EXHIBIT 10.2

                                  KRONOS INTERNATIONAL, INC.



                          SECOND AMENDED AND RESTATED LOAN AGREEMENT



                                 Dated as of January 31, 1997



                                        DM 418,249,878



                                 HYPOBANK INTERNATIONAL S.A.

                                           as Agent



                                           and the

                                      BANKS NAMED HEREIN







                                              1

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<TABLE>
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                                       TABLE OF CONTENTS
                                                                                          Page

<S>                                                                                        <C>
ARTICLE 1.  DEFINITIONS......................................................................4

ARTICLE 2.  THE FACILITY....................................................................38
        2.01   .............................................................................38
        2.02   .............................................................................40
        2.03   .............................................................................40
        2.04   .............................................................................40
        2.05   .............................................................................42
        2.06   .............................................................................42

ARTICLE 3.  PURPOSE OF THE LOAN.............................................................45

ARTICLE 4.  CONDITIONS PRECEDENT AND NOTICE OF BORROWING....................................45
        4.01   .............................................................................45
        4.02   .............................................................................49
        4.03   .............................................................................50
        4.04   .............................................................................50

ARTICLE 5.  INTEREST PERIODS................................................................50
        5.01   .............................................................................50
        5.02   .............................................................................50
        5.03   .............................................................................50
        5.04   .............................................................................51

ARTICLE 6.  INTEREST........................................................................51
        6.01   .............................................................................51
        6.02   .............................................................................51
        6.03   .............................................................................51
        6.04   .............................................................................51
        6.05   .............................................................................51

ARTICLE 7.  SUBSTITUTE BASIS................................................................52
        7.01   .............................................................................52
        7.02   .............................................................................52
        7.03   .............................................................................53
        7.04   .............................................................................54

ARTICLE 8.  PREPAYMENT......................................................................54
        8.01   .............................................................................54
        8.02   .............................................................................58

                                              ii

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        8.03   .............................................................................59

ARTICLE 9.  REPAYMENT.......................................................................59

ARTICLE 10.  EVIDENCE OF DEBT...............................................................60
        10.01  .............................................................................60
        10.02  .............................................................................60
        10.03  .............................................................................61

ARTICLE 11.  PAYMENTS.......................................................................61
        11.01  .............................................................................61
        11.02  .............................................................................62
        11.03  .............................................................................63
        11.04  .............................................................................63
        11.05  .............................................................................63
        11.06  .............................................................................64
        11.07  .............................................................................64
        11.08  .............................................................................64
        11.09  .............................................................................65

ARTICLE 12.  DEFAULT INTEREST AND INDEMNITY.................................................65
        12.01  .............................................................................65
        12.02  .............................................................................66
        12.03  .............................................................................66
        12.04  .............................................................................67

ARTICLE 13.  SET-OFF AND REDISTRIBUTION OF PAYMENTS.........................................67
        13.01  .............................................................................67
        13.02  .............................................................................68
        13.03  .............................................................................68
        13.04  .............................................................................68
        13.05  .............................................................................68

ARTICLE 14.  CHANGE OF CIRCUMSTANCES; ILLEGALITY;
                   RESERVE REQUIREMENTS.....................................................69
        14.01  Change of Circumstances......................................................69
        14.02  Illegality...................................................................70
        14.03  Reserve Requirements.........................................................71

ARTICLE 15.  REPRESENTATIONS AND WARRANTIES.................................................72
        15.01  Corporate Existence of Borrower and Subsidiaries.............................72
        15.02  Power and Authority of Borrower..............................................72
        15.03  Power and Authority of Pledgors and Guarantors...............................72

                                             iii

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        15.04  Rank of Indebtedness.........................................................73
        15.05  No Conditions to Performance and Enforceability..............................73
        15.06  No Filings; No Stamp Taxes...................................................73
        15.07  Legal, Valid and Enforceable Obligations.....................................74
        15.08  Bankruptcy...................................................................74
        15.09  No Defaults; No Litigation...................................................74
        15.10  Environmental Compliance.....................................................75
        15.11  Financial Statements.........................................................76
        15.12  No Material Adverse Change...................................................76
        15.13  Accurate Information.........................................................76
        15.14  No Violation, Defaults or Liens..............................................76
        15.15  ERISA........................................................................77
        15.16  Non-U.S. Employee Plans......................................................79
        15.17  Investment Company...........................................................79
        15.18  Subsidiaries.................................................................79
        15.19  Margin Stock.................................................................80
        15.20  Taxes........................................................................81
        15.21  Intellectual Property Rights.................................................81
        15.22  Key Contracts................................................................82
        15.23  Affiliate Transactions.......................................................82
        15.24  NL Debt Offering; Mirror Notes; Subordinated Loans; Consideration
                 for Prepayments............................................................83
        15.25  Taxes relating to Mirror Notes...............................................83
        15.26  Ownership of Material Assets.................................................83
        15.27  Optional Prepayments.........................................................84
        15.28  Certain Adjusted Restricted Payments.........................................84

ARTICLE 16.  UNDERTAKINGS AND COVENANTS.....................................................84
        16.01  Delivery of Financial Statements, etc........................................84
        16.02  Operating Permits............................................................86
        16.03  Environmental Compliance.....................................................86
        16.04  Compliance with Applicable Law...............................................86
        16.05  Books and Records............................................................87
        16.06  Environmental Reports........................................................87
        16.07  Intellectual Property Rights.................................................87
        16.08  Liens........................................................................88
        16.09  Dispositions.................................................................88
        16.10  Merger; Consolidation........................................................89
        16.11  Employee Matters.............................................................90
        16.12  Interest Rate Protection Agreements..........................................92
        16.13  Indebtedness to Subsidiaries.................................................92
        16.14  Maintenance of Separate Corporate Identities.................................92
        16.15  Affiliate Transactions.......................................................92

                                              iv

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        16.16  Transactions with Subsidiaries...............................................93
        16.17  Notice of Default; Change of Law.............................................94
        16.18  Limitation of Indebtedness...................................................94
        16.19  Subsidiary Indebtedness......................................................94
        16.20  Restricted Payments..........................................................94
        16.21  Maximum Funded Debt Ratio; Maximum Indebtedness..............................95
        16.22  Minimum Consolidated Equity..................................................96
        16.23  Current Assets to Current Liabilities Ratio..................................96
        16.24  Interest Coverage Ratio......................................................96
        16.25  Minimum EBITDA...............................................................97
        16.26  Registered Office in Germany.................................................97
        16.27  Service Contract of Kronos Titan.............................................97
        16.28  Restriction on Dividends from Subsidiaries...................................97
        16.29  Investments..................................................................98
        16.30  Limitation on Restricted Payments............................................98
        16.31  Maintenance of Property; Insurance...........................................99
        16.32  Continuation of Business.....................................................99
        16.33  Taxes........................................................................99
        16.34  Additional Guaranties, Pledged Subsidiaries..................................99
        16.35  Pledged Stock...............................................................100
        16.36  Principal Shareholder Waiver................................................101
        16.37  Maximum Capital Expenditures................................................101
        16.38  Mirror Notes; Subordinated Loans............................................102
        16.39  Notification of Indenture Defaults..........................................102
        16.40  Bank Accounts...............................................................102

ARTICLE 17.  COLLATERAL....................................................................103
        17.01  ............................................................................103
        17.02  ............................................................................104
        17.03  ............................................................................104
        17.04  ............................................................................105
        17.05  ............................................................................106

ARTICLE 18.  EVENTS OF DEFAULT.............................................................107
        18.01  ............................................................................107
        18.02  ............................................................................107
        18.03  ............................................................................107
        18.04  ............................................................................107
        18.05  ............................................................................107
        18.06  ............................................................................107
        18.07  ............................................................................108
        18.08  ............................................................................108
        18.09  ............................................................................108

                                              v

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        18.10  ............................................................................108
        18.11  ............................................................................108
        18.12  ............................................................................108
        18.13  ............................................................................109
        18.14  ............................................................................109
        18.15  ............................................................................109
        18.16  ............................................................................109
        18.17  ............................................................................109

ARTICLE 19.  FEES..........................................................................110
        19.01  ............................................................................110
        19.02  ............................................................................111
        19.03  ............................................................................111
        19.04  ............................................................................111

ARTICLE 20.  EXPENSES AND DUTIES...........................................................111
        20.01  ............................................................................111
        20.02  ............................................................................111
        20.03  ............................................................................112
        20.04  ............................................................................112

ARTICLE 21.  THE AGENT AND THE BANKS.......................................................112
        21.01  ............................................................................112
        21.02  ............................................................................112
        21.03  ............................................................................113
        21.04  ............................................................................113
        21.05  ............................................................................114
        21.06  ............................................................................114
        21.08  ............................................................................115
        21.09  ............................................................................115
        21.10  ............................................................................116
        21.11  ............................................................................116

ARTICLE 22.  NO WAIVER.....................................................................116

ARTICLE 23.  PARTIAL INVALIDITY; CHANGE IN ACCOUNTING PRINCIPLES...........................117
        23.01  ............................................................................117
        23.02  ............................................................................117

ARTICLE 24.  ASSIGNMENTS, PARTICIPATION....................................................117
        24.01  ............................................................................117
        24.02  ............................................................................118
        24.03  ............................................................................119

                                              vi

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        24.04  ............................................................................120
        24.05  ............................................................................120
        24.06  ............................................................................120
        24.07  ............................................................................121

ARTICLE 25.  LANGUAGE......................................................................121

ARTICLE 26.  NOTICES.......................................................................121

ARTICLE 27.  LIMITATION ON SPECIAL DAMAGES.................................................121

ARTICLE 28.  APPLICABLE LAW; JURISDICTION; SERVICE OF PROCESS..............................122

ARTICLE 29.  COUNTERPARTS..................................................................122

ARTICLE 30.  FURTHER ASSURANCES............................................................122

ARTICLE 31.  CONSTRUCTION..................................................................123

ARTICLE 32.  ENTIRE AGREEMENT..............................................................123

ARTICLE 33.  SURVIVAL OF WARRANTIES AND AGREEMENTS.........................................123

ARTICLE 34.  NO THIRD PARTY BENEFICIARIES..................................................123

ARTICLE 35.  NO NOVATION...................................................................124

ARTICLE 36.  MISCELLANEOUS.................................................................124
        36.01  ............................................................................124
        36.02  ............................................................................124
        36.03  ............................................................................124
        36.04  ............................................................................125


</TABLE>

                                             vii

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                                           SCHEDULES

Schedule 1     List of Banks

Schedule 2     Indebtedness

Schedule 3     Liens

Schedule 4     Certain Legal Matters

Schedule 5     Litigation

Schedule 6     ERISA and Non-U.S. Employee Plans

               A      Erisa Disclosure
               B      Termination
               C      Plan Description
               D      Withdrawal
               E      Claims
               F      Non-U.S. Employee Plans

Schedule 7     Subsidiaries

Schedule 8     License Agreements and Intellectual Property Rights

               A      Exceptions to Ownership of Intellectual Property Rights
               B      Affiliate License Agreements
               C      Third Party License Agreements
               D      Other Agreements
               E      Patents
               F      Trademarks
               G      Infringements Claims

Schedule 9     Affiliate Transactions

Schedule 10    Insurance

Schedule 11    Tax Information

Schedule 12    Certain Loan Agreements

Schedule 13    Certain Material Assets


                                             viii

<PAGE>



                                           EXHIBITS

Exhibit A      Form of Assignment and Acceptance

Exhibit B      Form of Mirror Notes

Exhibit C      Subordinated Loan Documents

Exhibit D      Forms of Amendments and/or Reaffirmations of Pledge Agreements

Exhibit E      Forms of Amendments and/or Reaffirmations of Guaranties

Exhibit F      Form of Second  Amended and Restated  Technology  and Trademark
               Undertaking

Exhibit G      Form of Amendment and/or  Reaffirmation  of  Subordination  and
               Contribution Agreement

Exhibit H      Form of Second Amended and Restated Liquidity Undertaking

Exhibit I      Form of Acknowledgment of Limitation of Special Damages

Exhibit J      Form of NL Guaranty

Exhibit K      Form of Canadian Security Documents

Exhibit L      Form of Nordenham Mortgage

Exhibit M      Forms of Cash Pledge Agreements of the Borrower

Exhibit N      Forms of Cash Pledge Agreements of the Canadian Subsidiaries

Exhibit O      Form of Solvency Certificate

Exhibit P      Form of Notice of Borrowing

Exhibit Q      Form of Certificate of Chief  Financial  Officer of Borrower as
               to Annual Financial Statements

Exhibit R      Form of Certificate of Chief  Financial  Officer of Borrower as
               to Quarterly Financial Statements

Exhibit S      Form of Confidentiality Agreement


                                              ix

<PAGE>



                          SECOND AMENDED AND RESTATED LOAN AGREEMENT

        THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT, dated as of January 31,
1997,  is executed  and  delivered by and among  KRONOS  INTERNATIONAL,  INC., a
Delaware corporation (the "BORROWER"), KRONOS TITAN - GMBH, a German corporation
("KRONOS  TITAN") (for the limited  purposes  specified  herein),  the BANKS (as
hereinafter defined), HYPOBANK INTERNATIONAL S.A., as Agent for the Banks.

        The Borrower has a registered office in Leverkusen,  Germany,  and is an
indirect  wholly-owned   subsidiary  of  NL  Industries,   Inc.,  a  New  Jersey
corporation ("NL INDUSTRIES"). As of May 30, 1990, and prior to January 1, 1992,
the  Borrower was a  wholly-owned  subsidiary  of Kronos (US),  Inc., a Delaware
corporation  formerly and then known as Kronos, Inc. ("KRONOS (US)").  Effective
as of January 1, 1992, Kronos (US) assigned the Stock of the Borrower to Kronos,
Inc., a Delaware corporation formerly (prior to such assignment) known as Kronos
(USA), Inc.  ("KRONOS") and a subsidiary of Kronos (US),  whereupon the Borrower
became (and is now) a wholly-owned subsidiary of Kronos.

        The Borrower,  the Banks (or their predecessors in interest),  the Agent
and Banque Paribas, Co-Agent for the Banks (the "CO-AGENT") were parties to that
certain Loan Agreement  dated as of May 30, 1990, as amended by that certain (a)
First Amendment  Agreement (herein so called) dated as of December 31, 1990, (b)
Second  Amendment  Agreement  (herein so called) dated as of March 22, 1991, and
(c) Third Amendment  Agreement  (herein so called) dated as of June 15, 1992 (as
amended thereby, the "ORIGINAL AGREEMENT").  Pursuant to the Original Agreement,
the Borrower  requested that the Banks (and/or their  predecessors  in interest)
make, and the Banks (and/or their  predecessors in interest)  made,  advances to
the  Borrower  in  Deutsche  Mark  in  the  aggregate  principal  amount  of  DM
1,600,000,000  on the terms and subject to the  conditions  and for the purposes
set forth in the Original Agreement.

        Pursuant to the First Amendment  Agreement,  certain financial covenants
in the Original Agreement were amended for the year 1990.

        Pursuant  to  the  Second  Amendment  Agreement,   INTER  ALIA,  certain
financial  covenants in the  Original  Agreement  were  amended,  the  repayment
schedule for the Loan was amended and the NL/Kronos  Guaranty and the Investment
Account Agreement (as defined in the Original Agreement) were executed.

        Pursuant to the Third Amendment Agreement, INTER ALIA, certain financial
covenants in the Original Agreement were amended, the repayment schedule for the
Loan was amended,  certain  U.S.  Dollar  denominated  tranches of the Loan were
permitted,  the Borrower was given the right to reborrow certain  prepayments of
the final  repayment  installment  of the Loan and a Liquidity  Undertaking  was
executed by NL Industries and Kronos (US).

        Effective  as of January 1, 1992,  the  Borrower  became a  wholly-owned
subsidiary  of Kronos as  explained  in the second  paragraph of the preamble of
this Agreement.


                                              1

<PAGE>



        During  February 1993, the Borrower  notified the Agent and the Co-Agent
of certain proposed  transactions  involving its Subsidiaries,  certain of which
transactions  were required to be approved by the requisite  Banks. As a result,
the First Approval Agreement was executed and the transactions  described in the
First Approval  Agreement  have been  consummated  (except for the  transactions
referred  to in Step 10 of  Schedule 1 to the First  Approval  Agreement,  which
transactions have not been, and need not be, consummated).

        The Borrower,  the Banks, the Agent and the Co-Agent are parties to that
certain  Amended and Restated Loan  Agreement  dated as of October 15, 1993 (the
"FIRST RESTATED  AGREEMENT"),  which amends and restates the Original Agreement.
Pursuant to or in connection  with the First Restated  Agreement,  (a) the Agent
and  the  Banks  (or  their  predecessors  in  interest)  were  requested  by NL
Industries,  Kronos  (US)  and  Kronos  to  approve,  and did  approve,  certain
transactions pursuant to which NL Industries assigned,  contributed or otherwise
transferred  the Stock of Kronos  (US) to Kronos and  Kronos  (US)  assigned  or
otherwise  transferred  the Stock of Kronos to NL Industries,  (b) a substantial
prepayment  of the Loan was made from proceeds of a public debt offering made by
NL Industries and the maturity of the principal amount of the Loan that remained
outstanding  after giving effect to such  prepayment  was extended,  and (c) the
Original Agreement was amended in certain other respects.

        During  1994,  the  Borrower  notified  the Agent of (a) the  Borrower's
receipt of the Tentative Tax Refund (as hereinafter  defined) relating to German
income taxes for the calendar year 1990 and (b) the Borrower's position that the
Tentative Tax Refund did not constitute the Tax Refund for purposes of the First
Restated Agreement. In addition, in consideration of the Agent, the Co-Agent and
the Banks not  challenging  that position and in  accordance  with the terms and
provisions  of the Tentative Tax Refund  Letter (as  hereinafter  defined),  the
Borrower  agreed to apply the amount of the  Tentative Tax Refund as an optional
prepayment of the  Revolving  Portion and,  notwithstanding  Section 2.04 of the
First Restated Agreement, further agreed to not borrow all or any portion of the
Tentative Tax Refund Availability Amount (as hereinafter defined) except for the
purpose  of (i)  prior  to the  Final  Determination  Date  (as  defined  in the
Tentative Tax Refund Letter),  repaying  amounts  constituting the Tentative Tax
Refund  which  the  Borrower  became  obligated  to  repay  to  the  German  tax
authorities in respect of German tax  assessments or liabilities of the Borrower
and certain of its Consolidated Subsidiaries for calendar years 1989 and 1990 or
(ii) at the Borrower's election, treating the amount so borrowed as a portion of
the Tax Refund and prepaying  the Loan pursuant to SECTION  8.01(D) of the First
Restated  Agreement.  During 1994, the Borrower paid DM 175,000,000 to the Agent
for application  against the Revolving  Portion in accordance with the Tentative
Tax Refund Letter.

        On  October  31,  1994,  the  Borrower  drew down DM  50,000,000  of the
Revolving  Portion from the Banks under the  Tentative  Tax Refund  Availability
Amount and applied such amount (which  constituted  part of the Tax Refund) as a
prepayment of the Term Portion in accordance  with SECTION  8.01(D) of the First
Restated Agreement.


                                              2

<PAGE>



        During  1996,  the  Borrower  notified  the  Agent of  certain  proposed
transactions  involving its  Subsidiaries,  certain of which  transactions  were
required to be approved by the requisite Banks. As a result, the Second Approval
Agreement (as hereinafter  defined) was executed and the transactions  described
in the  Second  Approval  Agreement  have  been or are in the  process  of being
consummated.

        On  October  22,  1996,  the  Borrower  drew down DM  49,361,653  of the
Revolving  Portion from the Banks under the  Tentative  Tax Refund  Availability
Amount to pay German  income taxes in  accordance  with the Tentative Tax Refund
Letter.  On January 22, 1997,  the  Borrower  repaid DM 1,649,238 of such amount
drawn on  October  22,  1996,  which DM  1,649,238  amount  was  applied  to the
Revolving  Portion and thereby  increased the Tentative Tax Refund  Availability
Amount by DM 1,649,238.

        Immediately  prior to the Second  Restatement  Date, (a) the outstanding
principal  amount of the Term Portion was DM 395,537,463 and (b) the outstanding
principal  amount of the  Revolving  Portion was DM  142,784,415.  In  addition,
immediately  prior to the Second  Restatement  Date, the undrawn  portion of the
Revolving  Portion was DM  107,215,585,  DM 77,287,585 of which  constituted the
Tentative  Tax  Refund  Availability   Amount,  the  reborrowing  of  which  was
restricted  in  accordance  with the terms and  provisions  of the Tentative Tax
Refund Letter.

        Notwithstanding that the Final Determination Date may not have occurred,
the Borrower,  in consideration of the agreements of the Banks set forth in this
Agreement,  is willing  and  desires to treat the amount of DM  77,287,585  as a
portion of the Tax Refund as of the Second Restatement Date subject to the terms
and  conditions  of this  Agreement.  Accordingly,  in  accordance  with SECTION
8.01(D) of the First Restated Agreement and this Agreement,  the Borrower shall,
on the Second  Restatement  Date,  make a DM  77,287,585  prepayment of the Term
Portion,  all of which  shall be  applied,  on a pro rata basis as  provided  in
SECTION  8.01(D),  to reduce the remaining  Repayment  Installments  of the Term
Portion, with the proceeds of a drawdown of the Revolving Portion (in accordance
with the Tentative Tax Refund Letter) in the amount of DM 57,287,585 and with DM
20,000,000  of the  proceeds  of the NL  Subordinated  Loan  referred  to in the
immediately succeeding paragraph.

        The  Borrower,  the Agent and the Banks  have  discussed,  and desire to
provide for, (a) a DM 150,000,000  prepayment of the Term Portion of the Loan to
be made on the Second Restatement Date from a subordinated loan in the principal
amount of DM  260,000,000  to be made by NL  Industries  to the Borrower and (b)
certain other amendments to the First Restated Agreement.  DM 20,000,000 of such
prepayment will be (as stated in the immediately  preceding  paragraph) applied,
on a pro rata basis, to reduce the remaining Repayment  Installments of the Term
Portion as a mandatory  prepayment of part of the Tax Refund in accordance  with
SECTION  8.01(D) of the First  Restated  Agreement  and this  Agreement  and the
remaining  DM  130,000,000  of such  prepayment  will be applied as a  mandatory
prepayment  of the Term  Portion  in  accordance  with  SECTION  8.01(H) of this
Agreement and will be applied to the outstanding Repayment

                                              3

<PAGE>



Installments  of the Term Portion in the direct order of the  maturities of such
installments.  In order to accomplish  the  foregoing and to address  additional
matters relating  thereto,  the Borrower,  the Banks and the Agent now desire to
amend and restate the First Restated Agreement as provided in this Agreement.

        NOW, THEREFORE,  in consideration of the Original  Agreement,  the First
Restated  Agreement,  this  Agreement and the mutual  covenants  and  agreements
contained therein and herein, and for other good and valuable consideration, the
receipt and  sufficiency of which are hereby  acknowledged  and  confessed,  the
First Restated Agreement is hereby amended and restated in its entirety, and the
parties hereto hereby agree, as follows:

                                    ARTICLE 1.  DEFINITIONS

        In this Agreement, unless the context otherwise requires:

"Adjusted Restricted  Payments"             means, without
                                            duplication (a) the aggregate of all
                                            Restricted  Payments,  plus  (b) the
                                            aggregate  of all Deemed  Restricted
                                            Payments.

"Affiliate"                                 means any  individual,  corporation,
                                            partnership,  joint venture,  trust,
                                            unincorporated    organization    or
                                            association,  mutual company,  joint
                                            stock  company,   estate,  trust  or
                                            other organization, whether or not a
                                            legal  entity,   which  directly  or
                                            indirectly  is  in  Control  of,  is
                                            Controlled  by,  or is under  common
                                            Control with respect to, any Person.

"Affiliate License Agreements"              means as set forth in SECTION 15.21.

"Agent"                                     means Hypobank  International  S.A.,
                                            its  corporate   successors  or  any
                                            successor agent  appointed  pursuant
                                            to ARTICLE 21.

"Agreement"                                 means  this   Second   Amended   and
                                            Restated Loan  Agreement,  including
                                            all  of  the   Schedules   and   the
                                            Exhibits   hereto,   as  amended  or
                                            supplemented from time to time.

"Assignment and Acceptance"                 means an assignment
                                            and  acceptance  of a Bank's  rights
                                            and  obligations  with  respect to a
                                            Loan  (or  a   Commitment   relating
                                            thereto) or a portion thereof in the
                                            form attached hereto as EXHIBIT A.


                                              4

<PAGE>



"Assignment of Dividends"                   means an assignment of
                                            dividends from Societe  Industrielle
                                            du Titane S.A. in the form delivered
                                            in  connection   with  the  Original
                                            Agreement,    the   First   Restated
                                            Agreement  or  this  Agreement,   as
                                            amended or supplemented from time to
                                            time.

"Bank" and  "Banks"                         means  any  bank  or
                                            financial  institution  or all banks
                                            or financial  institutions as listed
                                            on  the  signature   pages  of  this
                                            Agreement  and on SCHEDULE 1 and any
                                            bank(s) or financial  institution(s)
                                            which  become(s)  a Bank or Banks in
                                            accordance  with  ARTICLE 24 of this
                                            Agreement.

"Base Deutsche Mark Amount"                 means (a) with
                                            respect  to any  advance of the Loan
                                            originally borrowed in U.S. Dollars,
                                            the   amount   of   Deutsche    Mark
                                            specified in the Notice of Borrowing
                                            of  which  the  U.S.  Dollar  amount
                                            advanced is the Equivalent Amount on
                                            the Drawdown  Date of such  advance,
                                            and (b) with  respect to any advance
                                            of the Loan or portion thereof to be
                                            redenominated  from Deutsche Mark to
                                            U.S. Dollars, the amount of Deutsche
                                            Mark  specified  in  the  Borrower's
                                            request for redenomination  pursuant
                                            to  SECTION  2.05 of which  the U.S.
                                            Dollar amount to be redenominated is
                                            the Equivalent Amount as of the date
                                            of redenomination.

"Borrower"                                  means  as set  forth  in  the  first
                                            paragraph  of the  preamble  of this
                                            Agreement.

"Business Day"                              means a day on which  banks are
                                            required to be open for  business in
                                            London,  Luxembourg,  New  York  and
                                            Munich.

"Canadian Dollars or Can. $"                means lawful currency of Canada.

"Canadian Security Documents"               mean a Deed of
                                            Collateral   Hypothec   executed  by
                                            Kronos  Canada,   Inc.  pursuant  to
                                            which a Lien  affecting the real and
                                            personal  property of Kronos  Canada
                                            Inc. (including the plant located at
                                            Varennes,  Quebec,  Canada, and bank
                                            accounts  but  excluding   stock  of
                                            Kronos World Services S.A./N.V.  and
                                            certain    immaterial   assets)   is
                                            created in favor of the

                                              5

<PAGE>



                                            Agent,  a Deed of Hypothec  executed
                                            by 2927527  Canada Inc.  pursuant to
                                            which a Lien  affecting the personal
                                            property  of  2927527   Canada  Inc.
                                            (including    bank    accounts   but
                                            excluding certain immaterial assets)
                                            is created in favor of the Agent,  a
                                            Deed of Hypothec executed by 2969157
                                            Canada Inc. pursuant to which a Lien
                                            affecting  the personal  property of
                                            2969157  Canada Inc.  (including the
                                            Kronos Canada Note and bank accounts
                                            but  excluding  certain   immaterial
                                            assets)  is  created in favor of the
                                            Agent    and    other    agreements,
                                            documents and  instruments  relating
                                            to the foregoing.

"Capital Expenditures"                      means any expenditure
                                            by the Borrower or any  Consolidated
                                            Subsidiary for or with respect to an
                                            asset  which  has a  useful  life of
                                            more    than   one    year,    which
                                            expenditure is properly  classified,
                                            in   the   consolidated    financial
                                            statements  of the  Borrower  and in
                                            accordance  with German GAAP,  as an
                                            addition to equipment, real property
                                            or  improvements or similar types of
                                            tangible fixed assets.

"Capital Leases"                            means rental  obligations as
                                            lessee  under  leases   recorded  as
                                            capital  leases in  accordance  with
                                            German GAAP.

"Cash Pledge Agreements"                    means   such
                                            collateral   assignments,   security
                                            agreements, pledge agreements and/or
                                            similar  agreements,   in  form  and
                                            substance reasonably satisfactory to
                                            the Agent,  pursuant  to which Liens
                                            are  granted  in favor of the  Agent
                                            affecting  the cash  balances of the
                                            Borrower     and    its     Canadian
                                            Subsidiaries.

"Co-Agent"                                  means Banque Paribas in its capacity
                                            as Co-Agent  for the Banks under the
                                            Original  Agreement  and  the  First
                                            Restated Agreement.

"Code"                                      means  the  United  States  Internal
                                            Revenue Code of 1986, as amended and
                                            in effect from time to time.


                                              6

<PAGE>



"Collateral"                                means  the  Pledge  Agreements,  the
                                            Canadian  Security  Documents,   the
                                            Nordenham Mortgage,  the Cash Pledge
                                            Agreements, the Guaranties and other
                                            documents   delivered   or   to   be
                                            delivered   pursuant   to   SECTIONS
                                            16.34, 17.01, 17.02, 17.03 and 17.04
                                            of this  Agreement,  the  Liens  and
                                            guaranties  created  thereby and any
                                            and all  property,  real,  personal,
                                            tangible   or   intangible,    which
                                            secures the  Borrower's  obligations
                                            under this Agreement.

"Commitment" or "Commitments"               means, in relation
                                            to   each    Bank,    the    several
                                            obligations  of  such  Bank,  and in
                                            relation to all Banks, the aggregate
                                            obligations of such Banks,  sub ject
                                            to the terms of this  Agreement,  to
                                            make  available  its  portion of the
                                            Loans      (including,       without
                                            limitation,  the Revolving  Portion)
                                            to be made under this  Agreement  up
                                            to the  aggregate  principal  amount
                                            specified  in  SCHEDULE  1,  to  the
                                            extent not reduced or canceled under
                                            this   Agreement,    and   includes,
                                            without  limitation,  the "Revolving
                                            Commitment"       or      "Revolving
                                            Commitments", respectively.

"Company" or "Companies"                    means,  individually,
                                            any of  the  Borrower  or any  Major
                                            Subsidiary  and,  collectively,  the
                                            Borrower and all Major Subsidiaries.

"Consolidated Equity"                       means,  as of the  date  of
                                            determination  for the  Borrower and
                                            its  Subsidiaries  on a consolidated
                                            basis  in  conformity   with  German
                                            GAAP, (a) consolidated stockholder's
                                            equity determined in accordance with
                                            German GAAP, (b) plus any deductions
                                            made   for   currency    translation
                                            adjustments  and minus any additions
                                            made   for   currency    translation
                                            adjustments,   (c)  plus  an  amount
                                            equal to the  outstanding  principal
                                            of and accrued  and unpaid  interest
                                            on the  Subordinated  Debt,  if any,
                                            described  in CLAUSES  (A),  (B) and
                                            (C) of the  definition  of the  term
                                            "Subordinated    Debt"    in    this
                                            Agreement,  (d) minus any  increase,
                                            or plus any decrease,  in Net Income
                                            resulting from the foreign  currency
                                            translation  amount arising from the
                                            translation of the Mirror Notes from
                                            U.S.  Dollars to Deutsche Mark since
                                            the  issuance  of the Mirror  Notes,
                                            (e) minus the

                                              7

<PAGE>



                                            Restricted Capital Amount,  plus (f)
                                            any deductions  made for adjustments
                                            to  goodwill  if and  to the  extent
                                            that such  adjustments  have reduced
                                            Net Income.

"Consolidated Subsidiary"                   means any Subsidiary the
                                            accounts    of   which    would   be
                                            consolidated   with   those  of  the
                                            Borrower    in   its    consolidated
                                            financial statements.

"Contaminant"                               means    any    waste,    pollutant,
                                            hazardous      substance,      toxic
                                            substance,    hazardous   waste   or
                                            material,  special  or toxic  waste,
                                            petroleum   or   petroleum   derived
                                            substance    or   waste,    or   any
                                            constituent of any such substance or
                                            waste,      including,       without
                                            limitation,   any   such   substance
                                            defined  in  or   pursuant   to  any
                                            Environmental Law.

"Control" or "Controlled"                   means, with respect
                                            to any Person,  the power,  directly
                                            or indirectly:

                                            (a)    to  vote  more   than   fifty
                                                   percent  (50%) of the  voting
                                                   securities   issued  by  such
                                                   Person  for the  election  of
                                                   the  board of  directors  (or
                                                   members   of  an   equivalent
                                                   governing   body)   of   such
                                                   Person; or

                                            (b)    otherwise  to direct or cause
                                                   the  direction of  management
                                                   and policies of such Person.

"Controlled Group"                          means  all   members  of  a
                                            controlled group of corporations and
                                            all trades or businesses (whether or
                                            not   incorporated)   under   common
                                            control  which,  together  with  the
                                            Borrower,  are  treated  as a single
                                            employer   under   Section   414(b),
                                            414(c),  414(m)  or  414(o)  of  the
                                            Code.

"Current Assets"                            means,  for the Borrower and
                                            its  Subsidiaries  on a consolidated
                                            basis  in  conformity   with  German
                                            GAAP, consolidated assets, excluding
                                            intangibles   and   tangible   fixed
                                            assets,  realizable  within one year
                                            of the date of determination.

"Current Liabilities"                       means, for the Borrower
                                            and    its    Subsidiaries    on   a
                                            consolidated   basis  in  conformity
                                            with German

                                              8

<PAGE>



                                            GAAP,   consolidated   accruals  and
                                            liabilities  due  within one year of
                                            the date of determination, excluding
                                            Current Maturities.

"Current Maturities"                        means those portions of
                                            Funded  Debt due  within one year of
                                            the date of determination.

"Deemed Restricted  Payments"               means, without
                                            duplication,  any  payments or other
                                            transfers of value  (irrespective of
                                            the form of such  payments  or other
                                            transfers)  directly  or  indirectly
                                            made by the  Borrower  or any of its
                                            Subsidiaries    to    Kronos,     NL
                                            Industries, Kronos (US) or any other
                                            Affiliate  of  the  Borrower  (other
                                            than the Borrower or a Subsidiary of
                                            the Borrower) for less than full and
                                            fair  consideration  to the Borrower
                                            or its  Subsidiary  (as  applicable)
                                            and,  in any event,  shall  include,
                                            without limitation,  (a) all license
                                            fees,  royalties  or other  payments
                                            for the use of  technology  or other
                                            Intellectual Property Rights paid or
                                            payable to such Affiliates,  (b) all
                                            amounts  paid  or  payable  to  such
                                            Affiliates constituting cost sharing
                                            (excluding insurance expenses except
                                            to the  extent  that  such  expenses
                                            exceed  the  amount   therefor  that
                                            would  be  paid  or   payable  in  a
                                            comparable arm's length  transaction
                                            with  a  non-Affiliate),   personnel
                                            costs   and  other   overhead,   (c)
                                            transfers  of value  resulting  from
                                            the sale or  transfer  of product or
                                            other  assets by the Borrower or any
                                            of   its    Subsidiaries   to   such
                                            Affiliates for consideration that is
                                            less than the consideration  (net of
                                            reasonable     transaction     costs
                                            incurred in the  ordinary  course of
                                            business)  that is  obtained by such
                                            Affiliates  in  connection  with the
                                            resale  or  subsequent  transfer  of
                                            such  product or other  assets,  (d)
                                            transfers  of value  resulting  from
                                            the sale or  transfer  of product or
                                            other assets by such  Affiliates  to
                                            the   Borrower   or   any   of   its
                                            Subsidiaries for consideration  that
                                            is  more   than  the  cost  of  such
                                            product  or  other  assets  to  such
                                            Affiliates (provided,  however, that
                                            such  sales  or other  transfers  by
                                            such  Affiliates  of  product in the
                                            ordinary course of business shall be
                                            excluded from this CLAUSE (D) except
                                            to the extent that the consideration
                                            received therefor is more than would
                                            be paid or payable  in a  comparable
                                            arm's

                                              9

<PAGE>



                                            length     transaction     with    a
                                            non-Affiliate),  and (e) payments in
                                            the  form  of  service   charges  to
                                            compensate   such   Affiliates   for
                                            purchases  of titanium ore and other
                                            product or assets.

"Default"                                   means  an Event  of  Default  or any
                                            event, act or occurrence which, with
                                            the  giving of notice or  passage of
                                            time  or  both,   unless   cured  or
                                            waived,  would  become  an  Event of
                                            Default.

"Deutsche Mark"  or  "DM"                   means  the  lawful
                                            currency of Germany.

"Deutsche Mark  Amount"                     means (a) in the case
                                            of   any   amount   denominated   in
                                            Deutsche   Mark,   the   amount   of
                                            Deutsche  Mark  from  time  to  time
                                            outstanding,  and (b) in the case of
                                            any  amount  denominated  or  to  be
                                            denominated  in  U.S.  Dollars,  the
                                            amount  of  Deutsche  Mark  which is
                                            equivalent to a given amount of U.S.
                                            Dollars  as of  the  Relevant  Date,
                                            determined by using the Spot Rate on
                                            the date two Business  Days prior to
                                            the Relevant  Date  (unless  another
                                            date    is    specified    in   this
                                            Agreement).

"Disposition"                               means, with respect to any asset, to
                                            sell,   assign,   lease,   exchange,
                                            transfer  or  otherwise  dispose  of
                                            such asset.

"Drawdown Date"                             means (a) with respect to each
                                            advance  of the  Loan  prior  to any
                                            reborrowing   pursuant   to  SECTION
                                            2.04,  the  date  set  forth  in the
                                            Notice of Borrowing relating to such
                                            advance  (which  date was a Business
                                            Day on or before June 19, 1990), and
                                            (b) with respect to any  reborrowing
                                            under the Revolving Portion pursuant
                                            to SECTION 2.04,  the date set forth
                                            in the Notice of Borrowing  relating
                                            to  such  reborrowing,   which  date
                                            shall be a Business Day on or before
                                            August 15, 2000.

"Earnings Available for Fixed Charges"      means,
                                            for  the   preceding   four   fiscal
                                            quarters  and for the  Borrower  and
                                            its  Subsidiaries  on a consolidated
                                            basis  in  conformity   with  German
                                            GAAP,  Net Income plus Income  Taxes
                                            plus  depreciation,   depletion  and
                                            amortization  plus Interest  Expense
                                            plus

                                              10

<PAGE>



                                            rentals  payable under leases (other
                                            than  Capital   Leases)   having  an
                                            initial non-cancelable lease term in
                                            excess  of  one  year  plus,  to the
                                            extent  included in determining  Net
                                            Income,  the decrease resulting from
                                            the  foreign  currency   translation
                                            amount arising from the  translation
                                            of  the   Mirror   Notes  from  U.S.
                                            Dollars to  Deutsche  Mark or minus,
                                            to   the    extent    included    in
                                            determining Net Income, the increase
                                            resulting from the foreign  currency
                                            translation  amount arising from the
                                            translation of the Mirror Notes from
                                            U.S. Dollars to Deutsche Mark.

"EBITDA"                                    means,  with  respect  to any fiscal
                                            period,  for  the  Borrower  and its
                                            Subsidiaries on a consolidated basis
                                            in  conformity  with German GAAP or,
                                            with  respect to the third  sentence
                                            of   SECTION    8.01(C)   only,   NL
                                            Industries and its subsidiaries on a
                                            consolidated   basis  in  conformity
                                            with generally  accepted  accounting
                                            principles  in the United  States of
                                            America,  the sum of (a) net income,
                                            excluding  extraordinary  gains  and
                                            losses,  plus (b)  interest  expense
                                            (including  imputed interest expense
                                            in  respect  of  obligations   under
                                            capital  leases,   if  any),  income
                                            taxes,  depreciation,   amortization
                                            and other  non-cash  expenses to the
                                            extent that any of such expenses are
                                            deducted in determining  net income,
                                            minus  (c)  non-cash  income  to the
                                            extent  that such income is included
                                            in determining net income.

"Employee Plan"                             means an employee benefit plan
                                            within the  meaning of Section  3(3)
                                            of ERISA.

"Environmental Claim"                       means any written  notice by
                                            any  state,  federal,   territorial,
                                            provincial,  local or other court or
                                            govern mental  authority,  entity or
                                            instrumentality  alleging  potential
                                            liability    for   damage   to   the
                                            environment,   or  by   any   Person
                                            alleging  potential   liability  for
                                            personal injury (including sickness,
                                            disease or death) or property damage
                                            or   damage   of  any   other   kind
                                            resulting from or based upon:

                                            (a)    the   presence   or   release
                                                   (including,           without
                                                   limitation,     sudden     or
                                                   non-sudden, accidental

                                              11

<PAGE>



                                                   or  non-accidental,  leaks or
                                                   spills)  of  any  Contaminant
                                                   at,  in  or  from   property,
                                                   whether  or not  owned by the
                                                   Borrower  and/or  any  of its
                                                   Subsidiaries; or

                                            (b)    circumstances   forming   the
                                                   basis  of any  violation,  or
                                                   alleged  violation,   of  any
                                                   Environmental Law.

"Environmental Law"                         means   any   law,   rule  or
                                            regulation  pertaining  to land use,
                                            air,  soil,  surface  water,  ground
                                            water   (including  the  protection,
                                            cleanup,  removal,   remediation  or
                                            damage thereof),  public or employee
                                            health   or   safety  or  any  other
                                            environmental   matter,   including,
                                            without limitation, any of the above
                                            promulgated by the EU, together with
                                            any other non-U.S.  or domestic laws
                                            (federal,     state,    territorial,
                                            provincial  or  local)  relating  to
                                            emissions,  discharges,  releases or
                                            threatened     releases    of    any
                                            Contaminant  into ambient air, land,
                                            surface water, groundwater, personal
                                            property or structures, or otherwise
                                            relating    to   the    manufacture,
                                            processing,    distribution,    use,
                                            treatment,     storage,    disposal,
                                            transportation,     discharges    or
                                            handling of any Contaminant.

"Equivalent Amount"                         means  the  amount  of U.S.
                                            Dollars  which  is  equivalent  to a
                                            given amount of Deutsche  Mark as of
                                            the  Relevant  Date,  determined  by
                                            using  the Spot Rate on the date two
                                            Business  Days prior to the Relevant
                                            Date.

"ERISA"                                     means  the  United  States  Employee
                                            Retirement  Income  Security  Act of
                                            1974,  as amended and in effect from
                                            time to time.

