CREDIT AGREEMENT
BETWEEN
CONTRAN CORPORATION
AS BORROWER
AND
VALHI, INC.
AS LENDER
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is effective as of the Effective Date and is made between
CONTRAN CORPORATION, a Delaware corporation ("Borrower"), and VALHI, INC., a
Delaware corporation ("Lender"). Capitalized terms, unless otherwise expressly
provided herein, are defined in Section 6.1.
RECITALS
A. Subject to the terms and conditions of this Agreement, Borrower has
requested, and Lender has agreed to extend a loan to Borrower (the "Loan") in
the amount of up to ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇-▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ DOLLARS (U.S. $120,000,000.00).
B. This Agreement contains various covenants of Borrower and other
provisions relating to the payment of related costs and expenses. Lender's
obligation to disburse the Loan shall be governed by the terms and conditions
contained in this Agreement.
AGREEMENT
SECTION 1. AMOUNT AND TERMS.
1.1. Commitment.
(a) On the terms and subject to the conditions of this Agreement,
Borrower may from time to time on or after the Effective Date but before
the Maturity Date request Revolving Credit Advances under the credit
facility provided by this Agreement, in an aggregate amount of principal
outstanding not to exceed the Revolving Credit Commitment. The Loan shall
be made by deposit into the Borrower's principal operating account of
immediately available funds.
(b) Each Revolving Credit Advance or Payment shall be in a minimum
amount of $100,000.00 or an integral multiple thereof. Borrower may make
Revolving Credit Payments without prepayment penalties.
(c) Each Revolving Credit Advance shall be made on notice, given not
later than 1:00 p.m. (New York City time) on the second (2nd) Business Day
prior to the date of the proposed Revolving Credit Advance, in accordance
with Section 6.19. Each such notice of a request for a Revolving Credit
Advance shall specify the date and the amount of such advance.
1.2. Interest. Each Revolving Credit Advance shall bear interest on the
unpaid principal amount thereof until payment in full at a rate equal to the
Prime Rate. Any change in the interest rate accruing on the Loan resulting from
a change in the Prime Rate shall become effective as of the opening of business
on the day on which such change shall occur. Interest for each Revolving Credit
Advance shall be calculated on the basis of a 365-day year or 366-day year, as
applicable, all rates calculated for the actual number of days elapsed. Each
determination by Lender of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
1.3. Promissory Note. The Loan shall be evidenced by a promissory note of
the Borrower substantially in the form of Exhibit A to this Agreement (the
"Note").
1.4. Limitations on and Continuance of Interest Rate.
(a) Notwithstanding any of the other provisions of the Loan
Documents, nothing contained in the Loan Documents shall require the
Borrower to pay interest (including fees, charges, expenses or any other
amounts that, under applicable law, are deemed interest) for the account of
Lender or the holder of the Note at a rate exceeding the Maximum Lawful
Rate.
(b) If the amount of any interest (including fees, charges or
expenses or any other amounts that, under applicable law, are deemed
interest) contracted for, charged or received by or for the account of
Lender or the holder of the Note (the "Contract Rate") would exceed the
Maximum Lawful Rate, then, ipso facto, the amount of such interest payable
for the account of Lender or the holder of the Note in respect of such
interest computation period shall be automatically reduced to such Maximum
Lawful Rate, and if, from any such circumstance, Lender or the holder of
the Note shall ever receive interest or anything that might be deemed
interest under applicable law that would exceed the Maximum Lawful Rate,
such amount that would be excessive shall be applied to the reduction of
the principal amount owing on account of the Note or the amounts owing on
other Obligations of the Borrower to Lender or the holder of the Note under
any document executed in connection herewith and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of
principal of the Note and the amounts owing on other Obligations of the
Borrower to Lender or the holder of the Note under any document executed in
connection herewith, as the case may be, such excess shall be refunded to
the Borrower. All sums paid or agreed to be paid to Lender or the holder
of the Note for the use, forbearance or detention of the Indebtedness of
the Borrower to Lender or the holder of the Note shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such Indebtedness until payment in full of the
principal (including the period of any renewal or extension thereof) so
that the interest on account of such Indebtedness shall not exceed the
Maximum Lawful Rate.
(c) If at any time the Contract Rate is limited to the Maximum Lawful
Rate, any subsequent reductions in the Contract Rate shall not reduce the
rate of interest on the Loan below the Maximum Lawful Rate until the total
amount of interest accrued equals the amount of interest that would have
accrued if the Contract Rate had at all times been in effect. In the event
that, upon demand or acceleration of the Note or at final payment of the
Note, the total amount of interest paid or accrued on the Note is less than
the amount of interest that would have accrued if the Contract Rate had at
all times been in effect with respect thereto, then at such time, to the
extent permitted by law, in addition to the principal and any other amounts
Borrower owes Lender under the Loan Documents, the Borrower shall pay to
the holder of the Note an amount equal to the difference between: (i) the
lesser of the amount of interest that would have accrued if the Contract
Rate had at all times been in effect or the amount of interest that would
have accrued if the Maximum Lawful Rate had at all times been in effect;
and (ii) the amount of interest actually paid on such Note.
1.5. Payments; Optional Prepayments.
(a) Interest accrued on the unpaid principal amount of the Loan shall
be due and payable on the last Business Day of each calendar quarter and on
the Maturity Date until the Loan is repaid in full.
(b) The principal amount of the Note and all accrued and unpaid
interest shall be due and payable on August 10, 1998 (the "Maturity Date").
Any principal amounts prepaid by the Borrower may be reborrowed at anytime
upon notice prior to the Maturity Date up to the then current Revolving
Credit Commitment subject to the conditions precedent in Section 2.
1.6. Form of Payments. All payments (including prepayments) on account of
principal and interest shall be made in United States dollars and immediately
available funds. If any payment is scheduled to become due and payable on a
day that is not a Business Day, such payment shall instead become due and
payable on the immediately following Business Day and such extension of time
shall be included in the computation of interest under the Loan Documents.
1.7. Use of Proceeds. The proceeds of this Loan shall be used by the
Borrower: (i) to redeem shares of the Borrower's outstanding stock pursuant to a
settlement agreement arising from that certain civil action styled In re: The
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Family Trust No. 1 (No. 96-306-P) pending in the Probate Court
of Dallas County, Texas (the "Settlement Agreement") and (ii) for other general
corporate purposes of the Borrower.
1.8. Limitation on Indebtedness. The Borrower covenants and agrees that
so long as the Note remains unpaid or any of the Borrower's Obligations remain
unsatisfied under the Loan Documents, the Borrower will not incur, create,
assume, suffer to exist or in any manner become or be liable in respect of any
Indebtedness, liabilities or obligations, except for Permitted Indebtedness.
1.9. Limitation on Liens. The Borrower covenants and agrees that so long
as the Note remains unpaid or any of the Borrower's Obligations remain
unsatisfied under the Loan Documents, the Borrower shall not create, assume,
incur or suffer to exist any Lien on or with respect to any of its property or
assets, whether now owned or hereafter acquired, or assign or otherwise convey
any right of the Borrower to receive income, except that the Borrower may
create, assume, incur or suffer to exist Permitted Liens.
1.10. Other Limitations. The Borrower covenants and agrees during the
term of this Agreement:
(a) to preserve, renew and keep in full force and effect its
corporate existence and rights with respect thereto and maintain in full
force and effect all permits, licenses, trademarks, tradenames, approvals,
authorizations, leases and contracts necessary to carry on the business as
presently or proposed to be conducted;
(b) to continue to conduct and operate its business and financial
affairs substantially as such affairs have been conducted and operated;
(c) to maintain, preserve and protect and keep all of its assets
material to the operation of its business in good condition, reasonable
wear and tear excepted;
(d) to 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;
(e) not to (i) merge into or with or consolidate with any other
Person or permit any other Person to merge into or with or consolidate with
the Borrower unless Borrower is the surviving corporation or the surviving
entity assumes the Obligations, (ii) sell, assign, lease or transfer
(whether in one transaction or a series of transactions) to any Person all
or substantially all of the Borrower's assets unless such Person assumes
the Obligations, (iii) wind up, liquidate or dissolve or (iv) agree to do
any of the foregoing;
(f) to pay and discharge all taxes, assessments and governmental and
other charges and claims levied or imposed on or that, if unpaid when due,
might become a Lien upon its assets, earnings or business; except such
taxes as are being contested in good faith and against which adequate
reserves have been provided in accordance with GAAP;
(g) (i) to maintain insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks
as are usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower
operates, except where failure to maintain any such insurance could not
reasonably be expected to cause a material adverse effect on the financial
condition or operations of the Borrower taken as a whole and (ii) to
maintain such other insurance as may be required by law; provided that the
Borrower may self-insure to the extent and in the manner normal for
similarly situated companies of like size, type and financial condition
that are part of a group of companies under common control;
(h) The Borrower will comply at all times in all material respects
with all statutory laws, regulations, and orders that are applicable to it
and its property;
(i) to furnish to Lender:
(i) as soon as possible and in any event within three (3)
Business Days after the occurrence of each Default known to the
Borrower, a statement of an authorized officer of the Borrower setting
forth the details of such Default and the actions that the Borrower
has taken and proposes to take with respect thereto;
(ii) as soon as available and in any event not later than 60 days
after the end of each of the first three quarters of each fiscal year
of the Borrower, the unaudited consolidated financial statements of
the Borrower as of the end of such quarter, duly certified with
respect to such consolidated financial statements by an authorized
financial officer of the Borrower as having been prepared in
accordance with GAAP, together with a certificate of such officer (A)
stating that he or she has no knowledge that a Default has occurred
and is continuing or, if a Default has occurred and is continuing, a
statement as to the nature thereof and the action that the Borrower
proposes to take with respect thereto; and (B) stating that the
representations of the Borrower in Section 3.1 of this Agreement are
true and correct as of the date of such certificate;
(iii) as soon as available and in any event not later than
120 days after the end of each fiscal year of the Borrower, a copy of
the annual audited consolidated financial statements of the Borrower,
certified by an unqualified opinion of Coopers & ▇▇▇▇▇▇▇, L.L.P., or
other independent certified public accountants of equivalent national
stature, together with a certificate of an authorized financial
officer of the Borrower (A) stating that he or she has no knowledge
that a Default has occurred and is continuing or, if a Default has
occurred and is continuing, a statement as to the nature thereof and
the action that the Borrower proposes to take with respect thereto;
(B) stating that the representations and warranties of the Borrower in
Section 3.1 of this Agreement are true and correct as of the date of
such certificate;
(iv) as soon as possible and in any event within three (3) days
after the occurrence giving rise to the notice, notice of any
litigation or any other development that reasonably could have a
material adverse effect on the financial condition or operations of
the Borrower taken as a whole or on its ability to repay the Loan; and
(v) such other information respecting the business or
properties, or the condition or operations, financial or otherwise, of
the Borrower or any of its subsidiaries as Lender may from time to
time reasonably request;
(j) to maintain financial records in accordance with GAAP;
(k) from time to time upon reasonable notice or after an Event of
Default has occurred, to permit any Persons designated by the Lender to
visit, audit, and inspect any of the properties of the Borrower, including
its financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its affairs, finances and accounts with its
officers, employees and independent public accountants with respect to any
matters concerning or relating to this Agreement or the transactions
contemplated herein, all upon reasonable notice during normal business
hours and as often as may be reasonably requested while such Default exists
and all reasonable costs and expenses incurred by the Lender in connection
therewith shall be borne by the Borrower; and
(l) to pay to Lender on demand all reasonable out-of-pocket costs,
expenses, filing fees and taxes paid or payable in connection with the
preparation, negotiation, execution, delivery, recording, administration,
collection, liquidation, enforcement and defense of the Loan, the Loan
Documents and all other documents related hereto or thereto, including
reasonable outside attorney's fees.
