FORM OF VALHI, INC. GUARANTY
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Valhi, Inc., a Delaware corporation ("Guarantor"), in order to induce
ROGUE RESOURCES LLC, an Oregon limited liability company (the "Buyer") to enter
into an Asset Purchase Agreement dated as of October , 1996 (the "Agreement")
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by and among Buyer and Medite Corporation, a Delaware corporation and a
subsidiary of Guarantor (the "Seller"), hereby unconditionally and irrevocably
guarantees to Buyer the full and timely performance by Seller of all of the
obligations set forth in Section 8 of the Agreement on Seller's part to be
performed, provided however, that Guarantor shall have no obligation to perform
any of Seller's obligations unless and until (i) Seller shall have defaulted in
the performance of such obligations and such default is continuing without cure
on the part of Seller; and (ii) Buyer shall have given Guarantor thirty (30)
day's notice of such default on the part of Seller.
Guarantor hereby expressly waives (1) notice of acceptance of this
guaranty and (2) any other notice given to Seller in accordance with the
provisions of the Agreement on any default under the Agreement or otherwise,
except as provided in the first paragraph of this Guaranty. Guarantor hereby
authorizes Buyer to forbear with respect to, amend, modify, enlarge, extend,
compromise and discharge any or all of the obligations of Seller under the
Agreement without notice to or consent by Guarantor. Guarantor acknowledges and
agrees that its liability under this guaranty is joint and several with Seller
and, upon any continuing default by Seller, Buyer shall not be obligated to
first attempt enforcement against Seller but shall only be obligated to give the
notice provided in the first paragraph of this Guaranty. Guarantor hereby
waives any and all defenses to enforcement of this guaranty, now existing or
hereafter arising, which may be available to guarantors, sureties and other
secondary parties at law or in equity.
Guarantor represents and warrants to Buyer that (a) all necessary
corporate action has been duly taken by it to authorize the execution, delivery
and performance by it of this guaranty, (b) this guaranty is being executed on
Guarantor's behalf by a duly authorized representative, and (c) this guaranty is
the legally valid and binding obligation of Guarantor enforceable in accordance
with its terms.
Guarantor agrees to pay all reasonable costs and expenses, including
reasonable attorney fees and related costs, incurred by Buyer in enforcing
Guarantor s liability to Buyer under this guaranty whether or not a civil action
or similar proceeding (including claims and proceedings in and before the
bankruptcy court or arbitrators) is filed, prosecuted or appealed. If an action
or proceeding is filed, prosecuted or appealed, the reasonableness of such
attorney fees shall be determined by the trial judge and if, appealed, by the
appellate court.
This guaranty shall be binding upon Guarantor and its successors and
assigns, and shall inure to the benefit of and be enforceable by Buyer and its
successors and assigns.
Dated as of October , 1996.
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VALHI, INC., a Delaware corporation
By:
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Name:
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