"EU"                                        means the European Union.

"Eurocurrency Liabilities"                  means as that  term is
                                            defined in Regulation D.

"Eurocurrency Rate Reserve Percentage"      means the
                                            reserve  percentage  applicable  for
                                            any Bank during any Interest  Period
                                            under  regulations  issued from time
                                            to time by the  Federal  Reserve for
                                            determining   the  maximum   reserve
                                            requirement

                                              12

<PAGE>



                                            (including,  without limitation, any
                                            emergency,   supplemental  or  other
                                            marginal  reserve  requirement)  for
                                            such    Bank   with    respect    to
                                            liabilities or assets  consisting of
                                            or      including       Eurocurrency
                                            Liabilities  having a term  equal to
                                            such Interest Period.

"Event of Default"                          means as set forth in ARTICLE 18.

"Excess Adjusted Restricted Payments"       means,
                                            without    duplication,    for   the
                                            applicable calendar year (or portion
                                            thereof which has occurred as of any
                                            date of  determination),  the amount
                                            (if  any)  by  which  the  aggregate
                                            amount   of   Adjusted    Restricted
                                            Payments  exceeds (a) DM  47,000,000
                                            (Deutsche Mark Forty-Seven  Million)
                                            during  calendar  year 1996,  (b) DM
                                            39,000,000       (Deutsche      Mark
                                            Thirty-Nine Million) during calendar
                                            year   1997,   (c)   DM   44,000,000
                                            (Deutsche  Mark Forty- Four Million)
                                            during  calendar year 1998,  and (d)
                                            DM   47,000,000    (Deutsche    Mark
                                            Forty-Seven    Million)    for   any
                                            calendar year thereafter;  provided,
                                            however, that if, within 30 (thirty)
                                            days  after  the  payment  or  other
                                            making  of any such  excess  amount,
                                            the   entire   amount   thereof   is
                                            contributed  by NL Industries or any
                                            of its subsidiaries  (other than the
                                            Borrower  and its  Subsidiaries)  to
                                            the Borrower (or a Subsidiary of the
                                            Borrower  as the Agent may  approve,
                                            which    approval   shall   not   be
                                            unreasonably  withheld)  as  a  cash
                                            equity  capital  contribution  or as
                                            Subordinated    Debt   (other   than
                                            Subordinated  Debt  referred  to  in
                                            CLAUSE (A) of the  definition of the
                                            term  "Subordinated  Debt")  made or
                                            advanced,   respectively,   to   the
                                            Borrower  or such  Subsidiary,  then
                                            such excess amount  previously  paid
                                            or otherwise  made and thereafter so
                                            contributed   or   advanced  to  the
                                            Borrower  (or  its  Subsidiary,   as
                                            applicable)  shall  not be deemed to
                                            constitute   an   Excess    Adjusted
                                            Restricted Payment hereunder.

"Excess Cash Flow"                          means (a) Free Cash Flow
                                            minus (b) Capital  Expenditures  for
                                            the preceding  four fiscal  quarters
                                            less     any     Indebtedness     or
                                            Subordinated    Debt    specifically
                                            incurred to finance any such Capital
                                            Expenditures   during   such  fiscal
                                            quarters minus

                                              13

<PAGE>



                                            (c) the sum of (i) Fixed Charges and
                                            (ii)   repayments  of  Funded  Debt,
                                            exclusive  of  repayments  of Funded
                                            Debt  from   proceeds   of  the  Tax
                                            Refund, in the preceding four fiscal
                                            quarters.

"Excess EBITDA"                             means,  for the Borrower and
                                            its  Subsidiaries  on a consolidated
                                            basis and with respect to any fiscal
                                            year,  the  positive  remainder  (if
                                            any)  of (a)  (i)  EBITDA  for  such
                                            fiscal year, minus (ii) Income Taxes
                                            paid in  cash  (exclusive  of  taxes
                                            paid   arising   from    assessments
                                            received as a result of tax audits),
                                            Capital  Expenditures  and  Interest
                                            Expense,    other   than    non-cash
                                            Interest  Expense,  for such  fiscal
                                            year, minus (b) the amount set forth
                                            in the table  below for such  fiscal
                                            year:

                                     FISCAL YEAR ENDED           AMOUNT

                                            1997          Negative DM 90,000,000
                                            1998          Negative DM 7,500,000
                                            1999          DM 60,000,000

"Excess Term Prepayment"                    means DM 2,000,000
                                            (Deutsche  Mark Two Million),  which
                                            amount is the positive  remainder of
                                            (a)   the   amount   of  the   First
                                            Prepayment   applied   to  the  Term
                                            Portion in  accordance  with SECTION
                                            2.01(A) (expressed in Deutsche Mark)
                                            minus (b) DM  400,000,000  (Deutsche
                                            Mark Four Hundred Million).

"Excluded Taxes"                            means as set forth in SECTION 11.01.

"Federal Reserve"                           means   the   Board   of
                                            Governors  of  the  Federal  Reserve
                                            System.

"Financial Covenants"                       means as set forth in SECTION 23.02.

"First Amendment  Agreement"                means  as set
                                            forth in the third  paragraph of the
                                            preamble of this Agreement.

"First Approval Agreement"                  means   the
                                            Approval Agreement dated as of April
                                            6,  1993,  among the  Borrower,  the
                                            requisite  Banks who are signatories
                                            thereto, the Agent and the Co-Agent.

                                              14

<PAGE>



"First Prepayment"                          means the prepayment of
                                            the  Loan  in the  First  Prepayment
                                            Amount  as  referred  to in  SECTION
                                            2.01(A).

"First Prepayment Amount"                   means    DM
                                            552,000,000   (Deutsche   Mark  Five
                                            Hundred  Fifty-Two  Million),  i.e.,
                                            the  amount,  determined  as of  the
                                            First  Prepayment Date and expressed
                                            in  Deutsche  Mark,   equal  to  the
                                            remainder of (a) the gross  proceeds
                                            of the NL Debt  Offering  minus  (b)
                                            the NL Debt Offering Expenses.

"First Prepayment  Date"                    means  October 21,
                                            1993,  the date upon which the First
                                            Prepayment   was   received  by  the
                                            Agent.

"First Restated  Agreement"                 Means  as  set
                                            forth in the ninth  paragraph of the
                                            preamble of this Agreement.

"First Restatement Date"                    means October 15,
                                            1993, the date of the First Restated
                                            Agreement.

"Fixed Charges"                             means,  for the  preceding
                                            four  fiscal  quarters  and  for the
                                            Borrower and its  Subsidiaries  on a
                                            consolidated   basis  in  conformity
                                            with German GAAP,  Interest  Expense
                                            (excluding   Interest   Expense   on
                                            Subordinated Debt payable in kind in
                                            the  form of  Subordinated  Debt and
                                            excluding  non-cash Interest Expense
                                            on the Mirror  Notes)  plus  rentals
                                            payable  under  leases  (other  than
                                            Capital  Leases)  having an  initial
                                            non-cancelable  lease term in excess
                                            of one year.

"Free Cash Flow"                            means,  for the preceding
                                            four  fiscal  quarters  and  for the
                                            Borrower and its  Subsidiaries  on a
                                            consolidated   basis  in  conformity
                                            with  German   GAAP,   (a)  Earnings
                                            Available  for Fixed  Charges  minus
                                            (b) taxes paid in cash  during  such
                                            fiscal   quarters,   plus   (c)  tax
                                            refunds,   exclusive   of  the   Tax
                                            Refund, received in cash during such
                                            fiscal  quarters,  plus or minus, as
                                            the  case  may be (d)  any  non-cash
                                            additions or  subtractions  included
                                            in the  determination  of Net Income
                                            to the extent not already taken into
                                            account   in   the   definition   of
                                            Earnings    Available    for   Fixed
                                            Charges.

                                              15

<PAGE>



"Funded Debt"                               means,  as of the date of any
                                            calculation, (a) all Indebtedness of
                                            the Borrower and its Subsidiaries to
                                            the extent such  Indebtedness has an
                                            initial stated or final maturity of,
                                            or by  its  terms  is  renewable  or
                                            extendable  by the  Borrower  or its
                                            Subsidiaries  to, a date or a period
                                            ending  more than one year after the
                                            date of any  such  calculation,  (b)
                                            plus  Indebtedness  of the  Borrower
                                            and its Subsidiaries comprised of or
                                            liabilities  in respect of  unfunded
                                            vested   benefits   under   Non-U.S.
                                            Employee  Plans to the  extent  such
                                            liabilities  exceed  DM  150,000,000
                                            (Deutsche  Mark  One  Hundred  Fifty
                                            Million),    (c)   minus   unsecured
                                            working capital  Indebtedness of the
                                            Borrower   and   its    Subsidiaries
                                            (including the aggregate face amount
                                            of all funded and  unfunded  standby
                                            and documentary  letters of credit),
                                            but   only   to  the   extent   such
                                            unsecured       working      capital
                                            Indebtedness       is      Permitted
                                            Indebtedness, (d) minus the increase
                                            in  Indebtedness  resulting from the
                                            foreign currency  translation amount
                                            arising from the  translation of the
                                            Mirror  Notes  from U.S.  Dollars to
                                            Deutsche  Mark or plus the  decrease
                                            in  Indebtedness  resulting from the
                                            foreign currency  translation amount
                                            arising from the  translation of the
                                            Mirror  Notes  from U.S.  Dollars to
                                            Deutsche Mark, and (e) plus (without
                                            duplication) the Restricted  Capital
                                            Amount.

"Funded Debt Ratio"                         means,  for the Borrower
                                            and    its    Subsidiaries    on   a
                                            consolidated   basis,   Funded  Debt
                                            divided    by   the   sum   of   (a)
                                            Consolidated    Equity    plus   (b)
                                            Subordinated Debt.

"German GAAP"                               means   generally   accepted
                                            accounting    principles   for   the
                                            preparation    of   group   accounts
                                            pursuant  to the  provisions  of the
                                            relevant laws of Germany.

"Gross Proceeds"                            means, with respect to the
                                            Disposition  of Stock  or any  other
                                            asset,  cash  or  non-cash  proceeds
                                            actually   received,   directly   or
                                            indirectly  by,  or for the  account
                                            of, the Borrower or any Subsidiary.

"Guarantor"                                 means NL Industries,  Kronos Canada,
                                            Inc.,  2927527 Canada Inc.,  2969157
                                            Canada Inc. or any

                                              16

<PAGE>



                                            Subsidiary,  whether existing on the
                                            Second  Restatement  Date  or at any
                                            time  hereafter,   which  becomes  a
                                            Guarantor pursuant to SECTION 16.34.

"Guaranty" or "Guaranties"                  means a guaranty or
                                            the  guaranties  executed  or  to be
                                            executed   by  the   Guarantors   in
                                            accordance    with   the    Original
                                            Agreement,    the   First   Restated
                                            Agreement    or    this    Agreement
                                            (including,    without   limitation,
                                            SECTION  16.34 and  ARTICLE  17), as
                                            amended or supplemented from time to
                                            time.

"Income Taxes"                              means,  for the Borrower and
                                            its  Subsidiaries  on a consolidated
                                            basis,  expense for income  taxes in
                                            accordance with German GAAP.

"Indebtedness"                              means,   for  any   Person   without
                                            duplication,   and   excluding   all
                                            Subordinated  Debt  referred  to  in
                                            CLAUSES  (B),  (C)  and  (D)  of the
                                            definition of the term "Subordinated
                                            Debt":

                                            (a)    debt  consisting  of borrowed
                                                   money,  including obligations
                                                   evidenced      by      bonds,
                                                   debentures,  notes or similar
                                                   instruments,  or the deferred
                                                   purchase price of property or
                                                   services  (other  than  trade
                                                   payables incurred and payable
                                                   in  the  ordinary  course  of
                                                   business   and  on  customary
                                                   terms);

                                            (b)    rental    obligations   under
                                                   Capital Leases;

                                            (c)    obligations  under  direct or
                                                   indirect     guaranties    in
                                                   respect    of     obligations
                                                   (contingent  or otherwise) to
                                                   purchase     or     otherwise
                                                   acquire,   or   otherwise  to
                                                   assure  a  creditor   against
                                                   loss   (such   as,    without
                                                   limitation, obligations under
                                                   an   agreement   to  pay  for
                                                   property      or     services
                                                   irrespective  of  whether  or
                                                   not    such    property    is
                                                   delivered  or  such  services
                                                   are rendered), in respect of,
                                                   debt or obligations of others
                                                   of the kinds  referred  to in
                                                   CLAUSES (A) or (B) above;


                                              17

<PAGE>



                                            (d)    obligations   (contingent  or
                                                   otherwise)  under  letters of
                                                   credit  (funded or  unfunded)
                                                   not arising out of the import
                                                   of goods;

                                            (e)    liabilities   in  respect  of
                                                   unfunded    vested   benefits
                                                   under  (i) plans  covered  by
                                                   Title  IV of  ERISA  and (ii)
                                                   any laws  governing  Non-U.S.
                                                   Employee  Plans to the extent
                                                   such  liabilities  exceed  DM
                                                   150,000,000   (Deutsche  Mark
                                                   One Hundred  Fifty  Million);
                                                   and

                                            (f)    all  obligations  secured  by
                                                   any Lien,  other  than  Liens
                                                   described in CLAUSES (D), (E)
                                                   and (F) of the  definition of
                                                   the term "Permitted Liens" in
                                                   this Agreement,  to which any
                                                   property  or  asset  owned by
                                                   the   Borrower   and/or   its
                                                   Subsidiaries    is   subject,
                                                   whether     or    not     the
                                                   obligations  secured  thereby
                                                   shall  have been  assumed  by
                                                   the     Borrower    or    its
                                                   Subsidiaries.

"Indentures"                                means  that  certain  (a)  Indenture
                                            dated  as  of  October   20,   1993,
                                            between NL  Industries  and Chemical
                                            Bank, as trustee,  to be executed by
                                            the parties thereto  relating to the
                                            senior  secured notes due 2003 to be
                                            issued  by  NL  Industries  and  (b)
                                            Indenture  dated as of  October  20,
                                            1993,   between  NL  Industries  and
                                            State Street Bank and Trust Company,
                                            as  trustee,  to be  executed by the
                                            parties  thereto   relating  to  the
                                            senior  secured  discount  notes due
                                            2005 to be issued by NL Industries.

"Intellectual Property   Rights"            shall  mean  all
                                            material    patents    and    patent
                                            applications, technical information,
                                            know-how and processes necessary for
                                            or used in the current manufacturing
                                            operations  and all  material  trade
                                            names,     trademarks,     trademark
                                            registrations  and applications used
                                            in   the    marketing    and   sales
                                            operations  of the  Borrower and its
                                            Subsidiaries   as  of   the   Second
                                            Restatement Date.

"Interbank Rate"                            means  the  rate  per  annum
                                            determined   by  the  Agent  on  the
                                            Interest  Determination  Date  to be
                                            the

                                              18

<PAGE>



                                            arithmetic mean (rounded upwards, if
                                            necessary,   to  the  nearest   four
                                            decimal   places)   of   the   rates
                                            notified   to  the   Agent   by  the
                                            Reference Banks to be those at which
                                            each  Reference  Bank, in accordance
                                            with its normal practice, is able to
                                            obtain  deposits in  Deutsche  Mark,
                                            with  respect to that portion of the
                                            Loan  denominated  in Deutsche Mark,
                                            or  deposits in U.S.  Dollars,  with
                                            respect to that  portion of the Loan
                                            denominated  in  U.S.   Dollars  (or
                                            other substitute  currency agreed to
                                            in accordance with the provisions of
                                            ARTICLE  7) at or about  11:00  a.m.
                                            London time in the London  interbank
                                            Euro-currency market for delivery on
                                            the first day of the Interest Period
                                            for the  number  of  days  comprised
                                            therein,   provided   that,   if   a
                                            Reference  Bank shall fail to notify
                                            the Agent of its rate, the Interbank
                                            Rate  shall  be  determined  on  the
                                            basis  of  the  quotation(s)  of the
                                            remaining Reference Bank(s).

"Interest Coverage Ratio"                   means,   for  the
                                            preceding  four fiscal  quarters and
                                            for    the    Borrower    and    its
                                            Subsidiaries   on   a   consolidated
                                            basis,  (a) the  sum of (i)  EBITDA,
                                            plus (ii) the sum of (A) the amount,
                                            if  any,  of  contributions  to  the
                                            equity of the  Borrower  in the form
                                            of cash (as  distinguished  from the
                                            conversion  of debt to equity)  made
                                            by NL  Industries  or Kronos  during
                                            such period, plus (B) the amount, if
                                            any, of loans made by NL  Industries
                                            or  Kronos  as   Subordinated   Debt
                                            during such period,  minus (iii) the
                                            sum  of  (A)  the  increase  in  the
                                            Restricted   Capital  Amount  during
                                            such period,  plus (B) the aggregate
                                            amount of  Restricted  Payments made
                                            during  such   period   pursuant  to
                                            SECTION  16.20(B),  divided  by  (b)
                                            Interest   Expense   (exclusive   of
                                            non-cash     Interest      Expense);
                                            provided,  however, that the amounts
                                            referred to in clause (ii) preceding
                                            that shall be counted  for  purposes
                                            of  the   definition   of  "Interest
                                            Coverage Ratio" shall be made during
                                            no more  than  two  separate  fiscal
                                            years  of the  Borrower  during  the
                                            term of this  Agreement and any such
                                            amounts  contributed  or made during
                                            any  fiscal  year  shall  be  wholly
                                            excluded for purposes of determining
                                            the "Interest Coverage Ratio" during
                                            any other fiscal year.

                                              19

<PAGE>



"Interest Determination Date"               means,   with
                                            respect to any Interest Period,  the
                                            Business   Day   which  is  2  (two)
                                            Business Days prior to the first day
                                            of such Interest Period.

"Interest Expense"                          means  interest  expense of
                                            the Borrower and its Subsidiaries on
                                            a  consolidated  basis in conformity
                                            with German GAAP,  and shall include
                                            imputed  interest expense in respect
                                            of obligations under Capital Leases,
                                            if any.

"Interest Payment Date"                     means the last day of
                                            any Interest Period.

"Interest Period"                           means each of the successive
                                            periods,  determined  in  accordance
                                            with this Agreement,  into which the
                                            period   for   which   the  Loan  is
                                            outstanding is divided and for which
                                            a  rate   of   interest   is  to  be
                                            established under this Agreement.

"Interest Rate Protection Agreement"        means any
                                            agreement  evidencing an arrangement
                                            designed  to  protect  the  Borrower
                                            against   fluctuations  in  interest
                                            rates.

"Investment"                                means any investment of cash or cash
                                            equivalents  in any Person,  whether
                                            by means of  share  purchase,  loan,
                                            capital contribution or otherwise.

"Kroner"                                    means the lawful currency of Norway.

"Kronos"                                    means  as set  forth  in the  second
                                            paragraph  of the  preamble  of this
                                            Agreement.


"Kronos Canada Note"                        means  that  certain
                                            Amended    Promissory   Note   dated
                                            December 20,  1996,  in the original
                                            principal amount of Cdn. $89,000,000
                                            made by Kronos Canada,  Inc. payable
                                            to the order of 2969157 Canada Inc.,
                                            which  promissory  note  amends  and
                                            replaces  that certain  Subordinated
                                            Promissory  Note dated May 28, 1993,
                                            in the original  principal amount of
                                            Cdn.  $123,000,000  made  by  Kronos
                                            Canada, Inc. payable to the order of
                                            Kronos  S.A./N.V.  and  subsequently
                                            assigned to 2969157 Canada Inc.


                                              20

<PAGE>



"Kronos Subordinated Loan"                  means   the
                                            unsecured and  subordinated  loan in
                                            the    principal    amount   of   DM
                                            25,000,000       (Deutsche      Mark
                                            Twenty-Five  Million) made by Kronos
                                            to  the  Borrower  on  December  31,
                                            1996,   pursuant   to   the   Kronos
                                            Subordinated     Note     and    the
                                            Subordination
                                            Agreement.

"Kronos Subordinated Note"                  means   that
                                            certain  Zero  Coupon   Subordinated
                                            Promissory  Note dated  December 31,
                                            1996,  in  the  original   principal
                                            amount  of DM  25,000,000  (Deutsche
                                            Mark  Twenty-Five  Million)  made by
                                            the Borrower payable to the order of
                                            Kronos  which  evidences  the Kronos
                                            Subordinated Loan.

"Kronos Titan"                              means Kronos Titan - GmbH, a
                                            German  corporation  and an indirect
                                            wholly-owned   Subsidiary   of   the
                                            Borrower.

"Kronos Titan Revolving Portion             means as set
                                            forth in SECTION 2.04(C).

"Kronos (US)"                               means  as  set  forth  in the
                                            second  paragraph of the preamble of
                                            this Agreement.

"Kronos(US)/Kronos Flip"                    means    the
                                            transactions  pursuant  to  which NL
                                            Industries has assigned, contributed
                                            or otherwise  transferred  the Stock
                                            of Kronos  (US) to Kronos and Kronos
                                            (US)     assigned    or    otherwise
                                            transferred  the  Stock of Kronos to
                                            NL Industries.

"Lending Office"                            means,  as to each Bank, the
                                            office(s) or  branch(es)  located at
                                            the  address(es)  set  forth  on the
                                            signature   page(s)  below  or  such
                                            other  office(s)  or  branch(es)  of
                                            such  Bank  as it may  from  time to
                                            time  designate   pursuant  to  this
                                            Agreement.

"Leverkusen Lease"                          means  the  lease  agreement
                                            (Erbbaurechtsvertrag zum Grundstueck
                                            Gemarkung    Wiesdorf,    Flur   18,
                                            Parzelle 108/2 mit Ergaenzungsabrede
                                            zum      Erbbaurechtsvertrag     und
                                            Errechnung des Erbbauzinses) between
                                            Titangesellschaft   GmbH   and  I.G.
                                            Farbenindustrie   Aktiengesellschaft
                                            i.L. dated June 21, 1952, as amended
                                            by  Supplementary   Agreement  dated
                                            June 21, 1952.

                                              21

<PAGE>



"Lien"                                      means,  with respect to the Borrower
                                            or any  Subsidiary  (in  each  case,
                                            whether  the same is  consensual  or
                                            nonconsensual     or    arises    by
                                            contractual obligation, operation of
                                            law,  legal  process  or  otherwise,
                                            existing  on the Second  Restatement
                                            Date or at any time thereafter): any
                                            mortgage,   deed  of  trust,   lien,
                                            pledge, attachment,  levy, charge or
                                            other    security     interest    or
                                            encumbrance  of any kind in  respect
                                            of any  property  now  or  hereafter
                                            owned   by  the   Borrower   or  any
                                            Subsidiary,    personal,   real   or
                                            otherwise,  or  upon  the  proceeds,
                                            income  or  profits  therefrom.  For
                                            this  purpose,  the  Borrower or any
                                            Subsidiary  shall be  deemed to own,
                                            subject to a Lien, any asset that it
                                            has  acquired  or  hereafter   holds
                                            subject to the  interest of a vendor
                                            or  lessor  under  any   conditional
                                            sales   agreement,   Capital  Lease,
                                            reservation  of title or other title
                                            retention agreement relating to such
                                            asset.

"Liquidity Undertaking"                     means   the   Second
                                            Amended   and   Restated   Liquidity
                                            Undertaking  dated as of the  Second
                                            Restatement     Date     among    NL
                                            Industries, Kronos, the Borrower and
                                            the Agent.

"Liquidity Undertaking Credit"              means, as of the
                                            date  of  determination,  an  amount
                                            equal to the  aggregate  amount,  if
                                            any,  of  the  credits  against  the
                                            "Maximum     Required     Investment
                                            Amount",  as such term is defined in
                                            the      Liquidity      Undertaking,
                                            designated  by the  Borrower  by its
                                            giving  of  written  notice  to  the
                                            Agent,  at any time or from  time to
                                            time,  provided,  however,  that the
                                            Liquidity   Undertaking  Credit  (a)
                                            shall be zero  prior to  January  1,
                                            2000,  may not exceed DM  50,000,000
                                            (Deutsche Mark Fifty Million) at any
                                            time  prior to July 1,  2000 and may
                                            not exceed DM  75,000,000  (Deutsche
                                            Mark  Seventy-Five  Million)  at any
                                            time after July 30, 2000,  (b) shall
                                            not,   at  any  time,   exceed   the
                                            aggregate   amount   of   Restricted
                                            Payments  then  permitted to be made
                                            by the Borrower  pursuant to Section
                                            16.20(a)   in  the  absence  of  any
                                            Liquidity Undertaking Credit and (c)
                                            once designated,  may not thereafter
                                            be reduced.


                                              22

<PAGE>



"Loan" or "Loans"                           means,  with  respect to
                                            each Bank, at any time, the total of
                                            all monies  advanced  by or owing to
                                            each  such Bank  under the  Original
                                            Agreement,    the   First   Restated
                                            Agreement  or  this   Agreement  and
                                            outstanding  at  any  time,  or  the
                                            aggregate  of all monies so advanced
                                            by  or  owing  to  all   Banks   and
                                            outstanding at any time.

"Loan Documents"                            means   the   Original
                                            Agreement,    the   First   Restated
                                            Agreement,   this   Agreement,   the
                                            Guaranties,  the Pledge  Agreements,
                                            the Canadian Security Documents, the
                                            Nordenham Mortgage,  the Cash Pledge
                                            Agreements,    the   Assignment   of
                                            Dividends,     the     Subordination
                                            Agreement,       the      Technology
                                            Undertaking,   the  Special  Purpose
                                            Account  Agreement,   the  Liquidity
                                            Undertaking,   the  First   Approval
                                            Agreement,   the   Second   Approval
                                            Agreement,  the  documents  executed
                                            pursuant to or specified or referred
                                            to in CLAUSES  (I)(A) through (I) of
                                            SECTION   4.01(A)   of   the   First
                                            Restated  Agreement,  CLAUSES (I)(A)
                                            through  (N) of SECTION  4.01(B) and
                                            SECTIONS  16.40,  17.01  (other than
                                            17.01(J)),  17.02, 17.03, and 17.04,
                                            any   and  all   amendments   to  or
                                            restatements  of the foregoing  Loan
                                            Documents  and  any  and  all  other
                                            documents,      instruments      and
                                            certificates  executed and delivered
                                            or to be executed  and  delivered by
                                            the   Borrower   or  any   Affiliate
                                            pursuant   to  the   terms  of  this
                                            Agreement  or any  amendment to this
                                            Agreement    (including,     without
                                            limitation,      the      documents,
                                            instruments and  certificates in the
                                            forms  attached  as  Exhibits to the
                                            Original   Agreement,    the   First
                                            Restated     Agreement    or    this
                                            Agreement).

"Majority Banks"                            means,  at any time  when no
                                            Loans  are  outstanding,  the  Banks
                                            whose  aggregate  Commitments at any
                                            time  exceed 50% (fifty  percent) of
                                            the total  aggregate  Commitments of
                                            all  Banks  and,  at any  time  when
                                            Loans  are  outstanding,  the  Banks
                                            holding   more   than   50%   (fifty
                                            percent)  of  the  aggregate  unpaid
                                            principal amount of the Loans.


                                              23

<PAGE>



"Majority Banks (662/3%)"                   means, at any time
                                            when no Loans are  outstanding,  the
                                            Banks whose aggregate Commitments at
                                            any time  exceed 66 2/3%  (sixty-six
                                            and two-thirds percent) of the total
                                            aggregate  Commitments  of all Banks
                                            and,  at any  time  when  Loans  are
                                            outstanding,  the Banks holding more
                                            than  66  2/3%  (sixty-six  and  two
                                            thirds  percent)  of  the  aggregate
                                            unpaid   principal   amount  of  the
                                            Loans.

"Major Subsidiaries"                        means  the  following
                                            Subsidiaries  (unless  amended  with
                                            the consent of the Majority Banks):

                                            (a)    NL  Industries  (Deutschland)
                                                   GmbH;

                                            (b)    Kronos Titan - GmbH;

                                            (c)    Societe    Industrielle    du
                                                   Titane, S.A.;

                                            (d)    Kronos Europe S.A./N.V.;

                                            (e)    Kronos     World     Services
                                                   S.A./N.V.;

                                            (f)    Kronos Norge A/S;

                                            (g)    Kronos Titan A/S;

                                            (h)    Titania A/S;

                                            (i)    Kronos Limited;

                                            (j)    Kronos Canada, Inc.;

                                            (k)    2969157 Canada Inc.;

                                            and  other   Subsidiaries,   whether
                                            existing  on the Second  Restatement
                                            Date or at any time thereafter, with
                                            Total    Assets    for   any    such
                                            Subsidiary,  determined  at the date
                                            of  presentation  of its  respective
                                            quarterly    unaudited   or   annual
                                            audited  financial  statements,   in
                                            excess  of DM  35,000,000  (Deutsche
                                            Mark Thirty-Five Million).


                                              24

<PAGE>



"Margin"                                    means,  with respect to that portion
                                            of the Loan that is  denominated  in
                                            Deutsche   Mark,   2.75%   (two  and
                                            three-quarters  of one  percent) per
                                            annum  and,  with  respect  to  that
                                            portion   of  the   Loan   that   is
                                            denominated in U.S. Dollars,  2.875%
                                            (two   and   seven-eighths   of  one
                                            percent) per annum.

"Material Adverse Effect"                   means a material adverse effect on:

                                            (a)    the   financial    condition,
                                                   business,    operations    or
                                                   properties  of any  specified
                                                   Person or a  specified  group
                                                   of Persons, taken as a whole;
                                                   or

                                            (b)    the  ability of the  Borrower
                                                   to    meet    its    payment,
                                                   Collateral       or      Lien
                                                   obligations     under    this
                                                   Agreement  or any other  Loan
                                                   Document.

"Mirror Notes"                              means  that   certain   (a)
                                            Second-Tier Senior Mirror Note dated
                                            as  of  October  20,  1993,  in  the
                                            original    principal    amount   of
                                            $250,000,000    executed    by   the
                                            Borrower  payable  to the  order  of
                                            Kronos and (b) Second-Tier  Discount
                                            Mirror  Note dated as of October 20,
                                            1993,  in  the  original   principal
                                            amount of  $187,500,000  executed by
                                            the Borrower payable to the order of
                                            Kronos, in the forms attached hereto
                                            as EXHIBIT B.

"Multiemployer Plan"                        means a multiemployer  plan as
                                            such  term  is  defined  in  Section
                                            4001(a)(3) of ERISA.

"Net Income"                                means  net  income  of  the
                                            Borrower and its  Subsidiaries  on a
                                            consolidated   basis  in  conformity
                                            with German GAAP.

"Net Proceeds"                              means, with respect to the
                                            Disposition  of Stock  or any  other
                                            asset by any Person,  Gross Proceeds
                                            of  such  Disposition  less  (i) all
                                            reasonable    fees   and    expenses
                                            actually  incurred  pursuant  to  an
                                            arm's     length     agreement    or
                                            arrangement,    including,   without
                                            limitation,    customary   brokerage
                                            commissions,  charges  or fees,  and
                                            (ii)  all  taxes,  excluding  income
                                            taxes.

                                              25

<PAGE>



"NL Debt Offering"                          means the offering of the NL Notes.

"NL Debt  Offering  Expenses"               means the
                                            reasonable    fees   and    expenses
                                            incurred  relating  to the  NL  Debt
                                            Offering.

"NL Guaranty"                               means the Guaranty  dated
                                            as of the  Second  Restatement  Date
                                            executed by NL  Industries to and in
                                            favor of the  Agent,  as  amended or
                                            supplemented from time to time.

"NL Industries"                             means  as set  forth in
                                            the second paragraph of the preamble
                                            of this Agreement.

"NL/Kronos Guaranty"                        means the Guaranty  dated
                                            as of March 22, 1991, executed by NL
                                            Industries  and  Kronos  (US)  (then
                                            known  as  Kronos,  Inc.)  to and in
                                            favor of the Agent.

"NL Notes"                                  means  the  senior   secured
                                            notes   due  2003  and  the   senior
                                            secured   discount  notes  due  2005
                                            issued by NL Industries  pursuant to
                                            the Indentures.

"NL Subordinated Loan"                      means   the
                                            unsecured and  subordinated  loan in
                                            the    principal    amount   of   DM
                                            260,000,000   (Deutsche   Mark   Two
                                            Hundred  Sixty  Million)  made by NL
                                            Industries  to  the  Borrower  on or
                                            before the Second  Restatement  Date
                                            pursuant to the NL Subordinated Note
                                            and the Subordination Agreement.

"NL Subordinated Note"                      means   that
                                            certain  Zero  Coupon   Subordinated
                                            Promissory  Note dated  January  31,
                                            1997,  in  the  original   principal
                                            amount of DM  260,000,000  (Deutsche
                                            Mark Two Hundred Sixty Million) made
                                            by the Borrower payable to the order
                                            of NL Industries which evidences the
                                            NL Subordinated Loan.

"NL Undertaking"                            means the  Amended and
                                            Restated     Undertaking    of    NL
                                            Industries,  Inc.  dated as of First
                                            Restatement     Date     among    NL
                                            Industries, the Agent and the Banks,
                                            as amended or supplemented from time
                                            to time.

"Non-U.S. Employee Plans"                   means all employee
                                            pension  benefit and welfare benefit
                                            plans of the Borrower or any of its

                                              26

<PAGE>



                                            Subsidiaries   including,    without
                                            limitation,  severance  pay,  plans,
                                            policies,  agreements  or  programs,
                                            governed by laws other than the laws
                                            of the United  States  applicable to
                                            or   covering   current   or  former
                                            employees   or   directors   of  the
                                            Borrower or any Subsidiaries.

"Nordenham Mortgage"                        means   Land    Charges
                                            executed by Kronos Titan pursuant to
                                            which  Liens   affecting   the  real
                                            properties  (and  plant)  of  Kronos
                                            Titan located in Nordenham,  Germany
                                            are  created  in favor of the  Agent
                                            and other agreements,  documents and
                                            instruments relating thereto.

"Notice of Borrowing"                       means as set forth in
                                            SECTION 4.02(C).

"Operating Subsidiaries"                    means as set forth in
                                            SECTION 16.09(F).

"Original Agreement"                        means as set forth in the
                                            third  paragraph  of the preamble of
                                            this Agreement.

"Original Currency"                         means as set forth in SECTION 12.03.

"Other Currency"                            means as set forth in SECTION 12.03.

"PBGC"                                      means the Pension  Benefit  Guaranty
                                            Corporation,    or   any   successor
                                            thereto.

"Pension Benefit Plan"                      means  an  employee
                                            pension   benefit  plan  within  the
                                            meaning of Section 3(2) of ERISA.

"Permitted Indebtedness"                    means, with respect to
                                            the Borrower and any Subsidiary:

                                            (a)    Indebtedness   described   on
                                                   SCHEDULE  2  attached  hereto
                                                   (other than  working  capital
                                                   indebtedness  of the Borrower
                                                   and any  Subsidiary set forth
                                                   in CLAUSE (D) below and other
                                                   than Subordinated Debt);

                                            (b)    trade  payables  incurred and
                                                   payable   in   the   ordinary
                                                   course  of  business  and  on
                                                   customary  terms  and  rental
                                                   obligations under Capital

                                              27

<PAGE>



                                                   Leases   relating  solely  to
                                                   personal property acquired by
                                                   the     Borrower    or    any
                                                   Subsidiary  in  the  ordinary
                                                   course of business;

                                            (c)    Indebtedness    arising    or
                                                   existing   pursuant  to  this
                                                   Agreement;

                                            (d)    unsecured (except as provided
                                                   in  this  CLAUSE  (D)  below)
                                                   working capital  Indebtedness
                                                   of  the   Borrower   and  its
                                                   Subsidiaries  maturing in all
                                                   cases no more  than 3 (three)
                                                   years from the date  incurred
                                                   or issued, including, without
                                                   limitation,   the   aggregate
                                                   face   amounts   (funded   or
                                                   unfunded)  of all standby and
                                                   documentary     letters    of
                                                   credit;  provided,   however,
                                                   that such  unsecured  working
                                                   capital   Indebtedness  shall
                                                   not  exceed in the  aggregate
                                                   DM 80,000,000  (Deutsche Mark
                                                   Eighty  Million)  at any time
                                                   outstanding;   and  provided,
                                                   further,  however,  that  any
                                                   such     working      capital
                                                   Indebtedness    incurred   by
                                                   Kronos Canada, Inc. shall not
                                                   exceed  Cdn.  $10,000,000  in
                                                   aggregate principal amount at
                                                   any time  outstanding and may
                                                   be   secured   by  the   Lien
                                                   referred  to in CLAUSE (H) of
                                                   the  definition  of the  term
                                                   "Permitted Liens";

                                            (e)    any    refinancing   of   the
                                                   Indebtedness in the foregoing
                                                   CLAUSES  (A)   through   (D),
                                                   provided, however, that, with
                                                   respect    to    Indebtedness
                                                   described  in CLAUSE (A) such
                                                   refinancing  shall  not:  (i)
                                                   (A)  include an  increase  in
                                                   Indebted  ness,  (B)  include
                                                   any  decrease,  reduction  or
                                                   shortening    of   the   then
                                                   remaining   term  over  which
                                                   such      Indebtedness     is
                                                   amortized,  (C)  include  any
                                                   increase  in  the  amount  or
                                                   frequency     of    principal
                                                   payments        of       such
                                                   Indebtedness, and (ii) result
                                                   in  a  Default   under   this
                                                   Agreement,  unless  otherwise
                                                   approved  in  writing  by the
                                                   Majority   Banks   in   their
                                                   reasonable discretion;


                                              28

<PAGE>



                                            (f)    Indebtedness between or among
                                                   any  of the  Borrower  and/or
                                                   its Subsidiaries;

                                            (g)    Indebtedness  of the Borrower
                                                   evidenced   by   the   Mirror
                                                   Notes; and

                                            (h)    Subordinated  Debt as defined
                                                   in   CLAUSE    (A)   of   the
                                                   definition    of   the   term
                                                   "Subordinated Debt."

"Permitted Liens"                           means:

                                            (a)    Liens  existing on the Second
                                                   Restatement   Date   and  set
                                                   forth in SCHEDULE 3;

                                            (b)    Liens existing on property at
                                                   the  time of its  acquisition
                                                   (other  than  any  such  Lien
                                                   created in  contemplation  of
                                                   or   connection   with   such
                                                   acquisition);

                                            (c)    extensions,    renewals   and
                                                   replacements     of     Liens
                                                   referred  to in  CLAUSES  (A)
                                                   and (B) above,  provided that
                                                   any such  extension,  renewal
                                                   or  replacement is limited to
                                                   the    property   or   assets
                                                   covered by the Lien extended,
                                                   renewed or replaced  and does
                                                   not secure  any  Indebtedness
                                                   in     addition    to    that
                                                   originally  secured,  in  the
                                                   case of Liens  referred to in
                                                   CLAUSE (A)  above,  as of May
                                                   30,  1990 and, in the case of
                                                   Liens  referred  to in CLAUSE
                                                   (B)  above,  at the time when
                                                   such   Liens   are  or   were
                                                   originally     created     or
                                                   incurred;

                                            (d)    Liens imposed by law, such as
                                                   carriers',    warehousemen's,
                                                   materialmen's,    landlords',
                                                   and mechanics' Liens;  zoning
                                                   restrictions;      easements;
                                                   survey            exceptions;
                                                   reservations;  rights-of-way;
                                                   restrictions   on  use;   and
                                                   other similar Liens that were
                                                   not  incurred  in con nection
                                                   with the  borrowing of monies
                                                   or obtaining credit and that:


                                              29

<PAGE>



                                                   (i)    do    not    in    the
                                                          aggregate   materially
                                                          detract    from    the
                                                          value,  or  materially
                                                          impair the use, of the
                                                          property  or assets to
                                                          which    such    Liens
                                                          attach; or

                                                   (ii)   are being contested in
                                                          good      faith     by
                                                          appropriate
                                                          proceedings,     which
                                                          proceedings  have  the
                                                          effect  of  preventing
                                                          the forfeiture or sale
                                                          of  the   property  or
                                                          assets subject to such
                                                          Lien;

                                            (e)    Liens  securing taxes not yet
                                                   due  or  being  contested  in
                                                   good  faith  by   appropriate
                                                   proceedings,            which
                                                   proceedings  have the  effect
                                                   of preventing  the forfeiture
                                                   or  sale of the  property  or
                                                   assets  subject to such Liens
                                                   and where  adequate  reserves
                                                   are      established      and
                                                   maintained   if  required  in
                                                   accordance  with German GAAP;
                                                   provided,  however, that none
                                                   of the Liens  referred  to in
                                                   this  CLAUSE (E) may,  at any
                                                   time, attach or relate to any
                                                   property  or  assets  of  any
                                                   Subsidiary  of  the  Borrower
                                                   except to the extent that the
                                                   taxes  secured   thereby  are
                                                   attributable  to and  owed by
                                                   such  Subsidiary  or are owed
                                                   to the taxing  authorities of
                                                   the  country  in  which  such
                                                   Subsidiary is organized;

                                            (f)    Liens  arising in  connection
                                                   with  workman's  compensation
                                                   laws or  similar  legislation
                                                   or  progress  payments  under
                                                   government     con    tracts,
                                                   deposits to secure  public or
                                                   statutory  obligations of the
                                                   Borrower   or   any   of  its
                                                   Subsidiaries,  or deposits as
                                                   security for contested import
                                                   duties;

                                            (g)    obligations under conditional
                                                   sale   agreements,    Capital
                                                   Leases  or   reservation   of
                                                   title    or    other    title
                                                   retention agreements relating
                                                   solely to  personal  property
                                                   acquired  by the  Borrower or
                                                   any    Subsidiary    in   the
                                                   ordinary course of business;

                                              30

<PAGE>



                                            (h)    Liens  affecting the property
                                                   of   Kronos   Canada,    Inc.
                                                   securing    working   capital
                                                   Indebtedness  not  to  exceed
                                                   Cdn. $10,000,000 in aggregate
                                                   principal  amount at any time
                                                   outstanding;

                                            (i)    other  Liens if  approved  by
                                                   the Majority  Banks, in their
                                                   sole discretion; and

                                            (j)    Liens in  favor of the  Agent
                                                   and the Banks  under the Loan
                                                   Documents.

