Exhibit 10.16

EXECUTION VERSION

 

 

 

UNITHOLDERS AGREEMENT

by and between

SCHILLING ROBOTICS, INC.,

TYLER SHILLING

and

FMC TECHNOLOGIES, INC.

Dated as of

December 26, 2008

 

 

 

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UNITHOLDERS AGREEMENT

THIS UNITHOLDERS AGREEMENT (this “Agreement”) is made and entered into as of
December 26, 2008 by and among Schilling Robotics, Inc., a Delaware corporation
(“Schilling Inc.”), Tyler Schilling, an individual (“Schilling”), and FMC
Technologies, Inc., a Delaware corporation (“FMC”). Each of Schilling Inc.,
Schilling and FMC are referred to herein as a “Party” and collectively as the
“Parties” and each of Schilling Inc. and Schilling are referred to herein as a
“Schilling Party” and collectively as the “Schilling Parties.”

R E C I T A L S

WHEREAS, Schilling Robotics, LLC, a Delaware limited liability company (the
“Company”), FMC, Schilling and Schilling Inc. have entered into a Securities
Purchase Agreement dated December 24, 2008 (the “Purchase Agreement”);

WHEREAS, the Schilling Parties own, directly and indirectly, 100% of the issued
and outstanding Units;

WHEREAS, after giving effect to the transactions contemplated by the Purchase
Agreement, at the Closing (as defined in the Purchase Agreement), FMC will own,
beneficially and of record, 45% of the issued and outstanding Units and the
Schilling Parties will own, beneficially and of record, 55% of the issued and
outstanding Units; and

WHEREAS, the obligations of Schilling Inc., Schilling, FMC and the Company under
the Purchase Agreement are conditioned on each of the Parties executing and
delivering this Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein set forth and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

1.1 Defined Terms. Capitalized terms undefined in the text of this Agreement
shall have the following meanings:

“Accredited” means a Person who meets the qualifications of an “accredited
investor” set forth in Rule 501 of Regulation D promulgated under the Securities
Act of 1933.

“Affiliate” means, with respect to a Person, another Person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person.

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“Board” means the Board of Directors, Board of Managers or other governing body
of the Company.

“Bring-Along Right Closing” means a closing of the sale of the FMC Interest
pursuant to the Bring-Along Right.

“Business Day” means any day other than a Saturday, Sunday, or a holiday on
which commercial banks in the States of California or Texas are authorized by
applicable law to close.

“Common Stock” means the common stock of FMC (or any Purchasing Entity, if
applicable) or any other type of common equity security of FMC (or any
Purchasing Entity, if applicable) entitled to vote for the election of directors
generally.

“Company IPO” means the first underwritten sale of securities to the public by a
corporation formed on conversion of the Company to a corporation under the terms
of the Operating Agreement pursuant to a registration statement filed in
accordance with the Securities Act, in which the gross proceeds to the Company
(prior to underwriters’ commissions and expenses) shall be equal to or exceed
$50,000,000.

“EBITDA” means, as to a particular Person and with respect to any applicable
period, consolidated net income from continuing operations for such period
calculated in accordance with GAAP, prior to the effect of income taxes,
interest expense, interest income, depreciation, amortization, compensation
expense related to the issuance of equity instruments (stock appreciation
rights, options or similar instruments), gains or losses on disposal of assets
or other extraordinary or non-recurring items recorded on the financial
statements of such Person for each of the four most recently completed fiscal
quarters immediately preceding the date of determination.

“Fair Market Value” means, with respect to a share of any security (including a
share of Common Stock), (i) if such share is listed on the New York Stock
Exchange (the “NYSE”) or, if the NYSE is not the primary national securities
exchange or inter-dealer quotation system with respect to such security, another
national securities exchange or quoted in an inter-dealer quotation system (or
any foreign equivalent exchange or quotation system), as of the date of
determination, the closing price of such share as listed or reported by the NYSE
or the other primary national securities exchange or inter-dealer quotation
system with respect to such security, as the case may be, or (ii) if such share
is not so listed on a national securities exchange or quoted in an inter-dealer
quotation system as of the date of determination, the value of a share of such
security calculated by an independent investment banking firm of international
repute (agreed to by the Parties) in accordance with a methodology to be agreed
by the Parties, but which shall be a methodology customarily adopted in the
valuation of securities of similarly situated businesses and pursuant to
commonly accepted valuation principles.

“FMC Interest” means all of the issued and outstanding Units, other limited
liability company membership interests of the Company, or any security
convertible into or exchangeable for any of the foregoing, currently held or
hereinafter acquired directly or indirectly by FMC.

 

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“FMC Market Capitalization” means the amount equal to the average value over a
period of 90 consecutive trading days immediately prior to the date of
determination, calculated on a daily basis, of the product of the Fair Market
Value of the Common Stock and the number of shares of Common Stock issued and
outstanding.

“FMC Restatement” means a public announcement that FMC intends to restate its
historical financial statements or otherwise discloses under Item 4.02 of Form
8-K that its board of directors has determined that its historical financial
statements should no longer be relied upon.

“FMC Restatement Period” means that period of time commencing with the public
announcement of an FMC Restatement and ending on the date that the last
amendment to a Quarterly Report on Form 10-Q or Annual Report on Form 10-K
required to be filed to give effect to such FMC Restatement has been filed with
the SEC.

“GAAP” means generally accepted accounting principles in the United States.

“Multiple” means the multiple calculated by dividing (a) the sum of (i) the FMC
Market Capitalization and (ii) the Net Debt of FMC as of the end of the most
recently completed fiscal quarter by (b) the EBITDA of FMC.

“Net Debt” means, as to a particular Person, the current and long-term
indebtedness of such Person and its consolidated subsidiaries (including,
without limitation, any obligations for borrowed money or for the deferred
purchase price of property or services and any obligations under financing or
capital leases or letters of credit), net of cash and cash equivalents. The
Parties agree that, for purposes of this Agreement, Net Debt may be a negative
number in the event that cash and cash equivalents is greater than current and
long-term indebtedness, calculated on a consolidated basis.

“Net Exercise Price” means, in the case of a Stock Election, the Exercise Price
less the Cash Advance.

“Operating Agreement” means that certain Amended and Restated Operating
Agreement of the Company dated as of December 26, 2008, as amended from time to
time.

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a governmental entity or any department, agency
or political subdivision thereof.

“Right of First Offer Closing” means the closing of the transactions
contemplated by the exercise of the Right of First Offer.

“Right Securities” means the issued and outstanding Units, other limited
liability company membership interests of the Company, or any security
convertible into or exchangeable for any of the foregoing, currently held or
hereinafter acquired directly or indirectly by the Schilling Parties (including
Units held directly by Schilling Robotics Newco LLC, a Delaware limited
liability company and wholly owned subsidiary of Schilling Inc.).

 

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“Schilling Counsel Fees” means any fees or expenses (to the extent such fees or
expenses are not fully discharged prior to the Right Closing) associated with
legal counsel or other advisors to advise Persons other than FMC in connection
with the exercise of the Right and incurred by, (i) in the case of a Stock
Election, Schilling Inc. and the Company or (ii) in the case of a Cash Election,
the Company.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Third-Party Offer Closing” means the closing of the transactions contemplated
by the terms of the Third-Party Offer.

“Transaction Closing” means a closing of (i) the sale of the Right Securities
pursuant to the Right Closing, (ii) the Subsidiary Merger, (iii) the Right of
First Offer Closing or (iv) a sale of the FMC Interest pursuant to the
Bring-Along Right or the Tag-Along Right, whichever occurs first.

“Unit” is defined in the Operating Agreement.

1.2 Accounting Terms. Accounting terms not otherwise defined herein shall have
the meanings assigned to such terms under GAAP.

ARTICLE II

RIGHT TO PURCHASE SCHILLING SECURITIES

2.1 Right to Purchase Outstanding Right Securities. The Schilling Parties hereby
grant to FMC the right to purchase all (but not less than all) of the
outstanding Right Securities (the “Right”) at the price and during the period
set forth below.

2.2 Exercise Period. FMC may deliver a Right Notice only during the period
commencing on January 1, 2012 and ending on the close of business on
December 31, 2013 (the “Right Period”), subject to the satisfaction of all other
terms and conditions set forth herein.

2.3 Exercise of Right. FMC may exercise the Right only upon written notice (the
“Right Notice”) to the Schilling Parties and the Company, in accordance with
Section 6.7.

2.4 Payment Upon Exercise of Right.

2.4.1 Schilling Parties Election. Within 30 Business Days after receipt of a
Right Notice under Section 2.3, the Schilling Parties shall provide FMC with
their written election (the “Schilling Consideration Election”) to receive the
Exercise Price (as defined below)

 

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in cash (a “Cash Election”) or partially in cash with a majority of the Exercise
Price in registered shares of Common Stock (a “Stock Election”) as set forth in
Section 2.4.3 below. Notwithstanding the foregoing, in the event that the Common
Stock of FMC or a Purchasing Entity is not registered under Section 12 of the
Securities Exchange Act of 1934 or is not publicly traded or listed on a
national securities exchange or inter-dealer quotation system (or any foreign
equivalent exchange or quotation system) at the time a Right Notice is
delivered, the Parties acknowledge and agree that the shares deliverable under a
Stock Election would not be required to be registered under the Securities Act
of 1933 and that FMC or a Purchasing Entity shall be permitted to cause
shareholders of Schilling Inc. who are not Accredited to receive cash in lieu of
shares of stock in connection with such Subsidiary Merger.

2.4.2 Cash Election. If the Schilling Parties make a Cash Election, FMC shall
deliver to the Schilling Parties at the Right Closing (as defined below) an
amount (the “Exercise Price”), in immediately available funds, calculated in
accordance with the following formula:

Exercise Price = (55% x ((E x M) – ND)) - SCF

 

Where:    E =    the EBITDA of the Company and its subsidiaries on a
consolidated basis    M =    the Multiple    ND =    any Net Debt of the Company
as of the Right Closing    SCF =    any Schilling Counsel Fees

Subject to Section 2.9, for purposes of calculating the Multiple, the applicable
date of determination shall be the date of delivery of the Right Notice. If the
Schilling Parties make a Cash Election, the Schilling Parties agree to sell,
convey, assign, transfer and deliver to FMC, and FMC agrees to purchase from the
Schilling Parties at the Right Closing, the Right Securities, free and clear of
all debts, liabilities, obligations, taxes, security interests, liens, pledges,
charges and encumbrances of every kind (collectively, “Liens”). In the event
that either of the Schilling Parties are obligated as of the Right Closing to
pay any amounts to FMC pursuant to Article IX of the Purchase Agreement, the
Exercise Price shall be further reduced by the amount of such obligation of the
Schilling Party to FMC in full satisfaction and discharge of such obligation.
The Schilling Parties shall allocate the Exercise Price between them in
accordance with their relative ownership of Units.

