April 11, 1995
VIA ELECTRONIC TRANSMISSION
Securities & Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Amendment No. 51 to Schedule 13D
filed by Valhi, Inc., et al.
regarding the Common Stock of NL Industries, Inc.
Ladies/Gentlemen:
On behalf of Valhi, Inc., electronically transmitted herewith is a filing
pursuant to the provisions of the Securities and Exchange Act of 1934, as
amended, of the above-referenced Amendment No. 51 to Schedule 13D.
Copies of the transmission are being sent to both the New York Stock
Exchange, Inc., the Pacific Stock Exchange Incorporated and NL Industries, Inc.
If you should have any questions regarding this filing, please do not
hesitate to call the undersigned at (214) 450-4216.
Very truly yours,
/s/ Steven L. Watson
Steven L. Watson
Vice President and Secretary
cc: New York Stock Exchange, Inc.
Pacific Stock Exchange Incorporated
NL Industries, Inc.
Bartlit Beck Herman Palenchar & Scott
GUARANTEE
March 24, 1995
Congress Financial Corporation (Central)
100 South Wacker Drive, Suite 1940
Chicago, Illinois 60606
Re: Titanium Metals Corporation, a Delaware Corporation ("Borrower")
Gentlemen:
Congress Financial Corporation (Central) ("Lender") and Borrower have entered
into certain financing arrangements pursuant to which Lender may make loans and
advances and provide other financial accommodations to Borrower as set forth in
the Amended and Restated Loan and Security Agreement, dated as of the date
hereof, by and between Borrower and Lender (as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, the "Loan Agreement"), and other agreements, documents and instruments
referred to therein or at any time executed and/or delivered in connection
therewith or related thereto, including, but not limited to, this Guarantee (all
of the foregoing, together with the Loan Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, being collectively referred to herein as the "Financing Agreements").
Due to the close business and financial relationships between Borrower and
the undersigned ("Guarantor"), in consideration of the benefits which will
accrue to Guarantor and as an inducement for and in consideration of Lender
making loans and advances and providing other financial accommodations to
Borrower pursuant to the Loan Agreement and the other Financing Agreements,
Guarantor hereby agrees in favor of Lender as follows:
1. Guarantee.
(a) Guarantor absolutely and unconditionally guarantees and agrees to
be liable for the full and indefeasible payment and performance when due of the
following (all of which are collectively referred to herein as the "Guaranteed
Obligations"): (i) all obligations, liabilities and indebtedness of any kind,
nature and description of Borrower to Lender and/or its affiliates, including
principal, interest, charges, fees, costs and expenses, however evidenced,
whether as principal, surety, endorser, guarantor or otherwise, arising in
connection with the Term Loan-B (as defined in the Financing Agreements) whether
now existing or hereafter arising, whether arising before, during or after the
initial or any renewal term of the Loan Agreement or after the commencement of
any case with respect to Borrower under the United States Bankruptcy Code or any
similar statute (including, without limitation, the payment of interest and
other amounts, which would accrue and become due but for the commencement of
such case and including loans, interest, fees, charges and expenses related
thereto and all other obligations of Borrower or its successors to Lender
arising after the commencement of such case), whether direct or indirect,
absolute or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, secured or unsecured, and however acquired by Lender
and (ii) all expenses (including, without limitation, attorneys' fees and legal
expenses) incurred by Lender in connection with the preparation, execution,
delivery, recording, administration, collection, liquidation, enforcement and
defense of Borrower's obligations, liabilities and indebtedness as aforesaid to
Lender, the rights of Lender in any collateral or under this Guarantee and all
other Financing Agreements or in any way involving claims by or against Lender
directly or indirectly arising out of or related to the relationships between
Borrower, Guarantor or any other Obligor (as hereinafter defined) and Lender,
whether such expenses are incurred before, during or after the initial or any
renewal term of the Loan Agreement and the other Financing Agreements or after
the commencement of any case with respect to Borrower or Guarantor under the
United States Bankruptcy Code or any similar statute. Notwithstanding anything
to the contrary contained in this Guarantee, the liability of the Guarantor
hereunder shall not exceed the sum of (i) Five Million Dollars ($5,000,000) plus
(ii) amounts paid or payable by Guarantor pursuant to Section 16 hereof.
(b) This Guarantee is a guaranty of payment and not of collection.
Guarantor agrees that Lender need not attempt to collect any Guaranteed
Obligations from Borrower, Guarantor or any other Obligor or to realize upon any
collateral, but may require Guarantor to make immediate payment of all of the
Guaranteed Obligations to Lender when due, whether by maturity, acceleration or
otherwise, or at any time thereafter. Lender may apply any amounts received in
respect of the Guaranteed Obligations to any of the Guaranteed Obligations, in
whole or in part (including attorneys' fees and legal expenses incurred by
Lender with respect thereto or otherwise chargeable to Borrower or Guarantor)
and in such order as Lender may elect.
(c) Payment by Guarantor shall be made to Lender at the office of
Lender from time to time on demand as Guaranteed Obligations become due.
Guarantor shall make all payments to Lender on the Guaranteed Obligations free
and clear of, and without deduction or withholding for or on account of, any
setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions,
withholding, restrictions or conditions of any kind. One or more successive or
concurrent actions may be brought hereon against Guarantor either in the same
action in which Borrower or any other Obligor is sued or in separate actions.
In the event any claim or action, or action on any judgment, based on this
Guarantee is brought against Guarantor, Guarantor agrees not to deduct, set-off,
or seek any counterclaim for or recoup any amounts which are or may be owed by
Lender to Guarantor.
(d) Lender may demand payment hereunder at any time, but Lender agrees
that Lender will not take legal action against the Guarantor and its assets to
collect amounts owing under this Guarantee unless (i) Lender has exercised (or
(a) has been legally unable or otherwise prohibited from exercising or (b)
Guarantor, Borrower or Contran Corporation ("Contran") or any of their
successors or any party claiming by or through any such party contests Lender's
right or ability to exercise) its rights under that certain Put Agreement (the
"Contran Put") dated as of the date hereof between Lender and Contran, and
Contran has failed to purchase the Pledged Shares in accordance with the terms
of the Put Agreement and (ii) Lender has exercised (or (a) has been legally
unable or otherwise prohibited from exercising or (b) Guarantor, Borrower or
Contran or any of their successors or any party claiming by or through of such
party contests Lender's right or ability to exercise) its rights under that
certain Pledge Agreement ("the Tremont Pledge") dated as of the date hereof
between Lender and Guarantor.
2. Waivers and Consents.
(a) Notice of acceptance of this Guarantee, the making of loans and
advances and providing other financial accommodations to Borrower and
presentment, demand, protest, notice of protest, notice of nonpayment or default
and all other notices to which Borrower or Guarantor is entitled are hereby
waived by Guarantor. Guarantor also waives notice of and hereby consents to,
(i) any amendment, modification, supplement, extension, renewal, or restatement
of the Loan Agreement and any of the other Financing Agreements, including,
without limitation, extensions of time of payment of or increase or decrease in
the amount of any of the Guaranteed Obligations or any collateral, and the
guarantee made herein shall apply to the Loan Agreement and the other Financing
Agreements and the Guaranteed Obligations as so amended, modified, supplemented,
renewed, restated or extended, increased or decreased, (ii) the taking,
exchange, surrender and releasing of collateral or guarantees now or at any time
held by or available to Lender for the obligations of Borrower or any other
party at any time liable on or in respect of the Guaranteed Obligations or who
is the owner of any property which is security for the Guaranteed Obligations
(individually, an "Obligor" and collectively, the "Obligors"), (iii) the
exercise of, or refraining from the exercise of any rights against Borrower or
any other Obligor or any collateral, (iv) the settlement, compromise or release
of, or the waiver of any default with respect to, any of the Guaranteed
Obligations and (v) any financing by Lender of Borrower under Section 364 of the
United States Bankruptcy Code or consent to the use of cash collateral by Lender
under Section 363 of the United States Bankruptcy Code. Guarantor agrees that
the amount of the Guaranteed Obligations shall not be diminished and the
liability of Guarantor hereunder shall not be otherwise impaired or affected by
any of the foregoing.
