentages in effect for the Fiscal Year, as adjusted from 
time to time, in which such Losses are recognized.

(c)  The following special allocations shall be made:

(i)  If, and to the extent that, any Partner is deemed to receive a 
distribution or recognize income (or is denied a deduction) as a result 
of any transaction between such Partner and the Partnership pursuant to 
Sections 1272-1274, Section 7872, Section 83, Section 61, Section 446 or 
Section 482 or 483 of the Code, or any other similar rule now or 
hereafter in effect, any corresponding resulting loss or deduction of 
the Partnership shall be allocated to the Partner who was charged with 
such income if, and to the extent, that such allocation is necessary to 
avoid consequences that were not anticipated by the parties at the time 
of the transaction.

(ii)  Items of loss or deduction attributable to partner nonrecourse 
debt (as defined in Treasury Regulation Section 1.704-2(b)(4)) shall be 
allocated in the manner required by Treasury Regulation Section 
1.704-2(i).  If there is a net decrease in partnership minimum gain 
(determined pursuant to Treasury Regulation Section 1.704-2(d)) or 
partner nonrecourse debt minimum gain (as defined in Treasury Regulation 
Section 1.704-2(i)(3)) during any calendar year, each Partner shall be 
allocated items of income and gain for amounts and of such character to 
the extent required by Treasury Regulation Section 1.704-2(f) and 
(i)(4), respectively.  This Section 4.3(c)(ii) is intended to be a 
minimum gain chargeback provision that complies with the requirements of 
Treasury Regulation Section 1.704-2(f) and (i).

Allocations made pursuant to this Section 4.3(c)(ii) shall be made 
before any other allocation of Partnership items is made pursuant to 
this Section 4.3(c).  To the extent possible without violating the 
provisions or purposes of Code Section 704 or the Treasury Regulations 
thereunder, the Partnership's subsequent income, gains, losses, 
deductions and credits shall be allocated so as to achieve as nearly as 
possible the results that would have been achieved if this Section 
4.3(c)(ii) were not in this Agreement.

(iii)  Any item of deduction or loss (including items treated as an item 
of loss or deduction under Section 4.2(b) (vii) and Section 4.2(b)(ix) 
and including any basis or cost recovery or other reduction of income) 
attributable to a loss, liability, claim, damage or expense for which a 
Partner or a Parent of a Partner makes, has made or is obligated to make 
an indemnification payment to the Partnership under Article VI of the 
Participation Agreement shall be allocated to, and reduce the Capital 
Account of, such Partner to the extent of the indemnification payment or 
obligation.

(iv)  An amount equal to the Realization described in Section 
4.2(b)(xii) shall be allocated to, and increase the Capital Account of, 
the Partner of the Parent to which such Realization relates.

(v)  An amount equal to each Partner's share of the TRER (as determined 
under Section 5.22.4.4(ii) of the Participation Agreement and treated as 
an item of income under Section 4.2(b)(xii) hereof) shall be allocated 
to and increase the Capital Account of the Partner of the Parent to 
which such amount relates.

(vi)  Any Qualifying Remedial Expenditure which has been treated as an 
item of loss or deduction in computing Losses under Section 4.2(b)(xi) 
shall be allocated to, and decrease the Capital Account of, the Partner 
of the Parent to which such Qualifying Remedial Expenditure relates.  If 
an amount of any Qualifying Remedial Expenditure has not been so charged 
against the aforesaid environmental reserves and at the time of 
liquidation of the Partnership under Section 9.4 such amount has not 
been treated as an item of loss or deduction under Section 4.2(b)(xi) 
but is carried on the Partnership's tax books as an asset, such asset 
shall be deemed to be distributed in liquidation to and reduce the 
Capital Account of the Partner of the Parent to which such Qualifying 
Remedial Expenditure relates and shall be valued at no less than its 
adjusted tax basis for such purposes.

(vii)  In determining the share of Profits and Losses allocated to a 
Partner whose interest varies during any Fiscal Year, the parties hereby 
agree to use the pro rata method described in Treasury Regulations 
Section 1.706-1(c)(2)(ii), except to the extent a different method is 
agreed to in accordance with Section 3.1(k) above.

4.4  Allocation of Taxable Income and Loss.

(a)  (i)  Except as otherwise provided herein, the amount, character and 
source of all items of taxable income, gain, loss, deduction, credit and 
basis for each Fiscal Year shall be allocated for tax purposes to the 
Partners in accordance with the allocation of any such item as provided 
in Section 4.3.

(ii)  Notwithstanding any other provision of this Agreement, any item of 
taxable income, loss or deduction resulting from any Qualified Remedial 
Expenditure which reduced any contributed environmental reserve shall be 
specifically allocated to the Partner who contributed such reserve.

(b)  (i)  As required by Section 704(c) of the Code, in the case of 
property contributed to the Partnership by a Partner as a capital 
contribution, items of income, gain, loss and deduction attributable 
thereto shall be allocated among the Partners for Federal income tax 
purposes in a manner that takes into account the variation between the 
Fair Market Value (determined in accordance with Schedule 4.1) of such 
property and its adjusted tax basis at the time of contribution.

(ii)  To the extent not otherwise subject to the provisions of clause 
(i) of this Section 4.4(b), any item of income attributable to a 
decrement in any LIFO reserve or to a difference between the amount 
allocated to inventory pursuant to Schedule 4.1 and the tax basis of 
such inventory at the time of contribution shall be allocated to the 
Partner that contributed such inventory to the Partnership.

(iii)  If Capital Accounts are adjusted pursuant to Section 4.1(d), 
items of income, gain, loss and deduction attributable thereto shall be 
allocated among the Partners for Federal income tax purposes in a manner 
that takes into account the variation between the Fair Market Value 
(determined in accordance with Section 12.16 below) of such property and 
its adjusted tax basis at the time of such adjustment.

(c)  Except to the extent attributable to Partner nonrecourse debt, tax 
credits shall be allocated according to the Partners' Share Percentages 
for the Fiscal Year in which the credits arise.  Tax credits 
attributable to Partner nonrecourse debt shall be allocated to the 
Partner who bears the economic risk of loss for such nonrecourse 
financing.  Any recapture of such tax credits shall be allocated pro 
rata to those Partners who were allocated the original credits based on 
their relative shares of such original credits.

(d)  All items of income, gain, loss, deduction, credit and basis 
allocation recognized by the Partnership for Federal income tax purposes 
and allocated in accordance with the provisions hereof shall be 
determined without regard to any election under Section 754 of the Code 
which may be made by the Partnership; provided, however, such 
allocations, once made, shall be adjusted, as necessary or appropriate, 
to take into account those adjustments permitted by Sections 734 and 743 
of the Code.

(e)  Allocations under this Section 4.4 are for tax purposes only and 
shall not be taken into account in determining Capital Accounts.

4.5  Additional Capital Contributions.  Except as otherwise provided in 
this Agreement and in Sections 2.3.3 or 5.22.5 or Article VI of the 
Participation Agreement, neither Partner shall have any obligation to 
make any additional capital contribution to the Partnership.  In the 
event that the Managing General Partner requests additional capital 
contributions from the Partners to meet the Partnership's anticipated 
cash requirements, investment opportunities within the Scope of Activity 
and other cash requirements (as deemed necessary or advisable by the 
Managing General Partner), the Partners may, at their option, make cash 
contributions to the Partnership in proportion to their Share 
Percentages.  If any Partner declines to make such a contribution within 
40 Business Days (or 20 Business Days for the Limited Partner if the 
capital contribution requested is less than $2 million and for the 
Managing General Partner if the capital contribution requested is less 
than $5 million) of the Managing General Partner's request, the other 
Partner may elect to make such declining Partner's additional capital 
contribution (or any portion thereof).  In the event that a Partner 
declines to make such a contribution, and regardless of whether or to 
what extent the contributing Partner elects to make additional capital 
contributions requested from the declining Partner, the contributing 
Partner may, at its option, treat its entire additional capital 
contribution as either (i) a senior unsecured loan to the Partnership 
bearing interest at 100 basis points (1.0%) above the U.S. Treasury rate 
then applicable to the term of repayment (which shall be determined by 
the contributing Partner) or (ii) an equity contribution to the 
Partnership.  In the event that such contributing Partner elects to 
treat such additional capital contribution as an equity contribution to 
the Partnership, then (i) the Partnership shall promptly determine, at 
its expense, the Appraised Value of the Partnership in the manner 
prescribed in Section 7.2(c) below, (ii) the contributing Partner's 
Share Percentage will be increased such that its Share Percentage after 
such contribution will equal (a) the sum of (x) the amount of such 
contribution plus (y) the product of its Share Percentage prior to such 
contribution and the Appraised Value of the Partnership prior to such 
contribution divided by (b) the sum of (x) the Appraised Value of the 
Partnership prior to such contribution plus (y) the amount of such 
contribution and (iii) each non-contributing Partner's Share Percentage 
will be reduced (subject to the limitation contained in Section 3.1(h) 
above) such that (A) its Share Percentage after such contribution will 
be in the same relative proportion to the total Share Percentages of all 
non-contributing Partners and (B) the total of all Partners' Share 
Percentages will equal 100%.

4.6  Loss Limitation and Special Allocation.

(a)  No allocation of Losses shall be made to the Limited Partner if 
such allocation will cause or increase an Adjusted Capital Account 
Deficit with respect to such Limited Partner taking into account the 
adjustments, allocations and distributions described in Treasury 
Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).  Any losses 
not allocated to the Limited Partner under this Section 4.6(a) shall be 
allocated to the Managing General Partner and to its Reallocated Loss 
Account.  In the event a Limited Partner unexpectedly receives any such 
adjustments, allocations or distributions described in said Treasury 
Regulations that cause or increase an Adjusted Capital Account Deficit 
with respect to the Limited Partner, items of Partnership income and 
gain shall be specially allocated to such Limited Partner in amounts and 
manner sufficient to eliminate the Adjusted Capital Account Deficit as 
quickly as possible.  To the extent such items of Partnership income and 
gain are specially allocated to the Limited Partner pursuant to the 
preceding sentence, subject to the provisions of the first sentence of 
this section 4.6(a), subsequent allocations to the Managing General 
Partner shall be made so as to put the Managing General Partner and the 
Limited Partner in the same position they would have been in had such 
allocation to the Limited Partner not been made.  For purposes of this 
Section 4.6(a), "Adjusted Capital Account Deficit" means with respect to 
a Limited Partner, the deficit balance, if any, in such Limited 
Partner's Capital Account as of the end of the relevant Fiscal Year, 
after crediting to such Capital Account any amount such Limited Partner 
is deemed to be obligated to restore under the Treasury Regulations and 
debiting to such Capital Accounts the adjustments, allocations and 
distributions described in Treasury Regulations Sections 
1.704-1(b)(2)(ii)(d)(4), (5) and (6).

(b)  Notwithstanding any other provision of this Agreement, to the 
extent there is outstanding at any time a Reallocated Loss Amount, then 
an amount of Adjusted Profits of the Partnership shall be allocated to 
the Managing General Partner in an amount equal to its Reallocated Loss 
Amount.  No allocation of Adjusted Profits shall be made to the Limited 
Partner until such time as the Reallocated Loss Account (including any 
Losses allocated to the Managing General Partner pursuant to Section 
4.6(a) covering the current Fiscal Year) is reduced to zero.  For 
purposes of this Section 4.6(b), "Adjusted Profits" means with respect 
to a Fiscal Year the excess of any of the Profits of the Partnership for 
such Fiscal Year determined according to Section 4.2(b) over the amount 
allocated to the Limited Partner pursuant to Section 4.3(a)(i) and (ii).

4.7  No Interest.  No interest shall be payable to the Partners on the 
balances in their Capital Accounts or otherwise in respect of the 
capital of the Partnership.

4.8  No Withdrawal.  No Partner shall be entitled to withdraw any part 
of its capital contribution or Capital Account or to receive any 
distribution from the Partnership, except as provided in Article VI and 
Article IX and in Section 2.3.3 of the Participation Agreement.

4.9  Loans From Partners.  Loans by a Partner to the Partnership shall 
not be considered capital contributions.

4.10  Loans to Partners.  The Partnership shall not make loans to 
Partners or Affiliates of Partners.

4.11  No Deficit Capital Account Make-Up Obligation.  Except as may 
otherwise be required by Delaware law, in no event shall a Partner be 
obligated to contribute capital at any time, including upon dissolution, 
to the Partnership for the purpose of eliminating a negative balance in 
its Capital Account.

ARTICLE V

FISCAL MATTERS.

5.1  Fiscal Years and Fiscal Quarters.  The Fiscal Year of the 
Partnership shall end on December 31 of each year and the Fiscal 
Quarters shall be the calendar quarters ending March 31, June 30, 
September 30 and December 31.  The Partnership's first Fiscal Year shall 
end December 31, 1994. 

5.2  Location of Books of Account.  The books of account for the 
Partnership shall be kept and maintained at the Principal Office or at 
such other place as the Managing General Partner shall determine.

5.3  Books and Records.  For financial reporting purposes (and not for 
purposes of maintaining Capital Accounts or determining taxable income 
or loss), the books of account shall be maintained on an accrual basis 
in accordance with GAAP, consistently applied except as otherwise 
permitted by Section 5.9, with reference to all Partnership 
transactions.  The books and records shall include the designation and 
identification of any property in which the Partnership owns an 
interest; such records shall also include, but shall not be limited to, 
the ownership of property (real, personal, and mixed).  The Partnership 
shall keep full and complete books of account, which shall be maintained 
in a manner that provides sufficient assurance that transactions of the 
Partnership are recorded so as to comply with all applicable laws and to 
permit (a) the preparation of the Partnership's financial statements in 
accordance with GAAP; (b) the Partners to account for their interests in 
the Partnership in accordance with GAAP; and (c) the Partners to 
facilitate compliance with the public reporting obligations of their 
respective Parents.  For financial reporting purposes, allocations of 
items described in Section 4.4(b) shall be consistent with the 
allocations made for tax purposes.  Each Partner shall prepare and 
provide to the other Partner such audited financial statements relating 
to pre-Closing periods as reasonably requested by the other Partner in 
order to facilitate the compliance by such Partner's Parent with the 
financial statement filing requirements, as applicable, of Regulation 
S-X, 17 C.F.R. Subsection 210.3-05 et seq.

5.4  Annual Financial Statements.  As soon as practicable following the 
end of each Fiscal Year and the review and approval of the Accountants 
referred to below (but not later than 16 Business Days after the end of 
such Fiscal Year), the Partnership shall prepare and deliver to each 
Partner such financial data as may be reasonably requested by such 
Partner for use in preparation of annual earnings releases, which data 
shall have been (or have been derived from) data that has been reviewed 
and approved by the Accountants as reflecting all necessary year-end 
audit adjustments.  Following the completion and audit of the 
Partnership's annual audited financial statements in the normal course 
(but not later than 30 Business Days after the end of such Fiscal Year), 
or on such other date as may be agreed upon by the parties hereto in the 
event of any change in any Parent's earnings reporting requirements, the 
Partnership shall prepare and deliver to each Partner and the members of 
the Advisory Committee, a balance sheet of the Partnership as of the end 
of such Fiscal Year and the related statements of operations, changes in 
Partners' equity and cash flow of the Partnership for such Fiscal Year, 
together with appropriate notes to such financial statements, and a 
balance sheet as of the end of such prior Fiscal Years and related 
statements for such number of additional fiscal years as may be 
reasonably requested by a Partner in order for such Partner to comply 
with Regulation S-X, 17 C.F.R. subsection 210.3-09 et seq.  These 
statements shall reflect all of the Partnership's expenses and 
contingent liabilities as if the Partnership were a stand-alone entity 
consistent with GAAP.  These financial statements shall also comply with 
the other relevant provisions of Regulation S-X, 17 C.F.R. Subsection 
210, and shall be audited and reported on by the Accountants.  At the 
same time, the Partnership shall deliver (at its expense) to each 
Partner a report indicating a reasonable estimate of such Partner's 
share of all items of income, gain, loss, deduction and credit of the 
Partnership for such Fiscal Year and any other financial information 
related to the Partnership which is reasonably requested by either 
Partner for Federal, national, state, local or foreign income or 
franchise tax purposes or for financial reporting purposes.

5.5  Interim Financial Statements and Other Information.  As soon as 
practicable following the end of each month (and in any event, with 
respect to each month other than the last month of the Partnership's 
Fiscal Year, not later than the 8th Business Day after the end of each 
such month during the Partnership's first Fiscal year or the 6th 
Business Day after the end of each such month during each subsequent 
Fiscal Year), the Partnership shall prepare and deliver to each Partner 
such financial data as may be reasonably requested by such Partner for 
use in preparation of internal monthly financial statements and 
quarterly earnings releases and whatever regularly prepared reports the 
Partnership delivers to the Managing General Partner at such time as 
such reports are delivered to the Managing General Partner.  Such 
financial information and reports shall reflect all adjustments 
necessary to a fair presentation, all of which adjustments shall be of a 
normal, recurring nature, except as indicated otherwise.

