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INTERCORPORATE SERVICES AGREEMENT
This INTERCORPORATE SERVICES AGREEMENT (the "Agreement"), effective as of
January 1, 1994, amends and supersedes that certain Intercorporate Services
Agreement dated as of January 1, 1993 by and between VALHI, INC. ("Valhi"), a
Delaware corporation, and NL INDUSTRIES, INC. ("Recipient"), a New Jersey
corporation.
W I T N E S S E T H:
WHEREAS, employees and agents of Valhi and affiliates of Valhi perform
management, financial and administrative functions for Recipient without direct
compensation from Recipient; and
WHEREAS, Recipient does not separately maintain the full internal
capability to perform all necessary management, financial and administrative
functions which Recipient requires; and
WHEREAS, 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 then could otherwise be obtained
from a third party for comparable services; and
WHEREAS, 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.
NOW, THEREFORE, for and in consideration of the mutual premises,
representations and covenants herein contained, the parties hereto mutually
agree as follows:
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 Articles of
Incorporation and By-Laws of Recipient.
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(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; preparation and filing of tax returns, tax reporting,
examinations by government authorities and tax planning.
(f) Consultation and assistance in performing internal audit and control
functions.
(g) Such other services as may be requested by Recipient or deemed
necessary and proper from time to time.
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
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, 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.
3. Fee for Services: Recipient agrees to pay to Valhi $50,000.00 quarterly,
commencing as of January 1, 1994, pursuant to this Agreement.
4. Original Term: Subject to the provisions of Section 5 hereof, the original
term of this Agreement shall be from January 1, 1994 to December 31, 1994.
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
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superseded by a subsequent written agreement of the parties hereto.
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.
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 such party may become subject to arising out of
the Services provided by Valhi to Recipient hereunder, provided that such
indemnity shall not protect any such party against any liability to which
such person would otherwise be subject to by reason of willful
misfeasance, bad faith or gross negligence.
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.
9. Notices. All communications hereunder shall be in writing and shall be
addressed, if intended for Valhi, to Three Lincoln Centre, 5430 LBJ
Freeway, Suite 1700, Dallas, Texas 75240, Attention: President, or such
other address as it shall have furnished to Recipient in writing, and if
intended for Recipient, to 3000 North Sam Houston Parkway East, Houston,
Texas 77032, Attention: President, or such other address as it shall
have furnished to Valhi in writing.
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.
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.
12. Governing Law: This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Texas.
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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/ Michael A. Snetzer
___________________________
Michael A. Snetzer
President
NL INDUSTRIES, INC.
By: /s/ J. Landis Martin
___________________________
J. Landis Martin
President and Chief
Executive Officer
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