Exhibit 10.6
INTERCORPORATE SERVICES AGREEMENT
This INTERCORPORATE SERVICES AGREEMENT (the "Agreement"), effective as of
January 1, 2000, amends and supersedes that certain Intercorporate Services
Agreement effective as of January 1, 1999 between NL INDUSTRIES, INC., a New
Jersey corporation ("NL"), and COMPX INTERNATIONAL INC., a Delaware corporation
("CompX").
Recitals
A. NL provides CompX (i) certain occupancy and related office services
(the "Occupancy and Related Office Services"), which services include, without
limitation, office space that CompX's personnel currently occupy at NL's
corporate offices at Two Greenspoint Plaza, 16825 Northchase Drive, Suite 1200,
Houston, Texas and mail, telecommunication, copying and other reasonable office
services related to such occupancy and (ii) certain insurance, risk management,
loss control, computer support, and internal audit services as set forth in this
Agreement.
B. The terms of this Agreement are no less favorable to CompX than could
otherwise be obtained from a third party for comparable services.
C. CompX desires to continue receiving the services presently provided by
NL and affiliates of NL and NL is willing to continue to provide such services
under the terms of this Agreement.
Agreement
For and in consideration of the mutual premises, representations and
covenants herein contained, the parties hereto mutually agree as follows:
Section 1. Services Provided. NL agrees to make available to CompX the
following services (the "Services") to be rendered by the internal staff of NL
and affiliates of NL:
(a) the Occupancy and Related Office Services (as outlined in Attachment
1);
(b) certain administration and management services with respect to CompX's
insurance and risk management needs, including:
(i) management of claims (including insured and self-
insured workers compensation and liability claims);
(ii) budgeting and related activities;
(iii) coordination of property loss control program; and
(iv) administration of CompX's insurance program, excluding
all employee benefit and welfare related programs;
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(c) consultation and assistance in performing internal audit projects, as
requested;
(d) computer related support services;
(e) such other services as may be requested by CompX or deemed necessary
and proper from time to time; and
(f) use of corporate aircraft.
Section 2. Miscellaneous Services. It is the intent of the parties hereto
that NL provide only the Services requested by CompX in connection with routine
administrative functions related to the ongoing operations of CompX and not with
respect to special projects, including corporate investments, acquisitions and
divestitures. The parties hereto contemplate that the Services rendered in
connection with the conduct of CompX's business will be on a scale comparable to
that existing on the effective date of this Agreement, and that adjustments may
be required to the terms of this Agreement in the event of special projects,
including corporate investments, acquisitions and divestitures. CompX will
continue to bear all other costs required for outside services, and it is
expressly understood that NL assumes no liability for any expenses or services
other than those stated in Section 1.
Section 3. Fee for Services. During the Term (as defined below) of the
Agreement, CompX shall pay to NL an annual fee of $132,800 for the Services
described in subsections 1(a), 1(b), and 1(e) above payable in quarterly
installments of $33,200 plus all out-of-pocket expenses incurred in connection
with the performance of such Services described in subsections 1(b) and 1(e).
CompX will pay to NL within thirty (30) days after receipt of an invoice (such
invoices to occur no more frequently than once per month) an amount equal to the
product of $500 multiplied by the number of days devoted by NL's internal
auditors to providing Services described in subsection 1(c) above times the
number of internal auditors providing such Services plus all out-of- pocket
expenses incurred in their performance of such Services. CompX will pay to NL
within thirty (30) days after receipt of an invoice, an amount equal to the
product of $50 multiplied by the number of hours devoted by NL's information
systems personnel providing such Services described in subsection 1(d) plus all
out-of-pocket expenses incurred in the performance of such Services. Regarding
Services described in subsection 1(f), CompX will pay to NL within thirty (30)
days after receipt of an invoice an amount equal to CompX's share of NL's
corporate aircraft expenses which includes CompX's share of the monthly
management fee (computed on a per hour basis) and actual flight hour costs at a
rate of $1,767 per hour (subject to annual escalation) plus fuel variable
charges, segment fees and excise taxes. Notwithstanding the foregoing, in the
event that CompX determines, in its sole discretion, that it no longer desires
certain of the Services or NL determines, in its sole discretion, that it no
longer desires to provide certain of the Services, then CompX or NL, as
appropriate, shall provide the other party with a thirty (30) day prior written
notice of cancellation describing the Services to be terminated or discontinued
and CompX and NL during such thirty-day period shall agree to a pro-rata
reduction of the fees due hereunder for such terminated or discontinued
Services.
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Section 4. Original Term. Subject to the provisions of Section 5 hereof,
the original term of this Agreement shall be from January 1, 2000 to December
31, 2000.
Section 5. Extensions. This Agreement shall be extended on a
quarter-to-quarter basis after the expiration of its original term unless
written notification is given by NL or CompX thirty (30) days in advance of the
first day of each successive quarter or unless it is superseded by a subsequent
written agreement of the parties hereto.
Section 6. Limitation of Liability. In providing its Services hereunder,
NL shall have a duty to act, and to cause its agents to act, in a reasonably
prudent manner, but neither NL nor any officer, director, employee or agent of
NL or its affiliates shall be liable to CompX for any error of judgment or
mistake of law or for any loss incurred by CompX in connection with the matter
to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of NL.
Section 7. Indemnification of NL by CompX. CompX shall indemnify and hold
harmless NL, its affiliates and their respective officers, directors and
employees from and against any and all losses, liabilities, claims, damages,
costs and expenses (including attorneys' fees and other expenses of litigation)
to which NL or any such person may become subject to arising out of the Services
provided by NL to CompX hereunder, provided that such indemnity shall not
protect any person against any liability to which such person would otherwise be
subject to by reason of willful misfeasance, bad faith or gross negligence on
the part of such person.
Section 8. Further Assurances. Each of the parties will make, execute,
acknowledge and deliver such other instruments and documents, and take all such
other actions, as the other party may reasonably request and as may reasonably
be required in order to effectuate the purposes of this Agreement and to carry
out the terms hereof.
Section 9. Notices. All communications hereunder shall be in writing and
shall be addressed to:
If to NL: NL Industries, Inc.
16825 Northchase Drive, Suite 1200
Houston, Texas 77060
Attention: General Counsel
If to COMPX: CompX International Inc.
16825 Northchase Drive, Suite 1200
Houston, Texas 77060
Attention: Chairman of the Board
or such other address as the parties shall have specified in writing.
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Section 10. Amendment and Modification. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated other than by
agreement in writing signed by the parties hereto.
Section 11. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of NL and CompX and their respective successors and
assigns, except that neither party may assign its rights under this Agreement
without the prior written consent of the other party.
Section 12. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the state of Texas.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
NL INDUSTRIES, INC.
By: /s/ Robert D. Hardy
Robert D. Hardy
Vice President
COMPX INTERNATIONAL INC.
By: /s/ John A. Miller
John A. Miller
Vice President
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Attachment No. 1
A-5