2.4.2.1 The Exercise Price shall be reduced by 20% if at any time prior to the
earlier of (i) the date FMC delivers a Right Notice or (ii) December 31, 2013,
(x) Schilling voluntarily resigns from his employment with the Company or
(y) Schilling’s employment is terminated by the Board because (A) Schilling is
absent from his duties with respect to the Company for a period exceeding 90
calendar days without approval of the Board or (B) Schilling

 

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is convicted or enters a plea of guilty or nolo contendere to either a felony or
a crime of moral turpitude. Such adjustment of the Exercise Price shall be made,
if applicable, regardless of whether a Cash Election or a Stock Election is made
by the Schilling Parties.

2.4.2.2 If the Schilling Parties make a Stock Election and request that
Schilling Inc. pay expenses (including Schilling Counsel fees) or other
liabilities at or prior to the Right Closing, FMC will advance those amounts to
Schilling Inc. in cash at least 5 Business Days prior to the Right Closing (the
“Cash Advance”).

2.4.3 Stock Election. If the Schilling Parties make a Stock Election, FMC and
the Schilling Parties will promptly take all actions as are reasonably necessary
and appropriate to cause Schilling Inc. to merge with and into a subsidiary of
FMC in a transaction (x) that qualifies as a tax-free reorganization under
Section 368 of the Internal Revenue Code of 1968, as amended (the “Code”) (or
any successor provision), (y) in which a wholly owned subsidiary of FMC merges
with and into Schilling Inc. and (z) in which the stockholders of Schilling Inc.
receive, pro rata, shares of Common Stock that are registered pursuant to a
registration statement on Form S-4 (or any equivalent form) that has been
declared effective or is deemed effective under the rules and regulations of the
Securities and Exchange Commission and applicable state securities laws and are
otherwise tradeable without restriction (except as otherwise provided in
Section 2.4.1) (the “Subsidiary Merger”). The aggregate number of shares of
Common Stock issuable to Schilling Inc. stockholders in the Subsidiary Merger
shall be equal to (i) the product of (a) the Net Exercise Price (as may be
adjusted under Section 2.4.2.1 above) and (b) 0.90, divided by (ii) the average
Fair Market Value of the Common Stock during the 20 trading days immediately
prior to the date the Right Notice is delivered pursuant to Section 2.3 hereof.
Notwithstanding anything herein to the contrary, the obligation of FMC to
consummate the Subsidiary Merger shall be subject to (A) the execution and
delivery of a merger agreement in form and substance reasonably satisfactory to
FMC, (B) the receipt of all necessary consents and approvals from the Board and
stockholders of Schilling Inc., (C) the Schilling Parties shall have used best
efforts to obtain a release in form and substance reasonably satisfactory to FMC
executed and delivered by each of the stockholders of Schilling Inc. releasing
Schilling Inc. and its Affiliates (including FMC after giving effect to the
Subsidiary Merger) from any and all liabilities and obligations such Persons may
have to such stockholder and any and all claims such stockholder may have
against Schilling Inc. and its Affiliates, (D) holders representing no more than
5% of the outstanding capital stock of Schilling Inc. shall have validly elected
to seek appraisal of their shares in accordance with Section 262 of the Delaware
General Corporation Law and (E) Schilling Inc. will have a Net Debt of $0 as of
the Right Closing. If Schilling Inc. makes a Stock Election, at the closing of
the Subsidiary Merger, (i) the Schilling Parties agree to take all actions
necessary to cause all of the outstanding capital stock of Schilling Inc. and
all of the Right Securities, to be free and clear of all Liens at the Right
Closing, and (ii) Schilling will convey any Units he then owns to Schilling Inc.
In the event that the conditions precedent to the completion of the Subsidiary
Merger are not satisfied or waived by FMC, then the Stock Election shall be
deemed to be automatically converted to a Cash Election and the Schilling
Parties shall be entitled to receive the cash consideration contemplated by
Section 2.4.2.

 

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2.5 Right Closing. The closing of the transactions contemplated by the exercise
of the Right (the “Right Closing”) shall take place at the offices of DLA Piper
LLP (US), 400 Capitol Mall, Suite 2400, Sacramento, California (or such other
place as the Schilling Parties and FMC may agree) on a Business Day no later
than 60 calendar days following the delivery of the Schilling Consideration
Election or, if later, the latest of (i) the 5th Business Day after the
expiration or early termination of the waiting period under both the
Hart-Scott-Rodino Antitrust Improvements Act (the “HSR Act”) and any antitrust
filings as may be required in any foreign jurisdiction (if either are applicable
to the transactions contemplated by the exercise of the Right), (ii) the 30th
Business Day after a registration statement filed under the Securities Act for
the purpose of registering Common Stock issuable pursuant to the Subsidiary
Merger (if applicable) is declared effective by the SEC (the “Right Closing
Date”) or (iii) the 10th Business Day following the determination of the EBITDA
of the Company in accordance with Section 2.8. If the Schilling Parties make a
Cash Election, the Schilling Parties agree to sell, convey, assign, transfer and
deliver to FMC, and FMC agrees to purchase from the Schilling Parties at the
Right Closing, the Right Securities, free and clear of all Liens. The Company
shall be responsible for preparing, and FMC shall have the right to review, the
Company’s short-form income tax return for such year that the Right Closing
occurs.

