SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 59)*
VALHI, INC.
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
918905100
(CUSIP Number)
STEVEN L. WATSON
THREE LINCOLN CENTRE
SUITE 1700
5430 LBJ FREEWAY
DALLAS, TEXAS 75240-2694
(972) 233-1700
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 11, 1997
(Date of Event which requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following pages)
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Valhi Group, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 85,644,496
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
85,644,496
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
85,644,496
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
74.9%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
National City Lines, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 97,135,505
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
97,135,505
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
97,135,505
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
84.9%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
NOA, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not Applicable
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 97,135,505
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
97,135,505
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
97,135,505
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
84.9%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Dixie Holding Company
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not Applicable
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 85,644,496
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
85,644,496
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
85,644,496
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
74.9%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Dixie Rice Agricultural Corporation, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not Applicable
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Louisiana
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 85,644,496
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
85,644,496
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
85,644,496
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
74.9%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Southwest Louisiana Land Company, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not Applicable
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Louisiana
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 97,135,505
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
97,135,505
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
97,135,505
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
84.9%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Contran Corporation
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 105,015,963
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
105,015,963
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
105,015,963
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
91.8%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
CO
CUSIP No. 918905100
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Harold C. Simmons
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(SEE
INSTRUCTIONS)
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS(SEE INSTRUCTIONS)
Not applicable
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 105,211,346
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH -0-
10 SHARED DISPOSITIVE POWER
105,211,346
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
3,383
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) [ X ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS)
IN
AMENDMENT NO. 59
TO SCHEDULE 13D
This statement on Schedule 13D is hereby amended and restated in its
entirety as set forth below, except for Item 3, which is amended but not
restated in its entirety (collectively, this "Statement").
Item 1. Security and Issuer
This Statement relates to the common stock, $0.01 par value per share (the
"Shares"), of Valhi, Inc., a Delaware corporation (the "Company"). The
principal executive offices of the Company are located at Three Lincoln Centre,
5430 LBJ Freeway, Suite 1740, Dallas, Texas 75240.
Item 2. Identity and Background
(a) This Statement is filed by (i) Valhi Group, Inc. ("VGI"), National
City Lines, Inc. ("National") and Contran Corporation ("Contran") as the direct
holders of Shares, (ii) by virtue of the direct and indirect ownership of
securities of VGI and National (as described below in this Statement), NOA, Inc.
("NOA"), Dixie Holding Company ("Dixie Holding"), Dixie Rice Agricultural
Corporation, Inc. ("Dixie Rice") and Southwest Louisiana Land Company, Inc.
("Southwest") and (iii) by virtue of his positions with Contran and certain of
the other entities (as reported on this Statement), Harold C. Simmons
(collectively, the "Reporting Persons"). By signing this Statement, each
Reporting Person agrees that this Statement is filed on its or his behalf.
VGI, National and Contran are the direct holders of approximately 74.9%,
10.0% and 6.6%, respectively, of the 114,365,404 Shares outstanding as of
February 28, 1997 according to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 (the "Outstanding Shares"). Together, VGI,
National and Contran may be deemed to control the Company. National, NOA and
Dixie Holding are the direct holders of approximately 73.3%, 11.4% and 15.3%,
respectively, of the outstanding common stock of VGI. Together, National, NOA
and Dixie Holding may be deemed to control VGI. Contran and NOA are the direct
holders of approximately 85.7% and 14.3%, respectively, of the outstanding
common stock of National and together may be deemed to control National.
Contran and Southwest are the direct holders of approximately 49.9% and 50.1%,
respectively, of the outstanding common stock of NOA and together may be deemed
to control NOA. Dixie Rice is the holder of 100% of the outstanding common stock
of Dixie Holding and may be deemed to control Dixie Holding. Contran is the
direct holder of approximately 88.7% and 54.3% of the outstanding common stock
of Southwest and Dixie Rice, respectively, and may be deemed to control
Southwest and Dixie Rice.
Mr. Harold C. Simmons is chairman of the board, president and chief
executive officer of VGI, National, NOA, Dixie Holding and Contran. Mr. Simmons
is also chairman of the board and chief executive officer of Dixie Rice and
Southwest.
Substantially all of Contran's outstanding voting stock is held by two
trusts, the Harold C. Simmons Family Trust No. 1 dated January 1, 1964 and the
Harold C. Simmons Family Trust No. 2 dated January 1, 1964 (together, the
"Trusts"), established for the benefit of Mr. Simmons' children and
grandchildren, of which Mr. Simmons is the sole trustee. As sole trustee of
each of the Trusts, Mr. Simmons has the power to vote and direct the disposition
of the shares of Contran stock held by each of the Trusts. Mr. Simmons,
however, disclaims beneficial ownership of such Shares.
By virtue of the holding of the offices, the stock ownership and his
service as trustee, all as described above, (a) Mr. Simmons may be deemed to
control such entities and (b) Mr. Simmons and certain of such entities may be
deemed to possess indirect beneficial ownership of Shares directly held by
certain of such other entities. However, Mr. Simmons disclaims such beneficial
ownership of the Shares beneficially owned, directly or indirectly, by any of
such entities.
The Contran Deferred Compensation Trust No. 2 (the "CDCT No. 2") directly
holds approximately 0.2% of the Outstanding Shares. Contran contributed to the
CDCT No. 2 the 279,000 Shares directly held by the CDCT No. 2 on November 15,
1995. Contran established the CDCT No. 2 pursuant to an agreement (the "Trust
Agreement"), dated as of October 1, 1995, between Contran and NationsBank of
Texas, N.A., a national banking association ("NationsBank"). NationsBank
serves as the trustee of the CDCT No. 2 (the "Trustee"). The CDCT No. 2 was
established in connection with the Amended Deferred Compensation Agreement,
dated as of October 1, 1995, between Contran and Harold C. Simmons. Pursuant to
the Trust Agreement, Contran retains the right to vote the Shares held by the
CDCT No. 2. Except to fund withholding obligations with respect to payments to
Mr. Simmons, the Trustee may not sell the Shares without Contran's consent.
Contran retains the right at anytime, in its sole discretion, to substitute
assets of equal fair market value for any Shares held by the CDCT No. 2. The
foregoing summary of the Trust Agreement is qualified in its entirety by
reference to Exhibits 13 and 14 to this Statement, which are incorporated herein
by this reference. As a result of the relationship between Contran and the CDCT
No. 2, Contran (i) retains sole power to vote the Shares that Contran will
contribute to the CDCT No. 2, (ii) shares dispositive power with the Trustee
over such Shares and (iii) may be deemed the indirect beneficial owner of such
Shares.
The Combined Master Retirement Trust (the "CMRT") directly holds
approximately 0.1% of the Outstanding Shares. The CMRT is a trust formed by the
Company to permit the collective investment by trusts that maintain the assets
of certain employee benefit plans adopted by the Company and related companies.
Mr. Simmons is sole trustee of the CMRT and sole member of the trust investment
committee for the CMRT. Mr. Simmons is a participant in one or more of the
employee benefit plans that invest through the CMRT. Mr. Simmons, however,
disclaims beneficial ownership of the Shares held by the CMRT, except to the
extent of his vested beneficial interest therein.
Harold C. Simmons' spouse is the direct beneficial owner of 77,000 Shares,
or approximately 0.1% of the Outstanding Shares. Mr. Simmons may be deemed to
share indirect beneficial ownership of such Shares. Mr. Simmons disclaims all
such beneficial ownership.
The Reporting Persons understand that NL Industries, Inc. ("NL") and
Valmont Insurance Company ("Valmont") directly held 1,186,200 Shares and
1,000,000 Shares, respectively. The Company and Tremont Corporation ("Tremont")
are the direct holders of approximately 55.6% and 17.7%, respectively, of the
outstanding common stock of NL and together may be deemed to control NL. VGI,
National, Contran, NL and Valmont are the direct holders of approximately 35.2%,
4.7%, 1.1%, 0.5% and 0.4%, respectively, of the outstanding common stock of
Tremont. Together, VGI, National and Contran may be deemed to control Tremont.
The Company is the holder of 100% of the outstanding common stock of Valmont
and may be deemed to control Valmont. Mr. Harold C. Simmons is chairman of the
board of NL and is a director of Tremont.
The Reporting Persons further understand that, pursuant to Delaware law,
the Company treats the Shares that Valmont and NL hold directly as treasury
stock for voting purposes. For the purposes of this Statement, the Shares that
Valmont and NL hold directly are not deemed outstanding.
Certain information concerning the directors and executive officers of the
Reporting Persons, including offices held by Mr. Simmons is set forth on
Schedule B attached hereto and incorporated herein by reference.
(b) The principal offices of VGI, National, NOA, Dixie Holding, Southwest
and Dixie Rice and Contran are located at, and the business address of Harold C.
Simmons is, Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas
75240-2697. The principal business address of Dixie Rice is 600 Pasquiere
Street, Gueydan, Louisiana 70542. The principal business address of Southwest
is 402 Canal Street, Houma, Louisiana 70360. The business addresses of the
remaining directors and executive officers of the Reporting Persons are set
forth on Schedule B to this Statement and incorporated herein by reference.
(c) The Company is a diversified holding company engaged, through
operating subsidiaries in the chemicals, component products, fast food and waste
management industries.
VGI does not engage in any business activity other than holding Shares.
National is engaged directly or through subsidiaries (other than VGI and
its subsidiaries), in real estate, oil and gas activities and the rental and
sales of compressors and related products.
Dixie Holding does not engage in any business activity other than holding
common stock of VGI and preferred stock of Contran.
NOA holds investments in land, securities and notes receivable.
Dixie Rice is engaged in (other than Dixie Holding and its subsidiaries)
land management, agriculture and oil and gas activities.
Southwest is engaged in (other than NOA and its subsidiaries) land
management, agriculture and oil and gas activities.
Contran is a diversified holding company engaged through its subsidiaries,
other than as set forth above, in the production of, among other things,
titanium metals, wire products, industrial wire and steel rod.
(d) None of the Reporting Persons or, to the best knowledge of such
persons, any of the persons named in Schedule B to this Statement has been
convicted in a criminal proceeding in the past five years (excluding traffic
violations or similar misdemeanors).
(e) None of the Reporting Persons or, to the best knowledge of such
persons, any person named in Schedule B to this Statement, was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
as a result of which such person was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
(f) Contran, Dixie Holding and National are Delaware corporations. VGI is
a Nevada corporation. NOA is a Texas corporation. Dixie Rice and Southwest are
Louisiana corporations. Harold C. Simmons and all persons named on Schedule B to
this Statement are citizens of the United States, except as otherwise indicated
on such Schedule.
Item 3. Source and Amount of Funds or Other Consideration
The total amount of funds required by Contran to acquire the Shares
reported in Item 5(c) was $4,403,010.00 (including commissions). Such funds
were or will be provided by Contran's cash on hand and no funds were or will be
borrowed for such purpose.
The Reporting Persons understand that the funds required by each person
named in Schedule B to this Statement to acquire Shares were from such person's
personal funds.
Item 4. Purpose of Transaction
The Reporting Persons acquired Shares to obtain an equity interest in and
control of the Company. By virtue of the relationships and positions held by
Harold C. Simmons as reported in Item 2, Mr. Simmons, directly and indirectly
through Contran, may be deemed to control the Company.
Contran purchased the additional Shares reported in Item 5(c) of this
Statement in order to increase its equity interest in the Company. Depending
upon their evaluation of the Company's business and prospects, and upon future
developments (including, but not limited to, performance of the Shares in the
market, availability of funds, alternative uses of funds, and money, stock
market and general economic conditions), any of the Reporting Persons or other
entities that may be deemed to be affiliated with Contran may from time to time
purchase Shares, and any of the Reporting Persons or other entities that may be
deemed to be affiliated with Contran may from time to time dispose of all or a
portion of the Shares held by such person, or cease buying or selling Shares.
Any such additional purchases or sales of the Shares may be in open market or
privately negotiated transactions or otherwise.
The Reporting Persons understand that prior purchases of Shares by persons
named in Schedule B to this Statement were made for the purpose of each such
person's personal investment.
Except as described in this Item 4, none of the Reporting Persons nor, to
the best knowledge of such persons, any other person named in Schedule B to this
Statement has formulated any plans or proposals which relate to or would result
in any matter required to be disclosed in response to paragraphs (a) through (j)
of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) VGI is the direct beneficial owner of 85,644,496 Shares, or
approximately 74.9% Outstanding Shares. By virtue of the relationships reported
under Item 2 of this Statement, National, NOA, Southwest, Dixie Holding, Dixie
Rice, Contran and Harold C. Simmons may be deemed to share indirect beneficial
ownership of the Shares directly held by VGI.
National is the direct beneficial owner of 11,491,009 Shares or
approximately 10.0% of the Outstanding Shares. VGI is the direct beneficial
owner of 85,644,496 Shares. By virtue of the relationships reported under Item
2 of this Statement, National may be deemed to be the beneficial owner of the
97,135,505 Shares (approximately 84.9% of the Outstanding Shares) directly held
by VGI and itself. By virtue of the relationships reported under Item 2 of this
Statement, NOA, Southwest, Contran and Harold C. Simmons may be deemed to share
indirect beneficial ownership of the Shares directly and indirectly held by
National.
Contran is the direct beneficial owner of 7,601,458 Shares, or
approximately 6.6% of the Outstanding Shares. VGI, National and the CDCT No. 2
are the direct beneficial owners of 85,644,496, 11,491,009 and 279,000 Shares,
respectively. By virtue of the relationships described under Item 2 of this
Statement, Contran may be deemed to be the beneficial owner of the 105,015,963
Shares (approximately 91.8% of the Outstanding Shares) directly held by VGI,
National, the CDCT No. 2 and itself. By virtue of the relationships reported
under Item 2 of this Statement, Harold C. Simmons may be deemed to share
indirect beneficial ownership of the Shares directly and indirectly held by
Contran.
Harold C. Simmons directly owns 3,383 Shares, or less than 0.1% of the
Outstanding Shares. VGI, National, Contran, the CDCT No. 2, the CMRT and Mr.
Simmons' spouse are the direct beneficial owners of 85,644,496, 11,491,009,
7,601,458, 279,000, 115,000 and 77,000 of the Shares, respectively. By virtue
of the relationships described under Item 2 of this Statement, Harold C. Simmons
may be deemed to share indirect beneficial ownership of the 105,211,346 Shares
(approximately 92.0% of the Outstanding Shares) directly held by VGI, National,
Contran, the CDCT No. 2 the CMRT and Mr. Simmons' spouse. Except for the 3,383
Shares that he holds directly and to the extent of his vested beneficial
interest in Shares directly held by the CMRT, Mr. Simmons disclaims beneficial
ownership of all Shares.
The Reporting Persons understand, based on ownership filings with the
Securities and Exchange Commission or upon information provided by the persons
listed on Schedule B to this Statement, that such persons may be deemed to
personally beneficially own the Shares as indicated on Schedule C to this
Statement.
(b) Each of VGI, National, Contran and Harold C. Simmons has the direct
power to vote and direct the disposition of the Shares directly held by it or
him. By virtue of the relationships described in Item 2:
(1) National may be deemed to share the indirect power to vote and
direct the disposition of the Shares directly held by VGI;
(2) Contran, Southwest and NOA may be deemed to share the indirect
power to vote and direct the disposition of the Shares directly held by VGI
and National;
(3) Dixie Rice and Dixie Holding may be deemed to share the indirect
power to vote and direct the disposition of the Shares directly held by
VGI;
(4) Contran may also be deemed to share the indirect power to vote
and direct the disposition of the Shares directly held by the CDCT No. 2;
and
(5) Harold C. Simmons may be deemed to share the indirect power to
vote and direct the disposition of the Shares directly held by VGI,
National, Contran, the CDCT No. 2, the CMRT and his spouse.
Additionally, the Reporting Persons may be deemed to have the indirect
power to direct the disposition of the Shares directly held by NL and Valmont.
(c) The table below sets forth purchases of the Shares by the Reporting
Persons during the last 60 days. All of such purchases were effected by Contran
on the New York Stock Exchange.