"Person"                                    means an individual,  a corporation,
                                            a partnership,  joint venture,  or a
                                            trust,  unincorporated  organization
                                            or  association  or mutual  company,
                                            joint stock company,  estate,  trust
                                            or other  organization,  whether  or
                                            not  a  legal  entity,  including  a
                                            government or political  subdivision
                                            or  an  agency  or   instrumentality
                                            thereof.

"Pledge Agreement"  
or  "Pledge  Agreements"                    means the pledge agreement or pledge
                                            agreements   executed   or   to   be
                                            executed  by NL  Industries  and the
                                            Pledgors  in  accordance   with  the
                                            Original   Agreement,    the   First
                                            Approval   Agreement,    the   First
                                            Restated   Agreement,   the   Second
                                            Approval Agreement or this Agreement
                                            (including,    without   limitation,
                                            SECTION  16.34 and  ARTICLE  17), as
                                            amended or supplemented from time to
                                            time.

"Pledged Subsidiary"
or "Pledged Subsidiaries"                   means,
                                            individually or  collectively,  each
                                            of the following Subsidiaries of the
                                            Borrower  (unless  amended  with the
                                            consent of the Majority Banks):

                                            (a)    NL  Industries  (Deutschland)
                                                   GmbH;

                                            (b)    Kronos Chemie GmbH;

                                            (c)    Societe    Industrielle    du
                                                   Titane, S.A.;

                                            (d)    Kronos Europe S.A./N.V.;


                                              31

<PAGE>



                                            (e)    Kronos Norge A/S;

                                            (f)    Kronos Limited;

                                            (g)    Kronos Canada, Inc.;

                                            (h)    2927527 Canada Inc.;

                                            (i)    2969157 Canada Inc.;

                                            and   any   Subsidiaries,    whether
                                            existing  on the Second  Restatement
                                            Date  or  at  any  time  thereafter,
                                            which  become  Pledged  Subsidiaries
                                            pursuant to SECTION
                                            16.34.

"Pledgors"                                  means   the   Borrower   and   those
                                            Subsidiaries which have delivered or
                                            will  deliver  a pledge of the Stock
                                            of any of the  Pledged  Subsidiaries
                                            pursuant   to   SECTION   16.34  and
                                            ARTICLE 17.

"Primary Syndication Completion Date"       means
                                            the Primary  Syndication  Completion
                                            Date as such term is  defined in the
                                            Original Agreement.

"Principal Shareholder"                     means, with respect to
                                            the  Borrower,  any  Person who owns
                                            directly   more   than  50%   (fifty
                                            percent) of the voting  Stock of the
                                            Borrower (whether such Stock is held
                                            in the  name  of such  Person  or is
                                            held in the name of  another  Person
                                            for the benefit of such Person),  or
                                            if no Person owns such percentage of
                                            voting   Stock,   that   Person  who
                                            directly   owns  an  amount  of  the
                                            Borrower's    voting   Stock   which
                                            exceeds  the  amount  of such  Stock
                                            owned    directly   by   any   other
                                            stockholder  (whether  such Stock is
                                            held in the name of such  Person  or
                                            is  held  in  the  name  of  another
                                            Person  for  the   benefit  of  such
                                            Person).

"Reference Banks"                           means the principal London or
                                            Luxembourg office of:

                                            (a)    Hypobank International S.A.;

                                            (b)    Bankers Trust Company; and


                                              32

<PAGE>



                                            (c)    Arab Banking Corporation;

                                            provided  that, if the Commitment of
                                            any  Reference  Bank  is  terminated
                                            pursuant  to this  Agreement  or any
                                            Reference  Bank  ceases to be a Bank
                                            or  ceases  to  act  as a  Reference
                                            Bank, the Agent, with the consent of
                                            the  Borrower,  which  consent shall
                                            not  be  unreasonably   withheld  or
                                            delayed,  shall select  another Bank
                                            to   serve  as  a   Reference   Bank
                                            hereunder.

"Regulation D"                              means Regulation D of the Federal
                                            Reserve.

"Relevant Date"                             means,  with  respect  to any
                                            amounts   denominated   or   to   be
                                            denominated  in  U.S.   Dollars,   a
                                            Drawdown  Date  or the  date  of any
                                            redenomination  or payment  pursuant
                                            to this Agreement in U.S. Dollars or
                                            the  date of any  other  calculation
                                            with  respect  to U.S.  Dollars,  as
                                            applicable.

"Repayment Date"                            means  each of the  days  for
                                            repayment of the Loan or any portion
                                            thereof  referred  to in  ARTICLE 9,
                                            provided that if any such day is not
                                            a   Business   Day,   the   relevant
                                            Repayment  Date  shall  be the  next
                                            succeeding Business Day.

"Repayment Installment"                     means each installment
                                            for repayment or amount of repayment
                                            of the Loan or any  portion  thereof
                                            required pursuant to or described in
                                            ARTICLE 9.

"Restricted Capital  Amount"                means,  as of  the
                                            date of determination, the aggregate
                                            amount   of   Restricted    Payments
                                            permitted to be paid by the Borrower
                                            on   or    after    the    date   of
                                            determination as Restricted Payments
                                            pursuant to SECTION
                                            16.20(B).

"Restricted Payments"                       means:

                                            (a)    with  respect  to  any  Stock
                                                   issued by any Person,

                                                   (i)    the        retirement,
                                                          redemption,   purchase
                                                          or  other  acquisition
                                                          for value

                                              33

<PAGE>



                                                          (directly           or
                                                          indirectly)   of   any
                                                          such   Stock   (except
                                                          Stock   acquired  upon
                                                          conversion  into other
                                                          shares of such Stock);
                                                          and

                                                   (ii)   the   declaration   or
                                                          payment     of     any
                                                          dividend    or   other
                                                          distribution,
                                                          including          any
                                                          distribution        of
                                                          assets,    properties,
                                                          cash,          rights,
                                                          obligations         or
                                                          securities,  but other
                                                          than    dividends   or
                                                          distributions  payable
                                                          solely  in  shares  of
                                                          such Stock, on or with
                                                          respect  to  any  such
                                                          Stock;

                                            (b)    payments  of   principal   or
                                                   interest  on or with  respect
                                                   to any Subordinated Debt;

                                            (c)    Investments  by the  Borrower
                                                   or  any   Subsidiary   in  an
                                                   Affiliate,   other  than  the
                                                   Borrower  or any  Subsidiary,
                                                   consisting of  investments in
                                                   the  capital  stock  of  such
                                                   Affiliate  or  loans  to such
                                                   Affiliate (exclusive of trade
                                                   payables   and    contractual
                                                   obligations  not for borrowed
                                                   money    incurred   by   such
                                                   Affiliate   in  the  ordinary
                                                   course of business); and

                                            (d)    for   purposes   of   SECTION
                                                   16.20(A)  only, the Liquidity
                                                   Undertaking Credit.

"Revolving Commitment"      
or "Revolving Commitments"                  means,  in relation to
                                            each Bank,  the several  obligations
                                            of such Bank, and in relation to all
                                            Banks, the aggregate  obligations of
                                            such Banks,  subject to the terms of
                                            this  Agreement,  to make  available
                                            its portion of the Revolving Portion
                                            to be made under this  Agreement  up
                                            to the  aggregate  principal  amount
                                            specified  in  SCHEDULE  1,  to  the
                                            extent not reduced or canceled under
                                            this Agreement.

"Revolving Portion"                         means that  portion of the
                                            principal of the Loan in the maximum
                                            amount   of   (a)   DM   230,000,000
                                            (Deutsche

                                              34

<PAGE>



                                            Mark Two Hundred Thirty Million) for
                                            the    period    from   the   Second
                                            Restatement  Date through  March 14,
                                            2000 or (b) DM 105,000,000 (Deutsche
                                            Mark One Hundred  Five  Million) for
                                            the  period   from  March  15,  2000
                                            through  September  14, 2000,  which
                                            portion  includes  the Kronos  Titan
                                            Revolving  Portion  and may be, from
                                            time to time,  prepaid  pursuant  to
                                            SECTION 8.02 and reborrowed pursuant
                                            to SECTION 2.04; provided,  however,
                                            that each of the  amounts  set forth
                                            in  CLAUSES  (A) and  (B)  preceding
                                            shall be automatically reduced by an
                                            aggregate   amount   equal  to  300%
                                            (three   hundred   percent)  of  the
                                            cumulative   total  of  the   Excess
                                            Adjusted  Restricted  Payments which
                                            have  been,   as  of  any  date  but
                                            subject to the 30 (thirty)  day cure
                                            period  specified in the  definition
                                            of   "Excess   Adjusted   Restricted
                                            Payments",  paid  or  made  or  have
                                            otherwise  arisen or  existed  on or
                                            after   January   1,   1996,   which
                                            reduction in the  Revolving  Portion
                                            shall   occur   automatically   upon
                                            expiration  of the 30  (thirty)  day
                                            cure   period   applicable   to  the
                                            payment,  making,  arising  or other
                                            existence   of  each   such   Excess
                                            Adjusted Restricted Payment.

"Revolving Portion  Availability"           means, at any
                                            time,  the  principal  amount of the
                                            Revolving   Portion  that  has  been
                                            prepaid pursuant to SECTION 2.04 and
                                            is not then outstanding.

"Second Amendment  Agreement"               means  as set
                                            forth in the third  paragraph of the
                                            preamble of this Agreement.

"Second Approval Agreement"                 means   the
                                            Approval  Agreement dated as of June
                                            21, 1996,  among the  Borrower,  the
                                            requisite  Banks who are signatories
                                            thereto, the Agent and the Co-Agent.

"Second Prepayment"                         means the prepayment of
                                            the  Loan in the  Second  Prepayment
                                            Amount pursuant to SECTION 2.01(B).

"Second Prepayment Amount"                  means    DM
                                            150,000,000   (Deutsche   Mark   One
                                            Hundred Fifty Million).

"Second Restatement Date"                   means January 31,
                                            1997, the date of this Agreement (as
                                            unamended).


                                              35

<PAGE>



"Service Contract"                          means   the   agreement
                                            between  Bayer  AG,  Leverkusen  and
                                            Kronos  Titan  -  GmbH,  Leverkusen,
                                            dated June 21,  1952,  as amended on
                                            September    9,    1971    and    as
                                            supplemented  on December  29, 1983,
                                            and  as  supplemented  on  June  30,
                                            1995.

"Special Purpose Account"                   has the meaning set
                                            forth in the Special Purpose Account
                                            Agreement.

"Special Purpose Account Agreement"         means the
                                            Amended and Restated Special Purpose
                                            Account  Agreement  dated  as of the
                                            First   Restatement  Date  among  NL
                                            Industries, Kronos, the Borrower and
                                            the    Agent,    as    amended    or
                                            supplemented from time to time.

"Spot Rate"                                 means,  with  respect  to any
                                            day,  the  rate  determined  on such
                                            date  on the  basis  of the  offered
                                            rates,    as    reflected   on   the
                                            appropriate   BHFX  display  of  the
                                            Reuter  Monitor  Money Rates Service
                                            at or about 1:00 p.m. Frankfurt time
                                            (a)    with     respect    to    the
                                            determination  of the Deutsche  Mark
                                            Amount,  to purchase  Deutsche  Mark
                                            with  U.S.   Dollars  and  (b)  with
                                            respect to the  determination of the
                                            Equivalent  Amount, to purchase U.S.
                                            Dollars with Deutsche Mark, provided
                                            that,  if at least two such  offered
                                            rates  appear on such  display,  the
                                            rate shall be the arithmetic mean of
                                            such  offered  rates and, if no such
                                            offered rates are so displayed,  the
                                            Spot Rate shall be determined by the
                                            Agent on the basis of the arithmetic
                                            mean of such offered rates  notified
                                            to the Agent by the Reference  Banks
                                            in  accordance   with  their  normal
                                            practice.

"Stock"                                     means,  with  respect to any Person,
                                            any  capital  stock or other  equity
                                            rights,   bonds,   notes   or  other
                                            instruments convertible into capital
                                            stock or other equity interests, and
                                            options, warrants or other rights to
                                            acquire   capital   stock  or  other
                                            equity interests.

"Subordinated Debt"                         means    the     following
                                            Indebtedness   (exclusive   of   the
                                            Indebtedness   of  the  Borrower  to
                                            Kronos   evidenced   by  the  Mirror
                                            Notes):


                                              36

<PAGE>



                                            (a)    Indebtedness (if any) owed by
                                                   the Borrower to Kronos and/or
                                                   NL  Industries  in respect of
                                                   loans  to the  Borrower  from
                                                   Kronos  and/or NL  Industries
                                                   made    after    the    First
                                                   Prepayment Date if and to the
                                                   extent that (i) the  proceeds
                                                   of such  loans are  deposited
                                                   by    Kronos     and/or    NL
                                                   Industries  into the  Special
                                                   Purpose  Account  (or,  if so
                                                   agreed  by  the  Agent,  into
                                                   another  special,  restricted
                                                   account   of   the   Borrower
                                                   maintained at, and acceptable
                                                   to,  the Agent from which the
                                                   Borrower    may   not    make
                                                   withdrawals    or   otherwise
                                                   direct  distributions  except
                                                   with  respect to any interest
                                                   to accrue thereon),  and (ii)
                                                   such  proceeds are applied to
                                                   the Loans in accordance  with
                                                   the Special  Purpose  Account
                                                   Agreement;

                                            (b)    Indebtedness (if any) owed by
                                                   the Borrower to Kronos and/or
                                                   NL  Industries  in respect of
                                                   loans  to the  Borrower  from
                                                   Kronos  and/or NL  Industries
                                                   made    after    the    First
                                                   Prepayment  Date obtained for
                                                   general corporate purposes or
                                                   made  to   comply   with  the
                                                   obligations  of Kronos and/or
                                                   NL   Industries   under   the
                                                   Liquidity Undertaking,  which
                                                   Indebtedness is not otherwise
                                                   permitted      under      the
                                                   definition    of   "Permitted
                                                   Indebtedness" or described in
                                                   CLAUSE (A) of this definition
                                                   of "Subordinated Debt";

                                            (c)    the Kronos  Subordinated Loan
                                                   and the NL Subordinated Loan;
                                                   and

                                            (d)    other  Indebtedness  approved
                                                   by  the  Majority   Banks  as
                                                   Subordinated Debt.

"Subordinated Loan  Documents"              means    the
                                            Subordination   Agreement,   the  NL
                                            Subordinated  Note  and  the  Kronos
                                            Subordinated Note, true, correct and
                                            complete photocopies of which (other
                                            than  the  Subordination  Agreement)
                                            are attached hereto as EXHIBIT C.

                                              37

<PAGE>



"Subordination Agreement"                   means  the  Amended  and
                                            Restated      Subordination      and
                                            Contribution  Agreement  dated as of
                                            the First  Restatement Date among NL
                                            Industries, Kronos, the Borrower and
                                            the    Agent,    as    amended    or
                                            supplemented from time to time.

"Subsidiary"                                means any Person Controlled directly
                                            or indirectly by the Borrower.

"Tax Refund"                                means  the  German  income
                                            taxes   to  be   refunded   to   the
                                            Borrower,  if any,  pursuant  to its
                                            1990 German federal corporate income
                                            tax returns for  calendar  year 1990
                                            claiming  refunds  aggregating  more
                                            than DM 150,000,000 of German income
                                            taxes   previously   paid   by   the
                                            Borrower  and  certain  Consolidated
                                            Subsidiaries   for  calendar   years
                                            1988, 1989 and 1990.

"Taxes"                                     shall have the  meaning set forth in
                                            SECTION 11.01.

"Technology Undertaking"                    means the  Amended and
                                            Restated  Technology  and  Trademark
                                            Undertaking  dated  as of the  First
                                            Restatement   Date   among   Kronos,
                                            Kronos   (US)  and  the  Agent,   as
                                            amended or supplemented from time to
                                            time.

"Temporary Cash Investment"                 means    any
                                            Investment in (i) direct obligations
                                            of, or  obligations  guaranteed  by,
                                            the governments of Belgium,  Canada,
                                            Germany,  France, Norway, the United
                                            Kingdom or the United  States or any
                                            agency of any of the foregoing, (ii)
                                            commercial paper (including, without
                                            limitation,   Eurocommercial  paper)
                                            rated  in the  highest  grade  by an
                                            internationally   recognized  credit
                                            rating  agency,  (iii) time deposits
                                            (including,    without   limitation,
                                            Euro-deposits  and  certificates  of
                                            deposit),   with  prime   commercial
                                            banks of international standing, and
                                            (iv)  bonds  issued by  corporations
                                            and  financial   institutions   with
                                            obligations  rated at least  "AA" by
                                            an internationally recognized credit
                                            rating agency; provided, however, in
                                            each  case,   that  such  Investment
                                            matures  within  one  year  from the
                                            date of

                                              38

<PAGE>



                                            acquisition  thereof by the Borrower
                                            or its Subsidiary.

"Tentative Tax  Refund"                     means as set  forth in
                                            the Tentative Tax Refund Letter.

"Tentative Tax Refund
Availability Amount"                        means  as set  forth in the
                                            Tentative Tax Refund Letter.

"Tentative Tax Refund Letter"               means  that
                                            certain  letter  dated May 27, 1994,
                                            from the Borrower to the Agent.

"Term Portion"                              means that  portion of the
                                            principal of the Loan other than the
                                            Revolving Portion.

"Third Amendment Agreement"                 means  as set
                                            forth in the third  paragraph of the
                                            preamble of this Agreement.

"Third Party License Agreements"            shall have
                                            the  meaning  set  forth in  SECTION
                                            15.21.

"Total Assets"                              means  total  assets of the
                                            Borrower and its  Subsidiaries  on a
                                            consolidated   basis  in  conformity
                                            with German GAAP.

"Underwriting Agreement"                    means  the  Underwriting
                                            Agreement  dated as of  October  13,
                                            1993,   between  NL  Industries  and
                                            Salomon  Brothers  Inc.  executed by
                                            the  parties  thereto in  connection
                                            with  the  underwriting  of  the  NL
                                            Notes.

"U.S. Dollars  or  U.S.  $"                 means  lawful
                                            currency  of the  United  States  of
                                            America.

        When used in this Agreement:

        (a)    A reference to a law, rule or regulation  includes any amendment,
               supplement or  modification  to such law, rule or regulation  and
               any successor to such law, rule or regulation;

        (b)    A reference to an agreement, instrument or document shall include
               such  agreement,  instrument  or  document  as  the  same  may be
               amended, modified,  supplemented or restated from time to time in
               accordance with its terms and as permitted by this

                                              39

<PAGE>



               Agreement or has been amended, modified, supplemented or restated
               in accordance with its terms;

        (c)    All article and section  headings in this  Agreement are for ease
               of reference only and shall be disregarded in the construction of
               this Agreement; and

        (d)    A reference to a Person shall, unless otherwise provided, include
               its successors.

                                   ARTICLE 2.  THE FACILITY

2.01    (a)    The Banks  (or their  predecessors  in  interest)  previously
               granted,   through  their  respective  Lending  Offices,  to  the
               Borrower,  upon the terms and  subject to the  conditions  of the
               Original  Agreement  (as  and  to  the  extent  amended  by  this
               Agreement), the Loan in the maximum aggregate principal amount of
               DM 1,600,000,000 (Deutsche Mark One Billion Six Hundred Million),
               of which DM 1,100,000,000  (Deutsche Mark One Billion One Hundred
               Million) was outstanding as of the First  Restatement Date (prior
               to  giving  effect  to  the  First  Prepayment).   On  the  First
               Prepayment  Date and in accordance with SECTION 2.01 of the First
               Restated  Agreement,  but immediately  prior to the making of the
               First  Prepayment,  the Loan was  deemed to be  divided  into two
               portions, the Term Portion in the outstanding principal amount of
               DM  850,000,000  (Deutsche  Mark Eight Hundred Fifty Million) and
               the Revolving  Portion in the outstanding  principal amount of DM
               250,000,000  (Deutsche  Mark Two Hundred Fifty  Million).  On the
               First  Prepayment Date and in accordance with SECTION 2.01 of the
               First Restated  Agreement,  and promptly upon the consummation of
               the NL Debt Offering, NL Industries or Kronos wire transferred to
               the Agent (to the Agent's  account  specified  in SECTION  11.04)
               immediately  available  funds in the  amount  equal to the  First
               Prepayment  Amount. The Borrower agreed that it had absolutely no
               control  over such  funds used to make the First  Prepayment  and
               that its estate was not,  in any way,  diminished  as a result of
               such transfer of funds or the First Prepayment.  Immediately upon
               the Agent's receipt of the First Prepayment, the First Prepayment
               was applied in accordance  with SECTION 2.1 of the First Restated
               Agreement  as a  prepayment  of the  principal  of the  Loan,  as
               follows:

               (i)    first, DM 400,000,000 (Deutsche Mark Four Hundred Million)
                      of the First  Prepayment  Amount  was  applied to the Term
                      Portion;

               (ii)   second,  DM  150,000,000  (Deutsche Mark One Hundred Fifty
                      Million) of the First Prepayment Amount was applied to the
                      Revolving Portion as a prepayment of the Loans pursuant to
                      SECTION 8.02; and

               (iii)  third, an amount equal to DM 2,000,000  (Deutsche Mark Two
                      Million) of the First Prepayment Amount was applied to the
                      Term Portion.

                                              40

<PAGE>



               After giving effect to such  application of the First  Prepayment
               and other  prepayments made in accordance with the First Restated
               Agreement,  the outstanding principal balance of the Term Portion
               was,  immediately  prior  to  the  Second  Restatement  Date,  DM
               395,537,463 (Deutsche Mark Three Hundred Ninety-Five Million Five
               Hundred Thirty-Seven Thousand Four Hundred Sixty-Three).

        (b)    The Banks shall continue to maintain the Loan in accordance  with
               and subject to the terms and provisions of this Agreement.  On or
               before the Second  Restatement  Date,  NL  Industries  shall wire
               transfer  to the  Agent's  account  with  respect to  payments in
               Deutsche  Mark  specified  in  SECTION   11.04,   in  immediately
               available  funds,  proceeds  of the NL  Subordinated  Loan in the
               amount equal to the Second Prepayment Amount. The Borrower agrees
               that it shall have  absolutely no control over such funds used to
               make the Second  Prepayment  and that its estate shall not be, in
               any way,  diminished as a result of such transfer of funds or the
               Second  Prepayment.  Immediately  upon the Agent's receipt of the
               Second  Prepayment,  the Second  Prepayment shall be promptly and
               automatically  applied  by  the  Agent  as a  prepayment  of  the
               principal of the Term Portion of the Loan as follows:  first,  DM
               20,000,000   (Deutsche   Mark  Twenty   Million)  of  the  Second
               Prepayment Amount shall be applied as a mandatory prepayment of a
               portion of the amount equal to the Tax Refund in accordance  with
               SECTION 8.01(D) and,  second,  DM 130,000,000  (Deutsche Mark One
               Hundred Thirty Million) of the Second  Prepayment Amount shall be
               applied as a mandatory  prepayment  pursuant to SECTION  8.01(H).
               Also   concurrently   herewith,   the  Borrower  shall  cause  NL
               Industries  to wire  transfer to the  Borrower's  account  number
               5803610284  maintained at Bayerische  Hypotheken-und  Wechselbank
               AG, Munich, in immediately  available funds, the remainder of the
               proceeds  of  the  NL  Subordinated  Loan  in  the  amount  of DM
               110,000,000  (Deutsche  Mark  One  Hundred  Ten  Million),  which
               proceeds shall be available for general corporate purposes of the
               Borrower  without any  restriction on use of proceeds  imposed by
               any  Affiliate  of the  Borrower.  The  proceeds  of  the  Kronos
               Subordinated  Loan in the amount of DM 25,000,000  (Deutsche Mark
               Twenty-Five  Million) also shall be available for working capital
               purposes  of  the  Borrower  without  any  restriction  on use of
               proceeds imposed by any Affiliate of the Borrower.

2.02    Upon the terms and  subject to the  conditions  of this  Agreement,  the
        Revolving  Portion shall be made available to the Borrower  severally by
        each Bank in the amount of such Bank's  Revolving  Commitment under this
        Agreement.

2.03    The failure of any Bank to perform its obligations  under this Agreement
        shall not affect the obligations of the Borrower toward the Agent or any
        other Bank or the obligations of any other Bank toward the Borrower, nor
        shall the Agent or any other Bank be liable for the failure of such Bank
        to perform its obligation under this Agreement.

                                              41

<PAGE>




2.04    (a)    The Revolving  Portion may be, from time to time,  prepaid in
               whole  or in part  at the  option  of the  Borrower  pursuant  to
               SECTION  8.02  and  thereafter  the  amounts  so  prepaid  may be
               reborrowed  pursuant  to,  and in  compliance  with all terms and
               conditions  of,  SECTION  2.04 and the other  provisions  of this
               Agreement.  Notwithstanding anything to the contrary contained in
               SECTION 2.04 or elsewhere  in this  Agreement,  the amount of the
               Loan that may be reborrowed  by the Borrower  pursuant to SECTION
               2.04  at  any  time  shall  not  exceed  the  Revolving   Portion
               Availability  at such time.  The  Borrower  may not  reborrow any
               amounts  prepaid  pursuant to SECTION 8.01 or any other provision
               of  this  Agreement  (other  than  SECTION  8.02,  to the  extent
               permitted in the immediately preceding  sentences).  The Borrower
               and the Banks hereby acknowledge and agree that, as of the Second
               Restatement  Date and after giving effect to the prepayment in an
               amount equal to the Tax Refund as referred to in SECTION 8.01(D),
               the Revolving  Portion  Availability  is DM 29,928,000  (Deutsche
               Mark  Twenty-Nine  Million  Nine Hundred  Twenty-Eight  Thousand)
               (i.e.,  the remainder of DM  230,000,000,  the maximum  principal
               amount of the  Revolving  Portion  as of the  Second  Restatement
               Date, minus DM 200,072,000,  the outstanding  principal amount of
               the Revolving Portion as of the Second Restatement Date).

        (b)    Upon the terms and  subject to the  conditions  set forth in this
               SECTION 2.04 and elsewhere in this Agreement (including,  without
               limitation,   the  Borrower's   satisfaction  of  all  conditions
               precedent to such reborrowing),  and upon request of the Borrower
               made pursuant to a Notice of Borrowing  delivered to the Agent in
               compliance with SECTION 4.02(C), each Bank agrees,  severally and
               not jointly, to make advances of the Revolving Portion (including
               the Kronos Titan Revolving  Portion) to or for the account of the
               Borrower  from the First  Prepayment  Date to August 15, 2000, by
               making  such  amounts  available  to the Agent on the  respective
               Drawdown  Dates  therefor  pursuant to SECTION  11.06;  provided,
               however,  that (i) the  principal  amount of each  advance of the
               Revolving Portion made by each Bank pursuant to this SECTION 2.04
               at any time may not exceed such Bank's pro rata share (based upon
               its  Revolving  Commitment  as  a  percentage  of  the  aggregate
               Revolving  Commitments  of all  Banks) of the  Revolving  Portion
               Availability at such time and the aggregate  principal  amount of
               all advances of the Revolving  Portion made by each Bank pursuant
               to this  SECTION 2.04 and  outstanding  from time to time may not
               exceed  such  Bank's pro rata  share  (based  upon its  Revolving
               Commitment as a percentage of the aggregate Revolving Commitments
               of all Banks) of the  Revolving  Portion  and (ii) the  aggregate
               principal amount of all advances of the Revolving Portion made by
               all  Banks  pursuant  to this  SECTION  2.04 at any  time may not
               exceed the Revolving  Portion  Availability  at such time and the
               aggregate  principal  amount  of all  advances  of the  Revolving
               Portion  made by all  Banks  pursuant  to this  SECTION  2.04 and
               outstanding  from  time to  time  may not  exceed  the  aggregate
               Revolving Commitments of all Banks. Unless the Agent

                                              42

<PAGE>



               determines  that any applicable  condition  precedent to any such
               reborrowing  has not been  satisfied,  the Agent  shall  make the
               funds  so  received  from the  Banks  available  to the  Borrower
               pursuant to SECTION  11.05;  provided,  however,  that such funds
               consisting of drawdowns under the Kronos Titan Revolving  Portion
               requested by Kronos Titan  (together with the Borrower)  shall be
               made  available  directly  to  Kronos  Titan in  accordance  with
               SECTION  2.04(C).  Each  advance of the  Revolving  Portion  made
               pursuant  to  this  SECTION  2.04  shall  be  made as a part of a
               borrowing  consisting of advances made by the Banks in accordance
               with their respective pro rata shares thereof; provided, however,
               that the failure of any Bank to advance its pro rata share of any
               such  advance  shall not in itself  relieve any other Bank of its
               obligation  under this  SECTION 2.04 (it being  agreed,  however,
               that no Bank shall be  responsible  for the  failure of any other
               Bank to do so).  Prior to August 15, 2000, the Borrower may repay
               and  reborrow  under this  SECTION  2.04 and the Banks shall make
               advances  in  accordance  with the terms of this  Agreement.  The
               Banks  shall  not  be  obligated  to  make  any  advances  of the
               Revolving  Portion  under this  SECTION  2.04  subsequent  to the
               August 15, 2000.

        (c)    It is  acknowledged  and agreed by the parties hereto that Kronos
               Titan  may  utilize  certain  proceeds  of  drawdowns  under  the
               Revolving  Portion.  Accordingly,  as of the  Second  Restatement
               Date,  an  amount  of the  Revolving  Portion  not to  exceed  DM
               20,000,000  (Deutsche Mark Twenty Million) shall be designated as
               the "Kronos Titan Revolving Portion".  The Kronos Titan Revolving
               Portion  is, and shall be deemed to be for all  purposes  of this
               Agreement, a part of the Revolving Portion and is available to be
               drawn down by the Borrower in accordance with this Agreement. The
               Borrower and Kronos Titan agree that, notwithstanding anything to
               the contrary  contained in this SECTION 2.04,  the Borrower shall
               use its best efforts to ensure that the proceeds of all drawdowns
               under the  Revolving  Portion  that are to be  utilized by Kronos
               Titan,  unless the Kronos Titan  Revolving  Portion is then fully
               drawn,  shall be  requested by Kronos  Titan  (together  with the
               Borrower) to be advanced by the Agent  directly to Kronos  Titan.
               Notwithstanding  anything  to  the  contrary  contained  in  this
               Agreement  or any other Loan  Document,  each of the Borrower and
               Kronos Titan  hereby  jointly and  severally  agrees to repay the
               principal  of the  Kronos  Titan  Revolving  Portion,  to pay all
               interest  accrued on such principal that is outstanding from time
               to time and to pay all fees  accrued  with  respect to the Kronos
               Titan Revolving Portion from time to time, all in accordance with
               the terms and provisions of this  Agreement;  provided,  however,
               that  Kronos  Titan so agrees only if and to the extent that such
               indebtedness,  liabilities  and  obligations  relate to  advances
               under the Kronos Titan  Revolving  Portion  advanced  directly to
               Kronos Titan.  Furthermore,  the Borrower acknowledges and agrees
               that  advances of the Kronos  Titan  Revolving  Portion to Kronos
               Titan shall  directly  benefit the Borrower to the same extent as
               if such advances had been made directly to the Borrower, and that
               the  indebtedness,  liabilities  and  obligations of the Borrower
               with  respect  to the Kronos  Titan  Revolving  Portion  shall be
               identical to

                                              43

<PAGE>



               the Borrower's  indebtedness,  liabilities and  obligations  with
               respect to the portion of the  Revolving  Portion that is not the
               Kronos Titan Revolving Portion.

2.05    The Borrower may, in connection with and concurrently with any Notice of
        Borrowing  with  respect to any  reborrowing  of the  Revolving  Portion
        pursuant to SECTION 2.04 and in connection  with and  concurrently  with
        any selection of a new Interest Period pursuant to SECTION 5.02, deliver
        to the Agent a written request that such  reborrowing or such portion of
        the Loan  subject to such new  Interest  Period,  as the case may be, be
        denominated or  redenominated  (as the case may be) in U.S.  Dollars (as
        opposed  to  Deutsche  Mark),  provided,  however,  that  the  aggregate
        principal amount of the Loan at any time outstanding that is denominated
        in U.S.  Dollars may not, without the prior written consent of the Banks
        that  hold  at  least  80%  (eighty  percent)  of the  aggregate  unpaid
        principal  amount of the Loans,  immediately  upon giving  effect to any
        such reborrowing or any such Interest  Period,  exceed the Base Deutsche
        Mark  Amount  of DM  350,000,000  (Deutsche  Mark  Three  Hundred  Fifty
        Million).  Each  such  written  request  for a U.S.  Dollar  denominated
        tranche shall specify the Base Deutsche Mark Amount of such tranche.  If
        such a written  request  for a U.S.  Dollar  denominated  tranche is not
        received  by the  Agent at least  five (5)  Business  Days  prior to the
        proposed  Drawdown  Date,  with respect to a Notice of Borrowing,  or no
        later than 10:00 a.m., Luxembourg time, on the fourth (4th) Business Day
        prior to the beginning of the relevant Interest Period,  with respect to
        the  selection  of a new  Interest  Period,  then the  tranche  shall be
        denominated  in  Deutsche   Mark,   provided,   however,   that  if  the
        corresponding tranche for the Interest Period then ending is denominated
        in U.S.  Dollars,  then the  tranche  for the next  succeeding  Interest
        Period shall also be  denominated  in U.S.  Dollars  unless the Borrower
        notifies the Agent, pursuant to SECTION 5.02, that such tranche shall be
        redenominated in Deutsche Mark for the next succeeding  Interest Period.
        Any  agreement or  obligation of the Banks to provide any portion of the
        Loan in Deutsche Mark or U.S.  Dollars  pursuant to this Agreement shall
        in all cases be subject to the condition that no circumstance  described
        in SECTION 7.01 shall have occurred (as  determined in good faith by the
        Agent) in the London interbank  Euro-currency  market or otherwise after
        request  therefor by the Borrower and before the relevant  Drawdown Date
        or the first day of the relevant Interest Period, as the case may be. If
        the Agent has determined that such a change has occurred,  then it shall
        forthwith  give  notice  thereof to the  Borrower  and each Bank and the
        procedures set forth in ARTICLE 7 shall be applicable.

2.06    (a)    If the Borrower requests  (pursuant to SECTION 2.05) that any
               reborrowing of the Revolving  Portion  (pursuant to SECTION 2.04)
               be  denominated  in U.S.  Dollars,  the Banks  shall,  subject to
               compliance  by the Borrower with SECTION 2.05 and the other terms
               and  conditions  of this  Agreement,  make their  advances of the
               reborrowing in U.S.  Dollars in an aggregate  amount equal to the
               Equivalent  Amount  of  the  Base  Deutsche  Mark  Amount  of the
               advances to be funded in U.S.
               Dollars.


                                              44

<PAGE>



        (b)    In the event of any  advance of the Loan being  redenominated  in
               whole or in part in U.S. Dollars for the next succeeding Interest
               Period and such advance having been  denominated in Deutsche Mark
               during the Interest  Period then  ending,  each Bank will make an
               amount equal to the Equivalent Amount in U.S. Dollars of the Base
               Deutsche  Mark  Amount of its advance  (or the  relevant  portion
               thereof)  to be  denominated  in U.S.  Dollars  during  the  next
               succeeding  Interest  Period  available to the Agent on the first
               day of such next  succeeding  Interest  Period.  The Agent shall,
               subject  to the  provisions  of SECTION  2.06(F),  make each such
               amount of U.S. Dollars available to the Borrower on such date and
               in like  currency  and funds as  received  by the Agent  from the
               Banks in the manner  provided in SECTION 11.06,  and the Borrower
               on the last day of the  Interest  Period then ending  shall repay
               the amount of such  advance  (or the  relevant  portion  thereof)
               outstanding  in  Deutsche  Mark during the  Interest  Period then
               ending (with accrued interest thereon in Deutsche Mark).

        (c)    In the event that (i) any advance of the Loan denominated in U.S.
               Dollars is to continue to be denominated in U.S.  Dollars for the
               next succeeding  Interest Period,  and (ii) as of the last day of
               the Interest  Period then ending,  the  aggregate  Deutsche  Mark
               Amount of all outstanding  advances of the Loan then  denominated
               in U.S.  Dollars is more than one hundred and five percent (105%)
               of the aggregate  Base  Deutsche  Mark Amount of all  outstanding
               advances of the Loan then denominated in U.S.  Dollars,  then the
               Borrower  shall  repay  to the  Agent,  on the  last  day of such
               Interest  Period then ending,  an amount of U.S.  Dollars as will
               result in (after giving effect to such  repayment)  the aggregate
               Deutsche Mark Amount of all outstanding advances of the Loan then
               denominated in U.S.  Dollars,  as of the last day of the Interest
               Period then ending,  being equal to one hundred percent (100%) of
               the  aggregate  Base  Deutsche  Mark  Amount  of all  outstanding
               advances of the Loan then denominated in U.S. Dollars. The amount
               to be repaid by the  Borrower  pursuant to this  SECTION  2.06(C)
               shall be in addition to any Repayment Installment or other amount
               due and payable by the Borrower on the last day of such  Interest
               Period then ending. In the event that (A) any advance of the Loan
               denominated  in U.S.  Dollars is to continue to be denominated in
               U.S. Dollars for the next succeeding  Interest Period,  (B) as of
               the last day of the Interest  Period then ending,  the  aggregate
               Deutsche Mark Amount of all outstanding advances of the Loan then
               denominated  in U.S.  Dollars  is less than  ninety-five  percent
               (95%)  of  the  aggregate   Base  Deutsche  Mark  Amount  of  all
               outstanding  advances  of  the  Loan  then  denominated  in  U.S.
               Dollars, and (C) no Default shall have occurred and be continuing
               as of the last day of the Interest Period then ending,  then each
               Bank shall make available to the Agent,  and the Agent shall make
               available  to the  Borrower,  on the  last  day of such  Interest
               Period then  ending,  such Bank's pro rata share  (based upon its
               Commitment as a percentage of the  aggregate  Commitments  of all
               Banks)  of an  amount of U.S.  Dollars  as will  result in (after
               giving effect to the delivery of such amount to the Borrower) the
               aggregate Deutsche Mark

                                              45

<PAGE>



               Amount of all outstanding  advances of the Loan then  denominated
               in U.S.  Dollars,  as of the last day of the Interest Period then
               ending,  being  equal  to  one  hundred  percent  (100%)  of  the
               aggregate Base Deutsche Mark Amount of all  outstanding  advances
               of the Loan then denominated in U.S.  Dollars.  The obligation of
               the Banks and the Agent to make such additional amounts available
               to the Agent and the Borrower, respectively, shall be subject, in
               all respects,  to the condition  precedent that no  circumstances
               described in SECTION  7.01,  as  determined  in good faith by the
               Agent, shall have occurred in the London interbank  Euro-currency
               market or  otherwise  on or about  the last day of such  Interest
               Period then ending.

        (d)    In the event of any  advance of the Loan being  redenominated  in
               whole  or in part  in  Deutsche  Mark  for  the  next  succeeding
               Interest Period and such advance having been  denominated in U.S.
               Dollars  during the Interest  Period then ending,  each Bank will
               make its  advance  in  Deutsche  Mark in an amount  equal to such
               Bank's pro rata  share of the Base  Deutsche  Mark  Amount of the
               aggregate  advance  to  commence  on the  first  day of such next
               succeeding  Interest  Period.  The Agent  shall,  subject  to the
               provisions of SECTION 2.06(F),  make each such amount of Deutsche
               Mark  available to the Borrower on such date and in like currency
               and funds as  received  by the Agent in the  manner  provided  in
               SECTION  11.06,  and the Borrower on the last day of the Interest
               Period then ending shall repay the amount of such advance (or the
               relevant portion thereof)  outstanding in U.S. Dollars during the
               Interest  Period then ending (with  accrued  interest  therein on
               U.S. Dollars).

        (e)    In the event that,  with  respect to any tranche  requested to be
               denominated  in U.S.  Dollars,  any of the  events  specified  in
               SECTION 7.01 shall occur relating to U.S. Dollar  deposits,  then
               the Agent,  with the consent of Majority  Banks and by the giving
               of notice to the  Borrower,  may  require  that (i) each  advance
               shall be made to the Borrower in Deutsche Mark in an amount equal
               to such Bank's pro rata share of the Base Deutsche Mark Amount of
               the aggregate advance requested to be made in U.S. Dollars,  (ii)
               each advance which shall have been  denominated  in Deutsche Mark
               during the  Interest  Period  then  ending  shall  continue to be
               denominated  in  Deutsche  Mark and (iii)  each Bank  shall  make
               available to the Agent in Deutsche  Mark the Base  Deutsche  Mark
               Amount of its advance which shall have been  outstanding  in U.S.
               Dollars  during the Interest  Period then ending on the first day
               of the next succeeding Interest Period. The Agent shall,  subject
               to the  provisions  of SECTION  2.06(F),  make such Base Deutsche
               Mark  Amount  available  to the  Borrower on the same date and in
               like  currency  and funds as received by the Agent from such Bank
               in the manner  provided in SECTION  11.06 and the Borrower on the
               last day of the  Interest  Period  then  ending  shall  repay the
               amount of such advance  denominated  in U.S.  Dollars  during the
               Interest  Period then ending (with  accrued  interest  thereon in
               U.S. Dollars).


                                              46

<PAGE>



        (f)    In the event the Borrower is required to repay any amounts on the
               last day of any Interest  Period  pursuant to this SECTION  2.06,
               the Agent  shall  make any  amounts to be  advanced  by the Banks
               available to the Borrower on the first day of the next succeeding
               Interest  Period  only  if  the  Agent   receives,   concurrently
               therewith in accordance with this Agreement, the relevant amounts
               to be repaid by the Borrower  pursuant to this SECTION 2.06.  The
               Borrower hereby agrees that it shall indemnify the Agent and each
               Bank, and hold the Agent and each Bank harmless from and against,
               any and all funding or foreign exchange costs, losses or expenses
               that the Agent and the Banks may  suffer,  sustain  or incur as a
               consequence  of a failure by the Borrower to promptly  pay,  when
               due, any amounts required to be paid by the Borrower.

                                ARTICLE 3.  PURPOSE OF THE LOAN

        The  Borrower  represents  and  warrants  that the  proceeds of the Loan
initially were used to refinance all of its then outstanding  bank  indebtedness
and certain of its then existing  indebtedness  (including principal and accrued
interest) to Kronos (US) (then known as Kronos,  Inc.),  and that the  remaining
proceeds  of the  Loan  in  excess  of  the  amount  needed  to  refinance  such
indebtedness  were used  exclusively  for its general  corporate  purposes.  The
Borrower shall use the entire proceeds of each  reborrowing  under the Revolving
Portion  exclusively  for its general  corporate  purposes  (including,  without
limitation, to make Restricted Payments permitted under SECTION 16.20).

                   ARTICLE 4.  CONDITIONS PRECEDENT AND NOTICE OF BORROWING

4.01    (a)    Reference  is hereby made to Sections  4.01(a),  4.01(b) and
               4.01(c) of the First Restated  Agreement,  which Section  4.01(a)
               contains certain conditions of the First Restated Agreement,  and
               which  Sections  4.01(a),  4.01(b) and  4.01(c) are  incorporated
               herein by reference.

        (b)    Notwithstanding  anything  to  the  contrary  contained  in  this
               Agreement or in any other Loan  Document,  this  Agreement  shall
               become  effective when (and shall not become effective unless and
               until) each of the following  conditions  precedent are satisfied
               to the reasonable satisfaction of the Agent:

               (i)    The Agent shall have received the following documents,  as
                      appropriately  executed,  delivered and (where applicable)
                      completed to its reasonable  satisfaction (except that any
                      such condition  precedent set forth in this CLAUSE (I) may
                      be  waived  by the  Agent,  subject  to  any  post-closing
                      documentation requirements imposed by the Agent):

                             (A)    amendment and restatement,  amendment and/or
                                    reaffirmation   of   each   of  the   Pledge
                                    Agreements executed by

                                              47

<PAGE>



                                    the  Borrower or, with respect to the Pledge
                                    Agreement   relating  to  the  Stock  of  NL
                                    Industries  (Deutschland) GmbH pledged by NL
                                    Industries,  executed by NL Industries, each
                                    of  which   amendments   and   restatements,
                                    amendments and/or reaffirmations shall be in
                                    the  applicable   form  attached  hereto  as
                                    EXHIBIT D,  together  with such  agreements,
                                    documents and  instruments as may reasonably
                                    be required by the Agent in connection  what
                                    the Pledge Agreements;

                             (B)    amendment  and/or  reaffirmation  of each of
                                    the  Guaranties  (other  than the  NL/Kronos
                                    Guaranty  which  has been  fully  performed)
                                    executed  by Kronos  Canada,  Inc.,  2927527
                                    Canada Inc. and 2969157 Canada Inc., each of
                                    which amendments and/or reaffirmations shall
                                    be in the applicable form attached hereto as
                                    EXHIBIT E;

                             (C)    Second  Amended and Restated  Technology and
                                    Trademark Undertaking executed by Kronos and
                                    Kronos (US), which agreement shall be in the
                                    form attached hereto as EXHIBIT F;

                             (D)    amendment and restatement,  amendment and/or
                                    reaffirmation  of the Amended  and  Restated
                                    Subordination  and  Contribution   Agreement
                                    executed  by NL  Industries,  Kronos and the
                                    Borrower,  which amendment and  restatement,
                                    amendment and/or  reaffirmation  shall be in
                                    the form attached hereto as EXHIBIT G;

                             (E)    amendment and restatement,  amendment and/or
                                    reaffirmation  of the Amended  and  Restated
                                    Liquidity   Undertaking   executed   by   NL
                                    Industries,  Kronos and the Borrower,  which
                                    amendment and restatement,  amendment and/or
                                    reaffirmation  shall be in the form attached
                                    hereto as EXHIBIT H;

                             (F)    amendment and restatement,  amendment and/or
                                    reaffirmation  of (i) each of the agreements
                                    executed by the Borrower,  NL Industries and
                                    Kronos  pursuant  to which it  appoints  Dr.
                                    Wienand   Meilicke  to  accept   service  of
                                    process   in   Germany   pursuant   to   the
                                    applicable Loan Documents,  and (ii) each of
                                    the  agreements  executed  by  Prentice-Hall
                                    Corporation  System,  Inc. pursuant to which
                                    it agrees to act as agent for the  Borrower,
                                    NL Industries  and Kronos to accept  service
                                    of process in New York pursuant to the

                                              48

<PAGE>



                                    applicable Loan Documents,  which amendments
                                    and    restatements,    amendments    and/or
                                    reaffirmations   shall   be  in   form   and
                                    substance  reasonably  satisfactory  to  the
                                    Agent;

                             (G)    an  Acknowledgment  of Limitation of Special
                                    Damages  executed by Kronos  World  Services
                                    S.A./N.V.,  which acknowledgment shall be in
                                    the form attached hereto as EXHIBIT I;

                             (H)    the NL Guaranty,  which Guaranty shall be in
                                    the form attached hereto as EXHIBIT J;

                             (I)    the Canadian Security  Documents executed by
                                    Kronos Canada, Inc., 2927527 Canada Inc. and
                                    2969157 Canada Inc., which Canadian Security
                                    Documents  shall  be in the  forms  attached
                                    hereto as EXHIBIT K;

                             (J)    the  Nordenham  Mortgage  executed by Kronos
                                    Titan, which Nordenham Mortgage shall secure
                                    only  the   indebtedness,   liabilities  and
                                    obligations  of Kronos Titan relating to the
                                    Kronos Titan Revolving  Portion and shall be
                                    in the form attached hereto as EXHIBIT L;

                             (K)    the Cash Pledge  Agreements  executed by the
                                    Borrower, which Cash Pledge Agreements shall
                                    be in the forms  attached  hereto as EXHIBIT
                                    M;

                             (L)    the  Cash  Pledge  Agreements   executed  by
                                    Kronos Canada, Inc., 2927527 Canada Inc. and
                                    2969157  Canada  Inc.,   which  Cash  Pledge
                                    Agreements  shall be in the  forms  attached
                                    hereto as EXHIBIT N;

                             (M)    a certificate  of the  Secretary,  Assistant
                                    Secretary  or  other  appropriate   officer,
                                    director or other  representative of each of
                                    the   Borrower,    its   Subsidiaries,    NL
                                    Industries,   Kronos  and  Kronos  (US)  (as
                                    applicable) as to the  authorization  of the
                                    Loan Documents to be executed by such Person
                                    pursuant to this  Agreement  and as to other
                                    corporate matters;

                             (N)    a true and correct  photocopy of each of the
                                    Subordinated  Loan  Documents as executed by
                                    all parties thereto, which photocopies shall
                                    be   certified   by  the   Secretary  or  an
                                    Assistant  Secretary  of each of the parties
                                    thereto as being

                                              49

<PAGE>



                                    true,   correct  and  complete   photocopies
                                    thereof,  all  of  which  Subordinated  Loan
                                    Documents  shall  be in form  and  substance
                                    satisfactory to the Agent;

                             (O)    such  legal   opinions  of  counsel  to  the
                                    Borrower and its Subsidiaries and counsel to
                                    the Agent as the Agent may  require,  all of
                                    which   opinions   shall   be  in  form  and
                                    substance  reasonably  satisfactory  to  the
                                    Agent;

                             (P)    such   other   agreements,   documents   and
                                    instruments  relating to the Loan  Documents
                                    and/or the parties  thereto as the Agent may
                                    reasonably request.

            (ii)      Any and all invoiced fees, costs or expenses to be paid or
                      reimbursed,  as of the  Second  Restatement  Date,  by the
                      Borrower  to the  Agent or any Bank with  respect  to this
                      Agreement  or any other Loan  Document or any  transaction
                      contemplated   hereby  or  thereby   (including,   without
                      limitation, charges and expenses for which the Borrower is
                      obligated  pursuant to the Original  Agreement,  the First
                      Restated Agreement and/or this Agreement), shall have been
                      paid in full.

           (iii)      All corporate  proceedings  taken in  connection  with the
                      transactions contemplated by this Agreement, and all legal
                      matters  incident to this  Agreement,  shall be reasonably
                      satisfactory to the Agent.

            (iv)      The  Borrower  shall  have  paid  to the  Agent  all  fees
                      required  to be paid to the Agent or any Bank on or before
                      the Second  Restatement Date pursuant to SECTION 19.01 and
                      SECTION 19.02.

             (v)      The  NL   Subordinated   Loan  shall  have  been  made  in
                      accordance   with  the   terms  and   provisions   of  the
                      Subordinated Loan Documents.

            (vi)      DM  57,287,585  (Deutsche  Mark  Fifty-Seven  Million  Two
                      Hundred Eighty-Seven Thousand Five Hundred Eighty-Five) of
                      the Tax Refund  shall have been drawn under the  Tentative
                      Tax Refund  Availability  Amount of the Revolving  Portion
                      Availability  and paid to the Agent to be  applied  to the
                      Term Portion in accordance with SECTION 8.01(D).

           (vii)      The Agent shall have received (A) from NL  Industries  and
                      for the  account  of the Banks  ratably in  proportion  to
                      their portion of the Loan and for application  against the
                      outstanding  principal  amount of the Term  Portion of the
                      Loan  in  accordance  with  SECTION  2.01(B),  the  Second
                      Prepayment from the proceeds of the NL Subordinated  Loan,
                      and (B) a Solvency Certificate

                                              50

<PAGE>



                      executed by NL Industries  and Kronos,  which  certificate
                      shall be in the form attached hereto as EXHIBIT O.

          (viii)      The Borrower shall have received DM 110,000,000  (Deutsche
                      Mark One  Hundred Ten  Million) of the  proceeds of the NL
                      Subordinated  Loan (i.e.,  the entirety of the proceeds of
                      the  NL   Subordinated   Loan  in  excess  of  the  Second
                      Prepayment Amount) in accordance with SECTION 2.01(B).

        (c)    The Borrower  shall  (except to the extent waived as permitted by
               this  Agreement)  cause  the  conditions  precedent  set forth in
               SECTION 4.01(B) to be satisfied  concurrently with the Borrower's
               execution of this Agreement, and the Borrower shall, concurrently
               with its execution of this Agreement, so certify to the Agent and
               the Banks.

4.02    Each Drawdown of the Revolving Portion  (including,  without limitation,
        the Kronos Titan Revolving Portion) is subject to:

        (a)    no Default having occurred;

        (b)    all  representations  and warranties  made by the Borrower and/or
               any Affiliate in the Loan Documents  being true and correct as of
               the  Drawdown  Date  (other  than  the  representations  and  the
               warranties  that are expressly  made only in reference to another
               specific date);

        (c)    the receipt by the Agent of a notice of borrowing in the form set
               forth in EXHIBIT P ("Notice of Borrowing"),  duly completed,  not
               less than 5 (five)  Business Days prior to the proposed  Drawdown
               Date;

        (d)    the  conditions  that (i)  immediately  prior to giving effect to
               such drawdown,  the outstanding  principal  amount of the Loan is
               not less than DM 100,000  (Deutsche  Mark One Hundred  Thousand),
               (ii)  the  Agent,  as Agent  for the  Banks,  shall  have a first
               priority   perfected  security  interest  in  the  Stock  of  the
               respective  Subsidiaries  pledged under the Pledge  Agreements as
               security  for  the  Loan  (including,   without  limitation,  the
               Revolving  Portion and any reborrowings of the Revolving  Portion
               to be advanced on the date of any drawdown thereof),  which Stock
               shall be free and clear of all Liens  (other  than such  security
               interest  securing  the  Loan)  except  for any  Permitted  Liens
               referred to in CLAUSE (D),  (E), (F) OR (I) of the  definition of
               such term in this  Agreement,  and (iii) the Agent,  as Agent for
               the Banks,  shall have the  additional  Liens as security for the
               Loans (including,  without limitation,  the Revolving Portion and
               any  reborrowings of the Revolving  Portion to be advanced on the
               date of any drawdown  thereof)  provided in SECTION 17.05,  which
               Liens shall have the priority  specified  in such SECTION  17.05;
               and


                                              51

<PAGE>



        (e)    the condition that no Excess  Adjusted  Restricted  Payments have
               been directly or  indirectly  paid or made by the Borrower or any
               of its  Subsidiaries to any Affiliate of the Borrower (other than
               the  Borrower or  Subsidiaries  of the  Borrower)  from and after
               January  1, 1996  (subject  to the 30  (thirty)  day cure  period
               specified  in  the  definition  of  "Excess  Adjusted  Restricted
               Payments").

4.03    Each Notice of Borrowing  shall be irrevocable and the Borrower shall be
        bound to borrow in accordance with such notice.

4.04    Upon the Agent's receipt of each (a) Notice of Borrowing,  (b) notice of
        selection  of a new  Interest  Period  pursuant  to SECTION  5.02 or (c)
        request  that any  tranche be  denominated  (or  redenominated)  in U.S.
        Dollars  pursuant to SECTION 2.05, the Agent shall promptly  notify each
        Bank of the contents thereof and, if applicable, of such Bank's pro rata
        share  of any  advance  of the Loan to be  made.  Furthermore,  upon the
        determination of the interest rate applicable to any tranche,  the Agent
        shall promptly notify each Bank of such interest rate.

                                 ARTICLE 5.  INTEREST PERIODS

5.01    The Loan  proceeds  shall be made  available  to the Borrower in no more
        than 4 (four)  tranches for Interest  Periods of 1 (one),  3 (three),  6
        (six) or 12 (twelve) months with respect to each such tranche, except as
        provided  in SECTION  5.04 and  provided  that the  Borrower  may select
        Interest  Periods of 1 (one) month or 3 (three) months only with respect
        to any tranche  denominated or to be denominated in U.S.  Dollars.  Each
        tranche  shall  be in a  minimum  principal  amount  of  DM  100,000,000
        (Deutsche  Mark  One  Hundred  Million)  and  integral  multiples  of DM
        10,000,000  (Deutsche  Mark  Ten  Million)  in  excess  thereof  (or the
        Equivalent Amount thereof in U.S. Dollars);  provided, however, that any
        tranche  evidencing a reborrowing of the Revolving  Portion  pursuant to
        SECTION  2.04  shall be in a minimum  principal  amount of DM  5,000,000
        (Deutsche  Mark Five  Million)  and  integral  multiples of DM 1,000,000
        (Deutsche Mark One Million) in excess thereof (or the Equivalent  Amount
        thereof  in U.S.  Dollars)  and  provided,  further,  however,  that any
        concurrent  reborrowing  under the Kronos  Titan  Revolving  Portion and
        reborrowing  under the Revolving  Portion that does not  constitute  the
        Kronos Titan  Revolving  Portion shall be aggregated for purposes of the
        immediately  preceding  proviso.  Each tranche shall be  denominated  in
        Deutsche  Mark or, if permitted by SECTION 2.05 and upon  compliance  by
        the Borrower with SECTION 2.05, U.S. Dollars,  provided,  however,  that
        each tranche shall be entirely  denominated  in either  Deutsche Mark or
        U.S. Dollars.

5.02    The Borrower shall inform the Agent no later than 10:00 a.m., Luxembourg
        time,  on the 4th (fourth)  Business  Day prior to the  beginning of the
        relevant  Interest  Period  of the  tenor of the next  Interest  Period,
        including,  without limitation, the duration of such Interest Period and
        the  currency  (whether  Deutsche  Mark or U.S.  Dollars)  in which  the
        tranche  to  be  outstanding  during  such  Interest  Period  is  to  be
        denominated.  Unless the Agent is notified to the contrary by such time,
        the relevant Interest Period shall have a duration of

                                              52

<PAGE>



        1 (one) month and the  currency  in which the tranche to be  outstanding
        during  such  Interest  Period  is to be  denominated  shall be the same
        currency  in which the  corresponding  tranche was  denominated  for the
        Interest Period then ending.

5.03    Each Interest  Period for any tranche,  other than the initial  Interest
        Period,  shall commence on the expiration of the  immediately  preceding
        Interest  Period for such tranche.  If an Interest Period would end on a
        day which is not a Business Day, such Interest  Period shall be extended
        to the next succeeding  Business Day unless such day falls into the next
        calendar  month,  in which event such  Interest  Period shall end on the
        immediately  preceding Business Day. If any other date on which interest
        is payable  under this  Agreement  is not a Business  Day,  then payment
        shall be due on the next  succeeding  Business Day unless such day falls
        into the next calendar month, in which event payment shall be due on the
        immediately preceding Business Day.

5.04    The Borrower  may not select an Interest  Period which begins prior to a
        Repayment  Date and ends after such  Repayment Date unless the aggregate
        amount of the tranches which have Interest Periods ending on or prior to
        such  Repayment  Date shall at least equal the  principal  amount of the
        Loan  required  to be  paid  on  such  Repayment  Date.  Notwithstanding
        anything  herein to the  contrary,  the  Borrower may select an Interest
        Period other than one, three or six months, but not to exceed six months
        (subject  to the  ability  of  the  Reference  Banks  to  determine  the
        Interbank  Rate for such  period),  for that  portion of the Loan not in
        excess of the amount of the Loan which is scheduled to come due pursuant
        to ARTICLE 9 within six months of the first day of such Interest  Period
        and which Interest Period shall end on such scheduled Repayment Date.

                                     ARTICLE 6.  INTEREST

6.01    On each Interest  Payment Date,  the Borrower shall pay to the Agent for
        the account of the Banks for the Interest Period ending thereon, accrued
        interest,  on the  applicable  tranche as  provided  in this  Agreement,
        provided,  however, that if any Interest Period is longer than 3 (three)
        months,  accrued  interest shall be payable (a) on the date in the third
        succeeding calendar month numerically  corresponding to the commencement
        date of such Interest  Period,  or, if there exists no date  numerically
        corresponding  to the  commencement  date of such Interest Period in any
        such third succeeding  month,  such accrued interest shall be payable on
        the last Business Day of such third succeeding  calendar month after the
        first day of such Interest Period and (b) on the Interest  Payment Date.
        Interest shall be paid in the currency in which the  applicable  tranche
        is denominated on the applicable Interest Payment Date.

6.02    The rate of interest  applicable  to each tranche of the Loan during any
        Interest  Period  relating  thereto shall be the Interbank Rate plus the
        Margin.


                                              53

<PAGE>



6.03    Interest  payable pursuant to this Agreement shall be calculated for the
        actual  number  of days  elapsed  on the basis of a 360  (three  hundred
        sixty) day year.

6.04    The Agent  shall  promptly  notify  the  Borrower  and each Bank of each
        determination  of  an  interest  rate  made  by  the  Agent  under  this
        Agreement.

6.05    All agreements  between the Borrower,  the Agent and the Banks,  whether
        now  existing or  hereafter  arising and  whether  written or oral,  are
        hereby  limited  so  that  in  no  contingency,  whether  by  reason  of
        acceleration  of the  maturity  of the  Loan  or  otherwise,  shall  the
        interest  contracted for, charged or received by the Agent, the Banks or
        any of them from the  Borrower  exceed the  maximum  amount  permissible
        under  applicable law. If, from any  circumstance  whatsoever,  interest
        would  otherwise  be payable  to the Agent,  the Banks or any of them in
        excess of the maximum lawful amount,  the interest payable to the Agent,
        the  Banks  or any of  them  shall  be  reduced  to the  maximum  amount
        permitted under  applicable law; and if from any circumstance the Agent,
        the Banks or any of them shall ever  receive  anything  of value  deemed
        interest by applicable law in excess of the maximum  lawful  amount,  an
        amount equal to any excessive interest shall be applied to the reduction
        of the principal of the Loan and to the payment of interest,  or if such
        excessive  interest  exceeds the unpaid  principal  balance of the Loan,
        such excess  shall be refunded to the  Borrower.  All  interest  paid or
        agreed to be paid to the Agent,  the Banks or any of them shall,  to the
        extent  permitted by applicable law, be amortized,  prorated,  allocated
        and  spread  throughout  the full  period  until  payment in full of the
        principal  (including the period of any renewal or extension  hereof) so
        that the  interest on the Loan for such full period shall not exceed the
        maximum amount permitted by applicable law. This paragraph shall control
        all  agreements  between the  Borrower,  the Agent,  the Banks or any of
        them.

                                 ARTICLE 7.  SUBSTITUTE BASIS

7.01    If any of the following should occur:

        (a)    the  Reference  Banks  determine and notify the Agent that, at or
               about 11:00 a.m. (London time) on the Interest Determination Date
               for an Interest  Period,  no Deutsche  Mark  deposits  (as to the
               portion of the Loan proposed to be  denominated in Deutsche Mark)
               or no U.S.  Dollar  deposits  (as to the portion of the  proposed
               Loan to be  denominated in U.S.  Dollars) in the required  amount
               for  the  required  Interest  Period  are  being  offered  to the
               Reference   Banks  by  prime   banks  in  the  London   interbank
               Euro-currency market;

        (b)    before  the  close of  business  in  Luxembourg  on the  Interest
               Determination  Date for an Interest  Period,  the Majority  Banks
               determine  and  notify  the  Agent  that the  rate at which  such
               deposits  were being so offered does not  accurately  reflect the
               cost to them of obtaining such deposits; or


                                              54

<PAGE>



        (c)    the Reference Banks shall determine and notify the Agent that, by
               reason  of   circumstances   affecting   the   London   interbank
               Euro-currency  market generally,  such deposits are not available
               to banks in such market or that adequate and reasonable  means do
               not  or  will  not  exist  for  ascertaining  the  interest  rate
               applicable to the next succeeding Interest Period;

        then,  notwithstanding  the  provisions  of  ARTICLES 5 and 6, the Agent
        shall  forthwith  give notice of any such event to the Borrower and each
        Bank.

7.02    With  respect to the  circumstances  described  in  SECTIONS  7.01(A) or
        7.01(B) above,  the Borrower may, subject to the rights of the Agent and
        the Banks pursuant to SECTION 2.06(E):

        (a)    elect to prepay  the  applicable  portion  of the  Loan,  without
               premium  or  penalty,  at the end of the  then  current  Interest
               Period; or

        (b)    select an alternative Interest Period, to the extent available as
               determined by the Reference  Banks 2 (two) Business Days prior to
               the  first day of the next  succeeding  Interest  Period,  during
               which  Interest  Period  the  applicable  interest  rate  for the
               applicable  portion of the Loan shall be the  Interbank  Rate, if
               available  for  such  alternative   Interest  Period,   plus  the
               applicable Margin; or

        (c)    request  that the  Agent,  on behalf  of the  Banks,  enter  into
               negotiations  regarding the  applicable  interest  rate, in which
               event the Interest Period for the applicable  portion of the Loan
               shall be one month and during such Interest  Period the Agent, on
               behalf of the Banks,  and the  Borrower  shall  negotiate in good
               faith to agree upon an interest rate that will adequately reflect
               the cost to the Banks of  maintaining  or funding the  applicable
               portion of the Loan for such Interest Period, and if the Borrower
               and  the  Majority  Banks  (662/3%)  are  able to  agree  on such
               interest  rate,  the  interest  rate  that  shall  apply  to  the
               applicable  portion of the Loan for such Interest Period shall be
               the sum of the applicable Margin and the interest rate so agreed.
               If the Borrower and the Agent, on behalf of the Banks, are unable
               to  agree  upon an  interest  rate by the  day  which  is 2 (two)
               Business  Days before the end of the  one-month  Interest  Period
               referred to above, the interest rate that shall apply to the Loan
               for such Interest  Period shall be (i) the rate determined by the
               Agent to be the arithmetic mean (rounded  upwards,  if necessary,
               to the nearest four decimal  places) per annum of the  respective
               rates  notified to the Agent by each Reference Bank as that which
               expresses  as a  percentage  rate  per  annum  the  cost  to such
               Reference Bank of obtaining such deposits from such sources as it
               may  select  having  reasonable  regard to the  interests  of the
               Borrower, plus (ii) the applicable Margin.


                                              55

<PAGE>



7.03    With respect to  circumstances  described in SECTION 7.01(C) above,  the
        duration of such next succeeding  Interest Period shall be one month or,
        if the  period  until the next  Repayment  Date is less than one  month,
        shall end on the next Repayment Date and,  during such Interest  Period,
        the  Borrower  and the Agent,  on behalf of the Banks and subject to the
        consent of the Majority Banks (662/3%), shall negotiate in good faith in
        order  to  redenominate  the  applicable  portion  of  the  Loan  in  an
        alternative  currency  which is freely  convertible  into  Deutsche Mark
        (which alternative  currency may include,  without limitation,  Deutsche
        Mark as to the portion of the Loan  proposed to be  denominated  in U.S.
        Dollars) and in which deposits are available to the Reference  Banks for
        determining the interest rate from time to time applicable  thereto (but
        excluding  any  such  currency  for  which  any  central  bank or  other
        governmental authorization in the country of issue is required to permit
        use of such  currency by a Bank for lending  hereunder,  if such authori
        zation  has not  been  obtained  and any  currency  the use of  which as
        contemplated  hereunder  is  restricted  or  prohibited  pursuant to any
        request,   directive,   regulation  or  guideline  of  any  governmental
        authority  (whether  or not having the force of law) with which any Bank
        is  accustomed  to act),  and the interest  rate that shall apply to the
        applicable portion of the Loan for such Interest Period shall be the sum
        of the  applicable  Margin  and the  interest  rate for the  alternative
        currency  so agreed.  If the  Borrower  and the Agent,  on behalf of the
        Banks and with the consent of the Majority Banks (662/3%), are unable to
        agree  on  such  alternative  currency  or an  interest  rate  for  such
        alternative  currency by the day which is 2 (two)  Business  Days before
        the end of the Interest  Period  referred to above,  the Borrower  shall
        repay the applicable  portion of the Loan together with accrued interest
        thereon at the rate  determined by the Agent to be the  arithmetic  mean
        (rounded  upwards,  if necessary to the nearest four decimal  places) of
        the  respective  rates  notified to the Agent by each  Reference Bank as
        being that which  expresses as a  percentage  rate per annum the cost to
        such  Reference  Bank of obtaining such deposits from such sources as it
        may select  having  reasonable  regard to the interests of the Borrower,
        plus the applicable  Margin, on the next Interest Payment Date,  without
        premium or penalty except as otherwise provided in SECTION 12.04.

7.04    During the period when any alternative  interest rate or Interest Period
        or  redenomination  of the Loan or any applicable  portion thereof is in
        force pursuant to SECTION 7.02 or 7.03 above, the Agent, in consultation
        with the Banks, shall periodically review whether circumstances are such
        that an  Interbank  Rate may  again be  determined  in  accordance  with
        ARTICLES 5 and 6. If such a  determination  may again be made, the Agent
        shall  forthwith  give written  notice  thereof to the Borrower and each
        Bank and the Interbank  Rate, plus the applicable  Margin,  shall be the
        applicable  interest  rate  commencing  with the  beginning  of the next
        Interest Period for the Loan or the applicable portion thereof.

                                    ARTICLE 8.  PREPAYMENT

8.01    From and after the  Prepayment  Date,  the Borrower shall make mandatory
        prepayments of the Loan as follows:

                                              56

<PAGE>




        (a)    An amount equal to the Net Proceeds  (with respect to CLAUSES (2)
               and (3) below, only to the extent that the aggregate Net Proceeds
               exceed DM 15,000,000  (Deutsche Mark Fifteen  Million) during any
               calendar year, from:

               (1)    the Disposition by the Borrower or any of its Subsidiaries
                      of any Stock of any Subsidiary, other than:

                      (i)    Dispositions  of Stock  of any of the  Subsidiaries
                             from  the  Borrower  to  any  Subsidiary,   from  a
                             Subsidiary    to   the    Borrower,    or   between
                             Subsidiaries; or

                      (ii)   Dispositions which constitute  Restricted  Payments
                             permitted  in  accordance  with  SECTION  16.20  or
                             Dispositions  permitted in accordance  with SECTION
                             16.15(C);

               (2)    the Disposition by the Borrower or any of its Subsidiaries
                      of any assets, individually or in the aggregate, or of any
                      Stock of any Subsidiary  (other than a Major Subsidiary or
                      a Pledged Subsidiary), other than:

                      (i)    Dispositions  of assets in the  ordinary  course of
                             business;

                      (ii)   Dispositions  from the Borrower to any  Subsidiary,
                             from  a  Subsidiary  to  the  Borrower  or  between
                             Subsidiaries;

                      (iii)  Dispositions which constitute  Restricted  Payments
                             permitted  in  accordance  with  SECTION  16.20  or
                             Dispositions  permitted in accordance  with SECTION
                             16.15(C);

                      (iv)   Dispositions which constitute  interest payments on
                             Subordinated  Debt  permitted  in  accordance  with
                             SECTION 16.09(D);

                      (v)    Dispositions  or other events  described in CLAUSES
                             (1) or (3) of SECTION 8.01(A); or

                      (vi)   Dispositions  prior to the Second  Restatement Date
                             of   the   distributorship/marketing   arrangements
                             existing as of the First  Restatement  Date between
                             Rheox,  Inc.  and/or its  subsidiaries  and certain
                             Subsidiaries of the Borrower; and/or

               (3)    the   Disposition,   termination,   shortening   or  other
                      modification  of the  Leverkusen  Lease  or any  agreement
                      providing for the Disposition,  termination, shortening or
                      other modification of the Leverkusen Lease;

                                              57

<PAGE>



               shall be used,  to the  extent  permitted  by law,  to prepay the
               Loan,  without  premium or penalty except as set forth in SECTION
               12.04, on the Interest Payment Date(s) immediately  following the
               receipt by the Borrower or any  Subsidiary  of such Net Proceeds,
               in accordance with SECTION 8.01(B).  If the Net Proceeds from the
               aforementioned  Dispositions  described  in CLAUSES (2) or (3) of
               this  SECTION  8.01(A) or from other  transactions  described  in
               CLAUSE (3) of this SECTION 8.01(A) exceed DM 15,000,000 (Deutsche
               Mark Fifteen  Million) in any calendar year, or, if there are any
               Net Proceeds from the  aforementioned  Dispositions  described in
               CLAUSE (1) of this SECTION  8.01(A),  then the Borrower  shall in
               accordance  with SECTION  8.01(B) make a mandatory  prepayment in
               cash  equal to the  amount of such  excess in the case of CLAUSES
               (2) and (3) or equal to the  amount of such Net  Proceeds  in the
               case of CLAUSE (1), in each case  whether or not the Net Proceeds
               are comprised of cash or non-cash proceeds.  For purposes of this
               SECTION  8.01(A),  the value of the  non-cash  proceeds  received
               shall be determined in good faith by the chief financial  officer
               of the Borrower.

        (b)    Amounts payable under SECTION 8.01(A) shall be deposited promptly
               into an interest  bearing  account  maintained in the name of the
               Banks  with the  Agent  for the  benefit  of the  Banks and shall
               remain on deposit with the Agent until the next Interest  Payment
               Date(s),  at which  time  such  amounts  together  with  interest
               thereon  shall be applied at the  Borrower's  request to interest
               or, on a  pro-rata  basis,  to  reduce  the  remaining  Repayment
               Installments of the Term Portion or, after such  installments are
               paid in full, to permanently reduce the Revolving Portion.

        (c)    On the Interest Payment Date(s) immediately following delivery of
               the financial statements in accordance with SECTION 16.01(A), the
               Borrower shall prepay the Loan, without premium or penalty except
               as set forth in SECTION 12.04, in an amount equal to 70% (seventy
               percent)  of the  amount  by  which  Excess  Cash  Flow  for  the
               immediately preceding fiscal year exceeds DM 20,000,000 (Deutsche
               Mark Twenty Million); provided, however, that this sentence shall
               apply only to Excess  Cash Flow for  fiscal  year 1996 and fiscal
               years prior thereto. On the earlier to occur of (a) 5 (five) days
               after the date upon which  EBITDA for the  immediately  preceding
               fiscal  year  (commencing  with the  fiscal  year  1997) has been
               finally  determined or (b) 90 (ninety) days after the immediately
               preceding  fiscal year end, the  Borrower  shall prepay the Loan,
               without  premium or penalty except as set forth in SECTION 12.04,
               in an amount equal to 70% (seventy  percent) of Excess EBITDA for
               the immediately  preceding fiscal year. In addition, on or before
               March 31,  1997,  the  Borrower  shall  prepay the Loan,  without
               premium or penalty  except as set forth in SECTION  12.04,  in an
               amount  equal  to the  amount  (if  any) by  which  EBITDA  of NL
               Industries  and its  subsidiaries  for fiscal  year 1996  exceeds
               $140,000,000  (One  Hundred  Forty  Million  Dollars).  All  such
               prepayments shall be applied to the Repayment Installments of the
               Term Portion in the inverse order

                                              58

<PAGE>



               of  the   maturities   of  such   installments   or,  after  such
               installments  are  paid  in  full,  to  permanently   reduce  the
               Revolving Portion.

        (d)    An amount  equal to the amount of each  payment  received  by the
               Borrower with respect to the Tax Refund at any time shall be used
               by the  Borrower to prepay the Loan,  without  premium or penalty
               except as set forth in SECTION  12.04,  on the  Interest  Payment
               Date(s)  immediately   following  the  date(s)  upon  which  such
               payment(s)  is (are)  received by the Borrower.  Amounts  payable
               under this SECTION  8.01(D)  shall be deposited  promptly into an
               interest bearing account maintained in the name of the Banks with
               the Agent  for the  benefit  of the  Banks  and  shall  remain on
               deposit until the next Interest  Payment  Date(s),  at which time
               such amounts together with interest thereon shall be applied,  on
               a pro-rata basis, to reduce the remaining Repayment  Installments
               of the Term Portion or, after such installments are paid in full,
               to  permanently  reduce  the  Revolving  Portion.   The  Borrower
               represents  and  warrants  to the Agent  and the  Banks  that all
               amounts drawn under the Tentative Tax Refund  Availability Amount
               prior to the Second Restatement Date have been used to pay German
               income taxes or have been paid to the Agent and applied to reduce
               the  Revolving  Portion in  accordance  with  paragraph  2 of the
               Tentative Tax Refund Letter. Accordingly, the Borrower, the Agent
               and the Banks hereby agree that (although the Final Determination
               Date may not yet have  occurred)  DM  77,287,585  (Deutsche  Mark
               Seventy-Seven  Million Two  Hundred  Eighty-Seven  Thousand  Five
               Hundred  Eighty-Five)  shall be deemed to be the remaining amount
               of the Tax  Refund  received  by the  Borrower  as of the  Second
               Restatement  Date and not  previously  applied to prepay the Term
               Portion and that, on the Second  Restatement  Date, DM 57,287,585
               (Deutsche  Mark  Fifty-Seven  Million  Two  Hundred  Eighty-Seven
               Thousand  Five  Hundred  Eighty-Five)  of the Tax Refund shall be
               drawn under the Tentative Tax Refund  Availability  Amount of the
               Revolving Portion Availability and applied to the Term Portion in
               accordance with this SECTION 8.01(D) and DM 20,000,000  (Deutsche
               Mark  Twenty  Million) of the  proceeds of the Second  Prepayment
               shall be applied  to the Term  Portion  in  accordance  with this
               SECTION 8.01(D). As of the Second Restatement Date, DM 20,000,000
               (Deutsche  Mark  Twenty  Million)  of the  Tentative  Tax  Refund
               Availability  Amount  shall be deemed to have been  cancelled  by
               virtue of the  reduction in the maximum  principal  amount of the
               Revolving Portion from DM 250,000,000  (Deutsche Mark Two Hundred
               Fifty  Million)  to DM  230,000,000  (Deutsche  Mark Two  Hundred
               Thirty Million).

        (e)    On March 15, 2000,  the Borrower  shall prepay,  and  permanently
               reduce,  the Revolving Portion in an amount equal to the positive
               remainder (if any) of (i) the then  outstanding  principal amount
               of the Revolving Portion minus (ii) DM 125,000,000 (Deutsche Mark
               One Hundred Twenty-Five Million).


                                              59

<PAGE>



        (f)    Upon the  occurrence  of a "Change of  Control",  as such term is
               defined in either of the Indentures,  the Borrower shall promptly
               so notify the Agent and each of the Banks of such  occurrence and
               shall  (whether or not the Borrower  complies with its obligation
               to give such notice) prepay the Loans, and all accrued and unpaid
               interest  thereon to the date of the  prepayment,  in full on the
               date upon which the  holders  of any of the NL Notes may  receive
               prepayment  of any of the NL Notes as a result of such  Change of
               Control  (assuming such holders elect to receive such  prepayment
               but  whether or not such  holders so elect)  unless the  Majority
               Banks  (662/3%)  shall  have  expressly   waived  such  right  of
               prepayment  on or before the date upon which such  prepayment  is
               required to be made.

        (g)    On or  before 2 (two)  Business  Days  after the last day of each
               calendar  month upon which the  aggregate  cash  balances  of the
               Borrower and its Subsidiaries (excluding any cash balances of the
               Borrower and its Canadian  Subsidiaries  which are pledged to the
               Agent as security for the Loans and  excluding  U.S.  Dollar cash
               balances  held in the  ordinary  course  of  business)  exceed DM
               40,000,000  (Deutsche  Mark  Forty  Million)  (or the  equivalent
               amount in any  currency),  the  Borrower  shall  prepay,  without
               premium or  penalty  except as set forth in  SECTION  12.04,  the
               outstanding  principal  amount of the  Revolving  Portion  by the
               entire amount of such excess;  provided,  however,  that the cash
               balances  held by the Borrower  immediately  prior to a Repayment
               Date or a date upon which payments are required to be made on the
               Mirror Notes which are to be applied and are actually  applied to
               make  repayments  of the Loan or such  required  payments  on the
               Mirror  Notes,  respectively,  shall be excluded  for purposes of
               determining   the  cash   balances  of  the   Borrower   and  its
               Subsidiaries  pursuant to this SECTION  8.01(G).  For purposes of
               this SECTION  8.01(G) and SECTION 16.40,  "cash  balances"  shall
               mean the aggregate of the collected cash balance in bank accounts
               (net of checks issued and  uncleared),  other cash  (exclusive of
               petty cash  maintained  in  reasonable  amounts  in the  ordinary
               course of  business)  and  Temporary  Cash  Investments.  Amounts
               payable under this SECTION  8.01(G)  shall be  deposited,  within
               such 2 (two)  Business  Days,  into an interest  bearing  account
               maintained  in the  name of the  Banks  with  the  Agent  for the
               benefit of the Banks and shall  remain on deposit  with the Agent
               until  the next  Interest  Payment  Date(s),  at which  time such
               amounts  together with  interest  thereon shall be applied to the
               Revolving Portion as provided herein.  The Borrower covenants and
               agrees  that  it  will  not,  and  will  not  permit  any  of its
               Subsidiaries  to, convert  non-U.S.  Dollar cash balances to U.S.
               Dollar cash balances except to the extent reasonably necessary in
               the ordinary conduct of their business.

        (h)    On the Second  Restatement  Date,  the Borrower  shall prepay the
               Loan,  without  premium or penalty except as set forth in SECTION
               12.04, in the amount of DM 130,000,000 (Deutsche Mark One Hundred
               Thirty Million). Such prepayment

                                              60

<PAGE>



               shall  be  applied  to the  Repayment  Installments  of the  Term
               Portion  in  the  direct   order  of  the   maturities   of  such
               installments.

8.02    The Borrower may make optional prepayments (including the portion of the
        First  Prepayment  applied  toward the  Revolving  Portion  pursuant  to
        SECTION 2.01(A) and optional prepayments deemed made with funds provided
        by NL Industries and/or Kronos resulting from capital contributions made
        or Subordinated Debt, other than the Kronos Subordinated Loan and the NL
        Subordinated  Loan,  extended  by NL  Industries  and/or  Kronos  to the
        Borrower) as follows:

        On giving not less than 5 (five) days prior written notice to the Agent,
        the  Borrower  may prepay all or any part (but in any case not less than
        DM 5,000,000  (Deutsche  Mark Five  Million) (or the  Equivalent  Amount
        thereof in U.S.  Dollars)  and in  integral  multiples  of DM  1,000,000
        (Deutsche  Mark One Million) (or the  Equivalent  Amount thereof in U.S.
        Dollars) in excess  thereof per  prepayment) of the Loan on any Interest
        Payment Dates, without premium or penalty,  except as otherwise provided
        in SECTION 12.04, provided that:

        (a)    except as expressly permitted by SECTION 2.04 with respect to the
               Revolving Portion,  each prepayment made under this Agreement may
               not be reborrowed under this Agreement;

        (b)    unless the Borrower  expressly  informs the Agent,  in connection
               with  the  aforesaid  notice  of  such   prepayment,   that  such
               prepayment  shall  be  applied  to  the  Revolving  Portion,  any
               prepayment  under  this  SECTION  8.02  shall be  applied  to the
               outstanding Repayment Installments of the Term Portion in inverse
               order of the maturities of such installments; and

        (c)    notice of prepayment  given by the Borrower  shall be irrevocable
               and the Borrower shall be bound to prepay in accordance with each
               such notice.

8.03    To the extent that the amounts  available to prepay the Loan pursuant to
        SECTIONS 8.01 or 8.02 shall exceed the principal of the tranche relating
        to the immediately  following  Interest Payment Date, such amounts shall
        be applied to prepay the principal of such tranche and the remainder, if
        any, shall be applied to prepay the principal of the tranche relating to
        the next  immediately  following  Interest Payment Date or Dates, as the
        case may be,  until  all  amounts  allocated  for  prepayment  have been
        applied.  The  requirement  that  prepayments  be applied pro rata under
        SECTION  8.01(B) or 8.01(D),  in inverse order of maturity under SECTION
        8.01(C) and SECTION  8.02 or in direct order of maturity  under  SECTION
        8.01(H) shall not be affected by the fact that  prepayments  may be made
        on an Interest Payment Date which is also a Repayment Date.


                                              61

<PAGE>



                                     ARTICLE 9.  REPAYMENT

        Subject to the  prepayment  provisions  set forth in ARTICLE 8, the Term
Portion shall be repaid in 6 (six)  installments  due and payable on each of the
following Repayment Dates in the following amounts:

       REPAYMENT DATE           REPAYMENT INSTALLMENT

       March 15, 1997           DM 50,000,000

       September 15, 1997       DM 50,000,000

       March 15, 1998           DM 75,000,000

       September 15, 1998       DM 75,000,000

       March 15, 1999           DM 100,000,000 minus 50% (fifty percent) of the
                                Excess Term Prepayment (if any)

       September 15, 1999       DM 100,000,000 minus 50% (fifty percent) of the
                                        Excess Term Prepayment (if any)

Subject to the  prepayment  provisions  set forth in  ARTICLE  8, the  Revolving
Portion  (which shall be reduced to DM  105,000,000  (Deutsche  Mark One Hundred
Five  Million)  on March 15,  2000)  shall be repaid  (as  provided  in  SECTION
8.01(E))  on March 15,  2000 to the extent  necessary  to cause the  outstanding
principal  amount  of  the  Revolving  Portion,  after  giving  effect  to  such
repayment, to equal DM 105,000,000 (Deutsche Mark One Hundred Five Million), and
shall be repaid in full on  September  15,  2000.  All  amounts  owed under this
Agreement with respect to the Term Portion shall be due and payable on or before
September  15, 1999,  in accordance  with the terms of this  Agreement,  and all
amounts owed under this Agreement with respect to the Revolving Portion shall be
due and payable on or before September 15, 2000, in accordance with the terms of
this Agreement.

        After  giving  effect  to the  mandatory  prepayments  to be made on the
Second  Restatement Date pursuant to SECTIONS 8.01(D) and 8.10(H) (including the
Second  Prepayment),   (a)  the  Repayment  Installments  of  the  Term  Portion
previously (immediately prior to the Second Amendment Date) due on each of March
15, 1997,  September  15, 1997,  and March 15, 1998 shall have been paid in full
and (b) the Repayment  Installments of the Term Portion previously  (immediately
prior to the Second Amendment Date) due on each of September 15, 1998, March 15,
1999, and September 15, 1999, shall have been paid in part.  Accordingly,  after
giving effect to such prepayments,  the remaining outstanding Term Portion shall
be payable in 3 (three)  installments due and payable on the following Repayment
Dates in the following amounts:


                                              62

<PAGE>



               REPAYMENT DATE           REMAINING REPAYMENT INSTALLMENT
 
               September 15, 1998       DM 48,751,048

               March 15, 1999           DM 70,785,415

               September 15, 1999       DM 68,713,415

                                 ARTICLE 10.  EVIDENCE OF DEBT

10.01   Each  Bank  shall  maintain,  in  accordance  with its  usual  practice,
        accounts  evidencing  the amounts from time to time lent by and owing to
        it under this Agreement,  including such amounts with respect to each of
        the Term Portion and the  Revolving  Portion,  which  accounts  shall be
        prima facie  evidence of such amounts.  Such amounts shall be designated
        in Deutsche Mark or U.S. Dollars, as appropriate,  and, if designated in
        U.S.  Dollars,  shall  also  be  designated  in the  corresponding  Base
        Deutsche Mark Amount.

10.02   The Agent  shall  maintain  on its books an  account  in which  shall be
        recorded:

        (a)    the amount of the Loan (and the currency in which each portion of
               the Loan is  denominated  or  redenominated  from  time to time),
               including  the  amount  of  each  of the  Term  Portion  and  the
               Revolving Portion  outstanding from time to time, and each Bank's
               share therein;

        (b)    the amount of any principal or interest due or to become due from
               the Borrower to the Banks under this  Agreement (and the currency
               in which such amount is denominated or redenominated from time to
               time) with respect to each of the Term Portion and the  Revolving
               Portion and each Bank's share therein; and

        (c)    the amount of any sum received or recovered by the Agent (and the
               currency  in  which  such  amount  is  denominated)   under  this
               Agreement and each Bank's share therein.

10.03   In any legal action or proceeding  arising out of or in connection  with
        this Agreement,  the entries made in the accounts maintained pursuant to
        SECTIONS  10.01 and 10.02 shall be prima facie evidence of the existence
        and amounts of the obligations and the payments of the Borrower  therein
        recorded.  In the case of any conflict between  accounting under SECTION
        10.01 and 10.02,  the  accounts of each Bank under  SECTION  10.01 shall
        control.

                                     ARTICLE 11.  PAYMENTS

11.01   Any and all  payments by the  Borrower  and/or  Kronos  Titan under this
        Agreement  shall be made without  setoff or  counterclaim,  and free and
        clear of and without  deduction for any and all present or future taxes,
        levies,   imposts,   deductions,   charges  or  withholdings,   and  all
        liabilities  with respect  thereto,  whether under U.S. or German law or
        otherwise,

                                              63

<PAGE>



        excluding,  in the case of each Bank and the Agent, taxes imposed on its
        overall net income and franchise taxes imposed on it by the jurisdiction
        under  the laws of which  such Bank or the Agent (as the case may be) is
        organized or any political  subdivision thereof and, in the case of each
        Bank,  taxes  imposed on its  overall  net income  and  franchise  taxes
        imposed on it by the  jurisdiction  of such Bank's Lending Office or any
        political  subdivision  thereof (all such excluded taxes being hereunder
        referred to as "Excluded Taxes" and all such non-excluded taxes, levies,
        imposts,  deductions,   charges,   withholdings  and  liabilities  being
        hereinafter referred to as "Taxes"). If the Borrower and/or Kronos Titan
        shall be required by law (whether U.S. or German or otherwise) to deduct
        any Taxes from or in respect of any sum payable hereunder to any Bank or
        the Agent,

        (a)    and if the deductions are the result of a change in circumstances
               after May 30, 1990 of the type described in CLAUSE (1) of SECTION
               14.01(A),  the sum payable shall be increased as may be necessary
               so that, after making all required  deductions,  such Bank or the
               Agent (as the case may be) receives an amount equal to the sum it
               would have received had no such deductions been made;

        (b)    the Borrower and/or Kronos Titan shall make such deductions; and

        (c)    the  Borrower  and/or  Kronos  Titan  shall  pay the full  amount
               deducted to the relevant taxation authority or other authority in
               accordance with applicable law.

        Any Bank  claiming  any  additional  amounts  payable  pursuant  to this
        SECTION 11.01 shall use reasonable efforts (consistent with its internal
        policy and legal and regulatory restrictions) to transfer its portion of
        the Loan to a  Lending  Office  in  another  jurisdiction  where no such
        deductions are required.  The Borrower and/or Kronos Titan shall forward
        promptly  to the Agent  official  receipts of the  relevant  taxation or
        other authority or other evidence acceptable to the respective recipient
        of the amount deducted or withheld as described above,  when and as such
        receipts or other  evidence are made  available  to the Borrower  and/or
        Kronos Titan by the relevant authority.

11.02   From time to time upon the request of the Borrower,  Kronos Titan or the
        Agent,

        (a)    each Bank organized under the laws of a jurisdiction  outside the
               United  States shall  provide the Agent and the  Borrower  and/or
               Kronos  Titan  with a  certificate,  signed by an officer of each
               such  Bank,  stating  that  payments  to be  made  to  such  Bank
               hereunder are expected,  in the reasonable judgment of such Bank,
               to be exempt from United States  withholding tax, if such Bank is
               so  exempt,  and the forms (if any)  prescribed  by the  Internal
               Revenue Service of the United States certifying as to such Bank's
               status; and

        (b)    each  Bank  organized  under the laws of a  jurisdiction  outside
               Germany  shall  provide the Agent and the Borrower  and/or Kronos
               Titan with a certificate, signed by an

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               officer of each such Bank,  stating  that  payments to be made to
               such Bank hereunder are expected,  in the reasonable  judgment of
               such Bank, to be exempt from German withholding tax, if such Bank
               is  so  exempt,   and  the  forms  (if  any)  prescribed  by  the
               appropriate  German  governmental tax authority  certifying as to
               such Bank's status.

        Unless  the  Borrower,  Kronos  Titan or the Agent (as  applicable)  has
        received forms or other  documents  satisfactory  to it indicating  that
        payments   hereunder   are  not  subject  to  United  States  or  German
        withholding tax, as applicable,  the Borrower, Kronos Titan or the Agent
        (as applicable)  shall,  unless the Borrower,  Kronos Titan or the Agent
        (as  applicable)  determines  that  no  such  withholding  is  required,
        withhold  taxes from such payments at the  applicable  statutory rate in
        the case of  payments to or for any Bank  organized  under the laws of a
        jurisdiction  outside  the  United  States or the  Federal  Republic  of
        Germany,  as the  case  may be.  If any Bank  fails  to  furnish  to the
        Borrower,  Kronos  Titan or the  Agent  (as  applicable)  forms or other
        documents  necessary for claiming exemption from United States or German
        withholding  tax, then payments to such Bank shall be net of any amounts
        the Borrower,  Kronos Titan or the Agent (as  applicable) is required to
        withhold under applicable law, provided,  however, that, notwithstanding
        anything in this Agreement to the contrary,  any Bank that is subject to
        withholding as a result of a change in circumstances occurring after May
        30,  1990 of the type  described  in SECTION  14.01 shall be entitled to
        payments pursuant to SECTION 11.01(A).

        Each Bank hereby  represents  and  warrants to the  Borrower  and Kronos
        Titan that,  on the date that it became or becomes a Bank in  accordance
        with the terms of the Original  Agreement,  the First Restated Agreement
        or this  Agreement,  respectively  (as may be  applicable),  its Lending
        Office was or is  entitled  to receive  payments  of  principal  of, and
        interest on, Loans made by such Bank from such  Lending  Office  without
        withholding  or  deduction  for or on  account  of Taxes  imposed by the
        United  States  of  America,   Germany  or  any   respective   political
        subdivisions of the United States of America or Germany.

11.03   If the Borrower  and/or  Kronos Titan makes an increased  payment to any
        Bank  pursuant  to  SECTION  11.01  and  such  Bank  determines  in  its
        reasonable  discretion  that it has  received  or been  granted a credit
        against or relief or remission for, or payment of tax paid or payable by
        it in  respect of or  calculated  with  reference  to the  deduction  or
        withholding giving rise to such payment,  such Bank shall, to the extent
        that  it can in its  sole  discretion  do so  without  prejudice  to the
        retention of the amount of such credit, relief,  remission or repayment,
        pay to the Borrower and/or Kronos Titan (as  applicable)  such amount as
        such Bank shall have  calculated to be attributable to such deduction or
        withholding. If Taxes are incorrectly or illegally paid or assessed, and
        if any Bank or the Agent  contests  the  payment or  assessment  of such
        Taxes,  such Bank or the Agent shall refund, to the extent of any refund
        made to such Bank or the Agent,  any amounts paid by the Borrower and/or
        Kronos  Titan  under  SECTION  11.01 in respect of such  Taxes.  Amounts
        payable pursuant

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        to this  SECTION  11.03 shall be paid  within 30 (thirty)  days from the
        date of receipt of the relevant refund by such Bank or the Agent (as the
        case may be).

11.04   All payments to be made by the Borrower  and/or  Kronos Titan under this
        Agreement  shall be made in the appropriate  currency  (Deutsche Mark or
        U.S.  Dollars,  as applicable)  and in immediately  available  funds not
        later than 10:00 a.m.  (local time at Munich) on the date upon which the
        relevant  payment is due, (a) with respect to payments in Deutsche Mark,
        to the Agent's account no.  6450025141  with  Bayerische  Hypotheken-und
        Wechselbank AG, Munich, or (b) with respect to payments in U.S. Dollars,
        to the Agent's  account no. 001 1 329 026 with The Chase  Manhattan Bank
        N.A.,  New York,  or (in either  case) to such other bank and account as
        the Agent  may from  time to time  designate  by  written  notice to the
        Borrower and/or Kronos Titan (as  applicable).  All payments  (including
        prepayments)  of  principal  or  interest  accrued  with  respect to the
        Revolving  Portion  of the Loans  shall be  applied  (i)  first,  to the
        payment of interest accrued with respect to the Revolving  Portion other
        than the Kronos Titan Revolving  Portion (until such interest is paid in
        full), (ii) second,  to the payment of the outstanding  principal amount
        of the Revolving  Portion other than the Kronos Titan Revolving  Portion
        (until such principal is paid in full),  (iii) third,  to the payment of
        interest  accrued  with respect to the Kronos  Titan  Revolving  Portion
        (until such interest is paid in full),  and (iv) fourth,  to the payment
        of the  outstanding  principal  of the Kronos  Titan  Revolving  Portion
        (until such principal is paid in full).

11.05   All payments to be made by the Agent to the Borrower  (or,  with respect
        to advances  under the Kronos Titan  Revolving  Portion,  Kronos  Titan)
        under this Agreement shall be made not later than 10:00 a.m. (local time
        at Munich) on the date upon which the  relevant  payment is due and,  at
        the risk of the Borrower (and, with respect to advances under the Kronos
        Titan Revolving Portion,  Kronos Titan), remitted to, in the case of the
        Borrower,  an account in Munich or  Luxembourg  maintained  at  Hypobank
        International S.A. or an affiliate of Hypobank  International S.A. which
        is pledged to secure the Loans in  accordance  with SECTION 16.40 or, in
        the case of Kronos Titan, an account of Kronos Titan.

11.06   Each Bank shall make available to the Agent in the appropriate  currency
        (Deutsche  Mark or U.S.  Dollars,  as the case may be) as the  Agent may
        from time to time designate its portion of the Loan  hereunder  prior to
        10:00 a.m.  (local time at Munich) on the Drawdown Date or, with respect
        to any  redenomination  of any advance  pursuant to SECTION 2.06, on the
        first day of the next succeeding Interest Period, as the case may be, to
        such  account  as the  Agent  may from  time to time  designate  for the
        account of the Borrower  and/or Kronos Titan (as  applicable).  Not less
        than 2 (two)  Business Days prior to the  effective  date of any initial
        advance of the Loan in U.S. Dollars, each Bank shall notify the Agent of
        the  identity  and  location  of the  Lending  Office  for such  Bank in
        relation to all advances and payments to be denominated in U.S.  Dollars
        in the event that such  Lending  Office is  different  from the  Lending
        Office previously designated for the

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        Loan,  provided,  however,  that (a) each Bank shall utilize the Lending
        Office  previously  designated for the Loan unless it is prohibited from
        doing so by applicable regulatory  requirements,  (b) if the use of such
        previously  designated Lending Office is so prohibited,  such Bank shall
        use its best  efforts to use a Lending  Office  entitled to an exemption
        from United  States and German  withholding  taxes (but no Bank shall be
        required to establish an office or branch or obtain any authorization to
        engage in banking activities in any jurisdiction in order to be entitled
        to any exemption  from United States  withholding  taxes),  and (c) such
        Bank shall give written  notice to the Borrower  and/or Kronos Titan (as
        applicable)  if it is unable to utilize  its Lending  Office  previously
        designated for the Loan and if its Lending Office  utilized for the Loan
        is not entitled to an exemption from U.S. and German  withholding taxes,
        and further  provided that the Borrower shall not be in any way relieved
        of any  obligation  to gross up any  payments to be made to the Agent or
        any Bank under this  Agreement.  All advances to be made by each Bank in
        U.S. Dollars shall be made available  through the Lending Office of such
        Bank so designated for advances in U.S. Dollars.

11.07   Except for  payments  received  by the Agent for its  account or for the
        account of a specific Bank in accordance with this Agreement,  the Agent
        shall  promptly  distribute  in like  funds and  currency  each  payment
        received by it for the  account of the Banks  ratably in  proportion  to
        their  portion  of the Loan or,  as the  case may be,  their  respective
        Commitments.

11.08   Where an amount is to be made  available  under  this  Agreement  by the
        Agent to a  Person,  the Agent  shall  not be bound to make such  amount
        available  to such  Person  until the  Agent has been able to  establish
        whether or not such amount has been made available to the Agent.  If the
        Agent makes an amount  available  to the  Borrower  and/or  Kronos Titan
        which has not,  but should have,  been made  available to the Agent by a
        Bank, the Borrower  and/or Kronos Titan (as  applicable)  shall (without
        prejudice to any rights the Borrower and/or Kronos Titan (as applicable)
        may have  against that Bank) refund that amount to the Agent on request.
        If the Agent  makes an amount  available  to a Bank  which has not,  but
        should have,  been made  available  to the Agent by the Borrower  and/or
        Kronos Titan,  that Bank shall  (without  prejudice to any rights it may
        have against the Borrower  and/or Kronos Titan,  as  applicable)  refund
        that amount to the Agent on a date to be  determined  by the Agent after
        consultation with such Bank. Where, in accordance with the foregoing, an
        amount is to be  refunded to the Agent,  the Agent in addition  shall be
        indemnified by the Person who has failed to make an amount  available as
        required  under this  Agreement  against any  reasonable  interest costs
        actually  incurred  and paid by the Agent by reason of any lapse of time
        between the date on which the amount was made available to any Person by
        the Agent and the date on which the amount was  refunded to the Agent in
        full (including,  without limitation,  any interest paid by the Agent in
        respect  of funds  borrowed  by the Agent in order to fund  such  amount
        during such period).

11.09   Any currency  specified in accordance  with this Agreement  shall be the
        currency  of  account  and  of  payment  in  all  events.   The  payment
        obligations  of the  Borrower and Kronos  Titan  hereunder  shall not be
        discharged by an amount paid in another currency, whether

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        pursuant  to a judgment or  otherwise,  to the extent that the amount so
        paid upon  conversion by the Agent or the Banks (as  applicable)  to the
        specified  currency under normal and reasonable  banking procedures does
        not yield at the place when  payment is due the amount of the  specified
        currency due hereunder. In the event that any payment by or on behalf of
        the Borrower  and/or  Kronos  Titan,  whether  pursuant to a judgment or
        otherwise,  upon such  conversion  and after the  deduction of all fees,
        costs and expenses  relating  thereto does not result in payment of such
        amount of the specified  currency at the place payment is due, the Agent
        and each Bank shall be  entitled  to receive  from the  Borrower  and/or
        Kronos Titan (as applicable),  and shall have a separate cause of action
        for,   the   deficiency   in  respect  of  the  payments  due  to  each,
        respectively.

                          ARTICLE 12.  DEFAULT INTEREST AND INDEMNITY

12.01   In the event of a failure by the  Borrower to pay any sum on the date on
        which  such  sum is due  and  payable  pursuant  to this  Agreement  and
        irrespective  of any  notice  by the  Agent or any  other  Person to the
        Borrower in respect of such failure,  the Borrower shall pay interest on
        such sum,  on  demand,  from the date of such  failure up to the date of
        actual  payment  (both  after  and  before  any  judgment)  at the rate,
        increased by the sum of the Margin plus 2% (two percent),  determined by
        the Agent to be the arithmetic mean (rounded upwards,  if necessary,  to
        the nearest four decimal  places) of the rates  notified to the Agent by
        the  Reference  Banks to be those at which  deposits in Deutsche Mark or
        U.S.  Dollars  as  the  Agent  may  select  in  its  discretion   (after
        consultation  with the Banks) for such period as the Agent may select in
        its  discretion  (after  consultation  with the Banks) are so offered to
        each Reference Bank by prime banks in the London interbank Euro-currency
        market at or about 11:00 a.m.  (London time) for value 2 (two)  Business
        Days after the Business  Day  immediately  succeeding  that on which the
        Agent  becomes  aware  of such  failure  and,  so  long  as the  failure
        continues, such rate shall be recalculated on the same basis thereafter,
        provided that:

        (a)    if any Reference  Bank is unable or otherwise  fails to furnish a
               quotation  for the purposes of this SECTION  12.01,  the interest
               rate  shall  be  determined  on the  basis  of  the  quotation(s)
               furnished by the remaining Reference Bank(s); and

        (b)    if for any such period,  none of the Reference  Banks was offered
               deposits in the required amount and for the required period,  the
               rate of interest applicable thereto shall be the weighted average
               (having  regard to the  respective  portions  of such unpaid sum)
               (rounded  upwards,  if  necessary  to the  nearest  four  decimal
               places) per annum of the  respective  rates notified to the Agent
               by each  Reference  Bank  as  being  that  which  expresses  as a
               percentage  rate per  annum  the cost to such  Reference  Bank of
               obtaining such deposits from such sources as it may select having
               reasonable regard to the interests of the Borrower.

        Interest  accruing  under this SECTION 12.01 shall be due and payable at
        the end of each period by reference to which it is calculated.


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12.02   Without prejudice to the foregoing and irrespective of any notice by the
        Agent or any other Person to the  Borrower in respect of the  Borrower's
        failure to make any payment  when due or in respect of any other  matter
        relating to this SECTION 12.02,  the Borrower shall  indemnify the Agent
        and  the  Banks  against  any  and  all  damages,   losses  or  expenses
        (including,  without  limitation,  losses  incurred  in  paying  default
        interest or in  liquidating  or employing  deposits  from third  parties
        acquired  to  make,  fund or  maintain  the  Loan or any  part  thereof,
        including  interest and penalties on unpaid Taxes, if any, and including
        losses on foreign currency  exchanges,  if any, with respect to portions
        of the Loan denominated in U.S.  Dollars) which any of them may properly
        and  reasonably  sustain or incur as a consequence of (a) the failure by
        the  Borrower  to borrow  pursuant to any Notice of  Borrowing,  (b) the
        failure by the Borrower to pay any sum,  including  Taxes,  if any, when
        due and payable under this Agreement upon the occurrence of any Event of
        Default,  (c) the  funding  of the Loan or any  portion  thereof in U.S.
        Dollars as opposed to Deutsche Mark or (d) the liquidation or employment
        of amounts borrowed or contracted for relating to, or the termination or
        unwinding of any contract  entered into in order to fund,  an advance in
        U.S. Dollars requested by the Borrower that, by reason of the occurrence
        of any event specified in SECTION 7.01, is not funded as requested.

12.03   If for the  purposes  of  filing  a claim  or  proof  for  obtaining  or
        enforcing  any  judgment in any court,  it is necessary to convert a sum
        due under this  Agreement in Deutsche Mark or U.S.  Dollars (as the case
        may be) (the  "Original  Currency")  into another  currency  (the "Other
        Currency"),  the parties  hereto agree,  to the fullest extent that they
        may  effectively do so, that the rate of exchange used shall be the rate
        of  exchange  offered by any one or more of the  Reference  Banks to the
        Agent,  in respect of the relevant  sums, at which,  in accordance  with
        normal banking procedures,  the Agent could purchase the greatest amount
        of the Original  Currency with the Other Currency at or about 11:00 a.m.
        in London on the Business Day preceding  that on which final judgment is
        given.  The  obligation of the Borrower in respect of any sum due in the
        Original  Currency from it to any Bank or the Agent under this Agreement
        shall, notwithstanding any judgment in any Other Currency, be discharged
        only to the extent that on the  Business Day  following  receipt by such
        Bank or the Agent (as the case may be) of any sum  adjudged to be so due
        in such Other Currency,  such Bank or the Agent (as the case may be) may
        in  accordance  with normal  banking  procedures  purchase  the Original
        Currency  with  such  Other  Currency.  If the  amount  of the  Original
        Currency so purchased is less than the sum  originally  due to such Bank
        or the Agent (as the case may be) in the Original Currency, the Borrower
        agrees, as a separate  obligation and notwithstanding any such judgment,
        to  indemnify  immediately  such  Bank or the Agent (as the case may be)
        against  such  loss,  and if the  amount  of the  Original  Currency  so
        purchased  exceeds the sum  originally  due to any Bank or the Agent (as
        the case may be) in the  Original  Currency,  such Bank or the Agent (as
        the case may be) agrees to remit to the Borrower such excess.  The above
        indemnity shall constitute a separate and independent  obligation of the
        Borrower from its other obligations under this Agreement and shall apply
        irrespective of any grace period granted by the Agent or the Banks.


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12.04   Any prepayment or repayment of principal made under this  Agreement,  if
        made otherwise than on an Interest  Payment Date relative to the amounts
        prepaid or repaid,  shall be made together with accrued interest thereon
        and such  additional  amount as each Bank may  certify as  necessary  to
        compensate it for any damages or losses incurred or to be incurred by it
        in  connection  with such  prepayment  or repayment  (including  loss of
        Margin and losses on account of funds borrowed in order to make, fund or
        maintain  its  proportion  of the Loan or any part  thereof  prepaid  or
        repaid).

                      ARTICLE 13.  SET-OFF AND REDISTRIBUTION OF PAYMENTS

13.01   Upon the occurrence  and during the  continuance of any Event of Default
        specified in SECTION 18.01 consisting of the failure to pay principal of
        the Loan or any portion thereof and subject to the prior written consent
        of the Agent or the Majority Banks or upon the occurrence and during the
        continuance of any Event of Default and the acceleration of the maturity
        of the Loan  pursuant  to the  provisions  of ARTICLE  18,  each Bank is
        hereby  authorized  at any time and from  time to time,  to the  fullest
        extent  permitted  by law,  to set off and  apply  any and all  deposits
        (general or special,  time or demand,  provisional or final) at any time
        held  and  other  indebtedness  at any time  owing by such  Bank (at any
        office or branch) to or for the  credit or the  account of the  Borrower
        against all or any portion of the Loan outstanding  under this Agreement
        and other amounts payable hereunder. Each Bank agrees promptly to notify
        the Borrower after any such set-off and  application  made by such Bank,
        provided  that the  failure  to give such  notice  shall not  affect the
        validity of such set-off and application.  The rights of each Bank under
        this ARTICLE 13 are in addition to other rights and remedies (including,
        without  limitation,  other rights of set-off) which such Bank may have.
        Each Bank agrees that if it shall, by exercising any right of set-off or
        counterclaim  or  otherwise,  receive  payment  of a  proportion  of the
        aggregate  amount of  principal  and  interest  due with  respect to any
        portion  of the Loan  held by it which is  greater  than the  proportion
        received  by any  other  Bank in  respect  of the  aggregate  amount  of
        principal  and interest due with respect to any portion of the Loan held
        by such other Bank,  the Bank  receiving  such  proportionately  greater
        payment  shall  purchase such  participation  in the portion of the Loan
        held by the other Banks,  and such other  adjustments  shall be made, as
        may be required so that all such payments of principal and interest with
        respect to the Loans held by the Banks  shall be shared by the Banks pro
        rata; provided that nothing in this ARTICLE 13 shall impair the right of
        any Bank to exercise  any right of set-off or  counterclaim  it may have
        and to apply the  amount  subject  to such  exercise  to the  payment of
        indebtedness  hereunder.  Subject to SECTION 13.02 hereof,  the Borrower
        agrees,  to the fullest  extent such holder may  effectively do so under
        applicable law, that any holder of a participation in a Loan, whether or
        not acquired pursuant to the foregoing arrangements, may exercise rights
        of  set-off  or  counterclaim  and other  rights  with  respect  to such
        participation  as  fully as if such  holder  of a  participation  were a
        direct  creditor of the  Borrower  in the amount of such  participation.
        Anything herein to the contrary notwithstanding, nothing in this ARTICLE
        13 shall impair the right of the Borrower to receive  notice and to have
        the opportunity to cure certain Events of Default as provided in ARTICLE
        18 or otherwise prior to the declaration of an acceleration of maturity.

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13.02   Except for payments to a Bank from the Agent which were  received by the
        Agent for the account of such Bank in accordance  with the provisions of
        this  Agreement,  if any  Bank  shall  at any time  receive  payment  or
        satisfaction of all or a part of its share of the Loan, interest thereon
        or any other amount payable hereunder,  whether by setoff,  counterclaim
        or otherwise, in a proportion which, in relation to any amounts received
        by any other  Bank or Banks at the same time,  represents  more than its
        percentage  participation  in the Loan,  then such Bank shall notify the
        Agent  thereof  and shall pay to the Agent not later  than 10 (ten) days
        after request by the Agent for account of the other Banks such amount as
        determined  by the Agent as will  ensure  that each Bank will  receive a
        proportion of such payment equal to its percentage participation.

13.03   In the event  that at any time any Bank shall be  required  to refund to
        the  Borrower  any amount  which has been paid to or  received  by it by
        set-off,  counterclaim  or otherwise on account of any part of the Loan,
        interest  thereon or any other amount  payable  hereunder  and which has
        been paid to any other Bank pursuant to this ARTICLE 13, such other Bank
        shall repay a  proportionate  amount of the amounts so refunded  without
        interest.

13.04   The  Borrower  and  the  Banks  expressly  agree  that  payments  by  or
        recoveries from the Borrower shall be distributed in accordance with the
        provisions  of this  ARTICLE 13 without the need for further  consent or
        the completion of any other formalities whatsoever.

13.05   If a Bank is required to make any payment to any other Bank  pursuant to
        this ARTICLE 13, then,  subject to SECTION  13.02,  the liability of the
        Borrower to the Bank making such payment under this  Agreement  shall be
        treated as not having been reduced by the amount of such payment and the
        liability of the Borrower to any Bank  receiving  such payment  shall be
        treated as having been reduced by the amount of the payment  received by
        such Bank.

                       ARTICLE 14.  CHANGE OF CIRCUMSTANCES; ILLEGALITY;
                                     RESERVE REQUIREMENTS

14.01   Change of Circumstances

        (a)    If, after May 30, 1990, the adoption of any applicable  law, rule
               or  regulation,  or any  change  therein,  or any  change  in the
               interpretation or  administration by any governmental  authority,
               central bank or comparable agency charged with the interpretation
               or  administration  thereof,  or  compliance  by any Bank (or its
               Lending  Office)  with any request or  directive  (whether or not
               having the force of law) of any such  authority,  central bank or
               comparable agency:

               (1)    shall subject any Bank (or its Lending Office) to any tax,
                      duty or  other  charge  with  respect  to the  Loan or its
                      obligation  to make such  Loan,  or any part  thereof,  or
                      shall change the basis of taxation of payments to any Bank
                      (or its Lending Office) of the principal of or interest on
                      its Loan, or any

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                      part  thereof,   or  any  other  amounts  due  under  this
                      Agreement in respect of its Loan or its obligation to make
                      the Loan,  or any part thereof  (except for changes in the
                      rate of tax on the  overall net income of such Bank or its
                      Lending Office imposed by the  jurisdiction  in which such
                      Bank's  principal  executive  office or Lending  Office is
                      located); or

               (2)    shall  impose,  modify  or deem  applicable  any  reserve,
                      special  deposit  or  similar   requirement,   (including,
                      without  limitation,  any such requirement  imposed by the
                      Federal  Reserve)  against assets of, deposits with or for
                      the  accounts  of, or credit  extended by any Bank (or its
                      Lending  Office)  or  shall  impose  on any  Bank  (or its
                      Lending  Office)  or on the  London  interbank  market any
                      other  condition  affecting its Loan, or any part thereof,
                      or  other   indebtedness   under  the   Agreement  or  its
                      obligations to make the Loan;

               and the result of any of the foregoing is to increase the cost to
               such Bank (or its Lending  Office) of making or  maintaining  the
               Loan, or any portion thereof,  or to reduce the amount of any sum
               received or receivable by such Bank (or its Lending Office) under
               this Agreement with respect  thereto,  then,  within 15 (fifteen)
               days after  demand by such Bank (with a copy to the  Agent),  the
               Borrower  shall pay  promptly  for the  account of such Bank such
               additional  amount or  amounts as will  compensate  such Bank for
               such increased  cost or reduction.  Such Bank shall submit to the
               Borrower  and the  Agent a  certificate  showing,  in  reasonable
               detail, the calculation of the amount of such increased cost.

        (b)    If,  after  May  30,  1990,  the  adoption  of any  law,  rule or
               regulation  of  any  general   applicability   regarding  capital
               adequacy,   or  any  change   therein,   or  any  change  in  the
               interpretation  or  administration   thereof  by  a  governmental
               authority,  central bank or  comparable  agency  charged with the
               interpretation or administration thereof, or compliance by a Bank
               (or its Lending  Office) with any request or directive  regarding
               capital adequacy  (whether or not having the force of law) of any
               such  authority,  central bank or comparable  agency  (including,
               without  limitation,  and whether  promulgated  or made before or
               after  the  Second   Restatement   Date,  any  law,   regulation,
               interpretation,  guideline or request  contemplated by the report
               dated July 1988 entitled  "International  Convergence  of Capital
               Measurement and Capital  Standards" issued by the Basle Committee
               on Banking Regulations and Supervisory Practices),  shall, in the
               determination  of a Bank, have the effect of reducing the rate of
               return of such  Bank's  capital to a level  below that which such
               Bank could have  achieved  as a  consequence  of its  obligations
               hereunder but for such  adoption,  change or  compliance  (taking
               into  consideration  such Bank's policies with respect to capital
               adequacy), by an amount deemed by such Bank to be material in its
               sole and absolute  discretion,  then,  within 15  (fifteen)  days
               after  demand  by  such  Bank  (with a copy  to the  Agent),  the
               Borrower shall pay to such Bank such additional amount or amounts
               as will compensate such Bank for such reduction.


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        (c)    Each Bank will notify the Borrower and the Agent  promptly of any
               event  of which  it has  knowledge,  occurring  after  the  First
               Restatement  Date,  which will entitle such Bank to  compensation
               pursuant  to this  SECTION  14.01 and will  designate a different
               Lending  Office if such  designation  will avoid the need for, or
               reduce the  amount of,  such  compensation  and will not,  in the
               judgment of such Bank, be otherwise disadvantageous to such Bank.
               A  certificate  of any  Bank  claiming  compensation  under  this
               SECTION 14.01 and setting forth the additional  amount or amounts
               to be paid to it under this Agreement  shall be conclusive in the
               absence of manifest error.

        (d)    Upon the  occurrence  of any of the events  described  in SECTION
               14.01(A)  or (B),  the  Borrower  may prepay  without  premium or
               penalty except as otherwise provided in SECTION 12.04 such Bank's
               portion of the Loan  together with all interest  accrued  thereon
               and all fees and other amounts  (including  amounts payable under
               SECTION 14.01(A) or (B) above) payable to such Bank hereunder, on
               giving not less than 10 (ten) days  prior  written  notice to the
               Agent.  Such Bank's Commitment shall be canceled on the giving of
               such notice.

14.02   ILLEGALITY

        (a)    Notwithstanding  anything  to  the  contrary  contained  in  this
               Agreement,  if any change in law,  regulation or treaty or in the
               interpretation or application  thereof after May 30, 1990, by any
               authority charged with the  administration  thereof shall make it
               unlawful  for any Bank to make,  fund or maintain  its portion of
               the  Loan   (although   such  Bank  may  lawfully   maintain  its
               Commitment)  or to give  effect to its  obligations  through  its
               Lending Office as contemplated hereby, such Bank may give written
               notice  thereof to the Agent to be  forwarded by the Agent to the
               Borrower  and the other Banks.  Before  giving such notice to the
               Agent,  such  Bank,  to the  reasonable  extent  possible,  shall
               designate a different  Lending  Office if such  designation  will
               avoid the need for giving such notice.

        (b)    Until  such Bank  notifies  the  Borrower  and the Agent that the
               circumstances  of the type described  above no longer exist,  the
               obligation  of such Bank to make its portion of the Loan shall be
               suspended  and the Borrower  may, at its option,  terminate  such
               Bank's Commitment, by notice to such Bank and to the Agent, to be
               given  within 30  (thirty)  days  after the date of notice by the
               Agent to the Borrower, as provided above.

        (c)    If such Bank shall determine that it may not lawfully continue:

               (1)    to maintain and fund its portion of the  outstanding  Loan
                      to maturity; and

               (2)    to  maintain  its  Commitment  to  maturity,  and shall so
                      specify in such notice, the Borrower shall prepay, without
                      premium or penalty except as otherwise provided in SECTION
                      12.04, forthwith (or if permitted by law, on the next

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<PAGE>



                      following  Interest  Payment Date) such Bank's  portion of
                      the Loan,  together with all interest  accrued thereon and
                      all fees and other amounts payable to such Bank under this
                      Agreement.  Such Bank's  obligations  under this Agreement
                      and its Commitment shall be canceled on the giving of such
                      notice.

14.03   RESERVE REQUIREMENTS

        The  Borrower  shall pay to the Agent for the  account of each Bank,  so
        long as such Bank shall be  required  under  regulations  of the Federal
        Reserve to  maintain  reserves  with  respect to  liabilities  or assets
        consisting  of  or  including  Eurocurrency  Liabilities,   interest  in
        addition to the applicable  interest rate plus the applicable  Margin on
        the  unpaid  principal  amount  of the  applicable  portion  of the Loan
        advanced by such Bank,  from the date of such Loan until such  principal
        amount is paid in full,  an amount  equal to an interest  rate per annum
        equal at all times to the remainder obtained by subtracting (i) the rate
        (not including the applicable  Margin) for the Interest  Period for such
        Loan,  from (ii) the rate  obtained by dividing  the rate  described  in
        CLAUSE  (I) of this  SECTION  14.03 by a  percentage  equal to 100% (one
        hundred percent) minus the Eurocurrency Rate Reserve  Percentage of such
        Bank for such Interest Period, payable on each date on which interest is
        payable.  A certificate of each Bank setting forth in reasonable  detail
        the  calculation of the amount of such increased  costs and such amounts
        as shall be necessary to compensate  such Bank for such costs,  shall be
        delivered  to the Borrower  and the Agent.  The Borrower  shall pay each
        Bank the amount shown as due on any such certificate  within 30 (thirty)
        days after its receipt of the same.

        Each Bank that became a "Bank" pursuant to the Original  Agreement prior
        to the  Primary  Syndication  Completion  Date waives the right to claim
        additional amounts based upon reserve requirements in effect on the date
        it became a Bank;  provided,  however,  that such  waiver does not apply
        with  respect to  reserve  requirements  to which such Bank is  entitled
        pursuant to Regulation D.

                          ARTICLE 15.  REPRESENTATIONS AND WARRANTIES

        The Borrower  represents and warrants as of the Second  Restatement Date
(which  representations  and  warranties  shall be deemed to be  repeated on the
first day of each  Interest  Period)  and as of the date of each  advance of the
Revolving  Portion  existing  during the term of this  Agreement  (except to the
extent such  representations and warranties are expressly made only in reference
to another specific date) that:

15.01   CORPORATE EXISTENCE OF BORROWER AND SUBSIDIARIES

        The Borrower is a corporation  duly organized,  validly  existing and in
        good standing  under the laws of the State of Delaware with a registered
        office in the Federal  Republic of Germany.  The Borrower has  corporate
        power and authority to own its assets and carry on business as it is now
        being conducted in the United States and the Federal Republic of

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<PAGE>



        Germany.  Each of the Subsidiaries is a corporation or limited liability
        company  duly  organized  and  validly  existing  under  the laws of its
        respective  jurisdiction of incorporation,  with the corporate power and
        authority  to own its  assets and carry on  business  as it is now being
        conducted.

15.02   POWER AND AUTHORITY OF BORROWER

        The  Borrower  had,  at the  time  of  its  execution  of  the  Original
        Agreement,  the First  Restated  Agreement and the other Loan  Documents
        executed  in  connection  with  the  Original  Agreement  and the  First
        Restated Agreement, the necessary corporate power and authority to enter
        into the Original Agreement,  the First Restated Agreement and such Loan
        Documents  to which it is a signatory  and to exercise its rights and to
        perform its obligations under the Original Agreement, the First Restated
        Agreement  and  such  other  Loan  Documents,  and has  duly  taken  all
        corporate  action  required to authorize  the execution and delivery of,
        and the performance of its obligations  under,  the Original  Agreement,
        the First Restated  Agreement and such Loan Documents.  The Borrower has
        the necessary corporate power and authority to enter into this Agreement
        and the other Loan Documents  executed in connection with this Agreement
        to which it is a signatory and to exercise its rights and to perform its
        obligations  under this Agreement and such Loan Documents,  and has duly
        taken all  corporate  action  required to authorize  the  execution  and
        delivery  of,  and  the  performance  of  its  obligations  under,  this
        Agreement and such Loan Documents.

15.03   POWER AND AUTHORITY OF PLEDGORS AND GUARANTORS

        Each of the Pledgors has the necessary  corporate power and authority to
        enter  into  its  respective   Pledge   Agreement  and  to  perform  its
        obligations under its respective  Pledge  Agreement,  and has duly taken
        all  corporate  action  required to authorize the execution and delivery
        of, and the performance of its obligations  under, its respective Pledge
        Agreement;  and each  Guarantor  has the necessary  corporate  power and
        authority  to enter into its  respective  Guaranty  and to  perform  its
        obligations  under  its  respective  Guaranty,  and has duly  taken  all
        corporate  action  required to authorize  the execution and delivery of,
        and the performance of its obligations under, its respective Guaranty.

15.04   RANK OF INDEBTEDNESS

        The claims of the Agent and the Banks  against the  Borrower  under this
        Agreement  will rank  senior in  respect of  priority  of payment to any
        Subordinated  Debt  and will  rank at least  pari  passu in  respect  of
        priority of payment with all other  present and future  Indebtedness  of
        the  Borrower  (excluding  rights of  secured  parties  with  respect to
        Permitted Liens).  As of the Second  Restatement Date, under the laws in
        force in the jurisdiction of incorporation of each of the Guarantors and
        in the jurisdiction of its principal place(s) of business, the claims of
        the Agent and the Banks  against  the  Guarantors  under the  respective
        Guaranties  will rank at least  pari passu in  respect  of  priority  of
        payment with

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<PAGE>



        all present and future Indebtedness of the Guarantors  (excluding rights
        of secured  parties with respect to Permitted  Liens) subject to matters
        described on SCHEDULE 4.

15.05   NO CONDITIONS TO PERFORMANCE AND ENFORCEABILITY

        As of the Second  Restatement  Date,  under the laws in force, all acts,
        conditions   and  things  have  been  done,   fulfilled  and  performed,
        including, without limitation, obtaining all authorizations, permits and
        consents, and making all filings and registrations, in order:

        (a)    to enable the Borrower,  Guarantor and Pledgors lawfully to enter
               into, to exercise  rights under and to perform and to comply with
               their respective obligations under the Loan Documents; and

        (b)    to ensure that the  obligations  assumed under the Loan Documents
               are legal, valid,  binding and enforceable except as set forth on
               SCHEDULE 4.

15.06   NO FILINGS; NO STAMP TAXES

        As of the Second  Restatement  Date,  under the laws in force, it is not
        necessary in order to be legal, valid,  binding and enforceable (subject
        to matters described in SCHEDULE 4):

        (a)    that the Original Agreement,  the First Restated Agreement,  this
               Agreement or any of the other Loan  Documents  (except the Pledge
               Agreement  for Societe  Industrielle  du Titane,  S.A.) be filed,
               recorded or  enrolled  with any court or other  authority  in any
               jurisdiction; or

        (b)    that any  stamp,  registration  or  similar  tax be paid on or in
               relation to the Original Agreement, the First Restated Agreement,
               this Agreement or any other Loan  Documents,  except such actions
               or payments  that have been taken as of the date of the  Original
               Agreement  or the First  Restated  Agreement  or, with respect to
               this Agreement and the Loan Documents executed in connection with
               this Agreement, as of the Second Restatement Date.

15.07   LEGAL, VALID AND ENFORCEABLE OBLIGATIONS

        The Loan Documents have been duly executed and delivered by the Borrower
        and its Subsidiaries who are signatories  thereto, and each of such Loan
        Documents is a legal,  valid and binding  obligation  of such entity and
        enforceable  against such entity in accordance  with the terms  thereof,
        except to the extent  that  enforcement  may be  limited by  bankruptcy,
        insolvency,  reorganization,  moratorium or other similar laws affecting
        the  enforcement  of  creditors'  rights  generally and by principles of
        equity and except as set forth in SCHEDULE 4. The execution and delivery
        of the Loan Documents by the Borrower, and its Subsidiaries, as the case
        may be, who are signatories thereto, do not contravene any provisions of
        the  Certificate  of   Incorporation   and  By-Laws,   or  corresponding
        constitutive  documents  by  whatever  name,  of  the  Borrower  or  its
        Subsidiaries.

