EXHIBIT 10.6
SERVICES AGREEMENT
BETWEEN
NL INDUSTRIES, INC.
KRONOS (US), INC.
AND KRONOS INTERNATIONAL INC.
DATED AS OF
JANUARY 1, 1995
AMENDED AS OF
APRIL 1, 2002
TABLE OF CONTENTS
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<Caption>
PAGE
ARTICLE I RETENTION OF NL.................................................................................1
Section 1.1 Performance of Services.....................................................................1
Section 1.2 Disclaimer, Limited Liability...............................................................2
ARTICLE II SERVICES........................................................................................3
Section 2.1 Provision of Financial, Audit, Accounting and Tax Services..................................3
Section 2.2 Provision of Executive, Legal, Risk Management, Treasury, Information Systems, Third-Party
Consulting and Other Services...............................................................3
ARTICLE III COMPENSATION....................................................................................3
Section 3.1 Compensation for Services...................................................................3
ARTICLE IV MISCELLANEOUS...................................................................................4
Section 4.1 Review by KUS and KII.......................................................................4
Section 4.2 Maintenance and Inspection of Records.......................................................4
Section 4.3 Indemnity...................................................................................4
Section 4.4 Notices.....................................................................................4
Section 4.5 Term; Renewal...............................................................................5
Section 4.6 Independent Contractor......................................................................5
Section 4.7 Force Majeure...............................................................................5
Section 4.8 Entire Agreement............................................................................6
Section 4.9 Amendments..................................................................................6
Section 4.10 Severability................................................................................6
Section 4.11 Counterparts................................................................................6
Section 4.12 Successors and Assigns......................................................................6
Section 4.13 Governing Law...............................................................................6
Section 4.14 Submission To Jurisdiction; Service; Waivers................................................6
Section 4.15 No Third-Party Beneficiaries................................................................7
Section 4.16 Titles and Headings.........................................................................7
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SERVICES AGREEMENT
THIS SERVICES AGREEMENT ("Agreement"), is entered into effective as of
January 1, 1995 (the "Effective Date"), by and between NL INDUSTRIES, INC., a
corporation organized under the laws of New Jersey ("NL") and KRONOS (US), INC.,
a corporation organized under the laws of Delaware, ("KUS"), and, effective
April 1, 2002, by and between NL and Kronos International, Inc., a corporation
organized under the laws of Delaware ("KII").
WHEREAS, KUS and KII are wholly-owned subsidiaries of Kronos, Inc.,
which is in turn a wholly-owned subsidiary of NL; and
WHEREAS, KUS is engaged in the sales, marketing and distribution of
titanium dioxide and related by products; and
WHEREAS, KII has been organized with its seat of management in Germany
in order to improve the worldwide coordination of management experience and in
order to improve the position of the group in a unified European market.
WHEREAS, KUS has and will have the need for executive, legal, audit,
tax, accounting, administrative, financial, risk management, technical,
consulting and similar services from time to time, but has determined that it is
not cost effective to obtain and separately maintain the infrastructure
associated therewith, particularly including the costs associated with
attracting and maintaining on its payroll on a full time basis a full complement
of skilled employees; and
WHEREAS, KII has and will have the need for treasury and other
financial services from time to time, but has determined it is not cost
effective to separately maintain a full complement of skilled employees
providing such services; and
WHEREAS, NL is able and willing, to provide the foregoing services to
KUS and KII, and KUS and KII desire to engage NL as an independent contractor to
provide the same in accordance with the terms set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements, provisions and covenants contained herein, and for other good and
valuable consideration, receipt and legal sufficiency whereof are hereby
acknowledged, the parties hereto further agree as follows:
ARTICLE I
RETENTION OF NL
Section 1.1 Performance of Services
(a) KUS and KII hereby engage and retain NL to perform the
general and administrative services set forth in Article II (the "Services") and
NL hereby accepts and agrees to provide such Services to KUS and KII upon the
terms and conditions hereinafter set forth. All Services to be provided by NL
hereunder shall be provided at the request and under the direction
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of KUS and/or KII, and NL shall not have any power to act independently on
behalf of KUS and/or KII other than as specifically authorized hereunder or from
time to time by KUS and/or KII.
(b) NL shall determine the corporate facilities to be used in
rendering the Services and the individuals who will render such Services.
(c) The Services provided to KUS and KII hereunder will be
performed by those employees of NL who perform equivalent services for NL or for
other subsidiaries of NL, or both, in the normal course of their employment.
(d) Nothing herein shall be deemed to restrict NL or its
directors, officers or employees from engaging in any business, or from
contracting with other parties, including, without limitation, other
subsidiaries of NL, for similar or different services.
Section 1.2 Disclaimer, Limited Liability
(a) NL makes no express or implied representations, warranties
or guarantees relating to the Services or the quality or results of Services to
be performed under this Agreement.