<TABLE>
<CAPTION>
Approximate Price
Per Share ($)
Number of (exclusive of
Date Shares commissions)
- ---------------- --------------- -------------------
<S> <C> <C>
01/31/97 15,000 $7.375
02/10/97 22,000 $7.250
02/11/97 1,700 $7.250
02/12/97 5,000 $7.250
02/12/97 12,500 $7.125
02/13/97 5,300 $7.250
02/13/97 9,700 $7.375
02/14/97 1,200 $7.500
02/14/97 23,600 $7.625
02/18/97 10,000 $7.500
02/18/97 6,600 $7.375
02/19/97 6,000 $7.500
02/19/97 4,900 $7.625
02/20/97 8,900 $7.625
02/20/97 15,000 $7.750
02/21/97 5,000 $7.750
02/21/97 15,200 $7.875
02/24/97 800 $7.875
02/24/97 20,000 $8.000
02/25/97 15,500 $8.000
02/26/97 9,200 $8.000
02/27/97 15,100 $8.000
02/28/97 4,300 $7.875
02/28/97 56,800 $8.000
03/03/97 6,700 $7.875
03/03/97 15,000 $8.000
03/04/97 10,100 $7.875
03/05/97 4,500 $7.875
03/06/97 10,100 $7.875
03/06/97 15,000 $8.000
03/07/97 21,300 $7.875
03/10/97 2,000 $7.750
03/10/97 20,400 $7.875
03/11/97 22,500 $7.875
03/12/97 300 $7.875
03/12/97 8,700 $8.000
03/13/97 12,000 $7.875
03/13/97 21,300 $8.000
03/14/97 5,000 $7.875
03/17/97 11,100 $7.875
03/18/97 2,600 $7.875
03/19/97 22,000 $8.000
03/20/97 2,000 $8.000
03/21/97 22,600 $8.000
03/24/97 1,500 $8.000
03/25/97 1,700 $8.000
03/25/97 6,200 $8.125
03/26/97 3,400 $8.125
03/27/97 17,800 $8.125
03/31/97 4,100 $8.125
</TABLE>
(d) Each of VGI, National, the CDCT No. 2, Contran, the CMRT, Harold C.
Simmons and his spouse has the right to receive and the power to direct the
receipt of dividends from, and proceeds from the sale of, the shares directly
held by such entity or person.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
Contran is a party to a $20 million revolving credit and letter of credit
facility dated as of October 31, 1991, as amended and supplemented through
October 29, 1996 with Banque Paribas, Houston Agency and Societe Generale,
Southwest Agency (the "Paribas/Societe Facility"). Borrowings under the
Paribas/Societe Facility bear interest at the rate announced publicly from time
to time by each bank as its base rate or at a rate of 1.5% over the London
interbank offered rate of interest ("LIBOR"), are due October 28, 1997 or such
extended maturity date as may be mutually agreed to, and are collateralized by,
among other things, certain Shares. On March 31, 1997, no money had been
borrowed, letters of credit aggregating $4.1 million were outstanding and
2,000,000 Shares had been pledged under the Paribas/Societe Facility. The
foregoing summary of the Paribas/Societe Facility is qualified in its entirety
by reference to Exhibits 1 through 9 to this Statement, which are incorporated
herein by this reference.
VGI, National and Contran are parties to a $40 million credit facility
dated as of November 8, 1996 with United States National Bank of Oregon and
Societe Generale, Southwest Agency (the "U.S. Bank/SoGen Facility"). Borrowings
under the U.S. Bank/SoGen Facility bear interest at the rate announced publicly
from time to time by each bank as its prime rate or at a rate of 1.75% over
LIBOR, are due November 7, 1997 or such extended maturity date as may be
mutually agreed to, and are collateralized by certain Shares. On March 31,
1997, no money had been borrowed under the U.S. Bank/SoGen Facility and
7,200,000 Shares had been pledged under the U.S. Bank/SoGen Facility. The
foregoing summary of the U.S. Bank/SoGen Facility is qualified in its entirety
by reference to Exhibit 10 to this Statement, which is incorporated herein by
this reference.
Dixie Rice is a party to a $1.5 million credit facility dated as of August
18, 1986 with Southern Methodist University (the "SMU Facility"). Borrowings
under the SMU Facility bear interest at the greater or 7.5% per annum or 76% of
the Shearson Lehman Brothers, Inc. Bond Market Report - Corporate Bond Index -
Long Term (Average) Yield, are due in forty equal quarterly installments
beginning September 30, 1996 and ending on June 30, 2006 and are secured by
certain Shares. On March 31, 1997, approximately $1.4 million had been
borrowed under the SMU Facility and 600,000 Shares had been pledged under the
SMU Facility. The Shares pledged under the SMU Facility are held directly by
Contran but loaned to Dixie Rice pursuant to a Collateral Agreement, dated
December 29, 1988 between Dixie Rice and Contran (the "Collateral Agreement").
The foregoing summary of the SMU Facility and the Collateral Agreement is
qualified in its entirety by reference to Exhibits 11 and 12 to this Statement,
respectively, which are incorporated herein by this reference.
Other than as set forth above, none of the Reporting Persons or, to the
best knowledge of such persons, any person named in Schedule B to this Statement
has any contract, arrangement, understanding or relationship (legal or
otherwise) with any person with respect to securities of the Company, including,
but not limited to, transfer or voting of any such securities, finder's fees,
joint ventures, loans or option arrangements, puts or calls, guarantees of
profits, division of profits or losses, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 Letter Agreement dated as of October 31, 1991 among Contran,
Banque Paribas, Houston Agency and Societe Generale, Southwest
Agency (incorporated by reference to Exhibit 1 to Amendment No.
39 to the Schedule 13D filed by NL Industries, Inc., the Combined
Master Retirement Trust and Contran Corporation with respect to
common stock of Keystone Consolidated Industries, Inc. and
referred to herein as the "Keystone Schedule 13D").
Exhibit 2 First Amendment to Letter Agreement and Security Agreement dated
as of December 17, 1991 among Contran Corporation, Banque
Paribas, Houston Agency and Societe Generale, Southwest Agency
(incorporated by reference to Exhibit 1 to Amendment No. 39 to
the Keystone Schedule 13D).
Exhibit 3 Second Amendment to Letter Agreement and Security Agreement dated
as of October 31, 1992 among Contran Corporation, Banque Paribas,
Houston Agency and Societe Generale, Southwest Agency
(incorporated by reference to Exhibit 1 to Amendment No. 39 to
the Keystone Schedule 13D).
Exhibit 4 Third Amendment to Letter Agreement and Security Agreement dated
as of October 31, 1993 among Contran Corporation, Banque Paribas,
Houston Agency and Societe Generale, Southwest Agency
(incorporated by reference to Exhibit 1 to Amendment No. 39 to
the Keystone Schedule 13D).
Exhibit 5 Fourth Amendment to Letter Agreement and Security Agreement
effective as of September 30, 1994 among Contran Corporation,
Banque Paribas, Houston Agency and Societe Generale, Southwest
Agency (incorporated by reference to Exhibit 1 to Amendment No.
44 to the Keystone Schedule 13D).
Exhibit 6 Fifth Amendment to Letter Agreement and Security Agreement
effective as of October 31, 1994 among Contran Corporation,
Banque Paribas, Houston Agency and Societe Generale, Southwest
Agency (incorporated by reference to Exhibit 1 to Amendment No.
44 to the Keystone Schedule 13D).
Exhibit 7 Sixth Amendment to Letter Agreement and Security Agreement
effective as of October 30, 1995 among Contran Corporation,
Banque Paribas, Houston Agency and Societe Generale, Southwest
Agency (incorporated by reference to Exhibit 1 to Amendment No.
44 to the Keystone Schedule 13D).
Exhibit 8 Seventh Amendment to Letter Agreement and Security Agreement
effective as of March 27, 1996 among Contran Corporation, Banque
Paribas, Houston Agency and Societe Generale, Southwest Agency
(incorporated by reference to Exhibit 1 to Amendment No. 44 to
the Keystone Schedule 13D).
Exhibit 9* Eighth Amendment to Letter Agreement and Security Agreement
effective as of October 29, 1996 among Contran Corporation,
Banque Paribas, Houston Agency and Societe Generale, Southwest
Agency.
Exhibit 10* Loan Agreement, dated as of November 8, 1996, among Valhi Group,
Inc., National City Lines, Inc., Contran Corporation, United
States National Bank of Oregon and Societe Generale, Southwest
Agency.
Exhibit 11* Loan and Pledge Agreement, dated as of August 18, 1986, between
Dixie Rice Agricultural Corporation, Inc. and Southern Methodist
University
Exhibit 12* Collateral Agreement, dated as of December 29, 1988, between
Dixie Rice Agricultural Corporation, Inc. and Contran
Corporation.
Exhibit 13 Contran Deferred Compensation Trust No. 2, dated as of October 1,
1995, between Contran Corporation and NationsBank of Texas, N.A.
(incorporated by reference to Exhibit 1 to Amendment No. 43 to
the Keystone Schedule 13D).
Exhibit 14* Amendment One to the Contran Deferred Compensation Trust No. 2,
dated as of December 18, 1996, between Contran Corporation and
NationsBank of Texas, N.A.
- ----------
[FN]
* Filed herewith.
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
Date: March 31, 1997
By: /s/ Harold C. Simmons
----------------------------
Harold C. Simmons
Signing in his individual capacity only.
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
Date: March 31, 1997
/s/ Steven L. Watson
--------------------------------
Steven L. Watson
Signing in the capacities listed on Schedule
"A" attached hereto and incorporated herein by
reference.
SCHEDULE A
Steven L. Watson, as Vice President of each of:
CONTRAN CORPORATION
DIXIE RICE AGRICULTURAL CORPORATION, INC.
DIXIE HOLDING COMPANY
NATIONAL CITY LINES, INC.
NOA, INC.
VALHI GROUP, INC.
SOUTHWEST LOUISIANA LAND COMPANY, INC.
Schedule B
The names of the directors and executive officers of Contran Corporation
("Contran"), Dixie Rice Agricultural Corporation, Inc. ("Dixie Rice"), Dixie
Holding Company ("Dixie Holding"), National City Lines, Inc. ("National"), NOA,
Inc. ("NOA"), Southwest Louisiana Land Company, Inc. ("Southwest"), Valhi Group,
Inc. ("VGI") and their present principal occupations are set forth below.
Except as otherwise indicated, the business address of each such person is 5430
LBJ Freeway, Suite 1700, Dallas, Texas 75240.
Name Present Principal Occupation
- ----------------------- ----------------------------------------
Eugene K. Anderson Vice President of Contran, Dixie
Holding, NOA, National, Valhi, Inc.
("Valhi") and VGI
F. Murlyn Broussard Treasurer of Southwest. 402 Canal
Street, Houma, LA 70360
J. Mark Hollingsworth General Counsel of Contran, Dixie
Holding, Dixie Rice, NOA, National,
Southwest and Valhi.
William J. Lindquist Vice President and Tax Director of
Contran, Dixie Holding, Dixie Rice, NOA,
National, Southwest, VGI and Valhi.
Andrew McCollam, Jr. Director of Dixie Rice; President and
Director of Southwest; Private Investor.
402 Canal Street, Houma, LA 70360
Present Principal Occupation
Harold M. Mire President of Dixie Rice; Vice President
and General Manager of Southwest. 600
Pasquiere Street, Gueydan, LA 70542
Bobby D. O'Brien Vice President and Treasurer of Contran,
Dixie Holding, NOA, National, VGI and
Valhi; Vice President of Dixie Rice and
Southwest.
Glenn R. Simmons Vice Chairman of the Board and Director
of Contran, Dixie Holding, NOA,
National, VGI and Valhi. Director of NL
and Tremont. Director and Executive
Vice President of Southwest and Dixie
Rice. Director and Chairman of the
Board of Keystone Consolidated
Industries, Inc. ("Keystone") (wire
products, industrial wire and steel rod
manufacturer).
Harold C. Simmons Chairman of the Board, Chief Executive
Officer, Director and President of
Contran, Dixie Holding, NOA, National,
VGI and Valhi. Chairman of the Board,
Chief Executive Officer and Director of
Dixie Rice and Southwest. Director and
Chairman of the Board of NL; Director of
Tremont.
Robert W. Singer Vice President of Contran and Valhi;
President and Chief Executive Officer of
Keystone
Richard A. Smith Director and Treasurer of Dixie Rice.
600 Pasquiere Street, Gueydan, LA 70542-
0010
Gregory M. Swalwell Controller of Contran, Dixie Holding,
NOA, National, Southwest, VGI and Valhi.
Steven L. Watson Vice President and Secretary of Contran,
Dixie Holding, Dixie Rice, NOA,
National, Southwest, VGI and Valhi.
SCHEDULE C
Based upon ownership filings with the Securities and Exchange Commission or
upon information provided by the persons listed on Schedule B to this Statement,
such persons may be deemed to personally beneficially own Shares, as outlined
below:
<TABLE>
<CAPTION>
Name Shares Held Options Held (1)
- ---------------------------- ---------------- ----------------
<S> <C> <C>
Eugene K. Anderson (2) 1,446 12,000
F. Murlyn Broussard (3) 1,157 ---
J. Mark Hollingsworth --- 57,600
William J. Lindquist(4) 2,713 157,000
Andrew McCollam, Jr. 550 ---
Harold M. Mire 1,137 ---
Bobby D. O'Brien --- 40,000
Glenn R. Simmons(5) 52,683 640,000
Harold C. Simmons(6) 80,383 650,000
Robert W. Singer(7) 54,015 50,000
Richard A. Smith 2,610 ---
Gregory M. Swalwell(8) 1,166 72,000
Steven L. Watson(9) 18,635 226,000
</TABLE>
- ----------
[FN]
(1) Represents Shares issuable pursuant to the exercise within 60 days of the
date of this Statement of stock options.
(2) The Reporting Persons understand that the Shares indicated as held by
Eugene K. Anderson include 1,446 Shares held in his individual retirement
account.
(3) The Reporting Persons understand that the Shares indicated as held by F.
Murlyn Broussard include 1,157 Shares held in his individual retirement
account.
(4) The Reporting Persons understand that the Shares indicated as held by
William J. Lindquist include 2,713 Shares held in his individual retirement
account.
(5) The Reporting Persons understand the Shares indicated as held by Glenn R.
Simmons include 4,383 Shares held in his individual retirement account.
The Reporting Persons further understand that the Shares indicated as held
by Mr. Simmons also include 3,000 Shares held by Mr. Simmons' wife and 800
Shares held in his wife's retirement account, with respect to all of which
beneficial ownership is disclaimed by Mr. Simmons.
(6) The Reporting Persons understand that the Shares indicated as held by
Harold C. Simmons include 77,000 Shares held by Mr. Simmons wife, with
respect to all of which beneficial ownership is disclaimed by Mr. Simmons.
Mr. Simmons may be deemed to possess indirect beneficial ownership of the
Shares set forth in Item 5(a) of this Statement, held by other Reporting
Persons. Except for the 3,383 Shares that he owns directly and to the
extent of his vested beneficial interest in Shares directly held by the
CMRT, Mr. Simmons disclaims beneficial ownership of all Shares.
(7) The Reporting Persons understand that the Shares indicated as held by
Robert W. Singer include 8,515 Shares held in his individual retirement
account and 10,000 Shares held in another of his retirement accounts. The
Reporting Persons further understand that the Shares indicated as held by
Mr. Singer include 5,000 Shares held by Mr. Singer's wife in a retirement
account, with respect to all of which beneficial ownership is disclaimed by
Mr. Singer.
(8) The Reporting Persons understand that the Shares indicated as held by
Gregory M. Swalwell include 1,166 Shares held in his individual retirement
account.
(9) The Reporting Persons understand that the Shares indicated as held by
Steven L. Watson include 3,035 Shares held in his individual retirement
account.
EXHIBIT INDEX
Exhibit 1 Letter Agreement dated as of October 31, 1991 among Contran,
Banque Paribas, Houston Agency and Societe Generale, Southwest
Agency (incorporated by reference to Exhibit 1 to Amendment No.
39 to the Schedule 13D filed by NL Industries, Inc., the Combined
Master Retirement Trust and Contran Corporation with respect to
common stock of Keystone Consolidated Industries, Inc. and
referred to herein as the "Keystone Schedule 13D").
Exhibit 2 First Amendment to Letter Agreement and Security Agreement dated
as of December 17, 1991 among Contran Corporation, Banque
Paribas, Houston Agency and Societe Generale, Southwest Agency
(incorporated by reference to Exhibit 1 to Amendment No. 39 to
the Keystone Schedule 13D).
Exhibit 3 Second Amendment to Letter Agreement and Security Agreement dated
as of October 31, 1992 among Contran Corporation, Banque Paribas,
Houston Agency and Societe Generale, Southwest Agency
(incorporated by reference to Exhibit 1 to Amendment No. 39 to
the Keystone Schedule 13D).
Exhibit 4 Third Amendment to Letter Agreement and Security Agreement dated
as of October 31, 1993 among Contran Corporation, Banque Paribas,
Houston Agency and Societe Generale, Southwest Agency
(incorporated by reference to Exhibit 1 to Amendment No. 39 to
the Keystone Schedule 13D).
Exhibit 5 Fourth Amendment to Letter Agreement and Security Agreement
effective as of September 30, 1994 among Contran Corporation,
Banque Paribas, Houston Agency and Societe Generale, Southwest
Agency (incorporated by reference to Exhibit 1 to Amendment No.
44 to the Keystone Schedule 13D).
Exhibit 6 Fifth Amendment to Letter Agreement and Security Agreement
effective as of October 31, 1994 among Contran Corporation,
Banque Paribas, Houston Agency and Societe Generale, Southwest
Agency (incorporated by reference to Exhibit 1 to Amendment No.
44 to the Keystone Schedule 13D).
Exhibit 7 Sixth Amendment to Letter Agreement and Security Agreement
effective as of October 30, 1995 among Contran Corporation,
Banque Paribas, Houston Agency and Societe Generale, Southwest
Agency (incorporated by reference to Exhibit 1 to Amendment No.
44 to the Keystone Schedule 13D).
Exhibit 8 Seventh Amendment to Letter Agreement and Security Agreement
effective as of March 27, 1996 among Contran Corporation, Banque
Paribas, Houston Agency and Societe Generale, Southwest Agency
(incorporated by reference to Exhibit 1 to Amendment No. 44 to
the Keystone Schedule 13D).
Exhibit 9* Eighth Amendment to Letter Agreement and Security Agreement
effective as of October 29, 1996 among Contran Corporation,
Banque Paribas, Houston Agency and Societe Generale, Southwest
Agency.
Exhibit 10* Loan Agreement, dated as of November 8, 1996, among Valhi Group,
Inc., National City Lines, Inc., Contran Corporation, United
States National Bank of Oregon and Societe Generale, Southwest
Agency.
Exhibit 11* Loan and Pledge Agreement, dated as of August 18, 1986, between
Dixie Rice Agricultural Corporation, Inc. and Southern Methodist
University
Exhibit 12* Collateral Agreement, dated as of December 29, 1988, between
Dixie Rice Agricultural Corporation, Inc. and Contran
Corporation.
Exhibit 13 Contran Deferred Compensation Trust No. 2, dated as of October 1,
1995, between Contran Corporation and NationsBank of Texas, N.A.
(incorporated by reference to Exhibit 1 to Amendment No. 43 to
the Keystone Schedule 13D).
Exhibit 14* Amendment One to the Contran Deferred Compensation Trust No. 2,
dated as of December 18, 1996, between Contran Corporation and
NationsBank of Texas, N.A.
- ----------
[FN]
* Filed herewith.
Effective as of October 29, 1996
Contran Corporation
Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2697
Attention: Mr. William C. Timm,
Vice President-Finance
Re: Eighth Amendment to Letter Agreement and Security Agreement
Ladies and Gentlemen:
Reference is made to that certain (a) Letter Agreement dated October 31,
1991, by and among BANQUE PARIBAS HOUSTON AGENCY ("Paribas"), SOCIETE GENERALE,
SOUTHWEST AGENCY ("SG"), BANQUE PARIBAS HOUSTON AGENCY as Agent for Paribas and
SG ("Agent") and CONTRAN CORPORATION ("Borrower") relating to a line of credit
and letter of credit facility extended to Borrower (as amended, the "Letter
Agreement"), (b) Security Agreement dated October 31, 1991, executed by Borrower
to and in favor of Agent, Paribas and SG (as amended, the "Security Agreement"),
(c) First Amendment to Letter Agreement and Security Agreement dated
December 17, 1991, by among Borrower, Paribas, SG and Agent, (d) Second
Amendment to Letter Agreement and Security Agreement dated October 31, 1992, by
and among Borrower, Paribas, SG and Agent, (e) Third Amendment to Letter
Agreement and Security Agreement dated October 31, 1993, by and among Borrower,
Paribas, SG and Agent, (f) Fourth Amendment to Letter Agreement and Security
Agreement dated September 30, 1994, by and among Borrower, Paribas, SG and
Agent, (g) Fifth Amendment to Letter Agreement and Security Agreement dated
October 31, 1994, by and among Borrower, Paribas, SG and Agent, (h) Sixth
Amendment to Letter Agreement and Security Agreement dated October 30, 1995, by
and among Borrower, Paribas, SG and Agent, and (i) Seventh Amendment to Letter
Agreement and Security Agreement dated as of March 27, 1996, by and among
Borrower, Paribas, SG and Agent. Borrower, Paribas, SG and Agent desire to
amend the Letter Agreement and the Security Agreement as hereinafter set forth.
Accordingly, Borrower, Paribas, SG and Agent, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby agree as follows:
1. Definitions. The term "Letter Agreement", as used in this Eighth
Amendment to Letter Agreement and Security Agreement (this "Amendment"), shall
mean the Letter Agreement referred to hereinabove, as amended hereby. The term
"Security Agreement", as used in this Amendment, shall mean the Security
Agreement referred to hereinabove, as amended hereby. Capitalized terms used in
this Amendment, if and to the extent not otherwise defined in this Amendment,
shall have the same meanings in this Amendment as in the Letter Agreement;
provided, however, that capitalized terms used in amended terms and provisions
of the Security Agreement shall have the same meanings as in the Security
Agreement.
2. Amendments to the Letter Agreement.
(a) Facility. The section of the Letter Agreement entitled
"Facility" is hereby amended to read in its entirety as follows:
"$20,000,000 (the 'Committed Amount') aggregate committed
line of credit for loans (the 'Loans') and letters of credit
(the 'Letters of Credit'), subject to the Advance Rate (as
hereinafter defined) and the other terms and conditions of
this Agreement and the other Loan Papers (as hereinafter
defined); provided, however, that the commitment of Paribas
shall be $10,000,000 of the Committed Amount and the
commitment of SG shall be $10,000,000 of the Committed
Amount. The commitments of Banks under this Facility shall
expire on the earlier to occur of the Maturity Date (as
hereinafter defined) or the occurrence of an Event of
Default. Banks shall not be obligated to make any advances
of Loans or issue any Letter of Credit under the Facility on
or after the Maturity Date."
(b) Maturity Date. The section of the Letter Agreement entitled
"Maturity Date" is hereby amended to read in its entirety as follows:
"October 28, 1997 (the "Maturity Date"), subject to
acceleration upon the occurrence of an Event of Default."
(c) Other Terms and Provisions. The first sentence of the section of
the Letter Agreement entitled "Other Terms and Provisions" is hereby
amended to read in its entirety as follows:
"In addition to the terms and provisions specified herein,
the terms and provisions contained in that certain (a)
Security Agreement dated October 31, 1991, executed by
Borrower to and in favor of Agent and Banks, as amended by
that certain (i) First Amendment to Letter Agreement and
Security Agreement dated December 17, 1991, by and among
Borrower, Banks and Agent, (ii) Second Amendment to Letter
Agreement and Security Agreement dated October 31, 1992, by
and among Borrower, Banks and Agent, (iii) Third Amendment
to Letter Agreement and Security Agreement dated October 31,
1993, by and among Borrower, Banks and Agent, (iv) Fourth
Amendment to Letter Agreement and Security Agreement dated
September 30, 1994, by and among Borrower, Banks and Agent,
(v) Fifth Amendment to Letter Agreement and Security
Agreement dated October 31, 1994, by and among Borrower,
Banks and Agent, (vi) Sixth Amendment to Letter Agreement
and Security Agreement dated October 30, 1995, by and among
Borrower, Banks and Agent, (vii) Seventh Amendment to Letter
Agreement and Security Agreement dated March 27, 1996, by
and among Borrower, Banks and Agent, and (viii) Eighth
Amendment to Letter Agreement and Security Agreement dated
October 29, 1996, by and among Borrower, Banks and Agent (as
amended, the "Security Agreement"), (b) Amended and Restated
Promissory Note dated October 29, 1996, in the original
principal amount of $10,000,000 made by Borrower payable to
the order of Paribas (the "Paribas Note"), (c) Amended and
Restated Promissory Note dated October 29, 1996, in the
original principal amount of $10,000,000 made by Borrower
payable to the order of SG (the "SG Note") (the Paribas Note
and the SG Note, together with all renewals, extensions,
amendments and replacements thereof from time to time, are
hereinafter collectively called the "Promissory Notes"), and
(d) all other agreements, documents, instruments and
certificates executed or delivered in connection herewith
(this Agreement, the Security Agreement, the Promissory
Notes and such other agreements, documents, instruments and
certificates, as the same may be amended, renewed, extended,
restated or supplemented from time to time, are hereinafter
collectively called the "Loan Papers"), all of which are
incorporated herein by reference for all purposes, shall
apply and shall govern the relationship among Borrower,
Agent and Banks with respect to the Facility."
3. Amendments to the Security Agreement.
(a) Definition of Loan Papers. The first sentence of Subparagraph
(f) of Paragraph 21 of the Security Agreement is hereby amended to read in
its entirety as follows:
"The term "Loan Papers", as used in this Agreement, shall
mean and refer to (i) the Letter Agreement, (ii) that
certain Amended and Restated Promissory Note dated October
29, 1996, in the original principal amount of $10,000,000
made by the undersigned payable to the order of Banque
Paribas Houston Agency, (iii) that certain Amended and
Restated Promissory Note dated October 29, 1996, in the
original principal amount of $10,000,000 made by the
undersigned payable to the order of Societe Generale,
Southwest Agency, (iv) this Agreement, and (v) the other
"Loan Papers", as such term is defined in the Letter
Agreement, as the same may be amended, renewed, extended,
restated or supplemented from time to time."
4. Ratifications, Representations and Warranties.
(a) Except as expressly amended by this Amendment, the terms and
provisions of the Letter Agreement and the Security Agreement are hereby
ratified and confirmed and shall continue in full force and effect. The
Letter Agreement and the Security Agreement as amended hereby shall con-
tinue to be legal, valid, binding and enforceable in accordance with their
terms.
(b) Borrower hereby represents and warrants to Banks that the
execution, delivery and performance of this Amendment and all other Loan
Papers executed and/or delivered in connection herewith, and the
performance of the transactions contemplated hereby and thereby, have been
duly authorized by all requisite corporate action on the part of Borrower
and will not violate the Certificate of Incorporation or Bylaws of Borrower
or any other material agreement, document, instrument or certificate to
which Borrower, or any of its assets, is a party or is bound or affected.
5. Conditions Precedent. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent:
(a) Agent shall have received the following, each dated (unless
otherwise indicated) the date of this Amendment, in form and substance
satisfactory to Banks:
(i) an Amended and Restated Promissory Note in the original
principal amount of $10,000,000 made by Borrower payable to the order
of Paribas and an Amended and Restated Promissory Note in the original
principal amount of $10,000,000 made by Borrower payable to the order
of SG;
(ii) an Amended and Restated Federal Reserve Form U-1 executed by
Borrower pertaining to this Amendment; and
(iii) a Corporate Certificate executed by Borrower and
certain officers of Borrower evidencing that the transactions
contemplated by this Amendment have been duly authorized by all
requisite corporate action on the part of Borrower.
(b) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all agreements, documents,
instruments and certificates and other legal matters incident thereto shall
be reasonably satisfactory to Agent and its legal counsel, Jenkens &
Gilchrist, P.C.
6. Miscellaneous.
(a) All representations and warranties contained in this Amendment
shall survive the execution and delivery of this Amendment and the other
Loan Papers, and no investigation by Agent or Banks or any closing shall
affect such representations and warranties or the right of Agent and Banks
to rely thereon.
(b) The Loan Papers are hereby amended so that any reference therein
to the Letter Agreement or the Security Agreement shall mean a reference to
the Letter Agreement or the Security Agreement, respectively, as amended
hereby.
(c) Any provision of this Amendment held by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate
the remainder of this Amendment and the effect thereof shall be confined to
the provision so held to be invalid or unenforceable.
(d) This Amendment is binding upon and shall inure to the benefit of
Banks, Agent and Borrower and their respective successors and assigns;
provided, however, that Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of Banks.
(e) This Amendment may be executed in one or more counterparts.
(f) Borrower agrees to pay on demand by Agent the reasonable fees and
out-of-pocket expenses of counsel to Agent and Paribas in connection with
the preparation, negotiation and execution of this Amendment and the other
Loan Papers executed pursuant hereto.
(g) THIS AMENDMENT, TOGETHER WITH THE OTHER LOAN PAPERS AS WRITTEN,
REPRESENT THE FINAL AGREEMENTS BETWEEN AND AMONG THE PARTIES HERETO WITH
RESPECT TO THE FACILITY, THE LOANS AND THE LETTERS OF CREDIT AND MAY NOT BE
CONTRADICTED BY EVIDENCE OR PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
(1) BORROWER AND (2) AGENT OR ANY BANK.
If you are in agreement with all of the terms and conditions stated herein,
please indicate by signing below whereupon this Amendment shall become effective
as of the date first above written.
Sincerely,
BANQUE PARIBAS HOUSTON AGENCY
Individually and as Agent
By: /s/ Scott Clingan
----------------------------------
Name: Scott Clingan
Title: Vice President
By: /s/ Larry Robinson
----------------------------------
Name: Larry Robinson
Title: Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ Richard M. Lewis
----------------------------------
Name: Richard M. Lewis
Title: Vice President
AGREED AND ACCEPTED:
CONTRAN CORPORATION
By: /s/ William C. Timm
----------------------------------
Name: William C. Timm
Title: Vice President-Finance
LOAN AGREEMENT
This loan agreement (this "Agreement") is dated as of November 8, 1996, and is
among Contran Corporation, a Delaware corporation ("Contran"), the affiliated
corporations herein referred to as the "Contran Affiliates," United States
National Bank of Oregon ("USBO"), and Societe Generale, Southwest Agency
("SoGen").
Recitals
A. Contran, the Contran Affiliates, the Agent, and the Bank Group
desire to enter into the Loan Documents under which the members of the Bank
Group will severally make Advances to Contran aggregating no more than the
Maximum Availability at any one time.
B. The members of the Bank Group are prepared to severally make
Advances and extend credit to Contran aggregating no more than the Maximum
Availability at any one time under the terms and conditions of the Loan
Documents.
NOW, THEREFORE, for value, it is agreed that:
I. DEFINITIONS; CONSTRUCTION MATTERS.
A. Definitions. As used in the Loan Documents:
"Advance" means the substantially contemporaneous Advances or
extensions of credit made by the members of the Bank Group to Contran
under the Loan Documents for the benefit of one or more members of the
Contran Companies;
"Agent" means USBO or any successor or assignee when acting as the
administrative agent for the Bank Group under the Loan Documents;
"Allowed Uses" means the general corporate purposes of the Contran
Companies including the purchase of margin stock;
"Available" or "Availability" means the difference between the Maximum
Availability and the outstanding balance of the Advances at the time
that Availability is being determined;
"Average Availability" means the difference between the Maximum
Availability and the average outstanding principal balance of the
Advances during a Quarter;
"Bank Group" means USBO, SoGen, and any banks hereafter added to this
Agreement by modification agreement;
"Bank Group Majority" means USBO and SoGen;
"Banking Day" means a day when all members of the Bank Group are open
to the public at their main offices for carrying on substantially all
of its banking activities (except for a Saturday, Sunday, or a bank
holiday listed in '707.430 of the Oregon Revised Statutes) and, with
respect to LIBOR Advances, a day upon which banks transact business on
the London interbank market for Eurodollars;
"Commitment Fee" means a fee, which is payable quarterly in arrears as
of the last Banking Day of each Quarter for the Average Availability
in that Quarter and which will be calculated by the Agent by
multiplying the Average Availability in such Quarter by 37.5 basis
points per annum (365/366 day year) on a prorated basis;
"Contran Companies" means Contran and the Contran Affiliates and
"Contran Company" means any one of the Contran Companies;
"Contran Affiliates" means NCL and VGI and "Contran Affiliate" means
either NCL or VGI;
"Credit Line" means the revolving lines of credit being severally
extended by the members of the Bank Group to and for the benefit of
the Contran Companies under the terms and conditions of the Loan
Documents;
"Default Rate" means the rate of interest that is otherwise applicable
plus an additional 2% per annum;
"Eurodollars" means U.S. dollars to be deposited in a bank or other
financial institution located outside of the United States;
"Expiry Date" means the date which is 364 days following the date of
this Agreement, and any anniversary of such date as extended by mutual
agreement of the Contran Companies and the Bank Group;
"Guaranty" means the unconditional payment guaranty to be issued to
each member of the Bank Group by the Contran Affiliates in the form
attached as exhibit A;
"Hazardous Material" or "Hazmat" means any waste, substance, mixture,
pollutant or contaminant defined as hazardous, toxic or radioactive
under any federal, state, or local statutory laws, regulations, or
orders and includes, whether or not so defined, petroleum and natural
gas products, polychlorinated biphenyls and asbestos-containing
materials;
"Interest Period" means as of the end of each calendar month for Prime
Rate Advances and a period of 1 month, 2 months, 3 months or 6 months
as selected by Contran for each LIBOR Advance, and, if any Interest
Period would otherwise end on a day which is not a Banking Day, such
Interest Period will end on the next succeeding Banking Day unless
such day falls in the next calendar month in which case that Interest
Period will end on the last Banking Day in the immediately preceding
calendar month;
"LIBOR" means the London interbank offered rate of interest, as
determined and quoted by the Agent, for a deposit of Eurodollars in
the amount of the Advance requested by Contran, rounded up to the
nearest 1/16th of 1% and adjusted for any reserves, FDIC insurance
premiums or other charges which would be payable by any member of the
Bank Group in connection therewith, plus 1.75% per annum;
"LIBOR Advance" means an Advance to which the LIBOR applies;
"LTV" means the percentage resulting from dividing the outstanding
principal balance of the Advances on the date the LTV is being
determined by the published closing prices for the preceding trading
day, as published in the Wall Street Journal or, if the prices are not
published, as reasonably determined by the Agent, of the security
interest of the Bank Group (i.e., market value less the amount secured
by any prior liens and security interests or any offsets, defenses, or
counterclaims, such as unpaid subscription liability, asserted by the
issuer of any investment security) in the Pledged Securities;
"Loan Documents" means this Agreement, the Guaranties, the Notes, and
the Security Documents, as originally executed and as hereafter
extended and/or modified;
"Maximum Availability" means $40,000,000 until changed by mutual
agreement or reduced by Contran as provided in this Agreement.
"NCL" means National City Lines, Inc., a Delaware corporation;
"Note" means the note to be issued by Contran to each member of the
Bank Group in the form attached as exhibit B;
"Notice of Borrowing" means the notice of intention to borrow to be
given by Contran to the Agent in the form attached as exhibit C;
"Obligations" means the debts and obligations of the Contran Companies
to the Bank Group and the Agent under the Loan Documents, including
repayment of the Advances;
"Per annum" means, when referring to interest, the actual number of
days elapsed in an Interest Period over a denominator of 360 days;
"Percentage Interest" means the percentage interest of each member of
the Bank Group determined by dividing its commitment by the Maximum
Availability;
"Pledged Securities" means initially the 7,200,000 shares of common
stock that have been issued by Valhi and 3,042,467 shares of common
stock that have been issued by Tremont and any investment securities
that are pledged to the Bank Group under 'II.B.10 of this Agreement to
secure payment and performance of the Obligations;
"Prime Rate" means the rate of interest publicly-announced by the
Agent from time to time as its prime rate of interest for Advances to
commercial customers;
"Prime Rate Advance" means an Advance to which the Prime Rate is
applicable;
"Prospective Default" means an event of Default but for the giving of
any required notice, the passage of any applicable grace or notice
period, or both;
"Quarter" means a calendar quarter;
"Security Document" means the securities pledge agreement to be
executed by the Contran Affiliates in the form attached as exhibit D,
and the related stock powers and compliance forms, and any security
agreement and financing statements that any Contran Company hereafter
executes to secure performance of the Obligations;
"Tremont" means Tremont Corporation, a Delaware corporation;
"Valhi" means Valhi, Inc., a Delaware corporation; and
"VGI" means Valhi Group, Inc., a Delaware corporation.
B. Additional References.
1. Accounting Terms. Accounting terms which are not specifically
defined in the Loan Documents will be defined or interpreted and
all reporting practices will be performed, in accordance with
generally accepted accounting principles ("GAAP") unless the Bank
Group has given its prior written consent to a different
accounting definition, interpretation or practice. Without
thereby limiting the generality of the foregoing, all financial
statements and calculations which are based on financial
condition or results of operations as of specific dates or for
specific periods (including compliance with financial covenants)
will be calculated on a consolidated basis unless otherwise
specified. Whenever any Loan Document calls for a payment to be
made or an event to occur annually or quarterly, the reference is
to Contran's fiscal year and fiscal quarter. The term "financial
statements" means balance sheets and statements of income and
cash flows prepared in reasonable detail, on a comparative basis,
and in accordance with GAAP for the interim (quarterly)
accounting periods and balance sheets and statements of income,
cash flows, and equity, and related footnotes, for the annual
accounting periods.
2. Legal Terms. The definitions and substantive terms of the
Uniform Commercial Code, the Uniform Fraudulent Transfer Act, and
the Bankruptcy Code will be used as additional aids to
construction of the Loan Documents before resort to any other
source. The word "execute" means to subscribe and deliver a
document. The term "investment security" means the obligation of
an issuer, or a share, participation, or other interest in an
issuer or in property or an enterprise of an issuer, and any
related certificate and entitlement, including a warrant,
dividend, or other distribution in respect thereof.
3. Date/Time. Whenever a date or time is specified in the Loan
Documents, it means such date or time in Portland, Oregon.
4. Schedules/Exhibits. The schedules and exhibits, if any, that are
attached to this Agreement incorporated into this Agreement by
this reference.
5. Gender; Number. The Loan Documents are intended to be gender
neutral and the neuter pronoun can refer not only to an
organization but also to an individual. Use of the singular can
include the plural and vice versa. Where the singular refers to
several persons, the liability of such persons is joint and
several.
6. Conflicts. The terms and conditions of the Loan Documents are
intended to complement and supplement each other and are to be
construed so as to be consistent and complimentary. In the event
that a conflict of terms cannot be reconciled, the terms and
conditions of this Agreement will govern over any conflicting
terms or conditions in any other Loan Document.
7. Captions. Captions and headings are merely for convenience and
substantively are not a part of the Loan Documents.
8. Governing Law. Construction, performance, and enforcement of the
Loan Documents will be governed by the substantive provisions
(i.e., without regard to the rules for conflict of laws) of
Oregon law, but if the Bank Group has greater rights or remedies
under federal law, then such rights and remedies under federal
law also will be available to the Bank.
9. Complete Agreement. The Loan Documents are the complete, final,
and exclusive agreement of the parties. No term or condition can
or will be explained, supplement, waived, or modified by conduct
or oral agreement either before, at, or after signing and
delivery of the Loan Documents.
II. THE LINE OF CREDIT.
A. Advances.
1. Commitment. Upon satisfaction of the conditions precedent by the
Contran Affiliates or waiver thereof by the Bank Group, each
member of the Bank Group severally promises and agrees (commits)
to make Advances and/or extend credit (all such Advances and/or
extensions of credit at substantially the same time being an
"Advance") to the Contran Companies for the Allowed Uses until
the Expiry Date as long as at the time of such Advance (a)
Contran is not in Default or Prospective Default under the Loan
Documents, (b) the aggregate principal amount of all outstanding
Advances and the requested Advance does not exceed the Maximum
Availability, and (c) the LTV after such Advance will not exceed
40%.
2. Revolving Nature. The commitments of the Bank Group are
revolving in nature so the Contran Companies may borrow and repay
at any time and from time to time without penalty or premium
(except for breakage charges collectible in connection with full
or partial prepayment of LIBOR Advances) subject to the terms and
conditions of the Loan Documents. LIBOR Advances mature and must
be repaid or renewed at a new LIBOR or at the Prime Rate at the
end of the Interest Period applicable thereto. Prime Rate
Advances mature and must be repaid on the Expiry Date.
3. Notice of Borrowing. In order to borrow (obtain a LIBOR Advance
or a Prime Rate Advance), convert a Prime Rate Advance to a LIBOR
Advance or vice versa, or replace an LIBOR Advance with another
new LIBOR Advance at the end of an Interest Period, Contran must
submit a Notice of Borrowing to the Agent through an authorized
representative (a) not later than 10 a.m. on the date of any
requested Prime Rate Advance and (b) not later than 9 a.m. on the
third Banking Day before the effective date of a LIBOR Advance,
unless the Advance is requested orally and the Agent grants the
request, in which case either the Advance will be repaid or a
Notice of Borrowing will be submitted to the Agent in writing
within 48 hours following the oral request (including any
breakage charge related thereto).
The Notice of Borrowing will specify the date when the Advance is
to be funded, converted, or renewed, the amount thereof, the
applicable interest rate and, if the LIBOR has been selected, the
Interest Period. Each Notice of Borrowing and oral request will
be irrevocable and the Agent and the Bank Group will be entitled
to procure funds in reliance on such Notice of Borrowing and oral
request; provided, however, that Contran may withdraw any Notice
of Borrowing at any time prior to the funding of such Advance as
long as Contran pays all reasonable direct costs and expenses
(including breakage charges) incurred by any member(s) of the
Bank Group in reliance on such Notice of Borrowing. No LIBOR
Interest Period may be selected that extends beyond the Expiry
Date. The Prime Rate will be applicable to each Advance unless
Contran has properly selected the LIBOR.
4. Disbursement of Proceeds. All Advances will be funded by wiring
the proceeds thereof into Contran's general corporate checking
account.
5. Interest Rates. The rates of interest payable by Contran will be
(a) the Prime Rate on each Prime Rate Advance and (b) if selected
by Contran, the LIBOR plus a margin of 1.75% (175 basis points)
per annum for on each LIBOR Advance in the minimum amount of
$1,000,000 and increments of $500,000 in excess of the minimum
amount.
6. Principal Repayment. Contran will repay the Advances on or
before the Expiry Date.
B. General Matters.
1. Medium. All Advances will be made by, and all payments will be
made to, the Bank Group in immediately available U.S. dollars.
2. Interest Payments. Interest on Prime Rate Advances is due
monthly in arrears. Interest on LIBOR Advances is due in arrears
at the end of the Interest Period and, in the event of any 6-
month LIBOR Interest Period, at the end of the first 90 days of
the Interest Period.
3. Payments. Any payment received by the Agent after noon will be
deemed to have been made on the next following Banking Day and
interest will accrue to that day. In the event that the date
specified for payment is not a Banking Day, then interest will
accrue to and the payment will be made on the next following
Banking Day; provided, however, that if the next Banking Day
following the end of an Interest Period for a LIBOR Advance is in
the following calendar month, then payment or renewal of the
LIBOR Advance will be due on the last Banking Day which precedes
the end of that Interest Period. All payments will be applied,
to the extent amounts are due, first to costs (including breakage
charges), then to fees, then to accrued interest, and finally to
principal.
4. Breakage Charge. Contran may prepay a LIBOR Advance only upon
three days' advance written notice and upon payment of the
breakage charge specified in the Note.
5. Terminating LIBOR. The Bank Group is offering the LIBOR to
Contran on the assumption that there will continue to be an
active interbank market in Eurodollars. If that market ceases to
exist or if it otherwise becomes illegal or impractical for any
member of the Bank Group to fund an Advance with reference to
this source of funds, then the Bank Group member(s) so affected
will give notice of such illegality or impracticality to Contran
and any future loan from those members of the Bank Group will be
at the Prime Rate.
6. Increased Costs. If any member of the Bank Group is required to
increase its reserves, insurance premiums, or regulatory capital
or to pay additional taxes (other than income taxes) in order to
make Advances to Contran because of the future enactment,
promulgation, or amendment of any statute, regulation, or order
by a government or governmental subdivision or agency, then
Contran will reimburse such member(s) of the Bank Group on demand
for all such increased costs as estimated in writing with
reasonable particularity by such member.
7. Notes; Promise of Repayment. Contran promises and agrees to
issue a note to each member of the Bank Group in the amount of
such member's commitment and to repay all Advances, plus
interest, fees, costs and expenses, to the order of each member
of the Bank Group in accordance with such member's Percentage
Interest.
8. Guaranty; Promise of Repayment. The Contran Affiliates jointly
and severally promise and agree to issue the guaranty to each
member of the Bank Group and to repay each Bank Group member's
Percentage Interest of all Advances, plus interest, fees, costs
and expenses, to such member's order in accordance with the terms
hereof and of the note.
9. Nature of Liability. Contran, VGI, and NCL are jointly,
severally, and primarily liable for performance of the
Obligations.
10. Maintenance of Loan-to-Value Ratio: Mandatory Prepayment or
Pledge of Additional Pledged Securities. If the outstanding
principal balance of the Advances at any time results in an LTV
of more than 50%, the Contran Affiliates immediately will either
(a) make a prepayment of principal so as to reduce the LTV to 50%
or less and/or (b) pledge additional investment securities in
quality and quantity reasonably acceptable to the Bank Group so
as to reduce the LTV to 50% or less. For the purposes of this
paragraph, the Bank Group acknowledges and agrees that the
Contran Companies always may pledge additional shares of Valhi
common stock owned by a Contran Company in order to meet the LTV
requirement. Prepayments required under this section will be
applied first to Prime Rate Advances, because such Advances may
be prepaid without payment of the breakage charge, and then to
LIBOR Advances in an order which first pays the LIBOR Advance(s)
with the shortest remaining time until maturity, then the next
shortest period, etc. If additional investment securities are
pledged and the value of the pledged securities later increases,
the Agent will, upon the written request of the Contran
Affiliates, return to the Contran Affiliates any of the
additional pledged securities (but not the Valhi or Tremont
shares pledged initially) which are not then necessary to
maintain the LTV at 50% or less.
11. Waiver; Forbearance. Each Contran Affiliate waives acceptance,
presentment (including notice of dishonor) and all claims,
offsets, defenses, and counterclaims based on suretyship or
impairment of collateral. Without limiting the foregoing, each
Contran Affiliate consents to extension of due dates, material
modifications, and impairment of contribution rights and the
value of interests in collateral without prior notice or demand.
III. CONDITIONS PRECEDENT.
A. Conditions to First Borrowing. The following are conditions precedent
which must be satisfied by the Contran Affiliates or waived by the
Bank prior to the first Advance:
1. Loan Documents. Contran has duly executed (signed, acknowledged
where appropriate, and delivered) the Loan Documents;
2. Guaranties. The Contran Affiliates have executed the Guaranties
and the Security Documents;
3. Corporate Documents. Each Contran Company has delivered
certified true copies of currently effective (a) articles of
incorporation, bylaws, and similar governance documents (its
"organization documents"), (b) resolutions of its board of
directors authorizing it to execute each of the Loan Documents to
which such organization is a party and to perform the
Obligations, and specifying the representative(s) who will
execute the Loan Documents on its behalf (and, for Contran, who
may request Advances) (its "borrowing resolutions"), and (c) an
incumbency certificate executed by its corporate secretary
containing specimen signatures of the representatives who will
execute the Loan Documents and, in the case of Contran, request
Advances (its "incumbency certificate");
4. Representations and Warranties. The representations and
warranties made by the Contran Affiliates in the Loan Documents
are true, complete and correct in all material respects as of the
date upon which the Loan Documents are executed and the date upon
which the first loan is requested and a duly authorized
representative of each Contran Affiliate has executed a
certificate dated as of the date of the first Advance certifying
the continued accuracy and completeness of the representations
and warranties;
5. Legal Opinion. Contran's general counsel has rendered an opinion
to the Bank Group opining that as of the date of the Loan
Documents (a) each Contran Company is an existing Delaware
corporation that has been duly organized, (b) each Contran
Company has been duly authorized to execute each of the Loan
Documents to which such organization is a party and to perform
the Obligations, (c) each of the Loan Documents is the legally
valid and binding obligation of each Contran Company who is a
party thereto and is enforceable in accordance with its terms
except as enforcement may be limited by insolvency or other
similar laws affecting the rights and remedies of creditors
generally, general principles of equity, whether applied by a
court of law or equity, and other generally applicable rules of
law, and (d) the Security Documents are a form sufficient to
create a lien on or security interest in all right, title, and
interest of the Contran Companies in the Pledged Securities;
6. Perfection. The Contran Companies have delivered to the Agent
possession of the certificates evidencing the investments
securities which are part of the Pledged Securities with stock
powers signed in blank and related compliance certificates and
the Agent has perfected its security interest of the Bank Group
in any other types or items of the collateral;
7. Legal Matters. All matters pertaining to the Loan Documents and
the Advances are reasonably satisfactory to the Agent and the
Agent has received all certificates, insurance policies and
documents that it reasonably requires to establish compliance
with the terms and conditions of the Loan Documents.
B. Subsequent Advances. The following are conditions precedent which
must be satisfied by Contran or waived by the Bank Group prior to any
Advance subsequent to the first Advance:
1. No default. There is no Default or Prospective Default on the
date of such Advance after giving effect to such Advance;
2. Representations and Warranties. The representations and
warranties made by the Contran Companies in the Loan Documents
continue to be true, complete and correct in all material
respects; and
3. LTV Compliance. After giving effect to the requested Advance,
the LTV will be 40% or less.
IV. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties. Each Contran Company represents and
warrants to the Bank Group that:
1. Corporate Organization. Each Contran Company is a Delaware
corporation which is duly organized and is duly qualified to
transact business in all other states and countries where the
failure to be so qualified would have a material adverse impact
on its business operations or ownership of property;
2. Authorization. Each Contran Company has been duly authorized to
execute each of the Loan Documents to which such organization is
a party and to perform the Obligations;
3. Due Execution and Delivery. Each Loan Document to which such
organization is a party has been duly executed by a
representative of such organization who has been duly authorized
to perform such acts;
4. Legally Binding Documents. Each Loan Document is the legally
valid and binding obligation of each Contran Company who is a
party to such document and is enforceable against such
organization in accordance with its terms except as such
enforcement may be limited by insolvency or other similar laws
affecting the rights and remedies of creditors generally, general
principles of equity whether applied by a court of law or equity,
and generally applicable rules of law;
5. Accurate Financial Statements. The annual and interim financial
statements of the Contran Companies furnished to the Bank Group
present fairly the financial position of such Contran Companies
as of the date of such financial statements and the results of
the operations and changes in financial position for the annual
and interim periods then ending (1);
6. No Violations. Neither the execution of the Loan Documents nor
the performance of the Obligations by the Contran Companies is
prohibited by or will subject any Contran Company to any fine,
penalty or similar sanction under, any statute, regulation, or
order applicable to such organization;
7. No Proceedings. There are no civil, criminal, or administrative
proceeding now pending or overtly threatened in writing against
any Contran Company which has not been disclosed in the audited
financial statements which have been provided to the Bank or
[FN]
(1)
The financial statements for VGI and NCL may omit footnote disclosures which
would normally be required under GAAP.
separately in writing and which, if adversely determined, would
have a material adverse effect on the ability of the Contran
Companies to repay the Advances and perform their other
obligations to the Bank Group under the Loan Documents;
8. No Breach or default. No Contran Company is now, or by reason of
the execution of the Loan Documents or performance of the
Obligations will be, in breach of or in default under any
"employee pension benefit plans" or "employee benefit plans" (as
those terms are defined by Section 3 of the Employee Retirement
Income Security Act of 1974, as amended) to which such
organization is a party or sponsor in any material respect or any
other material agreement, instrument, undertaking, or other
contract to which such organization is a party or by which its
property is bound;
9. Tax Returns; Taxes. Each Contran Company has filed all material
tax returns that it is required by any statute, regulation, or
order to file and has paid when due all material taxes imposed on
it or its property;
10. Compliance with Law. Each Contran Company is in compliance in
all material respects with all statutory laws, regulations, and
orders that are applicable to such organizations and their
property specifically including, but not limited to,
environmental laws;
11. Hazardous Material. To the best knowledge of Contran, there is
no hazardous material being released, and no hazardous material
has been released, from or at any real property owned or operated
by any Contran Company in quantities which would trigger such
organization's obligation under applicable environmental laws to
report the existence of such waste or to remove and dispose of
such waste or to remediate the effects of a prior discharge
thereof except as disclosed to the Bank in writing before the
date of the Loan Documents;
12. Solvency. No Contran Company is insolvent or the subject of any
insolvency proceedings and each Contran Company has capital which
is reasonably adequate to conduct its business in the manner in
which it intends to conduct such business;
13. Investment Company Act. No Contran Company (which by definition
excludes Tremont) is an "investment company" as that term is
defined by Section 3(a) of the Investment Company Act of 1940;
14. No Material Adverse Change. There has been no material adverse
change in the business operations, financial position, or cash
flows of the Contran Companies since the date of the lastest
annual financial statement provided to the Bank Group before the
date of this Agreement; and
15. Ownership of Pledged Securities. Each Contran Company owns the
item or items of Pledged Securities that such organization
purports to own and such property is free and clear of all liens,
security interests, and claims except to the extent that a
security interest is granted to the Bank Group in the Loan
Documents.
B. Reaffirmation. The Contran Companies will be deemed to reaffirm the
accuracy and completeness of the foregoing representations and
warranties each time that an Advance is requested.
V. COVENANTS.
A. Affirmative Covenants. The Contran Companies promise and agree that
until the Advances are repaid and all other Obligations are discharged
by performance, each Contran Company will, unless the Agent otherwise
consents in writing:
1. Preserving Existence. Preserve its legal status and material
franchises and pay all material taxes and fees in connection
therewith;
2. Compliance with Laws and Orders. Comply in all material respects
with all statutory laws, regulations, and orders applicable to it
or its property specifically including, but not limited to,
environmental laws, if noncompliance would or is likely to have a
material adverse effect on the financial condition or business
prospects of such organization or its ability to perform the
Obligations;
3. Insurance. Obtain and maintain with responsible carriers or
through self-insurance such workers' compensation, fire with
extended coverage endorsement, public liability and property
damage and such other insurance in such coverage amounts,
deductibles and terms as may be consistent with industry
practices and will provide evidence of such insurance and payment
of premiums to the Agent as and when required by the Agent;
4. Payment and Performance of Debts, Liabilities and Obligations.
Pay and perform when due all material debts and obligations owed
to all third persons, specifically including, but not limited to,
its obligations under any "employee pension benefit plans" or
"employee benefit plans" (as those terms are defined by Section 3
of the Employee Retirement Income Security Act of 1974, as
amended) to which such person is a party or sponsor in any
material respect or any other material agreement, instrument,
undertaking, or other contract to which such person is a party or
by which its property is bound;
5. Books and Records. Keep accurate and complete books and records
relating to the Pledged Securities and its other assets and
liabilities, management and employees, production, marketing,
operations, performance and earnings;
6. Tax Returns. File all tax returns required by statute,
regulations, and orders to be filed and pay all material taxes
when due;
7. Financial Statements. Deliver to each member of the Bank Group
(a) unaudited interim consolidated financial statements of
Contran within 60 days following the end of each of the first
three quarterly reporting periods of each fiscal year, (b)
audited annual consolidated financial statements of Contran
within 120 days following the end of each fiscal year,
accompanied by a copy of an unqualified audit opinion issued by
certified public accountants reasonably satisfactory to the Bank
Group and, if issued, copies of such auditor's "management
letter," and (c) unaudited consolidating financial statements of
VGI and NCL within 60 days following the end of each of the first
three quarterly reporting periods and within 120 days of the end
of each fiscal year, which unaudited consolidating financial
statements of VGI and NCL may omit all footnote disclosures
normally required in financial statements prepared in accordance
with GAAP;
8. Auditor Certificates. Deliver to each member of the Bank Group
with the audited annual consolidated financial statements of
Contran the certificate of the auditors addressed to the Agent
and certifying, based only on review of the annual audited
financial statements and the Loan Documents, that the auditors
are not aware of any event of Default or Prospective Default or,
if such auditors are aware of such event, specifying such events
with reasonable particularity; provided, however, that in
connection therewith the auditors shall be under no obligation to
go beyond the bounds of generally accepted auditing standards for
the purpose of certifying such compliance or non-compliance;
9. Additional Information; Compliance Certificates. Provide to the
Agent:
a) A Notice of Borrowing when and as Contran requests Advances;
b) Such additional information as and when reasonably requested
by the Bank Group or the Agent as to the Pledged Securities
and the business operations and financial condition of any
one or more of the Contran Companies;
c) Notice of any material adverse change in the business
operation or financial condition of any Contran Company; and
d) Within 10 Banking Days after any Contran Company receives
written notice thereof, a report of each pending and overtly
threatened claim, litigation, and governmental proceeding
which, if adversely determined, probably would involve an
aggregate liability of $5,000,000 or more;
e) Quarterly and annual compliance certificates, to accompany
the quarterly and annual financial statements, signed by a
duly authorized representative of the Contran Companies
which either (A) certifies that there is no event of Default
or Prospective Default as of the date of the certificate to
the knowledge of the representative or (B) specifies with
reasonable particularity such events then existing and known
to the representative and outlines its plan for cure
thereof;
f) Copies of any filings or reports that any Contran Company
files or makes with any federal or state government
department, commission, or agency regulating investment
securities as and when such filings or reports are filed or
made to such government department, commission, or agency;
and
g) If Contran becomes aware of any material event of Default or
Prospective Default between quarterly and annual reporting
dates, written notice of such event of Default or
Prospective Default within 10 days after Contran's senior
management learns of such event of Default or Prospective
Default.
10. Inspection Rights. The Agent will have the right to discuss
financial statements and other books and records with accounting
employees and outside accountants of each Contran Company and the
Contran Companies will ensure that the Agent may exercise and
enjoy such rights subject to the obligation of the Agent to give
reasonable advance notice to the Contran Companies under the
circumstances. The Contran Companies will reimburse the Agent for
all reasonable costs and expenses incurred by the Agent in
connection with the foregoing. All employees and outside
accountants are hereby authorized to discuss such matters with
the Agent, to provide such additional books and records and
information as may be reasonably requested by the Agent in
connection therewith, and to bill the Contran Companies for such
services. The Agent also will give prior notice to the Contran
Companies of the intention to discuss such matters with the
outside accountants so as to provide the opportunity to the
management of the Contran Companies to be present at such
discussions.
11. Contest Rights. Notwithstanding the foregoing covenants, each
Contran Company will have the right to contest its obligations
under statutory laws, regulations, orders, and contracts (other
than the Obligations) and for payment of taxes as long as (a)
such contest is started and continued in good faith and by
appropriate means, (b) adequate reserves are maintained by the
Contran Company engaging in such contest for performance of the
obligation in the event of an outcome of such contest that is
adverse to the Contran Company involved and (c) the Bank Group is
notified of any such contest where an adverse outcome probably
would involve a payment of $5,000,000 or more.
B. Negative Covenants. Each Contran Company promises and agrees that
until the Advances are repaid and all other Obligations have been
discharged by performance, it will not, unless the Bank Group
otherwise consents in writing:
1. Additional Debt. Directly or indirectly (by borrowing, deferred
purchase, guarantee, or otherwise) incur more than $25,000,000 as
a group in funded debt in excess of that immediately available to
the Contran Companies on the date of this Agreement except for
loans occurring in the ordinary course of business from the
Contran Companies to each Contran Company and/or Valhi;
2. Asset Transfers. Transfer any material or essential part of or
interest in their property to any third party except for sales of
inventory and surplus or obsolete equipment, the collection of
accounts, and sales and exchanges of other assets in the ordinary
course of business;
3. Transactions with Affiliates. Engage in any material business
transaction with any affiliate or other third party on terms less
favorable to the Contran Company than those which could be
obtained at the time thereof in arm's-length dealings with a
nonaffiliated person;
4. Business Combinations. Engage in any merger, acquisition, or
exchange of equity securities unless the Contran Company is the
surviving corporation and the Contran Companies continue to be in
compliance with all of the terms and conditions of the Loan
Documents; or
5. Use of Proceeds. Use the proceeds of any loan for any purpose
not permitted by the Loan Documents.
VI. DEFAULT.
TIME IS OF THE ESSENCE. Contran will be in default under the Loan
Documents if:
A. Payment Failure. The Contran Companies fail to make any payment of
principal when due or fail to make any payment of interest, fees or
costs within three Banking Days following the due date;
B. LTV Compliance. The Contran Companies fail to prepay principal or
pledge additional Pledged Securities within three Banking Days
following receipt of written notice from the Agent that the LTV
exceeds 50% if and when required by the Agent under the terms of this
Agreement.
C. Misrepresentation. Any Contran Company knowingly misrepresents any
material fact to the Bank Group or the Agent or fails to disclose to
the Bank Group or the Agent a material fact which is necessary to make
the facts which have been disclosed not misleading in the
circumstances under which they are made;
D. Affirmative Covenants. The Contran Companies fail to comply with the
affirmative covenants contained in any of the Loan Documents within 30
days following the date such compliance is demanded by the Bank Group
or, if such compliance cannot be completed within that 30-day period,
fails to substantially commence compliance within that 30-day period
and then to complete such compliance as soon as possible thereafter
but in no event later than 60 days after such compliance is demanded;
E. Negative Covenants. Any Contran Company breaches any negative
covenant contained in the Loan Documents;
F. Debt Default. Any Contran Company breaches or is in default under any
agreement, instrument, or similar contractual undertaking for the
repayment of funded debt in excess of $5,000,000 or does not pay any
trade account payables which is material or essential to its business,
other than those where the amount or validity is being contested in
good faith and by appropriate means, in the ordinary course of
business;
G. Guaranty. Any Contran Affiliate repudiates, breaches, or is in
default under the Guaranty or the Security Documents;
H. Insolvency. Any Contran Company becomes insolvent, the subject of any
voluntary insolvency proceeding or, having become the subject of an
involuntary insolvency proceeding, fails to have the involuntary
proceeding dismissed within 90 days of commencement;
I. Judgments. Any Contran Company becomes a judgment debtor for more
than $5,000,000 if such liability is not either covered by insurance
or vacated, discharged, stayed, or bonded in connection with an appeal
within 30 days of entry of the judgment; or
J. Change in Control. Any person or group of persons, other than the
current holders, hereafter directly or indirectly acquires control of
any Contran Company and such change in control continues for 60 days.
VII. REMEDIES.
A. Suspending Commitment. The members of the Bank Group may suspend
their obligations to make Advances to Contran upon the occurrence of a
Prospective Default or when the LTV is more than 40%.
B. Canceling Commitments. The members of the Bank Group may cancel their
obligations to makes Advances to Contran and accelerate the due date
of the Notes (make payment of all principal, interest, fees and costs
immediately due and payable) without further notice or demand upon the
occurrence of an event of Default and Contran's failure to cure such
Default within applicable notice and grace periods.
C. Collecting Payments; Order of Exercise of Remedies. The Bank Group
may collect the overdue payments or the accelerated balance of the
Notes at such times and in such order as the Bank Group selects. All
rights and remedies provided by law, equity and contract are
cumulative.
D. Consent to Jurisdiction. Each Contran Company consents to the
jurisdiction and venue of the circuit court of the state of Oregon for
Multnomah County (Portland) and of any federal court located in the
state of Oregon for any proceeding arising out of the Loan Documents,
including offsets, defenses, and counterclaims arising in contract or
tort.
E. Offset. Without limiting the generality of the foregoing, each
Contran Company expressly grants to each member of the Bank Group the
right to offset the obligations of the Bank Group to the Contran
Companies against the Obligations without notice or demand upon the
occurrence and continuance of a Default.
F. JURY TRIAL WAIVER. ON ADVICE OF COUNSEL AND IN LIEU OF AN ARBITRATION
CLAUSE NORMALLY REQUIRED BY THE AGENT, EACH CONTRAN COMPANY WAIVES
TRIAL BY JURY IN ANY CONTROVERSY (CLAIM, OFFSET, DEFENSE,
COUNTERCLAIM, OR THIRD-PARTY CLAIM WHETHER ASSERTED IN TORT OR
CONTRACT) ARISING OUT OF OR IN ANY WAY RELATED TO CONSTRUCTION,
PERFORMANCE, AND/OR ENFORCEMENT OF THE LOAN DOCUMENTS.
G. Costs. The prevailing party in the trial or appeal of any civil
action or other proceeding relating to the Loan Documents (including
claims and adversary proceedings in the Bankruptcy Court) will be
entitled to the award of a reasonable attorney fee in addition to
costs and disbursements. If the Bank Group uses an attorney to
enforce performance of the Obligations, the Contran Companies will
reimburse the Bank Group for such costs reasonably incurred on demand
whether or not a civil action or other proceeding is commenced.
VIII.INDEMNITY.
A. Indemnity. The Contran Companies promise and agree to indemnify,
defend and hold harmless each member of the Bank Group from and
against all claims and causes of action (and any direct and reasonable
loss, damage, liability, cost, and expense, including penalties,
damages, liens and reasonable attorney fees and other defense costs
resulting therefrom) of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against any of such member in
connection with any investigation, litigation, or other proceeding,
that arises from or relates to the Loan Documents or the failure of
any of the Contran Companies to perform the Obligations, but the
Contran Companies will not be responsible for any portion of such
indemnified claims or causes of action that arise from or relate to
the negligence or willful misconduct of any member of the Bank Group,
any controversies or claims among the members of the Bank Group, or
the failure of a member of the Bank Group to comply with any statute,
regulation, or order applicable to such indemnified party.
B. Durable Nature. This indemnity will survive the satisfaction or
discharge of the Advances by payment, bankruptcy discharge, or
otherwise.
IX. AGENCY PROVISIONS.
A. Authorization and Action. Each member of the Bank Group hereby
irrevocably appoints the Agent as its agent for administration of the
Advances and Obligations and authorizes the Agent to take such action
and exercise such powers under this Agreement as are granted to the
Bank Group, subject to the voting/approval provisions of this Article,
by the terms of this Agreement together with such additional actions
and powers as are reasonably incidental thereto. The obligations of
the Agent are mechanical and administrative in nature. Accordingly,
the Agent is not by reason of its role under this Agreement a trustee
or fiduciary for any member of the Bank Group. The Agent will have no
obligations except those expressly stated in this Agreement. As to
any matters not expressly provided for in this Agreement (including,
but not limited to, enforcement or collection of the Notes), the Agent
will not be required to exercise any discretion or take any action,
but will be required to act or to refrain from acting upon the
instructions of the Bank Group Majority, and such instructions will be
binding on all members of the Bank Group; provided, however, that the
Agent will not be required to take any action which exposes the Agent
to personal liability or that is contrary to this Agreement or
applicable laws, regulations, or orders.
B. Liability of the Agent. The Agent (including its shareholders,
directors, officers, agents, and employees) will not be liable for any
action taken or inaction by it under or in connection with this
Agreement in the absence of its own gross negligence or willful
misconduct. Without thereby limiting the foregoing sentence, the
Agent:
1. May treat the payee of a Note as the holder thereof until the
Agent receives written notice of a transfer thereof signed by
such payee in a form reasonably satisfactory to the Agent;
2. May consult with legal counsel, independent public accountants,
and other experts selected by it and will not be liable for any
action taken or inaction by it in good faith in accordance with
the advice of such counsel, accountants, or experts;
3. Makes no warranty or representation to any Bank and will not be
liable or responsible for the statements, warranties, or
representations made by the Contran Companies or any other person
in connection with this Agreement,
4. Will not have any obligation to inquire as to the performance or
observance of any of the terms, covenants, or conditions of this
Agreement on the part of the Contran Companies or any other
person or to inspect any Pledged Securities, books and records,
or other property of the Contran Companies or any other person;
5. Will not be responsible to any member of the Bank Group for the
due execution, legality, validity, enforceability, genuineness,
perfection, sufficiency, or value of this Agreement, the Notes,
or any other certificate, instrument, or document furnished
pursuant to this Agreement, and
6. Will have no liability under this Agreement or otherwise by
acting upon any notice, consent, certificate, or other
instrument, document, or other writing (whether personally
delivered or sent by mail, messenger, telegram, telex, or
facsimile) believed by the Agent to be genuine and signed by the
proper person.
