EXHIBIT 10.1
INTERCORPORATE SERVICES AGREEMENT
This INTERCORPORATE SERVICES AGREEMENT (the "AGREEMENT"), effective as
of January 1, 1999, amends and supersedes that certain Intercorporate Services
Agreement effective as of January 1, 1999 between NL INDUSTRIES, INC., a New
Jersey corporation ("NL"), and COMPX INTERNATIONAL INC., a Delaware corporation
("RECIPIENT").
RECITALS
A. NL provides Recipient (i) certain occupancy and related office
services (the "OCCUPANCY AND RELATED OFFICE SERVICES"), which services include,
without limitation, office space that Recipient's personnel currently occupy at
NL's corporate offices at Two Greenspoint Plaza, 00000 Xxxxxxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx and mail, telecommunication, computer support, copying and
other reasonable office services related to such occupancy and (ii) certain
insurance, risk management, loss control and internal audit services as set
forth in this Agreement.
B. The terms of this Agreement are no less favorable to Recipient than
could otherwise be obtained from a third party for comparable services.
C. Recipient desires to continue receiving the services presently
provided by NL and affiliates of NL and NL 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. NL agrees to make available to
Recipient the following services (the "SERVICES") to be rendered by the internal
staff of NL and affiliates of NL:
(a) the Occupancy and Related Office Services (as outlined in
Attachment 1);
(b) certain administration and management services with respect to
Recipient'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 Recipient's insurance program,
excluding all employee benefit and welfare related
programs;
(c) consultation and assistance in performing internal audit
projects, as requested; and
(d) such other services as may be requested by Recipient or deemed
necessary and proper from time to time.
SECTION 2. MISCELLANEOUS SERVICES. It is the intent of the parties
hereto that NL provide only the Services requested by Recipient in connection
with routine 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 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, and it is
expressly understood that NL assumes no liability for any expenses or services
other than those stated in SECTION 1.
SECTION 3. FEE FOR SERVICES. During the Term (as defined below) of the
Agreement, Recipient shall pay to NL an annual fee of $108,500 for the Services
described in SUBSECTIONS 1(a), 1(b), AND 1(d) above payable in quarterly
installments of $27,125 plus all out-of-pocket expenses incurred in connection
with the performance of such Services described in paragraphs 1(b) and 1(d). In
addition, Recipient 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 SUBSECTION 1(c) above
times the number of internal auditors providing such Services plus all
out-of-pocket expenses incurred in their performance of such Services.
Nothwithstanding the foregoing, in the event that Recipient 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 Services, then Recipient 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 Recipient 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.
SECTION 4. ORIGINAL TERM. Subject to the provisions of SUBSECTION 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 NL 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, 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 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 NL.
SECTION 7. INDEMNIFICATION OF NL BY RECIPIENT. Recipient shall
indemnify and hold harmless NL, 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 NL or any such person may become subject to
arising out of the Services provided by NL to Recipient hereunder, PROVIDED that
such indemnity shall not protect any person against any liability to which such
person would otherwise be subject to 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 NL, to Two Greenspoint Plaza, 00000
Xxxxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attention: President, or
such other address as it shall have furnished to Recipient in writing, and if
intended for Recipient, to Two Greenspoint Plaza, 00000 Xxxxxxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx 00000, Attention: Chairman of the Board, or such other
address as it shall have furnished to NL 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. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of NL 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.
NL INDUSTRIES, INC.
By: /s/ XXXXXX X. XXXXX
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XXXXXX X. XXXXX
VICE PRESIDENT
COMPX INTERNATIONAL INC.
By: /s/ XXXXXX X. XXXXXXXXXXX
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XXXXXX X. XXXXXXXXXXX
CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER
