tie8k081231-103.htm


    PLEDGE
AND SECURITY AGREEMENT

    


    This
Pledge and Security Agreement (this “Agreement”),
dated as of December 31, 2008, is among Contran Corporation, a Delaware
corporation (“Contran”),
and Titanium Metals Corporation, a Delaware corporation (“TIMET”).

    


    RECITALS

    


    A.           On
the date of this Agreement Contran has purchased from TIMET Two Million Three
Hundred Fifty-Two Thousand Nine Hundred and Forty-Two (2,352,942) shares (the
“Shares”)
of the common stock, $.01 par value per share, of Whitney International
University System Ltd.  The purchase occurred pursuant to the terms
and subject to the conditions set forth in that certain Stock Purchase Agreement
dated as of the date of this Agreement between Contran and TIMET (the “Stock Purchase
Agreement”).

    


    B.           As
full payment of the purchase price for the Shares, Contran executed and
delivered to TIMET a promissory note, dated as of the date of this Agreement, in
the original principal amount of SIXTEEN MILLION SEVEN HUNDRED THOUSAND AND
NO/100THS DOLLARS ($16,700,000) (the “Note”).

    


    C.           In
the Stock Purchase Agreement, Contran agreed to execute and deliver this
Agreement, pledging and granting a security interest in the Shares to secure its
payment of the indebtedness represented by the Note, including principal,
interest and reasonable costs, expenses, attorneys’ fees and other reasonable
fees and charges (the “Indebtedness”).

    


    AGREEMENT

    


    In
consideration of the foregoing recitals and the mutual agreements hereinafter
set forth, Contran and TIMET agree as follows:

    


    Section 1.  The
Pledge.  As collateral security for the due and punctual
payment of the Indebtedness, Contran hereby pledges and grants to TIMET a
continuing first priority and perfected security interest in, the Shares, all
products and proceeds of any of the Shares including, without limitation, all
dividends, cash, instruments, subscriptions, warrants and any other rights and
options and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Shares (the
“Pledged
Collateral”).

    


    Section 2.  Security for
Indebtedness.   This Agreement
secures the payment of all of the Indebtedness, whether for principal, interest,
fees, expenses or otherwise, and all obligations of Contran now or hereafter
existing under this Agreement or the Note (all such obligations of Contran now
or hereafter existing being referred to herein as the
“Liabilities”).

    


    Section 3.  Delivery of
Pledged Collateral.  All certificates or instruments
representing or evidencing the Pledged Collateral shall be delivered to and held
by or on behalf of TIMET pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
TIMET.

    


    Section 4.  Representations
and Warranties.  Contran represents and warrants as
follows:

    (a)           Contran
is the legal and beneficial owner of the Pledged Collateral, free and clear of
any security interest, mortgage, pledge, lien, charge or other encumbrance
(“Lien”) on the Pledged Collateral.

    


    (b)           The
pledge and collateral assignment of the Pledged Collateral pursuant to this
Agreement creates a valid and perfected first priority interest in such Pledged
Collateral securing the payment of the Liabilities for the benefit of
TIMET.

    


    (c)           No
authorization, approval, or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required either (i) for the
pledge and collateral assignment by Contran of the Pledged Collateral pursuant
to this Agreement or for the execution, delivery or performance of this
Agreement by Contran or (ii) for the exercise by TIMET of the voting or other
rights provided for in this Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Agreement (except such filings of beneficial
ownership as may be required by federal securities laws).

    


    (d)           Contran
has full power and authority to enter into this Agreement and has the right to
vote the Shares and to pledge, collaterally assign and grant a security interest
in the Pledged Collateral.

    


    (e)           This
Agreement has been duly authorized, executed and delivered by Contran and
constitutes a legal, valid and binding obligation of Contran, enforceable
against Contran in accordance with its terms, except as such enforceability may
be limited by the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally or general principles of equity.