5.6  Estimated Tax Information.  The Partnership shall prepare and 
deliver to each Partner such information and at such times as reasonably 
requested by either Partner to aid it in meeting its obligation to make 
returns of estimated Taxes to Federal, national, state, local and 
foreign income taxing jurisdictions.

5.7  Tax Return Information.  The Partnership shall prepare and deliver 
to each Partner such information and at such times as reasonably 
requested by either Partner to aid it in meeting its obligation to make 
returns of Taxes to Federal, state, local and foreign income taxing 
jurisdictions.  Notwithstanding the foregoing, the Partnership shall 
prepare and deliver to each Partner its copy of Form K-1 for each 
taxable year of the Partnership on or before July 15 next following the 
end of such taxable year.

5.8  Inspection of Facilities and Records; Partnership Assistance.  Each 
Partner shall have the right in a reasonable manner at all reasonable 
times during usual business hours to inspect the facilities of the 
Partnership and to examine all books of account, files, records and 
databases of the Partnership, whether in written form or contained on 
computer tapes or disks.  Such right may be exercised through any agent, 
employee or representative of such Partner designated by it or by an 
independent public accountant (subject to any confidentiality assurances 
that the Partnership may reasonably request).  The Partner conducting 
such examination or inspection shall bear all costs and expenses 
incurred in connection therewith.  The Partnership and the Partners 
agree (a) to retain all books and records which are relevant to (i) the 
determination of the Tax liabilities pertinent to the Assets and the 
Partners relating to any pre-Closing Tax period until the expiration of 
the applicable statute of limitations and to abide by all record 
retention agreements entered into with any taxing authority and (ii) the 
support for the items reflected on each Partner's Final Closing Balance 
Sheet until the third anniversary of the Closing Date and (b) to give 
the other parties reasonable written notice prior to destroying or 
discarding any such books and records and, if any of the other parties 
so requests, the Partnership or the Partner, as the case may be, shall 
allow the other party to take possession of such books and records.

Upon the reasonable request by either Partner, the Partnership will 
promptly assist such Partner and its Parent in the prosecution or 
defense of any claim, audit or investigation or proceeding by or against 
any Governmental Authority or any vendee of the Defense Business of such 
Partner.  Such assistance shall be provided by the Partnership employee 
or employees best qualified to provide the requested assistance 
expeditiously; provided, however, that (i) such assistance does not 
unreasonably disrupt the conduct of the Partnership's operations and 
(ii) the Partnership shall incur no monetary liability to such Parent or 
its Partner in connection with the provision of such assistance.  Such 
assistance shall include, without limitation, to the extent reasonably 
practicable, extracting from the files and records of the Partnership 
all information relevant to the matter, consultation concerning such 
matter, testimony, if necessary, in any proceeding relating to such 
matter and assistance with the preparation of any pleadings or other 
submissions with respect to such matter.  Such requesting Partner shall 
reimburse the Partnership for its out-of-pocket expenses and, to the 
extent not allowable under any customer contracts, its administrative 
costs incurred in connection with such request.

5.9  Principal Accounting Procedures.

The Principal Accounting Procedures to be elected, adopted and followed 
by the Partnership for purposes of determining the amount and timing of 
items of Partnership income, gain, loss, deduction and credit for 
purposes of U.S. federal income taxation and for purposes of financial 
reporting as of the Closing Date are set forth on Schedule 5.9 annexed 
hereto.  No change in any such Principal Accounting Procedure shall be 
made without the approval of the Limited Partner, so long as the Limited 
Partner's Share Percentage is at least 20 percent, unless such change 
(i) is required by law, (ii) is required to comply with GAAP or (iii) is 
not material.  Any such approval shall be deemed given by the Limited 
Partner if such Limited Partner does not notify the Partnership in 
writing of an objection to such change within 45 days of its receipt of 
notice of such change.  For these purposes, a change is not material 
only if:

(A)  such change would not have resulted in the amount of either the 
Partnership's net earnings or sales, as applicable, for the prior Fiscal 
Year differing by more than 3 percent or $1,000,000 (whichever is 
greater) from the actual amount of the Partnership's net earnings or 
sales for such Fiscal Year;

(B)  such change would not have resulted in the amount of any Partner's 
Capital Account as of the end of the prior Fiscal Year differing by more 
than 3 percent or $1,000,000 (whichever is greater) from the actual 
amount of the Partner's Capital Account as of such time (provided that 
this paragraph (B) shall be applied as if there were no allocations or 
distributions to the Limited Partner with respect to its Limited Partner 
Allocation);

(C)  such change would not have resulted in the amount of the 
Partnership's total assets or total liabilities as of the end of the 
prior Fiscal Year differing by more than 3 percent or $1,000,000 
(whichever is greater) from the actual amount of the Partnership's total 
assets or total liabilities as of such time;

(D)  such change would not have resulted in (1) the percentage of an 
item of Partnership income, gain, loss, deduction or credit reported as 
a separate line item on the Partnership's Form K-1 for the prior Fiscal 
Year and allocated to a Partner differing by more than 3 percent or 
$1,000,000 (whichever is greater) from the actual amount of the 
percentage of such item that was allocable to such Partner or (2) the 
receipt by a Partner of a percentage of the amount of cash that would 
have been distributable to the Partners by the Partnership in the prior 
Fiscal Year differing by more than 3 percent from the percentage of cash 
actually distributed to such Partner (provided that this paragraph (D) 
shall be applied as if there were no allocations or distributions to the 
Limited Partner with respect to its Limited Partner Allocation);

(E)  such change does not require the consent of the Commissioner of 
Internal Revenue; and

(F)  in the event the Partnership becomes a registrant, such change will 
not require the filing of a preferability letter (of the type described 
in Item 601(b)(18) of Regulation S-K) with the SEC.

5.10  1993 Parent Financial Statements.  The Partnership shall assist 
and cooperate, as reasonably requested by each Parent and at no cost to 
such Parent, in such Parent's preparation of its audited financial 
statements as of and for the year ended December 31, 1993.

5.11  Retention of Certain Items.  Any item of income or gain or any 
item of deduction or loss attributable to the final determination of (a) 
all reserves with respect to contracts which have been completed as of 
the date of Closing and (b) reserves that are not transferred (but that 
are maintained by the Partners pursuant to the Principal Accounting 
Procedures) with respect to contracts which have not been completed as 
of the date of Closing shall not be treated as a Partnership item but 
shall be retained by the Partner who maintained the reserve.  This 
provision shall not apply to allocations provided by Section 4.4(b).

5.12  Responsibilities of Accountants.  The parties agree that the 
Accountants shall, in accordance with their usual and customary 
practices (including practices as to materiality judgments, negative 
assurances and reliance on officer certification), provide accounting 
and related services to the Partnership which include the following on 
an annual basis (except as provided in (d) below):

(a)  reviewing the Partnership's U.S. Federal and foreign income tax 
return and schedules, confirming that all elections have been properly 
made in accordance with this Agreement and the Participation Agreement 
and signing such returns as paid preparer;

(b)  verifying that each Partner's Capital Account has been properly 
maintained and that the Partners' Capital Account balances as of the 
close of the Fiscal Year are correctly stated in accordance with this 
Agreement and the Participation Agreement;

(c)  verifying that tax allocations have been made in accordance with 
Section 4.4 of the Partnership Agreement;

(d)  confirming (on the basis of a limited review) that the quarterly 
"split" of income or loss for book purposes in accordance with GAAP and 
for U.S. Federal income tax purposes, including the amount, character 
and source of all items of income, gain, loss, deduction, credit and 
basis, are allocated between the Partners in compliance with this 
Agreement and the Participation Agreement;

(e)  confirming that the accounting policies and methods of accounting 
used for book purposes in accordance with GAAP and for U.S. Federal 
income tax purposes are in compliance with this Agreement and the 
Participation Agreement; and

(f)  verifying that distributions of cash or property to the Partners 
have been made in compliance with this Agreement and the Participation 
Agreement.

5.13  State Income Taxes.

(a)  The Partnership shall pay the State and local Income Taxes, if any, 
attributable to the taxable income of the Partnership whether such 
Income Taxes are imposed on the Partnership or on a Partner or the 
Partners under applicable tax law.  Notwithstanding the foregoing, the 
Partnership shall undertake to obtain an Advance Agreement from the DOD 
regarding the recoverability of State Income Taxes paid by the Partners.  
In the event that the Partnership obtains such an Advance Agreement, 
then the Partnership shall no longer be obligated to pay on behalf of 
the Partners any State Income Taxes.

(b)  The Partners shall be required to provide such information as the 
Partnership shall reasonably require in order to comply with the 
requirements of the Defense Contract Audit Agency regarding the 
recoverability of State Income Taxes paid by the Partnership on behalf 
of the Partners.  Each of the Partners shall provide the Partnership 
with reasonable access to such books and records of such Partner as are 
required to meet the requirements of the Defense Contract Audit Agency.

(c)  Notwithstanding any other provision of this Agreement, the 
Partnership shall not be required to make a payment of State Income 
Taxes on behalf of a Partner if the making of such payment by the 
Partnership would result in the Partnership's being treated as making a 
tax distribution (under Section 6.3(c) hereof) on behalf of such Partner 
in an amount greater than the product of (i) such Partner's positive 
taxable income (as determined in accordance with Section 6.3(a) hereof) 
multiplied by (ii) the maximum Federal marginal income tax rate under 
Section 11 of the Code in effect for such Fiscal Year, plus five 
percentage points.

ARTICLE VI

DISTRIBUTIONS.

A distribution to a Partner or Partners under this Article VI shall be 
made in the same order of priority as the order in which it is set forth 
below.  Thus, a distribution identified in a Section with a lower number 
shall be made in full before any portion of a distribution identified in 
a Section with a higher number is made.

6.1  Distribution of Limited Partner Allocation.  Subject to applicable 
law, the Partnership shall distribute to the Limited Partner, on or 
before the 15th day of the third month after the end of the Fiscal Year, 
an amount of cash equal to the Profits of the Partnership allocable to 
the Limited Partner under Section 4.3(a)(i) for such Fiscal Year in 
respect of its Limited Partner Allocation.  The Partnership shall make 
quarterly estimated distributions of such amount during the 
Partnership's Fiscal Year (taking into account any prior distributions 
under this Section for such Fiscal Year).  Distributions with respect to 
the Limited Partner Allocation, including quarterly estimated 
distributions with respect thereto, shall bear interest at the rate of 
one year LIBOR prevailing on the date the distribution is payable plus 
100 basis points for the period between the date the distribution is 
payable and the date of the payment of the distribution ("Limited 
Partner Allocation Late Payment Interest").  The Limited Partner shall 
promptly return to the Partnership, on or before the 15th day of the 
third month after the end of the Fiscal Year, any amount distributed 
hereunder on an estimated basis to the extent that the total of such 
amounts exceeds the amount of Profits allocable to the Limited Partner 
under Section 4.3(a)(i).

6.2  Environmental Carrying Cost Distributions.  Subject to applicable 
law, the Partnership shall distribute to the Limited Partner or the 
Managing General Partner, as the case may be, on or before the last 
Business Day of the third month after the end of each Fiscal Year, an 
amount of cash equal to the Profits of the Partnership allocable to such 
Partner under Section 4.3(a)(ii) for such Fiscal Year.

6.3  Tax Distributions.

(a)  Subject to applicable law, the Partnership shall make a tax 
distribution to each Partner on or before the date on which Federal 
income tax payments are due with respect to the Fiscal Year.  A 
Partner's tax distribution for any particular Fiscal Year shall be equal 
to the product of (i) the Partner's positive taxable income from the 
Partnership for the Fiscal Year (excluding the items allocated by 
Sections 4.3(a)(i), 4.3(a)(ii), 4.3(c)(iv), 4.3(c)(v), 4.3(c)(vi), 
4.4(a)(ii), 4.4(b) and 4.6) and (ii) the maximum Federal marginal income 
tax rate applicable to a corporation under Section 11 of the Code in 
effect for the Fiscal Year, plus five percentage points.

(b)  The Partnership shall make estimated distributions under the 
principles of (a) above during the Fiscal Year on or before the dates on 
which Federal estimated income tax payments must be made by the 
Partners.  Such estimated tax distributions shall reduce a Partner's 
required tax distribution under (a) above and shall be returned to the 
Partnership on or before the date on which Federal income tax payments 
are due with respect to the Fiscal Year to the extent in excess of a 
Partner's required tax distribution under (a) above. 

(c)  To the extent that the Partnership makes payments on behalf of a 
Partner pursuant to Section 5.13 hereof, such payments shall for 
purposes of this Section 6.3 be treated as a tax distribution and 
therefore reduce such Partner's required tax distribution under Section 
6.3(a) hereof.

6.4  Special Distributions.  Subject to applicable law, the Partnership 
shall, within 30 Business Days after the close of a Fiscal Quarter, 
distribute in cash to each Partner the lesser of (i) the amount that 
such Partner's Cumulative Remedial Balance would otherwise be reduced 
below zero at the end of such Fiscal Quarter or (ii) the amount by which 
the cumulative amount of all special contributions made by the Partner 
(or its Parent) pursuant to Section 5.22.5 of the Participation 
Agreement exceeds the amount of all distributions previously made to 
such Partner pursuant to this Section 6.4.

6.5  Additional Cash Distributions.  Subject to applicable law and to 
(a) and (b) below, at least annually the Partnership shall distribute to 
the Partners in proportion to their respective allocations of Profits 
under Section 4.3(a)(iii) all cash not reasonably required for (i) 
payment of any distribution required by Sections 6.1, 6.2, 6.3 and 6.4 
and (ii) the operation of its business, including planned capital 
projects and other cash requirements.  All such distributions shall be 
made by the fifteenth Business Day following the end of the Fiscal Year.

(a)  For each of the periods ending on the last day of the fourth full 
calendar quarter and the eighth full calendar quarter commencing on or 
after the Closing Date, the Partnership shall distribute at least 
annually to the Partners in proportion to their respective allocations 
of Profits under Section 4.3(a)(iii) an amount of cash (determined as of 
the end of each of such periods) which, when added to the amount of all 
tax distributions under Section 6.3 made or anticipated to be made in 
respect of such period, is equal to not less than 70% and not more than 
120% of the Partnership's Modified Taxable Income for that period.  
"Modified Taxable Income" shall mean the Partnership's cumulative 
taxable income (excluding the items allocated by Sections 4.3(a)(i), 
4.3(a)(ii), 4.3(c)(iv), 4.3(c)(v), 4.3(c)(vi), 4.4(a)(ii), 4.4(b) and 
4.6) for such period, as estimated by the Partnership.  During such 
period, the Managing General Partner shall review at least quarterly the 
Partnership's cash resources and anticipated requirements and may (but 
shall not be obligated to) make distributions under this Section more 
frequently than annually.  The following example is intended to be 
illustrative only:

If the Modified Taxable Income for a given Fiscal Year is $100 and the 
aggregate amount of special distributions made pursuant to Section 6.4 
is $20, then the amounts to be distributed for such annual period to the 
Partners under this Section 6.5(a) are:

at least 70%, and not more than 120%, of ($100)-($20) = $80 in the 
aggregate   

or

at least $22.40 and not more than $38.40 to Harsco L.P. and at least 
$33.60 and not more than $57.60 to FMC.

(b)  The Managing General Partner may withhold from distributions 
pursuant to this Section 6.5 that amount of cash deemed by the Managing 
General Partner to be necessary or advisable to meet the Partnership's 
existing cash requirements and investment opportunities; provided, 
however, that the Managing General Partner shall not withhold from 
distribution cash to fund investment opportunities or capital 
investments (other than Permitted Capital Investments) unless (i) in the 
case of cash withheld prior to 24 months after the Closing Date, 120% of 
the Partnership's Modified Taxable Income shall have been distributed to 
the Partners pursuant to this Section 6.5; (ii) the amount of cash 
withheld in respect of any Fiscal Year in excess of $20 million does not 
exceed an additional $20 million (measured on December 31 in each of the 
first two Fiscal Years and on the last Business Day of each Fiscal 
Quarter in each subsequent Fiscal Year); and (iii) that any withholding 
of cash for such purposes shall only be in such amounts as are necessary 
for specifically identified investment opportunities anticipated within 
the following twelve months and reported to the Advisory Committee.  For 
purposes of this Section 6.5(b), investment opportunities and capital 
investments refer to the type of out-of-pocket expenditures by the 
Partnership that would be reflected in the consolidated statement of 
cash flows as cash required by investing activities in the Partnership's 
regularly prepared financial statements, excluding changes in the 
investment account reflecting earnings or losses during the period for 
affiliated companies for that period.  The provisions of this Section 
6.5(b) are limited to the withholding from distribution of cash balances 
of the Partnership and shall not be construed to restrict, or require 
any consent or approval of the Limited Partner not otherwise required by 
Section 3.1 of this Agreement for, any capital expenditure or investment 
of the Partnership or any financing thereof from a source other than 
cash balances of the Partnership, whether by capital calls, third-party 
borrowings or otherwise.