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15.08   BANKRUPTCY

        Neither the Borrower nor any of its Subsidiaries has taken any corporate
        action nor have any other  steps been  taken or legal  proceedings  been
        started or (to the best of the  Borrower's  knowledge  and belief)  been
        threatened  against any of the Borrower or any of its  Subsidiaries  for
        the winding-up,  dissolution,  administration or reorganization (in each
        such case under bankruptcy or insolvency laws) or for the appointment of
        a receiver,  administrator,  administrative receiver, trustee or similar
        officer  of it or  them  or of any or all  of  its or  their  assets  or
        revenues,  except the  dissolution of  Subsidiaries  which are not Major
        Subsidiaries  with  respect to which  notice is or has been given to the
        Agent.

15.09   NO DEFAULTS; NO LITIGATION

        Neither the Borrower nor any of its  Subsidiaries  is in breach of or in
        default  under any  agreement to which it is a party or which is binding
        on it or any of its or their  assets,  which  breach  or  default  could
        reasonably be expected to have a Material Adverse Effect on the Borrower
        and its  Consolidated  Subsidiaries,  taken as a whole; and no action or
        administrative  proceeding  before any court,  arbitration  tribunal  or
        governmental agency has been commenced or, to the Borrower's  knowledge,
        threatened against the Borrower or any Subsidiary,  or any assets of any
        of them, in which an adverse  decision  could  reasonably be expected to
        have a Material  Adverse  Effect on the  Borrower  and its  Consolidated
        Subsidiaries,  taken  as a whole.  As of the  Second  Restatement  Date,
        SCHEDULE 5 sets forth a summary  of each such  action or  administrative
        proceeding before any court, arbitration tribunal or governmental agency
        pending or, to the knowledge of the Borrower,  threatened in writing, as
        of the Second  Restatement Date which action or proceeding may result in
        liability to the Borrower  and/or any  Subsidiary in an amount in excess
        of  DM  10,000,000  (Deutsche  Mark  Ten  Million).  As  of  the  Second
        Restatement  Date,  except as may be set forth on SCHEDULE 5, neither NL
        Industries  nor Kronos nor any other  Affiliate  of the  Borrower  is in
        breach of or  default  under  any of (a) the  Indentures  or the  senior
        secured notes or senior  secured  discount notes issued by NL Industries
        thereunder,  (b) the "First-Tier  Senior Mirror Note" or the "First-Tier
        Discount  Mirror Note" (as such terms are defined in the  Indentures) or
        (c) the Mirror Notes issued by the Borrower.

15.10   ENVIRONMENTAL COMPLIANCE

        (a)    Each of the Borrower and its Subsidiaries is in compliance in all
               respects with all applicable  Environmental Laws except where the
               failure to do so would not have a Material  Adverse Effect on the
               Borrower and its Consolidated Subsidiaries, taken as a whole;

        (b)    Except  where the failure to do so or absence  thereof  would not
               have  a  Material   Adverse   Effect  on  the  Borrower  and  its
               Consolidated  Subsidiaries,  taken  as a  whole,  (1) each of the
               Borrower  and its  Subsidiaries  has  obtained or applied for all
               environmental,  health and  safety  permits  necessary  for their
               respective operations;

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               (2) with  respect to all such permits  which have been  obtained,
               all such permits are in good standing other than those which have
               expired as to which  applications  for renewal or  extension  are
               pending;  (3) with  respect to all such  permits  which have been
               obtained,  each  of  the  Borrower  and  its  Subsidiaries  is in
               compliance in all material respects with all terms and conditions
               of such permits;  and (4) with respect to those permits for which
               applications  are  pending or renewals  or  extensions  have been
               requested, neither the Borrower nor any of its Subsidiaries is in
               violation  of any  applicable  law for the  failure  to have such
               permit in good standing;

        (c)    Neither the Borrower nor any of its Subsidiaries nor any of their
               respective properties or operations nor, to the best knowledge of
               the Borrower,  any of their formerly owned or operated properties
               are subject to any  outstanding  written  notice or order from or
               agreement  with  any  state,   federal,   foreign,   territorial,
               provincial,  local or other court or governmental authority,  nor
               subject to any judicial or administrative  proceeding  respecting
               any  Environmental  Law,  the  result  of  which  notice,  order,
               agreement or proceeding  would have a Material  Adverse Effect on
               the Borrower and its Consolidated Subsidiaries, taken as a whole;
               and

        (d)    Except as  described  on SCHEDULE 5, there are no  conditions  or
               circumstances  associated  with any property or operations of the
               Borrower  or any  Subsidiary  or,  to the best  knowledge  of the
               Borrower,  property formerly owned or operated by the Borrower or
               any Subsidiary or any of their  predecessors or former operations
               of the  Borrower  or  its  Consolidated  Subsidiaries,  including
               offsite   disposal   practices,   which   could   give   rise  to
               Environmental Claims that would have a Material Adverse Effect on
               the Borrower and its Consolidated Subsidiaries, taken as a whole.
               As of the Second  Restatement  Date,  SCHEDULE 5 also sets forth,
               for  each  site  or  location,   a  brief   description   of  all
               Environmental Claims involving amounts in excess of DM 10,000,000
               (Deutsche  Mark Ten  Million)  (or the  equivalent  amount in any
               currency).

15.11   FINANCIAL STATEMENTS

        The consolidated  and  consolidating  group financial  statements of the
        Borrower  and  its  Subsidiaries  as of  December  31,  1995  and  as of
        September  30,  1996,  respectively,  and for the year and  period  then
        ended, present fairly, in all material respects,  the consolidated group
        financial  position  and results of  operations  of the Borrower and its
        Subsidiaries  as of such dates and for such  periods,  all in conformity
        with German GAAP,  and neither the Borrower nor any of its  Subsidiaries
        had any material  liabilities as of December 31, 1995 or as of September
        30, 1996 (as  applicable),  which are not  reflected  in such  financial
        statements.


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15.12   NO MATERIAL ADVERSE CHANGE

        Since the preparation of the consolidated group financial  statements of
        the Borrower and its  Subsidiaries  as of September 30, 1996,  there has
        been no change which has had a Material  Adverse  Effect on the Borrower
        and its Consolidated Subsidiaries, taken as a whole.

15.13   ACCURATE INFORMATION

        The financial  projections for the Borrower and NL Industries  contained
        in the projection  package dated January 15, 1997, were prepared in good
        faith based on assumptions believed by the management of the Borrower to
        be reasonable as of such date.

15.14   NO VIOLATION, DEFAULTS OR LIENS

        The execution and delivery by the Borrower and its Subsidiaries,  as the
        case may be, of the Loan  Documents  and the exercise by the Borrower of
        its rights,  and the performance by the Borrower and its Subsidiaries of
        their respective  obligations,  under the Loan Documents will not result
        in:

        (a)    the creation of or require the imposition of any Lien in favor of
               any Person other than the Agent and/or the Banks; or

        (b)    the  existence of any event of default  (howsoever  called) under
               any agreement or contract to which the Borrower or any Subsidiary
               is a party or by which any of them or their  properties are bound
               which event of default  would have a Material  Adverse  Effect on
               any Company; or

        (c)    the  violation  of any  law or  regulation,  or by any  judgment,
               decree or order,  applicable to the Borrower or its  Subsidiaries
               which  violation  would  have a  Material  Adverse  Effect on any
               Company.

15.15   ERISA

        (a)    Except as disclosed in SCHEDULE 6 A attached hereto, with respect
               to all Pension Benefit Plans which are or have been maintained by
               the Borrower or any member of the Controlled Group:

               (1)    there  have  not  been any  prohibited  transactions,  the
                      aggregate   liability   for  which  either  has  not  been
                      satisfied in full or would have a Material  Adverse Effect
                      on the Borrower and its Consolidated  Subsidiaries,  taken
                      as a whole;

               (2)    none of such  plans  has been  terminated,  the  aggregate
                      liability for which either has not been  satisfied in full
                      or the liability  for which would have a Material  Adverse
                      Effect on the Borrower and its Consolidated Subsidiaries,

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<PAGE>



                      taken as a whole,  and if any of such  plans  has not been
                      terminated,   the   aggregate   liability   and  potential
                      liability  of the  Borrower,  if all  such  plans  were to
                      terminate, would not have a Material Adverse Effect on the
                      Borrower  and its  Consolidated  Subsidiaries,  taken as a
                      whole;

               (3)    none of such plans has any accumulated funding deficiency,
                      whether or not waived,  the aggregate  liability for which
                      either  has not been  satisfied  in full or  would  have a
                      Material   Adverse   Effect  on  the   Borrower   and  its
                      Consolidated Subsidiaries, taken as a whole;

               (4)    neither  the  Borrower  nor any  member of the  Controlled
                      Group  has  incurred  aggregate   liabilities   (excluding
                      premium  payments  made as and when  due) to the PBGC with
                      respect to all such plans which  liabilities  would have a
                      Material   Adverse   Effect  on  the   Borrower   and  its
                      Consolidated Subsidiaries, taken as a whole;

               (5)    there  have  been  no  reportable  events,  the  aggregate
                      liability for which either has not been  satisfied in full
                      or would have a Material  Adverse  Effect on the  Borrower
                      and its Consolidated Subsidiaries, taken as a whole.

               For  purposes  of this  SECTION  15.15,  the  terms  "accumulated
               funding   deficiency"  and  "reportable  event"  shall  have  the
               respective meanings assigned thereto by ERISA and/or the Code.

        (b)    Except as  disclosed  in SCHEDULE 6 B with respect to all Pension
               Benefit  Plans  currently  maintained or  participated  in by the
               Borrower or another  member of the Controlled  Group,  the amount
               for which the Borrower would be liable pursuant to the provisions
               of Section 4063 of ERISA would not have a Material Adverse Effect
               on the Borrower  and its  Consolidated  Subsidiaries,  taken as a
               whole, if all such plans had terminated.

        (c)    Except as disclosed in SCHEDULE 6 C, neither the Borrower nor any
               other member of the Controlled Group is now, nor has the Borrower
               or any other member of the Controlled  Group during the preceding
               10 (ten) years ever been, a  contributing  employer to a multiple
               employer plan or a  Multiemployer  Plan with respect to which the
               Borrower or any other member of the Controlled Group has:

               (1)    withdrawn as a substantial  employer or otherwise so as to
                      become  subject to the provisions of Section 4063 of ERISA
                      or to any  liability for  withdrawal  from such plan under
                      either  provisions  of  applicable  non-U.S.  laws or with
                      respect  to  the  applicable  plan  document,  unless  the
                      aggregate  liability and potential  liability with respect
                      to all  such  withdrawals  has been  satisfied  in full or
                      would not have a Material  Adverse  Effect on the Borrower
                      and its Consolidated Subsidiaries, taken as a whole;


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               (2)    incurred  or  caused  to  occur  a  "complete  withdrawal"
                      (within  the  meaning  of  Section  4203  of  ERISA)  or a
                      "partial  withdrawal"  (within the meaning of Section 4205
                      of  ERISA)  from a  Multiemployer  Plan  that is a Pension
                      Benefit  Plan so as to incur  withdrawal  liability  under
                      Section  4201 of ERISA,  or  incurred or caused to incur a
                      similar  event  which  could  result  in  liability  under
                      non-U.S.  laws with  respect to  Non-U.S.  Employee  Plans
                      unless the aggregate liability and potential liability for
                      all such  withdrawals  has been satisfied in full or would
                      not have a Material Adverse Effect on the Borrower and its
                      Consolidated Subsidiaries taken as a whole; or

               (3)    been a party to any  transaction or agreement  under which
                      the  provisions of Section 4204 of ERISA were  applicable,
                      unless  Borrower  can no  longer  be held  liable  for any
                      withdrawal  liability with respect to a Multiemployer Plan
                      to be  contributed  to by the  purchaser  pursuant to such
                      transaction  or agreement or the amount of the  withdrawal
                      liability which could be imposed on Borrower if there were
                      a partial or complete  withdrawal with respect to all such
                      Multiemployer  Plans  would  not have a  Material  Adverse
                      Effect on the Borrower and its Consolidated  Subsidiaries,
                      taken as a whole.

        (d)    Except as  disclosed  on  SCHEDULE 6 D, the  aggregate  potential
               withdrawal   liability  of  the  Borrower  with  respect  to  all
               Multiemployer  Plans and any similar  liabilities of the Borrower
               and its Subsidiaries and potential  liabilities  under applicable
               non-U.S.  laws  or  Non-U.S.  Employee  Plans  would  not  have a
               Material  Adverse  Effect on the  Borrower  and its  Consolidated
               Subsidiaries,  taken as a whole,  if the Borrower and all members
               of  the   Controlled   Group  were  to  withdraw  from  all  such
               Multiemployer  Plans and were to incur all such  liabilities  and
               potential  liabilities  under  applicable  non-U.S.  laws or with
               regard to the Non-U.S. Employee Plans.

        (e)    Except as disclosed on SCHEDULE 6 E, there are no actions,  suits
               or claims pending (other than routine claims for benefits) or, to
               the knowledge of the Borrower,  threatened in writing which could
               reasonably  be expected to be asserted  against any Employee Plan
               maintained  by the Borrower or against the Borrower or the assets
               of any such plan, the liability for which in the aggregate  could
               have  a  Material   Adverse   Effect  on  the  Borrower  and  its
               Consolidated Subsidiaries, taken as a whole.

        (f)    All of the Employee  Plans  maintained  by the Borrower or by any
               member of the  Controlled  Group  comply or,  upon  amendment  to
               conform to legislation  within any applicable  remedial amendment
               period, will comply in all material respects with their terms and
               with all  applicable  provisions  of ERISA and the Code,  and all
               other applicable  laws,  rules and regulations,  except where the
               failure to do so would not have a Material  Adverse Effect on the
               Borrower and its Consolidated Subsidiaries, taken as a whole.


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15.16   NON-U.S. EMPLOYEE PLANS

        Except as provided  in  SCHEDULE 6 F, with  regard to Non-U.S.  Employee
        Plans for which assets are not required to be or have not been set aside
        in a separate  fund or trust,  the reserves on the balance sheet of each
        Subsidiary,  respectively,  equal or  exceed  the  present  value of all
        accrued  benefits  under such Non-U.S.  Employee  Plans or the amount by
        which such  reserves are less than the present value of all such accrued
        benefits  would not have a Material  Adverse  Effect on the Borrower and
        its  Consolidated  Subsidiaries,  taken as a whole.  The aggregate  fair
        market value of the assets of Non-U.S. Employee Plans which are required
        to be funded by  applicable  law, or are funded to any extent  (although
        not required to be funded),  is at least equal to the sum of the accrued
        benefits  and all other  accrued  liabilities  provided  for under  such
        Non-U.S.  Employee Plans, or if such value is not at least equal to such
        sum, the fact that, and the amount by which, the value is less than such
        sum would not have a Material  Adverse  Effect on the  Borrower  and its
        Consolidated   Subsidiaries,   taken  as  a  whole.  The  Borrower,  its
        Subsidiaries and their Non-U.S.  Employee Plans are in compliance in all
        material  respects with all  applicable  laws,  regulations  and reserve
        and/or funding requirements  concerning Non-U.S.  Employee Plans, except
        where the failure to so comply would not have a Material  Adverse Effect
        on the Borrower and its Consolidated Subsidiaries, taken as a whole.

15.17   INVESTMENT COMPANY

        Neither the Borrower nor any Subsidiary is (a) an  "investment  company"
        within the meaning of the Investment Company Act of 1940, as amended; or
        (b) a "holding company" or a "subsidiary company" of a "holding company"
        or an "affiliate" of a "holding company" or a "subsidiary  company" of a
        "holding  company"  within the  meaning of the  Public  Utility  Holding
        Company Act of 1935, as amended.

15.18   SUBSIDIARIES

        As of the Second Restatement Date:

        (a)    the Subsidiaries  listed in SCHEDULE 7 are the only  Subsidiaries
               of  the  Borrower,  and  the  Subsidiaries  designated  as  Major
               Subsidiaries in SCHEDULE 7 are the only Major Subsidiaries of the
               Borrower;

        (b)    SCHEDULE  7  sets  forth  the   jurisdiction  of   incorporation,
               principal  place of business and  percentage  of ownership of the
               Borrower or any of its Subsidiaries in such Subsidiaries;

        (c)    The Borrower or its  Subsidiaries  have good and marketable title
               to the shares of the Major Subsidiaries comprising the respective
               percentages of ownership  indicated on SCHEDULE 7, free and clear
               of any  Liens,  except  Liens in favor of the Agent and the Banks
               under the Loan Documents;


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<PAGE>



        (d)    Neither the  Borrower  nor any of its  Subsidiaries  have sold or
               agreed  to sell or  otherwise  dispose  of any  right,  title  or
               interest in any of its or their shares of any of the Subsidiaries
               described on SCHEDULE 7;

        (e)    All of the shares of capital  stock of the  Pledged  Subsidiaries
               have been duly  authorized and are fully paid and  non-assessable
               and,  in the  case of  Pledged  Subsidiaries  issuing  registered
               shares,  are in registerable  form;  SCHEDULE 7 sets forth,  with
               respect to the Pledged Subsidiaries, the number of shares of each
               class of capital stock  authorized,  the number of shares of each
               class of capital stock issued and outstanding and, if applicable,
               the stock  certificate  numbers  which  evidence  such issued and
               outstanding  shares;  and, as of the Second  Restatement Date, no
               options,  warrants,  conversion  or other  rights,  agreements or
               commitments  of any kind to a Person  other than the  Borrower or
               its Subsidiaries or officers or directors thereof  obligating any
               of the  Pledged  Subsidiaries  to issue or sell any shares of its
               capital stock of any class, or any securities convertible into or
               exchangeable for any of such shares, are outstanding, nor has any
               authorization therefor been given;

        (f)    There are no  contractual  restrictions  on the right to vote any
               shares of the Major  Subsidiaries  owned by the  Borrower  or its
               Subsidiaries, or the right to sell, transfer or otherwise dispose
               of such shares; and

        (g)    The  Pledge  Agreements,  which  have  been  accompanied  by  any
               required  delivery  of share  certificates,  create a valid first
               priority  perfected  security  interest  in  the  shares  of  the
               respective Subsidiaries pledged thereunder.

15.19   MARGIN STOCK

        Neither the  Borrower nor any  Subsidiary  is engaged in the business of
        extending  credit for the purpose of purchasing or carrying margin stock
        or margin  securities  (within the meaning of  Regulations U or X of the
        Federal Reserve) or owns any such margin stock or margin  security,  and
        no part of the proceeds of any extension of credit under this  Agreement
        will be used by the Borrower or any  Subsidiary to purchase or carry any
        such margin stock or margin  security or to extend  credit to others for
        the  purpose  of  purchasing  or  carrying  any  margin  stock or margin
        security.

15.20   TAXES

        The Borrower and its Subsidiaries  have filed all income tax returns and
        all other material tax returns that are required to be filed by them and
        have  paid all taxes  due for the  period  covered  by such  returns  or
        pursuant to any material  assessment  received by the Borrower or any of
        its  Subsidiaries,  except for those  being  contested  in good faith by
        appropriate  proceedings  against  which  adequate  reserves  are  being
        maintained if required in accordance  with German GAAP. As of the Second
        Restatement Date, except as may be specified on SCHEDULE 11, (i) none of
        the tax returns of the Borrower or any of its

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<PAGE>



        Subsidiaries  is under  audit,  (ii)  there  is no  dispute,  action  or
        administrative proceeding by or before any court, arbitration,  tribunal
        or  governmental  authority  pending  or, to the  Borrower's  knowledge,
        threatened in writing against the Borrower or any Subsidiary relating to
        any income taxes or similar types of taxes  involving  amounts in excess
        of DM 5,000,000  (Deutsche Mark Five Million) (or the equivalent  amount
        in any  currency),  and (iii) no Lien  referred  to in CLAUSE (E) of the
        definition  of  the  term  "Permitted  Lien"  arising  from  income  tax
        assessments  or similar  types of tax  assessments  has been  granted or
        exists involving  amounts in excess of DM 5,000,000  (Deutsche Mark Five
        Million) (or the equivalent amount in any currency).

15.21   INTELLECTUAL PROPERTY RIGHTS

        (a)    Except  as set  forth  on  SCHEDULE  8 A,  the  Borrower  and its
               Subsidiaries  either own or are  licensed to use  pursuant to the
               license  agreements  with Affiliates of the Borrower set forth on
               SCHEDULE 8 B (the "Affiliate License  Agreements") or pursuant to
               the license  agreements with parties other than Affiliates of the
               Borrower  set forth on  SCHEDULE 8 C (the  "Third  Party  License
               Agreements")  the  Intellectual  Property  Rights.  Each  of  the
               Affiliate   License   Agreements  and  the  Third  Party  License
               Agreements  is  presently  in full force and effect,  neither the
               Borrower, any of its Affiliates nor any of its Subsidiaries is in
               default  under any  Affiliate  License  Agreement  or Third Party
               License   Agreement  and,   pursuant  to  the  Affiliate  License
               Agreements and the Third Party License Agreements,  the Borrower,
               its  Affiliates  and its  Subsidiaries  hold (and  following  the
               completion of the  transactions  contemplated  by this  Agreement
               will  continue  to hold)  licenses to all  Intellectual  Property
               Rights material to the conduct of their businesses.

        (b)    Except for the Affiliate  License  Agreements and the Third Party
               License Agreements and except as set forth on SCHEDULE 8 D, there
               are  no  agreements   pursuant  to  which  the  Borrower  or  its
               Subsidiaries are licensed to use Intellectual Property Rights.

        (c)    SCHEDULE  8  E  sets  forth  the  owners  among  the   Borrower's
               Affiliates or Subsidiaries of Intellectual  Property Rights which
               are patented or for which patent applications have been filed.

        (d)    SCHEDULE  8  F  sets  forth  the  owners  among  the   Borrower's
               Affiliates  or  Subsidiaries   of  trademarks   included  in  the
               Intellectual  Property  Rights which are  registered or for which
               applications for registration have been filed.

        (e)    To  the  best   knowledge  of  the  Borrower,   (i)  the  current
               manufacturing operations of the Borrower's Subsidiaries as of the
               Second  Restatement  Date do not  infringe  on any valid  patent,
               trade  secret  or  copyright  of any  other  Person  and (ii) the
               current  marketing  and sales  operations of the Borrower and its
               Subsidiaries as of the Second Restatement Date do not infringe on
               any valid  trademark or trade name of any other Person which,  in
               each case, if enforced would have a Material

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<PAGE>



               Adverse Effect on the Borrower and its Consolidated Subsidiaries,
               taken as a whole.

        (f)    Except  as set  forth on  SCHEDULE  8 G, no  claims  by any other
               Person  alleging   infringement  of  any  patent,  trade  secret,
               trademark, trade name or copyright of such Person and relating to
               the current  manufacturing,  marketing or sales operations of the
               Borrower and its  Subsidiaries as of the Second  Restatement Date
               have  been  communicated  to  an  employee  of  Borrower  or  its
               Subsidiaries   charged  with   responsibility   for  Intellectual
               Property  Rights  and  are  pending   against   Borrower  or  its
               Subsidiaries,   nor  have  any  such  claims  been  made  and  so
               communicated  within  the  twelve  months  preceding  the  Second
               Restatement Date.

        (g)    The execution,  delivery and performance of the Loan Documents to
               which the Borrower is a party will not in any material  manner or
               to any  material  extent  impair the  ownership  of or any rights
               under  or  the  license  of,  as  the  case  may  be,  any of the
               Intellectual  Property Rights utilized by the Borrower and/or its
               Subsidiaries.

15.22   KEY CONTRACTS

        The Borrower  has  delivered  to the Agent,  true,  correct and complete
        photocopies  of the  Leverkusen  Lease,  the  Service  Contract  and all
        existing loan agreements,  including all Project  Financing  agreements,
        which,  if  terminated  or  materially  modified,  would have a Material
        Adverse Effect on the Borrower and its Consolidated Subsidiaries,  taken
        as a whole.  As of the  Second  Restatement  Date,  SCHEDULE  12  hereto
        specifically identifies each of such loan agreements.

15.23   AFFILIATE TRANSACTIONS

        SCHEDULE 9 sets forth all agreements or arrangements,  whether or not in
        the  ordinary  course of  business,  existing on the Second  Restatement
        Date,  which  involve  payments  or  transfers  of  assets  (other  than
        inventory in the ordinary  course of business) in excess of DM 5,000,000
        (Deutsche  Mark Five Million) per calendar  year by the Borrower  and/or
        its  Subsidiaries  to  Affiliates  (other  than  the  Borrower  and  its
        Subsidiaries).

15.24   NL DEBT OFFERING;  MIRROR NOTES;  SUBORDINATED LOANS;  CONSIDERATION FOR
        PREPAYMENTS

        (a)    The gross  proceeds  of the NL Debt  Offering  were not less than
               $350,000,000  (Three Hundred Fifty Million U.S. Dollars),  all of
               which gross proceeds,  less the NL Debt Offering  Expenses,  were
               paid by NL  Industries  or  Kronos  to the Agent on behalf of the
               Borrower as the First Prepayment  pursuant to SECTION 2.01 of the
               First Restated  Agreement.  The aggregate principal amount of the
               Mirror  Notes  issued by the  Borrower  did not  exceed the gross
               proceeds of the NL Debt Offering. The only consideration received
               or to be received by NL Industries, Kronos or any other Affiliate
               of  the  Borrower  from  the  Borrower  in  consideration  for or
               otherwise

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<PAGE>



               in  connection  with or relating to the First  Prepayment  is the
               Indebtedness evidenced by the Mirror Notes, and there is no other
               Indebtedness,  liability or obligation due or owing,  or that may
               become due or owing, by the Borrower as consideration  for, or in
               any way in connection with or relating to, the First Prepayment.

        (b)    The amount of the Kronos  Subordinated Loan made by Kronos to the
               Borrower on December 31, 1996,  was DM 25,000,000  (Deutsche Mark
               Twenty-Five Million). The amount of the NL Subordinated Loan made
               by NL  Industries  to  the  Borrower  on  or  before  the  Second
               Restatement  Date was DM  260,000,000  (Deutsche Mark Two Hundred
               Sixty Million),  DM 150,000,000  (Deutsche Mark One Hundred Fifty
               Million)  of which  proceeds  of the NL  Subordinated  Loan  are,
               concurrently  with the Second  Restatement Date, being paid by NL
               Industries  to the Agent on behalf of the  Borrower as the Second
               Prepayment.   The  Subordinated   Loan  Documents   evidence  and
               represent  the entire  agreement  between NL  Industries  and the
               Borrower  relating  to the  Kronos  Subordinated  Loan and the NL
               Subordinated Loan.

15.25   TAXES RELATING TO MIRROR NOTES

        Under the laws in force at the  First  Restatement  Date and the  Second
        Restatement  Date,  no Taxes were or will be  required to be deducted or
        withheld from or with respect to any sum payable or to be paid under the
        Mirror Notes.

15.26   OWNERSHIP OF MATERIAL ASSETS

        As of the Second Restatement Date,  SCHEDULE 13 sets forth each tangible
        property or asset (or group of related  properties  or assets),  whether
        real or personal property but exclusive of cash balances,  inventory and
        accounts  receivable,  of the Borrower or any of its Subsidiaries  which
        individual property or asset (or group of related properties or assets),
        individually  or in the  aggregate,  has a book value or estimated  fair
        market  value  of DM  20,000,000  (Deutsche  Mark  Twenty  Million)  (or
        equivalent  amount in any  currency)  or more,  and also sets  forth the
        owner(s) of each such property or asset (or group of related  properties
        or assets).

15.27   OPTIONAL PREPAYMENTS

        As of the Second  Restatement Date, no optional  prepayments of the Loan
        have been made with funds provided by Kronos and/or NL Industries  which
        would allow for the making of  Restricted  Payments in  accordance  with
        SECTION 16.20(B).

15.28   CERTAIN ADJUSTED RESTRICTED PAYMENTS


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<PAGE>



        The aggregate of all Adjusted  Restricted  Payments made by the Borrower
        or any of its  Subsidiaries to any Affiliate of the Borrower (other than
        Subsidiaries  of the Borrower)  during 1996 did not exceed DM 47,000,000
        (Deutsche Mark Forty-Seven Million).

15.29   SOLVENCY OF RHEOX, INC.

        A  condition  to the closing of the January  1997  $150,000,000  loan to
        Rheox,  Inc.  is the  issuance  by an  independent  valuation  firm of a
        solvency opinion with respect to the financial  condition of Rheox, Inc.
        after giving effect to such loan and a dividend in the maximum amount of
        $130,000,000 from Rheox, Inc. to NL Industries.

                            ARTICLE 16.  UNDERTAKINGS AND COVENANTS

        The Borrower  agrees that so long as the Loan or any portion  thereof or
any Commitment therefor is outstanding, the Borrower shall do the following:

16.01   DELIVERY OF FINANCIAL STATEMENTS, ETC.

        (a)    As soon as the same become available,  but in any event within 90
               (ninety) days after the end of each of its fiscal years,  deliver
               to the Agent,  in sufficient  copies for  distribution to all the
               Banks,  the  audited   consolidated  group  financial  statements
               (including  a  balance  sheet  and   statements  of   operations,
               stockholders'  equity  and  cash  flow) of the  Borrower  and its
               Subsidiaries for such fiscal year, and, as unaudited supplemental
               information:

               (1)    the related consolidating financial statements by country;
                      and

               (2)    separate  balance sheets,  as included in the consolidated
                      group balance  sheet of the  Borrower,  for each of Kronos
                      Titan, Kronos Europe S.A./N.V.,  Titania A/S, Kronos Titan
                      A/S and Kronos Canada, Inc.;

               all as prepared in accordance  with German GAAP,  consistent with
               the  preparation  of  the  financial  statements  for  the  prior
               financial  period  except  to the  extent  that any  inconsistent
               practice  is  specified  in  the  certificate   described  below,
               together  with a  certificate  executed  by the  chief  financial
               officer  of the  Borrower  in the  form of  EXHIBIT  Q  including
               calculations  of the  provisions of SECTIONS 16.18 through 16.25,
               showing in reasonable detail the basis for such calculations.

        (b)    Within  60  (sixty)  days  after the end of each  fiscal  quarter
               (excluding the fourth  quarter),  unaudited  consolidating  group
               financial  statements  of the Borrower and its  Subsidiaries,  by
               country, prepared in accordance with German GAAP, consistent with
               the  preparation  of  the  financial  statements  for  the  prior
               financial  period  except  to the  extent  that any  inconsistent
               practice is specified in the certificate described below, and, as
               supplemental information, separate balance sheets, as included in
               the consolidating balance sheets of the Borrower and its

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<PAGE>



               Subsidiaries,  for each of Kronos Titan, Kronos Europe S.A./N.V.,
               Titania A/S,  Kronos Titan A/S and Kronos Canada,  Inc., for each
               fiscal quarter (excluding the fourth quarter,  except as provided
               below) and,  commencing  with the third fiscal quarter of 1993, a
               certificate  executed  by  the  chief  financial  officer  of the
               Borrower in the form of EXHIBIT R including  calculations  of the
               provisions of SECTIONS 16.18 through 16.25, showing in reasonable
               detail the basis for such  calculations  and including  (for each
               fiscal  quarter,  including the fourth  quarter)  calculations of
               Adjusted  Restricted Payments made through the end of such fiscal
               quarter,   showing  in  reasonable  detail  the  basis  for  such
               calculations.

        (c)    Promptly   deliver  notice   thereof  to  the  Agent,   upon  the
               commencement of any action or other proceedings by or against the
               Borrower  or  any  of  its  Subsidiaries  under  any  bankruptcy,
               insolvency or other similar law.

        (d)    Upon   request  of  the  Agent,   furnish  the  Agent  with  such
               information about the business, assets and financial condition of
               each of the Borrower and/or any of its Subsidiaries as the Agent,
               or any Bank through the Agent, may reasonably request;  provided,
               however, nothing in this Agreement shall entitle the Agent or the
               Banks to request, nor require the Borrower or its Subsidiaries to
               provide,  (i) nonpublic  confidential  technical  information and
               knowhow or  information  relating to  processes of or used by the
               Borrower or its Subsidiaries or (ii) information  relating to the
               costs  of  manufacture   (including,   without  limitation,   raw
               materials supply contracts) any of which, if made public,  would,
               in the reasonable opinion of the Borrower, impair its competitive
               position,  provided, however, that the restriction on information
               set forth in CLAUSES (I) and (II) (A) shall not apply if an Event
               of Default  exists  and is  continuing  and (B) does not  include
               information which:

               (1)    is or becomes generally available to the public other than
                      as a result  of a  disclosure  by the  Agent or the  Banks
                      which  are   signatories   to  this   Agreement  or  their
                      respective  directors,  officers,  employees,  Affiliates,
                      attorneys,  accountants or other professional  advisors in
                      violation of this provision;

               (2)    was   available   to  the   Agent   or  any   Bank   on  a
                      non-confidential  basis  prior  to its  disclosure  to any
                      other Bank; or

               (3)    becomes   available   to  the  Agent  or  any  Bank  on  a
                      non-confidential  basis  from a  Person  (other  than  the
                      Borrower or its Affiliates) who, to the reasonable  belief
                      of  the   Agent  or  such   Bank,   is  not   bound  by  a
                      confidentiality  agreement  and  is  not  prohibited  from
                      transmitting such information under applicable law.

        (e)    Upon the request of the Agent, and at the Bank's expense,  permit
               an auditor  of the Agent to audit the  financial  statements  and
               review all the financial records of the

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<PAGE>



               Borrower and/or any of its  Subsidiaries  and permit the Banks to
               receive additional  information from the auditors of the Borrower
               and its Subsidiaries.

        (f)    Within 5 (five) days after the end of each month, (i) a report in
               form and  substance  reasonably  satisfactory  to the Agent which
               sets  forth  the  maximum  committed   amount,   the  outstanding
               principal  amount and  identities  of the debtor and payee of all
               Indebtedness of the Borrower or any of its Subsidiaries as of the
               end of such  immediately  preceding month, and (ii) the Liquidity
               Report (as such term is defined in the Liquidity Undertaking).

16.02   OPERATING PERMITS

        Inform the Agent  promptly  about the refusal of (or  written  notice of
        intent to refuse)  any  application  for any  operating  permits  and/or
        licenses or the  suspension or  withdrawal  of any operating  permits or
        licenses  by  governmental  authorities  having  jurisdiction  over  the
        Borrower or any of its Subsidiaries,  as the case may be, if the refusal
        of such  application  or the  occurrence of such refusal,  suspension or
        withdrawal would have a Material Adverse Effect on any of the Companies.

16.03   ENVIRONMENTAL COMPLIANCE

        Cause each of the Companies to comply in all material  respects with all
        applicable Environmental Laws and all other laws, rules, regulations and
        orders  relating to the  disposal of  Contaminants  except to the extent
        failure  to comply  would  not have a  Material  Adverse  Effect on such
        Company.

16.04   COMPLIANCE WITH APPLICABLE LAW

        Comply,  and cause each of its  Subsidiaries to comply,  in all material
        respects with all applicable laws,  ordinances,  rules,  regulations and
        requirements of governmental authorities (including, without limitation,
        applicable  Environmental Laws) except where the necessity of compliance
        therewith is contested in good faith by appropriate  proceedings and for
        which adequate  reserves are being maintained if required by German GAAP
        or where noncompliance with such laws, ordinances, rules, regulations or
        requirements  would  not have a  Material  Adverse  Effect on any of the
        Companies.

16.05   BOOKS AND RECORDS

        Keep,  and cause  each of its  Subsidiaries  to keep,  proper  books and
        records  and  accounts  in which  full,  true  and  correct  entries  in
        conformity with local  standards shall be made of all material  dealings
        and transactions in relation to its business and activities; and subject
        to  SECTION  16.01(D)  permit,  and cause  each of its  Subsidiaries  to
        permit,  representatives  of any Bank, at such Bank's expense,  to visit
        and  inspect  any of their  respective  properties,  to examine and make
        abstracts  from any of their  respective  books and records  (including,
        without limitation,  all documents relating to environmental  control of
        the production of

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        titanium  dioxide  pigments)  and to discuss their  respective  affairs,
        finances and accounts  with their  respective  officers,  employees  and
        independent  accountants,  and  authorize and instruct and cause each of
        its Subsidiaries to authorize and instruct said officers,  employees and
        accountants to so discuss the respective affairs, finances and accounts,
        all of the  foregoing  at such  reasonable  times  and as  often  as may
        reasonably be requested with prior notice.

16.06   ENVIRONMENTAL REPORTS

        (a)    Notify  the  Agent and the Banks in  writing,  promptly  upon the
               Borrower  or  any  of  its  Subsidiaries  learning  of any of the
               following  which could have a Material  Adverse  Effect on any of
               the Companies:

               (1)    any Environmental Claim against the Borrower or any of its
                      Subsidiaries, including one to take a remedial, removal or
                      other action with respect to any Contaminants contained on
                      any  property  whether  or not  owned by the  Borrower  or
                      Subsidiary so notified;

               (2)    any notice of violation of any Environmental Law; and

               (3)    the   commencement  of  any  judicial  or   administrative
                      proceedings or  investigation  alleging a violation of any
                      Environmental Law.

        (b)    Upon written  request by the Agent or any Bank submit,  and cause
               each of its Subsidiaries to submit, to the Agent or such Bank, at
               reasonable intervals,  a report providing an update of the status
               of any  environmental,  health  or safety  compliance,  hazard or
               liability  issue  identified in any notice  required  pursuant to
               this SECTION 16.06.

16.07   INTELLECTUAL PROPERTY RIGHTS

        (a)    Not  permit  any of its  Subsidiaries  to  assign  the  Affiliate
               License  Agreements  to  which  they  are a party  or to amend or
               modify in any respect  adverse to any Company or any  Subsidiary,
               or allow to expire,  or terminate  any of the  Affiliate  License
               Agreements  to  which  they  are  a  party,  provided  that  this
               provision  shall be without  prejudice to the right of a party to
               seek  damages or  specific  performance  for breach of any of the
               Affiliate License Agreements; and

        (b)    maintain,  protect and enforce,  and require each  Subsidiary  to
               take  reasonable  steps to  maintain,  protect and  enforce,  the
               Intellectual  Property  Rights  owned by it (if any),  consistent
               with prior  practice by and among  Kronos,  Kronos U.S. and their
               Affiliates and, in any event,  consistent  with prudent  business
               practices of the Borrower and the Subsidiaries.

16.08   LIENS

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        Not create or permit to exist,  or permit its  Subsidiaries to create or
        permit to exist, any Lien, except Permitted Liens.

16.09   DISPOSITIONS

        Not make, nor permit any of its  Subsidiaries  to make, a Disposition of
any asset:

        (a)    other than in the ordinary course of business;

        (b)    for  less  than  fair  market  value  (other  than a  Disposition
               described in SECTIONS 16.09(A), (C), (D), (F) or (G));

        (c)    other than transactions made in accordance with SECTION 16.15(C),
               Restricted  Payments  made in  accordance  with SECTION 16.20 and
               payments made under the Mirror Notes in accordance with the terms
               of the Mirror Notes;

        (d)    other than interest payments on Subordinated  Debt, if and to the
               extent permitted by the  Subordination  Agreement,  provided that
               there  exists no Default  with  respect to payment of any amounts
               due and owing under this Agreement and no Default exists or would
               result from such payment;

        (e)    except  for  cash,   if  the   aggregate  Net  Proceeds  of  such
               Dispositions (other than a Disposition  described in CLAUSES (A),
               (C), (D), (F) or (G) of this SECTION  16.09),  either alone or in
               the  aggregate,  during any calendar year during the term of this
               Agreement  exceeds  DM  100,000,000  (Deutsche  Mark One  Hundred
               Million);

        (f)    other than  Dispositions  between and among the  Borrower and its
               Subsidiaries  or between  and among the  Subsidiaries;  provided,
               however,  that with respect to Kronos Canada, Inc., Kronos Europe
               S.A./N.V.,  Kronos  Titan,  Kronos Titan A/S and Titania A/S (the
               "Operating  Subsidiaries"),  without  approval  of  the  Majority
               Banks,  the  Borrower  shall not make,  nor permit its  Operating
               Subsidiaries  to make, a  Disposition  to the Borrower or another
               Subsidiary of assets in such Operating Subsidiaries consisting of
               production capacity, inventory (other than in the ordinary course
               of  business),  accounts  receivable  (other than to Kronos World
               Services  S.A./N.V.  (and as long as it remains a Subsidiary) for
               cash) or  Intellectual  Property  Rights (other than licenses and
               sub-licenses of such Intellectual  Property Rights),  and further
               the  Borrower   shall  not  transfer,   nor  permit  any  of  its
               Subsidiaries  to transfer,  to any other  Subsidiary the Stock of
               any  Pledged  Subsidiary  without the  approval  of the  Majority
               Banks;

        (g)    notwithstanding anything in this Agreement to the contrary, other
               than  Dispositions,  termination  or  shortening  of the term, or
               modifications,  of  the  Leverkusen  Lease  for  full,  fair  and
               reasonable consideration; or


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<PAGE>



        (h)    other than Dispositions  prior to the Second  Restatement Date of
               the  distributorship/marketing  arrangements  existing  as of the
               First   Restatement   Date  between   Rheox,   Inc.   and/or  its
               subsidiaries and certain Subsidiaries of the Borrower.

        Not use, or allow to be used,  directly or  indirectly,  the proceeds of
        any  Disposition  permitted by this Section 16.09 to make any payment or
        other  transfer of funds to or for the benefit of any  Affiliate  of the
        Borrower  other than the  Subsidiaries  of the  Borrower  (if and to the
        extent that such payment or transfer to  Subsidiaries  is not  otherwise
        prohibited  by this  Agreement);  provided,  however,  that,  subject to
        compliance with the other terms of this  Agreement,  the proceeds of any
        such permitted  Disposition may be used to make  Restricted  Payments if
        and to the extent that such Restricted  Payments are permitted  pursuant
        to  Section  16.20  and to make  payments  under  the  Mirror  Notes  in
        accordance with the terms of the Mirror Notes.