(b) No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations shall affect, impair or be a defense to this
Guarantee, nor shall any other circumstance which might otherwise constitute a
defense available to or legal or equitable discharge of Borrower in respect of
any of the Guaranteed Obligations, or Guarantor in respect of this Guarantee,
affect, impair or be a defense to this Guarantee. Without limitation of the
foregoing, the liability of Guarantor hereunder shall not be discharged or
impaired in any respect by reason of any failure by Lender to perfect or
continue perfection of any lien or security interest in any collateral or any
delay by Lender in perfecting any such lien or security interest. As to
interest, fees and expenses, whether arising before or after the commencement of
any case with respect to Borrower under the United States Bankruptcy Code or any
similar statute, Guarantor shall be liable therefor, even if Borrower's
liability for such amounts does not, or ceases to, exist by operation of law.
(c) Guarantor hereby irrevocably and unconditionally waives and
relinquishes all statutory, contractual, common law, equitable and all other
claims against Borrower, any collateral for the Guaranteed Obligations or other
assets of Borrower or any other Obligor, for subrogation, reimbursement,
exoneration, contribution, indemnification, setoff or other recourse in respect
to sums paid or payable to Lender by Guarantor hereunder and Guarantor hereby
further irrevocably and unconditionally waives and relinquishes any and all
other benefits which Guarantor might otherwise directly or indirectly receive or
be entitled to receive by reason of any amounts paid by or collected or due from
Guarantor, Borrower or any other Obligor upon the Guaranteed Obligations or
realized from their property; provided, however, that the foregoing shall not
apply to any such claim which is subordinated to any claims of Lender against
Borrower pursuant to the terms of that certain Subordination Agreement made and
entered into as of April 18, 1994 by and between Guarantor and Lender.
3. (Intentionally deleted)
4. Acceleration. Notwithstanding anything to the contrary contained herein
or any of the terms of any of the other Financing Agreements, the liability of
Guarantor for the entire Guaranteed Obligations shall mature and become
immediately due and payable, even if the liability of Borrower or any other
Obligor therefor does not, upon the occurrence of any act, condition or event
which constitutes an Event of Default as such term is defined in the Loan
Agreement. Lender agrees to use good faith efforts to notify Guarantor when the
Guaranteed Obligations become immediately due and payable; provided, however,
that the failure to so notify Guarantor shall not (i) diminish or otherwise
alter any of the Guarantor's obligations or duties hereunder or otherwise, (ii)
prejudice any right of Lender hereunder or otherwise, (iii) create any right for
Guarantor hereunder or otherwise or (iv) create any liability for Lender
hereunder or otherwise.
5. Account Stated. The books and records of Lender showing the account
between Lender and Borrower shall be admissible in evidence in any action or
proceeding against or involving Guarantor as prima facie proof of the items
therein set forth, and the monthly statements of Lender rendered to Borrower, to
the extent to which no written objection is made within thirty (30) days from
the date of sending thereof to Borrower, shall be deemed conclusively correct
and constitute an account stated between Lender and Borrower and be binding on
Guarantor.
6. Termination and Arrangements for Termination Upon Repayment of Term Loan
B. This Guarantee is continuing, absolute and unconditional. All Guaranteed
Obligations shall be conclusively presumed to have been created in reliance on
this Guarantee. This Guarantee may not be terminated and shall continue so long
as the Loan Agreement shall be in effect (whether during its original term or
any renewal, substitution or extension thereof). Notwithstanding anything to
the contrary contained in the preceding sentences of this Section 6, at any time
that either (i) the principal balance of the Term Loan-B (as defined in the Loan
Agreement) is less than or equal to $5,000,000, and so long as (a) no Event of
Default (as defined in the Loan Agreement) or event which, with the passage of
time or the giving of notice, or both, would constitute an Event of Default (as
defined in the Loan Agreement) exists at such time and (b) payment of all or any
portion of the Obligations (as defined in the Financing Agreements) has not been
accelerated or become due and payable pursuant to Section 10.2 of the Loan
Agreement or (ii) Lender has received (a) a total of $5,000,000 pursuant to this
Guarantee, the Tremont Pledge and/or the Contran Put (this Guarantee, the
Tremont Pledge and the Contran Put, the "Guarantee Documents") and (b) all
amounts owing to Lender pursuant to Section 16 hereof, Section 13 of the Tremont
Pledge and/or subsection 6(h) of the Contran Put, this Guarantee shall upon
written request to the Lender, be, subject to Section 7 hereof, terminated.
Notwithstanding anything to the contrary in this Agreement, if (a) Lender
exercises its rights under the Put Agreement dated as of the date of this
Guarantee between Lender and Contran Corporation ("Contran") as it may be
amended from time to time (the "Put Agreement") to require Contran to purchase
all of the Pledged Shares (as such term is defined in the Put Agreement), and
(b) the Fair Market Value (as defined in the Put Agreement) of all of the
Pledged Shares so purchased is less than the amount paid by Contran to Lender
pursuant to the Put Agreement (such difference, the "Shortfall"), then (i)
Guarantor unconditionally agrees to pay Contran an amount equal to the Shortfall
and indemnify and hold Contran harmless from any losses caused by Contran's
performance of the Put Agreement, (ii) to the extent Contran has paid any and
all amounts owing to Lender pursuant to the Put Agreement (including, without
limitation, amounts owing to Lender pursuant to Section 2 and/or Section 6(g) of
the Put Agreement) Contran shall be subrogated to (on a basis which is
subordinate to Lender) to the rights of Lender under this Agreement, and (iii)
this Agreement shall not terminate until such Shortfall and any other amounts
are paid or Contran consents in writing to such termination. Lender and
Guarantor agree that Contran and its permitted assigns under the Put Agreement
shall be deemed to be third party beneficiaries of this Section 6, that Contran
may enforce its rights under this Agreement as if a party thereto, and that no
amendment, modification, waiver or discharge of this Section 6 shall be
effective unless (a) Contran (or such permitted assigns) has consented (which
consent shall not be unreasonably withheld or delayed) in writing to such action
or (b) the Put Agreement has been terminated.
7. Reinstatement. If after receipt of any payment of, or proceeds of
collateral applied to the payment of, any of the Guaranteed Obligations, Lender
is legally required to surrender or return such payment or proceeds to any
Person for any reason, then the Guaranteed Obligations intended to be satisfied
by such payment or proceeds shall be reinstated and continue and this Guarantee
shall continue in full force and effect (and if otherwise terminated, this
Guarantee shall be reinstated) as if such payment or proceeds had not been
received by Lender; provided, however, that this Guarantee shall not be so
reinstated if, following any such surrender or return by Lender, (a) the
principal balance of the Term Loan-B is less than or equal to $5,000,000, (b) no
Event of Default (as defined in the Loan Agreement) or event which, with the
passage of time or the giving of notice, or both, would constitute an Event of
Default (as defined in the Loan Agreement) exists at such time and (c) payment
of all or any portion of the Obligations (as defined in the Financing
Agreements) has not been accelerated or become due and payable pursuant to
Section 10.2 of the Loan Agreement. This Section 7 shall remain effective
notwithstanding any contrary action which may be taken by Lender in reliance
upon such payment or proceeds. This Section 7 shall survive the termination or
revocation of this Guarantee.
8. Amendments and Waivers. Neither this Guarantee nor any provision hereof
shall be amended, modified, waived or discharged orally or by course of conduct,
but only by a written agreement signed by an authorized officer of Lender.
Lender shall not, by any act, delay, omission or otherwise be deemed to have
expressly or impliedly waived any of its rights, powers and/or remedies unless
such waiver shall in writing and signed by an authorized officer of Lender. Any
such waiver shall be enforceable only to the extent specifically set forth
therein. A waiver by Lender of any right, power and/or remedy on any one
occasion shall not be construed as a bar to or waiver of any such right, power
and/or remedy which Lender would otherwise have on any future occasion, whether
similar in kind or otherwise.