ARTICLE VII

TRANSFER OF INTERESTS.

7.1  Private Sale.

(a)  At any time more than 25 months after the Closing Date, either 
Partner may sell or otherwise dispose of its ownership interest in the 
Partnership, or any portion thereof which represents a Share Percentage 
of at least 10%, to a single, unaffiliated third party; provided, that 
(i) any such sale or disposition by the Limited Partner shall include a 
ratable share of the Limited Partner Allocation and the allocation to 
the Limited Partner of the other Parent's respective CRB Carrying Costs 
and shall be subject to the Managing General Partner's right of first 
refusal, as described in Section 7.1(b) below, to purchase such interest 
at a price the same as that at which the Limited Partner proposes to 
make such sale or disposition to a third party and (ii) prior to the 
time that 30% of the equity of the Partnership (including the common 
equity of any corporate successor thereto) is publicly held, any such 
sale or disposition by the Managing General Partner shall be subject to 
the Limited Partner's right to include in such sale or disposition a 
percentage of its ownership interest in the Partnership equal to that 
percentage of the Managing General Partner's ownership interest in the 
Partnership which the Managing General Partner wishes to sell or dispose 
of (provided that the Limited Partner shall make such reasonable 
representations, warranties and covenants, and provide such 
indemnifications with respect thereto, to a single, non-affiliated third 
party purchaser and otherwise abide by such terms as the Managing 
General Partner makes or is subject to in such a sale or disposition, 
and provided, further, that if the Limited Partner is not entitled to or 
does not elect to include in such sale the Limited Partner's entire 
ownership interest in the Partnership, the Limited Partner shall not be 
required to sell all or any part of its Limited Partner Allocation and 
the Managing General Partner shall not be obligated to require the 
purchaser to purchase all or any part of such Limited Partner 
Allocation).  The parties acknowledge that in the event FMC sells its 
entire ownership interest in the Partnership, FMC shall no longer be 
entitled to receive any portion of the Annual Fee under the Management 
Services Agreement.  In the event that either Partner sells or otherwise 
disposes of its ownership interest in the Partnership in one or more 
related transactions in which such Partner and/or its Affiliates also 
sells assets other than such Partnership interest to the same purchaser 
or agrees to provide services, the portion of such consideration to be 
received by such selling Partner and/or its Affiliates allocable to such 
Partnership interest only shall be as mutually agreed by both Partners 
(or, if no agreement is reached, shall be deemed to be the Appraised 
Value as set forth in Section 7.2(c) below, subject to a right to cancel 
in the manner provided in Section 7.2(d)).  Except as otherwise 
expressly provided above or in the Participation Agreement or 
Registration Rights Agreement, neither Partner may, directly or 
indirectly, transfer or subject to any Lien all or any part of its 
ownership interest in the Partnership.  This Section 7.1(a) shall not 
apply to any sale of either Partner's ownership interest or any part 
thereof to an underwriter in contemplation of a public offering pursuant 
to the Registration Rights Agreement.

(b)  Prior to making any sale or disposition subject to Section 
7.1(a)(i), the Limited Partner will give written notice (the "Sale 
Notice") to the Managing General Partner.  The Sale Notice will disclose 
in reasonable detail the identity of the prospective purchaser, the 
amount of its ownership interest to be sold and the terms and conditions 
of the proposed sale or disposition.  The Managing General Partner may 
elect to purchase the amount of the Limited Partner's ownership interest 
proposed to be sold upon the same terms and conditions as those set 
forth in the Sale Notice by delivering a written notice of such election 
to the Limited Partner prior to the thirtieth day following the date the 
Sale Notice is given to the Managing General Partner (the "Authorization 
Date"); provided, however, that if the terms and conditions set forth in 
the Sale Notice provide for other than all cash payment, the Managing 
General Partner may exercise its election by paying in cash the Fair 
Market Value of the non-cash consideration; provided, further, that the 
Managing General Partner can pay in a security having equivalent terms 
(including covenants, representations and warranties, rating (if any) by 
a nationally recognized rating agency and equivalent value) if part of 
the consideration set forth in the Sale Notice was such a security.  If 
the Managing General Partner elects not to purchase the ownership 
interest specified in the Sale Notice, the Limited Partner may sell the 
ownership interest specified in the Sale Notice at a price and on terms 
no more favorable to the purchaser thereof than specified in the Sale 
Notice upon the earlier to occur of (i) the date on which the Managing 
General Partner notifies the Limited Partner of its election not to 
purchase such ownership interest and (ii) the Authorization Date.  If 
the sale of the Limited Partner's ownership interest as contemplated in 
such Sale Notice is not thereafter consummated within 180 days of the 
Authorization Date, then the Limited Partner's ownership interest shall 
again be subject to the provisions of this Section 7.1(b) in connection 
with any subsequent proposed sale.

(c)  Prior to making any sale or disposition subject to Section 
7.1(a)(ii), the Managing General Partner will give a Sale Notice to the 
Limited Partner.  The Managing General Partner Sale Notice will disclose 
in reasonable detail the identity of the prospective purchaser, the 
amount of its ownership interest to be sold and the terms and conditions 
of the proposed sale or disposition.  The Limited Partner may elect to 
sell the amount of the Limited Partner's ownership interest permitted to 
be sold pursuant to Section 7.1(a)(ii) upon the same terms and 
conditions as those set forth in the Sale Notice by delivering a written 
notice of such election to the Managing General Partner prior to the 
thirtieth day following the date the Sale Notice is given to the Limited 
Partner (the "Authorization Date").  If the Limited Partner so delivers 
such notice of election and the sale of the Managing General Partner's 
ownership interest as contemplated in such Sale Notice is not thereafter 
consummated within 180 days of the Authorization Date, then the Managing 
General Partner's ownership interest shall, subject to the terms of 
Section 7.1(a)(ii), again be subject to the provisions of this Section 
7.1(c) in connection with any subsequent proposed sale.

(d)  The Managing General Partner shall be entitled to assign its right 
of first refusal pursuant to Section 7.1(a)(i) above to the Partnership 
or to an Affiliate of the Managing General Partner, and such assignee 
shall be entitled to all of the rights and subject to all of the 
obligations set forth in this Article VII with respect to such right of 
first refusal; provided, however, that the Parent of the Managing 
General Partner shall be jointly and severally liable for the payment of 
the purchase price.

(e)  The Managing General Partner shall take all actions necessary to 
cause any Person who acquires an ownership interest from the Limited 
Partner to be admitted promptly as a limited partner of the Partnership.

7.2  Put and Call Options.

(a)  Call Option.  At any time more than 25 months after the Closing 
Date, the Managing General Partner shall have the option to purchase, or 
cause the Partnership to purchase, for cash, upon 60 days' prior written 
notice to the Limited Partner (which may be delivered at any time on or 
after the sixtieth day preceding the 25-month anniversary of the Closing 
Date), the Limited Partner's entire ownership interest in the 
Partnership for a price equal to the sum of (x) the product of 110% of 
the Appraised Value of the Partnership, determined in accordance with 
Section 7.2(c) below, multiplied by the Limited Partner's Share 
Percentage plus (y) the Capitalized Limited Partner Allocation; 
provided, however, that (i) the Managing General Partner may exercise 
such call option at any time following a Change in Control of Harsco or 
the Limited Partner, irrespective of the 25-month period referred to 
above, and (ii) in the event of such a Change in Control of Harsco or 
the Limited Partner, the price shall be the sum of (x) 100% of the 
Appraised Value of the Partnership multiplied by the Limited Partner's 
Share Percentage plus (y) the Capitalized Limited Partner Allocation; 
and provided, further, that if the Limited Partner has delivered a Sale 
Notice in respect of 100% of its ownership interest in the Partnership 
to the Managing General Partner under Section 7.1(b) prior to 
notification by the Managing General Partner with respect to this 
Section 7.2(a), then the Managing General Partner may only exercise such 
call option at the higher of the amount to be paid under this Section 
7.2(a) or the amount to be paid under Section 7.1(b).

(b)  Limited Partner Put Option.  At any time more than 25 months after 
the Closing Date, the Limited Partner shall have the option to require 
the Partnership to purchase, upon 60 days' prior written notice to the 
Partnership (which may be delivered at any time on or after the sixtieth 
day preceding the 25-month anniversary of the Closing Date), the Limited 
Partner's entire ownership interest in the Partnership for a price equal 
to the sum of (x) the product of 95% of the Appraised Value of the 
Partnership, determined in accordance with Section 7.2(c) below, 
multiplied by the Limited Partner's Share Percentage plus (y) the 
Capitalized Limited Partner Allocation; provided, however, that (i) the 
put option may be exercised at any time following a Change in Control of 
the Managing General Partner, irrespective of the 25-month period 
referred to above and (ii) in the event of such a Change in Control of 
the Managing General Partner, the price shall be equal to the sum of (x) 
100% of the Appraised Value of the Partnership multiplied by the Limited 
Partner's Share Percentage and (y) the Capitalized Limited Partner 
Allocation; provided, further, that if the Managing General Partner has 
delivered a Sale Notice in respect of 100% of its ownership interest in 
the Partnership to the Limited Partner under Section 7.1(c) prior to 
notification by the Limited Partner with respect to this Section 7.2(b), 
then the Limited Partner may only exercise such put option at the lower 
of the amount to be paid under this Section 7.2(b) or the amount to be 
paid under Section 7.1(c).  The full purchase price payable by the 
Partnership will be paid by means of a senior unsecured note without any 
right of set-off by the Partnership.  Such note shall be in 
substantially the form and contain substantially the terms of the form 
of note annexed hereto as Exhibit D.

(c)  Appraised Value.  In order to determine the Appraised Value of any 
Partner's ownership interest in the Partnership, each Partner shall, 
within 15 days, select a nationally recognized investment bank which is 
regularly engaged in the financial valuation of businesses and their 
securities, and those two investment banking firms shall, within 15 days 
after the engagement of the last to be engaged of such investment banks, 
in turn select a third nationally recognized investment bank which is 
regularly engaged in the financial valuation of businesses and their 
securities.  Each of the three investment banks shall independently 
estimate the fully distributed public equity trading value of the 
Partnership, employing customary investment banking valuation 
methodologies, including as appropriate (i) analysis of average public 
trading values of comparable companies over the preceding six months 
adjusted for all relevant differences between the Partnership and the 
respective comparable companies, (ii) comparable block sale transactions 
or comparable acquisition transactions without giving recognition to any 
control premium or illiquidity discount and (iii) a discounted cash flow 
analysis of the Partnership.  Under each methodology, the investment 
bank will assume (i) the income from the Partnership will be taxed at 
corporate income tax rates, (ii) a reasonable capital structure for 
comparable businesses, with debt at current market rates as of the date 
of the valuation, (iii) the public has access to and knowledge of the 
Partnership's long range plan, forecast, future prospects and all other 
information provided to the investment banks for the purpose of this 
valuation and (iv) that each Partner's Cumulative Remedial Balance has 
been funded in accordance with Annex B to the Participation Agreement.  
Each of the methodologies will take into account the value of any 
non-operating assets and liabilities of the Partnership, provisions of 
this Partnership Agreement and other Operative Documents requiring 
special allocations or distributions (including, in the case of the 
Limited Partner Allocation, treatment of the Limited Partner Allocation 
as a recurring operating expense), the future prospects of the 
Partnership and the comparable companies used in the valuation and 
indemnities to the Partnership.  The investment banks will conduct a due 
diligence review with each Parent as well as with the Partnership and 
will consider each party's input concerning the Partnership's long-range 
plan, forecast and future prospects.  Each of the three investment banks 
shall report its determination to the Partners within thirty days of its 
engagement.  The three estimates shall be averaged, and the estimate 
that deviates furthest from the average shall be ignored.  The average 
of the remaining two estimates shall be the "Appraised Value" of the 
Partnership.

(d)  Option to Cancel.  At any time within 10 days after the 
determination of the Appraised Value, a Partner exercising its put or 
call option, as the case may be, may cancel the exercise of such option, 
in which case such canceling Partner shall pay, or reimburse the 
Partnership for, the cost of determining the Appraised Value (including 
the fees of all valuation firms).  In the event that the put or call 
option is not canceled, each Partner shall pay the fees of the valuation 
firm selected by it, and the Partnership shall pay the fees of the third 
firm and all other expenses of the appraisal determination process.

(e)  The Managing General Partner shall be entitled to assign its call 
option pursuant to (a) above to the Partnership or to an Affiliate of 
the Managing General Partner, and the Limited Partner shall be entitled 
to assign its put option pursuant to (b) above to an Affiliate of the 
Limited Partner (in connection with the Limited Partner's assignment of 
its Partnership interest to its Affiliate) and such assignee shall be 
entitled to all of the rights and subject to all of the obligations set 
forth in this Article VII with respect to such call or put option.

(f)  The put option provided in (b) above shall not be exercisable (i) 
after the occurrence of any event that triggers the dissolution of the 
Partnership under Article IX or (ii) while the Partnership is in the 
process of winding-up under Section 9.3 or distributing its assets under 
Article IX. 

(g)  In the event that the Partnership purchases the Limited Partner's 
ownership interest pursuant to Section 7.2(a) or Section 7.2(b), the 
Limited Partner shall make such customary representations and warranties 
to the Partnership as to title to the ownership interest purchased and 
freedom of such ownership interest from liens or claims of third parties 
as the purchaser shall reasonably request.

7.3  Additional Matters.

(a)  Accruals and Carryovers of the CRB and the Limited Partner 
Allocation.  In the event of (i) the exercise by the Limited Partner of 
the put option, (ii) the exercise by the Managing General Partner of the 
call option, (iii) the incorporation of the Partnership pursuant to the 
Registration Rights Agreement, (iv) the sale by the Limited Partner of 
its entire interest in the Partnership as a result of and in conjunction 
with the sale by the Managing General Partner of its entire interest in 
the Partnership pursuant to Section 7.1(a) above, (v) the sale by the 
Limited Partner of its entire interest in the Partnership in a private 
sale pursuant to Section 7.1(a) above or (vi) the acquisition by the 
Managing General Partner of the entire interest of the Limited Partner 
in the Partnership as a result of the exercise by the Managing General 
Partner of its right of first refusal pursuant to Section 7.1(a) above, 
the Partnership will pay, in cash, on the date of the transfer of the 
Limited Partner's ownership interest in the Partnership or the date of 
incorporation of the Partnership, as the case may be, (A) to the Limited 
Partner amounts equal to the aggregate amount on such date of (1) any 
accrual of the Limited Partner Allocation, (2) any Carryover Amount of 
the Limited Partner Allocation, (3) any accrual of the CRB Carrying 
Costs payable to the Limited Partner and (4) any CRBCC Carryover Amount 
payable to the Limited Partner and (B) to the Managing General Partner 
amounts equal to the aggregate amount on such date of (1) any accrual of 
the CRB Carrying Costs payable to the Managing General Partner and (2) 
any CRBCC Carryover Amount payable to the Managing General Partner.  All 
such payments shall be made on the applicable payment date irrespective 
of the Partnership's cash position or any limitations on the 
Partnership's obligations to make distributions to a Partner or 
Partners.  To the extent that any amounts referred to in clause (A) or 
(B) above are not determinable on the applicable payment date, they 
shall be payable to the applicable Partner as soon as such amounts can 
be determined (but no later than 30 Business Days after the applicable 
payment date) with interest at the rate of one year LIBOR at the 
applicable payment date plus 100 basis points from the applicable 
payment date through the date such payment is made.

(b)  Tax and Additional Cash Distributions.  Following any of the events 
described in Section 7.3(a)(i) through (vi) above, the Partnership shall 
continue to be obligated to make all tax distributions and additional 
cash distributions to the Limited Partner to which it is entitled under 
(i) Section 6.3 determined in accordance with Section 4.3(c)(vii) 
hereof, if applicable, and (ii) with respect to the first eight full 
Fiscal Quarters commencing on or after the Closing Date, Section 6.5 
hereof through the date of the transfer of the Limited Partner's 
ownership interest in the Partnership or the date of incorporation of 
the Partnership, as the case may be.

(c)  Annex B.  Following the occurrence of any of the events described 
in Section 7.3(a)(i) through (vi) above, but subject to Section 7.3(b) 
above, the provisions of Annex B to the Participation Agreement shall 
control, notwithstanding any provisions in Article IV or VI hereof to 
the contrary.