16.10   MERGER; CONSOLIDATION

        (a)    (i)    Not merge or consolidate with any other Person whereby
                      the Borrower  shall be the surviving  corporation  without
                      the prior written consent of the Majority Banks.

               (ii)   Not merge or  consolidate  with or into any  other  Person
                      whereby any other  Person  would be the  surviving  entity
                      without the prior  written  consent of the Majority  Banks
                      (662/3%).

        (b)    Not permit Kronos  Canada,  Inc.,  2927527  Canada Inc.,  2969157
               Canada Inc. or Kronos Europe  S.A./N.V.  to merge or  consolidate
               with or into any other Person (other than,  as to 2927527  Canada
               Inc.  only,  the  Borrower),  unless the survivor  shall (i) be a
               corporation  organized  under the laws of Canada (with respect to
               Kronos Canada,  Inc., 2927527 Canada Inc. or 2969157 Canada Inc.)
               or Belgium (with respect to Kronos Europe S.A./N.V.); (ii) have a
               net worth  approximately  equal to or greater than that of Kronos
               Canada,  Inc., 2927527 Canada Inc., 2969157 Canada Inc. or Kronos
               Europe  S.A./N.V.,  as the case may be; (iii) have assumed all of
               the  liabilities  of Kronos  Canada,  Inc.,  2927527 Canada Inc.,
               2969157 Canada Inc. or Kronos Europe  S.A./N.V.,  as the case may
               be; and (iv) be a Subsidiary directly Controlled by the Borrower.

        (c)    Not permit Kronos Titan, Kronos Titan A/S or Titania A/S to merge
               or consolidate  with or into any Person unless the survivor shall
               (i) be a  corporation  organized  under the laws of Germany (with
               respect to Kronos  Titan) or Norway (with respect to Kronos Titan
               A/S or Titania A/S); (ii) have a net worth approximately equal to
               or greater than that of Kronos Titan, Kronos Titan A/S or Titania
               A/S,  as  the  case  may  be;  (iii)  have  assumed  all  of  the
               liabilities  of such  entity;  and  (iv) be a  Subsidiary  either
               directly  Controlled by the Borrower or directly  Controlled by a
               Subsidiary of the Borrower;

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<PAGE>




               provided,  however,  that any other  Subsidiary may merge with or
               into any other Subsidiary.

16.11   EMPLOYEE MATTERS

        (a)    DISCHARGE OF ERISA LIABILITY

               Pay and  discharge  promptly or cause any  Subsidiary  to pay and
               discharge  promptly any liability imposed upon it pursuant to the
               provisions of Title IV of ERISA or the  provisions of any similar
               applicable Non-U.S. law or similar provisions provided for in any
               applicable  plan or  document  relating  to such plan;  provided,
               however,  that neither the Borrower nor any  Subsidiary  shall be
               required to pay any such liability if:

               (i)    the amount,  applicability  or validity  thereof  shall be
                      diligently   contested   in  good  faith  by   appropriate
                      proceedings; and

               (ii)   the Borrower or the Subsidiary,  as the case may be, shall
                      establish and maintain reserves, if required in accordance
                      with German GAAP which,  in the opinion of the  Borrower's
                      independent   accountants,   are  adequate   with  respect
                      thereto.

        (b)    ERISA NOTICES

               Deliver to the Banks  promptly,  and in any event within 10 (ten)
working days:

               (i)    when the  Borrower or any member of the  Controlled  Group
                      gives or is  required  to give  notice  to the PBGC of any
                      "reportable  event" (as defined in Section  4043 of ERISA)
                      with  respect  to any  Pension  Benefit  Plan  that  might
                      constitute  grounds  for a  termination  of  such  Pension
                      Benefit  Plan under  Title IV of ERISA,  or knows that the
                      plan  administrator  of any Pension Benefit Plan has given
                      or is  required  to give  notice  of any  such  reportable
                      event, a copy of the notice of such reportable event given
                      or required to be given to the PBGC;

               (ii)   when the Borrower or a member of the Controlled  Group, or
                      an  administrator  of any Pension  Benefit Plan files with
                      participants, beneficiaries or the PBGC a notice of intent
                      to  terminate  any  such  plan in a  distress  termination
                      pursuant to Section  4041(c) of ERISA,  a copy of any such
                      notice;

               (iii)  upon the  receipt of notice by the  Borrower  or member of
                      the Controlled  Group or an  administrator  of any Pension
                      Benefit Plan from the PBGC of

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<PAGE>



                      the PBGC's intention to terminate any Pension Benefit Plan
                      or to appoint a trustee  to  administer  any such plan,  a
                      copy of such notice;

               (iv)   when the Borrower knows or has reason to know of any event
                      or  condition  which might  constitute  grounds  under the
                      provisions of Section 4042 of ERISA for the termination of
                      (or  the  appointment  of a  trustee  to  administer)  any
                      Pension Benefit Plan or when Borrower or any member of the
                      Controlled Group files an application under Section 412(d)
                      of the Code for a waiver of the minimum funding  standards
                      with respect to a Pension  Benefit Plan, an explanation of
                      such event or condition or a copy of such application,  as
                      the case may be; or

               (v)    upon the  receipt  by the  Borrower  or by a member of the
                      Controlled  Group of  aggregate  assessments  in excess of
                      $1,000,000  (U.S.   Dollars  One  Million)  of  withdrawal
                      liability  under Section 4201 of ERISA from  Multiemployer
                      Plans, a copy of each such assessment.

        (c)    ERISA TRANSACTIONS

               Not engage in any  transaction or permit any Subsidiary to engage
               in any  transaction  which  could  subject  the  Borrower  or any
               Subsidiary to a civil penalty assessed pursuant to the provisions
               of Section 502 of ERISA or tax imposed  under the  provisions  of
               Section 4975 of the Code, which civil penalty or tax would have a
               Material  Adverse  Effect on the  Borrower  and its  Consolidated
               Subsidiaries, taken as a whole.

        (d)    NO TERMINATION OF EMPLOYEE PLANS

               Not  terminate  any Pension  Benefit  Plan of the Borrower or any
               member of the Controlled Group in a "distress  termination" under
               Section 4041 of ERISA, or take any other action or have any event
               occur  with  respect  to an  Employee  Plan,  including,  without
               limitation,  any  action or event for  which  the  Borrower  must
               provide the Banks with a copy of a notice,  an  explanation of an
               event or condition, or a copy of an assessment under this SECTION
               16.11, which would have a Material Adverse Effect on the Borrower
               and its Consolidated Subsidiaries, taken as a whole.

        (e)    NON-U.S. EMPLOYEE PLANS

               Not permit  any  condition  to exist  with  respect to a Non-U.S.
               Employee Plan which would have a Material  Adverse  Effect on any
               Company.


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16.12   INTEREST RATE PROTECTION AGREEMENTS

        Shall, with financial institutions and at rates reasonably acceptable to
        the Agent,  maintain Interest Rate Protection Agreements with respect to
        a  minimum  of 45%  (forty-five  percent)  of the  amount  of the  Loans
        outstanding at any time through May 31, 1995.

16.13   INDEBTEDNESS TO SUBSIDIARIES

        Shall not make any payments with respect to any Indebtedness owed by the
        Borrower to any  Subsidiary if a Default  exists and is  continuing,  or
        would result from the making of such payment.

16.14   MAINTENANCE OF SEPARATE CORPORATE IDENTITIES

        Shall,  for so long as the Loan or any portion thereof or any Commitment
        therefor is outstanding,

        (a)    provide,  that at all times, at least one (1) member of its board
               of directors or at least one (1) of its officers will be a Person
               who is not an officer,  director  or employee of any  corporation
               which Controls the Borrower;

        (b)    maintain  corporate  records and books of account  separate  from
               those of any corporation which Controls the Borrower and separate
               from those of any Major Subsidiary;

        (c)    not commingle  its funds or assets with those of any  corporation
               which   Controls   the  Borrower  or  with  those  of  any  Major
               Subsidiary; and

        (d)    provide  that its board of  directors  will hold all  appropriate
               meetings,  which  will not be jointly  held with any  corporation
               which  Controls  the  Borrower,  to  authorize  and  approve  the
               Borrower's corporate actions.

16.15   AFFILIATE TRANSACTIONS

        Not, nor permit any of its Subsidiaries,  directly or indirectly, to pay
        any funds  (including,  without  limitation,  payments of  principal  or
        interest on Indebtedness  or  Subordinated  Debt to any Affiliate) to or
        for the account of, make any  investment  in, lease,  sell,  transfer or
        otherwise dispose of, any assets,  tangible or intangible,  grant loans,
        guarantees,   suretyships   to,  enter  into   management,   consulting,
        brokerage,  advisory or similar  agreements  or  arrangements  with,  or
        participate in or effect any  transaction  in connection  with any joint
        enterprise or other joint  arrangement  with, any Affiliate  (other than
        the  Borrower  and  its  Subsidiaries),   provided,  however,  that  the
        foregoing shall not restrict:

        (a)    transactions  which are on terms and conditions no less favorable
               to  the  Borrower  and  its  Subsidiaries  than  would  apply  in
               comparable arm's-length transactions

                                              95

<PAGE>



               (involving  comparable   circumstances)  with  a  Person  not  an
               Affiliate;  provided that (i) in no event shall payments provided
               for in any management, consulting, advisory or similar agreements
               or   arrangements   (other  than  the  existing   agreements  and
               arrangements  described in SCHEDULE 9) exceed,  in the aggregate,
               DM 10,000,000  (Deutsche  Mark Ten Million) in any calendar year;
               (ii) in no event shall  amounts paid to  Affiliates  as brokerage
               fees in connection with Dispositions to non-Affiliates exceed the
               lesser of (A) 3% (three  percent)  of the Gross  Proceeds  or (B)
               customary fees and expenses  which would be incurred  pursuant to
               an arm's length agreement or arrangement); and (iii) with respect
               to sales  or  transfers  of  product  or  similar  assets  by the
               Borrower or any of its Subsidiaries to Affiliates of the Borrower
               (other than the Borrower and its Subsidiaries) (A) all such sales
               or  transfers  shall be on payment  terms that  provide  for full
               payment in cash on or before 45 (forty-five)  days after the date
               of such sale or transfer  and (B) the  aggregate  amount owing to
               the Borrower and its Subsidiaries for all such sales or transfers
               (net of any amounts  owing by the Borrower  and its  Subsidiaries
               with respect to sales or  transfers of product or similar  assets
               to such  Affiliates of the Borrower) shall not at any time exceed
               $15,000,000  (Fifteen Million Dollars) (or the equivalent  amount
               in any currency);

        (b)    Restricted Payments made in accordance with SECTION 16.20;

        (c)    transactions by the Borrower or any Subsidiary with any Affiliate
               (including,  without  limitation,  loans  and  advances),  to the
               extent  that  the  aggregate  amount  of such  transactions  when
               aggregated with Restricted Payments shall not exceed the limit on
               payments in the periods  specified  under SECTION 16.20 and shall
               otherwise be made in accordance with SECTION 16.20;

        (d)    the Affiliate License Agreements and transactions by the Borrower
               or any Subsidiary  pursuant to the Affiliate License  Agreements;
               or

        (e)    the issuance and payment of the Mirror Notes in  accordance  with
               the terms of the Mirror Notes.

16.16   TRANSACTIONS WITH SUBSIDIARIES

        If  the  Borrower  or  any  Subsidiary,  or  a  Subsidiary  and  another
        Subsidiary, creates or enters into any agreement with a Subsidiary which
        is on terms and conditions  more favorable to such Subsidiary than would
        apply in a similar  agreement  with a Person which is not an  Affiliate,
        then,  in the  event  that  any such  benefitted  Subsidiary  merges  or
        consolidates  with another  entity such that the surviving  entity is no
        longer a  Subsidiary,  or such  agreement  is, or the  benefits  of such
        agreement are, sold (in one transaction or a series of transactions to a
        Person that is not a  Subsidiary),  any such  agreement  involving  such
        benefitted  Person must, prior to such merger,  consolidation or sale of
        assets, be modified so that the terms and conditions thereof would be no
        more favorable than would apply with a Person which is not an Affiliate.

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16.17   NOTICE OF DEFAULT; CHANGE OF LAW

        Advise the Agent  promptly upon the Borrower  becoming  aware of (i) any
        Default under this  Agreement or any of the other Loan Documents or (ii)
        any change in law which  would cause any  representation  or warranty in
        SECTION 15.04,  15.05,  15.06,  15.07,  or 15.14 of this Agreement to be
        incorrect if such change in law were in effect on the Second Restatement
        Date.

16.18   LIMITATION OF INDEBTEDNESS

        Not incur any Indebtedness other than Permitted Indebtedness.

16.19   SUBSIDIARY INDEBTEDNESS

        Not  allow  any  Subsidiary  to incur any  Indebtedness  other  than (a)
        Permitted  Indebtedness  or (b)  subject to the  limitations  of SECTION
        16.18,  Indebtedness  in respect of unfunded  vested  benefits under any
        laws governing non-U.S. Employee Plans.

16.20   RESTRICTED PAYMENTS

        Not make or declare any  Restricted  Payments  except for the  following
        Restricted  Payments if no Default  exists or would  result after giving
        effect thereto:

        (a)    As a  result  of the  First  Prepayment,  the  Borrower  may make
               Restricted  Payments  to Kronos  in an  aggregate  amount  not to
               exceed  DM  75,000,000  (Deutsche  Mark  Seventy-Five   Million),
               provided  that (i) none of such  Restricted  Payments may be made
               prior to  January  1,  1995 and  (ii) the  aggregate  of all such
               Restricted  Payments  made  during  calendar  year 1995 shall not
               exceed DM 50,000,000 (Deutsche Mark Fifty Million); and

        (b)    The Borrower  may make  Restricted  Payments to Kronos  and/or NL
               Industries if and to the extent that such payments do not exceed,
               at any time when paid, the positive remainder, if any, of (i) the
               sum of (A) the optional  prepayments  of the Loan made with funds
               provided by Kronos  and/or NL  Industries as described in SECTION
               8.02,   exclusive  of  any  optional   prepayments   directly  or
               indirectly  made with funds  constituting  capital  contributions
               made or Subordinated Debt advanced to the Borrower and satisfying
               all or any portion of the "Maximum Required Investment Amount" as
               such term is defined in the Liquidity  Undertaking  and exclusive
               of the First  Prepayment,  the  Second  Prepayment  and any other
               prepayments made with the proceeds of the NL Subordinated Loan or
               the Kronos  Subordinated  Loan, plus (B) interest  accrued,  at a
               rate not to exceed the average rate of interest applicable to the
               Loans plus 0.50% (one-half of one percent) as of the Business Day
               upon which such Restricted  Payment is made, on any  Subordinated
               Debt  borrowed by the Borrower  from Kronos  and/or NL Industries
               and incurred to finance  such  optional  prepayments  of the Loan
               referred to in

                                              97

<PAGE>



               CLAUSE (A) preceding minus (ii) the amount of Restricted Payments
               then  previously  paid  by  the  Borrower  to  Kronos  and/or  NL
               Industries  pursuant  to this CLAUSE  (B);  for  purposes of this
               CLAUSE  (B), no such  optional  prepayment  (or portion  thereof)
               shall be deemed to have been made with funds  provided  by Kronos
               and/or NL Industries unless, in connection with the prior written
               notice of such  optional  prepayment  given  pursuant  to SECTION
               8.02,  the  Borrower   notifies  the  Agent  that  such  optional
               prepayment (or portion thereof) shall be made with funds provided
               by  Kronos  and/or  NL  Industries  and,  at  the  time  of  such
               prepayment,  the Agent receives evidence reasonably  satisfactory
               to it that such optional  prepayment (or portion  thereof) was in
               fact paid with funds  provided by Kronos and/or NL Industries and
               placed into the Special  Purpose Account (or, if so agreed by the
               Agent, into another special,  restricted  account of the Borrower
               maintained  at,  and  acceptable  to,  the Agent  from  which the
               Borrower   may  not  make   withdrawals   or   otherwise   direct
               distributions  except  with  respect  to any  interest  to accrue
               thereon)  and then applied  against the Loan  pursuant to SECTION
               8.02.

        Notwithstanding   the  foregoing,   the  Borrower  may  make  Restricted
        Payments,  even if the foregoing conditions are not met, but only if and
        to the extent that, prior to or concurrently with the making of any such
        Restricted  Payment,  a cash equity capital  contribution is made to the
        Borrower  by the  Person to whom such  Restricted  Payment is to be made
        such that the sum of Consolidated  Equity plus  Subordinated Debt of the
        Borrower  is at  least  equal  to the sum of  Consolidated  Equity  plus
        Subordinated  Debt of the  Borrower if such  Restricted  Payment had not
        been made.

16.21   MAXIMUM FUNDED DEBT RATIO; MAXIMUM INDEBTEDNESS

        Maintain for each fiscal quarter during the fiscal years set forth below
        a Funded  Debt  Ratio  not  exceeding  the  maximum  Funded  Debt  Ratio
        specified opposite each such fiscal year:

               YEAR                         MAXIMUM FUNDED DEBT RATIO

               1996                             0.95 to 1.00

        Effective as of the Second  Restatement  Date,  allow to exist or remain
        outstanding  Indebtedness  of the  Borrower  and its  Subsidiaries  on a
        consolidated  basis,  exclusive  of the  Indebtedness  evidenced  by the
        Mirror Notes,  that does not, at any time during any  particular  fiscal
        year,  exceed  the  aggregate  amount  set  forth  in  the  table  below
        applicable to such year:


                                              98

<PAGE>



                                                Maximum Aggregate
               YEAR                             AMOUNT OF INDEBTEDNESS

               1997                             DM 430,000,000
               1998                             DM 430,000,000
               1999                             DM 400,000,000
               2000                             DM 300,000,000

16.22   MINIMUM CONSOLIDATED EQUITY

        Maintain for each fiscal quarter during the fiscal years set forth below
        Consolidated  Equity of not less than the  minimum  Consolidated  Equity
        specified opposite each such fiscal year:

               YEAR                         MINIMUM CONSOLIDATED EQUITY

               1997                         DM 1,600,000,000
               1998                         DM 1,325,000,000
               1999                         DM 1,175,000,000
               2000                         DM 1,100,000,000

16.23   CURRENT ASSETS TO CURRENT LIABILITIES RATIO

        Maintain a ratio of Current  Assets to Current  Liabilities  of not less
        than 1.50 to 1.00.

16.24   INTEREST COVERAGE RATIO

        Maintain for the four fiscal  quarters  then ended an Interest  Coverage
        Ratio of not less than the minimum  Interest  Coverage  Ratio  specified
        opposite each date as set forth below:

                 Four Fiscal                       Minimum Interest
               QUARTERS ENDED                        COVERAGE RATIO

               March 31, 1997                         0.65 to 1.00
               June 30, 1997                          0.35 to 1.00
               September 30, 1997                     0.30 to 1.00
               December 31, 1997                      0.30 to 1.00
               March 31, 1998                         0.30 to 1.00
               June 30, 1998                          0.50 to 1.00
               September 30, 1998                     0.80 to 1.00
               December 31, 1998                      1.00 to 1.00
               March 31, 1999                         1.05 to 1.00
               June 30, 1999                          1.15 to 1.00
               September 30, 1999                     1.25 to 1.00
               December 31, 1999                      1.60 to 1.00
               March 31, 2000                         1.75 to 1.00

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               June 30, 2000                          2.00 to 1.00

16.25   MINIMUM EBITDA

        Have or achieve,  for each fiscal year set forth  below,  EBITDA that is
        not less than the minimum  EBITDA  specified  opposite  each such fiscal
        year below:

               FISCAL YEAR ENDED                        MINIMUM EBITDA

                  1997                                DM  20,000,000
                  1998                                DM  90,000,000
                  1999                                DM 195,000,000

        For  purposes  of  determining   compliance   with  the  minimum  EBITDA
        requirements  set forth in the  immediately  preceding  sentence,  there
        shall be added to EBITDA during any fiscal year the positive  remainder,
        if any, of (a) the sum of (i) the amount,  if any, of  contributions  to
        the equity of the  Borrower in the form of cash (as  distinguished  from
        the conversion of debt to equity) made by NL Industries or Kronos during
        such  fiscal  year plus (ii) the  amount,  if any,  of loans  made by NL
        Industries or Kronos as Subordinated  Debt during such fiscal year minus
        (b) the sum of (i) the increase in the Restricted  Capital Amount during
        such fiscal year, plus (ii) the aggregate amount of Restricted  Payments
        made during such fiscal  year  pursuant to SECTION  16.20(B);  provided,
        however,  that such addition to EBITDA may occur during no more than two
        separate  fiscal years of the Borrower during the term of this Agreement
        and any such addition  occurring  during any fiscal year shall be wholly
        excluded  for  purposes of  determining  EBITDA  during any other fiscal
        year.

16.26   REGISTERED OFFICE IN GERMANY

        Maintain a registered office in Germany.

16.27   SERVICE CONTRACT OF KRONOS TITAN

        Cause Kronos Titan to maintain the Service  Contract or obtain a renewal
        or renewals,  or a replacement or  replacements,  thereof  providing for
        comparable services during the term of the Leverkusen Lease.

16.28   RESTRICTION ON DIVIDENDS FROM SUBSIDIARIES

        (a)    Without the consent of the Majority Banks, the Borrower shall not
               permit  any of its  Subsidiaries  to incur any  Indebtedness  not
               existing as of the First  Restatement  Date,  which  Indebtedness
               includes a consensual  encumbrance  or restriction on the ability
               of a Subsidiary to pay dividends or distributions or make similar
               payments on its Stock to the Borrower or to any other Subsidiary.


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        (b)    Without the consent of the Majority  Banks,  the  Borrower  shall
               not,  nor permit any of its  Subsidiaries  to, amend or refinance
               any  Indebtedness  if such  amendment or  refinancing  includes a
               consensual  encumbrance  or  restriction  on the  ability  of any
               Subsidiary  to pay  dividends  or  distributions  or make similar
               payments on its Stock to the Borrower or to any other  Subsidiary
               to a greater extent than exists with respect to such Indebtedness
               at the time of such amendment or refinancing.

16.29   INVESTMENTS

        Except as otherwise expressly permitted under SECTIONS 16.09 or 16.10 of
        this Agreement,  neither the Borrower nor any of its  Subsidiaries  will
        make or acquire any Investment in any Person other than:

        (a)    Temporary Cash Investments;

        (b)    Investments  by a Subsidiary in the Borrower,  or by the Borrower
               or any of the Subsidiaries in any of the Major Subsidiaries;

        (c)    Investments by the Borrower or by any of its  Subsidiaries in any
               Subsidiary which is not a Major Subsidiary if,  immediately after
               such Investment is made or acquired, the aggregate net book value
               of all  Investments  permitted by this CLAUSE (C) does not exceed
               DM 105,000,000 (Deutsche Mark One Hundred Five Million); and

        (d)    any Investment not otherwise  permitted by the foregoing  clauses
               of this SECTION 16.29 if,  immediately  after such  Investment is
               made or acquired, the aggregate net book value of all Investments
               permitted  by this  CLAUSE  (D) does  not  exceed  DM  25,000,000
               (Deutsche Mark Twenty-Five Million);

        and  provided,  however,  that  neither  the  Borrower  nor  any  of its
        Subsidiaries  shall,  if a Default  exists  and is  continuing,  make or
        acquire any  Investment in any Person other than pursuant to CLAUSES (A)
        and (B) of this SECTION 16.29.

16.30   LIMITATION ON RESTRICTED PAYMENTS

        Not make any Restricted  Payment to any Person if any one or more of the
        following  Persons  shall fail to make  payments when due and payable of
        any of their Indebtedness in an aggregate amount exceeding DM 20,000,000
        (Deutsche  Mark Twenty  Million)  with respect to each such  Person:  NL
        Industries, the Principal Shareholder,  or any corporation Controlled by
        NL Industries and Controlling the Principal Shareholder.


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16.31   MAINTENANCE OF PROPERTY; INSURANCE

        Except as otherwise permitted under this Agreement, keep, and cause each
        of its  Subsidiaries  to keep, all property  useful and necessary in its
        business in good working  order and  condition,  ordinary  wear and tear
        excepted and maintain,  and cause each of its  Subsidiaries  to maintain
        (either in the name of the Borrower or in such  Subsidiary's  own name),
        with financially sound and reputable insurance  companies,  insurance on
        all their  property  in at least such  amounts and against at least such
        risks  as are  usually  insured  against  in the  same  general  area by
        companies  of  established  repute  engaged  in the  same  or a  similar
        business; and furnish to the Agent, upon written request from the Agent,
        full  information  as to the  insurance  carried.  SCHEDULE  10 attached
        hereto is a description of the types and amounts of insurance carried by
        the Borrower and its Subsidiaries as of the Second Restatement Date.

16.32   CONTINUATION OF BUSINESS

        Except as otherwise permitted under this Agreement,  continue, and cause
        each of its Major Subsidiaries to continue, to engage in business of the
        same  general  type  as  conducted  by  each  of  them  as of the  First
        Restatement Date, and preserve, renew and keep in full force and effect,
        and cause each of its Major Subsidiaries to preserve,  renew and keep in
        full  force  and  effect  its  respective  corporate  existence  and its
        respective rights,  privileges and franchises  necessary or desirable in
        the normal conduct of business.

16.33   TAXES

        File, and cause each of its Subsidiaries to file, all income tax returns
        and all other  material  tax  returns  that are  required to be filed by
        them;  and timely pay and cause each of its  Subsidiaries  to pay timely
        all taxes due and  payable  for the period  covered  by such  returns or
        pursuant  to  any  assessment  received  by the  Borrower  or any of its
        Subsidiaries,  except  for  those  being  contested  in  good  faith  by
        appropriate   proceedings  and  against  which  adequate   reserves  are
        established and maintained if required in accordance with German GAAP.

16.34   ADDITIONAL GUARANTIES, PLEDGED SUBSIDIARIES, ETC.

        (a)    Cause any  Subsidiary  which is not a Guarantor  as of the Second
               Restatement Date  (including,  without  limitation,  a Subsidiary
               which becomes a Subsidiary after the Second  Restatement Date) to
               become a Guarantor  hereunder  and thereupon  promptly  execute a
               Guaranty in form and  substance  reasonably  satisfactory  to the
               Agent,  to the extent  permitted  by  applicable  law;  provided,
               however,  that no such  Subsidiary  shall be  required to execute
               such a Guaranty if, in the opinion of its independent  counsel or
               counsel  for the Agent,  the  execution  of such  Guaranty  could
               subject the directors or officers of such  Subsidiary to civil or
               criminal liability;  provided,  further,  however, that each such
               Subsidiary  which is not  required to execute  such a Guaranty in
               accordance with the preceding proviso shall

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<PAGE>



               be  required to execute  such  Guaranty if and when (and within a
               reasonably  prompt time after the occurrence of) any change in or
               clarification  of  applicable  law would permit the  execution of
               such  Guaranty  without the  imposition of such civil or criminal
               liability.

        (b)    Cause any Subsidiary which is not a Pledged  Subsidiary as of the
               Second  Restatement  Date  (including,  without  limitation,  any
               Subsidiary   which   becomes  a   Subsidiary   after  the  Second
               Restatement Date) to become a Pledged Subsidiary and if it or any
               Subsidiary  owns shares of a Subsidiary  which  becomes a Pledged
               Subsidiary, it shall, or shall cause such Subsidiary to, become a
               Pledgor  with  respect  thereto  and  promptly  execute  a Pledge
               Agreement in form and substance  reasonably  satisfactory  to the
               Agent,  to the extent  permitted  by  applicable  law;  provided,
               however,  that neither the Borrower nor any  Subsidiary  shall be
               required to execute a Pledge  Agreement if, in the opinion of its
               independent  counsel or counsel for the Agent,  the  execution of
               such Pledge  Agreement could subject the directors or officers of
               the Borrower or such  Subsidiary to civil or criminal  liability;
               provided,  further,  however,  that if and to the extent that the
               Borrower or any  Subsidiary  is not  required  to execute  such a
               Pledge  Agreement in accordance with the preceding  proviso,  the
               Borrower or such Subsidiary (as applicable)  shall be required to
               execute  such  Pledge   Agreement  if  and  when  (and  within  a
               reasonably  prompt time after the occurrence of) any change in or
               clarification  of  applicable  law would permit the  execution of
               such Pledge  Agreement  without the  imposition  of such civil or
               criminal liability.

16.35   PLEDGED STOCK

        (a)    Except as otherwise  permitted by this Agreement,  not effect nor
               permit any reduction in, or limitation on, by charter,  by-law or
               otherwise,   voting   rights,   rights  to   dividends  or  other
               distributions, or rights of sale by pledgees in foreclosure, with
               respect to the Stock of any Pledged Subsidiaries.

        (b)    Except as otherwise  permitted by this Agreement,  not effect any
               sale,  pledge,  hypothecation,  mortgage  of, nor grant an option
               with respect to, or otherwise transfer,  assign or encumber,  any
               of the Stock of any Pledged Subsidiary.

        (c)    Not permit a Pledged Subsidiary to issue Stock to the Borrower or
               other  Pledgor  that is not subject to a Pledge  Agreement  or as
               otherwise permitted under this Agreement.

        (d)    Not effect or permit,  by  charter,  by-laws,  contract  or other
               arrangement,  any restriction on the rights of the pledgees under
               the Pledge  Agreements to exercise  their rights of sale or other
               rights  or  remedies  in  accordance   with  the  terms  of  such
               agreements.


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16.36   PRINCIPAL SHAREHOLDER WAIVER

        If Kronos is no longer the Principal  Shareholder of the Borrower,  then
        any such Person which  becomes a Principal  Shareholder  shall  promptly
        execute,   to  the  extent  not   prohibited  by   applicable   law,  an
        Acknowledgement  of Limitation of Special Damages  substantially  in the
        form of EXHIBIT J to the First Restated Agreement.

16.37   MAXIMUM CAPITAL EXPENDITURES

        Not make or  allow  any  Consolidated  Subsidiary  to make  any  Capital
        Expenditures,  provided,  however that Capital  Expenditures may be made
        if, after giving effect thereto, the aggregate Capital Expenditures made
        during any  fiscal  year do not exceed  the  maximum  aggregate  Capital
        Expenditures specified opposite each such fiscal year below:

                                                   Maximum Aggregate
               YEAR                                CAPITAL EXPENDITURES

               1996                                DM 90,000,000
               1997                                DM 70,000,000
               1998                                DM 60,000,000
               1999                                DM 60,000,000
               2000                                DM 60,000,000
               2001                                DM 60,000,000
               2002                                DM 60,000,000

        and provided further,  however, that Capital Expenditures  exceeding the
        amount  thereof set forth in the preceding  table may be made during any
        fiscal year if and to the extent that (a) such Capital  Expenditures are
        reasonably required to comply with applicable Environmental Laws and the
        Borrower provides  reasonable  evidence of such requirement to the Agent
        and (b) such Capital  Expenditures have not been previously  budgeted or
        otherwise  planned  to occur  during  such  fiscal  year,  and  provided
        further,  however,  that the  Borrower  may,  in addition to the maximum
        aggregate  Capital  Expenditures  allowed  in the  table  above  for any
        particular  fiscal year,  make Capital  Expenditures  during such fiscal
        year of an amount  equal to the positive  remainder  (if any) of (i) the
        maximum  aggregate Capital  Expenditures  allowed in the table above for
        the immediately  preceding fiscal year minus (ii) the aggregate  Capital
        Expenditures  actually  made during such  immediately  preceding  fiscal
        year.  In  addition,  and  notwithstanding   anything  to  the  contrary
        contained in the immediately  preceding  sentence,  the Borrower and its
        Consolidated  Subsidiaries  shall, during each fiscal year subsequent to
        1996, make Capital Expenditures of not less than DM 40,000,000 (Deutsche
        Mark  Forty  Million)  (or the  equivalent  amount in any  currency)  in
        aggregate amount.


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16.38   MIRROR NOTES; SUBORDINATED LOANS

        (a)    Not  make  any  payment  (whether  principal,  interest  or other
               payment in any form) of, on or with respect to the Mirror  Notes,
               the NL Subordinated Loan or the Kronos  Subordinated Loan, except
               for payments of principal  and interest on or with respect to the
               Mirror  Notes in amounts not to exceed the amounts  then due made
               on or after the due dates for such  payments,  which  payments of
               principal  are (in the  absence of any  acceleration  of maturity
               upon the occurrence of a default) due,  respectively,  on October
               20, 2003 and October 20, 2005; and

        (b)    Not amend or modify any of the Mirror  Notes or the  Subordinated
               Loan Documents  without the prior written consent of the Majority
               Banks (662/3%) (i) to increase the principal amount of any of the
               Mirror  Notes  or  the  NL   Subordinated   Loan  or  the  Kronos
               Subordinated  Loan,  (ii) to shorten the maturity of, or any date
               for the payment of any  principal  of or interest  on, any of the
               Mirror  Notes  or  the  NL   Subordinated   Loan  or  the  Kronos
               Subordinated  Loan,  (iii) to increase the rate of interest on or
               with  respect to any of the Mirror  Notes or the NL  Subordinated
               Loan or the Kronos  Subordinated Loan, (iv) to otherwise amend or
               modify any of the  payment  terms of the  Mirror  Notes or the NL
               Subordinated  Loan or the Kronos  Subordinated Loan other than to
               waive or cancel any  payment  obligations  of the  Borrower  with
               respect thereto or to contribute such  Indebtedness to the equity
               capital of the  Borrower or a  Subsidiary,  (v) to  increase  any
               cost,  fee or expense  payable by the  Borrower,  (vi) to add any
               collateral  as security for payment or  collection  of any of the
               Mirror  Notes  or  the  NL   Subordinated   Loan  or  the  Kronos
               Subordinated  Loan or  (vii)  in any  other  respect  that  would
               reasonably  be  expected  to be  adverse to the  Borrower  or any
               Subsidiary.

16.39   NOTIFICATION OF INDENTURE DEFAULTS

        Promptly  notify the Agent of the  occurrence of any "Default" or "Event
        of Default", as such terms are defined in either of the Indentures.

16.40   BANK ACCOUNTS

        The  Borrower  shall  cause all cash  balances of the  Borrower  and its
        Subsidiaries,   other  than  Kronos  World  Services  S.A./N.V.,  to  be
        maintained at Hypobank  International S.A. (or any affiliate of Hypobank
        International  S.A.  acceptable  to the Agent) or another Bank (party to
        this  Agreement)  or  branch  of  such  Bank  acceptable  to the  Agent;
        provided,  however,  that an  aggregate  amount of cash  balances not to
        exceed DM 30,000,000  (Deutsche Mark Thirty  Million) (or the equivalent
        amount  in  any   currency)   may  be  maintained  by  the  Borrower  or
        Subsidiaries of the Borrower at other  financial  institutions if and to
        the extent that it is not feasible for the Borrower or such Subsidiaries
        to  maintain  cash  balances  with  Hypobank  International  S.A. or its
        affiliates or another Bank or branch of such Bank.  The Borrower  shall,
        and shall cause each of its Canadian  Subsidiaries to, from time to time
        as may be necessary, pledge to the Agent as security for the Loans,

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<PAGE>



        pursuant to agreements,  documents and instruments in form and substance
        reasonably  satisfactory  to the Agent which shall create first priority
        Liens  (except as provided in SECTION  17.05),  all cash balances of the
        Borrower and its Canadian Subsidiaries,  and the Borrower will, and will
        cause each of its Canadian  Subsidiaries to, at all times cause its cash
        balances to be so pledged.

                                    ARTICLE 17.  COLLATERAL

17.01   As security for the  repayment of the Loans and the  performance  of all
        other  obligations  of the  Borrower  to the Banks (and in  addition  to
        certain  undertakings,  covenants and other  agreements),  the following
        documents  were executed and  delivered in connection  with the Original
        Agreement or the First Approval Agreement:

        (a)    Pledge dated as of May 30, 1990,  executed by the Borrower to and
               in favor of the  Agent  relating  to the  Stock of NL  Industries
               (Deutschland)   GmbH,  Kronos  Chemie  GmbH  and  Schraubenfabrik
               Neustadt Goetz & Cie. GmbH, as amended and reaffirmed;

        (b)    Pledge dated as of May 30, 1990, executed by NL Industries to and
               in favor of the  Agent  relating  to the  Stock of NL  Industries
               (Deutschland) GmbH, as amended and reaffirmed;

        (c)    Deed of  Security  dated  as of May 30,  1990  and as of June 19,
               1992,   executed   by  the   Borrower,   the  Agent  and  Societe
               Industrielle du Titane S.A.,  Assignment of Dividends dated as of
               May 30, 1990 and as of June 19, 1992,  executed by the  Borrower,
               the Agent and Societe Industrielle du Titane S.A. and Declaration
               of Pledge dated as of June 19, 1992, executed by the Borrower and
               Societe Industrielle du Titane S.A. to and in favor of the Banks,
               all relating to the Stock of Societe Industrielle du Titane S.A.;

        (d)    Pledge  Agreement of Registered  Shares dated as of May 30, 1990,
               executed by the Borrower to and in favor of the Agent relating to
               the Stock of Kronos  S.A./N.V.  (including  power of attorney and
               notice  of   assignment   relating   thereto),   as  amended  and
               reaffirmed, and Pledge Agreement of Registered Shares dated as of
               May 28,  1993,  executed  by the  Borrower to and in favor of the
               Agent relating to the Stock of Kronos Europe S.A./N.V. (including
               power of attorney and notice of assignment relating thereto);

        (e)    Pledge  Agreement  dated  as of May  30,  1990,  executed  by the
               Borrower  to and in favor of the Agent  relating  to the Stock of
               Kronos Norge A/S, as amended and reaffirmed;

        (f)    Legal  Mortgage of Shares dated as of May 30,  1990,  executed by
               the  Borrower to and in favor of the Agent  relating to the Stock
               of Kronos Limited (including power of attorney relating thereto),
               as amended and reaffirmed;

                                             106

<PAGE>




        (g)    Pledge  of  Shares  dated  as of May 30,  1990,  executed  by the
               Borrower  to and in favor of the Agent  relating  to the Stock of
               Kronos Canada, Inc., as amended and reaffirmed;

        (h)    Stock Pledge Agreement dated as of May 30, 1990,  executed by the
               Borrower  to and in favor of the Agent  relating  to the Stock of
               Kronos Europe, Inc., as amended and reaffirmed;

        (i)    Guaranty  dated as of May 30,  1990,  executed by Kronos  Europe,
               Inc. to and in favor of the Agent, as amended and reaffirmed;

        (j)    Guaranty  dated as of March 22, 1991,  executed by NL  Industries
               and  Kronos  (US)  to and in  favor  of  Agent,  as  amended  and
               reaffirmed (which Guaranty has been fully performed);

        (k)    Guarantee  Agreement dated as of May 10, 1991, executed by Kronos
               Canada,  Inc.  to and in  favor  of the  Agent,  as  amended  and
               reaffirmed;

        (l)    Special  Purpose  Account  Agreement  dated  as of May 15,  1992,
               executed  by NL  Industries,  Kronos  (US) (then known as Kronos,
               Inc.) and the  Borrower to and in favor of the Agent  relating to
               the Special Purpose Account;

        (m)    Declaration dated as of June 15, 1992,  executed by the Borrower,
               NL  Industries  and  Kronos  (US)  relating  to the pledge of the
               Special  Purpose  Account  (and  additional   documents  relating
               thereto);

        (n)    Pledge of Shares dated as of September 30, 1993,  executed by the
               Borrower  to and in favor of the Agent  relating  to the Stock of
               2927527 Canada Inc.; and

        (o)    Guarantee  Agreement dated as of September 30, 1993,  executed by
               2927527 Canada Inc. to and in favor of the Agent.

17.02   As  additional   security  for  the  repayment  of  the  Loans  and  the
        performance of all other  obligations of the Borrower to the Banks,  the
        documents  referred to in CLAUSES (I)(A) through (C) of SECTION  4.01(A)
        of the First Restated Agreement were executed and delivered concurrently
        with the First Restatement Date.

17.03   As  additional   security  for  the  repayment  of  the  Loans  and  the
        performance of all other  obligations of the Borrower to the Banks,  the
        documents  referred to in  Paragraphs  3(h),  3(i) and 3(k) of the First
        Approval  Agreement,  if required to be executed  under such  agreement,
        were  executed  and  delivered  in  accordance  with,  and at the  times
        specified in, the First Approval Agreement.


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17.04   As  additional   security  for  the  repayment  of  the  Loans  and  the
        performance of all other  obligations of the Borrower to the Banks,  the
        following  documents have been, or will be concurrently  with the Second
        Restatement Date, executed and delivered:

        (a)    (i)    Pledge  of  Shares  dated  as of  November  5,  1993,
                      executed  by the  Borrower  to and in favor  of the  Agent
                      relating to the Stock of 2969157  Canada Inc.,  as amended
                      and reaffirmed;

               (ii)   Guarantee Agreement dated as of November 5, 1993, executed
                      by 2969157  Canada Inc.  to and in favor of the Agent,  as
                      amended and reaffirmed;

               (iii)  Amendment and  Reaffirmation  of Pledge Agreement dated as
                      of January  28,  1994,  executed by the  Borrower  and the
                      Agent  confirming the pledge of 48,313 new shares of Stock
                      of  Kronos  Norge A/S  issued  by Kronos  Norge A/S to the
                      Borrower;

               (iv)   Pledge  Agreement of ZCON and ZCON  Agreement  dated as of
                      February 2, 1994, executed by the Borrower to and in favor
                      of the Agent  relating  to the pledge of the  Subordinated
                      Zero  Coupon  Option  Note dated  March 15,  1993,  in the
                      principal  amount  of NOK 110  million  issued  by  Kronos
                      Europe  S.A./N.V.  (then  known as  Kronos  S.A./N.V.)  to
                      Kronos Norge A/S and the Agreement dated January 29, 1993,
                      between Kronos Europe  S.A./N.V.  and Kronos Norge A/S and
                      the ZCON Amendment Agreement dated March 15, 1993;

               (v)    Amendment and  Reaffirmation  of Pledge of Shares dated as
                      of January 1, 1994, executed by the Borrower and the Agent
                      relating to the Stock of 2927527 Canada Inc.; and

               (vi)   Amendment and  Reaffirmation  of Pledge of Shares dated as
                      of January 1, 1994, executed by the Borrower and the Agent
                      relating to the Stock of 2969157 Canada Inc.;

        (b)    Amended and Restated Pledge  Agreement dated as of June 26, 1996,
               executed by the Borrower to and in favor of the Agent relating to
               the pledge of 53,427 newly issued shares and 532,196 newly issued
               shares of Stock of Kronos Norge A/S and that  certain  Promissory
               Note and Agreement dated June 26, 1996, in the original principal
               amount of NOK 200,000,000 made by Kronos Norge A/S payable to the
               order of the Borrower; and

        (c)           (i) the Nordenham Mortgage executed by Kronos Titan to and
                      in favor of the Agent,  which Lien  document  shall secure
                      only the  principal  amount of the Kronos Titan  Revolving
                      Portion  which has at any time been  advanced  directly to
                      Kronos  Titan  and  which  is   outstanding  at  any  time
                      (including the principal thereof, interest accrued thereon
                      and fees incurred with respect

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                      thereto)   and  the   priority  of  which  Lien  shall  be
                      subordinate  only to (A) the  existing  Lien in  favor  of
                      Westdeutsche  Landesbank securing an actual (as opposed to
                      nominal)  aggregate  amount  not to  exceed  DM  4,000,000
                      (Deutsche Mark Four Million) of principal  Indebtedness at
                      any time  outstanding,  (B) the existing  Lien in favor of
                      the  German  tax  authorities  securing  claims  for taxes
                      (including  interest) of the Borrower and its Subsidiaries
                      owed to the German tax  authorities  for fiscal  year 1990
                      not to exceed DM  100,000,000  (Deutsche  Mark One Hundred
                      Million) and (C) any (if any) Permitted  Liens referred to
                      in  CLAUSES  (D) and  (E) of the  definition  of the  term
                      "Permitted Liens";

               (ii)   the Canadian Security Documents executed by Kronos Canada,
                      Inc.,  2927527  Canada Inc.  and 2969157  Canada Inc.  (as
                      applicable) to and in favor of the Agent;

               (iii)  the  Cash  Pledge  Agreements  executed  by the  Borrower,
                      Kronos  Canada,  Inc.,  2927527  Canada  Inc.  and 2969157
                      Canada Inc. (as  applicable) to and in favor of the Agent;
                      and

               (iv)   the NL Guaranty  executed by NL Industries to and in favor
                      of the Agent.