9. Corporate Existence, Power and Authority. Guarantor is a corporation
duly organized and in good standing under the laws of its state or other
jurisdiction of incorporation and is duly qualified as a foreign corporation and
in good standing in all states or other jurisdictions where the nature and
extent of the business transacted by it or the ownership of assets makes such
qualification necessary, except for those jurisdictions in which the failure to
so qualify would not have a material adverse effect on the financial condition,
results of operation or businesses of Guarantor or the rights of Lender
hereunder or under any of the other Financing Agreements. The execution,
delivery and performance of this Guarantee is within the corporate powers of
Guarantor, have been duly authorized and is not in contravention of law or the
terms of the certificates of incorporation, by-laws, or other organizational
documentation of Guarantor, or any indenture, agreement or undertaking to which
Guarantor is a party or by which Guarantor or its property are bound. This
Guarantee constitutes the legal, valid and binding obligation of Guarantor
enforceable in accordance with its terms.
10. Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.
(a) The validity, interpretation and enforcement of this Guarantee and
any dispute arising out of the relationship between Guarantor and Lender,
whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the State of Illinois (without giving effect to principles of
conflicts of law).
(b) Guarantor hereby irrevocably consents and submits to the non-
exclusive jurisdiction of the courts of the State of Illinois located in
Chicago, Illinois and the United States District Court for the Northern District
of Illinois and waives any objection based on venue or forum non conveniens with
respect to any action instituted therein arising under this Guarantee or any of
the other Financing Agreements or in any way connected with or related or
incidental to the dealings of Guarantor and Lender in respect of this Guarantee
or any of the other Financing Agreements or the transactions related hereto or
thereto, in each case whether now existing or hereafter arising and whether in
contract, tort, equity or otherwise, and agrees that any dispute arising out of
the relationship between Guarantor or Borrower and Lender or the conduct of any
such persons in connection with this Guarantee, the other Financing Agreements
or otherwise shall be heard only in the courts described above (except that
Lender shall have the right to bring any action or proceeding against Guarantor
or its property in the courts of any other jurisdiction which Lender deems
necessary or appropriate in order to realize on any collateral at any time
granted by Borrower or Guarantor to Lender or to otherwise enforce its rights
against Guarantor or its property).
(c) Guarantor hereby waives personal service of any and all process
upon it and consents that all such service of process may be made by certified
mail (return receipt requested) directed to its address set forth on the
signature pages hereof and service so made shall be deemed to be completed five
(5) days after the same shall have been so deposited in the U.S. mails, or, at
Lender's option, by service upon Guarantor in any other manner provided under
the rules of any such courts. Within thirty (30) days after such service,
Guarantor shall appear in answer to such process, failing which Guarantor shall
be deemed in default and judgment may be entered by Lender against Guarantor for
the amount of the claim and other relief requested.
(d) GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS GUARANTEE OR ANY OF THE
OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF GUARANTOR AND LENDER IN RESPECT OF THIS GUARANTEE
OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE. GUARANTOR HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY AND THAT GUARANTOR OR LENDER MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF GUARANTOR AND LENDER TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.
(e) Lender shall not have any liability to Guarantor (whether in tort,
contract, equity or otherwise) for losses suffered by Guarantor in connection
with, arising out of, or in any way related to the transactions or relationships
contemplated by this Guarantee, or any act, omission or event occurring in
connection herewith, unless it is determined by a final and non-appealable
judgment or court order binding on Lender that the losses were the result of
acts or omissions constituting gross negligence or willful misconduct. In any
such litigation, Lender shall be entitled to the benefit of the rebuttable
presumption that it acted in good faith and with the exercise of ordinary care
in the performance by it of the terms of the Loan Agreement and the other
Financing Agreements.
11. Notices. All notices, requests and demands hereunder shall be in
writing and (a) made to Lender at its address set forth above and to Guarantor
at its chief executive office set forth below, or to such other address as
either party may designate by written notice to the other in accordance with
this provision, and (b) deemed to have been given or made: if delivered in
person, immediately upon delivery; if by telex, telegram or facsimile
transmission, immediately upon sending and upon confirmation of receipt; if by
nationally recognized overnight courier service with instructions to deliver the
next business day, one (1) business day after sending; and if by certified mail,
return receipt requested, five (5) days after mailing.
12. Partial Invalidity. If any provision of this Guarantee is held to be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Guarantee as a whole, but this Guarantee shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
13. Entire Agreement. This Guarantee represents the entire agreement and
understanding of this parties concerning the subject matter hereof, and
supersedes all other prior agreements, understandings, negotiations and
discussions, representations, warranties, commitments, proposals, offers and
contracts concerning the subject matter hereof, whether oral or written.
14. Successors and Assigns. This Guarantee shall be binding upon Guarantor
and its successors and assigns and shall inure to the benefit of Lender and its
successors, endorsees, transferees and assigns. The liquidation, dissolution or
termination of Guarantor shall not terminate this Guarantee as to such entity or
as to Guarantor.
15. Construction. All references to the term "Guarantor" wherever used
herein shall mean Guarantor and its successors and assigns (including, without
limitation, any receiver, trustee or custodian for Guarantor or any of its
assets or Guarantor in its capacity as debtor or debtor-in-possession under the
United States Bankruptcy Code). All references to the term "Lender" wherever
used herein shall mean Lender and its successors and assigns and all references
to the term "Borrower" wherever used herein shall mean Borrower and its
successors and assigns (including, without limitation, any receiver, trustee or
custodian for Borrower or any of its assets or Borrower in its capacity as
debtor or debtor-in-possession under the United States Bankruptcy Code). All
references to the term "Person" or "person" wherever used herein shall mean any
individual, sole proprietorship, partnership, corporation (including, without
limitation, any corporation which elects subchapter S status under the Internal
Revenue Code of 1986, as amended), business trust, unincorporated association,
joint stock corporation, trust, joint venture or other entity or any government
or any agency or instrumentality or political subdivision thereof. All
references to the plural shall also mean the singular and to the singular shall
also mean the plural.
16. Expenses; Interest. Guarantor will pay to Lender the amount of all
reasonable expenses, including without limitation, the reasonable fees, expenses
and disbursements of its counsel (including allocated costs of inside counsel),
of any investment banking firm, business broker or other selling agent and of
any other experts and agents retained by Lender, which Lender may incur in
connection with (i) the administration of the Guarantee Documents, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral (as defined in the Tremont
Pledge), (iii) the exercise or enforcement of any of the rights of Lender under
the Guarantee Documents or (iv) the failure of any party other than Lender to
perform or observe any of the provisions of any of the Guarantee Documents. All
amounts owing under this Section 16 shall be paid upon demand. Any and all
amounts payable under or pursuant to this Agreement (whether pursuant to Section
1 hereof, this Section 16 or otherwise) which are not paid when due shall bear
interest (which shall be payable upon demand) at a rate equal to the Prime Rate
(as defined in the Loan Agreement) plus two percent (2%) per annum.
IN WITNESS WHEREOF, Guarantor has executed and delivered this Guarantee as of
the day and year first above written.
ATTEST: TREMONT CORPORATION
________________________ By: ________________________________
Title: ______________________________
Address of Chief Executive Office
___________________________________
___________________________________
STATE OF )
) ss.:
COUNTY OF )
On this ____ day of __________, 19__, before me personally came
_____________________, to me known, who stated that he is the
____________________ of __________________________________, the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto by order of the Board of Directors of said corporation.
___________________________
Notary Public
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered into as
of March 24, 1995 by TREMONT CORPORATION, a Delaware corporation (the
"Pledgor"), in favor of CONGRESS FINANCIAL CORPORATION (CENTRAL), an Illinois
corporation ("Lender").
W I T N E S S E T H:
WHEREAS, Pledgor is the owner of the outstanding shares of stock (the
"Pledged Shares") set forth on Schedule I hereto of NL Industries, Inc. (the
"Issuer"); and
WHEREAS, Pledgor desires that TITANIUM METALS CORPORATION, a Delaware
corporation ("TIMET"), obtain an amended and restated credit facility from
Lender for the purposes described in the Amended and Restated Loan and Security
Agreement dated as of the date hereof, among TIMET and Lender (as the same has
been or may from time to time be amended, restated, supplemented or otherwise
modified, the "Loan Agreement"); capitalized terms used herein and not otherwise
defined herein shall have the meanings given to such terms in the Loan
Agreement; and
WHEREAS, pursuant to that certain Guarantee dated as of the date
hereof made by Pledgor (as the same has been and may from time to time be
amended, restated, supplemented or otherwise modified, the "Guarantee"), Pledgor
has guaranteed certain of TIMET's obligations to Lender; and
WHEREAS, Lender has required, as a condition to its entering into the
Loan Agreement, that Pledgor (i) pledge to Lender, and grant to Lender a
security interest in, the Pledged Collateral (as defined herein) and
(ii) execute and deliver this Agreement in order to secure the payment and
performance by Pledgor of the Guaranteed Obligations (as defined in the
Guarantee).
