Execution Copy Confidential
8
Execution Copy Confidential
PI-954828 v1
AGREEMENT REGARDING SHARED INSURANCE
This Agreement Regarding Shared Insurance (hereinafter the "Agreement") is
made as of the 30th day of October 2003, by and between
CompX International Inc. ("CompX")
Contran Corporation ("Contran");
Keystone Consolidated Industries, Inc. ("Keystone");
Kronos Worldwide, Inc. ("KI")
NL Industries, Inc. ("NL");
Titanium Metals Corp. ("Titanium Metals");
and
Valhi, Inc. ("Valhi");
(For convenience, each of the above entities and/or its subsidiaries may be
referred to as a "Party," and collectively they may be referred to as the
"Parties").
WITNESSETH THAT:
WHEREAS, the Parties are affiliated companies that have been, are, and in the
future may be insured under a number of shared insurance policies that provide
shared limits of available insurance; and
WHEREAS, although as of the date of this Agreement the Parties separately and
collectively never have exhausted the total limits of insurance coverage
available under any shared insurance agreement, the Parties wish to ensure that
claims asserted under any of the shared insurance policies by any one Party will
not unreasonably deprive other Parties of insurance that may be available to
them.
AGREEMENTS:
NOW, THEREFORE, in full consideration of the foregoing and of the mutual
agreements herein contained, and intending to be legally bound, the Parties
agree as follows:
1. Definitions
The following definitions will apply to the listed terms wherever those terms
appear throughout the Agreement as well as in any exhibits or attachments
thereto. Moreover, each defined term stated in a singular form shall include the
plural form, each defined term stated in plural form shall include the singular
form, and each defined term stated in the masculine form or in the feminine form
shall include the other.
A. "Shared Insurance Policy" shall mean any one or more of the insurance
policies listed on Exhibit "A" hereto, as well as any past, present or
future insurance policies that provide insurance coverage to all of the
Parties to this Agreement and where the policy provides for an aggregate
limit for all claims during the policy period.
B. "Covered Claim" shall mean any claim for insurance coverage that any Party
may assert at any time under any Shared Insurance Policy that is covered in
whole or in part under the terms and conditions of the Shared Insurance
Policy in question, or that would be covered but for the fact that all
available limits of insurance coverage under the Shared Insurance Policy in
question already have been exhausted by another claim or claims of any
Party.
C. "Reimbursed Covered Claim" shall mean any Covered Claim for which any Party
actually has received a total or partial insurance coverage under any
Shared Insurance Policy.
D. "Remaining Covered Claim" shall mean any Covered Claim or portion of a
Covered Claim of any Party for which the available limits of insurance
coverage under the Shared Insurance Policy in question already have been
exhausted by a Reimbursed Covered Claim or Reimbursed Covered Claims of any
Party or Parties.
2. Agreement
Whenever the available limits of insurance under any Shared Insurance Policy
have been exhausted by a Reimbursed Covered Claim or Reimbursed Covered Claims
submitted by one or more of the Parties, this Agreement will provide a mechanism
by which the Parties will share financial responsibility for all Remaining
Covered Claims.
Financial responsibility for each Remaining Covered Claim shall be divided among
those Parties with Covered Claims for that policy. Each Party other than the
holder of a particular Remaining Covered Claim shall indemnify and reimburse the
holder of that Remaining Covered Claim for a percentage of that Remaining
Covered Claim equal to the percentage of Covered Claims of the Indemnifying
Party bears to the sum of all Parties' Covered Claims for the particular policy.
Any indemnification obligation required by this Agreement shall be paid within
60 days after a Party requests in writing indemnification from another Party or
Parties with respect to a Remaining Covered Claim and provides a brief
description of the Remaining Covered Claim, as well as identification of the
Shared Insurance Policy that would, but for exhaustion of limits, provide
coverage for the Remaining Covered Claim. If the insurer issuing the Shared
Insurance Policy in question has taken the position that the claim would be
covered and payable but for prior exhaustion of available limits of coverage,
the claim conclusively will be considered by the Parties to be a Remaining
Covered Claim. If the insurer issuing the Shared Insurance Policy in question
has not or will not expressly state that a claim would be covered and payable
but for exhaustion, the Parties will attempt in good faith to agree whether or
not the claim is a Remaining Covered Claim. If the Parties cannot agree whether
a claim is a Remaining Covered Claim, the question will be settled pursuant to
the "Dispute Resolution" provisions of this Agreement.
3. Confidentiality
The Parties agree that all matters relating to the terms, negotiation and
implementation of this Agreement, including documents and information exchanged
during negotiations or relating to indemnification obligations and claims made
hereunder, shall be confidential and are not to be disclosed except as required
by law or regulation or by order of court or by agreement, in writing, of the
Parties, except that, provided recipients agree to keep such information
confidential, the Agreement may be disclosed to any officer, director, or parent
corporation of any Party and any outside counsel, consultants, auditors or
accountants of any Party.
In the event a private litigant, by way of document request, interrogatory,
subpoena, or questioning at deposition or trial, attempts to compel disclosure
of anything protected by this Section, the Party from whom disclosure is sought
shall decline to provide the requested information on the ground that this
Agreement prevents such disclosure. In the event such private litigant seeks an
Order from any court or governmental body to compel such disclosure, or in the
event that a court, government official, or governmental body (other than the
Inland Revenue or Internal Revenue Service or other similar U.S. or foreign
governmental taxation authorities) requests or requires disclosure of anything
protected by this Agreement, the Party from whom disclosure is sought shall
promptly give written notice by facsimile or hand-delivery to the other Party,
and shall promptly provide copies of all notice papers, orders, requests or
other documents in order to allow each Party to take such protective steps as
may be appropriate in order to preserve the confidentiality of such information.
