INTERCORPORATE SERVICES AGREEMENT
This INTERCORPORATE SERVICES AGREEMENT (the "~Agreement~"), effective as of
January 1, 1999, is between VALHI, INC., a Delaware corporation ("~Valhi~"), and
TREMONT CORPORATION, a Delaware corporation. ("~Recipient~").
RECITALS
A. Employees and agents of Valhi and affiliates of Valhi perform
management, financial and administrative functions for Recipient without direct
compensation from Recipient.
B. Recipient does not separately maintain the full internal capability to
perform all necessary management, financial and administrative functions that
Recipient requires.
C. The cost of maintaining the additional personnel by Recipient
necessary to perform the functions provided for by this Agreement would exceed
the fee set forth in SECTION 3 of this Agreement, and the terms of this
Agreement are no less favorable to Recipient than could otherwise be obtained
from a third party for comparable services.
D. Recipient desires to continue receiving the management, financial and
administrative services presently provided by Valhi and affiliates of Valhi and
Valhi is willing to continue to provide such services under the terms of this
Agreement.
AGREEMENT
For and in consideration of the mutual premises, representations and
covenants herein contained, the parties hereto mutually agree as follows:
SECTION 1. ~SERVICES~TO~BE~PROVIDED~. Valhi agrees to make available to
Recipient, upon request, the following services (the "~Services~") to be
rendered by the internal staff of Valhi and affiliates of Valhi:
(a) Consultation and assistance in the development and implementation
of Recipient's corporate business strategies, plans and objectives;
(b) Consultation and assistance in management and conduct of
corporate affairs and corporate governance consistent with the charter and
bylaws of Recipient;
(c) Consultation and assistance in maintenance of financial records
and controls, including preparation and review of periodic financial
statements and reports to be filed with public and regulatory entities and
those required to be prepared for financial institutions or pursuant to
indentures and credit agreements;
(d) Consultation and assistance in cash management and in arranging
financing necessary to implement the business plans of Recipient;
(e) 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; and
(f) Such other services as may be requested by Recipient from time to
time.
SECTION 2. ~MISCELLANEOUS~SERVICES~. It is the intent of the parties
hereto that Valhi provide only the Services requested by Recipient in connection
with routine management, financial and administrative functions related to the
ongoing operations of Recipient and not with respect to special projects,
including corporate investments, acquisitions and divestitures. The parties
hereto contemplate that the Services rendered in connection with the conduct of
Recipient's business will be on a scale compared to that existing on the
effective date of this Agreement, adjusted for internal corporate growth or
contraction, but not for major corporate acquisitions or divestitures, and that
adjustments may be required to the terms of this Agreement in the event of such
major corporate acquisitions, divestitures or special projects. Recipient will
continue to bear all other costs required for outside services including, but
not limited to, the outside services of attorneys, auditors, trustees,
consultants, transfer agents and registrars, and it is expressly understood that
Valhi assumes no liability for any expenses or services other than those stated
in SECTION 1. In addition to the fee paid to Valhi by Recipient for the
Services provided pursuant to this Agreement, Recipient will pay to Valhi the
amount of out-of-pocket costs incurred by Valhi in rendering such Services.
SECTION 3. ~FEE~FOR~SERVICES~. Recipient agrees to pay to Valhi $26,000
quarterly, commencing as of January 1, 1999, pursuant to this Agreement.
SECTION 4. ~ORIGINAL~TERM.~ Subject to the provisions of SECTION 5
hereof, the original term of this Agreement shall be from January 1, 1999 to
December 31, 1999.
SECTION 5. ~EXTENSIONS.~ This Agreement shall be extended on a quarter-
to-quarter basis after the expiration of its original term unless written
notification is given by Valhi or Recipient thirty (30) days in advance of the
first day of each successive quarter or unless it is superseded by a subsequent
written agreement of the parties hereto.
SECTION 6. ~LIMITATION~OF~LIABILITY~. In providing its Services
hereunder, Valhi shall have a duty to act, and to cause its agents to act, in a
reasonably prudent manner, but neither Valhi nor any officer, director, employee
or agent of Valhi or its affiliates shall be liable to Recipient for any error
of judgment or mistake of law or for any loss incurred by Recipient in
connection with the matter to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
Valhi.
SECTION 7. ~INDEMNIFICATION~OF~VALHI~BY~RECIPIENT~. Recipient shall
indemnify and hold harmless Valhi, its affiliates and their respective officers,
directors and employees from and against any and all losses, liabilities,
claims, damages, costs and expenses (including attorneys' fees and other
expenses of litigation) to which Valhi or any such person may become subject
arising out of the Services provided by Valhi to the Recipient hereunder,
~provided~that such indemnity shall not protect any person against any liability
to which such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence on the part of such person.
SECTION 8. ~FURTHER~ASSURANCES~. 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
be required in order to effectuate the purposes of this Agreement and to carry
out the terms hereof.
SECTION 9. ~NOTICES~. All communications hereunder shall be in writing
and shall be addressed, if intended for Valhi, to Three Lincoln Centre, 0000 XXX
Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: President, or such other
address as it shall have furnished to Recipient in writing, and if intended for
Recipient, to 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, Attention:
President, or such other address as it shall have furnished to Valhi in writing.
SECTION 10. ~AMENDMENT~AND~MODIFICATION~. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated other than by
agreement in writing signed by the parties hereto.
SECTION 11. ~SUCCESSOR~AND~ASSIGNS~. This Agreement shall be binding upon
and inure to the benefit of Valhi and Recipient and their respective successors
and assigns, except that neither party may assign its rights under this
Agreement without the prior written consent of the other party.
SECTION 12. ~GOVERNING~LAW~. This Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the state of Texas.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
VALHI, INC.
By:/s/ Xxxxxx X. Xxxxxx
~Xxxxxx~L.~Xxxxxx,~President~
TREMONT CORPORATION
By:/s/ J. Xxxxxx Xxxxxx
~J.~Xxxxxx~Xxxxxx,~Chairman~of~the~Board,~P
resident~and~Chief~Executive~Officer~