ARTICLE VIII

INDEMNIFICATION.

8.1  Indemnification of Partners.

(a)  The Partnership shall indemnify any Person who was or is a party or 
is threatened to be made a party to any threatened, pending or completed 
action, suit or proceeding, whether civil, criminal, administrative or 
investigative (other than an action by or in the right of the 
Partnership) by reason of the fact that such Person is or was the 
Managing General Partner or the Limited Partner of the Partnership (but 
only if, in the case of the Managing General Partner, any resulting 
liability was not caused by conduct that would give rise to liability 
under Section 3.4(b) as determined initially by the Managing General 
Partner on behalf of the Partnership or thereafter in a judicial 
proceeding culminating in a final, non-appealable order (unless 
otherwise resolved by the parties)), is or was a director or officer of 
the Managing General Partner or the Limited Partner or an officer of the 
Partnership or a member of the Advisory Committee or is or was serving 
at the request of the Partnership as a director, officer or trustee of 
another corporation, partnership, joint venture, trust or other 
enterprise (in each case if acting within the scope of such Person's 
authority), against expenses (including attorneys' fees), judgments, 
fines and amounts paid in settlement actually and reasonably incurred by 
such Person in connection with such action, suit or proceeding if such 
Person (other than the Managing General Partner, whose conduct shall be 
subject to indemnification hereunder only to the extent that such 
conduct would not give rise to liability under Section 3.4(b) as 
determined by agreement between the Partners or in a judicial proceeding 
culminating in a final, non-appealable order) acted in good faith and in 
a manner such Person reasonably believed to be in or not opposed to the 
best interests of the Partnership, and, with respect to any criminal 
action or proceeding, had no reasonable cause to believe such Person's 
conduct was unlawful.  The termination of any action, suit or proceeding 
by judgment, order, settlement, conviction, or upon a plea of nolo 
contendere or its equivalent, shall not, of itself, create a presumption 
that the Person did not act in good faith and in a manner which such 
Person reasonably believed to be in or not opposed to the best interests 
of the Partnership, and, with respect to any criminal action or 
proceeding, had reasonable cause to believe that such Person's conduct 
was unlawful.  Except as provided in Article VI of the Participation 
Agreement, the foregoing indemnity shall include, but not be limited to, 
any Losses for or on account of or arising from or in connection with or 
otherwise with respect to (i) any Liability assumed by the Partnership 
under any of the Operative Documents and (ii) the conduct of the 
business of the Partnership after the Closing and any liability of the 
Partnership incurred in connection therewith.

(b)  The Partnership shall indemnify any Person who was or is a party or 
is threatened to be made a party to any threatened, pending or completed 
action or suit by or in the right of the Partnership to procure a 
judgment in its favor by reason of the fact that such Person is or was 
the Managing General Partner or the Limited Partner of the Partnership, 
is or was a director or officer of the Managing General Partner or the 
Limited Partner or an officer of the Partnership or a member of the 
Advisory Committee, or is or was serving at the request of the 
Partnership as a director, officer or trustee of another corporation, 
partnership, joint venture, trust or other enterprise against expenses 
(including attorneys' fees) actually and reasonably incurred by such 
Person in connection with the defense or settlement of such action or 
suit if such Person (other than the Managing General Partner, whose 
conduct shall be subject to indemnification hereunder only to the extent 
that such conduct would not give rise to liability under Section 3.4(b) 
as determined initially by the Managing General Partner on behalf of the 
Partnership or thereafter in a judicial proceeding culminating in a 
final, non-appealable order (unless otherwise resolved by the parties)) 
acted in good faith and in a manner such Person reasonably believed to 
be in or not opposed to the best interests of the Partnership and except 
that no indemnification shall be made in respect of any claim, issue or 
matter as to which such Person shall have been adjudged to be liable to 
the Partnership unless and only to the extent that the Court of Chancery 
or the court in which such action or suit was brought shall determine 
upon application that, despite the adjudication of liability but in view 
of all the circumstances of the case, such Person is fairly and 
reasonably entitled to indemnity for such expenses which the Court of 
Chancery or such other court shall deem proper.

(c)  The Partnership shall pay the expenses (including attorneys' fees) 
incurred by any Person described in Section 8.1(a) or 8.1(b) in advance 
of the final disposition of the action, suit or proceeding to which such 
Person is a party upon receipt of an undertaking by or on behalf of such 
Person to repay such amount (plus interest equal to one year LIBOR plus 
100 basis points) if it shall ultimately be determined that such Person 
is not entitled to be indemnified by the Partnership. 

8.2  Indemnification by Partners.  Each Partner shall indemnify and hold 
the other Partner, each officer of the Partnership and the Partnership 
and each member of the Advisory Committee harmless, from and against any 
loss, cost, liability and expense arising out of or in any way connected 
with any action, commitment, contract, covenant or undertaking of such 
Partner for and on behalf of the Partnership which was not within the 
scope of its authority hereunder or which required the approval of the 
Limited Partner but for which no such approval was obtained.  Each 
Partner further agrees that it will indemnify the Partnership and the 
other Partner against any and all damages to which the Partnership or 
the other Partner may be or become subject arising or resulting from the 
breach by such Partner of Sections 3.1 or 3.3 herein.  Any obligations 
pursuant to this Section 8.2 shall survive (i) any termination, 
dissolution, winding up or liquidation of the Partnership and (ii) any 
direct or indirect transfer or disposition by a Partner (including such 
indemnifying Partner) of its Partnership interest.

8.3  Insurance.  The Partnership may, to the full extent permitted by 
law, purchase and maintain insurance against any liability that may be 
asserted against any Person entitled to indemnity hereunder.

8.4  Contract Right.  The indemnification provisions set forth in this 
Article VIII, including Section 8.1(c), shall be a contract right.  The 
rights set forth in this Article VIII and the indemnification provisions 
of the Participation Agreement shall not be construed cumulatively.

ARTICLE IX

DISSOLUTION; WITHDRAWAL.

9.1  Causes of Dissolution.  The Partnership shall be dissolved upon any 
of the following conditions:

(a)  Mutual Consent.  The mutual agreement of the Partners that the 
Partnership should be dissolved in accordance with Section 9.2 below; or

(b)  Governmental Action.  The issuance by any court of competent 
jurisdiction or Governmental Authority of a final decree or order, which 
cannot be appealed and which (i) directs the Partnership to dissolve; 
(ii) requires any Partner or any Affiliate of a Partner to withdraw from 
the Partnership or otherwise divest itself of its interest in the 
Partnership; or (iii) declares that the Partnership has been dissolved.

9.2  Dissolution by Agreement.  If the Partners decide to dissolve and 
liquidate the Partnership, the Partners shall proceed as promptly as 
practicable to wind up the affairs of the Partnership and distribute the 
assets thereof in accordance with Section 9.4(b) and applicable law, but 
the business and assets of the Partnership shall be liquidated in an 
orderly and businesslike manner, and a final accounting shall be made by 
the Partnership. The Accountants shall review the final accounting and 
shall render their opinion with respect thereto. 

9.3  Winding Up.  Dissolution of the Partnership shall be effective on 
the day on which the event giving rise to the dissolution occurs, but 
the Partnership shall not terminate until the assets of the Partnership 
shall have been distributed as provided herein.  The business of the 
Partnership and the affairs of the Partners, as such, shall continue to 
be governed by this Agreement until the Partnership is terminated as 
aforesaid.  Upon dissolution, the Managing General Partner shall satisfy 
the liabilities and liquidate the assets of the Partnership and apply 
and distribute the net proceeds thereof as provided in Section  9.4 
below. 

9.4  Distribution Upon Liquidation.

(a)  Procedure.  The Partnership shall cause to be prepared a statement 
setting forth the assets and liabilities of the Partnership as of the 
date of dissolution and shall furnish a copy of such statement to each 
Partner.  The assets which the Managing General Partner determines 
should be liquidated shall be divested in a commercially reasonable 
manner to avoid undue loss.  The affairs of the Partnership shall then 
be wound up and the proceeds of the Partnership distributed as follows:  
the Managing General Partner shall set up such reserves as it deems 
reasonably necessary for any contingent or unforeseen liabilities or 
obligations of the Partnership.  Such reserves may be held in escrow for 
the purpose of paying any such contingent or unforeseen liabilities or 
obligations and, at the expiration of such period as the Managing 
General Partner may deem advisable, such reserves shall be distributed 
to the Partners or their assigns in the manner set forth in subsection 
(b) of this Section 9.4.

(b)  Distributions.  After providing for such liabilities and such 
reserves, the Managing General Partner, subject to the applicable 
provisions of Sections 3.1 and 4.3(c)(vi) hereof, shall cause the 
remaining net assets of the Partnership to be distributed to the 
Partners, pro rata in proportion to their respective positive Capital 
Account balances as determined after giving effect to all allocations 
under this Agreement.  For purposes of effecting such distributions the 
Partnership assets shall be valued at their then Fair Market Value as 
determined by the Managing General Partner.

9.5  Withdrawal Prohibited.  Except pursuant to a written agreement 
between the Partners or pursuant to the other Operative Documents or 
except as set forth in Article VII above, neither Partner may withdraw 
from the Partnership without the consent of the other Partner or effect 
or cause a termination or dissolution of the Partnership.

ARTICLE X

CERTAIN TAX MATTERS.

10.1  Taxation as a Partnership.

(a)  The Partners intend that the Partnership be treated as a limited 
partnership for Federal, state, local and foreign tax purposes and (i) 
shall take all reasonable action, including the amendment of this 
Agreement and the execution of other documents, as may be required to 
qualify for and receive treatment as a partnership for Federal tax 
purposes and (ii) shall take no position for any purpose that is 
inconsistent with the position that the Partnership is taxed as a 
Partnership for Federal income tax purposes.

(b)  No election shall be made by the Partnership or any Partner for the 
Partnership to be excluded from the application of Subchapter K, Chapter 
1 of Subtitle A of the Code or any similar provisions of state tax laws.

(c)  Each Partner shall either (i) report its taxable income, gain or 
loss in a manner consistent with Schedule K-1 (or any successor schedule 
or form) as issued by the Partnership or (ii) disclose such 
inconsistency on its Federal income Tax returns and notify the other 
Partner of the inconsistency.

10.2  Election to Adjust Tax Basis.  The Managing General Partner may, 
but shall not be required to, cause the Partnership to make an election 
or to revoke any such election previously made under section 754 of the 
Code to adjust the basis of Partnership property under sections 734 and 
743 of the Code; provided that, if the Limited Partner, while its Share 
Percentage is at least 20% (measured immediately prior to the transfer 
described herein), transfers all or substantially all of its interest to 
a Person admitted as a partner pursuant to Article VII, the Managing 
General Partner shall make such election at the written request of the 
Limited Partner.

10.3  Partners' Share of Excess Nonrecourse Liabilities.  For purposes 
of Section 752 of the Code, the Partners shall share excess nonrecourse 
liabilities under Treasury Regulation Section 1.752-3(a)(3) in 
proportion to their Share Percentages.

10.4  Organizational Expenses.  The Partnership shall elect to amortize 
any organizational expenses pursuant to Section 709(b) of the Code.

10.5  Withholding and Certain Other Taxes.

(a)  Notwithstanding any other provision of this Agreement, if the 
Partnership is or may be obligated to pay any amount to a governmental 
taxing authority (or otherwise make a payment) because of the status of 
a Partner or otherwise attributable to such Partner (including, without 
limitation, Federal withholding taxes, state personal property or 
personal property replacement taxes and state unincorporated business 
taxes), the Managing General Partner is authorized to take any action 
that it reasonably determines to be necessary or appropriate to cause 
the Partnership to comply with any such requirements, including, in the 
event that the Limited Partner fails to make any such payment 
attributable to it, to cause the Partnership to make such payment and 
treat such payment as a distribution to the Limited Partner in an amount 
equal to such payment.

(b)  Any obligations pursuant to this Section 10.5 shall survive (i) any 
termination, dissolution, winding up or liquidation of the Partnership 
and (ii) any transfer or disposition by a Partner of its Partnership 
interest.

10.6  Books, Records and Cooperation.  Each Partner shall preserve and 
keep, free of charge, all books, papers, and records (including, but not 
limited to, tax records) ("Records") which relate to the Assets and 
Liabilities contributed by such Partner to the Partnership.  Each 
Partner shall provide access to the Partnership and the other Partner to 
such Records as reasonably requested by the Partnership or the other 
Partner and cooperate with and provide information to the Partnership 
and the other Partner as reasonably requested by the Partnership or the 
other Partner.  If either Partner disposes of its interest in the 
Partnership, such Partner shall retain and not destroy, and share with 
the Partnership upon its request, all Records which relate (i) primarily 
to the Assets and Liabilities previously contributed by such Partner to 
the Partnership and (ii) to any fiscal years for which federal income 
tax returns have not been closed.  These obligations shall remain in 
full force and effect irrespective of whether either Partner disposes of 
its interest in the Partnership.

10.7  Tax Elections.  Except as otherwise provided in this Agreement, 
all other elections by the Partnership for federal, state and local 
income and franchise tax purposes shall be determined by the Managing 
General Partner except where law provides that the election shall be 
made by the Partners.  Unless the Managing General Partner shall 
determine, in its best judgment, that another election shall be in the 
best interest of the Partnership and the Partners, the Managing General 
Partner shall make those elections which best defer recognition of 
taxable income, accelerate claiming of deductions and maximize tax 
credits.  The federal and state income tax returns shall be filed only 
after the Partners have had at least fifteen Business Days to review 
such returns.  The Partners will communicate their comments on such 
returns directly to the Managing General Partner.

10.8  Tax Matters Partner.  Each Partner does hereby appoint and 
designate initially the Managing General Partner as "Tax Matters 
Partner" of the Partnership as such term is defined under the Code but 
shall otherwise be considered to have retained such rights (and 
obligations, if any) as are provided for under the Code with respect to 
any examination, proposed adjustment or proceeding relating to 
Partnership items.  The Tax Matters Partner shall notify the other 
Partners, within ten Business Days after it receives notice from the 
IRS, of all administrative proceedings with respect to an examination 
of, or proposed adjustments to Partnership items.  Any Partner (other 
than the Tax Matters Partner) may notify the Tax Matters Partner of such 
Partner's intention to represent itself, or to cause independent tax 
counsel or accountants to represent it, in connection with any such 
examination, proceeding or proposed adjustment.  In the event that a 
Partner (other than the Tax Matters Partner) notifies the Tax Matters 
Partner of its intention to represent itself, or to cause independent 
tax counsel or accountants to represent it, in connection with any such 
examination, proceeding or proposed adjustment, the Tax Matters Partner 
agrees, upon request, to supply such Partner and its tax counsel or 
accountants, as the case may be, with copies of all written 
communications received by the Tax Matters Partner with respect thereto, 
together with such other information as may be reasonably requested in 
connection herewith.  The Tax Matters Partner further agrees, in the 
event of such separate representation, to cooperate with the Partner and 
its tax counsel or accountants, as the case may be, in connection with 
such separate representation, to the extent reasonably practicable.  In 
addition to the foregoing, the Tax Matters Partner shall notify the 
Limited Partner prior to submitting a request for administrative 
adjustment on behalf of the Partnership.

10.9  Amendment to Code or Treasury Regulations.  If any section of the 
Code or Treasury Regulations referred to in this Agreement is amended 
after December 31, 1993, the Managing General Partner and the Limited 
Partner agree, at the request of either party, to discuss in good faith 
whether any amendment to this Agreement is desirable.

ARTICLE XI

NOTICE.

11.1  Manner of Giving Notice.  Whenever notice is required to be given 
pursuant to this Agreement, it shall be by letter, or facsimile 
electronic transmission receipt of which is confirmed by telephone by 
the addressee, or by overnight air courier sent to the Partners or the 
Partnership at the addresses set forth below and, except as otherwise 
provided herein, shall be deemed to be given when sent or transmitted.

11.2  Addresses.  The addresses of the Partners for purposes of notice 
shall be as follows:

For the Managing General Partner:

     FMC Corporation
     200 East Randolph Drive
     Chicago, IL  60601
     Attn:  Corporate Secretary

For the Limited Partner:

     Harsco Defense Holding, Inc.
     P.O. Box 8888
     Camp Hill, PA  17011
     Attn:  President

The address of the Partnership for purposes of notice shall be as 
follows:

     United Defense, L.P.
     1525 Wilson Boulevard, Suite 700
     Arlington, VA  22209
     Attn:  Chief Executive Officer

Any Person whose address is listed in this Section 11.2 may change its 
address at any time by giving written notice, as provided herein, to the 
other Persons listed herein.

ARTICLE XII

MISCELLANEOUS.

12.1  Amendment.  This Agreement may be amended or modified by the 
Partners only by a written instrument executed by both Partners.  The 
Limited Partner hereby agrees that it will not unreasonably withhold or 
delay its consent to any amendment proposed by the Managing General 
Partner to permit the entry of (i) one or more new limited partners, 
each with an initial investment of at least $10,000,000, upon the 
Limited Partner's or Managing General Partner's election not to exercise 
preemptive rights under Section 3.1(g) and (ii) any new limited partner 
that is acquiring its interest in the Partnership for consideration 
other than cash.  For purposes of the foregoing, it is understood that 
the Limited Partner may withhold its consent based on the value of the 
consideration to be received only in the event that (x) the new limited 
partner is acquiring its interest in the Partnership for consideration 
other than cash and (y) the Fair Market Value of such consideration is 
less than the Fair Market Value of the interest in the Partnership being 
acquired in exchange therefor, in each case as determined under Section 
12.16 below.

12.2  Applicable 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 shall 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.

12.3  Further Assurances.  Each of the Partners agrees to execute and 
deliver all such other and additional instruments and documents and to 
do such other acts and things as may be necessary more fully to 
effectuate this Agreement and the Partnership created hereby and to 
carry on the business of the Partnership in accordance with this 
Agreement.

12.4  Headings.  The headings used in this Agreement are for reference 
purposes only and do not constitute substantive matter to be considered 
in construing the terms of this Agreement.

12.5  Section Numbers.  Unless otherwise indicated, reference to Section 
numbers are to Sections of this Agreement.

12.6  Parties Bound.  This Agreement shall be binding upon and inure to 
the benefit of the parties hereto and their respective legal 
representatives, successors, and permitted assigns where permitted by 
law.

12.7  Severability.  In case any one or more of the provisions contained 
in this Agreement shall, for any reason, be held to be invalid, illegal, 
or unenforceable in any respect, all other provisions of the Agreement 
shall nevertheless remain in full force and effect, but if the economic 
or legal substance of the transactions contemplated hereby is affected 
in a manner materially adverse to either party as a result of the 
determination that a provision is invalid, illegal or unenforceable, the 
parties hereto agree to negotiate in good faith to modify this Agreement 
so as to effect the original intent of the parties as closely as 
possible in an acceptable manner to the end that the transactions 
contemplated hereby are fulfilled to the fullest extent possible.

12.8  Waiver.  No waiver by any Partner of the performance of any 
provision, condition or requirement herein shall be deemed to be a 
waiver of, or in any manner release the other Partner from, performance 
of any other provision, condition or requirement herein; nor deemed to 
be a waiver of, or in any manner release the other Partner from, future 
performance of the same provision, condition or requirement; nor shall 
any delay or omission by any Partner to exercise any right hereunder in 
any manner impair the exercise of any such right accruing to it 
thereafter.

12.9  Entire Agreement.  This Agreement, the Participation Agreement and 
the other Operative Documents constitute the entire agreement between 
the Partners concerning the subject matter hereof or thereof and 
supersede any prior understanding or written or oral agreements 
respecting the subject matter of this Agreement or such documents.

12.10  Advice of Legal Counsel.  Each Partner acknowledges and 
represents that, in executing this Agreement, it has had the opportunity 
to seek advice as to its legal rights from legal counsel and that the 
person signing on its behalf has read and understood all of the terms 
and provisions of this Agreement.  This Agreement shall not be construed 
against either Partner or any of its Affiliates or Subsidiaries by 
reason of the drafting or preparation thereof.

12.11  Dispute Resolution.  Subject to Sections 3.5(h) and 3.12, either 
Parent shall have the right, at any time after good faith efforts have 
failed to resolve a dispute as to any matter governed by this Agreement 
or the Participation Agreement, to request a review of such matter by 
the chief executive officers of each Parent ("CEO Review").  Either 
Parent shall exercise its right to request a CEO Review by furnishing 
written notice to the Partnership and the other Parent identifying the 
matter in dispute and setting forth the positions of the parties with 
respect thereto.  The chief executive officers of the two Parents shall 
meet within 30 days of the date on which such notice is received and 
shall engage in good faith efforts to resolve the dispute.  Within 15 
days of such meeting, the chief executive officers shall provide notice 
to the Partnership stating whether they have been able to resolve the 
dispute and, if so, full details with respect to such resolution.  Any 
such resolution shall be binding on the Partnership, the Partners and 
the Parents.  If the chief executive officers are unable to resolve the 
dispute within the time limit set forth above, either party shall be 
free to seek judicial relief by appropriate proceedings.

12.12  Parties in Interest; Limitation on Rights of Others.  Subject to 
the other provisions of this Section, the terms of this Agreement shall 
be binding upon and inure to the benefit of the parties hereto and their 
successors and permitted assigns.  Nothing in this Agreement, whether 
express or implied, shall be construed to give any Person (other than 
the parties hereto and their successors and permitted assigns and as 
expressly provided herein) any legal or equitable right, remedy or claim 
under or in respect of this Agreement or any covenants, conditions or 
provisions contained herein.  This Agreement is not assignable in whole 
or in part by the Limited Partner or the Managing General Partner unless 
assigned in connection with the assignment of a Share Percentage in 
excess of 20% (in the case of the Limited Partner) or 30% (in the case 
of the Managing General Partner) of the aggregate Share Percentages in 
the Partnership and, if applicable, in accordance with the Managing 
General Partner's right of first refusal set forth in Section 7.1(b) 
above or pursuant to the terms of Section 7.2(e) above.  Any such 
assignment by the Managing General Partner shall not include an 
assignment of the Annual Fee payable under the Management Services 
Agreement unless the assignee becomes the Managing General Partner.  No 
assignee of any portion of the Managing General Partner's interest shall 
be entitled to become the Managing General Partner unless such assignee 
acquires a greater ownership interest in the Partnership than is then 
held by Harsco L.P.  Notwithstanding the foregoing, in the event that 
the Limited Partner assigns to a third party, in accordance with the 
terms of this Agreement, any portion of its ownership interest in the 
Partnership, such assignment shall be subject to, and entitled to the 
benefits of, the continued application of the terms of Sections 
7.1(a)(i), 7.1(c) and 7.2, and such third party shall be entitled to all 
of the rights and subject to all of the obligations of the Limited 
Partner therein set forth; provided, however, that (i) such third party 
shall only be entitled to be assigned the consent rights set forth in 
Section 3.1(a) in the event that it holds a Share Percentage in excess 
of 20% of the aggregate Share Percentages (in which event the assignor 
shall not have and may not, directly or indirectly, exercise any such 
consent rights) and (ii) such third party shall only be entitled to 
exercise the right set forth in Annex A to agree to the amount of the 
Limited Partner Allocation (without the consent or approval of any other 
partner or holder of a Partnership interest) in the event that it holds 
a Share Percentage in excess of 20% of the aggregate Share Percentages 
(in which event the assignor shall not have and may not, directly or 
indirectly, exercise any such right).  No assignment or transfer of this 
Agreement or a party's interest in the Partnership or its Partner shall 
relieve such party from its obligations hereunder or under any other 
Operative Document.

12.13  Counterparts.  This Agreement and any written consents required 
to be executed by both Partners hereunder may be executed by the 
Partners in separate counterparts, each of which when so executed and 
delivered shall be an original, but all such counterparts shall together 
constitute but one and the same document.

12.14  Jurisdiction, Court Proceedings.  Any suit, action or proceeding 
against any party hereto arising out of or relating to this Agreement or 
any other Operative Document, any transaction contemplated hereby or any 
judgment entered by any court in respect of any such suit, action or 
proceeding may be brought in any Federal or State court located in the 
Northern District of Virginia or such other district as may contain the 
Partnership's principal place of business, and each party hereto hereby 
submits to the jurisdiction of such courts for the purpose of any such 
suit, action or proceeding.  To the extent that service of process by 
mail is permitted by applicable law, each such party irrevocably 
consents to the service of process in any such suit, action or 
proceeding in such courts by the delivery of such process by mail, at 
its address set forth in Article XI, and no such service shall be 
effective until such delivery is made. Each such party irrevocably 
agrees not to assert any objection which it may ever have to the laying 
of venue of any such suit, action or proceeding in any Federal or State 
court in the Northern District of Virginia (or such other district which 
contains the Partnership's principal place of business), and any claim 
that any such suit, action or proceeding brought in any such court has 
been brought in an inconvenient forum.

12.15  Waiver of Rights of Partition and Dissolution.  Each Partner 
waives all rights it may have at any time to maintain any action for 
partition or sale of any Partnership assets as now or hereafter 
permitted under applicable law. Each Partner waives its rights to seek a 
court decree of dissolution or to seek the appointment of a court 
receiver for the Partnership as now or hereafter permitted under 
applicable law.

12.16  Determination of Fair Market Value.  Except as provided in 
Section 4.1, the Managing General Partner shall determine the Fair 
Market Value of any property or liability where such Fair Market Value 
is relevant for purposes of this Agreement (including, without 
limitation, any determination of the Fair Market Value of property 
acquired by the Partnership in exchange for the issuance of a 
partnership interest).  If the Limited Partner objects in writing to the 
Managing General Partner's determination of Fair Market Value within 15 
Business Days of receiving notice from the Managing General Partner of 
such valuation and the Limited Partner and the Managing General Partner 
are unable to agree on the Fair Market Value of the property or 
liability within 30 days of the date of the Limited Partner's objection, 
the Fair Market Value of the property or liability shall be determined 
by an independent appraiser mutually acceptable to the Partners (with 
the costs of such determination to be borne by the Partnership).  
Notwithstanding the foregoing sentence, in the event that Fair Market 
Value is determined pursuant to Section 12.1 and the Limited Partner 
objects in writing to such determination within 15 Business Days of 
receiving notice of such valuation, such Fair Market Value shall be 
redetermined by either Ernst & Young or Price Waterhouse, whichever is 
not the Accountants, which shall be required to make a valuation within 
30 days of its retention.

IN WITNESS WHEREOF, this Agreement has been duly executed on behalf of 
the Partners by their respective authorized representatives all as of 
the day and year first above written.

FMC CORPORATION

By:      /S/ Robert N. Burt
Its:     Chairman & CEO

HARSCO DEFENSE HOLDING, INC.

By:      /S/ Barrett W. Taussig
Its:     President

UNITED DEFENSE, L.P.

By:      FMC Corporation
         Its General Partner

By:      /S/ Robert N. Burt
Its:     Chairman & CEO

List of Omitted Exhibits and Schedules
to Partnership Agreement


Schedule 3.2      Reports to the Limited Partner

Schedule 4.1      Determination of Initial Capital Accounts

Schedule 5.9      Accounting Methods, Tax Elections and Tax Depreciation 
Methods

Exhibit A         Insurance Coverages

Exhibit B         Form of Confidentiality Agreement for Officers and 
Advisory
                  Committee Members

Exhibit C         Form of Confidentiality Agreement for Prospective 
Employees

Exhibit D         Form of Senior Promissory Note

Harsco Corporation will furnish supplementally a copy of any omitted 
exhibit or schedule to the Commission upon request.

EX-2.3

DEFINITIONS RELATING TO THE PARTNERSHIP AGREEMENT

among

FMC CORPORATION,

HARSCO DEFENSE HOLDING, INC.

and

UNITED DEFENSE, L.P.

Dated as of January 1, 1994

AND

THE PARTICIPATION AGREEMENT

among

FMC CORPORATION,
HARSCO CORPORATION,
HARSCO DEFENSE HOLDING, INC.
and 
UNITED DEFENSE, L.P.

Dated as of January 1, 1994

"$" denominates U.S. Dollars.

"401(k) Plan" means a defined contribution plan as defined in Section 
3(34) of ERISA that is qualified under Section 401(a) of the Code and 
that meets the requirements of Section 401(k) of the Code.

"Accountants" means a nationally-recognized independent certified public 
accounting firm mutually agreed to by the Partners for the Partnership.  
Unless otherwise agreed by the Partners, the Accountants for the 
Partnership shall be either Ernst & Young or Price Waterhouse, as 
determined by the Partnership on or before February 28, 1994.  With 
respect to FNSS, the term "Accountants" shall refer to Arthur Andersen & 
Co.  In any other foreign jurisdiction, the term "Accountants" for 
purposes of Section 5.12 of the Partnership Agreement shall refer to the 
nationally recognized independent certified public accounting firm 
selected by the Partnership to represent it in such foreign 
jurisdiction.

"Active Contract" means those Contracts which provide for the delivery 
of products or the rendering of services by a Parent and with respect to 
which the final product has not yet been delivered or the final service 
has not yet been rendered.

"Adjusted Capital Account Deficit" has the meaning set forth in Section 
4.6(a) of the Partnership Agreement.

"Adjusted Profits" has the meaning set forth in Section 4.6(b) of the 
Partnership Agreement.

"Advance Agreement" means a written agreement entered into between UD 
and a contracting officer or administrative contracting officer of the 
U.S. Federal government that specifies the allowability, reasonableness 
and allocability of certain special or unusual contract costs incurred 
by UD after the date of the Agreement.

"Advisory Committee" has the meaning set forth in Section 3.5(a) of the 
Partnership Agreement.

"Affiliate" of any Person means any other Person directly or indirectly 
controlling (within the meaning of Rule 12b-2 under the Securities 
Exchange Act of 1934, as amended, as in effect on the Closing Date), 
directly or indirectly controlled by or under direct or indirect common 
control with such Person, but such term does not, as to FMC or Harsco, 
include the Partnership or any Affiliate of the Partnership which is 
directly or indirectly controlled by the Partnership.

"Appraised Value" has the meaning set forth in Section 7.2(c) of the 
Partnership Agreement.

"Arbitrator"  has the meaning set forth in Section 3.12 of the 
Partnership Agreement.

"Assets" means the FMC Assets, and the Harsco Assets, or any of them, 
depending on the context.

"Assignment" means an assignment of a Contract to the Partnership which 
assignment is reasonably acceptable to the Parents and, in the case of 
Contracts with a Governmental Authority, acceptable to the Governmental 
Authority. 

"Assumption Agreement" means an assumption agreement, substantially in 
the form of Exhibit B to the Participation Agreement.

"Authorization Date" has the meaning set forth in Section 7.1(b) of the 
Partnership Agreement.

"Average Limited Partner Allocation" means an amount equal to the 
arithmetic average of the Limited Partner Allocation, without regard to 
whether there has been any allocation or payment of such Limited Partner 
Allocation under the terms of the Partnership Agreement, for the three 
Fiscal Years immediately preceding the calculation of the Capitalized 
Limited Partner Allocation.

"Book Value" of an Asset or Liability means, as of any particular date, 
the value at which the Asset or Liability is reflected on the books and 
records of the appropriate entity, computed under the accrual method of 
accounting in accordance with GAAP and the Principal Accounting 
Procedures and, except to the extent otherwise required by the reserve 
policies reflected in the Principal Accounting Procedures or as set 
forth on Schedule 2.3.1, on an accounting basis consistent with the 
principles used in the preparation of the appropriate Pro Forma Balance 
Sheet.

"Burdensome Governmental Condition" to a transaction shall be deemed to 
exist when a court of competent jurisdiction or any Governmental 
Authority acting within its regulatory authority has issued an order, 
injunction or preliminary injunction against the Partnership, any 
Partner, any party or any Affiliate of any party which would prohibit 
the transaction or which would compel the applicable Person to dispose 
of or hold separate a material portion of its business or assets as a 
result of such transaction.

"Business Day" means a day other than a Saturday, Sunday or other day on 
which banks are required or authorized to be closed in Arlington, 
Virginia.

"Capital Account" has the meaning set forth in Section 4.1(a) of the 
Partnership Agreement.

"Capital Contribution" means a contribution to the capital of the 
Partnership in cash or property as required or permitted by the 
Partnership Agreement.

"Capitalized Limited Partner Allocation" means the product of (x) the 
Earnings Multiple, (y) the Average Limited Partner Allocation and (z) 
one (1) minus the then current Tax Rate.  In the event that any put or 
call by a Partner is exercised before three years of data are available, 
then the data for all Fiscal Quarters completed since the inception of 
the Partnership shall be used to determine the Earnings Multiple and 
Average Limited Partner Allocation.  Notwithstanding the foregoing or 
any other provision of the Operative Documents, the Capitalized Limited 
Partner Allocation shall be equal to zero in the event that, immediately 
after giving effect to the transaction in connection with which the 
Capitalized Limited Partner Allocation is being determined, the Managing 
General Partner or its permitted successor in interest will not be 
entitled, whether due to termination, resignation or replacement as 
Managing General Partner, breach or any other cause, to receive its 
Annual Fee under Section 4(b) of the Management Services Agreement.