Notice shall be made under this Paragraph to the persons identified in this
Agreement.
4. No Modification
No change or modification of this Agreement shall be valid unless it is made in
writing and signed by each of the Parties.
5. Execution
There will be two signed originals of this Agreement. This Agreement may be
executed and delivered in counterparts, each of which when so executed and
delivered shall be deemed an original and shall together constitute an entire
Agreement. This Agreement may be executed and delivered by facsimile, each of
which when so executed and delivered shall be deemed an original.
6. Governing Law
This Agreement shall be governed by and shall be construed in accordance with
the laws of the State of Texas without giving effect to any choice of law or
conflict of law provision or rule.
7. Dispute Resolution
A. The Parties agree to use their best efforts to resolve claims relating
to this Agreement prior to instituting arbitration proceedings as set
forth below. In the event such efforts are unsuccessful, the Parties
agree that any controversy or claim arising out of or relating to this
Agreement or any breach thereof, including without limitation, any
disputes concerning the calculation of any settlement payment under
this Agreement, shall be submitted to final and binding arbitration
before a single arbitrator, who shall be a former judge or an attorney
licensed to practice law in Texas with at least ten years' experience,
and whom the Parties shall choose. If the Parties cannot agree on the
arbitrator, the arbitrator shall be selected in accordance with the
Commercial Arbitration Rules of the American Arbitration Association
that are in effect at the time the dispute is submitted to
arbitration.
B. To the extent the Parties are unable to agree, the commercial rules
and procedures of the American Arbitration Association that were in
effect on the date of execution of this Agreement shall apply to the
arbitration. Texas law shall govern any arbitration.
C. Any arbitration conducted in accordance with this Agreement shall be
conducted in Texas or such other location as the Parties may agree.
The Parties shall abide by the arbitrator's award, and judgment on
that award may be entered by a court of competent jurisdiction in
Texas , in accordance with Texas law.
8. Notices
Unless another person is designated, in writing, for receipt of notices
hereunder, notices to the respective Parties shall be sent to the following
person by facsimile transmission or overnight courier:
CompX International Inc.: Darryl R. Halbert
Three Lincoln Centre
5430 LBJ Freeway
Suite 1700
Dallas, Texas 75240
(972) 233-1700 phone
(972) 448-1419 fax
Contran Corporation: J. Mark Hollingsworth
Three Lincoln Centre
5430 LBJ Freeway
Suite 1700
Dallas, Texas 75240
(972) 233-1700 phone
(972) 448-1445 fax
Keystone Consolidated Industries, Inc. Bert D. Downing, Jr.
Three Lincoln Centre
5430 LBJ Freeway
Suite 1700
Dallas, Texas 75240
(972) 233-1700 phone
(972) 448-1408 fax
Kronos Worldwide, Inc. Robert D. Graham
Three Lincoln Centre
5430 LBJ Freeway
Suite 1700
Dallas, Texas 75240
(972) 233-1700 phone
(972) 448-1445 fax
NL Industries, Inc. Robert D. Graham
Three Lincoln Centre
5430 LBJ Freeway
Suite 1700
Dallas, Texas 75240
(972) 233-1700 phone
(972) 448-1445 fax
Titanium Metals Corporation: Joan Prusse
1999 Broadway
Suite 4300
Denver, Colorado 80202
303-296-5600 phone
303-291-1990 fax
Valhi, Inc.: J. Mark Hollingsworth
Three Lincoln Centre
5430 LBJ Freeway
Suite 1700
Dallas, Texas 75240
(972) 233-1700 phone
(972) 448-1445 fax
9. Integration
This Agreement constitutes the entire Agreement between the Parties with respect
to the subject matter hereof, and supersedes all discussions, agreements and
understandings, both written and oral, among the Parties with respect thereto.
10. Severability
This Agreement shall be binding upon and inure to the benefit of the Parties
hereto. In case any one or more of the provisions contained in this Agreement
shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired hereby.
11. Term
This Agreement may be terminated by each of the Parties upon one (1) year's
written notice to the other Parties.
12. Assignment
This Agreement shall not be assignable by any Party without the prior written
consent of the other except that any successor to the Party may assume the
rights and obligations of the Party under this Agreement. Nothing in this
Agreement, expressed or implied, is intended to confer upon any person, other
than the Parties hereto and their successors and assigns, any rights or remedies
under or by reason of this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly
authorized representatives.
CompX International Inc.
By: /s/ Darryl Halbert
Its: Chief Financial Officer
Date: October 31, 2003
Contran Corporation
By: /s/ J. Mark Hollingsworth
Its: Vice President, General Counsel
Date: November 10, 2003
Keystone Consolidated Industries, Inc.
By: /s/ Bert Downing, Jr.
Its: Vice President, CFO
Date: October 28, 2003
Kronos Worldwide, Inc.
By: /s/ Robert D. Graham
Its: Vice President, General Counsel
Date: November 7, 2003
NL Industries, Inc.
By: /s/ Robert D. Graham
Its: Vice President, General Counsel
Date: November 7, 2003
Titanium Metals Corporation.
By: /s/ Joan H. Prusse
Its: Vice President, General Counsel
Date: November 7, 2003
Valhi, Inc.
By: /s/ J. Mark Hollingsworth
Its: Vice President, General Counsel
Date: November 10, 2003
EXHIBIT A
Shared Insurance Policies
1. Directors and Officers Liability (Primary and Excess)
2. Fiduciary liability
3. General Liability (U.S)
4. General Liability (Canada)
5. Excess Liability
6. Property
7. Deductible Buydown