2.6 Taking of Necessary Action; Further Action. In the event the Right is
exercised, each of the Parties agrees to use its commercially reasonable efforts
to cause the transactions described in this Article II to occur as described
herein and to take all actions as are necessary and appropriate to cause the
Right Closing to occur including, but not limited to, (i) entering into
customary agreements, which agreements shall contain representations, warranties
and covenants (and indemnification provisions related thereto), in each case no
less favorable to FMC than those contained in Articles II, VI, and IX of the
Purchase Agreement, (ii) hiring counsel and other customary advisors,
(iii) delivering customary certificates and documents supporting such customary
agreements and (iv) furnishing appropriate information to the other Parties. If,
at any time after the Right Closing, any further action is necessary or
desirable to carry out the purposes of this Agreement and to vest FMC with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company, the Schilling Parties agree to take, and will
take, all such lawful and necessary action required to so do, so long as such
action is not inconsistent with this Agreement.

2.7 Purchasing Entity. In the event that any Person acquires control of FMC
(whether by merger, acquisition of securities, sale of all or substantially all
of the assets of FMC or other transaction), all references herein to FMC shall
be to such acquiring Person (or, in the event that FMC survives as a subsidiary
of another Person, all references herein to FMC shall be to the ultimate parent
of FMC) (in any such case, the “Purchasing Entity”). For the avoidance of doubt,
in the event of such a transaction as described in the preceding sentence, all
references herein to Common Stock, Fair Market Value, the EBITDA of FMC, FMC
Market Capitalization, Multiple and Net Debt shall be calculated with respect to
such Purchasing Entity as though such Purchasing Entity was FMC and, in the
event of a Stock Election, the stockholders of Schilling Inc. would be entitled
to receive Common Stock of such Purchasing Entity, provided, however, that in
such case the Multiple used to calculate the Exercise Price shall be no less
than the

 

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Multiple as calculated on a hypothetical basis using the Fair Market Value,
EBITDA of FMC, FMC Market Capitalization and Net Debt of FMC as though a Right
Notice had been delivered immediately prior to the consummation of such
acquisition of FMC (even if not then during the Right Period).

2.8 Determination of EBITDA; Resolution of Conflicts. Beginning no later than
the first quarter of fiscal year 2011, the Company and its audit committee shall
engage the Company’s outside audit firm to conduct a review of it’s interim
financial statements for each of the first, second and third quarters of each
fiscal year, under the standards and guidance for conducting interim reviews as
set forth in Statement of Accounting Standards No. 100, Interim Financial
Statements, as the same may be amended from time to time. Such quarterly reviews
shall be made available to FMC upon request. In connection with the calculation
of the Multiple and the Exercise Price, as the case may be, each of FMC (for
purposes of calculating the Multiple) and Schilling Inc. (for purposes of
calculating the Exercise Price) shall deliver promptly, but in any event within
20 calendar days after delivery of the Right Notice, to the other Party its
calculation of its respective EBTIDA for purposes of such required calculations.
Each such calculation shall include such additional information as is reasonably
necessary to support such calculation. Each of FMC and Schilling Inc., as the
case may be, shall have the right to object to the calculation of EBTIDA
prepared by the other Party and such Parties agree to consult with one another
to resolve any objections raised by either Party. In the event that either Party
is not able to resolve any such objection, each of FMC and Schilling Inc. agree
that the dispute shall be referred for determination (which determination shall
be final and non-appealable and binding on the Parties) to a
nationally-recognized independent public accounting firm that is not then under
engagement by any of the Parties. Each of FMC and Schilling Inc. shall submit
their proposed good faith calculation of the EBITDA calculation under dispute
within 15 calendar days of the selection of the independent public accounting
firm, and such accounting firm shall resolve the dispute through “baseball”
arbitration. The Party whose calculation is not selected by the independent
public accounting firm shall pay all costs and expenses incurred by each Party
and the independent public accounting firm in connection with the resolution of
the disputed calculation of the EBITDA.

2.9 Restatement of FMC Financial Statements. Notwithstanding anything herein to
the contrary, in the event FMC delivers a Right Notice during an FMC Restatement
Period or the 90 calendar days immediately following the end of the FMC
Restatement Period, then the calculation of the Multiple (including the related
FMC Market Capitalization, Net Debt and EBITDA of FMC) in such circumstance
shall be made using as the date of determination the first trading day that is
not less than seven calendar days before the commencement of the FMC Restatement
Period rather than the date of delivery of the Right Notice. In the event that
FMC delivers a Right Notice either before an FMC Restatement Period or after the
90th calendar day following the end of an FMC Restatement Period, then the
Multiple shall be calculated in accordance with Section 2.4.2 without giving
effect to this Section 2.9.

 

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ARTICLE III

RIGHT OF FIRST OFFER

3.1 Right of First Offer. Subject to the terms and conditions specified in this
Article III, the Schilling Parties hereby grant to FMC a right of first offer
with respect to the sale of all of the Right Securities (the “Right of First
Offer”), exercisable by FMC at any time after the expiration of the Right Period
but prior to the closing of a Company IPO (the “Right of First Offer Period”).