"Carrying Value" means (a) with respect to property contributed to the 
Partnership by or for the account of a Partner, the Fair Market Value of 
such property at contribution, reduced (but not below zero) by all 
depreciation, amortization and cost recovery deductions charged to the 
Partners' Capital Accounts pursuant to Article IV of the Partnership 
Agreement with respect to such property and increased by all 
post-contribution improvements to such property, (b) if Capital Accounts 
are restated pursuant to Section 4.1(d) of the Partnership Agreement, 
with respect to property owned by the Partnership at the time of the 
restatement, the Fair Market Value of such property at the time of the 
restatement, reduced (but not below zero) by all subsequent 
depreciation, amortization and cost recovery deductions charged to the 
Partners' Capital Accounts pursuant to Article IV of the Partnership 
Agreement with respect to such property and increased by all 
post-restatement improvements to such property and (c) with respect to 
any other property, the adjusted basis of such property for Federal 
income tax purposes, as of the time of determination.

"Carryover Amount" has the meaning set forth in Section 4.3(a)(i) of the 
Partnership Agreement.

"CAS" means Cost Accounting Standards as promulgated by the Cost 
Accounting Standards Board.

"CEO" has the meaning set forth in Section 3.6(a) of the Partnership 
Agreement.

"CEO Review" has the meaning set forth in Section 12.11 of the 
Partnership Agreement.

"CERCLA" means the Comprehensive Environmental Response, Compensation 
and Liability Act, 42 U.S.C. Section 9601, et seq.

"Change in Control" shall be deemed to have occurred with respect to a 
Person at such time as (1) a "person" or "group" (within the meaning of 
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as 
amended (the "1934 Act")), becomes the "beneficial owner" (as defined in 
Rule 13d-3 under the 1934 Act) of shares representing more than fifty 
percent (50%) of the then outstanding common stock of the Parent; or (2) 
the Person consolidates into or merges with any other Person pursuant to 
a transaction that results in the stockholders of the Person immediately 
preceding the effectiveness of such transaction owning, directly or 
indirectly, immediately after the effectiveness of the transaction, less 
than fifty percent (50%) of the outstanding voting stock of such new or 
surviving corporation.

"Close" has the meaning set forth in Section 3.0 of the Participation 
Agreement.
 
"Closing" means the closing of the transactions described in Section 2 
of the Participation Agreement.

"Closing Date" means January 1, 1994, subject to Section 2.2 of the 
Participation Agreement.

"Closing Party" has the meaning set forth in Section 3.0 of the 
Participation Agreement.

"Code" means the Internal Revenue Code of 1986, as amended and effective 
as of December 31, 1993.

"Common Excluded Assets" means those assets set forth as common excluded 
assets on Schedule A annexed hereto.

"Competitive Contract" means, in the case of a contract with the U.S. 
government (including any FMS contract), any contract which does not 
require the submission of certified cost or pricing data.

"Condition Party" has the meaning set forth in Section 3.1 of the 
Participation Agreement.

"Confidentiality Agreement" means the confidentiality agreement dated 
January 16, 1992 and amended July 27, 1992 between FMC and Harsco which 
is attached as Exhibit C to the Participation Agreement.

"Consent" means a consent, reasonably acceptable to the Parents, from a 
counterparty (other than the Parents) to a Contract transferred by a 
Parent to a Partner or the Partnership.

"Consolidation Costs" means out-of-pocket costs that would not have been 
incurred after the Closing Date but for the combination of the FMC 
Defense Business and the Harsco Defense Business, including, without 
limitation, costs incurred in connection with (i) severance payments; 
(ii) land preparation; (iii) relocation of equipment and tooling; (iv) 
re-layout of facilities; (v) standardization of computer-aided-design 
and computer-aided-manufacturing techniques and processes; (vi) 
construction of an oval test track; (vii) work transfer; (viii) 
retraining of employees; (ix) relocation of employees; (x) purchasing 
and systems conversions; and (xi) sale or other disposal of redundant 
plant, equipment, tooling and other property (including any losses 
thereby incurred); but excluding transfer taxes and other transaction 
costs incident to the combination.

"Contract Price" has the meaning set forth in Section 5.22.4.4 of the 
Participation Agreement.

"Contracts" means FMC Contracts or Harsco Contracts.

"Controlled Group" has the meaning set forth in Section 4.21.7 of the 
Participation Agreement.

"CPR"  has the meaning set forth in Section 3.12 of the Partnership 
Agreement.

"CRB Carrying Costs" of a Partner or its Parent for any Fiscal Quarter 
means the product of (i) 2.5% and (ii) the average of the relevant 
Partner's Cumulative Remedial Balances as of the beginning and as of the 
end of such Fiscal Quarter.  In the case of a Fiscal Quarter consisting 
of less than 3 calendar months, the "CRB Carrying Costs" of a Partner or 
its Parent for such short Fiscal Quarter means (a) the product of (i) 
2.5%, (ii) the average of the relevant Partner's Cumulative Remedial 
Balances as of the beginning and as of the end of such Fiscal Quarter 
and (iii) a fraction the numerator of which is the number of days in 
such short Fiscal Quarter and the denominator of which is the number of 
days in the calendar quarter of which the short Fiscal Quarter is a 
part.

"CRBCC Carryover Amount" has the meaning set forth in Section 4.3(a) of 
the Partnership Agreement.

"Cumulative Remedial Balance" of a Partner or its Parent means the 
cumulative amount since formation of the Partnership of all charges (net 
of all credits) to the relevant Partner's Remedial Cost Account in 
excess of the amount of the environmental reserves for Remedial 
Expenditures reflected on such Partner's Final Closing Balance Sheet; 
provided that charges and credits to such Remedial Cost Account under 
clauses (i), (vi) and (vii) of Section 5.22.4.2 of the Participation 
Agreement shall be ignored for this purpose.

"Data Rights" means unregistered copyrights and trade secrets and 
confidential information and knowledge possessed by each Parent as of 
the Closing Date, including, but not limited to, ideas, inventions, 
blueprints, know-how, formulae, manufacturing and production processes 
and techniques, research and development information, software, 
drawings, specifications, designs, plans, proposals, technical data, 
financial and accounting data, business and marketing plans and customer 
and supplier lists.

"Debt" of any Person as used in Sections 4.2 and 4.5 of the 
Participation Agreement means (a) obligations of such Person for 
borrowed money, (b) obligations of such Person evidenced by bonds, 
debentures, notes or other similar instruments, (c) obligations of such 
Person to pay the deferred purchase price of property or services (other 
than trade payables), (d) obligations of such Person as lessee under 
capital leases, (e) Debt of another secured by a Lien on any asset of 
such Person, whether or not such Debt is assumed by such Person, and (f) 
Debt of others guaranteed directly or indirectly by such Person or as to 
which such Person has an obligation which is the economic equivalent of 
a guarantee.

"Defense Affiliate" means, as to FMC, any Affiliate operating in the FMC 
Defense Business and, as to Harsco, any Affiliate operating in the 
Harsco Defense Business, which Affiliates are listed on Schedule B 
annexed hereto.

"Defense Business" means the FMC Defense Business or the Harsco Defense 
Business.

"Defense Subsidiary" means, as to FMC, any Subsidiary operating in the 
FMC Defense Business and, as to Harsco, any Subsidiary operating in the 
Harsco Defense Business, which Subsidiaries are listed on Schedule B 
annexed hereto.  Such term shall not include, as to FMC or Harsco, the 
Partnership.

"Defense Systems Group" means the Ground Systems, Armament Systems, 
Steel Products and Defense Systems International Divisions of FMC's 
Defense Systems Group, including FMC's investment in and contractual 
relations with FNSS, but specifically excluding the properties set forth 
as FMC Excluded Assets or Common Excluded Assets on Schedule A annexed 
hereto.

"Demolition Costs" has the meaning set forth in Section 6.4 of the 
Participation Agreement.

"Designated Representative" means Barrett W. Taussig, or any successor 
designated by Harsco L.P.

"Designee" means any of a Partner's designated representatives to the 
Advisory Committee, as provided in Section 3.5(b) of the Partnership 
Agreement.

"DOD" means the U.S. Department of Defense.

"DOJ" means the U.S. Department of Justice.

"Earnings Multiple" means the quotient obtained by dividing the 
Appraised Value of the Partnership by the arithmetic average of the 
annual after-tax income of the Partnership determined in accordance with 
GAAP (as reduced by the Limited Partner Allocation) for the three Fiscal 
Years immediately preceding the calculation of the Capitalized Limited 
Partner Allocation (as determined from the Partnership's regularly 
prepared financial statements, but assuming that the Partnership paid 
corporate tax on such income at a rate equal to the Tax Rate for each 
such Fiscal Year), provided that the Earnings Multiple shall never be 
less than 5 nor more than 15.

"Environmental Requirements" means all civil and criminal federal, 
state, local and foreign statutes, regulations, ordinances and similar 
provisions having the force or effect of law, all common law, and any 
currently effective judicial and administrative orders, permits and 
licenses (and conditions of the same) and determinations binding on the 
FMC Defense Business, the Harsco Defense Business, the FMC Assets, or 
the Harsco Assets, which provisions, common law, permits, licenses and 
orders and determinations concern public health and safety, worker 
health and pollution or protection of the environment, including without 
limitation all those relating to the presence, use, production, 
generation, handling, transport, treatment, storage, disposal, 
distribution, labeling, testing, processing, discharge, release, 
threatened release, control, or cleanup of any Hazardous Substances but 
excluding any of the foregoing to the extent relating to worker safety, 
all as may be amended or superseded from time to time.

"Environmental Liability Event" means any of the following:  (a) the 
Release (as hereinafter defined) of any Hazardous Substance at, from or 
onto any property or facility at any time owned, operated or used by 
either Defense Business or the Partnership, (b) the offsite treatment, 
storage, disposal, handling, disposition or Release of any Hazardous 
Substance generated, handled or in any fashion originating from or at 
any property or facility at any time owned, operated or used by, or 
otherwise in connection with, either Defense Business or the business of 
the Partnership or (c) any failure by either Parent, with respect to its 
Defense Business, or by the Partnership to comply with applicable 
Environmental Requirements (as such Environmental Requirements are 
constituted prior to the Closing Date).

"Environmental Realization Status Report" has the meaning set forth in 
Section 5.22.3.1 of the Participation Agreement.

"Environmental Special Allocation" has the meaning set forth in Section 
5.22.1 of the Participation Agreement.

"ERISA" means the Employee Retirement Income Security Act of 1974, as 
amended.

"Excluded Assets" means the FMC Excluded Assets and the Harsco Excluded 
Assets.

"Excluded Liabilities" means, in connection with each Defense Business:

(i)  all liabilities relating to Income Taxes of either Parent or any of 
its Affiliates; 

(ii)  all liabilities relating to Taxes, other than Income Taxes, to the 
extent not accrued on the Final Closing Balance Sheet;

(iii)  all liabilities for borrowed money as of the Closing Date other 
than FMC Liabilities relating to FNSS;

(iv)  all liabilities relating to claims with respect to government 
contracts, whether asserted or unasserted by the government, arising 
prior to the Closing Date to the extent not accrued on the Final Closing 
Balance Sheet;

(v)  all liabilities relating to "holdback reserves," "management 
contingency reserves" and "sales reserves" for all Inactive Contracts, 
and all "holdback reserves" (except for those relating to fixed-price 
incentive fee Contracts), on Active Contracts;

(vi)  all liabilities relating to any claims for pre-Closing breaches of 
contract or violations of Governmental Rules, to the extent not accrued 
on the Final Closing Balance Sheet; provided, however, that liabilities 
that are Remedial Expenditures shall be assumed to the extent provided 
in the Operative Documents; 

(vii)  all liabilities not set forth on or identified on an exhibit to 
the Final Closing Balance Sheet or on any Schedule to the Participation 
Agreement, in each case listing liabilities to be assumed by the 
Partnership, other than the liabilities set forth in clause (viii)(B), 
(xi) and (xii) of the definition of FMC Liabilities and the liabilities 
set forth in clauses (viii), (x) and (xi) of the definition of Harsco 
Liabilities;

(viii)  all liabilities for pre-Closing workers' compensation (subject 
to Section 5.15 of the Participation Agreement) and, to the extent not 
accrued on the Final Closing Balance Sheet, pre-Closing general and 
product liability occurrences; and

(ix)  all liabilities resulting from an Excluded Asset or any other 
Asset not acquired by the Partnership.

"Existing Contract" means any contract entered into by either Parent 
prior to the Closing.

"Fair Market Value" means the price a willing buyer would pay a willing 
seller in an arm's-length transaction, neither being under any 
compulsion to buy or sell and both having reasonable knowledge of 
relevant facts.  As applied to a liability, Fair Market Value means the 
price a buyer would demand in exchange for assuming the liability from 
the seller.

"FAR" means the Federal Acquisition Regulation, 48 C.F.R. Chapter 1, as 
promulgated by the U.S. government.

"Final Closing Balance Sheet" has the meaning set forth in Section 2.3.2 
of the Participation Agreement.

"Fiscal Quarter" has the meaning set forth in Section 5.1 of the 
Partnership Agreement.

"Fiscal Year" means a calendar year for the Partnership (as set forth in 
Section 5.1 of the Partnership Agreement).

"FMC" means FMC Corporation, a Delaware corporation.

"FMC Assets" means (a) $14,800,000 in cash and (b) all of the right, 
title and interest that FMC possesses in and to the following assets 
exclusively used or intended for exclusive use in the business of its 
Defense Systems Group:

(i)  all inventories of raw materials, packaging materials, work in 
process, consigned goods and finished goods (including warehoused 
inventories and inventories covered by purchase orders), including any 
such inventories acquired after the date hereof but excluding any such 
inventories sold or otherwise disposed of after the date hereof in the 
ordinary course of business consistent with past practices;

(ii)  all supplies, furniture, fixtures, machinery, equipment, vehicles 
and other fixed assets;

(iii)  all FMC Contracts; 

(iv)  all Transferred Intellectual Property Rights;

(v)  the Real Property listed or described on Schedule 4.8.2A to the 
Participation Agreement; 

(vi)  all accounts, notes and other receivables; 

(vii)  any permits or licenses issued by any Governmental Authority; 

(viii)  all stock or other debt or equity interests (including 
partnership interests) in the FMC Defense Affiliates set forth on 
Schedule B annexed hereto; and

(ix)  all other tangible or intangible assets.

The FMC Assets shall not include the FMC Excluded Assets or the Common 
Excluded Assets.

"FMC Capital Account Value" has the meaning set forth in Schedule 4.1 to 
the Partnership Agreement.

"FMC Contracts" means all contracts (other than Restricted Contracts), 
indentures, agreements, commitments, purchase orders, letters of credit, 
guarantees, foreign exchange contracts, commodity hedges, leases and 
other legally binding arrangements, whether oral or written, entered 
into in connection with the FMC Defense Business.

"FMC Defense Business" means the entire business and operations of the 
Defense Systems Group, as conducted on the date hereof.

"FMC Environmental Liability Event" means any Environmental Liability 
Event relating to or arising out of the conduct by FMC prior to the 
Closing Date of its Defense Business or the ownership, operation or use 
by FMC or any of its Affiliates prior to the Closing Date of any 
facility or property now or previously owned, operated or used in its 
Defense Business.

"FMC Excluded Assets" means those assets of FMC set forth on Schedule A 
annexed hereto.

"FMC Liabilities" means the following liabilities and obligations of FMC 
arising out of the operations of the FMC Defense Business or the 
ownership, operation or use of the FMC Assets (whether asserted or 
unasserted, absolute or contingent, accrued or unaccrued, liquidated or 
unliquidated, or due or arising before the Closing Date):

(i)  all liabilities to vendors and other creditors for goods purchased 
or services received on open account;

(ii)  amounts received from customers as advance payments to be applied 
to the related receivable when a sale is recorded at time of shipment or 
completion of service;

(iii)  amounts withheld from employees' compensation for Federal, state 
or local taxes and for other payroll deductions;

(iv)  sundry accounts payable;

(v)  amounts accrued for salaries, wages, commission and other 
remuneration earned by employees;

(vi)  commissions earned by salesmen, dealers or other agents who are 
not employees;

(vii)  all liabilities relating to accrued Taxes, other than Income 
Taxes, including but not limited to Taxes assessed against real and 
personal property based on the valuation of such property as determined 
by the laws of the state or local taxing authority;

(viii)  (A) accruals for FMC's cost of Federal, state or local taxes on 
payroll that are not an Excluded Liability and (B) all liabilities for 
other employee benefits to the extent provided in Section 5.9 of the 
Participation Agreement, but excluding workers compensation liabilities 
to the extent provided in Section 5.15 of the Participation Agreement;

(ix)  accruals for royalties payable in accordance with terms of royalty 
agreements; legal and professional fees for services rendered; insurance 
premiums (excluding workers' compensation and general and product 
liability coverages); policy and warranty claims and product and service 
liabilities, but excluding pre-Closing products liability or general 
liability occurrences (except to the extent, but not in excess of, any 
amount reserved for and reflected on FMC's Final Closing Balance Sheet); 
and miscellaneous expenses;

(x)  all liabilities associated with FMC's ownership of or interest in 
the Defense Affiliates of FMC set forth on Schedule B annexed hereto;

(xi)  all liabilities and obligations associated with any FMC 
Environmental Liability Event; and 

(xii)  obligations under FMC Contracts remaining unperformed on the 
Closing Date.

