EXHIBIT 10.5
INTERCORPORATE SERVICES AGREEMENT
This INTERCORPORATE SERVICES AGREEMENT (the "Agreement") is made effective
as of January 1, 1997, by and between Titanium Metals Corporation ("TIMET"), a
Delaware corporation, and NL Industries, Inc. ("NL"), a New Jersey corporation.
WHEREAS, TIMET desires that NL provide certain insurance, risk management,
loss control, internal audit, tax, and executive secretarial and administrative
services to TIMET, as set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and promises set forth
herein and for other good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, the parties to this Agreement agree as follows:
1. Services Provided. NL will make available to TIMET and its subsidiaries
the following services (the "Services"):
(a) certain administration and management services with respect to
TIMET's insurance and risk management needs, including:
(i) management of claims (including insured and self-insured
workers compensation and liability claims);
(ii) budgeting and related activities;
(iii) coordination of property loss control program; and
(iv) administration of TIMET's insurance program, excluding
all employee benefit and welfare related programs.
(b) consultation and assistance in performing internal audit
projects, as requested.
(c) consultation and assistance in tax management and
administration, including, without limitation, preparation and
filing of tax returns, tax reporting, examinations by
government authorities and tax planning.
(d) certain executive secretarial and administrative services.
2. Fees for Services and Reimbursement of Expenses. During the Term (as
defined below) of the Agreement, TIMET shall pay to NL an annual fee of $305,100
for the Services described in paragraphs 1(a), 1(c), and 1(d) above payable in
quarterly installments of $76,275 plus all out-of-pocket expenses incurred in
connection with the performance of such Services. In addition, during the
Initial Term and each Subsequent Term, TIMET will pay to NL within thirty (30)
days after receipt of an invoice (such invoices to occur no more frequently than
once per month) an amount equal to the product of $600 multiplied by the number
of days devoted by NL's internal auditors to providing Services described in
paragraph 1(b) above times the number of internal auditors providing such
Services plus all out-of-pocket expenses incurred in the performance of such
Services; provided, however, in the event that TIMET determines, in its sole
discretion, that it no longer desires certain of the Services or NL determines,
in its sole discretion, that it no longer desires to provide certain of the
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Services, then TIMET or NL, as appropriate, shall provide the other party with a
ninety (90) day prior written notice of cancellation describing the Services to
be terminated or discontinued and TIMET and NL during such ninety-day period
shall agree to a pro-rata reduction of the fees due hereunder for such
terminated or discontinued Services.
3. Limitation of Liability. In providing Services hereunder, NL shall have
a duty to act, and to cause its agents to act, in a reasonably prudent manner,
but neither NL nor any officer, director, employee or agent of NL shall be
liable to TIMET or its subsidiaries for any error of judgment or mistake of law
or for any loss incurred by TIMET or its subsidiaries in connection with the
matters to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of NL or from NL's
reckless disregard of obligations and duties under this Agreement.
4. Indemnification of NL by TIMET. TIMET shall indemnify and hold harmless
NL, its subsidiaries and their respective officers, directors and employees from
and against any and all losses, liabilities, claims, damages, costs and expenses
(including reasonable attorneys' fees and other expenses of litigation) to which
such party may become subject arising out of the provision by NL to TIMET and
its subsidiaries of any of the Services, provided that such indemnity shall not
protect any such party against any liability to which such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations and duties hereunder.
5. Further Assurance. Each of the parties will make, execute, acknowledge
and deliver such other instruments and documents, and take all such other
actions, as the other party may reasonably request and as may reasonably by
required in order to effectuate the purposes of this Agreement and to carry out
the terms hereof.
6. Notices. All communications hereunder shall be in writing and shall be
addressed to:
If to NL: NL Industries, Inc.
00000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
If to TIMET: Titanium Metals Corporation
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
or such other address as the parties shall have specified in writing.
7. Amendment and Modification. Neither this Agreement nor any item hereof
may be changed, waived, discharged or terminated other than by agreement in
writing signed by the parties hereto.
8. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties hereto,
provided that this Agreement may not be assigned by either of the parties hereto
without the prior written consent of the other party.
9. Miscellaneous. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. This Agreement constitutes the entire
agreement, and supersedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, and all of which together shall constitute one and the same
instrument. This
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Agreement shall be governed in all respects, including validity, interpretation
and affect, by the laws of the State of Texas.
10. Term of Agreement. This Agreement shall be effective as of January 1,
1997, and shall remain in effect for one year until December 31, 1997 (the
"Term"); provided, however, the Agreement shall be extended on a
quarter-to-quarter basis after the expiration of the Term unless written
notification is given by either party thirty (30) days in advance of the first
day of each successive quarter or unless it is terminated or superseded by a
subsequent written agreement of the parties hereto. Upon such termination or
upon the expiration of this Agreement, the parties' rights and obligations
hereunder shall cease and terminate except with respect to rights and
obligations arising on or prior to the date of expiration or termination and the
rights and obligations arising under paragraph 4 above.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
effective as of the _____ day of ____________, 1997, which Agreement will be
deemed to be effective as of January 1, 1997.
NL INDUSTRIES, INC.
By:____________________________________
Xxxxxx X. Xxxxxxx
Vice President
TITANIUM METALS CORPORATION
By:____________________________________
J. Xxxxxx Xxxxxxxxxx
Vice President - Finance and Treasurer
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