C. Rights of Agent as a Member of the Bank Group. With respect to its
individual commitment, the Advances made by it, and the Note and
Guaranty issued to it, the Agent will have the same rights, powers,
and obligations under this Agreement as any other member of the Bank
Group and may exercise and perform the same as though it were not also
the Agent. The Agent and its affiliates may accept deposits from,
lend money to, act as trustee for, and generally engage in any
business with or own securities of the Contran Companies as if the
Agent were not the Agent for the Bank Group and without any obligation
to account therefor to the Bank Group.
D. Independent Credit Decision. Each member of the Bank Group
acknowledges that it has made its own credit analysis and decision
before making its commitment on the basis of such documents and
information that it deemed appropriate and without reliance on any
information, analysis, or recommendation made by the Agent. Each
member of the Bank Group also acknowledges that it will continue to
make such independent credit analyses and decisions in taking or not
taking action under this Agreement. Except for the notices, reports,
and other documents and information that the Agent is specifically
required to furnish to the members of the Bank Group under this
Agreement, the Agent will have no obligation to provide to the members
of the Bank Group any additional information concerning the financial
condition, business operations, or property of the Contran Companies
that may come into the possession of the Agent or its affiliates.
E. Indemnification. Each member of the Bank Group agrees to indemnify
and hold harmless the Agent from and against such member's Percentage
Interest of all claims and causes of action (and any resulting loss,
damage, liability, cost, and expense, including penalties, damages,
liens and reasonable attorney fees and other defense costs) of any
kind or nature whatsoever that (i) may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising from this
Agreement, (ii) are not reimbursed to the Agent by the Contran
Companies, and (iii) are not the result of the Agent's gross
negligence or willful misconduct. Without limiting the generality of
the foregoing, each member of the Bank Group agrees to reimburse the
Agent for its Percentage Interest of any reasonable out-of-pocket
expenses, including reasonable attorney fees, incurred by the Agent in
connection with the preparation, administration, enforcement, or legal
advice with respect to rights or duties under, the Loan Documents to
the extent that such expenses are not reimbursed by the Contran
Companies.
F. Successor Agent. The Agent may resign at any time by giving at least
60 days' prior written notice to the Bank Group and to the Contran
Companies. Upon resignation, the Bank Group Majority will appoint a
successor Agent. If no successor Agent has been appointed and
accepted its appointment within 30 days of receipt of the notice of
resignation of the Agent, then the Agent may appoint its successor
which shall be a national bank having combined capital and surplus of
at least $100 million. Upon acceptance by the successor of its
appointment, such successor will succeed to and become vested with all
of the rights, powers, privileges, and duties of the Agent and the
retiring or removed Agent will be discharged from its obligations as
the Agent under this Agreement.
G. Sharing of Payments and Recoveries. If any member of the Bank Group
obtains any payment (whether voluntary, involuntary, by way of offset,
or otherwise) on account of the Note held by it and such payment is in
excess of its Percentage Interest, such member will purchase from the
other members of the Bank Group such participation in the Notes held
by them as is necessary to cause such purchasing member of the Bank
Group to share the excess payment ratably with the other members of
the Bank Group. If such member is thereafter required to return all
or any part of the excess payment, then the purchase of participation
by such member of the Bank Group will be rescinded to the same extent
and the purchase price of such participation (or so much thereof as is
recovered) will be refunded.
H. Modifications, Consents, and Waivers. Except as allowed or limited
by the remainder of this section, the Bank Group Majority may in
specific instances modify the terms and conditions of this Agreement,
grant consents requested by the Contran Companies, waive compliance by
the Contran Companies with the terms and conditions of this Agreement
but any such modifications, consent, or waiver must be in writing to
be effective.
Notwithstanding any other term or conditions of the Loan Documents, no
modification, consent, or waiver may, unless such modification,
consent, waiver, release, or termination is in writing and is signed
by all members of the Bank Group:
1. Waive any of the conditions precedent specified in Article III of
this Agreement;
2. Increase or decrease the individual commitment of any member of
the Bank Group, or otherwise subject any member of the Bank Group
to any additional obligations without such bank's consent
3. Reduce the amount payable on any Note (including principal,
interest, or fees);
4. Extend the Expiry Date or the Maturity Date;
5. Change the definition of "Bank Group Majority" or modify this
section; or
6. Authorize the release or termination of any Guaranty or the
security interest of the Bank Group in any material or essential
part of or interest in the Pledged Securities.
Notwithstanding the foregoing, the Bank Group Majority will have the right
to authorize the Agent to release parts of and/or interests in Pledged
Securities from time to time to accommodate ordinary course of business
transactions by the Contran Companies and the Agent may release additional
pledged securities as provided in 'II.B.10 of this Agreement as long as the
LTV is maintained at or above 50%.
X. MISCELLANEOUS.
A. Binding Successors. The Loan Documents will bind the successors and
assigns of the Contran Companies and will bind and inure to the
benefit of the successors and assigns of each member of the Bank Group
and the Agent.
B. Participants and Assignees. Each member of the Bank Group will be
entitled to sell no more than 75% participation in its percentage
interest in the Loan Documents (including the Advances made
thereunder) and will be entitled to propose to the Contran Companies
partial assignment of its rights and delegation of its duties to no
more than two financial institutions. While the Contran Companies
will have the right prior to a Default or Prospective Default to
consent to any such assignment and delegation, each Contran Company
covenants that its consent will not be unreasonably withheld.
Upon the sale of a participation or a partial assignment, the
participant or assignee shall be entitled to receive directly from the
Contran Companies copies of all reports, certificates and other
information, including the financial statements, as and when such
information is provided to the member of the Bank Group participating
or assigning such interest.
C. Non-Waiver. No term or condition of the Loan Documents shall be
deemed waived nor shall the grounds for the claim of estoppel be
established by a course of performance, oral understanding or other
circumstances. Terms and conditions may be waived or amended only in
writing executed by the Bank Group or, in appropriate circumstances,
the Bank Group Majority.
D. Communications. Whenever any communication is required by the terms
of the Loan Documents or by law, it will be deemed delivered when
delivered personally or by facsimile machine or on the third Banking
Day after it is mailed in a postage prepaid envelope addressed to the
intended recipient at the address specified below or such other
address as a party may hereafter specify by written notice to the
other parties.
E. Costs. The Contran Companies will pay on demand all reasonable direct
costs and expenses, including reasonable attorney fees, incurred by
the Agent in drafting, negotiating, modifying and reviewing the Loan
Documents.
F. Counterparts. The Loan Documents may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all
of which, taken together shall constitute one and the same contract.
G. Statutory Statement. Under Oregon Law, most agreements, promises and
commitments made by a financial institution after October 3, 1989,
concerning Advances and other credit extensions which are not for
personal, family or household purposes or secured solely by the
borrower's residence must be in writing, express consideration and be
signed by the financial institution to be enforceable.
UNITED STATES NATIONAL BANK CONTRAN CORPORATION
OF OREGON, as the Agent
By /s/ Janice T. Thede By /s/ Steven L. Watson
--------------------------- ---------------------------
Janice T. Thede Steven L. Watson
Vice President Vice President
NATIONAL CITY LINES, INC.
By /s/ Steven L. Watson
---------------------------
Steven L. Watson
Vice President
VALHI GROUP, INC.
By /s/ Steven L. Watson
---------------------------
Steven L. Watson
Vice President
UNITED STATES NATIONAL BANK Commitment Amount $30,000,000
OF OREGON
By /s/ Janice T. Thede
---------------------------
Janice T. Thede
Vice President
SOCIETE GENERALE,
SOUTHWEST AGENCY Commitment Amount $10,000,000
By /s/ Richard M. Lewis
---------------------------
Richard M. Lewis
LOAN AND PLEDGE AGREEMENT
THIS LOAN AND PLEDGE AGREEMENT (hereinafter referred to as this
"Agreement"), executed on the 18th day of August, 1986, by and between DIXIE
RICE AGRICULTURAL CORPORATION, INC., a Louisiana corporation (hereinafter
referred to as the "Borrower"), and SOUTHERN METHODIST UNIVERSITY, a Texas non-
profit corporation (hereinafter referred to as "SMU").
W I T N E S S E T H:
WHEREAS, Borrower has requested that SMU extend a revolving line of credit
in the amount of S1,500,000.00 to be secured by certain of Borrower's marketable
securities and SMU is willing to extend such line of credit on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
1. COMMITMENT OF SMU. Subject to the terms and conditions hereinafter
set forth, SMU agrees, at any time and from time to time during the period
beginning on the date of this Agreement and continuing through and including
June 30, 1996, to make one or more advances (hereinafter collectively referred
to as the "Advances") to Borrower under a revolving line of credit (the
"Commitment"). The aggregate amount of the Advances outstanding at any one time
shall not exceed the sum of $1,500,000.00. Each Advance under the Commitment
shall be subject to satisfactory compliance by Borrower with all provisions of
this Agreement including the procedure for requesting Advances set forth in
Section 7 hereof. Within the limits of the Commitment, Borrower may borrow,
repay and reborrow without penalty or premium. Notwithstanding any other
provision of this Agreement, no Advance shall be required to be made hereunder
if any Event of Default (as hereinafter defined) has occurred and is continuing,
or if any event or condition has occurred that may, with notice or the passage
of time, be an Event of Default.
2. NOTE EVIDENCING BORROWINGS. The Commitment shall be evidenced by a
promissory note of Borrower, in form and substance satisfactory to SMU, such
note bearing interest and being payable as set forth in Exhibit "A" attached
hereto and made a part hereof by reference for all purposes, with appropriate
insertions (hereinafter referred to as the "Note").
3. PLEDGE OF COLLATERAL. In consideration of the Commitment and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, Borrower hereby grants, assigns, transfers and sets
over to SMU a continuing security interest in and to the collateral described in
this Agreement (hereinafter referred to as the "Collateral"), and the
certificates representing the Collateral. Collateral includes, without
limitation, (a) all money, instruments and property of Borrower this day
delivered to and deposited with SMU, and all money, instruments and property of
Borrower heretofore delivered or which shall hereafter be delivered to or come
into the possession, custody or control of SMU in any manner or for any purpose
whatever during the existence of this Agreement, (b) any additional Shares
(defined herein) which may be delivered to SMU after the date hereof pursuant to
the agreement contained herein, and (c) the proceeds of any and all such
property.
4. SECURED INDEBTEDNESS. The security interest granted herein is given
to ratably secure the performance and payment of Borrower's obligations,
liabilities and indebtedness arising under or in connection with the Note and
this Agreement (hereinafter referred to as the "Secured Indebtedness").
5. COLLATERAL. The, word "Shares," as used herein, shall mean collectively
any and all shares of stock listed for trading and actively traded on the New
York Stock Exchange or American Stock Exchange or real-time reported NASDAQ
securities or such other securities as may be acceptable to SMU, which Borrower
has deposited with SMU contemporaneously with, or prior to, the execution of
this Agreement, and such additional shares of stock that Borrower may from time
to time in the future deposit with SMU pursuant to the terms of this Agreement.
SMU may, at its option, give written or telegraphic notice to any and all
parties issuing the Shares or having in their possession any Collateral for
which they or others are accountable to Borrower, to hold and dispose of such
Collateral for the account of SMU and to send such Collateral directly to SMU at
its address shown herein, and to thereafter treat and regard SMU as the assignee
and transferee of Borrower and entitled in its place and stead to receive any
and all Collateral. Without in any way limiting the effectiveness of the
authorization and direction in the next preceding sentence, if Borrower shall
receive any such Collateral which is hereby receivable by SMU, Borrower shall
hold the same in trust and shall remit and deliver, or cause to be remitted and
delivered, such Collateral immediately and forthwith, to SMU. SMU shall have no
responsibility whatsoever to obtain the deposit of such Collateral. The
inclusion of proceeds in this Agreement does not authorize Borrower to sell,
transfer, dispose of or otherwise use the Collateral in any manner not
specifically authorized herein.
Borrower covenants and agrees with SMU that so long as any Secured
Indebtedness is outstanding, it will deposit and maintain on deposit with SMU
Shares which at all times are valued at not less than two hundred percent (200%)
of the outstanding principal balance of the Note (the "Minimum Value"), as
determined by daily closing market price quotations (either last trade or
average of last bid and asked prices) from the New York Stock Exchange, American
Stock Exchange, NASDAQ or other regularly published source. Any Shares not
traded on a particular day shall be valued as of such day at the average
(weighted by days elapsed) of the values of such Shares on the next preceding
and next following days on which such Shares are traded. In the event on the
last day of any March, June, September or December (hereinafter referred to as a
"Determination Date"), commencing September 30, 1986, the value of the Shares
deposited with SMU as so determined falls below the Minimum Value, Borrower
covenants and agrees to deposit with SMU within ten (10) days following such
Determination Date additional Shares sufficient to increase the value of the
Shares to at least the Minimum Value. In the event, on any Determination Date,
the value of the Shares deposited with SMU exceeds two hundred ten percent
(210%) of the outstanding principal balance of the Note (the "Maximum Value"),
SMU agrees to promptly deliver to Borrower sufficient Shares selected by SMU in
its sole discretion to reduce the value of the Shares to below the Maximum
Value.
6. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
SMU that:
(a) Corporate Existence. Borrower is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction
in which it is incorporated and is duly qualified as a foreign corporation
in all jurisdictions wherein the property owned or to the best of its
knowledge the business transacted by it makes such qualification necessary;
(b) Corporate Power and Authorization. Borrower is duly authorized
and empowered to execute and deliver this Agreement, and to create and
issue the Note, and all corporate and other action on the part of Borrower
for the due creation and issuance of the Note and for the due execution,
delivery and performance of this Agreement has been duly and effectively
taken;
(c) Binding Obligations. This Agreement does, and the Note upon its
creation, issuance, execution and delivery will, constitute valid and
binding obligations of Borrower, enforceable in accordance with their terms
(except that enforcement may be subject to any applicable bankruptcy,
insolvency or similar laws generally affecting the enforcement of
creditors' rights and subject to availability of equitable remedies);
(d) No Legal Bar or Resultant Lien. This Agreement and the Note do
not and will not violate any provisions of any contract, agreement, law,
regulation, order, injunction, judgment, decree or writ to which Borrower
is subject, or result in the creation or imposition of any lien or other
encumbrance upon any assets or properties of Borrower, other than those
contemplated by this Agreement;
(e) No Consent. Borrower's delivery and performance of this
Agreement and the Note do not require the consent or approval of any other
person or entity, including without limitation any regulatory authority or
governmental body of the United States or any state thereof or any
political subdivision of the United States or any state thereof;
(f) Investments and Guaranties. Borrower has made no investments in,
advances to or guaranties of the obligations of any person or entity,
except as reflected in its most recent Financial Statements (defined
herein) delivered to SMU. As used herein, the term "Financial Statements"
shall mean balance sheets, income statements and appropriate footnotes and
schedules, prepared in accordance with generally accepted accounting
principles and consistent with prior periods.
(g) Liabilities. Except for liabilities incurred in the normal
course of business, Borrower has no material (individually or in the
aggregate) liabilities, direct or contingent, except as disclosed or
referred to in the Financial Statements. Except as described in the
Financial Statements, there is no litigation, legal or administrative
proceeding, investigation or other action of any nature pending or, to the
knowledge of Borrower, threatened against or affecting Borrower which
involves the possibility of any judgment or liability not fully covered by
insurance, and which might be reasonably expected to have a Material
Adverse Effect (defined herein). As used herein, the term "Material
Adverse Effect" shall mean any material and adverse effect on (i) the
assets or properties, liabilities, financial condition, business,
operations, affairs or circumstances of Borrower from those reflected in
the Financial Statements or from the facts represented or warranted in this
Agreement, or (ii) the ability of Borrower to carry out its business as at
the date of this Agreement or as proposed at the date of this Agreement to
be conducted or to meet its obligations under the Note or this Agreement on
a timely basis. No unusual or unduly burdensome restrictions, restraint,
or hazard exists by contract, law or governmental regulation or otherwise
relative to the business, assets or properties of Borrower, except as known
to affect its industry generally, which might reasonably be expected to
have a Material Adverse Effect;
(h) Taxes: Governmental Charges. Borrower has filed all tax returns
and reports required to be filed and has paid taxes, assessments, fees and
other governmental charges levied upon it or upon any of its assets,
properties or income which are due and payable, including interest and
penalties, or has provided adequate reserves, if required, in accordance
with generally accepted accounting principles for the payment thereof,
except such as are being contested in good faith by appropriate proceedings
and for which adequate reserves for the payment thereof as required by
generally accepted accounting principles have been provided;
(i) Titles, etc. Borrower has good and marketable legal and
beneficial title to the Collateral and to its assets and properties, free
and clear of all liens or other encumbrances except those referred to in
the Financial Statements, and those heretofore disclosed to SMU in writing,
and has the right to transfer any and all interests therein;
(j) Defaults. Borrower is not in default and no event or
circumstance has occurred which, but for the passage of time or the giving
of notice, or both, would constitute a default under any loan or credit
agreement, indenture, mortgage, deed of trust, security agreement or other
agreement or instrument in any respect that might be reasonably expected to
have a Material Adverse Effect. No Event of Default hereunder has occurred
and is continuing;
(k) Casualties; Taking of Properties. Since the dates of the
Financial Statements neither the business nor the assets or properties of
Borrower has been materially and adversely affected as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of property or
cancellation of contracts, permits or concessions by any domestic or
foreign government or any agency thereof, riot, activities of armed forces
or acts of God or of any public enemy;
(1) Use of Proceeds; Margin Stock. The proceeds of the Note will be
used by Borrower solely (i) to provide funds for working capital, (ii) to
provide funds for repayment of existing loans, or (iii) other general
corporate purposes. Borrower will not use any part of the proceeds of the
Note for the purpose of "purchasing" or "carrying" any "margin stock" as
such terms are defined in Regulations U, G, T or X of the Board of
Governors of the Federal Reserve System, or for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or
carry a margin stock or for any other purpose which might constitute this
transaction a "purpose credit" within the, meaning of said Regulation U.