AGREEMENT
NOW THEREFORE, in consideration of the premises and in order to induce
Lender to extend credit under the Loan Agreement and the Note to Pledgor,
Pledgor hereby agrees with Lender as follows:
SECTION 1. PLEDGE. Pledgor hereby pledges and collaterally
assigns to Lender, and grants to Lender a continuing first priority and
perfected security interest in, the following (the "Pledged Collateral"):
(a) the Pledged Shares and the certificates representing the Pledged
Shares, and all products and proceeds of any of the Pledged Shares
including, without limitation, all dividends, cash, instruments,
subscriptions, warrants and any other rights and options and other property
from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the Pledged Shares; and
(b) all additional shares of stock of, or equity interest in, the
Issuer from time to time delivered or required to be delivered by Pledgor
to Lender pursuant to Section 15.6 hereof, and the certificates
representing such additional shares (any such additional shares shall
constitute part of the Pledged Shares under and as defined in this
Agreement), and all products and proceeds of any of such additional Pledged
Shares, including, without limitation, all dividends, cash, instruments,
subscriptions, warrants and any other rights and options and other property
from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such additional Pledged Shares.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures the
payment of all of the Guaranteed Obligations (as defined in the Guarantee),
whether for principal, interest, fees, expenses or otherwise, and all
obligations of Pledgor now or hereafter existing under this Agreement or the
Guarantee (all such obligations of Pledgor now or hereafter existing being
referred to herein as the "Liabilities").
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of Lender pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Lender.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor represents and
warrants as follows:
(a) The Pledged Shares have been duly authorized and validly issued
and are fully paid and non-assessable.
(b) Pledgor is the legal and beneficial owner of the Pledged
Collateral, free and clear of any security interest, mortgage, pledge,
lien, charge or other encumbrance ("Lien") on the Pledged Collateral.
(c) The pledge and collateral assignment of the Pledged Collateral
pursuant to this Agreement creates a valid and perfected first priority
interest in such Pledged Collateral securing the payment of the Liabilities
for the benefit of Lender.
(d) No authorization, approval, or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
either (i) for the pledge and collateral assignment by Pledgor of the
Pledged Collateral pursuant to this Agreement or for the execution,
delivery or performance of this Agreement by Pledgor or (ii) for the
exercise by Lender of the voting or other rights provided for in this
Agreement or the remedies in respect of the Pledged Collateral pursuant to
this Agreement (except such filings of beneficial ownership as may be
required by federal securities laws).
(e) Pledgor has full power and authority to enter into this Agreement
and has the right to vote the Pledged Shares and to pledge, collaterally
assign and grant a security interest in the Pledged Collateral.
(f) This Agreement has been duly authorized, executed and delivered
by Pledgor and constitutes a legal, valid and binding obligation of
Pledgor, enforceable against Pledgor in accordance with its terms, except
as such enforceability may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally or general principles of equity.
(g) To the best of its knowledge, the Pledged Shares constitute, as
of the date hereof, the percentage of the authorized, issued and
outstanding capital stock of the Issuer set forth on Schedule I hereto.
(h) Pledgor's chief executive office is located at the address set
forth on the signature page hereto.
SECTION 5. FURTHER ASSURANCES; COVENANTS.
(a) Pledgor agrees that at any time and from time to time, at the
expense of Pledgor, Pledgor will promptly execute and deliver, or cause to
be executed and delivered, all stock powers, proxies, assignments,
instruments and documents and take all further action, that is reasonably
necessary, at Lender's request, in order to perfect any security interest
granted or purported to be granted hereby or to enable Lender to exercise
and enforce its rights and remedies hereunder with respect to any Pledged
Collateral and to carry out the provisions and purposes hereof.
(b) Pledgor covenants and agrees that it will not change its name or
the location of its chief executive office without having provided not less
than thirty (30) days prior written notice of such intended change to
Lender.
SECTION 6. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default shall have occurred and be
continuing, Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Shares or any part
thereof for any purpose not inconsistent with the terms of this Agreement;
provided, however, that Pledgor shall not exercise or shall refrain from
exercising any such right if such action would have a material adverse
effect on the value of the Pledged Collateral or any part thereof or be
inconsistent with or violate any provisions of this Agreement, the Loan
Agreement, the Notes or any of the other Financing Agreements.
(b) So long as no Event of Default shall have occurred and be
continuing, Pledgor shall be entitled to receive all cash dividends paid
from time to time in respect of the Pledged Shares.
(c) Any and all (i) dividends or other distributions paid or payable
in the form of instruments and/or other property (other than cash dividends
permitted under Section 6(b) hereof) received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged Collateral,
(ii) dividends and other distributions paid or payable in cash received,
receivable or otherwise distributed in respect of any Pledged Shares in
connection with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or paid-in-surplus,
and (iii) cash paid, payable or otherwise distributed in redemption of, or
in exchange for, any Pledged Shares, shall in each case be delivered
forthwith to Lender to hold as Pledged Collateral and shall, if received by
Pledgor, be received in trust for the benefit of Lender, be segregated from
the other property or funds of Pledgor, and be forthwith delivered to
Lender as Pledged Collateral in the same form as so received (with any
necessary endorsement).
(d) Lender shall execute and deliver (or cause to be executed and
delivered) to Pledgor all such proxies and other instruments as Pledgor may
reasonably request for the purpose of enabling Pledgor to exercise the
voting and other rights which it is entitled to exercise pursuant to
Section 6(a) above.
(e) All dividends or other distributions which are received by
Pledgor contrary to the provisions of this Section 6 shall be received in
trust for the benefit of Lender, shall be segregated from other funds of
Pledgor and shall be forthwith paid over to Lender as Pledged Collateral in
the same form as so received (with any necessary endorsement).
(f) Upon the occurrence and during the continuance of an Event of
Default, all rights of Pledgor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to Sec-
tion 6(a) shall cease, and all such rights shall become vested in Lender
which shall thereupon have the sole right to exercise such voting and other
consensual rights.
(g) Upon the occurrence and during the continuance of an Event of
Default, all cash dividends or other distributions payable in respect of
the Pledged Shares shall be paid directly to Lender and, if received by
Pledgor, shall be received in trust for the benefit of Lender, shall be
segregated from other funds of Pledgor, and shall be forthwith paid over to
Lender as Pledged Collateral in the same form as so received (with any
necessary endorsements) and Pledgor's right to receive such cash payments
pursuant to Sections 6(b) shall immediately cease.
SECTION 7. TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES.
(a) Pledgor agrees that it will not (i) sell or otherwise dispose of,
or grant any option with respect to, any of the Pledged Collateral without the
prior written consent of Lender, (ii) create or permit to exist any Lien upon or
with respect to any of the Pledged Collateral, except for the security interest
granted under this Agreement or (iii) enter into any agreement or understanding
that purports to or may restrict or inhibit Lender's rights or remedies
hereunder, including, without limitation, Lender's right to sell or otherwise
dispose of the Pledged Collateral.
SECTION 8. LENDER APPOINTED ATTORNEY-IN-FACT. Pledgor hereby
appoints Lender Pledgor's attorney-in-fact, with full authority in the place and
stead of Pledgor and in the name of Pledgor or otherwise, from time to time in
Lender's discretion to take any action and to execute any instrument which
Lender may deem necessary or advisable to further perfect and protect the
security interest granted hereby, including, without limitation, to receive,
endorse and collect all instruments made payable to Pledgor representing any
dividend, or other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same.
SECTION 9. LENDER MAY PERFORM. If Pledgor fails to perform any
agreement contained herein, Lender may itself perform, or cause performance of,
such agreement, and the reasonable expenses of Lender incurred in connection
therewith shall be payable by Pledgor under Section 13 hereof.
SECTION 10. NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights
and powers granted to Lender hereunder are being granted in order to preserve
and protect Lender's security interest in and to the Pledged Collateral granted
hereby and shall not be interpreted to, and shall not, impose any duties on
Lender in connection therewith. Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which Lender accords its own property, it being understood that Lender
shall not have any responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Collateral, whether or not Lender has or is deemed to
have knowledge of such matters, or (ii) taking any necessary steps to preserve
rights against any parties with respect to any Pledged Collateral.