The FMC Liabilities shall not include any Excluded Liability.

"FMC Master Trust" means the Master Trust established by the Master 
Trust Agreement between FMC Corporation and Bankers Trust Company dated 
January 1, 1976 implementing the pension benefit plans of FMC and its 
Subsidiaries and Affiliates.

"FMC Qualifying Remedial Expenditure" means any Remedial Expenditure to 
the extent arising out of any FMC Environmental Liability Event.

"FMS" means Foreign Military Sales.

"FNSS" means FMC-Nurol Savunma Sanayii A.S., a Turkish corporation.

"FRA" means the final remedial adjustment as described in Section 
5.22.4.4 of the Participation Agreement.

"FTC" means the U.S. Federal Trade Commission.

"GAAP" means generally accepted accounting principles in the United 
States of America.

"Goodyear" has the meaning set forth in Section 5.23 of the 
Participation Agreement.

"Goodyear Litigation" means the litigation styled as FMC Corporation v. 
The Goodyear Tire & Rubber Company (N.D. Ala., Eastern Div., Civil 
Action No. CV-90-H-01018E), including all appeals therefrom and all 
settlements thereof.

"Governmental Actions" means all authorizations, orders, consents, 
approvals, waivers, exceptions, variances, franchises, permissions, 
permits and licenses of, and filings and declarations with, by or in 
respect of, any Governmental Authorities.

"Governmental Authority" means any national, federal, state, local or 
foreign governmental Person, authority or agency, court, regulatory 
commission, stock exchange or other body and any arbitrator having 
jurisdiction over the matter; provided, that any arbitrators within this 
definition shall include only arbitrators having the right to issue a 
binding order or decision in such matter.

"Governmental Rule" means any statute, law, treaty, rule, code, 
ordinance, regulation, permit, certificate or order of any Governmental 
Authority or any judgment, decree, injunction, writ, order or like 
action of any court, arbitrator or other judicial or quasi-judicial 
tribunal, other than an ex-parte or temporary order if either party 
takes prompt action to set aside such action and such temporary order 
does not become final.

"Harsco" means Harsco Corporation, a Delaware corporation.

"Harsco Assets" means (a) $5,200,000 in cash and (b) all of the right, 
title and interest that Harsco possesses in and to the following assets 
exclusively used or intended for exclusive use in the business of its 
BMY-Combat Systems Division:

(i)  all inventories (net of progress payments) of raw materials, 
packaging materials, work in process, consigned goods and finished goods 
(including warehoused inventories and inventories covered by purchase 
orders), including any such inventories acquired after the date hereof 
but excluding any such inventories sold or otherwise disposed of after 
the date hereof in the ordinary course of business consistent with past 
practices;

(ii)  all supplies, furniture, fixtures, machinery, equipment, vehicles 
and other fixed assets;

(iii)  all Harsco Contracts; 

(iv)  all Transferred Intellectual Property Rights;

(v)  the Real Property listed or described on Schedule 4.8.2B to the 
Participation Agreement; 

(vi)  all accounts, notes and other receivables; 

(vii)  any permits or licenses issued by any Governmental Authority; and

(viii)  all other tangible and intangible assets.

The Harsco Assets shall not include the Harsco Excluded Assets or the 
Common Excluded Assets.

"Harsco Capital Account Value" has the meaning set forth in Schedule 4.1 
to the Partnership Agreement.

"Harsco Contracts" means all contracts (other than Restricted 
Contracts), indentures, agreements, commitments, purchase orders, 
letters of credit, guarantees, foreign exchange contracts, commodity 
hedges, leases and other legally binding arrangements, whether oral or 
written, entered into in connection with the Harsco Defense Business.

"Harsco Defense Business" means the entire business and operations of 
Harsco's BMY-Combat Systems Division, whose principal address is Wolf 
Church Road, York, Pennsylvania 17404, as conducted on the date hereof.

"Harsco Environmental Liability Event" means any Environmental Liability 
Event relating to or arising out of the conduct by Harsco prior to the 
Closing Date of its Defense Business or the ownership, operation or use 
by Harsco or any of its Affiliates prior to the Closing Date of any 
facility or property now or previously owned, operated or used in its 
Defense Business.

"Harsco Excluded Assets" means those assets of Harsco set forth on 
Schedule A annexed hereto.

"Harsco L.P." means Harsco Defense Holding, Inc., a Delaware corporation 
which is to be the Harsco limited partner of the Partnership and which 
is directly and wholly-owned by Harsco.

"Harsco Liabilities" means the following liabilities and obligations of 
Harsco arising out of the operations of the Harsco Defense Business or 
the ownership, operation or use of the Harsco Assets (whether asserted 
or unasserted, absolute or contingent, accrued or unaccrued, liquidated 
or unliquidated, or due or arising before the Closing Date):

(i)  all liabilities to vendors and other creditors for goods purchased 
or services received on open account;

(ii)  amounts received from customers as advance payments to be applied 
to the related receivable when a sale is recorded at time of shipment or 
completion of service;

(iii)  amounts withheld from employees' compensation for Federal, state 
or local taxes and for other payroll deductions;

(iv)  sundry accounts payable;

(v)  amounts accrued for salaries, wages, commission and other 
remuneration earned by employees;

(vi)  commissions earned by salesmen, dealers, or other agents who are 
not employees;

(vii)  all liabilities relating to accrued Taxes, other than Income 
Taxes, including but not limited to Taxes assessed against real and 
personal property based on the valuation of such property as determined 
by the laws of the state or local taxing authority;

(viii)  (A) accruals for Harsco's cost of Federal, state or local taxes 
on payroll that are not an Excluded Liability and (B) all liabilities 
for other employee benefits to the extent provided in Section 5.9 of the 
Participation Agreement, but excluding workers compensation liabilities 
to the extent provided in Section 5.15 of the Participation Agreement;

(ix)  accruals for royalties payable in accordance with terms of royalty 
agreements; legal and professional fees for services rendered; insurance 
premiums (excluding workers' compensation and general and products 
liability coverages); policy and warranty claims and product and service 
liabilities, but excluding pre-Closing products liability or general 
liability occurrences (except to the extent, but not in excess of, any 
amount reserved for and reflected on Harsco's Final Closing Balance 
Sheet); and miscellaneous expenses;

(x)  all liabilities and obligations associated with any Harsco 
Environmental Liability Event; and 

(xi)  obligations under Harsco Contracts remaining unperformed on the 
Closing Date.

The Harsco Liabilities shall not include any Excluded Liability.

"Harsco Qualifying Remedial Expenditure" means any Remedial Expenditure 
to the extent arising out of any Harsco Environmental Liability Event.

"Hazardous Substance" means any material, substance or waste that poses 
or causes, or is alleged to pose or cause, any damage to property or 
personal injury, including death, or any threat to the environment, 
including without limitation those substances defined, listed, 
designated, or classified as hazardous, toxic, radioactive, or dangerous 
or otherwise regulated or governed under any Environmental Requirements, 
including without limitation any hazardous substance for purposes of 
CERCLA, any hazardous waste for purposes of RCRA, any petroleum product 
or by-product, crude oil or any fraction thereof, natural gas, natural 
gas liquids, liquefied natural gas, synthetic gas usable as fuel, 
polychlorinated biphenyls, asbestos, heat, noise, microwave, odor, 
radioactive material or any substance that has been identified as a 
carcinogen or reproductive toxin under the Safe Drinking Water and Toxic 
Enforcement Act of 1986 of the State of California.

"Inactive Contract" means those Contracts which provide for the delivery 
of products or the rendering of contract-defined deliverable services, 
excluding warranties, by a Parent and with respect to which the final 
product has been delivered and the final service has been rendered prior 
to the Closing Date.

"Income Taxes" means Taxes measured by or based on income, and 
franchise, capital stock or net worth Taxes.

"Indemnified Parties" has the meaning set forth in Section 6.1 of the 
Participation Agreement.

"Initial Capital Contribution" of each of FMC and Harsco L.P. means the 
aggregate transfers by or on behalf of FMC or Harsco L.P., as 
applicable, pursuant to Sections 2.1.3, 2.1.4 and 2.1.5 of the 
Participation Agreement, as adjusted pursuant to Section 2.3.3 thereof.

"Intellectual Property Agreements" means the agreements to be entered 
into between FMC and the Partnership and between Harsco and the 
Partnership on or prior to the Closing Date, substantially in the forms 
of Exhibits F-1 and F-2 to the Participation Agreement.

"IRS" means the U.S. Internal Revenue Service.

"Knowledge" means the actual knowledge of the individuals listed on 
Schedule C.1 hereto in the case of FMC and the individuals listed on 
Schedule C.2 hereto in the case of Harsco, in each case after reasonable 
investigation unless otherwise expressly specified.

"Lease Agreement" means the agreement to be entered into between FMC and 
the Partnership on or prior to the Closing Date, substantially in the 
form of Exhibit G to the Participation Agreement.

"Leased Property" has the meaning set forth in Section 4.8.2 of the 
Participation Agreement.

"Liabilities" means FMC Liabilities or Harsco Liabilities.

"LIBOR" means the applicable London Interbank Offered Rate as set forth 
in The Wall Street Journal.

"Licensed Intellectual Property" means, with respect to each Parent, 
Data Rights, Statutory Rights and Marks used or intended for use, but 
not exclusively, in its Defense Business that will be licensed to the 
Partnership under the Intellectual Property Agreements.

"Licensed Third Party Rights" means, as to each Parent, copyrights and 
trade secrets and confidential information and knowledge and letters 
patent, utility models, inventor's certificates, registered copyrights, 
registered mask works and applications therefor under which such Parent 
has been granted license or other rights by a third party.

"Lien" means any lien, mortgage, encumbrance, pledge, charge, lease 
restriction, easement, servitude, right of others or security interest 
of any kind, including any thereof arising under conditional sales or 
other title retention agreements.

"Limited Non-Exclusive Licenses" means the licenses to be entered into 
between FMC and the Partnership and between Harsco and the Partnership 
on or prior to the Closing Date.

"Limited Partner" has the meaning set forth in the preface to the 
Partnership Agreement.

"Limited Partner Allocation" shall be an amount equal to $13,300,000 in 
the first Fiscal Year of the Partnership, and in each subsequent Fiscal 
Year of the Partnership shall equal the amount agreed to by FMC and the 
Limited Partner (so long as the Limited Partner's Share Percentage is at 
least 20%) or any other third party assignee from the Limited Partner 
who was assigned a Share Percentage in excess of 20% of the aggregate 
Share Percentages (which agreement shall not require the consent or 
approval of any other partner or holder of an interest of the 
Partnership) prior to the beginning of such Fiscal Year.  If no such 
agreement is reached, then the Limited Partner Allocation shall equal 
the prior year's Limited Partner Allocation (as the same may have 
previously been adjusted by agreement and/or for inflation), as further 
adjusted for inflation by the percentage increase (or decrease) in the 
Producer Price Index for Finished Goods (unadjusted index) for such 
prior Fiscal Year.

"Limited Partner Allocation Late Payment Interest" has the meaning set 
forth in Section 6.1 of the Partnership Agreement.

"Loss" means any loss, liability, claim, damage or expense (including 
reasonable legal fees and expenses).

"Major ASD Contract" means any New Contract (excluding any engineering 
contract) that provides for the production of products which are of the 
type currently produced by FMC's Armament Systems Division and that has 
a Contract Price, after giving effect to the exercise of any options 
which are exercised under such New Contract, of at least $50,000,000.

"Major Contract" means any Major ASD Contract, Major GSD/CSD Contract or 
Major SPD Contract.

"Major GSD/CSD Contract" means any New Contract (excluding any 
engineering contract) that provides for the production of products which 
are of the type currently produced by FMC's Ground Systems Division or 
the Harsco Defense Business and that has a Contract Price, after giving 
effect to the exercise of any options which are exercised under such New 
Contract, of at least $50,000,000.

"Major SPD Contract" means any New Contract (excluding any engineering 
contract) that provides for the production of products which are of the 
type currently produced by FMC's Steel Products Division and that has a 
Contract Price, after giving effect to the exercise of any options which 
are exercised under such New Contract, of at least $50,000,000.

"Management Services Agreement" means the agreement to be entered into 
between FMC and the Partnership on or prior to the Closing Date 
substantially in the form of Exhibit H to the Participation Agreement.

"Managing General Partner" has the meaning set forth in the preface to 
the Partnership Agreement.

"Marks" means, with respect to each Parent, registered and unregistered 
trademarks, tradenames, service marks, trade dress, logos and 
applications for registration thereof, all right, title and interest in 
which is owned by such Parent as of the Closing Date.

"Material Adverse Effect" means:  (a) with respect to either Parent's 
Defense Business, a material adverse effect on (i) the financial 
condition, results of operation, properties, business or prospects of 
such Parent's Defense Business, (ii) the Partnership's ability to 
conduct such Parent's Defense Business or (iii) the ability of such 
Parent or any of its Affiliates to perform any of its material 
obligations under any Operative Document; and (b) with respect to the 
Partnership, a material adverse effect on (i) the financial condition, 
results of operation, properties, business or prospects of the 
Partnership, (ii) the Partnership's ability to conduct its business or 
(iii) the ability of the Partnership to perform any of its material 
obligations under any Operative Document.

"Modified Taxable Income" has the meaning set forth in Section 6.5(a) of 
the Partnership Agreement.

"Net Book Value" means, with respect to each Parent, the Book Value of 
its Assets which are of the types reflected on the Pro Forma Balance 
Sheet minus the Book Value of its Liabilities which are of the types 
reflected on the Pro Forma Balance Sheet.

"Net Working Capital" means the excess of current assets over current 
liabilities.

"New Contract" means (i) any contract that was entered into by the 
Partnership after the Closing Date and (ii) that portion of any Existing 
Contract which relates to any increase in the quantity of deliverables 
subsequent to the Closing beyond the quantity (including priced options 
thereunder) formerly specified in such Existing Contract, which increase 
involves an increase in the contract price of at least $50 million.

"Nonqualified Plan" means a plan described in Section 3(34) or 3(35) of 
ERISA that is not qualified under Section 401(a) of the Code.

"Normative Fee" has the meaning specified in Section 5.22.4.4 of the 
Participation Agreement.

"Notice of Arbitration" has the meaning set forth in Section 3.12 of the 
Partnership Agreement.

"Novation Agreement" means the novation agreement, substantially 
consistent with the standard form of novation agreement set forth in the 
Federal Acquisition Regulation, 48 C.F.R. Subsection 42.12, among FMC, 
Harsco, the Partnership and the U.S. Government.

"Operative Documents" means the Assignments, the Assumption Agreements, 
the Consents, the Intellectual Property Agreements, the Lease Agreement, 
the Sublease and Assignment of Option to Purchase Aiken, South Carolina 
Facilities, the Limited Non-Exclusive Licenses, the Management Services 
Agreement, the Novation Agreement, the Partnership Agreement, the 
Registration Rights Agreement, the Participation Agreement and any other 
agreements that the parties mutually agree in writing to treat as 
Operative Documents.

"Owned Property" has the meaning set forth in Section 4.8.2 of the 
Participation Agreement.

"Parent" means FMC or Harsco, as appropriate given the context of the 
Participation Agreement.  For purposes of the Operative Documents, FMC 
shall be deemed to be the Parent of the FMC Partner.

"Participation Agreement" means the Participation Agreement dated as of 
January 1, 1994 by and between FMC, Harsco, Harsco L.P. and the 
Partnership as amended from time to time in accordance with its terms.

"Partner" means FMC (in the case of FMC) or Harsco L.P. (in the case of 
Harsco).  For purposes of the Operative Documents, FMC shall be deemed 
to be the Partner of FMC.

"Partners" means FMC and Harsco L.P.

"Partnership" means United Defense, L.P., the Delaware limited 
partnership formed in accordance with the Partnership Agreement.

"Partnership 401(k) Plan" has the meaning set forth in Section 5.9.6 of 
the Participation Agreement.

"Partnership Agreement" means the Delaware limited partnership agreement 
to be entered into by and among the Partners and the Partnership on or 
before the Closing Date and substantially in the form of Exhibit I of 
the Participation Agreement.

