-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QITdYjDEet4lExtKMepdpnduKPCpee86/00/hKpF7X3kTnRGHU1749VW/W+Ps6Xt oi327PMTd4vA11phftWp0A== 0000024240-96-000003.txt : 19961008 0000024240-96-000003.hdr.sgml : 19961008 ACCESSION NUMBER: 0000024240-96-000003 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19961007 SROS: NYSE SROS: PSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: KEYSTONE CONSOLIDATED INDUSTRIES INC CENTRAL INDEX KEY: 0000055604 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 370364250 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-31481 FILM NUMBER: 96639994 BUSINESS ADDRESS: STREET 1: 5430 LBJ FWY STE 1740 STREET 2: THREE LINCOLN CENTRE CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144580028 MAIL ADDRESS: STREET 1: 5430 LBJ FWY STE 1740 STREET 2: THREE LINCOLN CENTRE CITY: DALLAS STATE: TX ZIP: 75240 FORMER COMPANY: FORMER CONFORMED NAME: KEYSTONE STEEL & WIRE CO DATE OF NAME CHANGE: 19710506 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CONTRAN CORP CENTRAL INDEX KEY: 0000024240 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 4835 LBJ FREEWAY SUITE 600 CITY: DALLAS STATE: TX ZIP: 75234 SC 13D/A 1 KEYSTONE CONSOLIDATED INDUSTRIES, INC. 13D-AM44 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Schedule 13D Under the Securities Exchange Act of 1934 (Amendment No. 44)* KEYSTONE CONSOLIDATED INDUSTRIES, INC. (Name of Issuer) Common Stock, $1.00 par value (Title of Class of Securities) 49342210900 (CUSIP Number) STEVEN L. WATSON THREE LINCOLN CENTRE SUITE 1700 5430 LBJ FREEWAY DALLAS, TEXAS 75240-2694 (972) 233-1700 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 16, 1996 (Date of Event which requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ] Check the following box if a fee is being paid with the statement. [ ] (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class. See Rule 13d-7.) *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to by "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 49342210900 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Contran Corporation 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) WC 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER -0- NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 3,735,233 EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH -0- 10 SHARED DISPOSITIVE POWER 3,735,233 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,735,233 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 40.7% 14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS) CO CUSIP No. 49342210900 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Harold C. Simmons 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(SEE INSTRUCTIONS) (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS(SEE INSTRUCTIONS) Not applicable 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA 7 SOLE VOTING POWER -0- NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 4,025,733 EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH -0- 10 SHARED DISPOSITIVE POWER 4,025,733 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -0- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ X ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) -0- 14 TYPE OF REPORTING PERSON(SEE INSTRUCTIONS) IN AMENDMENT NO. 44 TO SCHEDULE 13D This amended and restated statement on Schedule 13D is hereby amended and restated in its entirety as set forth below, except for Item 3, which is merely amended (collectively, this "Statement"). Item 1. Security and Issuer This Statement relates to the common stock, $1.00 par value per share (the "Shares"), of Keystone Consolidated Industries, Inc., a Delaware corporation (the "Company"). The principal executive offices of the Company are located at Three Lincoln Centre, 5430 LBJ Freeway, Suite 1740, Dallas, Texas 75240. Item 2. Identity and Background (a) This Statement is filed by Contran Corporation, a Delaware corporation ("Contran"), and, by virtue of the positions reported below, Harold C. Simmons (collectively, the "Reporting Persons"). By signing this Statement, each Reporting Person agrees that this Statement is filed on its or his behalf. On September 27, 1996, the Company acquired by merger (the "Merger") DeSoto, Inc., a Delaware corporation ("DeSoto"). Pursuant to the Merger, the Company will issue an estimated 3,499,982 Shares (the "Estimated Additional Outstanding Merger Shares") to the holders of DeSoto common stock, par value $1.00 per share (the "DeSoto Common Stock") immediately prior to the effectiveness of the Merger. The ownership percentages for all persons or entities discussed in this Statement are based on 9,186,406 Shares outstanding (the "Outstanding Shares"), which number is the sum of 5,686,424 Shares outstanding on August 21, 1996 as reported in the Company's Registration Statement on Form S-4 (Registration No. 333-9117, effective August 23, 1996)(the "Registration Statement") plus the Estimated Additional Outstanding Merger Shares. The Estimated Additional Outstanding Merger Shares are based on the 4,688,523 shares of DeSoto Common Stock outstanding on August 22, 1996 as reported in the Registration Statement multiplied by the exchange ratio in the Merger of 0.7465 of a Share for each share of DeSoto Common Stock. Since the Estimated Additional Outstanding Merger Shares does not consider, among other things, the cash that will be issued to former holders of DeSoto Common Stock in lieu of fractional Shares, the Estimated Additional Outstanding Merger Shares overstates the actual number of Shares that will be issued in the Merger attributable solely to former holdings of DeSoto Common Stock. Contran and NL Industries, Inc. ("NL") are the direct holders of approximately 35.9% and 3.5%, respectively of the Outstanding Shares. Valhi, Inc. ("Valhi") and Tremont Corporation ("Tremont") are the direct holders of approximately 55.2% and 17.7%, respectively, of the outstanding common stock of NL and together may be deemed to control NL. Valhi Group, Inc. ("VGI"), National City Lines, Inc. ("National"), Contran, NL and Valmont Insurance Company ("Valmont") are the direct holders of approximately 35.2%, 4.7%, 1.1%, 0.5% and 0.4%, respectively, of the outstanding common stock of Tremont. Together, VGI, National and Contran may be deemed to control Tremont. Valhi is the holder of 100% of the outstanding common stock of Valmont and may be deemed to control Valmont. VGI, National and Contran are the direct holders of approximately 75.1%, 10.1%, and 6.0%, respectively, of the outstanding common stock of Valhi. Together, VGI, National and Contran may be deemed to control Valhi. National, NOA, Inc. ("NOA") and Dixie Holding Company ("Dixie Holding") are the direct holders of approximately 73.3%, 11.4% and 15.3%, respectively, of the outstanding common stock of VGI. Together, National, NOA and Dixie Holding may be deemed to control VGI. Contran and NOA are the direct holders of approximately 85.7% and 14.3%, respectively, of the outstanding common stock of National and together may be deemed to control National. Contran and Southwest Louisiana Land Company, Inc. ("Southwest") are the direct holders of approximately 49.9% and 50.1%, respectively, of the outstanding common stock of NOA and together may be deemed to control NOA. Dixie Rice Agricultural Corporation, Inc. ("Dixie Rice") is the holder of 100% of the outstanding common stock of Dixie Holding and may be deemed to control Dixie Holding. Contran is the holder of approximately 88.7% and 54.3% of the outstanding common stock of Southwest and Dixie Rice, respectively, and may be deemed to control Southwest and Dixie Rice. Mr. Harold C. Simmons is Chairman of the Board, President and Chief Executive Officer of Valhi, VGI, National, NOA, Dixie Holding and Contran. Mr. Simmons is also Chairman of the Board and Chief Executive Officer of Dixie Rice and Southwest. Additionally, Mr. Simmons is Chairman of the Board of NL and is a Director of Tremont. Substantially all of Contran's outstanding voting stock is held by two trusts, the Harold C. Simmons Family Trust No. 1 dated January 1, 1964 and the Harold C. Simmons Family Trust No. 2 dated January 1, 1964 (together, the "Trusts"), established for the benefit of Mr. Simmons' children and grandchildren, of which Mr. Simmons is the sole trustee. As sole trustee of each of the Trusts, Mr. Simmons has the power to vote and direct the disposition of the shares of Contran stock held by each of the Trusts. Mr. Simmons, however, disclaims beneficial ownership of such Shares. The Contran Deferred Compensation Trust No. 2 (the "CDCT No. 2") directly holds approximately 1.3% of the Outstanding Shares, 0.2% of the outstanding shares of Valhi common stock and 2.1% of the outstanding shares of Tremont common stock. Contran contributed to the CDCT No. 2 the 115,550 Shares held by the CDCT No. 2 on October 15, 1995. Contran established the CDCT No. 2 pursuant to an agreement (the "Trust Agreement"), dated as of October 1, 1995, between Contran and NationsBank of Texas, N.A., a national banking association ("NationsBank"). NationsBank serves as the trustee of the CDCT No. 2 (the "Trustee"). The CDCT No. 2 was established in connection with the Amended Deferred Compensation Agreement, dated as of October 1, 1995, between Contran and Harold C. Simmons. Pursuant to the Trust Agreement, Contran retains the right to vote the Shares held by the CDCT No. 2. Except to fund withholding obligations with respect to payments to Mr. Simmons, the Trustee may not sell the Shares without Contran's consent. Contran retains the right at anytime, in its sole discretion, to substitute assets of equal fair market value for any Shares held by the CDCT No. 2. Contran exercised its authority under the Trust Agreement to direct the Trustee not to reinvest proceeds from assets of the CDCT No. 2, including dividends on Shares, in securities of Contran or subsidiaries of Contran, including Shares. The foregoing summary of the Trust Agreement is qualified in its entirety by reference to Exhibit 2 to this Statement, which is incorporated herein by this reference. As a result of the relationship between Contran and the CDCT No. 2, Contran (i) retains sole power to vote the Shares that Contran will contribute to the CDCT No. 2, (ii) shares dispositive power with the Trustee over such Shares and (iii) may be deemed the indirect beneficial owner of such Shares. The Harold Simmons Foundation, Inc. (the "Foundation") directly holds approximately 2.7% of the Outstanding Shares. The Foundation is a tax-exempt foundation organized for charitable purposes. Harold C. Simmons is the Chairman of the Board and Chief Executive Officer of the Foundation and may be deemed to control the Foundation. Mr. Simmons, however, disclaims beneficial ownership of any Shares held by the Foundation. The Combined Master Retirement Trust (the "CMRT") directly holds less than 1.0% of the Outstanding Shares and less than 1.0% of the outstanding shares of Tremont and Valhi common stock, respectively. The CMRT is a trust formed by Valhi to permit the collective investment by trusts that maintain the assets of certain employee benefit plans adopted by Valhi and related companies. Mr. Simmons is sole trustee of the CMRT and sole member of the Trust Investment Committee for the CMRT. Mr. Simmons is a participant in one or more of the employee benefit plans that invest through the CMRT. Mr. Simmons, however, disclaims beneficial ownership of the Shares held by the CMRT, except to the extent of his vested beneficial interest therein. Harold C. Simmons' spouse is the direct beneficial owner of 10,500 Shares, or approximately 0.1% of the Outstanding Shares. Mr. Simmons may be deemed to share indirect beneficial ownership of such Shares. Mr. Simmons disclaims all such beneficial ownership. By virtue of the holding of such offices, the stock ownership and his service as trustee, all as described above, (a) Mr. Simmons may be deemed to control such entities and (b) Mr. Simmons and certain of such entities may be deemed to possess indirect beneficial ownership of Shares directly held by certain of such other entities. However, Mr. Simmons and the Trusts disclaim such beneficial ownership of the Shares beneficially owned, directly or indirectly, by any of such entities. The Reporting Persons understand that Valmont and NL beneficially owned 1,000,000 shares and 1,186,200 shares, respectively, of Valhi common stock as of the date of this report. The Reporting Persons further understand that the shares of Valhi common stock owned by Valmont and NL are treated as treasury stock by Valhi for voting purposes and for the purposes of this Statement. Certain information concerning the directors and executive officers of Contran, including offices held by Mr. Simmons is set forth on Schedule A attached hereto and incorporated herein by reference. (b) The principal executive offices of Contran are located at Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas 75240-2697. (c) Contran is a diversified holding company engaged through its subsidiaries in the production of, among other things, chemicals, titanium metals, refined sugar, building products, fast food, hardware products and steel rod, wire and wire products and in land management, agriculture and oil and gas activities. (d) Neither of the Reporting Persons nor, to the best knowledge of such persons, any of the persons named in Schedule A to this Statement has been convicted in a criminal proceeding in the past five years (excluding traffic violations or similar misdemeanors). (e) Neither of the Reporting Persons nor, to the best knowledge of such persons, any person named in Schedule A to this Statement, was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (e) Contran is Delaware corporation. Harold C. Simmons and all persons named on Schedule A to this Statement are citizens of the United States of America. Item 3. Source and Amount of Funds or Other Consideration The total amount of funds required by Contran to acquire the Shares reported in Item 5(c) was $1,336,622.50 (including commissions). Such funds were or will be provided by Contran's cash on hand and no funds were borrowed for such purpose. The Reporting Persons understand that the funds required by each person named in Schedule A to this Statement to acquire Shares were from such person's personal funds. Item 4. Purpose of Transaction Contran purchased the additional Shares reported in Item 5(c) of this Statement in order to increase its equity interest in the Company. Depending upon their evaluation of the Company's business and prospects, and upon future developments (including, but not limited to, performance of the Shares in the market, availability of funds, alternative uses of funds, and money, stock market and general economic conditions), any of the Reporting Persons or other entities that may be deemed to be affiliated with Contran may from time to time purchase Shares, and any of the Reporting Persons, or other entities that may be deemed to be affiliated with Contran may from time to time dispose of all or a portion of the Shares held by such person, or cease buying or selling Shares. Any such additional purchases or sales of the Shares may be in open market or privately negotiated transactions or otherwise. Harold C. Simmons, through Contran, may be deemed to control the Company. The Reporting Persons understand that prior purchases of Shares by each of the persons named in Schedule A to this Statement and Mr. Simmons' spouse were made for the purpose of such person's personal investment. Except as described in this Item 4, none of the Reporting Persons nor, to the best knowledge of such persons, any other person named in Schedule A to the this Statement has formulated any plans or proposals that relate to or would result in any matter required to be disclosed in response to paragraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. (a) As a result of the purchases described under Item 5(c), Contran is the direct beneficial owner of 3,293,633 Shares, or approximately 35.9% of the Outstanding Shares. In addition, NL, and the CDCT No. 2 are the direct beneficial owners of 326,050, and 115,550 of the Outstanding Shares, respectively. By virtue of the relationships described under Item 2 of this Statement, Contran may be deemed to be the beneficial owner of 3,735,233 Shares, or approximately 40.7% of the Outstanding Shares. Harold C. Simmons does not directly own any of the Outstanding Shares. Contran, NL, the Foundation the CDCT No. 2, the CMRT and Mr. Simmons' spouse, however, are the direct beneficial owners of 3,293,633, 326,050, 250,000, 115,550, 30,000 and 10,500 of the Outstanding Shares. By virtue of the relationships described under Item 2 of this Statement, Harold C. Simmons may be deemed to share indirect beneficial ownership of the Shares directly owned by Contran, NL, the Foundation, the CDCT No. 2, the CMRT and Mr. Simmons' spouse. Mr. Simmons disclaims all such beneficial ownership. The Reporting Persons understand, based on ownership filings with the Securities and Exchange Commission or upon information provided by persons named in Schedule A to this Statement, that the following persons may be deemed to personally beneficially own Shares, as indicated below.
NUMBER OF SHARES NAME BENEFICIALLY OWNED - ------------------------- ------------------- Eugene K. Anderson 200 Glenn R. Simmons 63,600 (1) Harold C. Simmons 10,500 (2) Robert W. Singer 28,770 (3) Steven L. Watson 250
[FN] - ----------- (1) Includes 22,500 Shares issuable upon the exercise of stock options within 60 days of the date of this Statement. (2) Shares held by such person's spouse of which such person expressly disclaims beneficial ownership. (3) Includes 6,000 Shares issuable upon the exercise of stock options within 60 days of the date of this Statement. (b) Contran has the direct power to vote and direct the disposition of the 3,273,633 Shares directly held by it and the indirect power to vote and direct the disposition of the 326,050 Shares directly held by NL and the 115,550 Shares directly held by the CDCT No. 2. By virtue of the relationships described in Item 2, Harold C. Simmons may be deemed to have the power to vote and direct the disposition of the Shares directly held by Contran, NL, the Foundation, the CDCT No. 2 and the CMRT. (c) The table below sets forth additional purchases of the Shares by the Reporting Persons during the 60 days prior to September 16, 1996 and subsequently to the date of the filing of this Statement. All of such purchases were effected by Contran on the New York Stock Exchange.
Approximate Price Per Share ($) Amount of (exclusive of Date Shares commissions) - ------------------- ------------------- ---------------- 07/18/96 2,500 $9.875 07/22/96 600 $9.875 07/23/96 1,000 $9.875 07/24/96 800 $9.875 08/02/96 4,200 $9.750 08/06/96 800 $9.750 08/22/96 4,800 $9.625 08/26/96 7,400 $9.625 08/27/96 2,500 $9.625 08/29/96 100 $9.625 09/10/96 3,600 $9.500 09/11/96 3,000 $9.500 09/12/96 1,300 $9.500 09/13/96 25,100 $9.500 09/16/96 14,100 $9.500 09/19/96 15,000 $9.375 09/20/96 5,000 $9.375 09/23/96 12,700 $9.250 09/24/96 7,300 $9.250 09/24/96 10,000 $9.125 09/25/96 10,000 $9.000 09/27/96 10,000 $8.875
(d) Each of Contran, NL, the Foundation, the CDCT No. 2 and the CMRT has the right to receive and the power to direct the receipt of dividends from, and proceeds from the sale of, the shares directly held by such entity. (e) As a result of the Merger on September 27, 1996 and the issuance of the Estimated Additional Outstanding Merger Shares, the ownership percentages of following entities dropped below 5%, and, consequently, such entities ceased being reporting persons under this Statement: NL, Tremont, Valhi, VGI, National, NOA, Dixie Holding, Dixie Rice, Southwest, the CMRT and the Foundation. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. Contran is a party to a $20 million credit facility dated as of October 31, 1991, as amended and supplemented through March 27, 1996 with Banque Paribas, Houston Agency and Societe Generale, Southwest Agency (the "Paribas/Societe Facility"). Borrowings under the Paribas/Societe Facility bear interest at the rate announced publicly from time to time by each bank as its base rate or at a rate of 1.5% over LIBOR, are due October 29, 1996 or such extended maturity date as may be mutually agreed to, and are secured by certain Shares. On September 30, 1996, approximately $9 million had been borrowed under the Paribas/Societe Facility. The foregoing summary of the Paribas/Societe Facility is qualified in its entirety by reference to Exhibit 1 to this Statement, which is incorporated herein by this reference. Other than set forth above, neither of the Reporting Persons nor, to the best knowledge of such persons, any person named in Schedule A to this Statement has any contract, arrangement, understanding or relationship (legal or otherwise) with any person with respect to securities of the Company, including, but not limited to, transfer or voting of any such securities, finder's fees, joint ventures, loans or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies. Item 7. Material to be Filed as Exhibits. Exhibit 1. Credit Facility dated as of October 31, 1991, as amended and supplemented December 17, 1991, October 31, 1992, October 31, 1993, September 30, 1994, October 31, 1994, October 30, 1995 and March 27, 1996 among Contran, Banque Paribas, Houston Agency and Societe Generale, Southwest Agency (the foregoing documents that are dated October 31, 1991, December 17, 1991, October 31, 1992, are incorporated by reference to Exhibit 1 to Amendment No. 39 to this Statement; the balance of the foregoing documents dated October 31, 1993, September 30, 1994, October 31, 1994, October 30, 1995 and March 27, 1996 are filed herewith as Exhibit 1). Exhibit 2. Contran Deferred Compensation Trust No. 2, dated as of October 1, 1995, between Contran Corporation and NationsBank of Texas, N.A. (incorporated by reference to Exhibit 1 to Amendment No. 43 to this Statement). Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. Date: October 4, 1996 By: /s/ Harold C. Simmons ---------------------------- Harold C. Simmons Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. Date: October 4, 1996 CONTRAN CORPORATION By: /s/ Steven L. Watson ---------------------------- Steven L. Watson Vice President Exhibit A The names of the directors and executive officers of Contran and their present principal occupations are set forth below. Name Present Principal Occupation - ------------------------- ------------------------------------- Eugene K. Anderson Vice President of Contran, Dixie Holding, National, NOA, Valhi and VGI; and Treasurer of the Foundation. J. Mark Hollingsworth General Counsel of Contran, Dixie Holding, National, NOA, Southwest, VGI, Valhi and the Foundation. William J. Lindquist Vice President and Tax Director of Contran, Dixie Rice, Dixie Holding, National, NOA, Southwest, VGI and Valhi. J. Thomas Montgomery, Jr. Vice President and Controller of Contran, Dixie Holding, National, NOA, Southwest, VGI and Valhi; Vice President of Dixie Rice. Glenn R. Simmons Vice Chairman of the Board and Director of Contran, Dixie Holding, National, NOA, VGI and Valhi; Director of NL and Tremont; Executive Vice President and Director of Dixie Rice and Southwest; Chairman of the Board, Chief Executive Officer and Director of the Company. Harold C. Simmons Chairman of the Board, President, Chief Executive Officer and Director of Contran, Dixie Holding, National, NOA, VGI and Valhi; Chairman of the Board and Director of NL; Director of Tremont; Chairman of the Board, Chief Executive Officer and Director of Dixie Rice, Southwest and the Foundation. Robert W. Singer Vice President of Contran and Valhi; President and Chief Operating Officer of The Company. William C. Timm Vice President-Finance and Treasurer of Contran, Dixie Holding, National, NOA, VGI and Valhi; Vice President- Finance and Director of Dixie Rice; Vice President-Finance of Southwest. Steven L. Watson Vice President and Secretary of Contran, Dixie Rice, Dixie Holding, National, NOA, Southwest, VGI and Valhi; Vice President, Secretary and Director of the Foundation. EXHIBIT INDEX Exhibit 1. Credit Facility dated as of October 31, 1991, as amended and supplemented December 17, 1991, October 31, 1992, October 31, 1993, September 30, 1994, October 31, 1994, October 30, 1995 and March 27, 1996 among Contran, Banque Paribas, Houston Agency and Societe Generale, Southwest Agency (the foregoing documents that are dated October 31, 1991, December 17, 1991, October 31, 1992, are incorporated by reference to Exhibit 1 to Amendment No. 39 to this Statement; the balance of the foregoing documents dated October 31, 1993, September 30, 1994, October 31, 1994, October 30, 1995 and March 27, 1996 are filed herewith as Exhibit 1). Exhibit 2. Contran Deferred Compensation Trust No. 2, dated as of October 1, 1995, between Contran Corporation and NationsBank of Texas, N.A. (incorporated by reference to Exhibit 1 to Amendment No. 44 to this statement). EX-1 2 AMENDMT(S) TO LTR AGMT & SECURITY AGMT October 31, 1993 Contran Corporation Three Lincoln Centre 5430 LBJ Freeway, Suite 1700 Dallas, Texas 75240-2697 Attention: Mr. William C. Timm, Vice President-Finance Re: Third Amendment to Letter Agreement and Security Agreement Ladies and Gentlemen: Reference is made to (a) that certain Letter Agreement dated October 31, 1991, by and among BANQUE PARIBAS HOUSTON AGENCY ("Paribas"), SOCIETE GENERALE ("SG"), BANQUE PARIBAS HOUSTON AGENCY as Agent for Paribas and SG ("Agent") and CONTRAN CORPORATION ("Borrower") relating to a line of credit and letter of credit facility extended to Borrower (as amended, the "Letter Agreement"), (b) that certain Security Agreement dated October 31, 1991, executed by Borrower to and in favor of Agent, Paribas and SG (as amended, the "Security Agreement"), (c) that certain First Amendment to Letter Agreement and Security Agreement dated March 17, 1991, by among Borrower, Paribas, SG and Agent and (d) that certain Second Amendment to Letter Agreement and Security Agreement dated October 31, 1992, by and among Borrower, Paribas, SG and Agent. Borrower, Paribas, SG and Agent desire to amend the Letter Agreement and the Security Agreement as hereinafter set forth. Accordingly, Borrower, Paribas, SG and Agent, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby agree as follows: 1. Definitions. The term "Letter Agreement", as used in this Third Amendment to Letter Agreement and Security Agreement (this "Amendment"), shall mean the Letter Agreement referred to hereinabove, as amended hereby. The term "Security Agreement", as used in this Amendment, shall mean the Security Agreement referred to hereinabove, as amended hereby. Capitalized terms used in this Amendment, if and to the extent not otherwise defined in this Amendment, shall have the same meanings in this Amendment as in the Letter Agreement; provided, however, that capitalized terms used in amended terms and provisions of the Security Agreement shall have the same meanings as in the Security Agreement. 2. Amendments to the Letter Agreement (a) Maturity Date. The section of the Letter Agreement entitled "Maturity Date" is hereby amended to read in its entirety as follows: "October 31, 1994 (the 'Maturity Date'), subject to acceleration upon the occurrence of an Event of Default." (b) Other Terms and Provisions. The first sentence of the section of the Letter Agreement entitled "Other Terms and Provisions" is hereby amended to read in its entirety as follows: "In addition to the terms an provisions specified herein, the terms and provisions contained in that certain (a) Security Agreement dated October 31, 1991, executed by Borrower to and in favor of Agent and Banks, as amended by that certain First Amendment to Letter Agreement and Security Agreement dated December 17, 1991, by and among Borrower, Banks and Agent, that certain Second Amendment to Letter Agreement and Security Agreement dated October 31, 1992, by and among Borrower, Banks and Agent and that certain Third Amendment to Letter Agreement and Security Agreement dated October 31, 1993, by and among Borrower, Banks and Agent (as amended, the "Security Agreement"), (b) Amended and Restated Promissory Note dated October 31, 1993, in the original principal amount of $9,000,000 made by Borrower payable to the order of Paribas (the "Paribas Note"), (c) Amended and Restated Promissory Note dated October 31, 1993, in the original principal amount of $9,000,000 made by Borrower payable to the order of SG (the "SG Note") (the Paribas Note and the SG Note, together with all renewals, extensions, amendments and replacements thereof from time to time, are hereinafter collectively called the "Promissory Notes"), and (d) all other agreements, documents, instruments and certificates. executed or delivered in connection herewith (this Agreement, the Security Agreement, the Promissory Notes and such other agreements, documents, instruments and certificates, as the same may be amended, renewed, extended, restated or supplemented from time to time, are hereinafter collectively called the "Loan Papers") all of which are incorporated herein by reference for all purposes, shall apply and shall govern the relationship among Borrower, Agent and Banks with respect to the Facility." 3. Amendment to Security Agreement. (a) Definition of Loan Papers. The first sentence of Subparagraph (f) of Paragraph 21 of the Security Agreement is hereby amended to read in its entirety as follows: "The term "Loan Papers", as used in this Agreement, shall mean and refer to (i) the Letter Agreement, (ii) that certain Amended and Restated Promissory Note dated October 31, 1993, in the original principal amount of $9,000,000 made by the undersigned payable to the order of Banque Paribas Houston Agency, (iii) that certain Amended and Restated Promissory Note dated October 3 1, 1993, in the original principal amount of $9,000,000 made by the undersigned payable to the order of Societe Generale, Southwest Agency, (iv) this Agreement, and (v) the other 'Loan Papers', as such term is defined in the Letter Agreement, as the same may be amended, renewed, extended, restated or supplemented from time to time." 4. Ratifications, Representations and Warranties. (a) Except as expressly amended by this Amendment, the terms and provisions of the Letter Agreement and the Security Agreement are hereby ratified and confirmed and shall continue in full force and effect. The Letter Agreement and the Security Agreement as amended hereby shall continue to be legal, valid, binding and enforceable in accordance with their terms. (b) Borrower hereby represents and warrants to Banks that the execution, delivery and performance of this Amendment and gill other Loan Papers executed and/or delivered in connection herewith, and the performance of the transactions contemplated hereby and thereby, have been duly authorized by all requisite corporate action on the part of Borrower and will not violate the Certificate of Incorporation or Bylaws of Borrower or any other material agreement, document, instrument or certificate to which Borrower, or any of its assets, is a party or is bound or affected. 5. Conditions Precedent. The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent: (a) Agent shall have received the following, each dated (unless otherwise indicated) the date of this Amendment, in form and substance satisfactory to Banks: (i) an Amended and Restated Promissory Note in the original principal amount of $9,000,000 made by Borrower payable to the order of each of Paribas and SG; (ii) an Amended and Restated Federal Reserve Form U- 1 executed by Borrower pertaining to this Amendment; and (iii) a Corporate Certificate executed by Borrower and certain officers of Borrower evidencing that the transactions contemplated by this Amendment have been duly authorized by all requisite corporate action on the part of Borrower. (b) All corporate proceedings taken in connection with the transactions contemplated by this Amendment and all agreements, documents, instruments and certificates and other legal matters incident thereto shall be reasonably satisfactory to Agent and its legal counsel, Jenkens & Gilchrist, P.C. 6. Miscellaneous (a) All representations and warranties contained in this Amendment shall survive the execution and delivery of this Amendment and the other Loan Papers, and no investigation by Agent or Banks or any closing shall affect such representations and warranties or the right of Agent and Banks to rely thereon. (b) The Loan Papers are hereby amended so that any reference therein to the Letter Agreement or the Security Agreement shall mean a reference to the Letter Agreement or the Security Agreement, respectively, as amended hereby. (c) Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. (d) This Amendment is binding upon and shall inure to the benefit of Banks, Agent and Borrower and their respective successors and assigns; provided, however, that Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of Banks. (e) This Amendment may be executed in one or more counterparts. (f) Borrower agrees to pay on demand by Agent the reasonable fees and out-of-pocket expenses of counsel to Agent and Paribas in connection with the preparation, negotiation and execution of this Amendment and the other Loan Papers executed pursuant hereto. (g) THIS AMENDMENT, TOGETHER WITH THE OTHER LOAN PAPERS AS WRITTEN, REPRESENT THE FINAL AGREEMENTS BETWEEN AND AMONG THE PARTIES HERETO WITH RESPECT TO THE FACILITY, THE LOANS AND THE LETTERS OF CREDIT AND MAY NOT BE CONTRADICTED BY EVIDENCE OR PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN (1) BORROWER AND (2) AGENT OR ANY BANK. If you are in agreement with all of the terms and conditions stated herein, please indicate by signing below whereupon this Amendment shall become effective as of the date first above written. Sincerely, BANQUE PARIBAS HOUSTON AGENCY Individually and as Agent By: /s/ Robert G. Shaw ------------------------- Name: Robert G. Shaw Title: Vice President By: /s/ Pierre-Jean de Filippis ------------------------- Name: Pierre-Jean de Filippis Title: General Manager SOCIETE GENERALE, SOUTHWEST AGENCY By: /s/ Matthew C. Flanigan ------------------------- Name: Matthew C. Flanigan Title: Vice President and Manager AGREED AND ACCEPTED: CONTRAN CORPORATION By: /s/ William C. Timm ------------------------- Name: William C. Timm Title: Vice President-Finance Effective as of September 30, 1994 (except as otherwise provided herein) Contran Corporation Three Lincoln Centre 5430 LBJ Freeway, Suite 1700 Dallas, Texas 75240-2697 Attention: Mr. William C. Timm, Vice President-Finance Re: Fourth Amendment to Letter Agreement and Security Agreement Ladies and Gentlemen: Reference is made to (a) that certain Letter Agreement dated October 31, 1991, by and among BANQUE PARIBAS HOUSTON AGENCY ("Paribas"), SOCIETE GENERALE, SOUTHWEST AGENCY ("SG"), BANQUE PARIBAS HOUSTON AGENCY as Agent for Paribas and SG ("Agent") and CONTRAN CORPORATION ("Borrower") relating to a line of credit and letter of credit facility extended to Borrower (as amended, the "Letter Agreement"), (b) that certain Security Agreement dated October 31, 1991, executed by Borrower to and in favor of Agent, Paribas and SG (as amended, the "Security Agreement"), (c) that certain First Amendment to Letter Agreement and Security Agreement dated March 17, 1991, by among Borrower, Paribas, SG and Agent, (d) that certain Second Amendment to Letter Agreement and Security Agreement dated October 31, 1992, by and among Borrower, Paribas, SG and Agent and (e) that certain Third Amendment to Letter Agreement and Security Agreement dated October 31, 1993, by and among Borrower, Paribas, SG and Agent. Borrower, Paribas, SG and Agent desire to amend the Letter Agreement and the Security Agreement as hereinafter set forth. Accordingly, Borrower, Paribas, SG and Agent, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby agree as follows: 1. Definitions. The term "Letter Agreement", as used in this Fourth Amendment to Letter Agreement and Security Agreement (this "Amendment"), shall mean the Letter Agreement referred to hereinabove, as amended hereby. The term "Security Agreement", as used in this Amendment, shall mean the Security Agreement referred to hereinabove, as amended hereby. Capitalized terms used in this Amendment, if and to the extent not otherwise defined in this Amendment, shall have the same meanings in this Amendment as in the Letter Agreement; provided, however, that capitalized terms used in amended terms and provisions of the Security Agreement shall have the same meanings as in the Security Agreement. 2. Amendments to the Letter Agreement. (a) Letter of Credit Sublimit. The section of the Letter Agreement entitled "Letter of Credit Sublimit" is hereby amended to read in its entirety as follows: "The amount available for drawing under outstanding Letters of Credit from time to time shall not exceed $10,000,000 in the aggregate, and the maturity of each Letter of Credit may not exceed one (1) year from the issuance date and may not extend beyond the Maturity Date; provided, however, that the maturity of a Letter of Credit may extend beyond the Maturity Date with the prior written consent of Banks." (b) Cash Collateral and Substitution of Collateral. A new section of the Letter Agreement entitled "Cash Collateral and Substitution of Collateral" is hereby added to the Letter Agreement immediately following the section of the Low Agreement entitled "Security", which new section shall read in its entirety as follows: "Notwithstanding anything to the contrary contained herein, in the event that, for whatever reason (a) any Letter of Credit is outstanding after the Maturity Date, (b) all Indebtedness (as such term is defined in the Security Agreement) is irrevocably paid in full (other than the contingent indebtedness of Borrower to Banks in connection with outstanding Letters of Credit) and (c) Agent delivers a written notice to Borrower requesting that cash collateral be provided to secure the contingent indebtedness of Borrower to Banks in connection with the outstanding Letters of Credit, then Borrower shall, on or before sixty (60) days after the Maturity Date, pledge, assign and grant a security interest in, to and in favor of Agent on behalf of Banks, Cash Collateral having an aggregate fair market value equal to or greater than the aggregate undrawn amount of the Letters of Credit that are outstanding on the day after the Maturity Date, which Cash Collateral and pledge, assignment and security interest thereof or therein shall be in form and substance reasonably satisfactory to Banks. For purposes of this Agreement, the term "Cash Collateral" shall mean (and shall consist of) cash and any cash equivalents (if any) as Banks may approve as being acceptable cash collateral from time to time. In the event that such Cash Collateral in form and substance reasonably satisfactory to Banks is timely provided to Agent on behalf of Banks as required hereby, then Agent shall, in connection with the providing of such Cash Collateral, release the shares of common stock of Keystone pledged by Borrower to Agent pursuant to the Security Agreement; provided, however, that Agent shall not release any such shares and Borrower shall not be obligated to provide any such Cash Collateral if, on or before the appropriate date of the proposed release, an Event of Default specified in clause (d), (e) or (f) of the "Event of Default" section of this Agreement shall have occurred. In the event that, for whatever reason, Borrower fails to timely provide such Cash Collateral as required pursuant to this section, then, notwithstanding anything to the contrary contained herein or in the Security Agreement, Agent may (at its discretion) sell, transfer, dispose of or otherwise liquidate all or any portion of the shares of common stock of Keystone pledged by Borrower to Agent pursuant to the Security Agreement and any other Collateral securing the Indebtedness (as such term is defined in the Security Agreement) and hold the proceeds thereof as cash collateral to secure the Indebtedness (as such term is defined in the Security Agreement), including, without limitation, the contingent indebtedness of Borrower to Banks in connection with outstanding Letters of Credit, pursuant to the Security Agreement. To the extent the Cash Collateral consists of cash, it shall be held in an interest bearing account or accounts mutually acceptable to Borrower and Agent and, if and to the extent feasible, the interest accrued thereon shall be distributed to Borrower from time to time upon request by Borrower to Agent so long as no Event of Default, or occurrence or event which, with the giving of notice or lapse of time, or both, would become an Event of Default, has occurred and is then continuing." (c) Representations and Warranties. Subparagraph (d) of the section of the Letter Agreement entitled "Representations and Warranties" is hereby amended to read in its entirety as follows: "all shares of common stock of Keystone constituting a part of the Collateral and all shares of common stock of Keystone which may be subsequently pledged as Collateral (i) are not subject to any restrictions on sale or transfer except for any restrictions regarding compliance with applicable securities laws and (ii) either (A) are not, and will not be, "restricted securities" as such term is used or defined in paragraph (a)(3) of Rule 144, or (B) if and to the extent such shares are or will be "restricted securities" as so defined, such shares have been held by Borrower for greater than three (3) years within the meaning of and as calculated pursuant to the holding period provisions of paragraph (d) of Rule 144, and Borrower fully paid the purchase price of the Keystone shares at the time it acquired the Keystone shares and did not give a promissory note or enter into any installment purchase contract or any other obligation as any part of its payment of the purchase price of the Keystone shares; provided, however, that the representation and warranty contained in clause (ii) immediately preceding shall apply only to 2,971,233 shares of common stock of Keystone pledged as Collateral." (d) Other Terms and Provisions. The first sentence of the section of the Letter Agreement entitled "Other Terms and Provisions" is hereby amended to read in its entirety as follows: "In addition to the terms and provisions specified herein, the terms and provisions contained in that certain (a) Security Agreement dated October 31, 1991, executed by Borrower to and in favor of Agent and Banks, as amended by that certain First Amendment to Letter Agreement and Security Agreement dated December 17, 1991, by and among Borrower, Banks and Agent, that certain Second Amendment to Letter Agreement and Security Agreement dated October 31, 1992, by and among Borrower, Banks and Agent, that certain Third Amendment to Letter Agreement and Security Agreement dated October 31, 1993, by and among Borrower, Banks and Agent and that certain Fourth Amendment to Letter Agreement and Security Agreement dated September 30, 1994, by and among Borrower, Banks and Agent (as amended, the "Security Agreement"), (b) Amended and Restated Promissory Note dated October 31, 1993, in the original principal amount of $9,000,000 made by Borrower payable to the order of Paribas (the "Paribas Note"), (c) Amended and Restated Promissory Note dated October 31, 1993, in the original principal amount of $9,000,000 made by Borrower payable to the order of SG (the "SG Note") (the Paribas Note and the SG Note, together with all renewals, extensions, amendments and replacements thereof from time to time, are hereinafter collectively called the 'Promissory Notes'), and (d) all other agreements, documents, instruments and certificates executed or delivered in connection herewith (this Agreement, the Security Agreement, the Promissory Notes and such other agreements, documents, instruments and certificates, as the same may be amended, renewed, extended, restated or supplemented from time to time, are hereinafter collectively called the "Loan Papers"), all of which are incorporated herein by reference for all purposes, shall apply and shall govern the relationship among Borrower, Agent and Banks with respect to the Facility." 3. Amendments to the Security Agreement. (a) Definition of Keystone Shares. Clause (i) of Subparagraph (b) of Paragraph 21 of the Security Agreement is hereby amended to read in its entirety as follows: "(i) the 2,971,233 shares of common stock of Keystone Consolidated Industries, Inc. ("Keystone") delivered to the Bank prior to or on or about October 31, 1991 and any and all additional shares of common stock of Keystone at any time delivered to the Bank (collectively, the "Keystone Shares");". (b) Definition of Indebtedness. Subparagraph (d)) of Paragraph 21 of the Security Agreement is hereby amended to read in its entirety as follows: "The term 'Indebtedness', as used in this Agreement, shall mean and refer to any and all debts, obligations or liabilities, whether now existing or herewith or hereafter incurred or created, whether voluntary or involuntary, whether due or not due, whether absolute or contingent, or whether incurred directly or acquired by the Bank by assignment or otherwise, of the undersigned to the Bank pursuant to the Letter Agreement (as hereinafter defined), the Promissory Notes (as hereinafter defined), the Letters of Credit (as such term is defined in the Letter Agreement) or the other Loan Papers (as hereinafter defined)." (c) Cash Collateral. Subparagraph (1) of Paragraph 21 of the Security Agreement is hereby amended to read in its entirety as follows: "If, by reason of the occurrence of an Event of Default or the fact that any Letter of Credit is outstanding after the Maturity Date (as such term is defined in the Letter Agreement), Agent or any Bank receives cash collateral or other payment from Borrower or proceeds from the disposition of any Collateral at a time when any Letter of Credit remains outstanding, Agent shall be entitled, after application of such cash collateral or other payment or proceeds to any Indebtedness then due and payable by Borrower if Agent elects to make such application, to retain such cash collateral or other payment or proceeds as cash collateral to secure the remaining Indebtedness (including without limitation any Indebtedness consisting of contingent indebtedness with respect to Letters of Credit) and, in furtherance thereof, Borrower hereby grants to the Bank a security interest therein as security for the Indebtedness in accordance with this Agreement." 4. Ratifications, Representations and Warranties. (a) Except as expressly amended by this Amendment, the terms and provisions of the Letter Agreement and the Security Agreement are hereby ratified and confirmed and shall continue in full force and effect. The Letter Agreement and the Security Agreement as amended hereby shall continue to be legal, valid, binding and enforceable in accordance with their terms. (b) Borrower hereby represents and warrants to Banks that the execution, delivery and performance of this Amendment and all other Loan Papers executed and/or delivered in connection herewith, and the performance of the transactions contemplated hereby and thereby, have been duly authorized by all requisite corporate action on the part of Borrower and will not violate the Certificate of Incorporation or Bylaws of Borrower or any other material agreement, document, instrument or certificate to which Borrower, or any of its assets, is a party or is bound or affected. 