SECTION 11. SUBSEQUENT CHANGES AFFECTING PLEDGED COLLATERAL.
Pledgor represents to Lender that Pledgor has made its own arrangements for
keeping informed of changes or potential changes affecting the Pledged
Collateral (including, but not limited to, rights to convert, rights to
subscribe, payment of dividends, payments of interest and/or principal,
reorganization or other exchanges, tender offers and voting rights), and Pledgor
agrees that Lender shall have no responsibility or liability for informing
Pledgor of any such changes or potential changes or for taking any action or
omitting to take any action with respect thereto.
SECTION 12. REMEDIES UPON DEFAULT. If any Event of Default shall
have occurred and be continuing, Lender shall, in addition to all other rights
given by law or by this Agreement, or otherwise, have all of the rights and
remedies with respect to the Pledged Collateral of a secured party under the
Uniform Commercial Code ("Code") in effect in the State of Illinois at that time
and Lender may, without notice and at its option, transfer or register, and
Pledgor shall register or cause to be registered upon request therefor by
Lender, the Pledged Shares or any part thereof on the books of the Issuer into
the name of Lender or Lender's nominee(s), indicating that such Pledged Shares
are subject to the security interest hereunder. In addition, with respect to
any Pledged Collateral which shall then be in or shall thereafter come into the
possession or custody of Lender, Lender may sell or cause the same to be sold at
any broker's board or at any public or private sale, in one or more sales or
lots, at such price or prices as Lender may deem best, for cash or on credit or
for future delivery, without assumption of any credit risk, all in accordance
with the terms and provisions of this Agreement. The purchaser of any or all
Pledged Collateral so sold shall thereafter hold the same absolutely, free from
any claim, encumbrance or right of any kind whatsoever. Unless any of the
Pledged Collateral threatens to decline speedily in value or is or becomes of a
type sold on a recognized market, Lender will give Pledgor reasonable notice of
the time and place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. Any sale of the
Pledged Collateral pursuant to that certain Put Agreement (the "Put Agreement")
dated as of the date hereof between Lender and Contran Corporation ("Contran")
or conducted in conformity with reasonable commercial practices of banks,
insurance companies, commercial finance companies, or other financial
institutions disposing of property similar to the Pledged Collateral shall be
deemed to be commercially reasonable. Any requirements of reasonable notice
shall be met if such notice is mailed to Pledgor as provided in Section 15.16
below, at least five (5) days before the time of the sale or disposition. Any
other requirement of notice, demand or advertisement for sale is, to the extent
permitted by law, waived. Lender may, in its own name or in the name of a
designee or nominee, buy any of the Pledged Collateral at any public sale and,
if permitted by applicable law, at any private sale. All expenses (including
court costs and reasonable attorneys' fees, expenses and disbursements) of, or
incident to, the enforcement of any of the provisions hereof shall be
recoverable from the proceeds of the sale or other disposition of the Pledged
Collateral. In view of the fact that federal and state securities laws may
impose certain restrictions on the method by which a sale of the Pledged
Collateral may be effected after an Event of Default, Pledgor agrees that upon
the occurrence or existence of any Event of Default, Lender may, from time to
time, attempt to sell all or any part of the Pledged Collateral pursuant to the
Put Agreement or by means of a private placement, restricting the prospective
purchasers to those who will represent and agree that they are purchasing for
investment only and not for distribution. In so doing, Lender may (i) solicit
offers to buy the Pledged Collateral, or any part of it, for cash, from a
limited number of investors who might be interested in purchasing the Pledged
Collateral, and if Lender solicits such offers from not less than four (4) such
investors that are not affiliated with Lender, then the acceptance by Lender of
the highest offer obtained therefrom shall be deemed to be a commercially
reasonable method of disposition of the Pledged Collateral or (ii) sell the
Pledged Collateral pursuant to the Put Agreement, and a sale pursuant to (i) or
(ii) of this sentence shall be deemed to be a commercially reasonably
disposition of the Pledged Collateral. Notwithstanding anything in this
Agreement to the contrary, Lender agrees that it will not sell all or any
portion of the Pledged Collateral to any Person other than Contran unless Lender
(i) has been legally unable to fully exercise or been otherwise prohibited from
fully exercising, or Borrower, Pledgor, Contran or any of their successors, or
any party claiming by or through any such party contests Lender's ability to
exercise, its rights under the Put Agreement or (ii) Lender has delivered a Put
Notice (as defined in the Put Agreement) and Contran has failed to purchase the
Pledged Shares in accordance with the terms of the Put Agreement.
In addition, upon the occurrence and during the continuance of an
Event of Default, all rights of Pledgor to exercise the voting and other rights
which it would otherwise be entitled to exercise shall cease, and all such
rights shall thereupon become vested in Lender as provided in and subject to the
terms of Section 6(f) hereof.
SECTION 13. EXPENSES. Pledgor will pay to Lender the amount of any
and all reasonable expenses, including, without limitation, the reasonable fees,
expenses and disbursements of its counsel (including allocated costs of inside
counsel), of any investment banking firm, business broker or other selling agent
and of any other experts and agents retained by Lender, which Lender may incur
in connection with (i) the administration of this Agreement, the Guarantee and
the Put Agreement, (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Pledged Collateral,
(iii) the exercise or enforcement of any of the rights of Lender hereunder or
under the Guarantee or the Put Agreement or (iv) the failure by Pledgor to
perform or observe any of the provisions hereof or of the Guarantee or the Put
Agreement. All amounts owing under this Section 13 shall be payable upon
demand. Any and all amounts payable under or pursuant to this Agreement which
are not paid when due shall bear interest (which shall be payable upon demand)
at a rate equal to the Prime Rate (as defined in the Loan Agreement) plus two
percent (2%) per annum.
SECTION 14. SECURITY INTEREST ABSOLUTE. All rights of Lender and
security interests hereunder, and all obligations of Pledgor hereunder, shall be
absolute and unconditional irrespective of, and unaffected by:
(a) any lack of validity or enforceability of any Financing
Agreement;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Liabilities, or any other amendment or
waiver of or any consent to any departure from any Financing Agreement;
(c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Liabilities; or
(d) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, Pledgor in respect of the Liabilities or
of this Agreement.
SECTION 1. MISCELLANEOUS PROVISIONS.
SECTION 1 Headings. The headings in this Agreement are for
purposes of reference only and shall not affect the meaning or construction of
any provision of this Agreement.
SECTION 2 Interpretation of Agreement. Time is of the essence in
each provision of this Agreement of which time is an element. All terms not
defined herein or in the Loan Agreement shall have the meaning set forth in the
applicable Uniform Commercial Code, except where the context otherwise requires.
Acceptance of or acquiescence in a course of performance rendered under this
Agreement shall not be relevant in determining the meaning of this Agreement
even though the accepting or acquiescing party had knowledge of the nature of
the performance and opportunity for objection.
SECTION 3 Continuing Security Interest. This Agreement shall
create a continuing security interest in the Pledged Collateral and shall remain
in full force and effect until the termination of this Agreement pursuant to
Section 15.8 hereof.
SECTION 4 Reinstatement. To the extent permitted by law, this
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any amount received by Lender, in respect of the Guaranteed
Obligations is rescinded or must otherwise be restored or returned by Lender,
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
Pledgor or upon the appointment of any receiver, intervenor, conservator,
trustee or similar official for Pledgor or any substantial part of its assets,
or otherwise, all as though such payments had not been made.
SECTION 5 Survival of Provisions. All representations,
warranties and covenants of Pledgor contained herein shall survive the execution
and delivery of this Agreement, and shall terminate only upon the full and final
payment and performance by Pledgor of the Liabilities secured hereby and
termination of the Loan Agreement, the Note and the other Financing Agreements.