"Partnership Benefit Plans" has the meaning set forth in Section 5.9.3 
of the Participation Agreement.

"Partnership Master Trust" means the Partnership Master Trust described 
in Section 5.9.6 of the Participation Agreement.

"Partnership Nonunion Pension Plan" has the meaning set forth in Section 
5.9.3 of the Participation Agreement.

"PBGC" means the Pension Benefit Guaranty Corporation.

"Permitted Capital Investments" means capital investments for (i) new 
equipment and equipment upgrades and replacements for existing lines of 
business; (ii) plant and equipment for existing or new programs at or 
adjoining existing Partnership facilities that are within the 
Partnership's Scope of Activity or carried on by SPD not primarily for 
commercial purposes; and (iii) research and development for programs 
within the Partnership's Scope of Activity.

"Permitted Liens" means (a) the rights and interests of the Partnership, 
any Parent or its Affiliates as provided in the Operative Documents, (b) 
Liens for Taxes either not yet due or being contested in good faith and 
by appropriate proceedings and (c) materialmen's, mechanics', workers', 
repairmen's, employees' or other Liens arising in the ordinary course of 
business for amounts either not yet due or being contested in good faith 
and by appropriate proceedings, so long as such proceedings shall not 
involve any substantial danger of the sale, forfeiture or loss of any 
part of the relevant asset, title thereto or any interest therein and 
shall not interfere with the use or disposition thereof.

"Person" means any individual, corporation, partnership, joint venture, 
association, joint-stock company, trust, unincorporated organization or 
Governmental Authority.

"Plan Participant" means, as the context requires, (a) a Transferred 
Employee who, on the Closing Date, participated under the terms of on 
the applicable plan, (b) a former employee who terminated employment 
before the Closing Date but as of the Closing Date had not incurred a 
break in service sufficient under the terms of the applicable plan to 
eliminate such former employee's right to prior service credit with 
respect to such plan or (c) a former employee (including the spouse or 
other dependent of a former employee) who terminated employment before 
the Closing Date but as of the Closing Date had rights to a benefit 
under the terms of the applicable plan; provided, however, that, in the 
case of (b) or (c), in order to be a Plan Participant such former 
employee, when terminating employment with FMC or Harsco, must have been 
employed in the Defense Business of FMC or Harsco.

"Postretirement Benefit Plan" means an employee welfare benefit plan as 
defined in Section 3(1) of ERISA that provides benefits to retired 
employees and their dependents.

"Preliminary Closing Balance Sheet" has the meaning set forth in Section 
2.3.1 of the Participation Agreement.

"Principal Accounting Procedures" means those accounting procedures 
described in Section 5.9 of the Partnership Agreement.

"Principal Office" of the Partnership has the meaning set forth in 
Section 2.1(c) of the Partnership Agreement.

"Private Actions" means all authorizations, consents, approvals, 
waivers, exceptions, variances, franchises, permissions, permits and 
licenses of (a) Persons other than Governmental Authorities and (b) 
Governmental Authorities acting in private capacities.

"Profits" or "Losses" has the meaning set forth in Section 4.2(a) of the 
Partnership Agreement.

"Pro Forma Balance Sheet" has the meaning set forth in Section 4.14 of 
the Participation Agreement.

"Qualified Pension Plan" means a defined benefit plan as described in 
Section 3(35) of ERISA that is qualified under Section 401(a) of the 
Code.

"Qualifying Remedial Expenditure" means any Remedial Expenditure to the 
extent arising out of any FMC Environmental Liability Event or Harsco 
Environmental Liability Event, as the case may be.

"RCRA" means the Resource Conservation and Recovery Act, 42 U.S.C. 
Subsection 6901 et seq.

"Real Property" means the Owned Property and the Leased Property.

"Realization" includes, with respect to each Major Contract, the 
Remedial Expenditures amount included in the forward pricing rate used 
by the Partnership to establish the contract price as adjusted as 
provided in Section 5.22.4.4 of the Participation Agreement and, with 
respect to each production contract other than a Major Contract and each 
other contract, regardless of amount, the Remedial Expenditures amount 
included in the forward pricing rate used by the Partnership to 
establish the contract price.  In addition, any amount reflected as a 
credit to FMC or Harsco in accordance with Section 5.22.4.2 of the 
Participation Agreement (including under clause (i) therein, but 
excluding clauses (vii) and (viii) therein) shall be deemed to be a 
Realization.

"Realize" means to obtain a Realization.

"Realized Remedial Expenditure" means any Remedial Expenditure (i) which 
has been (or is deemed to have been under Section 5.22.4 of the 
Participation Agreement) Realized pursuant to customer contracts or any 
other source (it being understood that Remedial Expenditures may be 
offset by such Realizations for purposes of the Operative Documents, 
irrespective of whether or not such Remedial Expenditures relate to the 
circumstances giving rise to such Realizations), (ii) as to which any 
related rebuttable presumption under Section 5.22.2.2 or 5.22.2.3 has 
been rebutted or (iii) which has been charged against the environmental 
reserves referred to in clause (i) of Section 5.22.4.2 (it being 
understood that Remedial Expenditures may be offset by such reserves for 
purposes of the Operative Documents, irrespective of whether or not such 
Remedial Expenditures relate to the historical basis for the creation of 
such reserves).  The Parents acknowledge that the Partnership may have 
Realizations prior to such time as the Partnership incurs the related 
Remedial Expenditures.  FMC Realized Remedial Expenditure and Harsco 
Realized Remedial Expenditure have corollary meanings.

"Reallocated Loss Account" means the account into which Losses, which, 
but for the application of Section 4.6(a) of the Partnership Agreement, 
would have been allocated to the Limited Partner.

"Reallocated Loss Amount" means the quotient of (i) the amount of Losses 
allocated to the Managing General Partner's Reallocated Loss Account 
pursuant to Section 4.6(a) of the Partnership Agreement divided by (ii) 
1 minus the Managing General Partner's Share Percentage.  The 
Reallocated Loss Amount shall be as adjusted from time to time as 
provided in Section 4.6(b) of the Partnership Agreement.

"Records" has the meaning set forth in Section 10.6 of the Partnership 
Agreement.

"Recovery Items" has the meaning set forth in Section 6.7(d) of the 
Participation Agreement.

"Registration Rights Agreement" means the agreement between FMC and 
Harsco L.P. to be entered into on or before the Closing Date 
substantially in the form of Exhibit J of the Participation Agreement.

"Related Party Transaction" means any transaction between the 
Partnership and any Partner or any Affiliate of any Partner.

"Release" means "release" as such term is defined for purposes of 
CERCLA.

"Remedial Costs Account" has the meaning set forth in Section 5.22.4.2 
of the Participation Agreement.

"Remedial Expenditure" means any expenditure by the Partnership with 
respect to any Environmental Liability Event either for (i) the 
treatment, containment or removal of contaminated soil or groundwater or 
the disposal of removed material (including such activity as conducted 
in connection with a corrective action pursuant to RCRA or a removal or 
remedial action pursuant to CERCLA), (ii) corrective or remedial action 
to cure a failure by either Parent or the Partnership, with respect to 
its Defense Business, prior to the Closing Date, to comply with 
applicable Environmental Requirements (as such Environmental 
Requirements are constituted prior to the Closing Date) and any 
governmental fines, penalties or other sanctions, whether civil or 
criminal, to the extent arising from such failure or (iii) legal and 
administrative proceedings against Persons other than either Parent 
regarding the nature and extent of the Partnership's or such other 
Persons' legal and financial responsibility for matters described in (i) 
and (ii) herein.

"Restricted Contracts" has the meaning set forth in Section 5.11 of the 
Participation Agreement.

"Rules" has the meaning set forth in Section 3.12 of the Partnership 
Agreement.

"Sale Notice" has the meaning set forth in Section 7.1(b) of the 
Partnership Agreement.

"Santa Clara Properties" means the following properties owned by FMC in 
Santa Clara County, California, used by and recorded on the financial 
statements of the FMC Defense Business, and leased by FMC to the 
Partnership pursuant to the terms of the Lease Agreement:

(i)  333 W. Brokaw Road, Santa Clara, California;
(ii)  328 W. Brokaw Road, Santa Clara, California;
(iii)  333 W. Julian Street, San Jose, California (except for that 
certain parcel thereof that is leased from Southern Pacific Railway and 
not owned by FMC); and
(iv)  1107, 1115 and 1125 Coleman Avenue, San Jose, California.

"Scope of Activity" has the meaning set forth in Section  2.2 of the 
Partnership Agreement.

"SEC" means the U.S. Securities and Exchange Commission.

"Settle" has the meaning set forth in Section 6.6 of the Participation 
Agreement.

"Share Percentage" means 60% as to FMC and 40% as to Harsco L.P., as 
adjusted from time to time pursuant to Section 4.5 of the Partnership 
Agreement.  

"Significant Event" has the meaning set forth in Section 4.1(d) of the 
Partnership Agreement.

"Signing Date" means the date on which the Participation Agreement is 
executed.

"Slow-Moving Inventory" means the inventory set forth on Schedule 5.16 
to the Participation Agreement.  This definition excludes inventory 
charged or allocated to cost-type contracts.  Inventory charged or 
allocated to cost-type contracts is owned by the Government and 
therefore outside the scope of Slow-Moving Inventory.  The gross level 
of Slow-Moving Inventory will be reduced but not completely offset by 
reserves on the Preliminary Closing Balance Sheet.

"SPD" means the Steel Products Division of FMC.

"Statutory Rights" means, with respect to each Parent, (i) letters 
patent, utility models, inventor's certificates, registered copyrights, 
registered mask works, (ii) applications for any of the foregoing and 
rights which may issue on such applications and (iii) any reissues, 
continuations, continuations-in-part, extensions, divisions, 
reexaminations or renewals of the foregoing, in which such Parent owns 
all or a part of the right, title and interest as of the Closing Date.

"Subsidiary" of any Person means a corporation, partnership, company or 
other entity (a) more than 50% of whose outstanding shares or securities 
(representing the right to vote for the election of directors or other 
managing authority) are or (b) which does not have outstanding shares or 
securities (as may be the case in a partnership, joint venture or 
unincorporated association), but more than 50% of whose ownership 
interest representing the right to make decisions for such other entity 
is, now or hereafter owned or controlled, directly or indirectly, by 
such Person; provided that such corporation, partnership, company or 
other entity shall be deemed to be a Subsidiary only so long as such 
ownership exists.

"Target Net Asset Value" means (i) in the case of FMC, $138,600,000, 
including $14,800,000 of cash and (ii) in the case of Harsco L.P., 
$29,600,000, including $5,200,000 of cash.

"Tax Benefits" has the meaning set forth in Section 6.7(a) of the 
Participation Agreement.

"Taxes" means any and all governmental or quasi-governmental fees 
(including license, filing and registration fees), taxes (including 
income, gross receipts, franchise, sales, use and property (real or 
personal, tangible or intangible), interest equalization and stamp 
taxes, assessments, levies, imposts, duties, charges, withholdings or 
other taxes of any kind or nature whatsoever, together with any and all 
penalties, fines or interest thereon.

"Tax Matters Partner" has the meaning set forth in Section 10.8 of the 
Partnership Agreement.

"Tax Rate" means an amount equal to the maximum Federal marginal income 
tax rate applicable to a corporation under Section 11 of the Code in 
effect for the relevant Fiscal Year plus five percentage points. 

"Tentative Remedial Expenditure Realization" or "TRER" means the 
Remedial Expenditure amount determined in accordance with clause (ii) of 
Section 5.22.4.4 of the Participation Agreement.

"Third Party Claim" has the meaning set forth in Section 6.5 of the 
Participation Agreement.

"Transfer Taxes" means any sales, use, recording, deed, value added, 
stamp, documentary or other transfer Taxes.

"Transferred Contract" means a contract entered into by a Parent or an 
Affiliate thereof transferred to the Partnership in accordance with the 
Participation Agreement.

"Transferred Employee" has the meaning set forth in Section 5.9.1 of the 
Participation Agreement.

"Transferred Intellectual Property Rights" means, with respect to each 
Parent, Data Rights, Statutory Rights and Marks (together with goodwill 
associated therewith) exclusively used or intended for exclusive use in 
its Defense Business, along with all income, royalties, damages and 
payments due or payable at the Closing or thereafter (including, without 
limitation, damages and payments for past and future infringements or 
misappropriations thereof), and the right to sue for damages and 
injunctive relief.

"Transferring Partner" has the meaning set forth in Section 5.11 of the 
Participation Agreement.

"Transition Benefit Plans" has the meaning set forth in Section 5.9.2 of 
the Participation Agreement.

"Treasury Regulations" means the income tax regulations promulgated 
under the Code and effective as of December 31, 1993.

"UD" means United Defense, L.P., the Delaware limited partnership formed 
in accordance with the Partnership Agreement.

"Unrealized Remedial Expenditure" means any Qualifying Remedial 
Expenditure which is not a Realized Remedial Expenditure.  FMC 
Unrealized Remedial Expenditure and Harsco Unrealized Remedial 
Expenditure have corollary meanings.

"VLS Receivables" means any unbilled account receivable relating to 
FMC's VLS contract included in the FMC Assets which will not become due 
until after the Closing.

Schedule A

Excluded Assets.

FMC Excluded Assets:

Rights to damages or other recoveries arising from the following 
litigation: FMC Corporation v. The Goodyear Tire & Rubber Company (N.D. 
Ala., Eastern Div., Civil Action No. CV-90-H-01018E), subject to Section 
5.23 of the Participation Agreement; ASBCA Case No. 39546; and FMC 
Corporation v. Liberty Mutual Insurance Co. et al., subject to Section 
6.2 of the Participation Agreement.

Cash and cash equivalents in excess of $14,800,000 

The Minneapolis Tech Center

Any rights in the trade name or trademark "FMC," subject to the Limited 
License Agreement, dated the date hereof, between FMC and the 
Partnership

The Santa Clara Properties (except as the Lease Agreement provides for 
their lease to the Partnership)

Harsco Excluded Assets:

Cash and cash equivalents in excess of $5,200,000

Any rights in the trade name or trademark "Harsco" or, subject to the 
Limited License Agreement, dated the date hereof, between Harsco and the 
Partnership, "BMY" 

The contracts set forth in Article I of the Non-Transfer and 
Indemnification Agreement

Common Excluded Assets:

Intellectual property rights (including patents, marks, know-how and 
rights and licenses thereto and interests therein), other than 
Transferred Intellectual Property Rights, to the extent, if any, 
applicable to The Field (as defined in the Intellectual Property 
Agreements).

Credits and claims for refunds with respect to Taxes related to periods 
prior to the Closing

Policies, manuals, financial statements and other material not relating 
exclusively to the contributed Assets or Business

Items prepaid or for which charges were deferred, to the extent the 
benefit of such items will not accrue to the Partnership

Insurance policies and contracts and claims thereunder relating to 
periods prior to Closing (subject to Article VI of the Participation 
Agreement)

Licenses, permits and other assets not transferable by law

Intra-company accounts receivable and payable

Claims against and recoveries from third parties arising out of acts or 
omissions (in the case of Active Contracts, only if a claim has been 
asserted in writing) prior to the Closing except to the extent included 
in the Final Closing Balance Sheets or as may be provided otherwise in 
any of the Operative Documents

Any receivable referred to in Section 5.14 of the Participation 
Agreement

Schedule B

Defense Affiliates and Defense Subsidiaries; Defense Affiliate Stock and 
Equity Interests Transferred by FMC.

FMC

1.  FMC-Nurol Savunma Sanayii A.S., a Turkish corporation

    Armored Vehicle Technologies Associated, a partnership of FMC and 
General
    Dynamics Land Systems, Inc.

    G&F, a partnership of FMC and General Motors Corporation

    FMC Arabia Ltd., a Saudi Arabian limited liability company

Harsco

1.  Harsco Defense Holding, Inc.

Schedule C.1

FMC

     Robert N. Burt
     Larry D. Brady
     Arthur D. Lyons
     William H. Schumann, III
     Randy S. Ellis
     Thomas W. Rabaut
     David I. Kolovat
     Eugene M. McCluskey
     Robert L. Day
     Francis A. Riddick, III
     Robert N. Sankovich
     Francis Raborn

Schedule C.2

Harsco

     Malcolm W. Gambill
     Derek C. Hathaway
     Barrett W. Taussig
     Paul C. Coppock
     Leonard A. Campanaro
     Warren A. Weisel
     Salvatore D. Fazzolari
     Richard C. Hawkins
     Daniel J. Sharp
     Richard E. Clemens
     Stuart J. Levey

EX-2.4

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.

 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.

 3.  Corporate governance provisions substantially the same as in 
Section 3.1 of the Partnership Agreement (other than Section 3.1(k))

 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]
  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.