COLLATERAL AGREEMENT
This Collateral Agreement (the "Agreement") is made by and between Xxxxx
Xxxx Agricultural Corporation, Inc., Louisiana corporation ("Xxxxx"), and
Contran Corporation, Delaware corporation ("Contran"), as of the 20th day of
December, 1988.
W I T N E S S E T H
WHEREAS, Xxxxx and Southern Methodist University ("SMU") have entered into
that certain Loan and Pledge Agreement dated August 18, 1986 (the "Loan
Agreement"), pursuant to which SMU has agreed to advance Xxxxx up to
$1,500,000.00 in loans; and
WHEREAS, SMU requires, among other things, that Xxxxx pledge shares of
stock with a market value of not less than two hundred percent (200%) of the
outstanding principal balance of the loans advanced under the Loan Agreement;
and
WHEREAS, Xxxxx does not currently hold securities which will qualify as
collateral under the Loan Agreement; and
WHEREAS, Contran has agreed to pledge shares of Valhi, Inc. common stock
owned by Contran, as collateral under the Loan Agreement.
NOW, THEREFORE, in consideration of the mutual premises, representations
and covenants herein contained, the parties hereto mutually agree as follows:
1) Contran agrees to pledge, as collateral under the Loan Agreement,
300,000 shares of Valhi, Inc. common stock owned by Contran, or such
greater number of shares which of at least shall have from time to time a
market value of at least $3,000,000.00 (the "Shares").
2) As consideration for pledging the Shares, Xxxxx shall pay to
Contran a fee equal to an annual rate of .5% of the average daily principal
loan balance outstanding, during periods in which any portion of the Shares
are pledged, under the Loan Agreement [payable quarterly on each March 31,
June 30, September 30 and December 31].
3) Xxxxx agrees to indemnify Contran against any loss or incremental
cost resulting from the pledge of the Shares under the Loan Agreement.
4) This Agreement may be terminated by either party hereto by giving
the other party thirty (30) days written notice of such termination.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
XXXXX XXXX AGRICULTURAL CORPORATION, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Chairman of the Board
CONTRAN CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