SECTION 6 Adjustment to Number of Pledged Shares. Lender may,
from time to time when it deems it appropriate, on any Business Day (a "Lender
Adjustment Day"), and Lender shall from time to time on a Business Day requested
by Pledgor at least two Business Days in advance (each such Business Day and
each Lender Adjustment Day, a "Valuation Day"), determine the market value of
the Pledged Shares (the "Market Value") (based, to the extent applicable, upon
the lesser of (i) the average, appropriately adjusted for dividends, stock
splits and similar transactions, of the closing sales prices of a share of stock
of NL Industries of the same class as the Pledged Shares on the New York Stock
Exchange composite tape for the five (5) trading days immediately preceding such
Valuation Day and (ii) the closing price of such a share on the New York Stock
Exchange on the trading day immediately preceding such Valuation Day. If the
Market Value on a particular Valuation Day is (i) less than Six Million Five
Hundred Thousand Dollars ($6,500,000), Lender shall notify Pledgor of the
existence and the amount of such shortfall and Pledgor shall promptly thereafter
(but in no event more than three (3) Business Days thereafter) pledge additional
shares of capital stock of the Issuer to Lender (which shares shall then be
Pledged Shares) (and, in accordance with Section 3 hereof, Pledgor shall deliver
to Lender certificates, and duly executed instruments of transfer or assignment
in blank with respect thereto, representing such additional shares) such that
after giving effect to such delivery of such additional Pledged Shares, the
Market Value of the Pledged Shares shall be greater than or equal to $7,000,000
and (ii) greater than Seven Million Five Hundred Thousand Dollars ($7,500,000,)
Lender shall notify Pledgor of such circumstance and, Lender shall, upon the
written request of Pledgor given within two Business Days of day on which Lender
so notifies Pledgor, release its interest in as many Pledged Shares as requested
by Pledgor as long as, after giving effect to such release, the Market Value of
the Pledged Shares constituting Pledged Collateral at such time is at least
$7,000,000. The dollar amounts specified in this paragraph shall be reduced by
the amount which Lender has received (and been allowed to retain) pursuant to
the Guarantee, this Agreement or the Contran Put (other than amounts received
pursuant to Section 16 of the Guarantee, Section 13 hereof and/or Subsection
6(g) of the Contran Put).
SECTION 7 Authority of Lender. Lender shall have and be entitled
to exercise all powers hereunder which are specifically granted to Lender by the
terms hereof, together with such powers as are reasonably incident thereto.
Lender may perform any of its duties hereunder or in connection with the Pledged
Collateral by or through agents or employees and shall be entitled to retain
counsel and to act in reliance upon the advice of counsel concerning all such
matters. Neither Lender nor any director, officer, employee, attorney or agent
of Lender shall be liable to Pledgor for any action taken or omitted to be taken
by it or them hereunder, except for its or their own gross negligence or willful
misconduct, nor shall Lender be responsible for the validity, effectiveness or
sufficiency of this Agreement or of any document or security furnished pursuant
hereto. Lender and its directors, officers, employees, attorneys and agents
shall be entitled to rely on any communication, instrument or document
reasonably believed by it or them to be genuine and correct and to have been
signed or sent by the proper person or persons. Pledgor agrees to indemnify and
hold harmless Lender and any other Person from and against any and all costs,
expenses (including reasonable fees, expenses and disbursements of attorneys and
paralegals (including, without duplication, reasonable charges of inside
counsel)), claims and liabilities incurred by Lender or such Person hereunder,
unless such claim or liability shall be due to willful misconduct or gross
negligence on the part of Lender or such Person.
SECTION 8 Release; Termination of Agreement. At any time
following the termination of the Guarantee, this Agreement shall upon written
request to Lender, be terminated; provided, however, if at any time following
any such termination, the Guarantee is reinstated, this Agreement shall be
automatically reinstated and shall thereafter continue in full force and effect.
Upon termination of this Agreement, Lender shall, at the request and expense of
Pledgor, reassign and redeliver to Pledgor all of the Pledged Collateral
hereunder which has not been sold, disposed of, retained or applied by Lender in
accordance with the terms hereof. Such reassignment and redelivery shall be
without warranty by or recourse to Lender, except as to the absence of any prior
assignments by Lender of its interest in the Pledged Collateral, and shall be at
the expense of Pledgor.
SECTION 9 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed and delivered, shall be deemed an
original but all of which shall together constitute one and the same agreement.
SECTION 10 Governing Law; Choice of Forum; Service of
Process; Jury Trial Waiver.
(a) The validity, interpretation and enforcement of this Agreement
and the other Financing Agreements and any dispute arising out of the
relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of Illinois
(without giving effect to principles of conflicts of law).
(b) Pledgor and Lender irrevocably consent and submit to the non-
exclusive jurisdiction of the courts of the State of Illinois located in
Chicago, Illinois and the United States District Court for the Northern District
of Illinois and waive any objection based on venue or forum non conveniens with
respect to any action instituted therein arising under this Agreement or any of
the other Financing Agreements or in any way connected with or related or
incidental to the dealings of the parties hereto in respect of this Agreement or
any of the other Financing Agreements or the transactions related hereto or
thereto, in each case whether now existing or hereafter arising, and whether in
contract, tort, equity or otherwise, and agree that any dispute with respect to
any such matters shall be heard only in the courts described above (except that
Lender shall have the right to bring any action or proceeding against Pledgor or
its property in the courts of any other jurisdiction which Lender deems
necessary or appropriate in order to realize on the Pledged Collateral or to
otherwise enforce its rights against Pledgor or its property).
(c) Pledgor hereby waives personal service of any and all process
upon it and consents that all such service of process may be made by certified
mail (return receipt requested) directed to its address set forth on the
signature pages hereof and service so made shall be deemed to be completed five
(5) days after the same shall have been so deposited in the U.S. mails, or, at
Lender's option, by service upon Pledgor in any other manner provided under the
rules of any such courts. Within thirty (30) days after such service, Pledgor
shall appear in answer to such process, failing which Pledgor shall be deemed in
default and judgment may be entered by Lender against Pledgor for the amount of
the claim and other relief requested.
(d) PLEDGOR AND LENDER EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT
OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS
AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED
HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. PLEDGOR AND LENDER EACH HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT PLEDGOR OR LENDER MAY FILE AN
ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
(e) Lender shall not have any liability to Pledgor (whether in tort,
contract, equity or otherwise) for losses suffered by Pledgor in connection
with, arising out of, or in any way related to the transactions or relationships
contemplated by this Agreement, or any act, omission or event occurring in
connection herewith, unless it is determined by a final and non-appealable
judgment or court order binding on Lender, that the losses were the result of
acts or omissions constituting gross negligence or willful misconduct. In any
such litigation, Lender shall be entitled to the benefit of the rebuttable
presumption that it acted in good faith and with the exercise of ordinary care
in the performance by it of the terms of the this Agreement, the Loan Agreement
and the other Financing Agreements.
SECTION 11 Waiver. LENDER AND PLEDGER WAIVE ALL RIGHTS OF
NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY LENDER OF ITS RIGHTS
FROM AND AFTER AN EVENT OF DEFAULT TO REPOSSESS THE PLEDGED COLLATERAL WITH
JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE PLEDGED COLLATERAL.
PLEDGOR WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF LENDER IN
CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF,
REPLEVY, ATTACH OR LEVY UPON PLEDGED COLLATERAL, TO ENFORCE ANY JUDGMENT OR
OTHER SECURITY FOR THE LIABILITIES, TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF SUCH PARTY OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY
RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION, THIS AGREEMENT, OR ANY
OTHER AGREEMENT OR DOCUMENT BETWEEN PLEDGOR AND ANY SUCH PARTY.
SECTION 12 Waiver of Notices. Pledgor hereby expressly waives
demand, presentment, protest and notice of protest and notice of dishonor with
respect to any and all instruments and commercial paper, included in or
evidencing any of the Liabilities or the Collateral, and any and all other
demands and notices of any kind or nature whatsoever with respect to the
Liabilities, the Collateral and this Agreement, except such as are expressly
provided for herein. No notice to or demand on Pledgor which Lender may elect
to give shall entitle Debtor to any other or further notice or demand in the
same, similar or other circumstances.
SECTION 13 Amendments and Waivers. Neither this Agreement
nor any provision hereof shall be amended, modified, waived or discharged orally
or by course of conduct, but only by a written agreement signed by an authorized
officer of Lender. Lender shall not, by any act, delay, omission or otherwise
be deemed to have expressly or impliedly waived any of its rights, powers and/or
remedies unless such waiver shall be in writing and signed by an authorized
officer of Lender. Any such waiver shall be enforceable only to the extent
specifically set forth therein. A waiver by Lender of any right, power and/or
remedy on any one occasion shall not be construed as a bar to or waiver of any
such right, power and/or remedy which Lender would otherwise have on any future
occasion, whether similar in kind or otherwise.