5. Conditions Precedent. The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent: (a) Agent shall have received the following, each dated (unless otherwise indicated) the date of this Amendment, in form and substance satisfactory to Banks: (i) a Corporate Certificate executed by Borrower and certain officers of Borrower evidencing that the transactions contemplated by this Amendment have been duly authorized by all requisite corporate action on the part of Borrower. (b) All corporate proceedings taken in connection with the transactions contemplated by this Amendment and all agreements, documents, instruments and certificates and other legal matters incident thereto shall be reasonably satisfactory to Agent and its legal counsel, Jenkens & Gilchrist, P.C. 6. Miscellaneous. (a) All representations and warranties contained in this Amendment shall survive the execution and delivery of this Amendment and the other Loan Papers, and no investigation by Agent or Banks or any closing shall affect such representations and warranties or the right of Agent and Banks to rely thereon. (b) The Loan Papers are hereby amended so that any reference therein to the Letter Agreement or the Security Agreement shall mean a reference to the Letter Agreement or the Security Agreement, respectively, as amended hereby. (c) Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. (d) This Amendment is binding upon and shall inure to the benefit of Banks, Agent and Borrower and their respective successors and assigns; provided, however, that Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of Banks. (e) This Amendment may be executed in one or more counterparts. (f) Borrower agrees to pay on demand by Agent the reasonable fees and out-of-pocket expenses of counsel to Agent and Paribas in connection with the preparation, negotiation and execution of this Amendment and the other Loan Papers executed pursuant hereto. (g) THIS AMENDMENT, TOGETHER WITH THE OTHER LOAN PAPERS AS WRITTEN, REPRESENT THE FINAL AGREEMENTS BETWEEN AND AMONG THE PARTIES HERETO WITH RESPECT TO THE FACILITY, THE LOANS AND THE LETTERS OF CREDIT AND MAY NOT BE CONTRADICTED BY EVIDENCE OR PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN (1) BORROWER AND (2) AGENT OR ANY BANK. If you are in agreement with all of the terms and conditions stated herein, please indicate by signing below whereupon this Amendment shall become effective as of the date first above written. Sincerely, BANQUE PARIBAS HOUSTON AGENCY Individually and as Agent By: /s/ Robert G. Shaw ------------------------- Name: Robert G. Shaw Title: Vice President By: /s/ Pierre-Jean de Filippis ------------------------- Name: Pierre-Jean de Filippis Title: General Manager SOCIETE GENERALE, SOUTHWEST AGENCY By: /s/ Matthew C. Flanigan ------------------------- Name: Matthew C. Flanigan Title: Vice President and Manager By: /s/ Richard M. Lewis ------------------------- Name: Richard M. Lewis Title: Assistant Vice President AGREED AND ACCEPTED: CONTRAN CORPORATION By: /s/ William C. Timm ------------------------- Name: William C. Timm Title: Vice President-Finance Effective as of October 31, 1994 Contran Corporation Three Lincoln Centre 5430 LBJ Freeway, Suite 1700 Dallas, Texas 75240-2697 Attention: Mr. William C. Timm, Vice President-Finance Re: Fifth Amendment to Letter Agreement and Security Agreement Ladies and Gentlemen: Reference is made to (a) that certain Letter Agreement dated October 31, 1991, by and among BANQUE PARIBAS HOUSTON AGENCY ("Paribas"), SOCIETE GENERALE, SOUTHWEST AGENCY ("SG"), BANQUE PARIBAS HOUSTON AGENCY as Agent for Paribas and SG ("Agent") and CONTRAN CORPORATION ("Borrower") relating to a line of credit and letter of credit facility extended to Borrower (as amended, the "Letter Agreement"), (b) that certain Security Agreement dated October 31, 1991, executed by Borrower to and in favor of Agent, Paribas and SG (as amended, the "Security Agreement"), (c) that certain First Amendment to Letter Agreement and Security Agreement dated March 17, 1991, by among Borrower, Paribas, SG and Agent, (d) that certain Second Amendment to Letter Agreement and Security Agreement dated October 31, 1992, by and among Borrower, Paribas, SG and Agent, (e) that certain Third Amendment to Letter Agreement and Security Agreement dated October 31, 1993, by and among Borrower, Paribas, SG and Agent and (f) that certain Fourth Amendment to Letter Agreement and Security Agreement dated October 31, 1994, by and among Borrower, Paribas, SG and Agent. Borrower, Paribas, SG and Agent desire to amend the Letter Agreement and the Security Agreement as hereinafter set forth. Accordingly, Borrower, Paribas, SG and Agent, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby agree as follows: 1. Definitions. The term "Letter Agreement", as used in this Fourth Amendment to Letter Agreement and Security Agreement (this "Amendment"), shall mean the Letter Agreement referred to hereinabove, as amended hereby. The term "Security Agreement", as used in this Amendment, shall mean the Security Agreement referred to hereinabove, as amended hereby. Capitalized terms used in this Amendment, if and to the extent not otherwise defined in this Amendment, shall have the same meanings in this Amendment as in the Letter Agreement; provided, however, that capitalized terms used in amended terms and provisions of the Security Agreement shall have the same meanings as in the Security Agreement. 2. Amendments to the Letter Agreement. (a) Maturity Date. The section of the Letter Agreement entitled "Maturity Date" is hereby amended to read in its entirety as follows: "October 30, 1995 (the 'Maturity Date'), subject to acceleration upon the occurrence of an Event of Default." (b) Other Terms and Provisions. The first sentence of the section of the Letter Agreement entitled "Other Terms and Provisions' is hereby amended to read in its entirety as follows: "In addition to the terms and provisions specified herein, the terms and provisions contained in that certain (a) Security Agreement dated October 31, 1991, executed by Borrower to and in favor of Agent and Banks, as amended by that certain First Amendment to Letter Agreement and Security Agreement dated December 17, 1991, by and among Borrower, Banks and Agent, that certain Second Amendment to Letter Agreement and Security Agreement dated October 31, 1992, by and among Borrower, Banks and Agent, that certain Third Amendment to Letter Agreement and Security Agreement dated October 31, 1993, by and among Borrower, Banks and Agent, that certain Fourth Amendment to Letter Agreement and Security Agreement dated September 30, 1994, by and among Borrower, Banks and Agent and that certain Fifth Amendment to Letter Agreement and Security Agreement dated October 31, 1994, by and among Borrower, Banks and Agent (as amended, the 'Security Agreement'), (b) Amended and Restated Promissory Note dated October 31, 1994, in the original principal amount of $9,000,000 made by Borrower payable to the order of Paribas (the 'Paribas Note'), (c) Amended and Restated Promissory Note dated October 31, 1994, in the original principal amount of $9,000,000 made by Borrower payable to the order of SG (the 'SG Note') (the Paribas Note and the SG Note, together with all renewals, extensions, amendments and replacements thereof from time to time, are hereinafter collectively called the 'Promissory Notes'), and (d) all other agreements, documents, instruments and certificates executed or delivered in connection herewith (this Agreement, the Security Agreement, the Promissory Notes and such other agreements, documents, instruments and certificates, as the same may be amended, renewed, extended, restated or supplemented from time to time, are hereinafter collectively called the 'Loan Papers'), all of which are incorporated herein by reference for all purposes, shall apply and shall govern the relationship among Borrower, Agent and Banks with respect to the Facility." 3. Amendments to the Security Agreement. (a) Definition of Loan Papers. The first sentence of Subpargraph (f) of Paragraph 21 of the Security Agreement is hereby amended to read in its entirety as follows: "The term 'Loan Papers', as used in this Agreement, shall mean and refer to (i) the Letter Agreement, (ii) that certain Amended and Restated Promissory Note dated October 31, 1994, in the original principal amount of $9,000,000 made by the undersigned payable to the order of Banque Paribas Houston Agency, (iii) that certain Amended and Restated Promissory Note dated October 31, 1994, in the original principal amount of $9,000,000 made by the undersigned payable to the order of Societe Generale, Southwest Agency, (iv) this Agreement, and (v) the other 'Loan Papers', as such term is defined in the Letter Agreement, as the same may be amended, renewed, extended, restated or supplemented from time to time." 4. Ratifications, Representations and Warranties. (a) Except as expressly amended by this Amendment, the terms and provisions of the Letter Agreement and the Security Agreement are hereby ratified and confirmed and shall continue in full force and effect. The Letter Agreement and the Security Agreement as amended hereby shall continue to be legal, valid, binding and enforceable in accordance with their terms. (b) Borrower hereby represents and warrants to Banks that the execution, delivery and performance of this Amendment and all other Loan Papers executed and/or delivered in connection herewith, and the performance of the transactions contemplated hereby and thereby, have been duly authorized by all requisite corporate action on the part of Borrower and will not violate the Certificate of Incorporation or Bylaws of Borrower or any other material agreement, document, instrument or certificate to which Borrower, or any of its assets, is a party or is bound or affected. 5. Conditions Precedent. The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent: (a) Agent shall have received the following, each dated (unless otherwise indicated) the date of this Amendment, in form and substance satisfactory to Banks: (i) an Amended and Restated Promissory Note in the original principal amount of $9,000,000 made by Borrower payable to the order of each of Paribas and SG; (ii) an Amended and Restated Federal Reserve Form U-1 executed by Borrower pertaining to this Amendment; and (iii) a Corporate Certificate executed by Borrower and certain officers of Borrower evidencing that the transactions contemplated by this Amendment have been duly authorized by all requisite corporate action on the part of Borrower. (b) All corporate proceedings taken in connection with the transactions contemplated by this Amendment and all agreements, documents, instruments and certificates and other legal matters incident thereto shall be reasonably satisfactory to Agent and its legal counsel, Jenkens & Gilchrist, P.C. 6. Miscellaneous. (a) All representations and warranties contained in this Amendment shall survive the execution and delivery of this Amendment and the other Loan Papers, and no investigation by Agent or Banks or any closing shall affect such representations and warranties or the right of Agent and Banks to rely thereon. (b) The Loan Papers are hereby amended so that any reference therein to the Letter Agreement or the Security Agreement shall mean a reference to the Letter Agreement or the Security Agreement, respectively, as amended hereby. (c) Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. (d) This Amendment is binding upon and shall inure to the benefit of Banks, Agent and Borrower and their respective successors and assigns; provided, however, that Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of Banks. (e) This Amendment may be executed in one or more counterparts. (f) Borrower agrees to pay on demand by Agent the reasonable fees and out-of-pocket expenses of counsel to Agent and Paribas in connection with the preparation, negotiation and execution of this Amendment and the other Loan Papers executed pursuant hereto. (g) THIS AMENDMENT, TOGETHER WITH THE OTHER LOAN PAPERS AS WRITTEN, REPRESENT THE FINAL AGREEMENTS