(b) NL will use reasonable efforts to make the Services
available with substantially the same degree of care as it employs in making the
same Services available for its own operations provided, however, that NL shall
not be liable to KUS or KII or any other person for any loss, damage or expense
which may result therefrom or from any change in the manner in which NL renders
the Services, so long as NL deems such change necessary or desirable in the
conduct of its own operations.
(c) Officers and employees of NL who provide services to KUS
and/or KII shall not be liable to KUS and/or KII or to any third party,
including any governmental agency, for any claims, damages or expenses relating
to the Services provided pursuant to this Agreement, and KUS and KII shall have
the ultimate responsibility for all Services provided herein.
(d) NL shall not be liable to KUS and/or KII for the
consequences of any failure or delay to perform any of NL's obligations under
this Agreement, other than for damages arising from NL's gross negligence or
willful or reckless misconduct; however, NL shall, based on its actual knowledge
thereof, provide reasonably prompt notice to KUS and/or KII of all such
liabilities and the reasons therefor.
(e) KUS and KII shall indemnify and hold harmless any employee
of NL who performs Services for KUS and/or KII pursuant to this Agreement to the
same extent that NL would indemnify such employee if the employee were to
perform such services for NL.
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ARTICLE II
SERVICES
Section 2.1 Provision of Financial, Audit, Accounting and Tax Services
During the term of this Agreement and as part of the Services, NL shall
provide financial, audit, accounting and income tax services, including without
limitation, operation and administration of income tax compliance, for KUS's and
KII's operations in the ordinary course (the "Accounting Services").
Section 2.2 Provision of Executive, Legal, Risk Management, Treasury,
Information Systems, Third-Party Consulting and Other Services
During the term of this Agreement and as part of the Services, at the
request of KUS and/or KII, NL shall provide executive, legal, risk management,
treasury, information systems, third-party consulting and other administrative
services required by KUS and/or KII from time to time (the "Other Services").
The Other Services may include, without limitation, the following:
(a) executive and managerial functions;
(b) administration of KUS's insurance policies including
administration of worker's compensation claims;
(c) treasury functions, bank negotiations, compliance
matters;
(d) legal advice and compliance reporting;
and such other administrative services as KUS and/or KII request from time to
time.
ARTICLE III
COMPENSATION
Section 3.1 Compensation for Services
NL and KUS and NL and KII shall before the beginning of each calendar year,
agree on the budgeted amounts of reimbursable costs and the allocation method to
be applied for the coming year. Such allocation method may be revised from time
to time with the consent of both parties.
(a) One fourth of the applicable budgeted annual amount
shall be paid quarterly from KUS and KII to NL.
(b) From time to time, the budgeted amounts may be
revised to better reflect actual expenses, and
adjusted billings will then be made from NL to KUS
and KII.
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(c) All charges from NL to KUS and KII are intended to be
equal to the actual cost of such expenses without
premium or mark-up to NL.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Review by KUS and KII
All reports, memoranda, returns, statements, contracts, agreements,
regulatory submissions, applications and any other documents for or on behalf of
KUS or KII pursuant to this Agreement shall be subject to review and approval by
KUS or KII.
Section 4.2 Maintenance and Inspection of Records
NL shall keep accurate books and records with respect to the costs and
expenses incurred in connection with the Services and such other books, accounts
and records of its operations as may be reasonably necessary for purposes of
this Agreement. KUS and KII shall be permitted to inspect such books and records
at any reasonable time.
Section 4.3 Indemnity
KUS and KII assume all liability for and agrees to defend, indemnify
and hold NL, its employees, officers, directors, shareholders and agents,
harmless from and against all demands, liabilities, damages, costs and expenses,
including attorneys' and expert witness fees ("Loss"), incurred by NL arising
from or in connection with the Services, other than any Loss caused by the gross
negligence or willful misconduct of NL.
Section 4.4 Notices
All notices and other communications hereunder shall be in writing, and
shall be delivered by hand or mailed by registered or certified mail (return
receipt requested) or transmitted by facsimile to the parties at the following
addresses (or at such other addresses for a party as shall be specified by like
notice) and shall be deemed given on the date on which such notice is received:
If to NL: NL Industries, Inc.
16825 Northchase Drive, Suite 1200
Houston, Texas 77060
Attention: Vice President, Controller & Asst. Secretary
Phone: 281-423-3300
Fax: 281-423-3333
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If to KUS: Kronos (US), Inc.
16825 Northchase Drive, Suite 1200
Houston, Texas 77060
Attention: Assistant Treasurer
Phone: 281-423-3300
Fax: 281-423-3333
If to KII: Kronos International Inc.
PeschstraBe 5
51373 Leverkusen, Germany
Attention: Vice President & Financial Controller
Phone: 011-49-214-3562201
Fax: 011-49-214-42162
Section 4.5 Term; Renewal
The initial term of this Agreement between NL and KUS commenced as of
the Effective Date and ended on December 31, 2001 but shall be automatically
renewed for successive terms of one year. This amendment effective as of April
1, 2002 through December 31, 2002, between NL and KII, shall be automatically
renewed for successive terms of one year. Any party may terminate this Agreement
by giving written notice of termination to the other party not less than sixty
(60) days prior to the end of the then current term. In addition, in the event
of a material default hereunder by a party, the non-defaulting party may
terminate this Agreement upon thirty (30) days prior written notice if such
default remains uncured and is continuing for twenty (20) days after receipt by
the defaulting party of such written notice of intent to terminate. A final
accounting and payment by one party to the other of all amounts payable
hereunder shall be made pursuant to the terms hereof within thirty (30) days
following the next Determination Date after such termination.
Section 4.6 Independent Contractor
NL shall be an independent contractor and not an employee of, or
partner or joint venture with, KUS or KII.
Section 4.7 Force Majeure
No party shall be in default of this Agreement or liable to the other
party for any delay or default in performance where occasioned by any cause of
any kind or extent beyond its control, including but not limited to, armed
conflict or economic dislocation resulting therefrom; embargoes; shortages of
labor, raw materials, production facilities or transportation; labor
difficulties; civil disorders of any kind; action of any civil or military
authorities (including, priorities and allocations); fires; floods and
accidents. The dates on which the obligations of the party are to be fulfilled
shall be extended for a period equal to the time lost by reason of any delay
arising, directly or indirectly from:
(a) Any of the foregoing causes, or
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(b) Inability of a party, as a result of causes beyond its
reasonable control, to obtain instruction or information from the other party in
time to perform its obligations by such dates.
Section 4.8 Entire Agreement
This Agreement constitutes the entire understanding between the parties
with respect to the subject matter hereof and all prior agreements or
understandings shall be deemed merged herein. No representations, warranties and
if certifications, express or implied, shall exist as between the parties except
as stated herein.
Section 4.9 Amendments
No amendments, waivers or modifications hereof shall be made or deemed
to have been made unless in writing, executed by the party to be bound thereby.
Section 4.10 Severability
If any provision in this Agreement or the application of such provision
to any person or circumstance shall be invalid, illegal or unenforceable, the
remainder of this Agreement or the application of such provision to persons or
circumstances other than those to which it is held invalid, illegal or
unenforceable shall not be affected thereby.
Section 4.11 Counterparts
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which when
taken together shall constitute this Agreement.
Section 4.12 Successors and Assigns
This Agreement shall not be assignable, in whole or in part, directly
or indirectly, by any party hereto without the prior written consent of the
other party hereto, and any attempt to assign any rights or obligations arising,
under this Agreement without such consent shall be void. This Agreement shall be
binding, upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 4.13 Governing Law
This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New Jersey, without regard to its
conflict of laws provisions.
Section 4.14 Submission To Jurisdiction; Service; Waivers
WITH RESPECT TO ANY CLAIM ARISING OUT OF THIS AGREEMENT, EACH PARTY (A)
IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW JERSEY (B) AGREES THAT THE VENUE FOR ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE EXCLUSIVE TO
SUCH COURTS, AND (C) IRREVOCABLY WAIVES ANY OBJECTION IT MAY HAVE AT ANY TO THE
LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
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RELATING TO THIS AGREEMENT BROUGHT IN ANY SUCH COURT, IRREVOCABLY WAIVES ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER IRREVOCABLY WITH THE RIGHT TO
OBJECT, WITH RESPECT TO SUCH CLAIM, SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER IT. EACH PARTY HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN ANY OF THE AFORESAID COURTS BY THE MAILING OF COPIES OF SUCH
PROCESS TO THE PARTY, BY CERTIFIED OR REGISTERED MAIL AT THE ADDRESS SPECIFIED
IN SECTION 4.4.
Section 4.15 No Third-Party Beneficiaries
This Agreement is solely for the benefit of the parties hereto and
should not be deemed to confer upon third parties any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement.
Section 4.16 Titles and Headings
Titles and headings to sections herein are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed as of the Effective Date.
NL INDUSTRIES, INC., a New Jersey corporation
By: /s/ Robert D. Hardy
--------------------------------
Name: Robert D. Hardy
Title: Vice President, Chief Financial Officer & Asst. Secretary
Kronos (US), Inc., a Delaware corporation
By: /s/ Joan Barzona
--------------------------------
Name: Joan Barzona
Title: Assistant Treasurer
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Kronos International, Inc., a Delaware corporation
By: /s/ Dr. Ulfert Fiand
--------------------------------
Name: Dr. Ulfert Fiand
Title: President
By: /s/ Volker Roth
--------------------------------
Name: Volker Roth
Title: VP/Controller
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