SECTION 14 Waiver of Counterclaims. Pledgor waives all rights to
interpose any claims, deductions, setoffs or counterclaims of any nature (other
then compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Pledged Collateral or any matter arising
therefrom or relating hereto or thereto.
SECTION 15 Indemnification. Pledgor shall indemnify and hold
Lender, and its directors, agents, employees and counsel, harmless from and
against any and all losses, claims, damages, liabilities, costs or expenses
("Indemnified Amounts") imposed on, incurred by or asserted against any of them
in connection with any litigation, investigation, claim or proceeding commenced
or threatened related to the negotiation, preparation, execution, delivery,
enforcement, performance or administration of this Agreement, any other
Financing Agreements, or any undertaking or proceeding related to any of the
transactions contemplated hereby or any act, omission, event or transaction
related or attendant thereto, including, without limitation, amounts paid in
settlement, court costs, and the reasonable fees and expenses of counsel, unless
the Indemnified Amounts proximately result from the gross negligence or willful
misconduct of Lender or the intentional breach by Lender of any obligation of
Lender under this Agreement. To the extent that the undertaking to indemnify,
pay and hold harmless set forth in this Section may be unenforceable because it
violates any law or public policy, Pledgor shall pay the maximum portion which
it is permitted to pay under applicable law to Lender in satisfaction of
indemnified matters under this Section. The foregoing indemnity shall survive
the payment of the Obligations and the termination or non-renewal of this
Agreement.
SECTION 16 Notices. All notices, requests and demands hereunder
shall be in writing and (a) made to Lender at its address set forth below and to
Pledgor at its chief executive office set forth below, or to such other address
as either party may designate by written notice to the other in accordance with
this provision, and (b) deemed to have been given or made: if delivered in
person, immediately upon delivery; if by telex, telegram or facsimile
transmission, immediately upon sending and upon confirmation of receipt if the
initial page thereof is received prior to 4:30 p.m. on a Business Day, or on the
next Business Day following the day of receipt and confirmation if the initial
page thereof is not received during a Business Day; if by nationally recognized
overnight courier service with instructions to deliver the next business day,
one (1) business day after sending; and if by certified mail, return receipt
requested, five (5) days after mailing.
SECTION 17 Partial Invalidity. If any provision of this Agreement
is held to be invalid or unenforceable, such invalidity or unenforceability
shall not invalidate this Agreement as a whole, but this Agreement shall be
construed as though it did not contain the particular provision held to be
invalid or unenforceable and the rights and obligations of the parties shall be
construed and enforced only to such extent as shall be permitted by applicable
law.
SECTION 18 Successors. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by Lender, Pledgor and their
respective successors and assigns, except that Pledgor may not assign its rights
under this Agreement without the prior written consent of Lender. Lender may
assign its rights and delegate its obligations under this Agreement to another
financial institution or other person, in which event, the assignee or
participant shall have, to the extent of such assignment or participation, the
same rights and benefits as it would have if it were the Lender hereunder,
except as otherwise provided by the terms of such assignment or participation.
SECTION 19 Entire Agreement. This Agreement and any instruments
or documents delivered or to be delivered in connection herewith represent the
entire agreement and understanding concerning the subject matter hereof between
the parties hereto, and supersede all other prior agreements, understandings,
negotiations and discussions, representations, warranties, commitments,
proposals, offers and contracts concerning the subject matter hereof, whether
oral or written.
(NEXT PAGE IS SIGNATURE PAGE)
IN WITNESS WHEREOF, Pledgor and Lender have each caused this Agreement
to be duly executed and delivered as of the date first above written.
PLEDGOR:
TREMONT CORPORATION,
a Delaware corporation
By:________________________________
Name:
Title:
Address of Chief Executive Office:
______________________
______________________
PLEDGEE:
CONGRESS FINANCIAL CORPORATION
(CENTRAL), an Illinois corporation
By:________________________________
Name:
Title:
Address:
100 South Wacker Drive
Suite 1940
Chicago, Illinois 60606
Schedule I
PLEDGED SHARES
(TO BE PROVIDED BY PLEDGOR)
Put Agreement
PUT AGREEMENT (this "Agreement"), dated as of March 24, 1995 between
Congress Financial Corporation (Central), an Illinois corporation ("Congress")
and Contran Corporation, a Delaware corporation ("Contran").
WHEREAS, Congress and Titanium Metals Corporation, a Delaware
corporation ("Timet") have entered into that certain Amended and Restated Loan
and Security Agreement dated as of the date hereof (as the same has been and may
from time to time be amended, restated, supplemented or otherwise modified, the
"Loan Agreement"); and
WHEREAS, pursuant to a Guarantee dated as of the date hereof in favor of
Congress (as the same has been and may from time to time be amended, restated,
supplemented or otherwise modified from time to time, the "Guarantee"), Tremont
Corporation ("Tremont") has guaranteed certain obligations; and
WHEREAS, pursuant to a Pledge Agreement dated as of the date hereof (as
the same has been and may from time to time be amended, restated, supplemented
or otherwise modified from time to time, the "Pledge Agreement") Tremont has
pledged certain shares of capital stock of NL Industries, Inc. (the "Pledged
Shares") to Congress to secure Tremont's obligations under the Guarantee.
NOW THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Put Right. Subject in each case to the conditions set forth in
Section 3 hereof, (i) Congress shall have the right (the "Put") to sell to
Contran (exercisable in the manner set forth in Section 2) and (ii) Contran
shall have the obligation to purchase from Congress, the lesser of (a) all of
the Pledged Shares or (b) the number of Pledged Shares such that the product of
(1) such number of Pledged Shares multiplied by (2) the Fair Market Value of a
Pledged Share, equals Five Million Dollars ($5,000,000) (or such lesser amount
as is owed to Congress pursuant to the Guarantee), for an aggregate purchase
price equal to Five Million Dollars ($5,000,000) (or such lesser amount as is
owed to Congress pursuant to the Guarantee). As used herein, Fair Market Value,
at any time, with respect to a Pledged Share, shall mean the lesser of (i) the
average, appropriately adjusted for dividends, stock splits and similar
transactions, of the closing sales prices of a share of stock of NL Industries
of the same class as the Pledged Shares on the New York Stock Exchange composite
tape for the five trading days prior to the day Congress sends the Put Notice
(as defined below) and (ii) the closing price of such a share on the New York
Stock Exchange on the trading day immediately preceding the day that Congress
sends the Put Notice.
2. Exercise of Put Right. If Congress elects to exercise the Put,
Congress shall send written notice of such election (the "Put Notice") to
Contran. The purchase and sale of the Pledged Shares (the "Closing") shall
thereafter take place at the principal office of Congress on the later of (i)
the tenth Business Day (as defined in the Loan Agreement) after receipt of the
Put Notice by Contran or (ii) the second Business Day (as defined in the Loan
Agreement) after all required regulatory approvals are obtained (it being agreed
that Contran shall work diligently to obtain all required regulatory approvals).
At the Closing (a) Contran shall pay an amount equal to Five Million Dollars
($5,000,000) (or such lesser amount as is owed to Congress pursuant to the
Guarantee) to Congress in immediately available funds, (b) Congress shall
deliver to Contran the certificates or other instruments representing the
Pledged Shares and all necessary stock powers relating thereto and (c) Congress
shall represent that it has not previously assigned or encumbered its interest
in the Pledged Shares being sold to Contran.
