FORM OF VALHI, INC. GUARANTY
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Valhi, Inc., a Delaware corporation ("Guarantor"), in order to induce
Willamette Industries, Inc. (`Willamette'') to subscribe for shares of Medford
International Holdings pursuant to a Share Subscription and Redemption Agreement
dated as of November , 1996 (the `Agreement'') by and among Willammette and
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Medite Corporation, a Delaware corporation and an indirect subsidiary of
Guarantor (`Medite''), hereby unconditionally and irrevocably guarantees to
Willamette the full and timely performance by Medite of all of the obligations
set forth in Section 8 of the Agreement on Medite's part to be performed,
provided however, that Guarantor shall have no obligation to perform any of
Medite's obligations unless and until (i) Medite shall have defaulted in the
performance of such obligations and such default is continuing without cure on
the part of Medite; and (ii) Willamette shall have given Guarantor five (5)
day's notice of such default on the part of Medite.
Guarantor hereby expressly waives (1) notice of acceptance of this
guaranty and (2) any other notice given to Medite 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 Willamette to forbear with respect to, amend, modify, enlarge,
extend, compromise and discharge any or all of the obligations of Medite 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
Medite and, upon any continuing default by Medite, Willamette shall not be
obligated to first attempt enforcement against Medite 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 Willamette 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 Willamette in enforcing
Guarantor s liability to Willamette 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 Willamette and
its successors and assigns.
Dated as of November , 1996
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VALHI, INC., a Delaware corporation
By:
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Name:
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