3.2 Initial Offer, Acceptance and Closing. At any time during the Right of First
Offer Period, the Schilling Parties may deliver a proposal in writing to FMC,
which contains the price and all other essential terms (including, if any Third
Party Sale (as defined below) is contemplated, the identity of the proposed
purchaser in such Third Party Sale), offering the sale of all but not less than
all of the Right Securities to FMC (the “Initial Offer”). Upon receipt of an
Initial Offer, FMC may elect to purchase the Right Securities by delivering a
written notice to the Schilling Parties (the “Purchase Notice”) indicating its
desire to exercise its rights under Section 3.1 within 30 calendar days of its
receipt of the Initial Offer (the “Acceptance”). If FMC timely delivers a
Purchase Notice, the Schilling Parties and FMC shall establish a closing date
(which shall be a Business Day) for the sale and purchase of the Right
Securities (the “Right of First Offer Closing Date”), which Right of First Offer
Closing Date shall be no later than 30 calendar days after the receipt of the
Acceptance. On the Right of First Offer Closing Date, (i) the Schilling Parties
shall deliver to FMC a certificate or certificates evidencing the Right
Securities together with a stock transfer power executed in blank against
receipt of immediately available funds in an amount equal to the purchase price
set forth in the Initial Offer and (ii) FMC and the Schilling Parties shall
enter into such customary agreements as are necessary to cause the Right of
First Offer Closing to occur. All such agreements shall contain representations,
warranties and covenants (and indemnification provisions related thereto) no
less favorable to FMC than those contained in Articles II, VI and IX of the
Purchase Agreement, and all Right Securities shall be delivered free and clear
of any Liens.

3.3 Permitted Sale. If FMC declines the Initial Offer or does not timely deliver
its Purchase Notice to the Schilling Parties, the Schilling Parties may, during
a period of 120 calendar days after FMC notifies Schilling Inc. that it has
declined the Initial Offer or after the end of the 30 day period that FMC may
respond to the Initial Offer, as such 90-day period may be extended to obtain
any necessary regulatory approvals, sell all (but not less than all) of the
Right Securities to any Person (a “Third-Party Sale”) for a price equal to or
greater than the price set forth in the Initial Offer, and, if any other
material terms are identified in the Initial Offer, on those terms (or those
terms modified in a manner which would be no less favorable to FMC). If, at the
end of such period, as such period may be extended to obtain any required
regulatory approvals, the Schilling Parties have not completed the sale of the
Right Securities in accordance with the foregoing, the restrictions in this
Article III shall remain in effect with respect to the Right Securities.

 

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3.4 Third-Party Offer. In the event the Schilling Parties receive a bona fide
written offer from a third party to purchase all but not less than all of the
Right Securities for a price and/or terms that are inferior to the Initial Offer
(a “Third-Party Offer”), the Schilling Parties shall be prohibited from
accepting such Third-Party Offer unless they shall have first given FMC notice
of such Third-Party Offer (including the identity of the Person making such
Third-Party Offer), whereupon FMC shall be entitled, during the following 30
calendar days after its receipt of such Third-Party Offer to match the
Third-Party Offer by offering to purchase the Right Securities from the
Schilling Parties on terms that are substantially identical to those contained
in the Third-Party Offer. If FMC timely matches the Third-Party Offer, the
Schilling Parties shall have been deemed to have accepted such offer and, with
FMC, shall establish a closing date (which shall be a Business Day) for the sale
and purchase of the Right Securities (the “Third-Party Offer Closing Date”),
which Third-Party Offer Closing Date shall be no later than 30 calendar days
after the date of delivery of FMC’s acceptance of the Third-Party Offer, as such
period may be extended to obtain any required regulatory approvals. On the
Third-Party Offer Closing Date, (i) the Schilling Parties shall deliver to FMC a
certificate or certificates evidencing the Right Securities together with a
stock transfer power executed in blank against receipt of immediately available
funds in an amount equal to the purchase price set forth in the Third-Party
Offer and (ii) the Schilling Parties and FMC shall enter into such other
customary agreements as are necessary to cause the Third-Party Offer Closing to
occur. All such agreements shall contain representations, warranties and
covenants (and indemnification provisions related thereto) no less favorable to
FMC than those contained in Articles II, VI and IX of the Purchase Agreement,
and all Right Securities shall be delivered free and clear of any Liens. If FMC
declines or does not timely accept the Third-Party Offer, the Schilling Parties
shall be entitled to complete the sale of the Right Securities on the terms of
the Third-Party Offer; provided, however, if Schilling Inc. has not completed
the transaction contemplated in the Third-Party Offer within 120 calendar days
after FMC’s acceptance or rejection of such offer, as such period may be
extended to obtain any required regulatory approvals, Schilling shall again be
subject to the terms of this Section 3.4.

ARTICLE IV

BRING-ALONG AND TAG-ALONG RIGHTS

4.1 Availability of Bring-Along Right and Tag-Along Right. The Bring-Along Right
and Tag-Along Right set forth in this Article IV are available only if the
Schilling Parties have first complied in all respects with their obligations
under Article III hereof.

4.2 Bring-Along Right.

4.2.1 Subject to Section 4.1 hereof, if, at any time after the expiration of the
Right Period, but prior to the closing of a Company IPO, the Schilling Parties
agree to sell all (but not less than all) of the Right Securities to any third
Person that is not an Affiliate of Schilling Inc. (the “Bring-Along Purchaser”),
the Schilling Parties may give written notice to FMC of its intent to exercise
its rights under this Section 4.2 (the “Bring-Along Notice”). The Bring-Along
Notice shall include the material terms and conditions of the sale to the
Bring-Along

 

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Purchaser, including (i) the name and address of the proposed transferee,
(ii) the proposed amount and form of consideration (and if such consideration
consists in part or in whole of property other than cash, the Schilling Parties
will provide such information, to the extent reasonably available to the
Schilling Parties, relating to such non-cash consideration) and (iii) the
proposed date of the Bring-Along Right Closing, which date shall be a Business
Day and shall not be less than 20 calendar days nor more than 90 calendar days
after the date the Bring-Along Notice is delivered.