Borrower is not engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock. Neither Borrower nor any person or
entity acting on behalf of Borrower has taken or will take any action which
might cause the loans hereunder to violate Regulation U or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate the Securities Exchange Act of 1934 or any rule or regulation
thereunder, in each case as now in effect or as the same may hereafter be
in effect;
(m) Compliance with the Law. Borrower:
(i) is not in violation of any law, judgment, decree, order,
ordinance, or governmental rule or regulation to which Borrower or any
of its assets or properties is subject; or
(ii) has not failed to obtain any license, permit, franchise or
ether governmental authorization necessary to the ownership of any of
its assets or properties or the conduct of its business;
which violation or failure might reasonably be expected to have a Material
Adverse Effect;
(n) No Material Misstatements. No information, exhibit or report
furnished by Borrower to SMU in connection with the negotiation of this
Agreement contains any material misstatement of fact or omits to state a
material fact or any fact necessary to make the statement contained therein
not misleading;
(o) Subsidiaries. Borrower has no subsidiaries other than Dixie
Equipment Leasing, Inc.;
(p) Investment Company Act. Borrower is not an "investment company"
or a company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(q) Public Utility Holding Company Act. Borrower is not a "holding
company", or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company," or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended;
(r) Shares Freely Transferable. The Shares described herein and
delivered to SMU as Collateral (i) are genuine, free from adverse liens,
claims, mortgages, pledges, encumbrances, or restrictions on transfer
whatsoever (including restrictions imposed under federal and state
securities laws), other security interests, default, prepayment or any
legal or equitable defenses, and (ii) comply with applicable laws
concerning form, content and manner of preparation and execution; and
(s) Warranty. The Collateral is not subject to the interests of any
third person, and Borrower will defend the Collateral and its proceeds
against the claims and demands of all third persons.
7. CONDITIONS OF LENDING. The obligation of SMU to make Advances
hereunder shall be subject to the conditions precedent that:
(a) Requests for Advances. At the time of requesting any Advance
hereunder, Borrower shall comply with the following procedure:
(i) Borrower shall deliver to SMU a certificate in form and
substance satisfactory to SMU, and substantially in the form of
Exhibit "B" attached hereto, stating the amount of the requested
Advance, the date of the requested Advance, and describing the
Collateral in sufficient detail to permit SMU to determine the market
value of such Collateral at such date;
(ii) SMU shall, as promptly as practicable, evaluate the proposed
Collateral to determine if, in its sole discretion, it is willing to
accept such Collateral as security for the Commitment;
(iii) In the event SMU determines that the proposed
Collateral has a market value at such date of at least two hundred
percent (200%) of the amount of the requested Advance and if SMU is
otherwise willing to accept such Collateral, SMU shall advise Borrower
of its decision, and shall make the Advance no later than thirty
(30)days thereafter, and
(iv) Borrower shall deposit with SMU the original certificates
evidencing its ownership of the Collateral together with stock powers
properly executed in favor of SMU.
(b) Representations and Warranties. The representations and
warranties of Borrower under this Agreement Shall be true and correct in
all material respects as of each such date, as if then made (except to the
extent that such representations and warranties relate solely to an earlier
date);
(c) No Event of Default. No Event of Default shall have occurred and
be continuing nor shall any event have occurred or fail to occur which,
with the passage of time or service of notice, or both, would constitute an
Event of Default;
(d) Other Documents. SMU shall have received such other instruments
and documents incidental and appropriate to the transaction provided for
herein as SMU or its counsel may reasonably request, and all such documents
shall be in form and substance satisfactory to SMU;
(e) Corporate Resolutions. On or before the closing of the
transaction contemplated by this Agreement, SMU shall have received
appropriate corporate authorizations and evidence of existence and good
standing for Borrower to enter into this Agreement and the Note and to
perform its obligations hereunder; and
(f) Legal matters satisfactory. On or before the closing of the
transaction contemplated by this Agreement, Borrower shall have delivered
to SMU an opinion of counsel from Borrower's counsel in form and substance
satisfactory to SMU (i) as to the matters (as of the date of such opinion)
set forth in Subsections 6(a), (b), (c), (d), (e), (g) and (m) hereof, and
(ii) as to such other matters as SMU or its counsel may reasonably request.
All legal matters incident to the consummation of the transactions
contemplated hereby shall be satisfactory to counsel for SMU.
8. AFFIRMATIVE COVENANTS. Without the prior written consent of SMU,
Borrower will at all times comply with the following affirmative covenants from
the date hereof and for 30 long as any part of the Note is outstanding.
(a) Annual Financial Statements and Certificates of
Compliance. Within 120 days after the end of each fiscal year of Borrower,
Borrower will furnish or cause to be furnished to SMU (1) annual unaudited
Financial Statements of Borrower, prepared in accordance with generally
accepted accounting principles, consistent with prior periods, and (2) a
certificate signed by Borrower (i) stating that Borrower has fulfilled in
all material respects its obligations under this Agreement and the Note and
that all representations and warranties made herein continue to be true and
correct in all material respects (or specifying the nature of any change)
or if an Event of Default has occurred, specifying the Event of Default and
the nature and status thereof; (ii) to the extent requested from time to
time by SMU, specifically affirming compliance of Borrower in all material
respects with any of the representations or obligations under said
instruments; and (iii) containing or accompanied by such financial or other
details, information and material as SMU may reasonably request to evidence
such compliance;
(b) Taxes and Other Liens. Borrower will pay and discharge promptly
all taxes, assessments and governmental charges or levies imposed upon
Borrower or upon the income or any assets or property of Borrower as well
as all claims of any kind (including claims for labor, materials, supplies
and rent) which, if unpaid, might become a lien or other encumbrance upon
any or all of the assets or property of Borrower, provided, however, that
Borrower shall not be required to pay any such tax, assessment, charge,
levy or claim if the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate proceedings diligently
conducted and if Borrower shall have set up reserves therefor adequate, if
required, under generally accepted accounting principles;
(c) Further Assurances. Borrower will cure promptly any defects in
the creation and issuance of the Note and the execution and delivery of
this Agreement. Borrower, at its expense will promptly execute and deliver
to SMU upon request all such other and further documents, agreements and
instruments in compliance with or accomplishment of the covenants and
agreements in this Agreement, or to correct any omissions in the Note or
more fully to state the obligations set out herein;
(d) Performance of Obligations. Borrower will pay the Note and other
obligations incurred by it hereunder according to the reading, tenor and
effect thereof and hereof; and Borrower will do and perform every act and
discharge all of the obligations provided to be performed and discharged by
Borrower hereunder, at the time or times and in the manner specified;
(e) Reimbursement of Expenses. Borrower will, upon request, promptly
reimburse SMU for all amounts expended, advanced or incurred by SMU to
satisfy any obligation of Borrower under this Agreement, or to protect the
assets or business of Borrower or to collect the loans made hereunder, or
to enforce the rights of SMU under this Agreement, which amounts will
include all court costs, attorneys' fees, fees of auditors and accountants,
and investigation expenses reasonably incurred by SMU in connection with
any such matters, together with interest at either (i) the highest lawful
rate permitted by law an each such amount from the date that the same is
expended, advanced or Incurred by SMU until the date of reimbursement to
SMU, or (ii) if no Event of Default shall have occurred and be continuing,
the pre-maturity rate specified in the Note on each such amount from the
date that the same is expended, advanced or incurred by SMU until ten (10)
days following the earlier of the date of mailing or delivery of written
demand or request by SMU for the reimbursement of same, and thereafter at
the rate specified in clause (i) above until the date of reimbursement to
SMU. In the event SMU elects to pay such amounts and Borrower falls to
reimburse SMU therefor as provided in this Subsection, SMU may make
advances at its own initiation for the account of Borrower on the Note to
provide for such reimbursement, without the necessity of a request for
advance from Borrower, and such advances shall be a part of the
indebtedness of Borrower under this Agreement;
(f) Accounts and Records. Borrower will keep books of record and
account in which full, true and correct entries will be made of all
dealings or transactions in relation to its business and activities,
prepared in a manner consistent with prior years;
(g) Right of Inspection. Borrower will permit any officer, employee
or agent of SMU to examine Borrower's books of record and accounts, and
take copies and extracts therefrom, all at such reasonable times and as
often as SMU may request; and
(h) Notice of Certain Events. Borrower shall promptly notify SMU if
Borrower learns of the occurrence of (i) any event which constitutes an
Event of Default, together with a detailed statement by Borrower of the
steps being taken to cure the Event of Default; or (ii) the receipt of any
notice from, or the taking of any other action by the holder of any
promissory note, or other evidence of indebtedness of Borrower with respect
to a claimed default, together with a detailed statement by Borrower
specifying the notice given or other action taken by such holder and the
nature of the claimed default and what action Borrower is taking or
proposes to take with respect thereto; or (iii) any legal, judicial or
regulatory proceedings affecting Borrower or any of the assets or
properties of Borrower in which the amount involved is material and is not
covered by insurance or which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect; or (iv) any dispute between
Borrower and any governmental or regulatory body or any other person or
entity which, if adversely determined, might reasonably be expected to
cause a Material Adverse Effect, except as known to affect the oil and gas
industry generally.
9. NEGATIVE COVENANTS. Without the prior written consent of SMU,
Borrower will at all times comply with the following negative covenants from the
date hereof and for so long as any part of the Note is outstanding;
(a) Proceeds of Note. Borrower will not permit the proceeds of the
Note to be used for any purpose other than as provided in subsection 6(l)
above;
(b) Nature of Business. Borrower will not permit any material change
to be made in the character of its business as carried on at the date
hereof; and
(c) Mergers, Etc. Borrower will not merge or consolidate with or
sell, assign, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets or properties (whether now owned or hereafter acquired) to, any
person or entity (i) unless the stockholders' equity of the successor
entity (whether or not Borrower) is equal to or greater than the
stockholders' equity of Borrower immediately before such transaction and
the successor entity becomes or remains liable for all of Borrower's
obligations hereunder, and (ii) except that Borrower may sell its output in
the ordinary course of business.
10. EVENTS OF DEFAULT.
(a) Any one or more of the following events shall be considered an
"Event of Default" as that term is used herein:
(i) Borrower shall fail to pay when due the principal of or
interest on the Note or any other indebtedness of Borrower incurred
pursuant to this Agreement;
(ii) Any representation or warranty made herein or in any
certificate or statement furnished or made to SMU pursuant hereto, or
in connection herewith, or in connection with any document furnished
hereunder, shall prove to be untrue in any material respect as of the
date on which such representation or warranty is made, or any
representation, statement (including financial statements),
certificate, report or other data furnished or made by Borrower
hereunder proves to have been untrue in any material respect, as of
the date of which the facts therein set forth were stated or
certified;
(iii) Default shall be made in the due observance or
performance of any of the covenants or agreements of Borrower
contained herein and such default shall continue for more than thirty
(30) days;
(iv) Default shall be made in respect of any obligation for
borrowed money, other than the Note, for which Borrower is liable
(directly, by assumption, as guarantor or otherwise), or any
obligations secured by any mortgage, pledge or other security
interest, lien, charge or encumbrance with respect thereto, on any
asset or property of Borrower or in respect of any agreement relating
to any such obligation, and such default shall continue for more than
thirty (30) days;
(v) Borrower shall (a) apply for or consent to the appointment
of a receiver, trustee, intervenor or liquidator of itself, or of an
or a substantial part of its assets or (b) be adjudicated a bankrupt
or insolvent or file a voluntary petition in bankruptcy, or admit in
writing that it is unable to pay its debts as they become due, or (c)
make a general assignment for the benefit of creditors, or (d) file
petition or answer seeking reorganization or an arrangement with
creditors, or to take advantage of any bankruptcy, reorganization or
insolvency proceedings;
(vi) An order, judgment or decree shall be entered by any court
of competent jurisdiction or other competent authority appointing a
receiver, trustee, intervenor or liquidator of Borrower or of all or
substantially all of Borrower's assets, and such order shall not be
discharged within a sixty (60) day period;
(vii) Borrower discontinues its usual business;
(viii) A judgment for the payment of money in excess of
$25,000 is rendered by any court or other governmental body against
Borrower and Borrower does not discharge the judgment or provide for
its discharge in accordance with its terms, or procure a stay of
execution thereof within thirty (30) days from the date of entry
thereof, and within said period of thirty (30) days from the date of
entry thereof or such longer period during which execution of such
judgment shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal while providing such
reserves therefor as may be required under generally accepted
accounting principles;
(ix) Any event shall occur which could, with the passage of
thirty (30) days, mature into an Event of Default hereunder (upon the
occurrence of which, Borrower shall give SMU written notice thereof);
(x) The value of the Shares described herein, on any
Determination Date, as determined pursuant to Section 5 hereof, shall
be less than the Minimum Value, and Borrower shall fail to provide
additional Shares pursuant to its agreement herein within ten (10)
days thereafter sufficient to increase the value of the Shares to at
least the Minimum Value; or
(xi) Legal or beneficial ownership of more than fifty percent
(50%) of the outstanding voting shares of capital stock of Borrower or
any successor entity permitted under Subsection 9(c) is transferred to
or otherwise acquired by persons or entities other than the persons or
entities now legally and beneficially owning such shares.
(b) Upon the occurrence of any Event of Default specified in
subparagraphs(a)(v) or (a)(vi) the entire principal amount due under the
Note and all interest then accrued thereon, and any other liabilities of
Borrower hereunder, shall become immediately due and payable all without
notice and without presentment, demand, protest, notice of protest or
dishonor or any other notice of default of any kind, all of which are
hereby expressly waived by Borrower. In any other Event of Default, SMU
may declare the principal of, and all interest then accrued on, the Note
and any other liabilities hereunder to be forthwith due and payable,
whereupon the same shall forthwith become due and payable without
presentment, demand, protest or other notice of any kind, all of which
Borrower hereby expressly waives, anything contained herein or in the Note
to the contrary notwithstanding. Nothing contained herein shall be
construed to limit or amend in any way the Events of Default enumerated in
the Note, or any other documents executed in connection with the
transaction contemplated herein.
(c) Upon the occurrence of an Event of Default, and at anytime
thereafter SMU shall have, then or at any time thereafter, all of the
rights and remedies of a secured party under the Texas Uniform Commercial
Code in force on the date of execution of this Agreement; and SMU may, in
its sole discretion, sell, transfer, assign and deliver all or any part of
the Collateral at public or private sale, and thereafter, SMU may bring
suit for any deficiency remaining after any public or private sale of the
Collateral.
(d) This Agreement, SMU's rights hereunder and/or the Secured
Indebtedness, or any part thereof, may be assigned from time to time by
SMU. SMU may at any time following the occurrence of an Event of Default
hereunder (i) transfer the Collateral to SMU or its nominee, pursuant to
the applicable provisions of the Texas Uniform Commercial Code, and/or (ii)
receive income, including money, thereon and hold the income as Collateral
or apply the income to the payment of the Secured Indebtedness, or any part
thereof; the manner and distribution of the application to be in the sole
and absolute discretion of SMU. SMU may delay or refrain from exercising
any right or remedy under this Agreement without waiving that or any other
right or remedy of hereunder.
11. EXERCISE OF RIGHTS. No failure to exercise, and no delay in
exercising, on the part of SMU, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right. The rights of SMU
hereunder shall be in addition to all other rights provided by law. No
modification or waiver hereof or of any provision of the Note, nor consent to
departure therefrom, shall be effective unless in writing, and no such consent
or waiver shall extend beyond the particular case and purpose involved. No
notice or demand given in any case shall constitute a waiver of the right to
take other action in the same, similar or other instances without such notice or
demand.