1.11. Fees. Borrower shall pay to Lender a commitment fee in the amount
of 1/2% per annum on the average daily unused and available Revolving Credit
Commitment, payable quarterly in arrears on the last Business Day of each
calendar quarter (the "Commitment Fee").
1.12. Prepayments. The Loan may be prepaid at any time, without penalty,
upon Borrower's election, subject to the provisions of Section 1.1(b).
1.13. Termination or Reduction of Revolving Credit Commitment. The
Borrower may at any time terminate or reduce the unused amount of the Revolving
Credit Commitment, upon three days written notice to the Lender, in integral
multiples of $1.0 million; provided, however, that any such termination or
reduction shall be permanent, and the Borrower shall not be entitled to
reinstate or increase the amount of the Revolving Credit Commitment. If
terminated, the Borrower shall pay Lender the prorated Commitment Fee on the
effectiveness of the termination. If reduced, Borrower shall pay Lender the
prorated Commitment Fee on the reduced portion of the Revolving Credit
Commitment upon the effectiveness of the reduction.
SECTION 2. CONDITIONS PRECEDENT.
The obligation of Lender to make any disbursement of the Loan shall be subject
to the fulfillment of the following conditions precedent in a manner reasonably
satisfactory to Lender.
(a) Lender shall have received the Loan Documents to which Borrower
is a party, each executed by Borrower.
(b) Lender shall have received all certificates evidencing the
Pledged Interests (as defined in the Pledge Agreement) and related stock
powers in favor of the Lender, duly executed on behalf of the Borrower.
(c) The Settlement Agreement shall have been fully executed by all of
the parties thereto and delivered.
(d) The Terminated Credit Agreement shall have been terminated.
(e) Borrower shall have received all consents, approvals and waivers
referred to in Sections 3.1(c), (d) and (e).
(f) The representations and warranties of the Borrower contained in
this Agreement shall be true and correct in all material respects on the
Effective Date and on and as of the date of the making of each Revolving
Credit Advance and the request for and acceptance of each Revolving Credit
Advance shall be deemed to be a representation by Borrower as to the
foregoing.
(g) The Borrower shall have complied in all material respects with
all of the terms and conditions of the Loan Documents to be performed or
observed by it.
(h) No Default or Event of Default shall be in existence or shall
exist after giving effect to the execution of this Agreement or the
disbursement of the Loan.
(i) All authorizing proceedings of the Borrower and all Loan
Documents shall be reasonably satisfactory in form and substance to Lender.
(j) After the Effective Date there shall not have occurred a material
adverse effect on the financial condition or operations of the Borrower
taken as a whole or on its ability to repay the Loan.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
3.1. Representations and Warranties of the Borrower. In order to induce
Lender to enter into the Loan Documents to which it is a party and to make the
Loan, the Borrower represents and warrants on the Effective Date and on the date
of each subsequent Revolving Credit Advance to the following.
(a) Existence, Power and Authority. The Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of
the state of Delaware with full power and authority to carry on its
business as presently conducted and as proposed to be conducted by it and
to own or hold under lease its properties. The Borrower has full power and
authority to execute and deliver the Loan Documents to which it is a party
and to perform its obligations and carry out the transactions so
contemplated.
(b) Borrower Authorization; Enforceable Obligations. The Loan
Documents to which the Borrower is a party have been duly authorized,
executed and delivered by the Borrower and constitute legal, valid and
binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms (except to the extent that
enforcement may be limited by any applicable bankruptcy, reorganization,
moratorium or similar laws now or subsequently in effect, which may affect
the enforceability of creditors' rights generally, or by general equitable
principles).
(c) No Legal Bar. The execution, delivery and performance of the
Loan Documents, the borrowings by the Borrower hereunder, the use of
proceeds thereof and the grant of security interests in the Pledged
Collateral (i) are not and will not be in violation of the Borrower's
charter or bylaws as they exist at such time; (ii) are not and will not be
in violation of or conflict with any valid law or governmental rule or
regulation, judgment, writ, order, injunction, award or decree of any
court, arbitrator, administrative agency or other governmental authority
applicable to the Borrower; or (iii) are not and will not conflict or be
inconsistent with, or result in any breach of, any of the terms, covenants,
conditions or provisions of or constitute a default under any material
indenture, mortgage, contract, deed of trust, debenture, agreement or other
undertaking or instrument to which the Borrower is a party or by which any
of its material assets may be bound or affected; except where the
violation, conflict, inconsistency, breach or default would not have a
material adverse effect on the financial condition or operations of the
Borrower taken as a whole or on its ability to repay the Loan. The
execution, delivery and performance of the Loan Documents do not and will
not result in the creation or imposition of any material Lien on the
Borrower's assets pursuant to the provisions of any such indenture,
mortgage, contract, deed of trust, debenture, agreement or other
undertaking or instrument (other than the security interest on the Pledged
Collateral granted by Borrower pursuant to Section 4 of this Agreement).
(d) No Debt Restrictions. No material note, bond, debenture,
indenture, mortgage, contract, deed of trust, agreement or other
undertaking or instrument to which the Borrower is subject contains any
restriction on the incurrence by the Borrower of Indebtedness under the
Loan Documents, except such restrictions as have been waived in writing
(copies of which shall be furnished to Lender).
(e) No Consents. No material permit, consent, approval or
authorization of, or declaration to or filing with, any governmental
authority is required in connection with the execution, delivery and
performance of the Loan Documents.
(f) Financial Condition. The annual and interim financial statements
of the Borrower furnished to the Lender present fairly the financial
position of Borrower 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.
(g) Litigation. There are no actions, suits or proceedings pending
against the Borrower at law, in equity or in admiralty or by or before any
governmental authority, and, to the best knowledge of the Borrower, there
are no actions, suits or proceedings threatened against the Borrower,
except for such actions, suits or proceedings that could not reasonably be
expected to cause a material adverse effect on the financial condition or
operations of the Borrower taken as a whole.
(h) Title to Collateral; Liens. The Borrower has good and
indefeasible title to all Pledged Collateral. Except for Permitted Liens,
all of the Pledged Collateral is free and clear of any and all Liens.
(i) Tax Returns. Except as previously disclosed to the Lender and
except in connection with taxes being diligently contested in good faith
and for which reserves in accordance with GAAP are maintained, the Borrower
has filed or caused to be filed all tax returns (or extensions) that it was
required to file, paid and discharged or caused to be paid and discharged
all taxes as shown on such returns (or extensions) or on any assessment
received by it to the extent that such taxes have become due, and does not
know of any actual or proposed assessments for additional governmental or
other taxes for any fiscal period. The charges, accruals and reserves on
its respective books with respect to governmental and other taxes for all
fiscal periods are adequate.
(j) Compliance with Law. The Borrower is in compliance in all
material respects with all statutory laws, regulations, and orders that are
applicable to it and its property specifically including, but not limited
to, environmental laws.
(k) Hazardous Material. To the best knowledge of the Borrower, there
is no hazardous material being released, and no hazardous material has been
released, from or at any real property owned or operated by the Borrower
the liability for which could reasonably be expected to cause a material
adverse effect on the financial condition or operations of the Borrower
taken as a whole, except as disclosed to the Lender.
(l) No Material Adverse Change. There has been no material adverse
change in the business operations, financial position or cash flows of the
Borrower since the date of the latest financial statements provided to the
Lender.
(m) Not an Investment Company. The 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.
(n) Use of Proceeds. The Borrower is not engaged principally, or as
one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying margin stock within the meaning of
Regulation U or X of the Board of Governors of the Federal Reserve System.
No proceeds of any Revolving Credit Advance will be used to purchase or
carry any margin stock in violation of Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System.
(o) Solvency. The Borrower is solvent and is not the subject of any
insolvency proceedings and the Borrower has capital that is reasonably
adequate to conduct its business in the manner in which it intends to
conduct such business.
(p) No Misleading Statements. The representations of the Borrower in
this Agreement or in any exhibit, annex, schedule, list or other document
delivered to Lender in connection with the transactions contemplated by the
Loan Documents do not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein or herein not misleading.
3.2. Representations and Warranties of Lender. Lender hereby represents
and warrants on the Effective Date to the following.
(a) Existence, Power and Authority. Lender is a corporation duly
incorporated and validly existing, in good standing, under the laws of
Delaware with full power, authority and legal right to execute and deliver
the Loan Documents to which Lender is a party and to carry out the
transactions so contemplated.
(b) Lender Authorization; Enforceable Obligations. The Loan
Documents to which the Lender is a party have been duly authorized,
executed and delivered by the Lender and constitute legal, valid and
binding obligations of the Lender, enforceable against the Lender in
accordance with their respective terms (except to the extent that
enforcement may be limited by any applicable bankruptcy, reorganization,
moratorium or similar laws now or subsequently in effect, which may affect
the enforceability of creditors' rights generally, or by general equitable
principles).
(c) No Legal Bar. The execution, delivery and performance of the
Loan Documents and the making of the Loan by Lender (i) are not and will
not be in violation of the Lender's charter or bylaws as they exist at such
time; (ii) are not and will not be in violation of or conflict with any
valid law or governmental rule or regulation, judgment, writ, order,
injunction, award or decree of any court, arbitrator, administrative agency
or other governmental authority applicable to the Lender; or (iii) are not
and will not conflict or be inconsistent with, or result in any breach of,
any of the terms, covenants, conditions or provisions of or constitute a
default under any material indenture, mortgage, contract, deed of trust,
debenture, agreement or other undertaking or instrument to which the Lender
is a party or by which any of its material assets may be bound or affected;
except where the violation, conflict, inconsistency, breach or default
would not have a material adverse effect on the financial condition or
operations of the Lender taken as a whole or the ability of Lender to make
the Loan.