4.2.2 Upon receipt of the Bring-Along Notice, FMC shall be obligated to deliver
at the Bring-Along Right Closing a certificate or certificates evidencing the
FMC Interest with a Unit transfer power executed in blank and shall thereby
convey all of its right, title and interest in the FMC Interest, free and clear
of any Liens, to the Bring-Along Purchaser. In addition, FMC shall be obligated
(i) to enter into customary agreements together with the Schilling Parties
relating to the transaction contemplated in the Bring-Along Notice (the
“Bring-Along Transaction”), (ii) to agree to make to the Bring-Along Purchaser
the same representations, warranties, covenants (other than standstill,
non-compete and non-solicitation provisions and licenses or any other covenant
that would require FMC to restrict or limit its or its Affiliates’ business
activities in any material respect) and indemnities as the Schilling Parties
agree to make in connection with the Bring-Along Transaction; provided, however,
that unless agreed to by FMC, FMC will not be required to make representations
and warranties or provide indemnities pursuant to any agreement entered into to
effect the Bring-Along Transaction other than representations and warranties
related to title and ownership of the Units owned by FMC, consents, authority,
power and legal right to enter into and consummate such agreements, and, in the
event an escrow is established to secure breaches of representations and
warranties, FMC will participate pro-rata in such escrow based on its ownership
of Units, but its obligations under such escrow shall only be for the purpose of
providing a remedy for any breach of the representations and warranties and
indemnification obligations of FMC.

4.2.3 The obligations of FMC pursuant to this Section 4.2 are subject to the
following conditions:

4.2.3.1 FMC and the Schilling Parties shall receive the same type and amount of
consideration, at the same time, on a per Unit basis, from the Bring-Along
Transaction; and

4.2.3.2 any expenses incurred by FMC or the Schilling Parties in relation to the
Bring-Along Transaction as well as any indemnities, holdbacks, escrows and
similar items relating to the Bring-Along Transaction that are not paid or
established by the Company (other than those that relate to representations or
indemnities concerning FMC’s valid ownership of the FMC Interest or the
Schilling Party’s valid ownership of the Right Securities free and clear of all
liens, claims or encumbrances, or FMC’s or each of the Schilling Party’s
authority, power and legal right to enter into and consummate the Bring-Along
Transaction) shall be paid or established by FMC and the Schilling Parties in
accordance with their respective ownership of the Units; provided, however, that
notwithstanding anything in this Section 4.2.3.1 to the

 

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contrary, any liability relating to representations and warranties (and related
indemnities) and other indemnification obligations shall not exceed the proceeds
received by FMC in the Bring-Along Transaction; and provided further, however,
that FMC’s obligations under any such holdback, escrow or similar item shall
only apply for the purpose of providing a remedy for any breach of a
representation or warranty provided by or other indemnification obligation
agreed to by FMC.

4.3 Tag-Along Right.

4.3.1 Subject to Sections 4.1 and 4.2 hereof, if, at any time after the
expiration of the Right Period, but prior to the closing of a Company IPO, any
of the Schilling Parties receives an offer from, and agrees to sell (a
“Tag-Along Transaction”) any of the Right Securities to, any third party that is
not an Affiliate of Schilling Inc. (the “Tag-Along Purchaser”), such Schilling
Party will provide written notice of such sale to FMC (the “Tag-Along Notice”).
The Tag-Along Notice shall include the material terms and conditions of the
offer from the Tag-Along Purchaser, including (i) the name and address of the
proposed transferee, (ii) the proposed amount and form of consideration (and if
such consideration consists in whole or in part of property other than cash,
such Schilling Party will provide such information, to the extent reasonably
available to such Schilling Party, relating to such non-cash consideration) and
(iii) the proposed date of the Tag-Along Right Closing, which shall not be less
than 20 Business Days after the delivery of the Tag-Along Notice.

4.3.2 FMC shall have the right (the “Tag-Along Right”), exercisable by delivery
of a written notice to the Schilling Parties, at any time within 15 Business
Days after receipt of the Tag Along Notice from a Schilling Party, indicating
whether FMC desires to transfer any of the FMC Interest concurrently with such
Schilling Party in accordance with the terms of this Section 4.3, upon the terms
included in the Tag-Along Notice. Failure of FMC to provide such written notice
within such 15 Business-Day period after actual receipt of notice from a
Schilling Party shall constitute a forfeiture by FMC of any and all Tag-Along
Rights with respect to such Tag-Along Notice. If the Tag-Along Purchaser is
unwilling to purchase all of the Units requested to be included by FMC in the
Tag-Along Transaction, then each Party shall reduce, on a pro rata basis, based
on their respective ownership interests in the Company, the amount of such Units
that each otherwise would have sold so as to permit each Party to sell the
number of Units (determined after giving effect to such reduction) that the
Tag-Along Purchaser is willing to purchase.

4.3.3 In connection with the Tag-Along Transaction, FMC and such Schilling Party
agrees and understands that FMC shall execute and deliver the same agreements
and commitments from the Tag-Along Purchaser with respect to the purchase of the
FMC Interest as such Schilling Party obtains from the Tag-Along Purchaser with
respect to the purchase of the Right Securities, including (i) the time of
transfer, (ii) that FMC and such Schilling Party shall receive the same type and
amount of consideration, at the same time, on a per Unit basis, from the
Tag-Along Transaction and (iii) other terms and conditions upon which the
transfer is to be made. In addition, FMC and the Schilling Parties agree that
each party shall bear its own costs or

 

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expenses in relation to the Tag-Along Transaction. If the transferee refuses to
purchase the FMC Interest pursuant to the exercise of the Tag-Along Right, such
Schilling Party shall be prohibited from selling any Right Securities to such
Tag-Along Purchaser.

4.3.4 In connection with the Tag-Along Transaction, FMC shall be obligated to
agree to make to the Tag-Along Purchaser the same representations, warranties,
covenants (other than standstill, non-compete and non-solicitation provisions
and licenses or any other covenant that would require FMC to restrict or limit
its or its Affiliates’ business activities in any material respect) and
indemnities as such Schilling Party agrees to make in connection with the
Tag-Along Transaction; provided, however, that unless agreed to by FMC, FMC will
not be required to make representations and warranties or provide indemnities
pursuant to any agreement entered into to effect the Tag-Along Transaction other
than representations and warranties related to title and ownership of the Units
owned by FMC, consents, authority, power and legal right to enter into and
consummate such agreements, and, in the event an escrow is established to secure
breaches of representations and warranties, FMC will participate pro-rata in
such escrow based on its ownership of Units.

ARTICLE V

COVENANTS

5.1 Preservation of Tax-Free Status. At all times during the Right Period and
following a Stock Election, FMC will use commercially reasonable efforts to
cooperate with Schilling Inc. to preserve the treatment of the issuance of
Common Stock to Schilling Inc. in a Merger as a tax-free reorganization in
compliance with Section 368 of the Code.

5.2 Transfer of Right Securities. Each of the Schilling Parties hereby covenants
and agrees, on behalf of itself and each of its affiliates, that, during the
term of this Agreement it shall not complete any transfer of any Right
Securities by sale, assignment, pledge, hypothecation or otherwise,
(collectively, a “Transfer”) unless such Schilling Party shall have first
obtained the written agreement of the transferee thereof to be bound by the
terms and conditions contained herein.

5.3 Transfer of the FMC Interest. FMC hereby covenants and agrees, on behalf of
itself and each of its Affiliates, that, during the term of this Agreement it
shall not complete any Transfer of any securities (as permitted by and pursuant
to the terms and conditions of the Operating Agreement) that constitute any part
of the FMC Interest, unless FMC shall have first obtained the written agreement
of the transferee thereof to be bound by the terms and conditions contained
herein.

5.4 Legend. In addition to any legend required pursuant to the Purchase
Agreement or any other agreement between the Parties and the Company, each
certificate evidencing Right Securities or certificates for securities
constituting the FMC Interest issued on or after the date hereof shall be
stamped or otherwise imprinted with a legend in substantially the following
form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER SET FORTH IN A UNITHOLDERS AGREEMENT DATED DECEMBER 26, 2008, AND MAY
NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF SUCH AGREEMENT, AS MAY BE
AMENDED FROM TIME TO TIME. A COPY OF SUCH AGREEMENT, AS AMENDED FROM TIME TO
TIME, SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON
WRITTEN REQUEST.”

 

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5.5 Termination. This Agreement shall terminate and be of no further force and
effect upon the completion of a Company IPO.

ARTICLE VI

MISCELLANEOUS

6.1 No Third Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any person other than the Parties hereto and their respective
successors and permitted assigns.

6.2 Entire Agreement. This Agreement and the documents and instruments and other
agreements among the Parties referred to herein constitute the entire agreement
among the Parties and supersedes any prior understandings, agreements or
representations by or among the Parties, written or oral, with respect to the
subject matter hereof. In case of any conflict between the terms of this
Agreement and the Operating Agreement, this Agreement shall govern to the extent
of such conflict.

6.3 Resolution of Conflicts.

6.3.1 Except as set forth in Section 2.8, in the event of any dispute or
disagreement among any of the Parties as to the interpretation of any provision
of this Agreement or the performance of obligations hereunder, after good faith
negotiation by the Parties, any Party may, by written notice to the other
Parties, demand arbitration of the matter, and such arbitration shall be
administered by the Center for Public Resources Institute for Dispute
Resolutions (“CPR”) in accordance with its then prevailing Rules for
Non-Administered Arbitration of Business Disputes, by an arbitrator or
arbitrators as selected and described in Section 6.3.2. The arbitrator(s) shall
set a limited time period and establish procedures designed to reduce the cost
and time for discovery while allowing the Parties an opportunity, adequate in
the sole judgment of the arbitrators, to discover relevant information from the
opposing Parties about the subject matter of the dispute. The arbitrator(s)
shall rule upon motions to compel or limit discovery and shall have the
authority to impose sanctions, including, without limitation, attorneys’ fees
and costs, to the same extent as a court of competent jurisdiction, should the
arbitrator(s) determine

 

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that discovery was sought without substantial justification or that discovery
was refused or objected to without substantial justification. The decision of
the arbitrator(s) shall be written, shall be in accordance with applicable law,
including, without limitation, the United States Arbitration Act, 9 U.S.C. §1
et. seq. (the “USAA”), and with this Agreement, and shall be supported by
written findings of fact and conclusions of law which shall set forth the basis
for such decision. The decision of the arbitrator(s) shall be final and not
subject to judicial review and judgment thereon may be entered in any court of
competent jurisdiction, and the Parties shall be entitled to act in accordance
with such decision.

6.3.2 For all disputes for which the aggregate disputed dollar amount is equal
to or less than $3,000,000, the Parties shall agree upon a single arbitrator to
oversee such dispute. If the Parties cannot agree on such arbitrator within 20
days after submitting the dispute for arbitration, then the dispute shall be
managed by a single independent arbitrator to be chosen by the CPR. For all
disputes for which the aggregate disputed dollar amount exceeds $3,000,000, such
dispute shall be managed and ruled upon by a panel of three arbitrators. FMC, on
the one hand, and the Schilling Parties, on the other hand, shall each name one
of the arbitrators, and the third arbitrator shall be chosen by FMC and the
Schilling Parties or, if FMC and the Schilling Parties cannot agree on such
arbitrator within 20 days after submitting the dispute for arbitration, then the
third arbitrator shall be an independent arbitrator selected by the CPR.

6.3.3 Any arbitration under this Section 6.3 shall be governed by the USAA and
shall be held in Delaware. The non-prevailing Party to an arbitration shall pay
its own expenses, the fees of the arbitrator, any fees and expenses of the CPR,
and the expenses, including attorneys’ fees and costs, reasonably incurred by
the other Party to the arbitration.

6.4 Succession and Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties named herein and their respective successors and
permitted assigns. No Party may assign this Agreement or any of its rights,
interests, or obligations hereunder without the prior written consent of the
other Party hereto; provided, however, that FMC shall be permitted to assign its
rights, interests or obligations hereunder to any Affiliate of FMC or to any
other Person in connection with the sale of all or substantially all of FMC’s
assets to such Person.

6.5 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

6.6 Headings. The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.

6.7 Notices. All notices, requests, demands, claims, and other communications
hereunder shall be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly delivered two Business Days after
it is sent by registered or certified mail, return receipt requested, postage
prepaid, or one Business Day after it is sent via a reputable nationwide
overnight courier service or sent via facsimile (with acknowledgment of complete
transmission) with a confirmation copy by registered or certified mail, in each
case to the intended recipient as set forth below:

 

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if to Schilling Inc.:   

SCHILLING ROBOTICS, INC.

201 Cousteau Place

Davis, CA 95618

Attention: Philip F. Otto

Facsimile No.: (530) 753-8092

   with a copy to   

DLA PIPER LLP (US)

400 Capitol Mall, Suite 2400

Sacramento, CA 95814

Attention: Gilles S. Attia

Facsimile No.: (916) 930-3201

if to Schilling:   

Tyler Schilling

c/o SCHILLING ROBOTICS, INC.

201 Cousteau Place

Davis, CA 95618

Facsimile No.: (530) 753-8092

if to FMC:   

FMC TECHNOLOGIES, INC.

1803 Gears Road

Houston, TX 77067

Attention: General Counsel

Facsimile No.: (281) 591-4102

  

 

with a copy to

 

Vinson & Elkins L.L.P.

1001 Fannin Street, Suite 2500

Houston, TX 77002

Attention: T. Mark Kelly

Facsimile No.: (713) 615-5531

 

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Any Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the Party for
whom it is intended. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.

6.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
Delaware.

6.9 Amendments and Waivers. The Parties may mutually amend any provision of this
Agreement at any time. No amendment of any provision of this Agreement shall be
valid unless the same shall be in writing and signed by all of the Parties
hereto. No waiver by any Party hereto of any default, misrepresentation or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation or breach
of warranty or covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent default, misrepresentation, breach of such
warranty or covenant.

6.10 Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction. If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed, provided that this Agreement shall not then
substantially deprive either party of the bargained-for performance of the other
Party.

6.11 Expenses. Except as otherwise provided herein, all fees and expenses
(including all legal and accounting fees and expenses and all other expenses)
incurred by FMC in connection with this Agreement and the transactions
contemplated hereby shall be paid by FMC, whether or not a transaction is
consummated, and all reasonable transaction costs incurred by the Schilling
Parties in connection with this Agreement and the transactions contemplated
hereby shall be paid by the Schilling Parties.

6.12 Specific Performance. Each Party acknowledges that it would be impossible
to determine the amount of damages that would result from any breach by him, her
or it of any of the provisions of this Agreement and that the remedy at law for
any breach, or threatened breach, of any of such provisions would likely be
inadequate and, accordingly, agrees that each Party

 

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shall, in addition to any other rights or remedies which it may have, be
entitled to seek such equitable and injunctive relief as may be available from
any court of competent jurisdiction to compel specific performance of, or
restrain such Party from violating any of, such provisions. In connection with
any action or proceeding for injunctive relief, each Party hereby waives the
claim or defense that a remedy at law alone is adequate and agrees, to the
maximum extent permitted by law, to have each provision of this Agreement
specifically enforced against him, her or it, without the necessity of posting
bond or other security against it.

6.13 Other Remedies. Except as otherwise provided herein, any and all remedies
herein expressly conferred upon a Party will be deemed cumulative with, and not
exclusive of, any other remedy conferred hereby or by law or equity upon such
Party, and the exercise by a Party of any one remedy will not preclude the
exercise of any other remedy.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Purchase Right and
Right of First Offer Agreement as of the date first above written.

 

SCHILLING ROBOTICS, INC. By:  

 

Name:   Philip F. Otto Title:   Chief Executive Officer TYLER SCHILLING By:  

 

Name:   Tyler Schilling FMC TECHNOLOGIES, INC. By:  

 

Name:   Jeffrey W. Carr Title:   Vice President, General Counsel & Secretary