EXHIBIT 10.10
INTERCORPORATE SERVICES AGREEMENT
This INTERCORPORATE SERVICES AGREEMENT (the "AGREEMENT"), effective as of
January 1, 1998, amends and supersedes that certain Intercorporate Services
Agreement effective as of January 1, 1997 by and between VALHI, INC., a Delaware
corporation ("VALHI"), and NL INDUSTRIES, INC., a New Jersey corporation ("NL").
RECITALS
A. NL desires to have the services of certain Valhi personnel and Valhi is
willing to provide such services under the terms of this Agreement.
B. Valhi desires to have the services of certain NL personnel and NL is
willing to provide such services under the terms of this Agreement.
C. The costs of maintaining the additional personnel necessary to perform
the functions provided for by this Agreement would exceed the amount charged to
such party that is contained in the net fee set forth in SECTION 4 of this
Agreement and that the terms of this Agreement are no less favorable to each
party than could otherwise be obtained from a third party for comparable
services.
D. Each party desires to continue receiving the services presently
provided by the other party and its affiliates and each party 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 contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto mutually agree as follows:
SECTION 1. VALHI SERVICES TO BE PROVIDED. Valhi agrees to make available
to NL, upon request, the following services (the "VALHI SERVICES") to be
rendered by the internal staff of Valhi and affiliates of Valhi:
(a) Consultation and assistance in the development and
implementation of NL'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 NL;
(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 NL;
(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 NL from time to time.
SECTION 2. NL SERVICES TO BE PROVIDED. NL agrees to make available to
Valhi, upon request, the following services (the "NL SERVICES," and collectively
with the Valhi Services, the "SERVICES") to be rendered by the internal staff of
NL:
(a) The services of Xxxxxx X. Xxxxxxxxxxx (through February 16,
1998) to act as Executive Vice President of Valhi, which Valhi and NL
agree shall involve substantially such time as has been allocated in the
past and is currently being devoted;
(b) The services of NL's internal audit personnel in providing
consultation and assistance in performing internal audit projects as
requested from time to time; and
(c) certain administration and management services with respect to
Valhi's insurance and risk management needs, including, without
limitations, administration of Valhi's:
(i) property and casualty insurance program,
(ii) claims management program,
(iii) property loss control program, and
(d) Such other services as may be requested by Valhi from time to
time.
SECTION 3. MISCELLANEOUS SERVICES. It is the intent of the parties hereto
that each party to this Agreement provide (a "PROVIDING PARTY") only such
Services as are requested by the other party (a "RECEIVING PARTY") in connection
with routine management, financial and administrative functions related to the
ongoing operations of the Receiving Party and not with respect to special
projects, including corporate investments, acquisitions and divestitures. The
parties hereto contemplate that the Services rendered by a Providing Party in
connection with the conduct of each Receiving Party'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. Each Receiving Party 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 each Providing Party assumes
no liability for any expenses or services other than those stated in this
Agreement to be provided by such party. In addition to the amounts charged to a
Receiving Party for Services provided pursuant to this Agreement, such Receiving
Party will pay the Providing Party the amount of out-of-pocket costs incurred by
the Providing Party in rendering such Services.
SECTION 4. NET FEE FOR SERVICES. NL agrees to pay to Valhi a net annual
fee of $12,600 payable in quarterly installments of $3,150 each, commencing as
of January 1, 1998, pursuant to this Agreement. In addition to the net annual
fee:
(a) Valhi shall pay to NL an additional amount equal to the sum of:
(i) the product of (x) $600, (y) the number of days devoted
by NL's internal auditors to providing NL Services described
in SUBSECTION 2(B) and (z) the number of internal auditors
providing such NL Services; and
(ii) all related out-of-pocket expenses;
(b) Valhi shall credit or pay to NL additional amounts plus all
related out-of-pocket costs, all as agreed to by the parties, for all NL
Services provided under SUBSECTION 2(D); and
(c) NL shall credit or pay to Valhi additional amounts plus all
related out-of-pocket costs, all as agreed to by the parties, for all
Valhi Services provided under SUBSECTION 1(F).
SECTION 5. ORIGINAL TERM. Subject to the provisions of SECTION 6 hereof,
the original term of this Agreement shall be from January 1, 1998 to December
31, 1998.
SECTION 6. 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 NL 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 7. LIMITATION OF LIABILITY. In providing Services hereunder, each
Providing Party shall have a duty to act, and to cause its agents to act, in a
reasonably prudent manner, but no Providing Party nor any officer, director,
employee or agent of such party nor or its affiliates shall be liable to a
Receiving Party for any error of judgment or mistake of law or for any loss
incurred by the Receiving Party 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 the Providing Party.
SECTION 8. INDEMNIFICATION. Each Receiving Party shall indemnify and hold
harmless the Providing Party, 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 such Providing Party may become subject arising
out of the Services provided by such Providing Party to the Receiving Party
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 9. 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 10. 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 NL in writing, and 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 Valhi
in writing.
SECTION 11. 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 12. SUCCESSOR AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of Valhi and NL 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 13. 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:
XXXXXX X. XXXXXX
VICE PRESIDENT
NL INDUSTRIES, INC.
By:
J. XXXXXX XXXXXX
President and Chief Executive
Officer