12. NOTICES. If notice to Borrower of the public sale or private sale or
other disposition of the Collateral is required by the Texas Uniform Commercial
Code, such notice shall be sufficient If SMU gives written notice to Borrower
five (5) days prior to the date of any public sale of the Collateral or five
(5). days prior to the date after which any private sale or other disposition of
the Collateral win be made. Any notices or other communications required or
permitted to be given by this Agreement or any other documents and instruments
referred to herein must be given in writing and must be personally delivered or
mailed by prepaid certified or registered mail to the party to whom such notice
or communication is directed at the address of such party as follows: (a)
BORROWER: 4835 LBJ Freeway, Suite 600, Dallas, Texas 75244, Attention: Chief
Executive Officer; or (b) SMU: P.O. Box 193, SMU Station, Southern Methodist
University, Dallas, Texas 75275, Attention: Vice President for Finance and
Administration. Any such notice or other communication shall be deemed to have
been given (whether actually received or not) on the day it is personally
delivered as aforesaid or, if mailed, on the day after it is mailed as
aforesaid. Any party may change its address for purposes of this Agreement by
giving notice of such change to all other parties pursuant to this Section.
13. GOVERNING LAW. This Agreement is being executed and delivered, and is
intended to be performed, in Dallas, Texas, and the substantive laws of such
state shall govern the validity, construction, enforcement and interpretation of
this Agreement and all other documents and instruments referred to herein,
unless otherwise specified therein or unless the laws of another state require
the application of the laws of such state.
14. INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, such provisions shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement.
15. MAXIMUM INTEREST RATE.
(a) Regardless of any provisions contained in this Agreement or in
any other documents and instruments referred to herein or any other
instrument or agreement entered into in connection with or as security for
the Note, SMU shall never be deemed to have contracted for or be entitled
to receive, collect or apply as interest on the principal amount evidenced
by the Note, any amount in excess of an amount which would result in
exceeding the maximum rate of interest permitted to be charged by
applicable law. In the event the maturity of the Note is accelerated by
reason of an election of the holders thereof resulting from any Event of
Default under this Agreement, or otherwise, or in the event of any required
or permitted prepayment, then such consideration that constitutes interest
under applicable law may never include more than the maximum amount allowed
by such applicable law, and excess interest, if any, provided for in this
Agreement, the Note or otherwise shall be cancelled automatically as of the
date of such acceleration and if theretofore paid shall be applied to the
reduction of the unpaid principal balance of the Note and if the principal
balance of the Note is paid in full, any remaining excess shall forthwith
be paid to Borrower. In determining whether or not the amount of interest
paid or payable under any specific contingency exceeds an amount which
would result in exceeding the maximum rate of interest permitted under
applicable law, SMU and Borrower shall, to the extent permitted under
applicable law (i) characterize any non-principal payment as an expense,
fee or premium rather thin as interest; and (ii) exclude voluntary
prepayments and the effect thereof; and (iii) compare the total amount of
interest contracted for, charged or received throughout the entire
contemplated term of the Note at the maximum lawful rate under applicable
law.
(b) If at any time and from time to time SMU is prevented from
collecting the rate of interest and the fees specified in the Note, by
applicable law or governmental regulation, it shall be entitled to recoup
the amount it would have otherwise been able to collect when such
recoupment will not violate such applicable law or governmental regulation.
Such recoupment shall be accomplished by Borrower paying interest at the
highest lawful rate until such time as SMU shall have fully recouped the
interest it would have otherwise been able to collect from Borrower in the
absence of such applicable law or governmental regulation. During any such
period of recoupment, interest collected by SMU shall first be credited to
payment of current interest due at the rate specified in the Note, then any
remaining interest collected shall. be applied to recoupment. When SMU
shall have recouped all such interest, the interest rate payable by
Borrower shall revert to the rate specified in the Note. In no event,
however, shall the interest rate charged hereunder ever exceed the maximum
rate of interest permitted by law.
16. ENTIRETY AND AMENDMENTS. This Agreement, the Note, and/or any other
documents and instruments referred to herein, embody the entire agreement
between the parties and supersede all prior agreements and understandings, if
any, relating to the subject matter hereof and thereof, and any provision hereof
or of the Note, may be amended or waived only by an instrument in writing
executed by Borrower and SMU.
17. MULTIPLE COUNTERPARTS: APPROVAL. This Agreement may be executed in a
number of identical separate counterparts, each of which for all purposes is to
be deemed an original, but. all of which shall constitute, collectively, one
agreement. No party to this Agreement shall be bound hereby until (a) a
counterpart of this Agreement has been executed and delivered by all parties
hereto, and (b) the terms and provisions of this Agreement, and the execution
and delivery thereof by SMU, shall have been duly approved by the Investment
Committee of the Board of Governors of SMU.
18. SURVIVAL. All covenants, agreements, undertakings, representations
and warranties made herein, in the Notes or other documents and instruments
referred to herein, shall survive all closings hereunder and shall not be
affected by any investigation made by any party.
19. PARTIES BOUND. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns, heirs,
legal representatives and estates; provided, however, that Borrower may not,
without the prior written consent of SMU, assign any rights, powers, duties or
obligations hereunder.
EXECUTED on the 18th day of August, 1986.
DEBTOR: DIXIE RICE AGRICULTURAL
CORPORATION, INC.
a Louisiana corporation
By: /s/ Michael Snetzer
----------------------------------
Its: Vice President
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SECURED PARTY: SOUTHERN METHODIST UNIVERSITY,
a Texas non-profit corporation
By: /s/ Laurence L. Laundry
----------------------------------
Its: Vice President
----------------------------------
EXHIBIT "A"
PROMISSORY NOTE
$1,500,000.00 Dallas, Texas August 18, 1986
FOR VALUE RECEIVED, the undersigned, DIXIE RICE AGRICULTURAL CORPORATION,
INC., a Louisiana corporation (the "Maker"), hereby unconditionally promises to
pay to the order of SOUTHERN METHODIST UNIVERSITY, a Texas nonprofit corporation
("SMU"), at its offices in University Park, Dallas County, Texas, the principal
sum of ONE MILLION FIVE HUNDRED THOUSAND and NO/100 DOLLARS ($1,500,000.00) or,
if less, the aggregate unpaid balance of all amounts advanced to Borrower
pursuant to that certain Loan and Pledge Agreement of even date herewith by and
between Maker and SMU (the "Loan Agreement"), in lawful money of the United
States of America, together with interest at the lesser of (a) the Maximum Rate
(defined herein) or (b) as follows (the "Contract Rate"):
(i) from the date of this Note and continuing until June 30, 1988,
this Note shall bear interest at the rate of seven and one-half percent (7-
1/2%) per annum;
(ii) From and after June 30, 1988 and continuing until maturity, this
Note shall bear interest at a rate to be determined annually on each June
30 (the "Interest Determination Date"), beginning June 30, 1988. The rate
of interest for the twelve (12) month period immediately following each
Interest Determination Date shall be equal to the greater of (a) seven and
one-half percent (7-1/2%) per annum, or (b) seventy-six percent (.76)
multiplied times the Index (defined herein) for the month including such
Interest Determination Date. As used herein, the term "Index" shall mean
the Shearson Lehman Brothers Inc. Bond Market Report - Corporate Bond Index
- Long Term (Average) Yield (which Index for June 1986 was 9.90 %) or if
same is no longer published, the successor index, if any, or if none is
available, a substantially equivalent index for obligations of the same
maturity and quality as designated by SMU with the consent of Maker, which
consent shall not be unreasonably withheld.
The term "Maximum Rate" as used herein includes, as to Article 5069-1.04,
Vernon's Texas Civil Statutes (and as the same may be incorporated by reference
in other Texas statutes), but otherwise without limitation, the rate based upon
the "indicated rate ceiling." All past due principal and interest of this Note
shall bear interest at the highest lawful rate until paid.
Interest on this Note is due and payable quarterly as it accrues, on the
last day of each September, December, March and June, commencing September 30,
1986. The principal balance of this Note outstanding on June 30, 1996 (the
"Conversion Date"), together with all accrued but unpaid interest, is due and
payable in thirty-nine (39) consecutive quarterly installments, each in the
amount of 1/40th of the principal balance of this Note outstanding on the
Conversion Date, commencing September 30, 1996 and continuing on the last day of
each December, March, June and September thereafter, with one (1) final
installment being due and payable. on June 30, 2006 in an amount equal to the
outstanding principal balance of this Note, plus all accrued but unpaid
interest. All installments of principal and interest are payable at SMU's
office in University Park, Dallas County, Texas.
This Note is executed and delivered pursuant to the Loan Agreement and is
the Note referred to therein, and is secured by capital stock in certain
publicly traded corporations. Reference is made to the Loan Agreement for a
description of the properties pledged and assigned, the nature and extent of the
security and the rights of the parties under the Loan Agreement in respect of
such security. Upon the occurrence of any Event of Default (as such term is
defined in the Loan Agreement), the principal balance hereof and the interest
accrued hereon may be declared to be forthwith due and payable, whereupon the
holder will have the remedies provided in the Loan Agreement.
Regardless of any provision contained in this Note, no holder of this Note
shall ever be entitled to receive, collect or apply, as interest on any amount
owing, hereunder, any amount in excess of the highest lawful rate of interest
permitted to be charged by applicable law, and in the event any holder of this
Note ever receives, collects or applies, as interest, any such excess, such
amount which would be excessive interest shall be deemed a partial prepayment of
principal and treated hereunder as such; and if the principal amount of this
Note is paid in full, any remaining excess shall forthwith be paid to the Maker.
In determining whether or not the interest paid or payable, under any specific
contingency, exceeds the highest lawful rate permitted by law, the undersigned
and any holder of this Note shall, to the maximum extent permitted under
applicable law, (i) characterize any non-principal payment as an expense, fee or
premium rather than as interest, (ii) exclude voluntary prepayments and the
effect thereof, and (iii) compare the total amount of interest contracted for,
charged or received with the total amount of interest which could be contracted
for, charged or received throughout the entire contemplated term of this Note at
the maximum lawful rate under applicable law; provided that if this Note is paid
and performed in full prior to the end of the full contemplated term thereof,
and if the interest received for the actual period of existence hereof exceeds
the highest lawful rate permitted by law, the holder of this Note shall refund
to the undersigned the amount of such excess or credit the amount of such excess
against the principal amount of this Note, and in such event, no holder of this
Note shall be subject to any penalties provided by any laws for contracting for,
charging or receiving interest in excess of the highest lawful rate permitted by
law.
If at any time and from time to time SMU is prevented from collecting the
Contract Rate and the fees specified in this Note, by applicable law or
governmental regulation, it shall be entitled to recoup the amount it would have
otherwise been able to collect when such recoupment will not violate such
applicable law or governmental regulation. Such recoupment shall be
accomplished by the Maker paying interest at the highest lawful rate until such
time as SMU shall have fully recouped the interest it would have otherwise been
able to collect from Maker in the absence of such applicable law or governmental
regulation. During any such period of recoupment, interest collected by SMU
shall first be credited to payment of current interest due at the Contract Rate,
then any remaining interest collected shall be applied to recoupment. When SMU
shall have recouped all such interest, the interest rate payable by Maker shall
revert to the Contract Rate. In no event, however, shall the interest rate
charged hereunder ever exceed the maximum rate of interest permitted by law.
If this Note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceeding at law or in equity or in bankruptcy,
receivership or other court proceedings, Maker agrees to pay all costs of
collection, including but not limited to court costs and reasonable attorneys'
fees.
Maker and each surety, endorser, guarantor and other party ever liable for
payment of any sums of money payable on this Note, jointly and severally waive
presentment and demand for payment, notice of intention to accelerate the
maturity, acceleration, protest, notice of protest and nonpayment, as to this
Note and as to each and all installments hereof, and agree that their liability
under this Note shall not be affected by any renewal or extension in the time of
payment hereof, or in any indulgences, or by any release or change in any
security for the payment of this Note.
MAKER:
DIXIE RICE AGRICULTURAL
CORPORATION, INC.,
a Louisiana corporation
By:
----------------------------------
----------------------------------
Its:
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EXHIBIT "B"
BORROWING CERTIFICATE
This Borrowing Certificate is executed by the undersigned pursuant to that
certain Loan and Pledge Agreement dated August , 1986 (the "Loan Agreement")
---
between Dixie Rice Agricultural Corporation, Inc. (the "Borrower") and Southern
Methodist University (the "Agreement"); and the undersigned hereby certifies and
affirms the accuracy of the following information:
1. Amount of requested Advance: ;
-------------------------
2. Proposed Collateral:
Capital stock of the following corporations, represented by certificates
for the number of shares set forth opposite the name of the respective
corporations, and being listed and actively traded on the exchange or
market set forth opposite the name of the respective corporations:
Corporation Certificate No. No. of Shares Exchange/Market
- --------------- --------------- --------------- ---------------
3. Price per share at date of execution of Certificate and total market value
of such shares based on such price:
Corporation Price per Share Total Market Value
- ------------------ ------------------ ------------------
The undersigned, the duly elected and acting -------------------of the Borrower,
hereby certifies that the conditions set forth in Subsections 7(b) and 7(c) of
the Loan Agreement are met as of the date hereof and has this ------- day of ---
- ---, 19--, executed this Borrowing Certificate for the purpose of obtaining an
Advance under the Agreement.
COLLATERAL AGREEMENT
This Collateral Agreement (the "Agreement") is made by and between Dixie
Rice Agricultural Corporation, Inc., Louisiana corporation ("Dixie"), and
Contran Corporation, Delaware corporation ("Contran"), as of the 20th day of
December, 1988.
W I T N E S S E T H
WHEREAS, Dixie and Southern Methodist University ("SMU") have entered into
that certain Loan and Pledge Agreement dated August 18, 1986 (the "Loan
Agreement"), pursuant to which SMU has agreed to advance Dixie up to
$1,500,000.00 in loans; and
WHEREAS, SMU requires, among other things, that Dixie pledge shares of
stock with a market value of not less than two hundred percent (200%) of the
outstanding principal balance of the loans advanced under the Loan Agreement;
and
WHEREAS, Dixie does not currently hold securities which will qualify as
collateral under the Loan Agreement; and
WHEREAS, Contran has agreed to pledge shares of Valhi, Inc. common stock
owned by Contran, as collateral under the Loan Agreement.
NOW, THEREFORE, in consideration of the mutual premises, representations
and covenants herein contained, the parties hereto mutually agree as follows:
1) Contran agrees to pledge, as collateral under the Loan Agreement,
300,000 shares of Valhi, Inc. common stock owned by Contran, or such
greater number of shares which of at least shall have from time to time a
market value of at least $3,000,000.00 (the "Shares").
2) As consideration for pledging the Shares, Dixie shall pay to
Contran a fee equal to an annual rate of .5% of the average daily principal
loan balance outstanding, during periods in which any portion of the Shares
are pledged, under the Loan Agreement [payable quarterly on each March 31,
June 30, September 30 and December 31].
3) Dixie agrees to indemnify Contran against any loss or incremental
cost resulting from the pledge of the Shares under the Loan Agreement.
4) This Agreement may be terminated by either party hereto by giving
the other party thirty (30) days written notice of such termination.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
DIXIE RICE AGRICULTURAL CORPORATION, INC.
By: /s/ Harold C. Simmons
----------------------------------
Harold C. Simmons
Chairman of the Board
CONTRAN CORPORATION
By: /s/ Michael A. Snetzer
----------------------------------
Michael A. Snetzer
AMENDMENT ONE
TO THE
CONTRAN DEFERRED COMPENSATION TRUST NO. 2
This Amendment, dated this 18th day of December, 1996, by and
between Contran Corporation, a Delaware corporation ("Company") and NationsBank
of Texas, N.A., a national banking association ("Trustee").
WITNESSETH:
WHEREAS, Company and Trustee have previously entered into the Contran
Deferred Compensation Trust No. 2 dated October 1, 1995 ("Trust");
WHEREAS, Company and Trustee desire to amend the Trust in certain respects;
NOW, THEREFORE, the parties hereby amend the Trust as follows:
1.By adding "or Section 5(c)" after "Section 3" in the first line of
Section 4 of the Trust.
2.Section 5(a) is amended to delete the words "may be" from the first line
thereof and to insert the words "real property, securities (including stock or
rights to acquire stock) or obligations issued by Company or subsidiaries of the
Company (provided such securities or obligations are publicly traded)," between
the words "any" and "stocks" in the third line thereof.
3.Section 5(b) is amended in its entirety to read as follows:
"(b) Trustee shall not have any investment discretion with respect to the
assets of the Trust and shall not sell or otherwise dispose of any assets that
are deposited by Contran with the Trust unless it is directed to do so by
Company in writing. All rights associated with assets of the Trust shall be
exercised by Company or the person designated by Company, and shall in no event
be exercisable by or rest with Plan participants. Voting rights with respect to
Trust assets will be exercised by the Company."
4.In all other respects, the provisions of the Trust are hereby ratified
and confirmed.
CONTRAN CORPORATION NATIONSBANK OF TEXAS, N.A.
By: /s/ Steven L. Watson By: /s/ Unreadable
--------------------------- ---------------------------
Title: Vice President Title: Vice President