    


    Section 5.  Further
Assurances; Covenants.  Contran agrees that at any time and
from time to time, at its own expense, to promptly execute and deliver, or cause
to be executed and delivered, all stock powers, proxies, assignments,
instruments and documents and take all further action, that is reasonably
necessary, at TIMET’s request, in order to perfect any security interest granted
or purported to be granted hereby or to enable TIMET to exercise and enforce its
rights and remedies hereunder with respect to any Pledged Collateral and to
carry out the provisions and purposes hereof.

    


    Section 6.  Voting Rights; Dividends;
Etc.

    


    (a) So long
as no Event of Default (as defined in the Note) shall have occurred and be
continuing, Contran shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Shares for any purpose not inconsistent with
the terms of this Agreement.

    


    (b) So long
as no Event of Default shall have occurred and be continuing, Contran shall be
entitled to receive all cash dividends or other distributions paid or made from
time to time with respect to the Shares.  Upon the occurrence and
during the continuance of an Event of Default, all rights of Contran to exercise
the voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 6(a) shall cease,
and all such rights shall become vested in TIMET, which shall thereupon have the
sole right to exercise such voting and other consensual rights.  Upon
the occurrence and during the continuance of an Event of Default, all cash
dividends or other distributions payable in respect of all securities pledged
hereunder shall be paid directly to TIMET and, if received by Contran, shall be
received in trust for the benefit of TIMET, shall be segregated from other funds
of Contran, and shall be forthwith paid over to TIMET as Pledged Collateral in
the same form as so received (with any necessary endorsements) and Contran’s
right to receive such cash payments pursuant to the foregoing sentence shall
immediately cease.

     

     

     

    Section 7.  Transfers And
Other Liens; Additional Shares.  Contran agrees that it will
not (i) sell or otherwise dispose of, or grant any option with respect to, any
of the Pledged Collateral without the prior written consent of TIMET, (ii)
create or permit to exist any Lien upon or with respect to any of the Pledged
Collateral, except for the security interest granted under this Agreement or
(iii) enter into any agreement or understanding that purports to or may restrict
or inhibit TIMET’s rights or remedies hereunder, including, without limitation,
TIMET’s right to sell or otherwise dispose of the Pledged
Collateral.

    


    Section 8.  TIMET Appointed
Attorney-In-Fact.  Contran hereby appoints TIMET Contran’s
attorney-in-fact, with full authority in the place and stead of Contran and in
the name of Contran or otherwise, from time to time in TIMET’s discretion to
take any action and to execute any instrument which TIMET may deem necessary or
advisable to further perfect and protect the security interest granted hereby,
including, without limitation, to receive, endorse and collect all instruments
made payable to Contran representing any dividend, or other distribution in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same.

    


    Section 9.  TIMET May
Perform.  If Contran fails to perform any agreement contained
herein, TIMET may itself perform, or cause performance of, such agreement, and
the reasonable expenses of TIMET incurred in connection therewith shall be
payable by Contran as provided herein.

    


    Section 10.  No Assumption Of
Duties; Reasonable Care.  The rights and powers granted to
TIMET hereunder are being granted in order to preserve and protect TIMET’s
security interest in and to the Pledged Collateral granted hereby and shall not
be interpreted to, and shall not, impose any duties on TIMET in connection
therewith.  TIMET shall be deemed to have exercised reasonable care in
the custody and preservation of the Pledged Collateral in its possession if the
Pledged Collateral is accorded treatment substantially equal to that which TIMET
accords its own property, it being understood that TIMET shall not have any
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not TIMET has or is deemed to have knowledge of
such matters, or (ii) taking any necessary steps to preserve rights against any
parties with respect to any Pledged Collateral.

    


    Section 11.  Subsequent
Changes Affecting Pledged Collateral.  Contran represents to
TIMET that Contran has made its own arrangements for keeping informed of changes
or potential changes affecting the Pledged Collateral (including, but not
limited to, rights to convert, rights to subscribe, payment of dividends,
payments of interest and/or principal, reorganization or other exchanges, tender
offers and voting rights), and Contran agrees that TIMET shall have no
responsibility or liability for informing Contran of any such changes or
potential changes or for taking any action or omitting to take any action with
respect thereto.

    


    Section 12.  Remedies Upon
Default.  If any Event of Default shall have occurred and be
continuing, TIMET shall, in addition to all other rights given by law or by this
Agreement, or otherwise, have all of the rights and remedies with respect to the
Pledged Collateral of a secured party under the Uniform Commercial Code (“Code”)
in effect in the State of Texas at that time and TIMET may, without notice and
at its option, transfer or register, and Contran shall register or cause to be
registered upon request therefor by TIMET, the Shares or any part thereof on the
books of the issuer into the name of TIMET or TIMET’s nominee(s), indicating
that such Shares are subject to the security interest hereunder.  In
addition, with respect to any Pledged Collateral which shall then be in or shall
thereafter come into the possession or custody of TIMET, TIMET may sell or cause
the same to be sold at any broker’s board or at any public or private sale, in
one or more sales or lots, at such price or prices as TIMET may deem best, for
cash or on credit or for future delivery, without assumption of any credit risk,
all in accordance with the terms and provisions of this
Agreement.  The purchaser of any or all Pledged Collateral so sold
shall thereafter hold the same absolutely, free from any claim, encumbrance or
right of any kind whatsoever.  Unless any of the Pledged Collateral
threatens to decline speedily in value or is or becomes of a type sold on a
recognized market, TIMET will give Contran reasonable notice of the time and
place of any public sale thereof, or of the time after which any private sale or
other intended disposition is to be made.  Any requirements of
reasonable notice shall be met if such notice is mailed to Contran as provided
in Section 15(e) below, at least five (5) days before the time of the sale or
disposition.  Any other requirement of notice, demand or advertisement
for sale is, to the extent permitted by law, waived.  TIMET may, in
its own name or in the name of a designee or nominee, buy any of the Pledged
Collateral at any public sale and, if permitted by applicable law, at any
private sale.  All expenses (including court costs and reasonable
attorneys’ fees, expenses and disbursements) of, or incident to, the enforcement
of any of the provisions hereof shall be recoverable from the proceeds of the
sale or other disposition of the Pledged Collateral.  In view of the
fact that federal and state securities laws may impose certain restrictions on
the method by which a sale of the Pledged Collateral may be effected after an
Event of Default, Contran agrees that upon the occurrence or existence of any
Event of Default, TIMET may, from time to time, attempt to sell all or any part
of the Pledged Collateral pursuant to the this Agreement or by means of a
private placement, restricting the prospective purchasers to those who will
represent and agree that they are purchasing for investment only and not for
distribution.  In so doing, TIMET may solicit offers to buy the
Pledged Collateral, or any part of it, for cash, from a limited number of
investors who might be interested in purchasing the Pledged Collateral, and if
TIMET solicits such offers from not less than four (4) such investors that are
not affiliated with TIMET, then the acceptance by TIMET of the highest offer
obtained therefrom shall be deemed to be a commercially reasonable method of
disposition of the Pledged Collateral, and a sale pursuant to this sentence
shall be deemed to be a commercially reasonably disposition of the Pledged
Collateral.

    


    In
addition, upon the occurrence and during the continuance of an Event of Default,
all rights of Contran to exercise the voting and other rights which it would
otherwise be entitled to exercise shall cease, and all such rights shall
thereupon become vested in TIMET as provided in and subject to the terms of
Section 6(b) hereof.

    


    Section 13.  Expenses.  Contran
will pay to TIMET the amount of any and all reasonable out-of-pocket expenses,
including, without limitation, the reasonable fees, expenses and disbursements
of its counsel (including allocated costs of inside counsel), of any investment
banking firm, business broker or other selling agent and of any other experts
and agents retained by TIMET, which TIMET may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Pledged
Collateral, (iii) the exercise or enforcement of any of the rights of TIMET
hereunder or (iv) the failure by Contran to perform or observe any of the
provisions hereof.  All amounts owing under this Section shall be
payable upon demand.  Any and all amounts payable under or pursuant to
this Agreement that are not paid when due shall bear interest (which shall be
payable upon demand) at the Maximum Rate.