BETWEEN AND AMONG THE PARTIES HERETO WITH RESPECT TO THE FACILITY, THE LOANS AND THE LETTERS OF CREDIT AND MAY NOT BE CONTRADICTED BY EVIDENCE OR PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN (1) BORROWER AND (2) AGENT OR ANY BANK. If you are in agreement with all of the terms and conditions stated herein, please indicate by signing below whereupon this Amendment shall become effective as of the date first above written. Sincerely, BANQUE PARIBAS HOUSTON AGENCY Individually and as Agent By: /s/ Robert G. Shaw ------------------------- Name: Robert G. Shaw Title: Vice President By: /s/ Pierre-Jean de Filippis ------------------------- Name: Pierre-Jean de Filippis Title: General Manager SOCIETE GENERALE, SOUTHWEST AGENCY By: /s/ Matthew C. Flanigan ------------------------- Name: Matthew C. Flanigan Title: Vice President and Manager By: /s/ Richard M. Lewis ------------------------- Name: Richard M. Lewis Title: Assistant Vice President AGREED AND ACCEPTED: CONTRAN CORPORATION By: /s/ William C. Timm ------------------------- Name: William C. Timm Title: Vice President-Finance Effective as of October 30, 1995 Contran Corporation Three Lincoln Centre 5430 LBJ Freeway, Suite 1700 Dallas, Texas 75240-2697 Attention: Mr. William C. Timm, Vice President-Finance Re: Sixth Amendment to Letter Agreement and Security Agreement Ladies and Gentlemen: Reference is made to (a) that certain Letter Agreement dated October 31, 1991, by and among BANQUE PARIBAS HOUSTON AGENCY ("Paribas"), SOCIETE GENERALE SOUTHWEST AGENCY, BANQUE PARIBAS HOUSTON AGENCY as Agent for Paribas and SG ("Agent") and CONTRAN CORPORATION ("Borrower") relating to a line of credit and letter of credit facility extended to Borrower (as amended, the "Letter Agreement"), (b) that certain Security Agreement dated October 31, 1991, executed by Borrower to and in favor of Agent, Paribas and SG (as amended, the "Security Agreement"), (c) that certain First Amendment to Letter Agreement and Security Agreement dated March 17, 1991, by among Borrower, Paribas, SG and Agent, (d) that certain Second Amendment to Letter Agreement and Security Agreement dated October 31, 1992, by and among Borrower, Paribas, SG and Agent, (e) that certain Third Amendment to Letter Agreement and Security Agreement dated October 31, 1993, by and among Borrower, Paribas, SG and Agent, (f) that certain Fourth Amendment to Letter Agreement and Security Agreement dated September 30, 1994, by and among Borrower, Paribas, SG and Agent and (g) that certain Fifth Amendment to Letter Agreement and Security Agreement dated October 31, 1994, by and among Borrower, Paribas, SG and Agent. Borrower, Paribas, SG and Agent desire to amend the Letter Agreement and the Security Agreement as hereinafter set forth. Accordingly, Borrower, Paribas, SG and Agent, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby agree as follows: 1. Definitions. The term "Letter Agreement" , as used in this Sixth Amendment to Utter Agreement and Security Agreement (this "Amendment"), shall mean the Letter Agreement referred to hereinabove, as amended hereby. The term "Security Agreement", as used in this Amendment, shall mean the Security Agreement referred to hereinabove, as amended hereby. Capitalized terms used in this Amendment, if and to the extent not otherwise defined in this Amendment, shall have the same meanings in this Amendment as in the Letter Agreement; provided, however, that capitalized terms used in amended terms and provisions of the Security Agreement shall have the same meanings as in the Security Agreement. 2. Amendments to the Letter Agreement. (a) Facility. The section of the Letter Agreement entitled "Facility" is hereby amended to read in its entirety as follows: "$20,000,000 (the 'Committed Amount') aggregate committed line of credit for loans (the 'Loan') and letters of credit (the 'Letters of Credit'), subject to the Advance Rate (as hereinafter defined) and the other terms and conditions of this Agreement and the other Loan Papers (as hereinafter defined); provided, however, that the commitment of Paribas shall be $11,000,000 of the Committed Amount and the commitment of SG shall be $9,000,000 of the Committed Amount. The commitments of Banks under this Facility shall expire on the earlier to occur of the Maturity Date (as hereinafter defined) or the occurrence of an Event of Default. Banks shall not be obligated to make any advances of Loans or issue any Letter of Credit under the Facility on or after the Maturity Date." (b) Security. The section of the Letter Agreement entitled "Security" is hereby amended to read in its entirety as follows: "Banks shall have a perfected first priority security interest in at least 3,121,233 shares of common stock of Keystone Consolidated Industries, Inc. ('Keystone'). Borrower shall deliver to Agent the stock certificates representing the Keystone shares and appropriate stock powers, executed in blank and in proper form for transfer, relating thereto, and thereby pledge the Keystone shares to Banks as further provided in the Security Agreement (as hereinafter defined). Borrower may, from time to time, pledge additional marketable securities acceptable to Banks in their discretion, including shares of common stock of Keystone which Banks hereby agree, in advance, are acceptable collateral." (c) Maturity Date. The section of the Letter Agreement entitled "Maturity Date" is hereby amended to read in its entirety as follows: "October 29, 1996 (the 'Maturity Date'), subject to acceleration upon the occurrence of an Event of Default." (d) Borrowing Rates. The first sentence of the section of the Letter Agreement entitled "Borrowing Rates" is hereby amended to read in its entirety as follows: "Borrower's option of Base Rate (as defined in the Promissory Notes) or one, two or three month reserve adjusted LIBOR + 1-1/2 %(the 'LIBOR Rate')". (e) Representations and Warranties. Subparagraph (d) of the, section of the Letter Agreement entitled "Representations and Warranties' is hereby amended to read in its entirety as follows: "all shares of common stock of Keystone constituting a part of the Collateral and all shares of common stock of Keystone which may be subsequently pledged as Collateral (i) are not subject to any restrictions on sale or transfer except for any restrictions regarding compliance with applicable securities laws and (ii) either (A) are not, and will not be, "restricted securities" as such term is used or defined in paragraph (a)(3) of Rule 144, or (B) if and to the extent such shares are or will be "restricted securities" as so defined, such shares have been held by Borrower for greater than three (3) years within the meaning of and as calculated pursuant to the holding period provisions of paragraph (d) of Rule 144, and Borrower fully paid the purchase price of the Keystone shares at the time it acquired the Keystone shares and did not give a promissory note or enter into any installment purchase contract or any other obligation as any part of its payment of the purchase price of the Keystone shares; provided, however, that (1) the representation and warranty contained in clause (ii) immediately preceding shall apply only to 3,121,233 shares of common stock of Keystone pledged as Collateral and (2) 400,000 shares of common stock of Keystone pledged as Collateral have been held by Borrower only since the date of the stock certificates evidencing such shares as stated in Paragraph 4 of the certain letter agreement dated December 7, 1994, by and among Borrower, Banks and Agent." (f) Other, Terms and Provisions. The first sentence of the section of the Letter Agreement entitled "Other Terms and Provisions" is hereby amended to read in its entirety as follows: "In addition to the terms and provisions specified herein, the terms and provisions contained in that certain (a) Security Agreement dated October 31, 1991, executed by Borrower to and in favor of Agent and Banks, as amended by that certain First Amendment to Letter Agreement and Security Agreement dated December 17, 1991, by and among Borrower, Banks and Agent, that certain Second Amendment to Letter Agreement and Security Agreement dated October 31, 1992, by and among Borrower, Banks and Agent, that certain Third Amendment to Letter Agreement and Security Agreement dated October 31, 1993, by and among Borrower, Banks and Agent, that certain Fourth Amendment to Letter Agreement and Security Agreement dated September 30, 1994, by and among Borrower, Banks and Agent, that certain Fifth Amendment to Letter Agreement and Security Agreement dated October 31, 1994, by and among Borrower, Banks and Agent and that certain Sixth Amendment to Letter Agreement and Security Agreement dated October 30, 1995, by and among Borrower, Banks and Agent (as amended, the 'Security Agreement'), (b) Amended and Restated Promissory Note dated October 30, 1995, in the original principal amount of $11,000,000 made by Borrower payable to the order of Paribas (the 'Paribas Note), (c) Amended and Restated Promissory Note dated October 30, 1995, in the original principal amount of $9,000,000 made by Borrower payable to the order of SG (the 'SG Note') (the Paribas Note and the SG Note, together with all renewals, extensions, amendments and replacements thereof from time to time, are hereinafter collectively called the 'Promissory Notes), and (d) all other agreements, documents, instruments and certificates executed or delivered in connection herewith (this Agreement, the Security Agreement, the Promissory Notes and such other agreements, documents, instruments and certificates, as the same may be amended, renewed, extended, restated or supplemented from time to time, are hereinafter collectively called the 'Loan Papers'), all of which are incorporated herein by reference for all purposes, shall apply and shall govern the relationship among Borrower, Agent and Banks with respect to the Facility." (g) Pro Rata Share. The first sentence of the section of the Letter Agreement entitled "Pro Rata Share" is hereby deleted. 3. Amendments to Security Agreement. (a) Definition of Collateral. Clause (i) of Subparagraph (b) of Paragraph 21 of the Security Agreement (see Addendum 2 to the Security Agreement regarding definition of Collateral) is hereby amended to read in its entirety as follows: "(i) the 3,121,233 shares of common stock of Keystone Consolidated Industries, Inc. ('Keystone') previously delivered and/or concurrently herewith being delivered to the Bank (the 'Keystone Shares');". (b) Definition of Loan Papers. The first sentence of Subparagraph (f) of Paragraph 21 of the Security Agreement is hereby amended to read in its entirety as follows: "The term 'Loan Papers', as used in this Agreement, shall mean and refer to (i) the Letter Agreement, (ii) that certain Amended and Restated Promissory Note dated October 30, 1995, in the original principal amount of $1 1,000,000 made by the undersigned payable to the order of Banque Paribas Houston Agency, (iii) that certain Amended and Restated Promissory Note dated October 30, 1995, in the original principal amount of $9,000,000 made by the undersigned payable to the order of Societe Generale, Southwest Agency, (iv) this Agreement, and (v) the other 'Loan Papers', as such term is defined in the Letter Agreement, as the same may be amended, renewed, extended, restated or supplemented from time to time." 4. Ratifications, Representations and Warranties. (a) Except as expressly amended by this Amendment, the terms and provisions of the Letter Agreement and the Security Agreement are hereby ratified and confirmed and shall continue in full force and effect. The Letter Agreement and the Security Agreement as amended hereby shall continue to be legal, valid, binding and enforceable in accordance with their terms. (b) Borrower hereby represents and warrants to Banks that the execution, delivery and performance of this Amendment and all other Loan Papers executed and/or delivered in connection herewith, and the performance of the transactions contemplated hereby and thereby, have been duly authorized by all requisite corporate action on the part of Borrower and will not violate the Certificate of Incorporation or Bylaws of Borrower or any other material agreement, document, instrument or certificate to which Borrower, or any of its assets, is a party or is bound or affected. 5. Conditions Precedent. The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent: (a) Agent shall have received the following, each dated (unless otherwise indicated) the date of this Amendment, in form and substance satisfactory to Banks: (i) an Amended and Restated Promissory Note in the original principal amount of $11,000,000 made by Borrower payable to the order of Paribas and an Amended and Restated Promissory Note in the original principal amount of $9,000,000 made by Borrower payable to the order of SG; (ii) an Amended and Restated Federal Reserve Form U-I executed by Borrower pertaining to this Amendment; and (iii) a Corporate Certificate executed by Borrower and certain officers of Borrower evidencing that the transactions contemplated by this Amendment have been duly authorized by all requisite corporate action on the part of Borrower. (b) All corporate proceedings taken in connection with the transactions contemplated by this Amendment and all agreements, documents, instruments and certificates and other legal matters incident thereto shall be reasonably satisfactory to Agent and its legal counsel, Jenkens & Gilchrist, P.C. 6. Miscellaneous (a) All representations and warranties contained in this Amendment shall survive the execution and delivery of this Amendment and the other Loan Papers, and no investigation by Agent or Banks or any closing shall affect such representations and warranties or the right of Agent and Banks to rely thereon. (b) The Loan Papers are hereby amended so that any reference therein to the Letter Agreement or the Security Agreement shall mean a reference to the Letter Agreement or the Security Agreement, respectively, as amended hereby. (c) Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. (d) This Amendment is binding upon and shall inure to the benefit of Banks, Agent and Borrower and their respective successors and assigns; provided, however, that Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of Banks. (e) This Amendment may be executed in one or more counterparts. (f) Borrower agrees to pay on demand by Agent the reasonable fees and out-of-pocket expenses of counsel to Agent and Paribas in connection with the preparation, negotiation and execution of this Amendment and the other Loan Papers executed pursuant hereto. (g) THIS AMENDMENT, TOGETHER WITH THE OTHER LOAN PAPERS AS WRITTEN, REPRESENT THE FINAL AGREEMENTS BETWEEN AND AMONG THE PARTIES HERETO WITH RESPECT TO THE FACILITY, THE LOANS AND THE LETTERS OF CREDIT AND MAY NOT BE CONTRADICTED BY EVIDENCE OR PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN (1) BORROWER AND (2) AGENT OR ANY BANK. If you are in agreement with all of the terms and conditions stated herein, please indicate by signing below whereupon this Amendment shall become effective as of the date first above written. Sincerely, BANQUE PARIBAS HOUSTON AGENCY Individually and as Agent By: /s/ Christopher S. Goodwin ------------------------- Name: Christopher S. Goodwin Title: Vice President By: /s/ Cheryl Johnson ------------------------- Name: Cheryl Johnson Title: Assistant Vice President SOCIETE GENERALE, SOUTHWEST AGENCY By: /s/ Richard M. Lewis ------------------------- Name: Richard M. Lewis Title: Vice President AGREED AND ACCEPTED: CONTRAN CORPORATION By: /s/ William C. Timm ------------------------- Name: William C. Timm Title: Vice President-Finance Effective as of March 27, 1996 Contran Corporation Three Lincoln Centre 5430 LBJ Freeway, Suite 1700 Dallas, Texas 75240-2697 Attention: Mr. William C. Timm, Vice President-Finance Re: Seventh Amendment to Letter Agreement and Security Agreement Ladies and Gentlemen: Reference is made to (a) that certain Letter Agreement dated October 31, 1991, by and among BANQUE PARIBAS HOUSTON AGENCY ("Paribas"), SOCIETE GENERALE, SOUTHWEST AGENCY, BANQUE PARIBAS, HOUSTON AGENCY as Agent for Paribas and SG ("Agent") and CONTRAN CORPORATION ("Borrower") relating to a line of credit and letter of credit facility extended to Borrower (as amended, the "Letter Agreement"), (b) that certain Security Agreement dated October 31, 1991, executed by Borrower to and in favor of Agent, Paribas and SG (as amended, the "Security Agreement"), (c) that certain First Amendment to Letter Agreement and Security Agreement dated March 17, 1991, by among Borrower, Paribas, SG and Agent, (d) that certain Second Amendment to Letter Agreement and Security Agreement dated October 31, 1992, by and among Borrower, Paribas, SG and Agent, (e) that certain Third Amendment to Letter Agreement and Security Agreement dated October 31, 1993, by and among Borrower, Paribas, SG and Agent, (f) that certain Fourth Amendment to Letter Agreement and Security Agreement dated September 30, 1994, by and among Borrower, Paribas, SG and Agent, (g) that certain Fifth Amendment to Letter Agreement and Security Agreement dated October 31, 1994, by and among Borrower, Paribas, SG and Agent, and (h) that certain Sixth Amendment to Letter Agreement and Security Agreement dated October 30, 1995, by and among Borrower, Paribas, SG and Agent. Borrower, Paribas, SG and Agent desire to amend the Letter Agreement and the Security Agreement as hereinafter set forth. Accordingly, Borrower, Paribas, SG and Agent, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby agree as follows: 1. Definitions. The term "Letter Agreement", as used in this Seventh Amendment to Letter Agreement and Security Agreement (this "Amendment"), shall mean the Letter Agreement referred to hereinabove, as amended hereby. The term "Security Agreement", as used in this Amendment, shall mean the Security Agreement referred to hereinabove, as amended hereby. Capitalized terms used in this Amendment, if and to the extent not otherwise defined in this Amendment, shall have the same meanings in this Amendment as in the Letter Agreement; provided, however, that capitalized terms used in amended terms and provisions of the Security Agreement shall have the same meanings as in the Security Agreement. 2. Amendments to the Letter Agreement. (a) Security. The section of the Letter Agreement entitled "Security" is hereby amended to read in its entirety as follows: "Banks shall have a perfected first priority security interest in at least (a) 3,121,233 shares of common stock of Keystone Consolidated Industries, Inc. ('Keystone') and (b) 2,000,000 shares of common stock of Valhi, Inc. ('Valhi'). Borrower shall deliver to Agent the stock certificates representing the Keystone shares and the Valhi shares and appropriate stock powers, executed in blank and in proper form for transfer, relating thereto, and thereby pledge the Keystone shares and the Valhi shares to Banks as further provided in the Security Agreement (as hereinafter defined). Borrower may, from time to time, pledge additional marketable securities acceptable to Banks in their discretion, including shares of common stock of Keystone and Valhi which Banks hereby agree, in advance, are acceptable collateral; provided, however, that additional shares of common stock of Valhi that would result in the pledge of ten percent or more of any class of stock issued by Valhi are not so agreed by the Banks in advance to be acceptable collateral." (b) Collateral Value Maintenance. The section of the Letter Agreement entitled 'Collateral Value Maintenance' is hereby amended to add the word "promptly" immediately following the word "shall" and preceding the word 'either' in the fifth line of such section. (c) Representations and Warranties. Subparagraph (d) of the section of the Letter Agreement entitled "Representations and Warranties" is hereby amended to read in its entirety as follows: "all shares of common stock of Keystone constituting a part of the Collateral, all shares of common stock of Valhi constituting a part of the Collateral and all shares of common stock of Keystone or Valhi which may be subsequently pledged as Collateral (i) are not subject to any restrictions on sale or transfer except for any restrictions regarding compliance with applicable securities laws and (ii) either (A) are not, and will not be, 'restricted securities' as such term is used or defined in paragraph (a)(3) of Rule 144, or (B) if and to the extent such shares are or will be 'restricted securities' as so defined, such shares have been held by Borrower for greater than three (3) years within the meaning of and as calculated pursuant to the holding period provisions of paragraph (d) of Rule 144, and Borrower fully paid the purchase price of the Keystone shares and the Valhi shares at the time it acquired the Keystone shares and the Valhi shares, respectively, and did not give a promissory note or enter into any installment purchase contract or any other obligation to or with the transferor of such Keystone shares or Valhi shares, respectively, as any part of its payment of the purchase price of the Keystone shares or the Valhi shares, respectively; provided, however, that (1) the representation and warranty contained in clause (ii) immediately preceding as it relates to the Keystone shares only (but not as it relates to the Valhi shares) shall apply only to 3,121,233 shares of common stock of Keystone pledged as Collateral and (2) 400,000 shares of common stock of Keystone pledged as Collateral have been held by Borrower only since the date of the stock certificates evidencing such shares as stated in Paragraph 4 of the certain letter agreement dated December 7, 1994, by and among Borrower, Banks and Agent." (d) Other Terms and Provisions. The first sentence of the section of the Letter Agreement entitled "Other Terms and Provisions" is hereby amended to read in its entirety as follows: "In addition to the terms and provisions specified herein, the terms and provisions contained in that certain (a) Security Agreement dated October 31, 1991, executed by Borrower to and in favor of Agent and Banks, as amended by that certain First Amendment to Letter Agreement and Security Agreement dated December 17, 1991, by and among Borrower, Banks and Agent, that certain Second Amendment to Letter Agreement and Security Agreement dated October 31, 1992, by and among Borrower, Banks and Agent, that certain Third Amendment to Letter Agreement and Security Agreement dated October 31, 1993, by and among Borrower, Banks and Agent, that certain Fourth Amendment to Letter Agreement and Security Agreement dated September 30, 1994, by and among Borrower, Banks and Agent, that certain Fifth Amendment to Letter Agreement and Security Agreement dated October 31, 1994, by and among Borrower, Banks and Agent, that certain Sixth Amendment to Letter Agreement and Security Agreement dated October 30, 1995, by and among Borrower, Banks and Agent and that certain Seventh Amendment to Letter Agreement and Security Agreement dated March 27, 1996, by and among Borrower, Banks and Agent (as amended, the 'Security Agreement'), (b) Amended and Restated Promissory Note dated October 30, 1995, in the original principal amount of $11,000,000 made by Borrower payable to the order of Paribas (the 'Paribas Note'), (c) Amended and Restated Promissory Note dated October 30, 1995, in the original principal amount of $9,000,000 made by Borrower payable to the order of SG (the 'SG Note') (the Paribas Note and the SG Note, together with all renewals, extensions, amendments and replacements thereof from time to time, are hereinafter collectively called the 'Promissory Notes'), and (d) all other agreements, documents, instruments and certificates executed or delivered in connection herewith (this Agreement, the Security Agreement, the Promissory Notes and such other agreements, documents, instruments and certificates, as the same may be amended, renewed, extended, restated or supplemented from time to time, are hereinafter collectively called the 'Loan Papers'), all of which are incorporated herein by reference for all purposes, shall apply and shall govern the relationship among Borrower, Agent and Banks with respect to the Facility. " 3. Amendments to the Security Agreement. (a) Definition of Collateral. Subparagraph (b) of Paragraph 21 of the Security Agreement (see Addendum 2 to the Security Agreement regarding definition of Collateral) is hereby amended to read in its entirety as follows: "(b) Definition of Collateral. The term 'Collateral', as used in this Agreement, shall mean and refer to any and all rights, titles and interests of the undersigned, Contran Corporation ('Contran'), in and to the following: (i) 3,121,233 shares of common stock of Keystone Consolidated Industries, Inc. ('Keystone') previously delivered and/or concurrently herewith being delivered to the Bank (the 'Keystone Shares') (which Keystone Shares presently, as of March 27, 1996, include those identified on Schedule 3 attached hereto and incorporated herein by reference); (ii) 2,000,000 shares of common stock of Valhi, Inc. ('Valhi') previously delivered and/or concurrently herewith being delivered to the Bank (the 'Valhi Shares') (which Valhi Shares presently, as of March 27, 1996, include those identified on Schedule 3 attached hereto and incorporated herein by reference); (iii) any and all money, securities (certificated and uncertificated), instruments, investment property, financial assets, securities accounts, security entitlements and other property heretofore delivered or which shall concurrently herewith or hereafter be delivered to or come into possession, custody or control of the Bank or any third party acting on the Bank's behalf, in any manner or for any purposes whatever during the existence of this Agreement, and whether held in a general or special account or deposit or for safe-keeping, or otherwise, to the extent but only to the extent that such money, securities, instruments, investment property, financial assets, securities accounts, security entitlements and other property relate, to or constitute proceeds of the Keystone Shares or the Valhi Shares, together with any and all interest, stock rights, rights to subscribe, liquidating dividends, stock dividends, dividends in cash and other assets, new securities and other property to which Contran is or may hereafter become entitled to receive on account of the Keystone Shares and the Valhi Shares (provided, however, that, except as provided in the proviso below, any cash or stock dividends which are both declared and paid prior to the occurrence of an Event of Default and prior to the occurrence of an occurrence or event which, with the giving of notice or lapse of time, or both, would become an Event of Default may be received by Contran free and clear of the security interest created by this Agreement, provided further, however, that the foregoing proviso shall not apply to (A) cash dividends paid or payable in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital or surplus or in connection with a redemption of or exchange for any Collateral or (B) stock dividends if, at the time of declaration or payment thereof, and assuming such stock dividends were not pledged to the Bank as security for the Indebtedness, the sum of the outstanding principal amount of the Loans plus the amount available for drawing under outstanding Letters of Credit exceeds 49% of the then current aggregate market value of the Keystone Shares and Valhi Shares pledged to the Bank as security for the Indebtedness); and (iv) any and all proceeds of the Keystone Shares and the Valhi Shares and of the money, securities, instruments, investment property, financial assets, securities accounts, security entitlements and other property referred to in clauses (i), (ii), and (iii) preceding." (b) Valid Security Interest. Subparagraph (j) of Paragraph 21 of the Security Agreement (see Addendum 2 to the Security Agreement) is hereby amended to read in its entirety as follows: "(j) Valid Security Interest. Contran represents and warrants to the Bank that the Bank has a valid, enforceable, first priority pledge of and security interest in the Keystone Shares and the Valhi Shares." (c) Rule 144. Subparagraph (k) of Paragraph 21 of the Security Agreement (see Addendum 2 to the Security Agreement) is hereby amended to read in its entirety as follows: "(k) Rule 144. Contran agrees that, if ten percent or more of any class of Keystone Shares or Valhi Shares is then pledged as Collateral or if the Bank otherwise is or would be an affiliate of the issuer of such shares for purposes of Rule 144, (i) it shall not, without the prior written consent of the Bank (which consent shall not be unreasonably withheld), sell any securities of the issuers of the Keystone Shares or the Valhi Shares (the 'Stock'), respectively, that are of the same class as the Stock, and (ii) it shall (A) give prompt written notice to Agent of any sales or purchases by the undersigned, or by any other person or entity whose sales would be aggregated with those of the Bank for purposes of Rule 144, of any securities of the issuers of the Stock that are of the same class as the Stock, whether such sales or purchases have occurred within the past three (3) months from the date thereof or are proposed to occur and (B) use its best efforts to cause any person or entity whose sales are to be aggregated with those of Contran or the Bank for purposes of Rule 144 to withhold from any sales any securities of the issuers of the Stock that are of the same class as the Stock." (d) Addendum. Numbered Paragraph 21 of the Security Agreement which appears immediately above Borrower's signature on the fourth page of the Security Agreement is hereby amended to read in its entirety as follows: "21. The terms and provisions of Addendum 1, Addendum 2 and Addendum 3 attached hereto are hereby incorporated herein by reference for all purposes." (e) Addendum 3 to the Security Agreement. A new Addendum 3 is hereby added to the Security Agreement, which Addendum 3 shall read in its entirety as set forth on Seventh Amendment Addendum A attached hereto and incorporated herein by reference. 4. Ratifications, Representations and Warranties. (a) Except as expressly amended by this Amendment, the terms and provisions of the Letter Agreement and the Security Agreement are hereby ratified and confirmed and shall continue in full force and effect. The Letter Agreement and the Security Agreement as amended hereby shall continue to be legal, valid, binding and enforceable in accordance with their terms. (b) Borrower hereby represents and warrants to Banks that the execution, delivery and performance of this Amendment and all other Loan Papers executed and/or delivered in connection herewith, and the performance of the transactions contemplated hereby and thereby, have been duly authorized by all requisite corporate action on the part of Borrower and will not violate the Certificate of Incorporation or Bylaws of Borrower or any other material agreement, document, instrument or certificate to which Borrower, or any of its assets, is a party or is bound or affected. 5. Conditions Precedent. The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent: (a) Agent shall have received the following, each dated (unless otherwise indicated) the date of this Amendment, in form and substance satisfactory to Banks: (i) the stock certificates representing the shares of common stock of Valhi, Inc. being pledged by Borrower in connection with this Amendment and instruments of transfer executed in blank by Borrower with respect to such stock certificates, and a UCC-1 financing statement executed by Borrower covering the Collateral (including such shares of common stock of Valhi, Inc.); (ii) an Amended and Restated Federal Reserve Form U-1 executed by Borrower pertaining to this Amendment; and (iii) a Corporate Certificate executed by Borrower and certain officers of Borrower evidencing that the transactions contemplated by this Amendment have been duly authorized by all requisite corporate action on the part of Borrower. (b) All corporate proceedings taken in connection with the transactions contemplated by this Amendment and all agreements, documents, instruments and certificates and other legal matters incident thereto shall be reasonably satisfactory to Agent and its legal counsel, Jenkens & Gilchrist, P.C. 6. Miscellaneous. (a) All representations and warranties contained in this Amendment shall survive the execution and delivery of this Amendment and the other Loan Papers, and no investigation by Agent or Banks or any closing shall affect such representations and warranties or the right of Agent and Banks to rely thereon. (b) The Loan Papers are hereby amended so that any reference therein to the Letter Agreement or the Security Agreement shall mean a reference to the Letter Agreement or the Security Agreement, respectively, as amended hereby. (c) Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. (d) This Amendment is binding upon and shall inure to the benefit of Banks, Agent and Borrower and their respective successors and assigns; provided, however, that Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of Banks. (e) This Amendment may be executed in one or more counterparts. (f) Borrower agrees to pay on demand by Agent the reasonable fees and out-of-pocket expenses of counsel to Agent and Paribas in connection with the preparation, negotiation and execution of this Amendment and the other Loan Papers executed pursuant hereto. (g) THIS AMENDMENT, TOGETHER WITH THE OTHER LOAN PAPERS AS WRITTEN, REPRESENT THE FINAL AGREEMENTS BETWEEN AND AMONG THE PARTIES HERETO WITH RESPECT TO THE FACILITY, THE LOANS AND THE LETTERS OF CREDIT AND MAY NOT BE CONTRADICTED BY EVIDENCE OR PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN (1) BORROWER AND (2) AGENT OR ANY BANK. (h) Borrower agrees that it will, from time to time upon the request of Agent, execute and deliver to Agent such financing or continuation statements or amendments thereto, and take or cause to be taken such other actions, as may be necessary or appropriate in the reasonable opinion of Agent to create, perfect and preserve the perfected and first priority security interests in the Collateral (as defined in the Security Agreement) granted (or purported to be granted) by the Security Agreement as amended hereby. (i) Borrower represents and warrants that (i) the shares of common stock of Keystone Consolidated Industries, Inc. and Valhi, Inc. described on Seventh Amendment Addendum A attached hereto (the "Presently Pledged Shares") are and shall be deemed to be pledged as Collateral to secure the payment and performance of the Indebtedness (as defined in the Security Agreement) in accordance with the terms and provisions of the Security Agreement, (ii) none of the stock certificates representing the Presently Pledged Shares contains any restrictions on transfer, and (iii) the chief executive office and principal place of business of Borrower are located in Dallas County, Texas. If you are in agreement with all of the terms and conditions stated herein, please indicate by signing below whereupon this Amendment shall become effective as of the date first above written. Sincerely, BANQUE PARIBAS HOUSTON AGENCY Individually and as Agent By: /s/ Christopher S. Goodwin ------------------------- Name: Christopher S. Goodwin Title: Vice President By: /s/ Cheryl Johnson ------------------------- Name: Cheryl Johnson Title: Assistant Vice President SOCIETE GENERALE, SOUTHWEST AGENCY By: /s/ Richard M. Lewis ------------------------- Name: Richard M. Lewis Title: Vice President AGREED AND ACCEPTED: CONTRAN CORPORATION By: /s/ William C. Timm ------------------------- Name: William C. Timm -----END PRIVACY-ENHANCED MESSAGE-----