3. Conditions to Put. The right of Congress to exercise the Put and
the obligation of Contran to purchase and pay for the Pledged Shares pursuant
thereto shall be subject to the fulfillment of the condition that either:
(a) Tremont has not fully satisfied all of its obligations under the
Guarantee, or
(b) (i) Tremont dissolved or suspended or discontinued doing business,
(ii) Tremont has become insolvent (however defined or evidenced under any
statute or common law doctrine applicable to it involving relief of debtors,
bankruptcy, liquidation, insolvency, reorganization, adjustment or composition
of debts, or similar doctrines or statutes), made an assignment for the benefit
of creditors, made or sent notice of a bulk transfer or called a general meeting
of its creditors or principal creditors for the purpose of rescheduling or
renegotiating its debts or restructuring its assets and liabilities, (iii) a
case or proceeding under the bankruptcy laws of the United States of America now
or hereafter in effect or under any insolvency, reorganization, receivership,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction now or hereafter in effect (whether at law or in equity) has been
filed against Tremont or all or any part of its properties and such petition or
application has not been dismissed within thirty (30) days after the date of its
filing or Tremont shall have filed any answer admitting or not contesting such
petition or application or indicated its consent to, acquiescence in or approval
of, any such action or proceeding or the relief requested has been granted, or
(iv) a case or proceeding under the bankruptcy laws of the United States of
America now or hereafter in effect or under any insolvency, reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction now or hereafter in effect (whether at a law or equity) has
been filed by Tremont or for all or any part of its property.
4. Securities Laws. Contran understands that (a) the Pledged Shares
are "restricted securities" under Rule 144 promulgated under the Securities Act
of 1933, as amended (the "Securities Act"), (b) the Pledged Shares cannot be
sold unless (i) they are registered and qualified under the Securities Act and
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (c) the Pledged Shares bear a legend to the
foregoing effect. In addition, Contran covenants and agrees that (i) it will
acquire the Pledged Shares for its own account and not with a view to a sale or
other distribution and (ii) it will not, and will not authorize any person to,
solicit any offer to buy, or offer, sell, dispose of or otherwise transfer, any
Pledged Share to any person in any manner that would violate or contravene any
applicable law (including, without limitation, the Securities Act and/or any
applicable state securities law).
5. Waivers and Consents.
(a) Notice of acceptance of this Agreement and/or the Guarantee, the
making of loans and advances and providing other financial accommodations to
Timet and presentment, demand, protest, notice of protest, notice of nonpayment
or default and all other notices to which Timet or Contran is entitled are
hereby waived by Contran. Contran also waives notice of and hereby consents to,
(i) any amendment, modification, supplement, extension, renewal, or restatement
of the Loan Agreement, the Guarantee, the Pledge Agreement and/or any of the
other Financing Agreements (as defined in the Loan Agreement), including without
limitation, extensions of time of payment of or increase or decrease in the
amount of any of the Guaranteed Obligations (as defined in the Guarantee) or the
Obligations (as defined in the Loan Agreement) or any collateral, (ii) the
taking, exchange, surrender and releasing of collateral or guarantees now or at
any time held by or available to Congress for the obligations of Timet, Tremont
or any other party at any time liable on or in respect of the Guaranteed
Obligations (as defined in the Guarantee) or the Obligations (as defined in the
Loan Agreement) or who is the owner of any property which is security for the
Guaranteed Obligations (as defined in the Guarantee) or the Obligations (as
defined in the Loan Agreement) (individually, or an "Obligor" and collectively,
the "Obligors"), (iii) the exercise of, or refraining from the exercise of any
rights against Timet, Tremont or any other Obligor or any collateral, (iv) the
settlement, compromise or release of, or the waiver of any default with respect
to, any of the Guaranteed Obligations (as defined in the Guarantee) or the
Obligations (as defined in the Loan Agreement) and (v) any financing by Congress
or Timet under Section 364 of the United States Bankruptcy Code or consent to
the use of cash collateral by Lender under Section 363 of the United States
Bankruptcy Code. Contran agrees that the amount of the Guaranteed Obligations
(as defined in the Guarantee) and the amount of the Obligations (as defined in
the Loan Agreement) shall not be diminished and the obligations of Contran
hereunder shall not be otherwise impaired or affected by any of the foregoing.
Congress agrees that no amendment of the Loan Agreement, the Guarantee, the
Pledge Agreement and/or any of the other Financing Agreements (as defined in the
Loan Agreement) or any other action by any of the parties thereto of the type
described in this Section 5 shall, without the consent of Contran, amend or
otherwise alter any of the terms or provisions hereof.
(b) No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations (as defined in the Guarantee) or the Obligations
(as defined in the Loan Agreement) shall affect, impair or be a defense to this
Agreement, nor shall any other circumstance which might otherwise constitute a
defense available to or legal or equitable discharge of Timet in respect of any
of the Obligations (as defined in the Loan Agreement) or of Tremont in respect
of the Guaranteed Obligations (as defined in the Guarantee) or Contran in
respect of this Agreement, affect, impair or be a defense to this Agreement.
Without limitation of the foregoing, the liability of Contran hereunder shall
not be discharged or impaired in any respect by reason of any failure by
Congress to perfect or continue perfection of any lien or security interest in
any collateral or failure by Congress to perfect or continue perfection of any
lien or security interest in any collateral or any delay by Congress in
perfecting any such lien or security interest.
(c) Except as expressly set forth in Section 6 of the Guarantee,
Contran hereby irrevocably and unconditionally waives and relinquishes all
statutory, contractual, common law, equitable and all other claims against
Timet, any collateral for the Guaranteed Obligations (as defined in the
Guarantee) or the Obligations (as defined in the Loan Agreement) or other assets
of Timet or any other Obligor, for subrogation, reimbursement, exoneration,
contribution, indemnification, setoff or other recourse in respect to sums paid
or payable to Congress by Contran hereunder and Contran hereby further
irrevocably and unconditionally waives and relinquishes any and all other
benefits which Contran might otherwise directly or indirectly receive or be
entitled to receive by reason of any amounts paid by or collected or due from
Contran, Timet or any other Obligor upon the Guaranteed Obligations (as defined
in the Guarantee) or the Obligations (as defined in the Loan Agreement) or
realized from their property.
6. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Illinois without regard to the principles
of conflicts of law.
(b) This Agreement shall terminate when the Guarantee terminates;
provided, however, that this Agreement shall be reinstated and continue in full
force and effect if, following such termination, the Guarantee shall be
reinstated.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
(d) This Agreement shall be binding upon, inure to the benefit of and
be enforceable by the parties hereto and each of their respective successors and
permitted assigns. Notwithstanding anything to the contrary contained herein,
this Agreement may not be assigned by Contran without the prior written consent
of Congress.
(e) This Agreement contains the entire understanding of the parties
hereto with respect to the subject matter hereof. There are no restrictions,
agreements, promises, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter. This Agreement may be amended only by a
written instrument duly executed by both parties hereto. Any condition to a
party's obligations hereunder may be waived in writing by such party.
(f) All notices, claims, certificates, requests, demands and other
communications thereunder will be given in writing at the address set forth
below (and will be deemed to have been duly given or made: (i) if delivered in
person, immediately upon delivery, (ii) if by facsimile transmission,
immediately upon confirmation of receipt (iii) if by nationally recognized
overnight courier service, on the day such courier service has been directed to
make the applicable delivery and (iv) if delivered or mailed (registered or
certified mail, postage prepaid, return receipt requested) five Business Days
(as defined in the Loan Agreement) after mailing:
If to Contran:
Three Lincoln Center, Suite 1700
5430 LBJ Freeway
Dallas, TX 75240-2697
Attention: Harold C. Simmons
If to Congress:
100 South Wacker Drive
Suite 1940
Chicago, Illinois 60606
Attention: James Ward
or, in either case, such other address as the person to whom notice is to be
given may have previously furnished to the other in the manner set forth above.
(g) Contran shall pay to Congress the amount of any and all reasonable
expenses, including without limitations, the reasonable fees, expenses and
disbursements of its counsel (including allocated expenses of inside counsel),
of any investment banking firm, business broker or other selling agent and of
any other experts and agents retained by Congress, which Congress may incur in
connection with (i) the exercise or enforcement of any of the rights of Congress
hereunder or (ii) the failure of Contran to perform or observe any of the
provisions hereof. All amounts owing pursuant to this subsection shall be
payable upon demand. Any and all amounts payable under or pursuant to this
Agreement which are not paid when due shall bear interest (which shall be
payable upon demand) at a rate equal to the Prime Rate (as defined in the Loan
Agreement) plus two percent (2%) per annum.
(h) This Agreement may be executed in counterparts, each of which shall
be deemed to be an original but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.
Contran Corporation
By:
Name:
Title:
Congress Financial Corporation (Central)
By:
Name:
Title:
