AMENDMENT NO. 1 TO
AGREEMENT AND PLAN OF MERGER
This Amendment No. 1 to Agreement and Plan of Merger, dated November 12,
2002 (this "Amendment"), by and among Valhi, Inc., a Delaware corporation
("Valhi"), Valhi Acquisition Corp., a Delaware corporation and a direct
wholly-owned subsidiary of Valhi ("Sub"), and Tremont Corporation, a Delaware
corporation ("Tremont"), and will amend the Agreement and Plan of Merger, dated
as of November 4, 2002, among Valhi, Sub and Tremont (the "Merger Agreement").
WHEREAS, the parties to the Merger Agreement desire to amend the Merger
Agreement to clarify their mutual intent relating thereto.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
hereby agree as follows:
1. The second recital of the Merger Agreement is restated to read in its
entirety as follows:
"WHEREAS, it is intended that, for Federal income tax purposes, the
Merger followed by the LLC Merger (as defined below) shall be a tax-free
reorganization as described in the Internal Revenue Code of 1986, as
amended (the "Code"), with respect to the holders of common stock, par
value $1.00 per share ("Tremont Common Stock"), of Tremont, other than
Valhi and Tremont Group, Inc., a Delaware corporation ("TGI")."
2. Section 2.1(a) of the Merger Agreement is restated to read in its
entirety as follows:
"(a) Cancellation of Treasury Stock and Valhi-Owned Stock. Each share
of Tremont Common Stock (i) that is owned by Valhi, (ii) that is held by
Tremont as treasury stock and (iii) that is owned by TGI shall, in each
case, automatically be canceled and retired and shall cease to exist, and
no consideration shall be delivered in exchange therefor."
3. Section 3.15 of the Merger Agreement is restated to read in its entirety
as follows:
"Section 3.15 Certain Tax Matters. Neither Valhi nor, to Valhi's
knowledge, any other person, has taken or agreed to take any action that
could reasonably be expected to prevent the Merger followed by the LLC
Merger from constituting a "reorganization" under Section 368(a) of the
Code with respect to the holders of Tremont Common Stock other than Valhi
and TGI. Valhi is not aware of any agreement, plan or other circumstance
that could reasonably be expected to prevent such qualification."
4. Section 5.14 of the Merger Agreement is restated to read in its entirety
as follows:
"Section 5.14 Tax-Free Transaction. From and after the date of this
Agreement, each party hereto shall use its reasonable commercial efforts to
cause the Merger followed by the LLC Merger to qualify, and shall not take,
or cause to be taken, any actions that could reasonably be expected to
prevent the Merger followed by the LLC Merger from qualifying as a
"reorganization" under Section 368(a) of the Code with respect to the
holders of Tremont Common Stock other than Valhi and TGI."
5. The following Section 5.15 is added to the Merger Agreement:
"Section 5.15 Other Transactions. Valhi shall cause the TGI Merger to
be consummated prior to the Effective Time and shall cause the LLC Merger
to be consummated as soon as practicable after the Effective Time."
6. Section 6.2(g) of the Merger Agreement is restated to read in its
entirety as follows:
"(g) Tax Opinion. Valhi and Sub shall have received an executed copy
of a tax opinion of Xxxxx Xxxxxxx & Xxxx LLP, Valhi's legal counsel, to the
effect that the Merger followed by the LLC Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code with
respect to the holders of Tremont Common Stock other than Valhi and TGI and
a complete liquidation of Tremont under Section 332 of the Code with
respect to Valhi."
7. Section 6.3(g) of the Merger Agreement is restated to read in its
entirety as follows:
"(g) Tax Opinion. Tremont shall have received an executed copy of a
tax opinion of Xxxxx Xxxxxxx LLP, legal counsel to the Special Committee of
the Board of Directors of Tremont, to the effect that the Merger followed
by the LLC Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code with respect to shareholders of Tremont other
than Valhi or TGI."
8. The following Section 6.3(j) is added to the Merger Agreement:
(j) Closing of the TGI Merger. The TGI Merger shall have become
effective.
9. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to such terms in the Merger Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
signed by their respective duly authorized officers as of the date first above
written.
VALHI, INC.
By: /s/ Xxxxx X. X'Xxxxx
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Xxxxx X. X'Xxxxx
Vice President, Chief Financial Officer and
Treasurer
VALHI ACQUISITION CORP.
By: /s/ Xxxxx X. X'Xxxxx
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Xxxxx X. X'Xxxxx
Vice President, Chief Financial Officer and
Treasurer
TREMONT CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
Vice President, General Counsel and
Secretary