(d) No Consents. No material authorization or approval of any public
regulatory body is required in connection with the execution, delivery or
performance by Lender of the Loan Documents to which it is a party.
SECTION 4. GRANT OF SECURITY INTEREST.
4.1. Grant of Security Interest. To secure payment and performance of all
Obligations, Borrower hereby grants to Lender a continuing security interest in,
a Lien upon, and a right of set off against, and hereby assigns to Lender as
security, the Pledged Collateral as more fully described in the Borrower Pledge.
SECTION 5. EVENTS OF DEFAULT.
5.1. Events of Default. For the purposes of this Agreement, an event of
default (an ("Event of Default") will be deemed to have occurred if:
(a) the Borrower fails pay principal when due (whether at maturity,
by acceleration or otherwise) on the Note or Borrower fails to pay
interest, any fee or any other amount on the Loan Documents and such
default continues for a period of three (3) Business Days after any such
payment becomes due and payable (a "Monetary Default");
(b) the Borrower breaches or otherwise fails to perform or observe
the covenants set forth in Section 1.8 or 1.9, and such breach or failure
to perform shall continue for a period of 5 days after notice thereof shall
have been given to the Borrower by Lender (a "Section 1.8 or 1.9 Default");
(c) the Borrower breaches or otherwise fails to perform or observe
any other provision contained in the Loan Documents (other than a Monetary
Default or a Section 1.8 or 1.9 Default), and such breach or failure to
perform shall continue for a period of 30 days after notice thereof shall
have been given to the Borrower by Lender;
(d) any representation or warranty of Borrower or information
furnished by Borrower in the Loan Documents is false or misleading in any
material respect on the date made or furnished;
(e) The Lien created by the Pledge Agreement shall at any time not
constitute a valid and perfected Lien (other than by fault of the Lender)
free and clear of all other Liens, or the enforceability of the Pledge
Agreement shall be contested by the Borrower;
(f) the Borrower makes an assignment for the benefit of creditors or
admits in writing its inability to pay its debts generally as they become
due; or an order, judgment or decree is entered adjudicating the Borrower
bankrupt or insolvent; or an order for relief with respect to the Borrower
is entered under the United States Bankruptcy Code, or the Borrower
petitions or applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of the Borrower or of any substantial part
of the assets of the Borrower, or commences any proceedings relating to the
Borrower under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction;
or any such petition or application is filed, or any such proceeding is
commenced, against the Borrower and either (i) the Borrower by any act
indicates its approval thereof, consent thereto or acquiescence therein or
(ii) such petition, application or proceeding is not dismissed within 60
days;
(g) a final judgment for the payment of money in excess of $10.0
million in the aggregate shall be rendered against the Borrower and, within
ten days after entry thereof, such judgment is not discharged or execution
thereof stayed pending appeal, or within ten days after the expiration of
any such stay, such judgment is not discharged; or
(h) any person or group of persons, other than the current holders or
their beneficiary successors, hereafter directly or indirectly acquires
control of the Borrower and such change in control continues for 60 days.
5.2. Optional Acceleration of Maturity. Except as provided in
Section 5.3, upon the occurrence and during the continuance of an Event of
Default, Lender shall have the right by notice to the Borrower to (i) terminate
the Revolving Credit Commitment and (ii) accelerate the maturity of the Note and
all Obligations of the Borrower under the Loan Documents, and, at the option of
the Lender, to declare such Obligations due and payable forthwith, and all such
Obligations shall thereafter be due and payable in full by the Borrower to the
Lender, without presentment, demand, protest, notice of intent to accelerate, or
any other notice of any kind, all of which are hereby expressly waived by the
Borrower.
5.3. Automatic Acceleration of Maturity. Upon the occurrence of any of
the Events of Default specified in Section 5.1(f) with respect to the Borrower,
the Revolving Credit Commitment shall automatically and immediately terminate,
and all Obligations of the Borrower under the Loan Documents shall be
automatically and immediately due and payable in full, without presentment,
demand, protest, notice of intent to accelerate, notice of acceleration, or any
other notice of any kind, all of which are hereby expressly waived by the
Borrower.
5.4. Remedies. Upon the occurrence and during the continuance of an Event
of Default, the Lender may proceed to protect and enforce rights by suit in
equity or action at law, whether for the specific performance of any term
contained in this Agreement, the Note, or any other Loan Document, or for an
injunction against any breach of any such term or in aid of the exercise of any
power granted in this Agreement, the Note, or any other Loan Document, or may
proceed to enforce the payment of the Note, to foreclose on any or all of the
Pledged Collateral or to enforce any other legal or equitable right, or may take
any one or more of such actions. No right, power or remedy of the Lender
conferred in the Loan Documents, or now or hereafter existing at law, in equity
or admiralty, by statute or otherwise, shall be exclusive, and each such right,
power or remedy shall, to the full extent permitted by law, be cumulative and in
addition to every other such right, power or remedy.
5.5. Post Default Interest. After the occurrence of any one or more of
the Events of Default or after five (5) Business Days after demand by Lender for
payment of the Note or any amounts owed under the Loan Documents, which amounts
are past due, interest shall accrue on the amounts the Borrower owes Lender at
the Prime Rate plus 2% per annum.
5.6. Offset. Without limiting the generality of the foregoing, the
Borrower expressly grants to Lender the right to offset the obligations of the
Lender to Borrower against the Obligations without notice or demand upon the
occurrence and continuance of a Default.
SECTION 6. GENERAL PROVISIONS.
6.1. Definitions. For purposes of this Agreement, the following terms
shall be defined as set forth below.
"Agreement" shall mean this Credit Agreement between the Borrower and the
Lender.
"Borrower" has the meaning set forth in the preface to this Agreement.
"Borrower Pledge" shall mean a pledge agreement in the form of Exhibit B
attached to this Agreement, executed by Borrower in favor of the Lender.
"Business Day" shall mean any day other than a Saturday, Sunday or legal
holiday in Dallas, Texas or a day on which commercial banks are authorized or
required by law to close in Dallas, Texas.
"Capital Stock" of any Person shall mean any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Chapter 15" has the meaning set forth in Section 6.10.
"Commitment Fee" has the meaning set forth in Section 1.11.
"Contract Rate" has the meaning set forth in Section 1.4(b).
"Default" shall mean an Event of Default or an event that, with notice or
lapse of time, or both, would become an Event of Default.
"Disqualified Stock" shall mean, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable for Indebtedness (other than
Preferred Stock) or Disqualified Stock or (iii) is redeemable at the option of
the holder thereof, in whole or in part, in each case on or prior to the
Maturity Date.
"Effective Date" shall mean the date that the Terminated Credit Agreement
terminates.
"Event of Default" has the meaning set forth in Section 5.1.
"Existing Indebtedness" shall mean Indebtedness outstanding or otherwise
available to the Borrower on the Effective Date and described in Schedule 6.1-
Existing Indebtedness, but in no event shall Existing Indebtedness include the
Terminated Credit Agreement.
"GAAP" shall mean accounting principles generally accepted in the United
States as in effect from time to time.
"Indebtedness" shall mean, as to any Person, without duplication: (a) all
obligations of such Person for borrowed money or evidenced by bonds, debentures,
notes or similar instruments; (b) all obligations of such Person for the
deferred purchase price of property or services; (c) all capital lease
obligations of such Person that are properly shown as a liability of such Person
under GAAP; (d) all Indebtedness of others secured by a Lien on any properties
of such Person or guaranteed by such Person; (e) all obligations of such Person,
contingent or otherwise, in respect of any letters of credit or bankers'
acceptances or similar instruments and (f) the amount of all obligations of such
Person with respect to the redemption, repayment or other repurchase of any
Disqualified Stock (but excluding, in each case, any accrued dividends).
"Lender" has the meaning set forth in the preface to this Agreement.
"Lien" shall mean, with respect to any real or personal property, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such property. For purposes of this Agreement, the Borrower shall be
deemed to own subject to a Lien any property that it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease) relating to such property.
"Loan" has the meaning set forth in Recital A.
"Loan Documents" shall mean this Agreement, the Note, the Borrower Pledge
and all other agreements, instruments or documents executed or contemplated to
be executed in connection with this Agreement, the Note or the Borrower Pledge.
"Maturity Date" has the meaning set forth in Section 1.5(b).
"Maximum Lawful Rate" shall mean the maximum rate of interest from time to
time permitted under federal or state laws now or hereafter applicable to the
Loan, in any case after taking into account, to the extent required by
applicable law, any and all relevant payments, charges, and calculations.
"Monetary Default" has the meaning set forth in Section 5.1(a).
"Note" has the meaning set forth in Section 1.3.
"Obligations" shall mean any and all Revolving Credit Advances and all
other obligations, liabilities and Indebtedness of every kind, nature and
description owing by Borrower to Lender, including principal, interest
(including post-default interest), charges, fees, costs and expenses, however
evidenced, whether arising under the Loan Documents or otherwise, whether now
existing or hereafter arising, whether arising before, during or after the
initial or any renewal term of this Agreement or after the commencement of any
case with respect to Borrower under the United States Bankruptcy Code or any
similar statute (including, without limitation, the payment of interest and
other amounts that would accrue and become due but for the commencement of such
case), whether direct or indirect, absolute or contingent, joint or several, due
or not due, primary or secondary, liquidated or unliquidated, secured or
unsecured, and however acquired by Lender.
"Permitted Indebtedness" shall mean (i) Indebtedness evidenced by the Loan
Documents, (ii) Indebtedness incurred pursuant to the Settlement Agreement,
(iii) Existing Indebtedness, (iv) any Permitted Refinancing Indebtedness, (v)
Indebtedness owing to Subsidiaries and affiliates of the Borrower if such
Indebtedness is not secured by any Lien on the property or assets of the
Borrower and (vi) any other Indebtedness that does not exceed in the aggregate
$10.0 million at any one time outstanding.
