EXHIBIT 10.3
INTERCORPORATE SERVICES AGREEMENT
This INTERCORPORATE SERVICES AGREEMENT (the "Agreement") is made
effective as of January 1, 1999, by and between Titanium Metals Corporation
("TIMET"), a Delaware corporation, and NL Industries, Inc. ("NL"), a New Jersey
corporation.
WHEREAS, TIMET desires that NL provide certain insurance, risk
management, loss control, internal audit, and tax services to TIMET, as set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and promises set forth
herein and for other good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, the parties to this Agreement agree as follows:
1. SERVICES PROVIDED. NL will make available to TIMET and its
subsidiaries the following services (the "Services"):
(a) certain administration and management services with
respect to TIMET'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 TIMET's insurance program,
excluding all employee benefit and welfare
related programs.
(b) consultation and assistance in performing internal
audit projects, as requested.
(c) 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.
2. FEES FOR SERVICES AND REIMBURSEMENT OF EXPENSES. During the Term (as
defined below) of the Agreement, TIMET shall pay to NL an annual fee of $312,000
for the Services described in paragraphs 1(a), 1(c), and 1(d) above payable in
quarterly installments of $78,000 plus all out-of-pocket expenses incurred in
connection with the performance of such Services. In addition, TIMET 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 paragraph 1(b) above times the number of internal auditors
providing such Services plus all out-of-pocket expenses incurred in the
performance of such Services. Notwithstanding the foregoing, in the event that
TIMET 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 TIMET 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 TIMET
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.
3. LIMITATION OF LIABILITY. In providing 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 shall
be liable to TIMET or its subsidiaries for any error of judgment or mistake of
law or for any loss incurred by TIMET or its subsidiaries in connection with the
matters to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of NL or from NL's
reckless disregard of obligations and duties under this Agreement.
4. INDEMNIFICATION OF NL BY TIMET. TIMET shall indemnify and hold
harmless NL, its subsidiaries and their respective officers, directors and
employees from and against any and all losses, liabilities, claims, damages,
costs and expenses (including reasonable attorneys' fees and other expenses of
litigation) to which such party may become subject arising out of the provision
by NL to TIMET and its subsidiaries of any of the Services, provided that such
indemnity shall not protect any such party against any liability to which such
person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations and duties hereunder.
5. FURTHER ASSURANCE. 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
by required in order to effectuate the purposes of this Agreement and to carry
out the terms hereof.
6. NOTICES. All communications hereunder shall be in writing and shall
be addressed to:
If to NL: NL Industries, Inc.
16825 Northchase Drive, Suite 1200
Houston, Texas 77060
Attention: General Counsel
If to TIMET: Titanium Metals Corporation
1999 Broadway, Suite 4300
Denver, Colorado 80202
Attention: General Counsel
or such other address as the parties shall have specified in
writing.
7. AMENDMENT AND MODIFICATION. Neither this Agreement nor any item
hereof may be changed, waived, discharged or terminated other than by agreement
in writing signed by the parties hereto.
8. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties hereto,
provided that this Agreement may not be assigned by either of the parties hereto
without the prior written consent of the other party.
9. MISCELLANEOUS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. This Agreement constitutes the entire
agreement, and supersedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, and all of which together shall constitute one and the same
instrument. This Agreement shall be governed in all respects, including
validity, interpretation and affect, by the laws of the State of Texas.
10. TERM OF AGREEMENT. This Agreement shall be effective as of January
1, 1999, and shall remain in effect for a term of one year until December 31,
1999 (the "Term"); provided, however, the Agreement shall be extended on a
quarter-to-quarter basis after the expiration of the Term unless written
notification is given by either party thirty (30) days in advance of the first
day of each successive quarter or unless it is terminated or superseded by a
subsequent written agreement of the parties hereto. Upon such termination or
upon the expiration of this Agreement, the parties' rights and obligations
hereunder shall cease and terminate except with respect to rights and
obligations arising on or prior to the date of expiration or termination and the
rights and obligations arising under paragraph 4 above.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
effective as of the 12th day of May, 1999, which Agreement will be deemed to be
effective as of January 1, 1999.
NL INDUSTRIES, INC.
By:_______________________________________
Robert D. Hardy
Vice President
TITANIUM METALS CORPORATION
By:_______________________________________
J. Thomas Montgomery
Vice President