    


    Section 14.  Security Interest
Absolute.  All rights of TIMET and security interests under
this Agreement, and all obligations of Contran under this Agreement, shall be
absolute and unconditional irrespective of, and unaffected by:

    


    (a)           any
lack of validity or enforceability of this Agreement or the Note;

    
      

        (b)           any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Indebtedness, or any other amendment or waiver of or any consent
to any departure from this Agreement or the Note; or

        


        (c)           any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, Contran in respect of the Indebtedness or of this
Agreement.

      Section 15.  Miscellaneous.

    

    


    (a)           While
this Agreement is in full force and effect, Contran shall, at the reasonable
request of TIMET, execute such appropriate financing statements as TIMET may
reasonably deem necessary to perfect TIMET’s security interest in the Pledged
Collateral.

    


    (b)           All
rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies otherwise provided by law or agreement between or among the
parties.  Any single or partial exercise of any right or remedy shall
not preclude the further exercise thereof or the exercise of any other right or
remedy.

     

    (c)           Any
delay on the part of TIMET in exercising any of TIMET’s rights, remedies, powers
and privileges hereunder or any partial or single exercise thereof shall not
constitute a waiver thereof.  None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly executed by Contran and TIMET.

    


    (d)           The
rights and obligations of Contran and TIMET under this Agreement shall be
binding upon and inure to the benefit of the parties and their respective heirs,
successors and assigns.

    


    (e)           All
notices, requests, consents or other communications hereunder shall be in
writing and shall be deemed duly given if personally delivered or when received
by overnight delivery or by registered or certified mail, addressed as
follows:

    


    If
to Contran:

    


    Three
Lincoln Centre

    5430 LBJ
Freeway, Suite 1700

    Dallas,
Texas 75240-2697

    Attn:  General
Counsel

    


    If
to TIMET:

    


    Three
Lincoln Centre

    5430 LBJ
Freeway, Suite 1700

    Dallas,
Texas 75240-2697

    Attn:  General
Counsel

    


    or at
such other address as a party may have advised the other parties in a notice
given as provided above.

    


    (f)           This
Agreement will be governed by the internal laws of the state of
Texas.  All terms not defined herein are used as set forth in (i) the
Stock Purchase Agreement; (ii) if not defined in the Stock Purchase Agreement,
the Note; and (iii) if not defined in either the Stock Purchase Agreement or the
Note, the Uniform Commercial Code as adopted in the state of Texas.

    


    (g)           This
Agreement, together with any documents expressly referred to herein, constitutes
the final agreement of the parties concerning the matters referred to herein,
and supersedes all prior agreements and understandings among the parties
regarding such matters.  The caption headings of the sections of this
Agreement are for convenience of reference only, are not part of this Agreement
and shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.  This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, and such counterparts together shall constitute one
instrument.

    


    (h)           Any
provision of this Agreement that is prohi­bited or unenforceable in any
jurisdiction shall, as to such juris­diction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

    


    (i)           This
Agreement shall remain in full force and effect until such time as all
Indebtedness of Contran to TIMET shall have been paid or satisfied in full, if
on such date no Event of Default shall exist, and otherwise on the first date
thereafter on which no Event of Default shall exist,.

    


    (j)           This
Agreement may be assigned in whole or in part by TIMET and by any assignee or
successor in interest of TIMET.

    


    


    IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set
forth above.

    


    
      	
               
      

            	
              CONTRAN
      CORPORATION

            


    

    


    


    


    
      	
               

            	 By: 
      /s/ William J.
      Lindquist	 


    

    
      	
               
      

            	
              William
      J. Lindquist, Senior Vice President

            


    

    


    


    


    


    
      	
               
      

            	
              TITANIUM
      METALS CORPORATION

            


    

    


    


    


    
      	
               
      

            	
               By:

            	
              /s/ Robert D.
      Graham

            	 


    

    
      	
               
      

            	
              Robert
      D. Graham, Executive Vice President