"Permitted Liens" shall mean Liens against property or assets of the
Borrower:
(a) securing the Obligations;
(b) for taxes, assessments or governmental charges or levies on
property of the Borrower if the same shall not at any time be delinquent or
thereafter can be paid without penalty, or are being contested in good
faith and by appropriate proceedings and with respect to which reserves in
conformity with GAAP, consistently applied, have been provided on the books
of the Borrower;
(c) imposed by law, such as carriers', warehousemen's and mechanics'
liens and other similar liens arising in the ordinary course of business
and securing obligations that are not overdue for a period of more than 30
days or that are being contested in good faith by appropriate proceedings;
(d) arising in the ordinary course of business out of pledges or
deposits under workers' compensation laws, unemployment insurance, old age
pensions or other social security or retirement benefits, or similar
legislation;
(e) securing the performance of bids, tenders, contracts (other than
for the repayment of borrowed money), leases (other than capital leases),
statutory obligations, surety and appeal bonds, Liens to secure progress or
partial payments made to the Borrower and other Liens of like nature made
or incurred in the ordinary course of business;
(f) existing on property (other than common stock or other
securities) acquired by the Borrower in the ordinary course of business
prior to the Borrower's acquisition of such property;
(g) encumbering property of the Borrower (other than stock) that does
not materially interfere with the use or value of such property or that are
otherwise material in relation to the value of such property or in relation
to the business, operations and financial condition of the Borrower;
(h) securing Indebtedness incurred pursuant to the Settlement
Agreement;
(i) securing any Existing Indebtedness;
(j) securing any Permitted Refinancing Indebtedness; or
(k) arising (other than those referred to in (a) through (i) above)
in the ordinary course of business with respect to any obligations of the
Borrower that do not exceed in the aggregate $10.0 million at any one time
outstanding.
"Permitted Refinancing Indebtedness" shall mean any, refunding, extension,
amendment, renewal or replacement (or successive refinancings, refundings,
extensions, renewals or replacements) as a whole, or in part, of any Existing
Indebtedness; provided, however, that (x) such Indebtedness has a final stated
maturity or redemption date no earlier that the Indebtedness being refinanced,
(y) any Lien created by such Indebtedness shall be limited to all or part of the
same property that secured the Existing Indebtedness being refunded, extended,
renewed or replaced (plus improvements on such property) and (z) the
Indebtedness is not increased to any amount greater than the sum of (A) the
outstanding principal amount or, if greater, committed amount of such Existing
Indebtedness and (B) an amount necessary to pay any fees and expenses, including
premiums, related to such refinancing, refunding, extension, renewal or
replacement.
"Person" shall mean any individual, corporation, limited liability or other
company, voluntary association, partnership, joint venture, trust,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).
"Pledged Collateral" has the meaning set forth in the Borrower Pledge
"Preferred Stock," as applied to the Capital Stock of any corporation,
shall mean Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Prime Rate" means a fluctuating interest rate per annum as shall be in
effect from time to time that at all times is equal to the base rate on
corporate loans as reported as the Prime Rate in the Money Rates column of The
Wall Street Journal.
"Revolving Credit Advance" means an advance made to the Borrower pursuant
to Section 1.1.
"Revolving Credit Commitment" means during the term of this Agreement the
commitment to make available in an aggregate amount of principal outstanding at
any one time of Revolving Credit Advances up to the lower of $120,000,000.00 or
such reduced amount as Borrower has set pursuant to Section 1.13.
"Revolving Credit Payment" means a repayment made to Lender pursuant to
Section 1.1.
"Section 1.8 or 1.9 Default" has the meaning set forth in Section 5.1(b).
"Settlement Agreement" has the meaning set forth in Section 1.7.
"Subsidiary" shall mean any corporation, association, partnership or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) the Borrower, (ii) the Borrower and one or more
of Borrower's Subsidiaries or (iii) one or more of Borrower's Subsidiaries.
"Terminated Credit Agreement" shall mean the credit agreement listed on
Schedule 6.1-Terminated Credit Agreement and all Liens against the property or
assets of Borrower created by such credit agreement or documents related to such
credit agreement.
6.2. Limitation of Liability. Lender shall not have any liability to
Borrower (whether in tort, contract, equity or otherwise) for losses suffered by
Borrower in connection with, arising out of, or in any way related to the
transactions or relationships contemplated by the Loan Documents, or any act,
omission or event occurring in connection herewith, unless it is determined by a
final and non-appealable judgment or court order binding on Lender, that the
losses were the result of acts or omissions constituting gross negligence or
willful misconduct. In any such litigation, Lender shall be entitled to the
benefit of the rebuttable presumption that it acted in good faith and with the
exercise of ordinary care in the performance by it of the terms of the Loan
Documents.
6.3. Indemnity. Borrower shall indemnify and hold Lender, and its
directors, agents, employees and counsel, harmless from and against any and all
losses, claims, damages, liabilities, costs or expenses ("Indemnified Amounts")
imposed on, incurred by or asserted against any of them in connection with any
litigation, investigation, claim or proceeding commenced or threatened related
to the negotiation, preparation, execution, delivery, enforcement, performance
or administration of the Loan Documents, or any undertaking or proceeding
related to any of the transactions contemplated by such or any act, omission,
event or transaction related or attendant thereto, including, without
limitation, amounts paid in settlement, court costs, and the reasonable out-of-
pocket fees and expenses of counsel, unless the Indemnified Amounts proximately
result from the gross negligence or willful misconduct of Lender or the
intentional breach by Lender of any obligation of Lender under the Loan
Documents. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in this Section may be unenforceable because it violates any
law or public policy, Borrower shall pay the maximum portion that it is
permitted to pay under applicable law to Lender in satisfaction of indemnified
matters under this Section. The foregoing indemnity shall survive the payment
of the Obligations and the termination or non-renewal of the Loan Documents.
6.4. Authority of Lender. Lender shall have and be entitled to exercise
all powers under the Loan Documents that are specifically granted to Lender by
the terms thereof, together with such powers as are reasonably incident thereto.
Lender may perform any of its duties hereunder or in connection with the Loan
Documents or the Pledged Collateral by or through agents or employees and shall
be entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters. Neither Lender nor any director, officer,
employee, attorney or agent of Lender shall be liable to Borrower for any action
taken or omitted to be taken by it or them under the Loan Documents, except for
its or their own gross negligence or willful misconduct, nor shall Lender be
responsible for the validity, effectiveness or sufficiency of the Loan Documents
or any security furnished pursuant thereto. Lender and its directors, officers,
employees, attorneys and agents shall be entitled to rely on any communication,
instrument or document reasonably believed by it or them to be genuine and
correct and to have been signed or sent by the proper person or persons.
6.5. Amendments and Waivers. None of the Loan Documents nor any provision
thereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written agreement signed by an authorized officer of
Lender. Lender shall not, by any act, delay, omission or otherwise be deemed to
have expressly or impliedly waived any of its rights, powers and/or remedies
unless such waiver shall be in writing and signed by an authorized officer of
Lender. Any such waiver shall be enforceable only to the extent specifically
set forth therein. A waiver by Lender of any right, power and/or remedy on any
one occasion shall not be construed as a bar to or waiver of any such right,
power and/or remedy that Lender would otherwise have on any future occasion,
whether similar in kind or otherwise.
6.6. Cumulative Remedies. The rights and remedies provided in the Loan
Documents are cumulative and not exclusive of any rights or remedies provided by
law.
6.7. Survival of Provisions. All representations, warranties and
covenants made in the Loan Documents shall survive the execution and delivery of
the Loan Documents and the making of the Loan. Such representations, warranties
and covenants shall terminate only upon the full and final payment and
performance by the Borrower of the Obligations and termination of this Agreement
and the Note.
6.8. Term of Agreement. This Agreement shall continue until the Note has
been paid in full or discharged in accordance with the terms of this Agreement
and until all Obligations of the Borrower under the Loan Documents shall have
been fully satisfied.
6.9. Reinstatement. To the extent permitted by law, the Loan Documents
shall continue to be effective or be reinstated, as the case may be, if at any
time any amount received by Lender, in respect of the Obligations is rescinded
or must otherwise be restored or returned by Lender, upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of Borrower or upon the
appointment of any receiver, intervenor, conservator, trustee or similar
official for Borrower or any substantial part of its assets, or otherwise, all
as though such payments had not been made.
6.10. Governing Law. The validity, interpretation and enforcement of the
Loan Documents and any dispute arising out of the relationship between the
parties thereto, whether in contract, tort, equity or otherwise, shall be
governed by the internal laws of the state of Texas (without giving effect to
principles of conflicts of law). Pursuant to Article 15.10(b) of Chapter 15
("Chapter 15") of the Texas Credit Code, the parties hereto expressly agree that
Chapter 15 shall not apply to the Loan Documents or to any advance, nor shall
the Loan Documents or any Revolving Credit Advance be governed by or be subject
to the provisions of Chapter 15 in any manner whatsoever.
6.11. Choice of Forum. Borrower and Lender irrevocably consent and submit
to the non-exclusive jurisdiction of the courts of the state of Texas located in
Dallas, Texas and the United States District Court for the Northern District of
Texas and waive any objection based on venue or forum non conveniens with
respect to any action instituted therein arising under the Loan Documents or in
any way connected with or related or incidental to the dealings of the parties
hereto with respect to the Loan Documents or the transactions related thereto,
in each case whether now existing or hereafter arising, and whether in contract,
tort, equity or otherwise, and agree that any dispute with respect to any such
matters shall be heard only in the courts described above (except that Lender
shall have the right to bring any action or proceeding against Borrower or its
property in the courts of any other jurisdiction that Lender deems necessary or
appropriate in order to realize on the Pledged Collateral or to otherwise
enforce its rights against Borrower or its property).
6.12. Successors and Assigns. Loan Documents shall be binding upon and
inure to the benefit of and be enforceable by Lender, Borrower and their
respective successors and permitted assigns, except that Borrower may not assign
its rights under this Agreement without the prior written consent of
Lender. Lender may assign its rights and delegate its obligations under the
Loan Documents to another Person, in which event, the assignee or participant
shall have, to the extent of such assignment or participation, the same rights
and benefits as it would have if it were the Lender hereunder, except as
otherwise provided by the terms of such assignment or participation.
6.13. No Third-Party Rights. The Loan Documents are not intended to and
shall not be construed to create any rights in or confer any benefits on any
persons other than the parties thereto and their respective successors and
permitted assigns.
6.14. Complete Agreement. The Loan Documents represent the final
agreement between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties.
6.15. Partial Invalidity. If any provision of the Loan Documents is held
to be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate the Loan Documents as a whole, but the Loan Documents shall be
construed as though they did not contain the particular provision held to be
invalid or unenforceable and the rights and obligations of the parties shall be
construed and enforced only to such extent as shall be permitted by applicable
law.
6.16. Interpretation of Agreement. Time is of the essence in each
provision of the Loan Documents of which time is an element. All terms not
defined herein or in the Loan Documents shall have the meaning set forth in the
applicable Uniform Commercial Code, except where the context otherwise requires.
Acceptance of or acquiescence in a course of performance rendered under the Loan
Documents shall not be relevant in determining the meaning of the Loan Documents
even though the accepting or acquiescing party had knowledge of the nature of
the performance and opportunity for objection.
6.17. 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.
6.18. Waiver of Notices. Borrower hereby expressly waives demand,
presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and commercial paper, included in or evidencing any
of the Obligations or the Pledged Collateral, and any and all other demands and
notices of any kind or nature whatsoever with respect to the Obligations, the
Pledged Collateral and the Loan Documents, except such as are expressly provided
for in the Loan Documents. No notice to or demand on Borrower that Lender may
elect to give shall entitle Borrower to any other or further notice or demand in
the same, similar or other circumstances.
6.19. Notices. All notices, demands or other communications to be given
or delivered under or by reason of this Agreement shall be in writing (including
telecopy, telegraphic, telex or cable communications) and mailed, telecopied,
telegraphed, telexed, cabled or delivered:
If to the Borrower, at:
Contran Corporation
Three Lincoln Centre
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President and Secretary
If to Lender, at:
Valhi, Inc.
Three Lincoln Centre
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Vice President and Treasurer
or such other address or to the attention of such other person as the recipient
party has specified by prior written notice to the sending party. All such
notices and communications shall (i) if mailed, be effective five (5) days after
deposit in the mail, (ii) if telecopied, be effective when transmission is
completed and confirmed, (iii) if delivered by a reputable overnight courier
under agreement to deliver the next day, be effective the next day if delivery
is confirmed and (iv) otherwise when received by the recipient.
6.20. Headings. The headings in the Loan Documents are for purposes of
reference only and shall not affect the meaning or construction of any provision
of the Loan Documents.
6.21. Counterparts. This Agreement may be executed in any number of
separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
Effective Date.
As Borrower:
CONTRAN CORPORATION
By:
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
As Lender:
VALHI, INC.
By:
----------------------------
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, Vice President
SCHEDULE 6.1
I. Existing Indebtedness:
A. Credit Agreement dated as of November 5, 1997 between Contran Corporation
and Societe Generale, Southwest Agency, as amended by the First Amendment
Agreement dated as of January 8, 1998 between the same parties.
II. Terminated Indebtedness:
A. Credit Agreement dated as of November 5, 1997 among Contran Corporation,
National City Lines, Inc. and Valhi Group, Inc., as borrowers, and United Sates
National Bank of Oregon and Societe Generale, Southwest Agency, as lenders, as
such agreement has been amended by (i) an Extension Agreement dated as of
November 7, 1997 among the same parties and (ii) a First Amendment to Loan
Agreement dated as of January 9, 1998 among the same parties.
EXHIBIT A
PROMISSORY NOTE
SECURED PROMISSORY NOTE
$120,000,000.00 Dallas, Texas February __, 1998
FOR VALUE RECEIVED, CONTRAN CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to VALHI, INC., a Delaware corporation
("Lender"), or holder, at the offices of Lender at Three Lincoln Centre, Suite
1700, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇, or such other place
designated by holder, the principal sum of ONE HUNDRED TWENTY MILLION AND NO
ONE-HUNDREDTHS DOLLARS ($120,000,000.00) or such lesser amount as shall equal
the unpaid principal amount of the loan made by Lender to the Borrower pursuant
to the Credit Agreement referred to below (the "Loan"), in lawful money of the
United States of America and in immediately available funds, on August __, 1998,
or acceleration as provided in the Credit Agreement, and to pay interest on the
unpaid principal amount of the Loan, at such office, in like money and funds,
until the Loan shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
The date, amount and interest rate of each Revolving Credit Advance Loan made by
Lender to the Borrower, and each payment made on account of the principal
thereof, shall be recorded by Lender on its books.
This Note is the Note referred to in the Credit Agreement (as amended, modified
and supplemented and in effect from time to time, the "Credit Agreement")
effective this date between the Borrower and Lender, and evidences the Loan made
by Lender thereunder. Capitalized terms used in this Note and not defined in
this Note have the respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the Indebtedness evidenced hereby to become
due and payable in full upon maturity or upon the occurrence of certain events,
and for prepayments of the Loan, upon the terms and conditions specified
therein.
If any payment of principal under this Note is not paid when due or any
interest, fee or cost under the Loan Documents is not paid three (3) Business
Days after such payment, fee or cost is due and this Note is placed in the hands
of an attorney for collection, whether or not suit is filed hereon, or if
proceedings are had in probate, bankruptcy, receivership, reorganization,
arrangement, or other legal proceeds for the collection hereof, the Borrower
agrees to pay the holder a reasonable amount of out-of-pocket attorneys' fees
incurred by the holder hereof.
The payment obligations of this Note are secured by a security interest in
certain collateral pursuant to the terms of a Pledge Agreement effective this
date between the Borrower and Lender.
This Note shall be governed by, and construed in accordance with, the laws of
the State of Texas.
CONTRAN CORPORATION
By:
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
EXHIBIT B
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered into as of
February __, 1998, by CONTRAN CORPORATION, a Delaware corporation ("Pledgor"),
in favor of VALHI, INC., a Delaware corporation ("Lender").
Recitals
A. Pledgor is the owner of the outstanding shares (the "Pledged
Interests") set forth on Schedule I hereto of its subsidiaries (the "Issuers").
B. Pledgor has entered into a credit facility with Lender for the
purposes described in the Credit Agreement effective as of the date of this
Agreement, between Pledgor and Lender (as the same has been or may from time to
time be amended, restated, supplemented or otherwise modified, the "Credit
Agreement").
C. Lender has required, as a condition to its entering into the Credit
Agreement, that Pledgor (i) pledge to Lender, and grant to Lender a security
interest in, the Pledged Collateral (as defined in Section 1) and (ii) execute
and deliver this Agreement in order to secure the payment and performance by
Pledgor of the Obligations.
D. Capitalized terms used in this Agreement and not otherwise defined
shall have the meanings given to such terms in the Credit Agreement.
Agreement
In consideration of the premises and in order to induce Lender to extend
credit under the Loan Documents to Pledgor, Pledgor hereby agrees with Lender as
follows.
SECTION 1. PLEDGE. Pledgor hereby pledges and collaterally assigns to
Lender, and grants to Lender a continuing first priority and perfected security
interest in the following (the "Pledged Collateral"):
(a) the Pledged Interests and the certificates representing the
Pledged Interests, and all products and proceeds of any of the Pledged
Interests including, without limitation, all distributions, cash,
instruments, subscriptions, warrants and any other rights and options and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Interests; and
(b) any other securities or interests that Pledgor is required to
pledge to Lender at any time pursuant to the Credit Agreement, the
certificates representing such securities, and all products and proceeds of
any of such securities, including, without limitation, all distributions,
cash, instruments, subscriptions, warrants and any other rights and options
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such securities.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures the payment
of all of the Obligations.
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of Lender and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance reasonably satisfactory to
Lender.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor represents and
warrants with respect to the Pledged Interests as of the date hereof and with
respect to the Pledged Interests and any other securities pledged to Lender
pursuant to the Credit Agreement as of the date of such later pledge, the
following.
(a) Pledgor is the legal and beneficial owner of the Pledged
Collateral, free and clear of any Lien.
(b) To the knowledge of the Pledgor, the issuers of the Pledged
Interests duly authorized the issuance of such Pledged Interests and the
Pledged Interests are validly issued, fully paid and nonassessable.
(c) The pledge and collateral assignment of the Pledged Collateral
pursuant to this Agreement creates a valid and perfected first priority
security interest in such Pledged Collateral securing the payment of the
Obligations for the benefit of Lender.
(d) On the Effective Date, no authorization, approval, or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required either (i) for the pledge and collateral
assignment by Pledgor of the Pledged Collateral pursuant to this Agreement
or for the execution, delivery or performance of this Agreement by Pledgor
or (ii) for the exercise by Lender of the voting or other rights provided
for in this Agreement or the remedies in respect of the Pledged Collateral
pursuant to this Agreement (except such filings of beneficial ownership as
may be required by federal securities laws).
(e) Pledgor has full power and authority to enter into the Loan
Documents, has the right to vote all securities that have voting power and
are pledged hereunder and to pledge, collaterally assign and grant a
security interest in the Pledged Collateral.
(f) The Loan Documents have been duly authorized, executed and
delivered by Pledgor and constitute legal, valid and binding obligations of
Pledgor, enforceable against Pledgor in accordance with their respective
terms, except as such enforceability may be limited by the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally or general principles of
equity.
(g) To the best of Pledgor's knowledge, the Pledged Interests
constitute, as of the date hereof, the percentage of the authorized, issued
and outstanding share of common stock of the Issuer(s) set forth on
Schedule I hereto.
(h) Pledgor's chief executive office is located at the address set
forth in Section 15(u).
SECTION 5. FURTHER ASSURANCES; COVENANTS. Pledgor agrees that at any time
and from time to time, at the expense of Pledgor, Pledgor will promptly execute
and deliver, or cause to be executed and delivered, all powers, proxies,
assignments, instruments and documents and take all further action, that is
reasonably necessary to perfect any security interest granted or purported to be
granted hereby or to enable Lender to exercise and enforce its rights and
remedies hereunder with respect to any Pledged Collateral and to carry out the
provisions and purposes hereof
SECTION 6. VOTING RIGHTS; DISTRIBUTIONS; ETC.
(a) So long as no Event of Default shall have occurred and be
continuing, Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to securities pledged hereunder or any
part thereof for any purpose not inconsistent with the terms of this
Agreement.
(b) So long as no Event of Default shall have occurred and be
continuing, Pledgor shall be entitled to receive all regular quarterly cash
distributions. All other distributions paid or made from time to time with
respect to the securities pledged hereunder shall be delivered to the
Lender pursuant to Section 3. Upon the occurrence and during the
continuance of an Event of Default, all rights of Pledgor to exercise the
voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 6(a) shall cease, and all such rights shall
become vested in Lender, which shall thereupon have the sole right to
exercise such voting and other consensual rights. Upon the occurrence and
during the continuance of an Event of Default, all distributions payable in
respect of all securities pledged hereunder shall be paid directly to
Lender and, if received by Pledgor, shall be received in trust for the
benefit of Lender, shall be segregated from other funds of Pledgor, and
shall be forthwith transferred or paid over to Lender as Pledged Collateral
in the same form as so received (with any necessary endorsements) and
Pledgor's right to receive such distributions.
SECTION 7. TRANSFERS AND OTHER LIENS. Pledgor agrees that it will not (i)
sell or otherwise dispose of, or grant any option with respect to, any of the
Pledged Collateral without the prior written consent of Lender, (ii) create or
permit to exist any Lien or encumbrance upon or with respect to any of the
Pledged Collateral, except for the security interest granted under this
Agreement or (iii) enter into any agreement or understanding that purports to or
may restrict or inhibit Lender's rights or remedies hereunder, including,
without limitation, Lender's right to sell or otherwise dispose of the Pledged
Collateral.
SECTION 8. LENDER APPOINTED ATTORNEY-IN-FACT. Pledgor hereby appoints
Lender as Pledgor's attorney-in-fact, with full authority in the place and stead
of Pledgor and in the name of Pledgor or otherwise, from time to time in
Lender's discretion to take any action and to execute any instrument that Lender
may deem necessary or advisable to further perfect and protect the security
interest granted hereby, including, without limitation, to receive, endorse and
collect all instruments made payable to Pledgor representing any distribution in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same.
SECTION 9. LENDER MAY PERFORM. If Pledgor fails to perform any agreement
contained herein, Lender may itself perform, or cause performance of, such
agreement, and the reasonable expenses of Lender incurred in connection
therewith shall be payable by Pledgor under Section 13.
SECTION 10. NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights and
powers granted to Lender under this Agreement are being granted in order to
preserve and protect Lender's security interest in and to the Pledged Collateral
and shall not be interpreted to, and shall not, impose any duties on Lender in
connection therewith. Lender shall be deemed to have exercised reasonable care
in the custody and preservation of the Pledged Collateral in its possession if
the Pledged Collateral is accorded treatment substantially equal to that which
Lender accords its own property, it being understood that Lender shall not have
any responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not Lender has or is deemed to have knowledge of
such matters, or (ii) taking any necessary steps to preserve rights against any
parties with respect to any Pledged Collateral.
SECTION 11. SUBSEQUENT CHANGES AFFECTING PLEDGED COLLATERAL. Pledgor
represents to Lender that Pledgor has made its own arrangements for keeping
informed of changes or potential changes affecting the Pledged Collateral
(including, but not limited to, rights to convert, rights to subscribe, payment
of dividends, payments of interest and/or principal, reorganization or other
exchanges, tender offers and voting rights), and Pledgor agrees that Lender
shall have no responsibility or liability for informing Pledgor of any such
changes or potential changes or for taking any action or omitting to take any
action with respect thereto.
SECTION 12. REMEDIES UPON DEFAULT. In addition to the rights of Lender
pursuant to Section 6, if any Event of Default shall have occurred and be
continuing, Lender shall, in addition to all other rights given by law or by
this Agreement, or otherwise, have all of the rights and remedies with respect
to the Pledged Collateral of a secured party under the Uniform Commercial Code
("Code") in effect in the State of Texas at that time and Lender may, without
notice and at its option, transfer or register, and Pledgor shall register or
cause to be registered upon request therefor by Lender, any securities pledged
hereunder or any part thereof on the books of the issuer thereof into the name
of Lender or Lender's nominee(s), indicating that such securities are subject to
the security interest under the Credit Agreement. In addition, with respect to
any Pledged Collateral that shall then be in or shall thereafter come into the
possession or custody of Lender, Lender may sell or cause the same to be sold at
any broker's board or at any public or private sale, in one or more sales or
lots, at such price or prices as Lender may deem best, for cash or on credit or
for future delivery, without assumption of any credit risk, all in accordance
with the terms and provisions of this Agreement. The purchaser of any or all
Pledged Collateral so sold shall thereafter hold the same absolutely, free from
any claim, encumbrance or right of any kind whatsoever. Unless any of the
Pledged Collateral threatens to decline speedily in value or is or becomes of a
type sold on a recognized market, Lender will give Pledgor reasonable notice of
the time and place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. Any sale of the
Pledged Collateral pursuant to this Agreement conducted in conformity with
reasonable commercial practices of banks, insurance companies, commercial
finance companies, or other financial institutions disposing of property similar
to the Pledged Collateral shall be deemed to be commercially reasonable. Any
requirements of reasonable notice shall be met if such notice is mailed to
Pledgor as provided in Section 15(u) below, at least five (5) days before the
time of the sale or disposition. Pledgor waives any other requirement of
notice, demand or advertisement for sale, to the extent permitted by law.
Lender may, in its own name or in the name of a designee or nominee, buy any of
the Pledged Collateral at any public sale and, if permitted by applicable law,
at any private sale. All expenses (including court costs and reasonable
attorneys' fees, expenses and disbursements) of, or incident to, the enforcement
of any of the provisions of this Agreement shall be recoverable from the
proceeds of the sale or other disposition of the Pledged Collateral. In view of
the fact that federal and state securities laws may impose certain restrictions
on the method by which a sale of the Pledged Collateral may be effected after an
Event of Default, Pledgor agrees that upon the occurrence or existence of any
Event of Default, Lender may, from time to time, attempt to sell all or any part
of the Pledged Collateral pursuant to this Agreement or by means of a private
placement, restricting the prospective purchasers to those who will represent
and agree that they are purchasing for investment only and not for distribution.
In so doing, Lender may solicit offers to buy the Pledged Collateral, or any
part of it, for cash, from a limited number of investors who might be interested
in purchasing the Pledged Collateral, and if Lender solicits such offers from
not less than four (4) such investors that are not affiliated with Lender, then
the acceptance by Lender of the highest offer obtained therefrom shall be deemed
to be a commercially reasonable method of disposition of the Pledged Collateral,
and a sale pursuant to this sentence shall be deemed to be a commercially
reasonably disposition of the Pledged Collateral.
SECTION 13. EXPENSES. Pledgor will pay to Lender the amount of any and
all reasonable out-of-pocket expenses, including, without limitation, the
reasonable fees, expenses and disbursements of its counsel (including allocated
costs of inside counsel), of any investment banking firm, business broker or
other selling agent and of any other experts and agents retained by Lender,
which Lender may incur in connection with (i) the administration of this
Agreement and the Credit Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Pledged
Collateral, (iii) the exercise or enforcement of any of the rights of Lender
hereunder or under the Credit Agreement or (iv) the failure by Pledgor to
perform or observe any of the provisions hereof or of the Credit Agreement. All
amounts owing under this Section shall be payable upon demand. Any and all
amounts payable under or pursuant to this Agreement that are not paid when due
shall bear interest (which shall be payable upon demand) at the Prime Rate plus
2% per annum.
SECTION 14. SECURITY INTEREST ABSOLUTE. All rights of Lender and security
interests under this Agreement, and all obligations of Pledgor under this
Agreement, shall be absolute and unconditional irrespective of, and unaffected
by:
(a) any lack of validity or enforceability of this Agreement, the
Credit Agreement or the Note;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Loan Documents; or
(c) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, Pledgor in respect of the Obligations or
of this Agreement.
SECTION 15. MISCELLANEOUS PROVISIONS.
(a) Continuing Security Interest. This Agreement shall create a
continuing security interest in the Pledged Collateral and shall remain in
full force and effect until the termination of this Agreement pursuant to
Section 15(b).
(b) Release; Termination of Agreement. At any time following the
termination of the Loan Documents shall upon written request to Lender, be
terminated; provided, however, if at any time following any such
termination, the Credit Agreement is reinstated, this Agreement shall be
automatically reinstated and shall thereafter continue in full force and
effect. Upon termination of this Agreement, Lender shall, at the request
and expense of Pledgor, reassign and redeliver to Pledgor all of the
Pledged Collateral hereunder that has not been sold, disposed of, retained
or applied by Lender in accordance with the terms hereof. Such
reassignment and redelivery shall be without warranty by or recourse to
Lender, except as to the absence of any prior assignments by Lender of its
interest in the Pledged Collateral, and shall be at the expense of Pledgor.
(c) Foreclosure Waiver. Lender and Pledgor waive all rights of
notice and hearing of any kind prior to the exercise by Lender of its
rights from and after an Event of Default to repossess with judicial
process any of the Pledged Collateral not in Pledgor's possession or to
replevy, attach or levy upon the Pledged Collateral. Pledgor waives the
posting of any bond otherwise required of Lender in connection with any
judicial process or proceeding to obtain possession of, replevy, attach or
levy upon pledged collateral, to enforce any judgment or other security for
the Obligations, to enforce any judgment or other court order entered in
favor of such party or to enforce by specific performance, temporary
restraining order, preliminary or permanent injunction, this agreement, or
any other agreement or document between Pledgor and any such party.
(d) Limitation of Liability. Lender shall not have any liability to
Pledgor (whether in tort, contract, equity or otherwise) for losses
suffered by Pledgor in connection with, arising out of, or in any way
related to the transactions or relationships contemplated by the Loan
Documents, or any act, omission or event occurring in connection herewith,
unless it is determined by a final and non-appealable judgment or court
order binding on Lender, that the losses were the result of acts or
omissions constituting gross negligence or willful misconduct. In any such
litigation, Lender shall be entitled to the benefit of the rebuttable
presumption that it acted in good faith and with the exercise of ordinary
care in the performance by it of the terms of the Loan Documents.
(e) Indemnity. Pledgor shall indemnify and hold Lender, and its
directors, agents, employees and counsel, harmless from and against any and
all losses, claims, damages, liabilities, costs or expenses ("Indemnified
Amounts") imposed on, incurred by or asserted against any of them in
connection with any litigation, investigation, claim or proceeding
commenced or threatened related to the negotiation, preparation, execution,
delivery, enforcement, performance or administration of the Loan Documents,
or any undertaking or proceeding related to any of the transactions
contemplated by such or any act, omission, event or transaction related or
attendant thereto, including, without limitation, amounts paid in
settlement, court costs, and the reasonable out-of-pocket fees and expenses
of counsel, unless the Indemnified Amounts proximately result from the
gross negligence or willful misconduct of Lender or the intentional breach
by Lender of any obligation of Lender under the Loan Documents. To the
extent that the undertaking to indemnify, pay and hold harmless set forth
in this Section may be unenforceable because it violates any law or public
policy, Pledgor shall pay the maximum portion that it is permitted to pay
under applicable law to Lender in satisfaction of indemnified matters under
this Section. The foregoing indemnity shall survive the payment of the
Obligations and the termination or non-renewal of the Loan Documents.
(f) Authority of Lender. Lender shall have and be entitled to
exercise all powers under the Loan Documents that are specifically granted
to Lender by the terms thereof, together with such powers as are reasonably
incident thereto. Lender may perform any of its duties hereunder or in
connection with the Loan Documents or the Pledged Collateral by or through
agents or employees and shall be entitled to retain counsel and to act in
reliance upon the advice of counsel concerning all such matters. Neither
Lender nor any director, officer, employee, attorney or agent of Lender
shall be liable to Pledgor for any action taken or omitted to be taken by
it or them under the Loan Documents, except for its or their own gross
negligence or willful misconduct, nor shall Lender be responsible for the
validity, effectiveness or sufficiency of the Loan Documents or any
security furnished pursuant thereto. Lender and its directors, officers,
employees, attorneys and agents shall be entitled to rely on any
communication, instrument or document reasonably believed by it or them to
be genuine and correct and to have been signed or sent by the proper person
or persons.
(g) Amendments and Waivers. None of the Loan Documents nor any
provision thereof shall be amended, modified, waived or discharged orally
or by course of conduct, but only by a written agreement signed by an
authorized officer of Lender. Lender shall not, by any act, delay,
omission or otherwise be deemed to have expressly or impliedly waived any
of its rights, powers and/or remedies unless such waiver shall be in
writing and signed by an authorized officer of Lender. Any such waiver
shall be enforceable only to the extent specifically set forth therein. A
waiver by Lender of any right, power and/or remedy on any one occasion
shall not be construed as a bar to or waiver of any such right, power
and/or remedy that Lender would otherwise have on any future occasion,
whether similar in kind or otherwise.
(h) Cumulative Remedies. The rights and remedies provided in the
Loan Documents are cumulative and not exclusive of any rights or remedies
provided by law.
(i) Survival of Provisions. All representations, warranties and
covenants made in the Loan Documents shall survive the execution and
delivery of the Loan Documents and the making of the Loan. Such
representations, warranties and covenants shall terminate only upon the
full and final payment and performance by the Pledgor of the Obligations
and termination of this Agreement and the Note.
(j) Term of Agreement. This Agreement shall continue until the Note
has been paid in full or discharged in accordance with the terms of this
Agreement and until all Obligations of the Pledgor under the Loan Documents
shall have been fully satisfied.
(k) Reinstatement. To the extent permitted by law, the Loan
Documents shall continue to be effective or be reinstated, as the case may
be, if at any time any amount received by Lender, in respect of the
Obligations is rescinded or must otherwise be restored or returned by
Lender, upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of Pledgor or upon the appointment of any receiver,
intervenor, conservator, trustee or similar official for Pledgor or any
substantial part of its assets, or otherwise, all as though such payments
had not been made.
(l) Governing Law. The validity, interpretation and enforcement of
the Loan Documents and any dispute arising out of the relationship between
the parties thereto, whether in contract, tort, equity or otherwise, shall
be governed by the internal laws of the state of Texas (without giving
effect to principles of conflicts of law). Pursuant to Article 15.10(b) of
Chapter 15 ("Chapter 15") of the Texas Credit Code, the parties hereto
expressly agree that Chapter 15 shall not apply to the Loan Documents or to
any advance, nor shall the Loan Documents or any Revolving Credit Advance
be governed by or be subject to the provisions of Chapter 15 in any manner
whatsoever.
(m) Choice of Forum. Pledgor and Lender irrevocably consent and
submit to the non-exclusive jurisdiction of the courts of the state of
Texas located in Dallas, Texas and the United States District Court for the
Northern District of Texas and waive any objection based on venue or forum
non conveniens with respect to any action instituted therein arising under
the Loan Documents or in any way connected with or related or incidental to
the dealings of the parties hereto with respect to the Loan Documents or
the transactions related thereto, in each case whether now existing or
hereafter arising, and whether in contract, tort, equity or otherwise, and
agree that any dispute with respect to any such matters shall be heard only
in the courts described above (except that Lender shall have the right to
bring any action or proceeding against Pledgor or its property in the
courts of any other jurisdiction that Lender deems necessary or appropriate
in order to realize on the Pledged Collateral or to otherwise enforce its
rights against Pledgor or its property).
(n) Successors and Assigns. The Loan Documents shall be binding upon
and inure to the benefit of and be enforceable by Lender, Pledgor and their
respective successors and permitted assigns, except that Pledgor may not
assign its rights under this Agreement without the prior written consent of
Lender. Lender may assign its rights and delegate its obligations under
the Loan Documents to another Person, in which event, the assignee or
participant shall have, to the extent of such assignment or participation,
the same rights and benefits as it would have if it were the Lender
hereunder, except as otherwise provided by the terms of such assignment or
participation.
(o) No Third-Party Rights. The Loan Documents are not intended to
and shall not be construed to create any rights in or confer any benefits
on any persons other than the parties thereto and their respective
successors and permitted assigns.
(p) Complete Agreement. The Loan Documents represent the final
agreement between the parties and may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements of the parties. There
are no unwritten oral agreements between the parties.
(q) Partial Invalidity. If any provision of the Loan Documents is
held to be invalid or unenforceable, such invalidity or unenforceability
shall not invalidate the Loan Documents as a whole, but the Loan Documents
shall be construed as though they did not contain the particular provision
held to be invalid or unenforceable and the rights and obligations of the
parties shall be construed and enforced only to such extent as shall be
permitted by applicable law.
(r) Interpretation of Agreement. Time is of the essence in each
provision of the Loan Documents of which time is an element. All terms not
defined herein or in the Loan Documents shall have the meaning set forth in
the applicable Uniform Commercial Code, except where the context otherwise
requires. Acceptance of or acquiescence in a course of performance
rendered under the Loan Documents shall not be relevant in determining the
meaning of the Loan Documents even though the accepting or acquiescing
party had knowledge of the nature of the performance and opportunity for
objection.
(s) 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 the Credit
Agreement will govern over any conflicting terms or conditions in any other
Loan Document.
(t) Waiver of Notices. Pledgor hereby expressly waives demand,
presentment, protest and notice of protest and notice of dishonor with
respect to any and all instruments and commercial paper, included in or
evidencing any of the Obligations or the Pledged Collateral, and any and
all other demands and notices of any kind or nature whatsoever with respect
to the Obligations, the Pledged Collateral and the Loan Documents, except
such as are expressly provided for in the Loan Documents. No notice to or
demand on Pledgor that Lender may elect to give shall entitle Pledgor to
any other or further notice or demand in the same, similar or other
circumstances.
(u) Notices. All notices, demands or other communications to be
given or delivered under or by reason of this Agreement shall be in writing
(including telecopy, telegraphic, telex or cable communications) and
mailed, telecopied, telegraphed, telexed, cabled or delivered:
If to the Pledgor, at:
Contran Corporation
Three Lincoln Centre
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President and Secretary
If to Lender, at:
Valhi, Inc.
Three Lincoln Centre
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Vice President and Treasurer
or such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
All such notices and communications shall (i) if mailed, be effective five
(5) days after deposit in the mail, (ii) if telecopied, be effective when
transmission is completed and confirmed, (iii) if delivered by a reputable
overnight courier under agreement to deliver the next day, be effective the
next day if delivery is confirmed and (iv) otherwise when received by the
recipient.
(v) Headings. The headings in the Loan Documents are for purposes of
reference only and shall not affect the meaning or construction of any
provision of the Loan Documents.
(w) Counterparts. This Agreement may be executed in any number of
separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, Pledgor and Lender have each caused this Agreement to
be duly executed and delivered as of the date first above written.
PLEDGOR:
CONTRAN CORPORATION
a Delaware corporation
By:
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
LENDER:
VALHI, INC.
a Delaware corporation
By:
--------------------------------
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, Vice President
SCHEDULE I
TO PLEDGE AGREEMENT
Pledged Interests
Number
of
Total Percent
Certifi- Certifi- of Shares Stock
▇▇▇▇ ▇▇▇▇ Common Pledged of Outstand-
Issuer No. Date Stock Issuer ing
----------------- ------- -------- -------- ---------- --------
National City
Lines, Inc. NN001 8,566 8,566 85.7%
▇▇▇▇▇ ▇▇▇▇
Agricultural
Corporation, Inc. 70 396 396 53.8%
NOA, Inc. 7 4,999 4,999 49.9%
Southwest
Louisiana Land
Company, Inc. 128 5,017
Southwest
Louisiana Land
Company, Inc. 132 ▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Company, Inc. ▇▇▇ ▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Company, Inc. 140 ▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Company, Inc. ▇▇▇ ▇▇.▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Company, Inc. 144 3
Southwest
Louisiana Land
Company, Inc. 145 75 5,273.5 88.5%
Valhi, Inc. AT1828 12/23/92 500,000
Valhi, Inc. AT3815 03/01/94 500,000
Valhi, Inc. AT4301 10/17/94 14,258
Valhi, Inc. AT4302 10/17/94 200,000
Valhi, Inc. AT4388 12/06/94 4,400
Valhi, Inc. AT4394 12/07/94 1,000
Valhi, Inc. AT4421 12/13/94 4,500
Valhi, Inc. AT4423 12/14/94 1,500
Valhi, Inc. AT4424 12/14/94 1,900
Valhi, Inc. AT4434 12/21/94 8,100
Valhi, Inc. AT4437 12/22/94 7,100
Valhi, Inc. AT4438 12/22/94 34,700
Valhi, Inc. AT4450 12/27/94 3,000
Valhi, Inc. AT4451 12/27/94 6,400
Valhi, Inc. AT4456 12/28/94 1,000
Valhi, Inc. AT4457 12/28/94 2,700
Valhi, Inc. AT4461 12/29/94 400
Valhi, Inc. AT4464 01/03/95 1,400
Valhi, Inc. AT4465 01/04/95 100
Valhi, Inc. AT4469 01/05/95 1,100
Valhi, Inc. AT4475 01/06/95 10,500
Valhi, Inc. AT4484 01/12/95 1,400
Valhi, Inc. AT4491 01/19/95 56,600
Valhi, Inc. AT4719 04/24/95 5,000
Valhi, Inc. AT4729 04/26/95 6,000
Valhi, Inc. AT4903 06/05/95 38,400
Valhi, Inc. AT4905 06/06/95 2,700
Valhi, Inc. AT4910 06/07/95 8,000
Valhi, Inc. AT4911 06/08/95 11,900
Valhi, Inc. AT4913 06/09/95 80,600
Valhi, Inc. AT4917 06/13/95 7,500
Valhi, Inc. AT4921 06/14/95 1,000
Valhi, Inc. AT5095 06/16/95 800
Valhi, Inc. AT5221 06/19/95 3,200
Valhi, Inc. AT5226 06/23/95 22,000
Valhi, Inc. AT5258 07/05/95 5,100
Valhi, Inc. AT5268 07/06/95 1,200
Valhi, Inc. AT5269 07/06/95 3,500
Valhi, Inc. AT5277 07/07/95 5,600
Valhi, Inc. AT5282 07/10/95 4,600
Valhi, Inc. AT5290 07/11/95 5,000
Valhi, Inc. AT5291 07/11/95 100
Valhi, Inc. AT5296 07/12/95 2,600
Valhi, Inc. AT5304 07/14/95 12,800
Valhi, Inc. AT5332 07/25/95 3,500
Valhi, Inc. AT5333 07/26/95 6,900
Valhi, Inc. AT5335 07/27/95 8,600
Valhi, Inc. AT5349 08/01/95 8,500
Valhi, Inc. AT5367 08/09/95 7,000
Valhi, Inc. AT5368 08/09/95 36,600
Valhi, Inc. AT5371 08/10/95 22,200
Valhi, Inc. AT5378 08/11/95 25,200
Valhi, Inc. AT5384 08/14/95 5,000
Valhi, Inc. AT5385 08/15/95 12,800
Valhi, Inc. AT5390 08/16/95 7,800
Valhi, Inc. AT5395 08/18/95 2,300
Valhi, Inc. AT5396 08/18/95 9,500
Valhi, Inc. AT5403 08/21/95 36,500
Valhi, Inc. AT5406 08/22/95 15,900
Valhi, Inc. AT5409 08/23/95 4,100
Valhi, Inc. AT5412 08/24/95 1,100
Valhi, Inc. AT5417 08/25/95 800
Valhi, Inc. AT5420 08/29/95 500
Valhi, Inc. AT5421 08/29/95 21,300
Valhi, Inc. AT5423 08/30/95 4,500
Valhi, Inc. AT5430 08/31/95 2,700
Valhi, Inc. AT5433 09/01/95 6,500
Valhi, Inc. AT5437 09/05/95 18,100
Valhi, Inc. AT5438 09/06/95 300
Valhi, Inc. AT5442 09/07/95 5,300
Valhi, Inc. AT5445 09/08/95 4,400
Valhi, Inc. AT5446 09/08/95 5,000
Valhi, Inc. AT5461 09/15/95 500
Valhi, Inc. AT5462 09/18/95 5,000
Valhi, Inc. AT5496 10/02/95 5,000
Valhi, Inc. AT5500 10/03/95 1,600
Valhi, Inc. AT5503 10/04/95 2,800
Valhi, Inc. AT5506 10/05/95 100
Valhi, Inc. AT5513 10/10/95 2,500
Valhi, Inc. AT5515 10/09/95 500
Valhi, Inc. AT5525 10/12/95 2,000
Valhi, Inc. AT5534 10/24/95 2,700
Valhi, Inc. AT5537 10/25/95 3,300
Valhi, Inc. AT5538 10/25/95 4,000
Valhi, Inc. AT5545 10/31/95 25,000
Valhi, Inc. AT5549 11/01/95 2,200
Valhi, Inc. AT5550 11/02/95 1,500
Valhi, Inc. AT5554 11/03/95 1,300
Valhi, Inc. AT5573 11/21/95 1,300
Valhi, Inc. AT5576 11/22/95 600
Valhi, Inc. AT5578 11/24/95 200
Valhi, Inc. AT5583 11/28/95 7,900
Valhi, Inc. AT5600 12/08/95 10,000
Valhi, Inc. AT5601 12/11/95 1,000
Valhi, Inc. AT5604 12/12/95 100
Valhi, Inc. AT5605 12/12/95 1,200
Valhi, Inc. AT5611 12/18/95 200
Valhi, Inc. AT5612 12/19/95 300
Valhi, Inc. AT5613 12/19/95 7,200
Valhi, Inc. AT5628 12/29/95 10,600
Valhi, Inc. AT5990 01/14/97 2,000
Valhi, Inc. AT5993 01/15/97 32,400
Valhi, Inc. AT5995 01/16/97 28,100
Valhi, Inc. AT5998 01/17/97 8,300
Valhi, Inc. AT5999 01/20/97 27,000
Valhi, Inc. AT6002 01/22/97 4,500
Valhi, Inc. AT6007 01/24/97 18,000
Valhi, Inc. AT6009 01/27/97 9,900
Valhi, Inc. AT6011 01/28/97 2,300
Valhi, Inc. AT6012 01/29/97 10,100
Valhi, Inc. AT6016 01/30/97 10,000
Valhi, Inc. AT6017 01/30/97 12,000
Valhi, Inc. AT6023 02/04/97 35,100
Valhi, Inc. AT6025 02/05/97 6,500
Valhi, Inc. AT6030 02/06/97 10,400
Valhi, Inc. AT6033 02/07/97 2,500
Valhi, Inc. AT6035 02/10/97 15,000
Valhi, Inc. AT6041 02/19/97 22,000
Valhi, Inc. AT6041 02/24/97 15,000
Valhi, Inc. AT6044 02/20/97 1,700
Valhi, Inc. AT6046 02/21/97 17,500
Valhi, Inc. AT6049 02/25/97 24,800
Valhi, Inc. AT6051 02/26/97 16,600
Valhi, Inc. AT6053 02/27/97 10,900
Valhi, Inc. AT6056 02/28/97 23,900
Valhi, Inc. AT6059 03/03/97 20,200
Valhi, Inc. AT6061 03/04/97 20,800
Valhi, Inc. AT6063 03/05/97 15,500
Valhi, Inc. AT6072 03/06/97 9,200
Valhi, Inc. AT6075 03/07/97 15,100
Valhi, Inc. AT6077 03/10/97 61,100
Valhi, Inc. AT6080 03/11/97 21,700
Valhi, Inc. AT6083 03/12/97 10,100
Valhi, Inc. AT6086 03/14/97 4,500
Valhi, Inc. AT6087 03/14/97 25,100
Valhi, Inc. AT6088 03/17/97 21,300
Valhi, Inc. AT6090 03/18/97 22,400
Valhi, Inc. AT6092 03/19/97 22,500
Valhi, Inc. AT6093 03/21/97 9,000
Valhi, Inc. AT6096 03/25/97 5,000
Valhi, Inc. AT6097 03/25/97 11,100
Valhi, Inc. AT6100 03/26/97 2,600
Valhi, Inc. AT6101 03/27/97 22,000
Valhi, Inc. AT6102 03/28/97 2,000
Valhi, Inc. AT6105 04/01/97 22,600
Valhi, Inc. AT6113 04/02/97 1,500
Valhi, Inc. AT6115 04/03/97 7,900
Valhi, Inc. AT6117 04/04/97 3,400
Valhi, Inc. AT6176 04/17/97 10,000
Valhi, Inc. AT6177 04/17/97 279,000
Valhi, Inc. AT6182 04/18/97 16,400
Valhi, Inc. AT6184 04/21/97 8,100
Valhi, Inc. AT6186 04/22/97 10,200
Valhi, Inc. AT6187 04/23/97 10,000
Valhi, Inc. AT6190 04/24/97 3,200
Valhi, Inc. AT6196 04/25/97 15,000
Valhi, Inc. AT6198 04/28/97 300
Valhi, Inc. AT6200 04/29/97 20,500
Valhi, Inc. AT6201 04/30/97 33,100
Valhi, Inc. AT6203 05/01/97 1,600
Valhi, Inc. AT6206 05/02/97 53,300
Valhi, Inc. AT6207 05/05/97 3,600
Valhi, Inc. AT6208 05/05/97 4,100
Valhi, Inc. AT6209 05/05/97 4,300
Valhi, Inc. AT6210 05/05/97 13,500
Valhi, Inc. AT6211 05/05/97 17,800
Valhi, Inc. AT6212 05/05/97 25,300
Valhi, Inc. AT6213 05/06/97 45,700
Valhi, Inc. AT6216 05/09/97 21,100
Valhi, Inc. AT6217 05/09/97 13,000
Valhi, Inc. AT6222 05/19/97 6,200
Valhi, Inc. AT6223 05/20/97 24,800
Valhi, Inc. AT6224 05/21/97 4,400
Valhi, Inc. AT6225 05/23/97 500
Valhi, Inc. AT6227 05/27/97 700
Valhi, Inc. AT6228 05/27/97 1,800
Valhi, Inc. AT6230 05/28/97 100
Valhi, Inc. AT6233 05/29/97 6,800
Valhi, Inc. AT6234 05/30/97 33,000
Valhi, Inc. AT6237 06/02/97 400
Valhi, Inc. AT6239 06/04/97 400
Valhi, Inc. AT6241 06/06/97 2,000
Valhi, Inc. AT6250 06/11/97 100
Valhi, Inc. AT6251 06/12/97 900
Valhi, Inc. AT6267 07/08/97 100
Valhi, Inc. AT6278 07/18/97 11,000
Valhi, Inc. AT6280 07/23/97 37,800
Valhi, Inc. AT6305 08/18/97 1,200
Valhi, Inc. AT6350 09/18/97 14,000
Valhi, Inc. AT6351 09/19/97 4,400
Valhi, Inc. AT6352 09/22/97 3,300
Valhi, Inc. AT6353 09/23/97 2,200
Valhi, Inc. AT6354 09/24/97 200
Valhi, Inc. AT6358 09/29/97 2,900
Valhi, Inc. AT6362 10/01/97 100
Valhi, Inc. AT6363 10/02/97 13,000
Valhi, Inc. AT6368 10/08/97 2,300
Valhi, Inc. AT6384 10/27/97 600
Valhi, Inc. AT687 10/03/91 200,000
Valhi, Inc. AT986 01/07/92 500,000
Valhi, Inc. AT987 01/07/92 500,000
Valhi, Inc. AT988 01/07/92 200,000
Valhi, Inc. DC5598 12/20/88 100,000
Valhi, Inc. DC5599 12/20/88 500,000
Valhi, Inc. DC8957 08/09/90 500,000
Valhi, Inc. DC8958 08/09/90 100,000
Valhi, Inc. DC8959 08/09/90 100,000
Valhi, Inc. DC9350 10/11/90 50,000
Valhi, Inc. DC9626 11/29/90 500,000
Valhi, Inc. DC9627 11/29/90 500,000
Valhi, Inc. DC9628 11/29/90 300,000
Valhi, Inc. DC9853 01/23/91 100,000
Valhi, Inc. DC9854 01/23/91 100,000
Valhi, Inc. AT6391 11/04/97 11,300
Valhi, Inc. AT6393 11/05/97 12,100
Valhi, Inc. AT6394 11/06/97 10,000
Valhi, Inc. AT6395 11/07/97 10,000
Valhi, Inc. AT6397 11/12/09 4,000
Valhi, Inc. AT6399 11/12/97 5,500
Valhi, Inc. AT6400 11/13/97 4,500
Valhi, Inc. AT6404 11/18/97 7,000
Valhi, Inc. AT6406 11/19/97 2,500
Valhi, Inc. AT6407 11/19/97 22,400
Valhi, Inc. AT6409 11/20/97 6,000
Valhi, Inc. AT6410 11/24/97 7,500
Valhi, Inc. AT6411 11/25/97 10,500
Valhi, Inc. AT6412 12/01/97 4,900
Valhi, Inc. AT6413 12/02/97 5,000
Valhi, Inc. AT6414 12/03/97 15,500
Valhi, Inc. AT6416 12/04/97 1,600
Valhi, Inc. AT6417 12/05/97 9,600
Valhi, Inc. AT6418 12/05/97 30,000
Valhi, Inc. AT6419 12/08/97 9,000
Valhi, Inc. AT6421 12/10/97 28,800
Valhi, Inc. AT6424 12/11/97 9,900
Valhi, Inc. AT6425 12/12/97 200
Valhi, Inc. AT6427 12/16/97 600 7,958,958 6.9%