17.05   The  Borrower  covenants  and  agrees  that,   pursuant  to  the  Pledge
        Agreements,  the Nordenham Mortgage, the Canadian Security Documents and
        the Cash Pledge  Agreements,  the Agent,  as Agent for the Banks,  shall
        have a Lien in and to (a) the Stock of the Pledged Subsidiaries, (b) the
        Nordenham plant of Kronos Titan,  (c) all material assets and properties
        of Kronos  Canada,  Inc.,  2927527  Canada Inc. and 2969157  Canada Inc.
        (including,  without limitation,  the Varennes,  Quebec, Canada plant of
        Kronos  Canada,  Inc. and the Kronos Canada Note held by 2969157  Canada
        Inc. but excluding the stock of Kronos World Services S.A./N.V. owned by
        Kronos  Canada,  Inc.),  and (d) certain bank  accounts of the Borrower,
        Kronos Canada, Inc., 2927527 Canada Inc. and 2969157 Canada Inc., all as
        security for the Loans  (including,  without  limitation,  the Revolving
        Portion and any reborrowings of the Revolving  Portion to be advanced on
        the date of any drawdown  thereof).  The Borrower further  covenants and
        agrees that all of such Liens referred to in the  immediately  preceding
        sentence shall constitute perfected first priority Liens in favor of the
        Agent for the benefit of the Agent and the Banks and the  properties and
        assets  affected  thereby  shall not be subject to any other Liens other
        than  Permitted  Liens referred to in CLAUSE (D), (E), (F) or (I) of the
        definition of the term "Permitted  Liens" in this  Agreement;  provided,
        however,  that (A) the Lien created by the  Nordenham  Mortgage may have
        the priority  specified in CLAUSE (I) of SECTION 17.04(C),  (B) the Lien
        referred to in CLAUSE (B) preceding may be  subordinate  to any (if any)
        Permitted  Liens referred to in CLAUSES (D) and (E) of the definition of
        the term "Permitted  Liens", and (C) the Liens referred to in CLAUSE (C)
        preceding may be subordinate to any (if any) Permitted Liens referred to
        in CLAUSES (D), (E), (F) and, as to Liens affecting assets or properties
        of Kronos Canada,  Inc. only, (H) of the term "Permitted Liens", and the
        Banks  hereby  expressly  authorize  the Agent to take all  actions  and
        execute all instruments

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        on their behalf necessary to subordinate its Liens referred to in CLAUSE
        (C) preceding  affecting assets or properties of Kronos Canada,  Inc. to
        the Liens referred to in CLAUSE (H) of the term "Permitted Liens".

                                ARTICLE 18.  EVENTS OF DEFAULT

        If,  for  whatever  reason,  any of the  following  shall  occur  and be
continuing:

18.01   The  Borrower  shall fail to pay  principal  of the Loan or any  portion
        thereof on the due date  therefor;  shall fail to pay any interest  with
        respect to the Loan or any portion  thereof  within five (5) days of the
        due date  therefor;  or shall fail to pay any fee or any other sum which
        shall have become due under this  Agreement  or any other Loan  Document
        within  five (5) days after  notice from the Agent;  provided,  however,
        that no  failure  of the  Borrower  to pay  principal  on the  due  date
        therefor shall be an Event of Default (as  hereinafter  defined) if, and
        only if, NL Industries or Kronos pays such principal on such due date;

18.02   The Borrower  ceases to be,  directly or  indirectly,  a  majority-owned
        subsidiary of NL Industries.

18.03   The  Leverkusen  Lease is  voluntarily  modified,  or is  terminated  or
        shortened  or there is a  Disposition  of the  Leverkusen  Lease,  or an
        agreement  providing for the Disposition,  modification,  termination or
        shortening of the Leverkusen Lease shall be entered into during the term
        of the Loan or while any payments due and payable by the Borrower remain
        outstanding,  unless such Disposition,  modification,  termination of or
        agreement  with  respect  to the  Leverkusen  Lease  will  result in the
        payment of full, fair and reasonable consideration to Kronos Titan.

18.04   The lessor  under the  Leverkusen  Lease  exercises  or has the right to
        exercise  immediately any remedies or rights of reversion or termination
        thereunder  or, with respect to rental  payments  required in accordance
        with the Leverkusen  Lease, the lessee fails to make rental payments for
        a period of 2 (two)  quarters or, if there is a bona fide  dispute,  the
        lessee fails to make rental payments for a period of 4 (four) quarters.

18.05   The Service  Contract is  terminated,  modified or  Disposition  is made
        thereof  during the term of the  Leverkusen  Lease  unless  replaced  or
        renewed with a contract or provisions  providing for comparable services
        which  replacement  continues during the term of the Leverkusen Lease or
        unless the Disposition of the Service  Contract or any such  replacement
        occurs  concurrently  with the Disposition,  termination,  shortening or
        modification  of the  Leverkusen  Lease in accordance  with the terms of
        this Agreement.

18.06   Any  representation,  warranty,  certification  or statement made by the
        Borrower or any Affiliate (including, without limitation, NL Industries,
        Kronos (US),  Kronos and the  Subsidiaries)  in any Loan Document  shall
        prove to have been incorrect in any material respect when made or deemed
        to have been made or repeated, as the case may be.

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<PAGE>




18.07   Except  as set  forth on  SCHEDULE  4, any Loan  Document  or any of the
        obligations  of  the  Borrower  or  any  Affiliate  (including,  without
        limitation,  NL Industries,  Kronos (US),  Kronos and the  Subsidiaries)
        thereunder  shall  cease in any  material  respect to be legally  valid,
        binding and enforceable in accordance with the respective  terms of such
        Loan Document,  or any Guarantor shall state its intention,  in writing,
        to revoke its Guaranty.

18.08   The Borrower  and/or any Subsidiary  shall fail to observe or perform in
        any  material  respect any  covenant or  agreement  contained in SECTION
        16.08  (to  the  extent  that  Borrower  or  any  of  its   Subsidiaries
        voluntarily  creates or permits  to exist any Lien,  except a  Permitted
        Lien) or SECTIONS 16.09,  16.10,  16.17 through 16.25, 16.30 or 16.38 of
        this Agreement.

18.09   The Borrower and/or any Affiliate  (including,  without  limitation,  NL
        Industries,  Kronos  (US),  Kronos and the  Subsidiaries)  shall fail to
        observe  or  perform  in any  material  respect  any other  covenant  or
        agreement  contained in any Loan Document (and not constituting an Event
        of Default  under any other  clause of this ARTICLE 18) and such failure
        shall  continue for 30 (thirty)  days after written  notice  thereof has
        been given to the Borrower by the Agent.

18.10   Any Company,  NL Industries,  Kronos,  the Principal  Shareholder or any
        corporation  which is  Controlled  by NL  Industries  and  Controls  the
        Principal Shareholder becomes insolvent for the purposes of any relevant
        law, or shall commence a voluntary action or other  proceedings  seeking
        liquidation,  reorganization or other relief with respect to itself, its
        properties  or its  debts  under  any  bankruptcy,  insolvency  or other
        similar law now or hereafter in effect,  or seeking the appointment of a
        trustee, receiver, liquidator, custodian or other similar official of it
        or any substantial part of its property,  or shall consent to any relief
        or to the appointment of or taking or possession by any such official in
        an involuntary case or other proceeding  commenced  against it, or shall
        make a general  assign ment for the benefit of creditors,  or shall fail
        generally  to pay its  debts  as they  become  due,  or  shall  take any
        corporate action to authorize any of the foregoing.

18.11   An involuntary  action or other  proceedings  shall be commenced against
        any Company,  NL Industries,  Kronos,  the Principal  Shareholder or any
        corporation  which is  Controlled  by NL  Industries  and  Controls  the
        Principal  Shareholder  seeking  liquidation,  reorganization  or  other
        relief with respect to it or its debt under any  bankruptcy,  insolvency
        or  other  similar  law  now or  hereafter  in  effect  or  seeking  the
        appointment  of a  trustee,  receiver,  liquidator,  custodian  or other
        similar official of it or any substantial part of its property, and such
        involuntary  case or  other  proceeding  shall  remain  undismissed  and
        unstayed for a period of 75  (seventy-five)  days; or an order of relief
        shall be entered against any such corporation  under any bankruptcy laws
        as now or hereafter in effect;

18.12   Indebtedness  of (i) the  Borrower  and/or  any  Subsidiary  or (ii) the
        Principal  Shareholder,  in  either  such  case in an  aggregate  amount
        exceeding  DM  20,000,000   (Deutsche  Mark  Twenty   Million)  (or  the
        equivalent amount in any currency) is not paid when due after any

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<PAGE>



        applicable  grace  period or is not paid if it becomes  due and  payable
        prior to its  specified  maturity,  or any  creditor or creditors of the
        Borrower or any of its Subsidiaries or the Principal Shareholder becomes
        entitled  immediately to declare any such  Indebtedness  due and payable
        prior to its specified maturity;

18.13   One or more final judgments or non-appealable  orders for the payment of
        money in excess of DM  10,000,000  (Deutsche  Mark Ten  Million) (or the
        equivalent  amount in any  currency)  for all such  judgments  or orders
        shall  be  rendered  against  the  Borrower  and/or  any  of  its  Major
        Subsidiaries,  and such judgments or orders shall  continue  unsatisfied
        and in effect for a period of 10 (ten) consecutive days;

18.14   Any other  event  occurs or  circumstances  arise  with  respect  to the
        Borrower and/or its Subsidiaries  which in the reasonable opinion of the
        Majority Banks is likely to materially  adversely  affect the ability of
        the  Borrower  to perform  its  obligations  with  respect to  payments,
        Collateral or Liens under the Loan Documents;

18.15   The  occurrence of an "Event of Default"  (whether or not such an "Event
        of  Default"  is  declared  or any  remedy  is  exercised  with  respect
        thereto), as such term is defined in either of the Indentures; or

18.16   (a) Either of the  Indentures or any of the NL Notes shall be amended or
        modified  without  the  prior  written  consent  of the  Majority  Banks
        (662/3%)  (i) to increase the  principal  amount of any of the NL Notes,
        (ii) to  shorten  the  maturity  of, or any date for the  payment of any
        principal of or interest on, any of the NL Notes,  (iii) to increase the
        effective  rate of interest or discount on or with respect to any of the
        NL Notes,  (iv) to  increase  any cost,  fee or  expense  payable  by NL
        Industries  or any of its  subsidiaries,  (v) to add any  collateral  as
        security for payment or  collection  of any of the NL Notes,  or (vi) in
        any other respect that would be  materially  adverse to NL Industries or
        any of its  subsidiaries,  (b) NL  Industries  shall  elect  to make any
        optional  redemption or optional prepayment of principal of, interest on
        or other  amount  with  respect  to the NL Notes (or any of such  notes)
        without the prior written consent of the Majority Banks (662/3%), or (c)
        the  Borrower  shall  voluntarily  or  involuntarily  make a payment  of
        principal  of,  interest  on or  other  amount  with  respect  to the NL
        Subordinated  Loan or the Kronos  Subordinated  Loan  without  the prior
        written consent of the Majority Banks (662/3%); or

18.17   The First Prepayment or any portion thereof or the Second  Prepayment or
        any  portion  thereof,  for any  reason,  is  determined  by a court  of
        competent jurisdiction to be void or invalid as a fraudulent transfer, a
        preference or the like or is otherwise required to be disgorged;

        then unless such an event (an "Event of Default")  shall have been cured
        or waived in accordance  with the  applicable  terms of this  Agreement,
        except for an event under  SECTIONS  18.10 or 18.11,  the Agent may, and
        upon  instruction  of the Majority  Banks  shall,  at any time after the
        occurrence  of such  Event  of  Default  by  notice  in  writing  to the
        Borrower,  declare that the Loan and all outstanding balances hereunder,
        together with

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        accrued interest thereon, and all other sums whatsoever payable pursuant
        to this Agreement and/or any other Loan Document have become immediately
        due and payable and that the Commitment of any Bank under this Agreement
        shall have terminated, without presentment, demand, protest or any other
        notice of any kind,  all of which are expressly  waived by the Borrower,
        and  exercise  any and all other  rights or remedies of the Agent and/or
        the  Banks  under  the  Loan  Documents  or  otherwise  available  under
        applicable  law (none or which rights or remedies are waived).  Upon the
        occurrence of any event in SECTION 18.10 or 18.11 above, the Commitments
        of the  Banks  shall  automatically  terminate  and  the  Loan  and  all
        outstanding  balances hereunder,  accrued interest thereon and all other
        sums whatsoever payable pursuant to this Agreement and/or any other Loan
        Document   shall   automatically   become  due  and   payable,   without
        presentment,  demand,  protest  or notice of any kind,  all of which are
        expressly waived by the Borrower.  The occurrence of an Event of Default
        shall  entitle  the Agent  and the Banks to  enforce  their  rights  and
        remedies  under the Loan  Documents  and  against  any  Collateral,  and
        otherwise  as  permitted  by  applicable  law,  and the  same  shall  be
        cumulative,  non-exclusive  and  concurrent  against the  Borrower,  its
        Affiliates  or  any  other   obligated   party  for  payment  of  and/or
        performance  under  the Loan or any of the Loan  Documents,  or any part
        thereof,  or against any one or more of them, or against the Collateral,
        at the sole discretion of the Agent and the Banks,  and may be exercised
        as often as  occasion  therefor  shall  arise,  it being  agreed  by the
        Borrower  that the  exercise of or failure to exercise any of same shall
        in no event be construed as a waiver or release thereof or of any right,
        remedy or recourse.

                                       ARTICLE 19.  FEES

19.01   On or before the Second  Restatement Date, the Borrower shall pay to the
        Agent,  for  distribution  amongst the Banks, a closing fee in an amount
        equal to 1/2 of 1%  (one-half  of one  percent)  of the sum of, for each
        such  Bank  and as of  the  Second  Restatement  Date,  the  outstanding
        principal  amount of the Term Portion of the Loans of such Bank plus the
        maximum amount of such Bank's  Revolving  Commitment (in each case after
        giving effect to the prepayments and the reduction in the maximum amount
        of the Revolving Portion to occur on the Second Restatement Date). On or
        before  January  29,  1997,  the  Borrower  shall pay to the Agent,  for
        distribution amongst each of the Banks who consents to this Agreement on
        or before January 24, 1997, whether or not this Agreement is executed by
        the  Majority  Banks,  an  additional  closing fee in an amount equal to
        1/10th of 1%  (one-tenth  of one percent) the sum of, for each such Bank
        and as of the Second Restatement Date, the outstanding  principal amount
        of the Term Portion of the Loans of such Bank plus the maximum amount of
        such Bank's  Revolving  Commitment  (in each case after giving effect to
        the prepayments and the reduction in the maximum amount of the Revolving
        Portion to occur on the Second  Restatement  Date). On or before January
        29, 1997, the Borrower  agrees to pay 40% (forty percent) of the closing
        fee referred to in the first sentence of this SECTION 19.01 preceding to
        each of the Banks who consents to this  Agreement  on or before  January
        24,  1997,  whether or not this  Agreement  is executed by the  Majority
        Banks.


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19.02   The Borrower shall pay to the Agent for its own account an annual agency
        fee in  Deutsche  Mark in the  amounts  and on the  dates  stated in the
        letter dated as of May 30, 1990 to the Agent from the Borrower,  as such
        letter may be amended from time to time. In addition,  and in connection
        with this  Agreement,  the  Borrower  shall pay to the Agent for its own
        account the fees in the  amounts  and on the dates  stated in the letter
        dated December 30, 1996 to the Agent from the Borrower.

19.03   The Borrower shall pay to the Agent for  distribution  amongst the Banks
        pro rata according to each Bank's Revolving Commitment a commitment fee,
        with respect to the Revolving Portion,  equal to one-half of one percent
        (0.50%) per annum of the average Revolving Portion  Availability  during
        the applicable  period.  Such  commitment fee shall be payable,  for the
        period from the First  Restatement  Date through  June 30, 2000,  on the
        last day of each calendar  quarter during the term of the First Restated
        Agreement or this Agreement (commencing December 31, 1993) and on August
        15, 2000,  and shall be calculated for the actual number of days elapsed
        on the basis of a 365 (three hundred sixty-five) day year.

19.04   All of the fees paid or payable by the Borrower pursuant to the Original
        Agreement,  the First Restated  Agreement,  this Agreement and the other
        Loan Documents shall be nonrefundable.

                               ARTICLE 20.  EXPENSES AND DUTIES

20.01   The  Borrower  shall  reimburse  the Agent on demand for all  reasonable
        out-of-pocket  charges and expenses  incurred by the Agent in connection
        with  the  preparation,   negotiation  and  execution  of  the  Original
        Agreement,  the First Restated  Agreement,  this Agreement and the other
        Loan  Documents  (including,  without  limitation,  fees and expenses of
        legal  advisors)  and  reimburse  the  Agent on  demand  for  reasonable
        out-of-pocket charges and expenses in connection with the publication of
        this  transaction.  The Borrower shall reimburse the Agent on demand for
        fees and expenses of legal  advisors,  financial  consultants  and other
        consultants  in  connection  with  the   preparation,   negotiation  and
        execution of the Original Agreement, the First Restated Agreement,  this
        Agreement and the other Loan Documents.

20.02   The Borrower  shall  reimburse the Agent and the Banks on demand for all
        reasonable,  out-of-pocket  charges and expenses  (including legal fees)
        reasonably  incurred by them or any of them in, or in  connection  with,
        any modification of, the enforcement of, or preservation of rights under
        the Original Agreement, the First Restated Agreement, this Agreement and
        the other Loan Documents, provided that prior to an Event of Default the
        Borrower  shall not be  obligated  to pay the fees and  expenses of more
        than one law firm (unless questions arise under laws of jurisdictions in
        which the principal  firms engaged are not  authorized to practice law),
        and, after an Event of Default,  the Borrower shall  reimburse the Banks
        for the fees and  expenses of counsel  for each such Bank in  connection
        with the  modification,  enforcement or  restructuring of this Agreement
        and the other Loan  Documents,  and  provided  further that the Borrower
        shall not be obligated to pay under the

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<PAGE>



        Original Agreement, the First Restated Agreement,  this Agreement or any
        of the other Loan Documents  losses,  costs or expenses  arising from or
        relating to disputes  solely  among the Agent and the Banks,  or losses,
        costs or  expenses  of the  Agent or any Bank  resulting  from its gross
        negligence or wilful misconduct.

20.03   The  Borrower  shall pay any and all  stamp,  registration  and  similar
        taxes,  duties and  charges of  whatsoever  nature  (but  excluding  all
        Excluded  Taxes) which may be payable or determined to be payable on, or
        in  connection   with,   the  execution,   registration,   notarization,
        performance or enforcement of the Original Agreement, the First Restated
        Agreement,  this  Agreement and the other Loan  Documents.  The Borrower
        shall  indemnify the Agent and the Banks against any and all liabilities
        with respect to or  resulting  from delay or omission on the part of the
        Borrower to pay any such taxes, duties or charges.

20.04   The Borrower  shall  reimburse  the Agent on demand for all  reasonable,
        out-of-pocket charges and expenses (including, without limitation, legal
        fees and fees of financial consultants and other consultants) reasonably
        incurred  by it in,  or in  connection  with,  periodic  monitoring  and
        determination of on-going compliance (or non-compliance, as the case may
        be) with the terms and  provisions of this  Agreement and the other Loan
        Documents.  The Borrower  acknowledges  and agrees that,  in addition to
        legal  advisors,  such  consultants  may  include,  without  limitation,
        industry, tax, accounting and environmental consultants.

                             ARTICLE 21.  THE AGENT AND THE BANKS

21.01   Each Bank hereby  irrevocably  appoints the Agent to act as its agent in
        connection with this Agreement and the Loan Documents and authorizes the
        Agent to exercise such rights,  remedies,  powers and  discretion as are
        specifically  delegated to the Agent by the terms of this  Agreement and
        the Loan Documents together with all such rights,  powers and discretion
        as are reasonably incidental thereto.

21.02   When acting in connection with the Loan Documents, the Agent may:

        (a)    assume that no Default has occurred and that the parties  thereto
               are not in  breach or  default  of their  respective  obligations
               thereunder   unless  the   officers  of  the  Agent   immediately
               responsible  for matters  concerning  this  Agreement  shall have
               actual knowledge or shall have been notified in writing by a Bank
               that such Bank  considers that a Default exists and is continuing
               and specifying the nature thereof;

        (b)    assume that each Bank's  Lending Office is that  identified  with
               its signature  below and on SCHEDULE 1 until it has received from
               such Bank written  notice  designating  some other office of such
               Bank as its Lending  Office and  continue to act upon such notice
               until the same is superseded by a further such notice;


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        (c)    subject to the  provisions of SECTION  20.02,  engage and pay for
               the  advice or  services  of any  lawyers,  accountants  or other
               experts  whose  advice  or  services  may to it  seem  necessary,
               expedient  or  desirable  and  fully  rely  upon  any  advice  so
               obtained;

        (d)    rely as to any matters of fact which might reasonably be expected
               to be  within  the  knowledge  of  the  Borrower  or  any  of its
               Affiliates  upon a certificate  signed by an officer on behalf of
               such entity;

        (e)    rely upon any  communication  or  document  believed  by it to be
               genuine;

        (f)    refrain from exercising any right,  power or discretion vested in
               it hereunder unless and until instructed by the Majority Banks as
               to the manner in which such right,  power or discretion should be
               exercised; and

        (g)    refrain from acting in accordance  with any  instructions  of the
               Majority  Banks to begin any legal action or  proceeding  arising
               out of or in connection  with the Loan  Documents  until it shall
               have been indemnified by the Banks to its reasonable satisfaction
               against  any and all costs,  claims,  expenses  (including  legal
               fees)  and  liabilities  which it will or may  expend or incur in
               complying with such instructions.

21.03   The Agent shall:

        (a)    subject to the provisions of this Agreement, promptly inform each
               Bank of the contents of any written  notice or document  received
               by it from the Borrower hereunder;

        (b)    promptly  notify each Bank of the occurrence of any Default under
               this  Agreement  of which the Agent has received  written  notice
               from a Bank pursuant to SECTION 21.02;

        (c)    subject to the  provisions of this  Agreement,  act in accordance
               with any written instructions given to it by the Majority Banks;

        (d)    if so instructed by the Majority  Banks in writing,  refrain from
               exercising any right, power or discretion vested in it hereunder;
               and

        (e)    administer and service the Loan in accordance  with its customary
               procedures and practices in the  administration  and servicing of
               loans of a similar nature made by the Agent,  and the Agent shall
               have the authority to make decisions hereunder in connection with
               the day-to-day administration and servicing of the Loan, and each
               Bank shall be bound thereby.

21.04   Neither the Agent nor any of its directors,  officers, employees, agents
        or Affiliates, shall:


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<PAGE>



        (a)    be bound to  inquire as to the  occurrence  or  otherwise  of any
               Default or Event of Default or as to any failure of the  Borrower
               or any  Affiliate  duly to perform its  obligations  hereunder or
               under the Loan Documents;

        (b)    be bound to account to any Bank for any sum or the profit element
               of any sum received by it for its own account;

        (c)    be bound to disclose to any other Person any information relating
               to the Borrower or any of the Borrower's  Affiliates  received by
               it if such disclosure would or might in the opinion of any of the
               above Persons  constitute a breach of any law or regulation or be
               otherwise actionable by suit of any Person;

        (d)    be under  any  fiduciary  duty  towards  any  Bank or  under  any
               obligations  other than those for which express provision is made
               herein;

        (e)    be liable for any action  taken or omitted to be taken except for
               their own gross negligence or wilful misconduct; or

        (f)    be liable for any error in  computing  any amount  payable to any
               Bank,  provided,  that the Agent,  the  Borrower and any affected
               Bank, upon discovery of such error,  shall make such  adjustments
               as may be required to correct such error.

21.05   Each Bank agrees to  indemnify  the Agent and its  directors,  officers,
        employees,  agents and  Affiliates  to the extent not  reimbursed by the
        Borrower in the proportion of its share in the Loan (or, if no amount is
        outstanding,  its Commitment) for any and all liabilities,  obligations,
        losses, damages,  penalties,  actions, judgments, suits, costs, expenses
        or disbursements of any kind and nature  whatsoever which may be imposed
        on,  incurred  by or  asserted  against  the  Agent  and its  directors,
        officers,  employees,  agents or  Affiliates  in any way  relating to or
        arising out of the First Restated Agreement, this Agreement or any other
        Loan Documents,  or any other  documents  contemplated by or referred to
        herein  or the  transactions  contemplated  hereby  (including,  without
        limitation,  the costs and  expenses  which the Borrower is obligated to
        pay under  ARTICLE  20 but  excluding,  unless an Event of  Default  has
        occurred and is  continuing,  normal  administrative  costs and expenses
        incident to the  performance of its Agent's agency duties  hereunder) or
        the  enforcement  of any of the terms of the First  Restated  Agreement,
        this  Agreement,  the Loan  Documents  or of any such  other  documents,
        provided  that no Bank shall be liable for any of the  foregoing  to the
        extent  they  arise  from  the  Agent's   gross   negligence  or  wilful
        misconduct.

21.06   Each  Bank  agrees  that the  Agent  shall  not be  responsible  for the
        accuracy or completeness of any  representation  made (whether orally or
        otherwise)  herein  or in  connection  herewith,  for the  proper  form,
        validity,  effectiveness,  adequacy or  enforceability  of the  Original
        Agreement,  the First Restated Agreement,  this Agreement, any Guaranty,
        the Pledge  Agreements,  the Nordenham  Mortgage,  the Canadian Security
        Documents, the Cash Pledge Agreements or any of the other Loan Documents
        or for the  creditworthiness  of the Borrower,  any Guarantor,  Pledgor,
        Pledged Subsidiary or any Affiliate of the foregoing

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        entities.  Neither  the  Agent  nor  any  of  its  directors,  officers,
        employees,  agents or Affiliates  shall be under any liability for or in
        respect of any action taken or omitted by any of them in relation to the
        Original Agreement,  the First Restated Agreement,  this Agreement,  any
        Guaranty,  the Pledge Agreements,  the Nordenham Mortgage,  the Canadian
        Security Documents,  the Cash Pledge Agreements or any of the other Loan
        Documents except for their gross negligence or wilful misconduct.

21.07   The Agent may accept deposits from,  lend money to and generally  engage
        in any kind of  banking  or other  business  with  the  Borrower  or any
        Affiliate, independently of the transactions contemplated herein.

21.08   It is  understood  and  agreed by each  Bank that it has been,  and will
        continue to be, solely responsible, without reliance upon the Agent, for
        making its own  independent  appraisal  of and  investigations  into the
        financial condition,  creditworthiness and affairs of the Borrower,  any
        Guarantor,  the Pledgors,  Pledged  Subsidiaries  and  Affiliates of the
        foregoing  entities  and the value of the  Collateral  or the  validity,
        enforceability  or  genuineness  of the  Original  Agreement,  the First
        Restated  Agreement,  this  Agreement or any of the Loan  Documents  and
        accordingly each Bank confirms to the Agent that it has not relied,  and
        will not hereafter rely, on the Agent:

        (a)    to check or inquire on its behalf into the adequacy,  accuracy or
               completeness of any  information  provided by the Borrower or any
               Affiliates,  director,  officer,  employee  or agent  thereof  in
               connection  with the Loan Documents or the  transactions  therein
               contemplated  whether  or not  such  information  has  been or is
               hereafter circulated to such Bank by the Agent; or

        (b)    to  assess  or keep  under  review on its  behalf  the  financial
               condition,  creditworthiness  or affairs of the  Borrower  or its
               Affiliates and the value and/or enforceability of the Collateral.

21.09   The Agent may at any time be removed by the Majority Banks upon at least
        30 (thirty) days prior written  notice to such Agent of such removal but
        only for cause  consisting of gross  negligence or wilful  misconduct or
        following a declaration of insolvency by the appropriate regulators. The
        Agent  may at any time  resign  from the  agency  upon not less  than 45
        (forty-five) days' notice to the Banks of its intention to do so and, if
        any such  notice  is given  by the  Agent,  the  Agent  shall,  upon the
        appointment of a successor  agent as hereinafter  provided for, cease to
        be under any further obligation as Agent hereunder.  Within such period,
        the Majority Banks may appoint a successor agent with the consent of the
        Borrower, which consent will not be unreasonably withheld or delayed and
        if, before the expiry of such notice,  such successor agent notifies the
        parties hereto that it accepts such appointment:

        (a)    each  reference   herein  to  the  "Agent"  shall  thereafter  be
               construed as a reference to the successor agent; and


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        (b)    the  successor  agent  and the  parties  hereto  other  than  the
               retiring Agent shall  thereafter have such rights and obligations
               inter se as they would have if the successor agent had been named
               herein as the Agent.  If no  successor  agent,  appointed  by the
               Majority Banks,  notifies the parties hereto, prior to the expiry
               of the Agent's  notice of its intention to retire from the agency
               giving rise to the need to appoint the same, of its acceptance of
               such  appointment,  the Agent may  appoint  any  experienced  and
               reputable bank having offices in London, Munich, New York City or
               Luxembourg  to be the  successor  agent and,  if it does and such
               successor  agent notifies the parties hereto that it accepts such
               appointment:

               (i)    each reference  herein to the "Agent" shall  thereafter be
                      construed  as  a  reference  to  the  successor  agent  so
                      appointed; and

               (ii)   the  successor  agent so  appointed  upon  execution  of a
                      counterpart of this Agreement and the parties hereto other
                      than the retiring Agent shall  thereafter have such rights
                      and  obligations  inter  se as  they  would  have  if  the
                      successor  agent so appointed had been named herein as the
                      Agent.

               Until the Borrower  receives written notice of the appointment of
               a new Agent,  the Borrower  shall be entitled to continue to send
               notices  and  payments  to the  previously  appointed  Agent  and
               otherwise  to treat such Agent as the Agent for  purposes of this
               Agreement.

21.10   If any  Reference  Bank shall be prepaid  under this  Agreement or shall
        cease to have any Commitment or after the Second  Restatement Date cease
        to have any principal or interest  owing to it hereunder,  the Agent may
        in  consultation  with the Banks and the  Borrower  appoint a substitute
        Reference Bank.

21.11   The  provisions  of this  ARTICLE 21 are  solely for the  benefit of the
        Agent and the Banks and  neither  the  Borrower  nor any  Subsidiary  or
        Affiliate of the Borrower shall have any rights  (whether as third party
        beneficiary or otherwise) except as specifically provided herein.

                                    ARTICLE 22.  NO WAIVER

        No failure to  exercise  and no delay in  exercising  on the part of the
Agent or any Bank of any right, power or privilege  hereunder shall operate as a
waiver thereof,  nor shall any single or partial exercise of any right, power or
privilege preclude any other or future exercise thereof,  or the exercise of any
other right,  power or privilege.  The rights and privileges herein provided are
cumulative and not exclusive of any rights or remedies provided by law in equity
or otherwise.  This Agreement may be amended and any provision of this Agreement
may be waived only with the consent of the Majority  Banks,  provided,  however,
that no  amendment  or waiver  shall,  unless in writing and signed by each Bank
affected thereby, do any of the following:

               (1)    reduce the  principal  or the rate of interest  payable by
                      the Borrower on any Loan or reduce any fees payable to the
                      Banks under this Agreement;

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               (2)    postpone the date fixed for the payment of principal of or
                      interest  on the Loan or any fees to the Banks  under this
                      Agreement;

               (3)    increase the Commitment of any Bank or subject any Bank to
                      any additional obligation to make Loans; or

               (4)    amend this ARTICLE 22;

provided,  further, that no amendment or waiver shall be effected which releases
or impairs or otherwise  compromises  any Collateral or  substitutes  Collateral
without the prior written  consent of the Majority  Banks (662/3%) other than in
the case of the NL Undertaking for which the consent of the Majority Banks shall
be required;  and provided  further that no such amendment or waiver or consent,
as the case may be,  which  has the  effect  of (i)  increasing  the  duties  or
obligations  of the Agent under this  Agreement  or of the Agent under any other
Loan Document,  or (ii) increasing the standard of care or performance  required
on the part of the Agent  under this  Agreement  or of the Agent under any other
Loan Document, or (iii) reducing or eliminating the indemnities or immunities to
which the Agent is entitled  hereunder  (including any amendment or modification
of this ARTICLE 22), shall be effective unless the same shall be signed by or on
behalf of the Agent.

               ARTICLE 23.  PARTIAL INVALIDITY; CHANGE IN ACCOUNTING PRINCIPLES

23.01   If at any time any provision of this  Agreement or other Loan  Documents
        to which the  Borrower or any of its  Affiliates  is a  signatory  is or
        becomes  illegal,  invalid or unenforceable in any respect under the law
        of any  jurisdiction,  the legality,  validity or  enforceability of the
        remaining  provisions  under this  Agreement or such Loan Document shall
        not in any way be affected or impaired thereby. Such illegal, invalid or
        unenforceable   provisions  shall  be  replaced  by  legal,   valid  and
        enforceable  provisions,  the economic and legal effects of which are as
        close  as  possible  to that of the  invalid  illegal  or  unenforceable
        provisions.

23.02   If any changes in German GAAP or other applicable  accounting principles
        after  the   First   Restatement   Date   result  in  a  change  of  the
        interpretation,  calculation  or  method  of  calculation  of  financial
        covenants,  ratios,  standards or terms contained in this Agreement (the
        "Financial   Covenants")   which  is  materially   different   from  the
        interpretation,  calculation  or method of  calculation of the Financial
        Covenants on the First  Restatement  Date,  the parties  hereto agree to
        enter into negotiations with a view to amending the Financial  Covenants
        so that the  criteria  for  evaluating  the  financial  condition of the
        Borrower  and its  Subsidiaries  shall be the same as if such change had
        not been made.

                            ARTICLE 24.  ASSIGNMENTS, PARTICIPATION

24.01   The  Borrower  may not  assign  or  transfer  all or any of its  rights,
        benefits and obligations  under this Agreement without the prior written
        consent of the Majority Banks (662/3%);  provided, however, that nothing
        in this SECTION 24.01 shall affect the ability of the

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        Borrower to merge or consolidate in accordance with the terms of SECTION
16.10.

24.02   (a)    Notwithstanding  any  other  provision  contained  in  this
               Agreement or any other documents,  no Bank may assign or transfer
               any of its interests  under this  Agreement  except in accordance
               with  the  provisions  of this  SECTION  24.02  and no  Bank  may
               transfer,  assign or grant  participations  in its rights  and/or
               delegations  under this Agreement  except in accordance with this
               SECTION 24.02;  provided,  however,  that nothing in this SECTION
               24.02 or in this  Agreement  shall  prevent,  subject  to SECTION
               24.03,  any Bank  assigning  or granting  participations  in such
               Bank's  interests under this Agreement to such Bank's parent bank
               holding  company or to any affiliate in which such Bank or parent
               bank  holding  company  has the power to vote at least 33 1/3% of
               the voting  securities  issued by such affiliate for the election
               of the board of directors (or members of an equivalent  governing
               body),  provided,  however, that such affiliate assignee may only
               further assign or subparticipate  its interests in Loans pursuant
               to the terms of this ARTICLE 24 and provided,  however, that such
               affiliate  assignee cannot further assign or  subparticipate  its
               interests in Loans to any Person  which is an affiliate  pursuant
               to the provisions of SECTION 24.02(A).

        (b)    Each  Bank  shall  have the  right to  transfer,  assign or grant
               participations  in all or any part of its  remaining  rights  and
               obligations  under this Agreement on the basis and subject to the
               conditions set forth below in this SUBSECTION 24.02(B).

               (i)    Each Bank may  assign  all or a portion  of its rights and
                      obligations   under  this   Agreement  to  any  Person  in
                      accordance  with the  terms  of this  SECTION  24.02.  The
                      parties to each such assignment  shall execute and deliver
                      to  the  Agent,  for  its  acceptance  and  recording,  an
                      Assignment  and  Acceptance  substantially  in the form of
                      EXHIBIT A together with a processing and  recordation  fee
                      of DM  1,000  (Deutsche  Mark  One  Thousand).  Upon  such
                      execution,  delivery,  acceptance and recording,  from and
                      after the effective date specified in each  Assignment and
                      Acceptance,  which  effective  date  shall  be at  least 5
                      (five) Business Days after the execution  thereof (or such
                      earlier  date as shall have been agreed to by the assignor
                      Bank,  the  assignee  and the  Agent),  (A)  the  assignee
                      thereunder shall be a party hereto and, to the extent that
                      rights and obligations  hereunder have been assigned to it
                      pursuant  to such  Assignment  and  Acceptance,  have  the
                      rights and  obligations  of a Bank  hereunder  and (B) the
                      Bank assignor  thereunder shall, to the extent that rights
                      and  obligations   hereunder  have  been  assigned  by  it
                      pursuant to such Assignment and Acceptance, relinquish its
                      rights and be  released  from its  obligations  under this
                      Agreement   (and,  in  the  case  of  an  Assignment   and
                      Acceptance  covering  all or the  remaining  portion of an
                      assigning   Bank's  rights  and  obligations   under  this
                      Agreement, such Bank shall cease to be a party hereto).


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               (ii)   Each Bank may sell  participations to one or more banks or
                      other  financial  institutions  in all or a portion of its
                      rights and  obligations  under this Agreement  (including,
                      without limitation, all or a portion of its Commitment and
                      the Loans owing to it); provided,  however,  that (A) such
                      Bank  shall  remain  a  "Bank"  for all  purposes  of this
                      Agreement and the transferee of such  participation  shall
                      not  constitute a Bank  hereunder,  (B) such Bank's rights
                      and obligations under this Agreement  (including,  without
                      limitation,  its  Commitment  to the  Borrower  hereunder)
                      shall  remain  unchanged,  (C)  no  notice  to  or  filing
                      (including  the  filing  of any  registration  or  similar
                      statement) with any  governmental  authority or regulatory
                      body is required in connection with any participation, (D)
                      such Bank shall  remain  solely  responsible  to the other
                      parties hereto for the  performance  of such  obligations,
                      (E) the Borrower, the Guarantors,  the Agent and the other
                      Banks shall continue to deal solely and directly with such
                      Bank in connection with such Bank's rights and obligations
                      under this  Agreement  and (F) any  agreement  pursuant to
                      which any Bank grants a  participation  in its rights with
                      respect to the Loan shall  provide  that,  with respect to
                      such  Loan,  such Bank  shall  retain  the sole  right and
                      responsibility  to exercise  the rights of such Bank,  and
                      enforce the  obligations of the Bor rower relating to such
                      Loan,  including  without  limitation the right to approve
                      any amendment,  modification or waiver of any provision of
                      this  Agreement or any other Loan  Documents and the right
                      to take action to have the Loan  declared  due and payable
                      pursuant to ARTICLE 18,  provided that such  participation
                      agreement may provide that such Bank will not agree to any
                      modification, amendment or waiver of this Agreement or any
                      of the other Loan  Documents  without  the  consent of the
                      participant that would:

                      (1)    reduce  the  principal  or  the  rate  of  interest
                             payable by the  Borrower  on any Loan or reduce any
                             fees payable under this Agreement;

                      (2)    postpone   any  date  fixed  for  the   payment  of
                             principal  of or  interest  on the Loan or any fees
                             under this Agreement;

                      (3)    increase the  Commitment of any Bank or subject any
                             Bank to any additional obligation to make Loans; or

                      (4)    amend  ARTICLE  22 or any other  provision  of this
                             Agreement  requiring the consent or other action of
                             all the Banks.

                      No participant  shall have any rights under this Agreement
                      to receive payments pursuant to SECTION 11.01 AND 14.01.

24.03   Assignments  under  this  Agreement,  including  assignments  made to an
        Affiliate of a Bank in accordance with SECTION 24.02(A),  are subject to
        the  condition  that if, at the time of such  assignment,  the  assignee
        would be subject to any greater Taxes than those to which

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        the assignor Bank is then subject, or thereafter,  if the assignee would
        at any time be  subject  to any  greater  Taxes  than those to which the
        assignor  Bank would at such time have been  subject,  the assignee Bank
        shall and does  hereby  waive any right to claim and  receive  Taxes and
        additional  amounts  payable  pursuant  to  SECTIONS  11.01 AND 14.01 in
        respect of the excess of the Taxes and additional  amounts applicable to
        it over the Taxes and  additional  amounts  applicable  to the  assignor
        Bank.

24.04   By executing and delivering an Assignment and  Acceptance,  the assignor
        Bank  thereunder and the assignee  thereunder  confirm to and agree with
        each other and the other  parties  hereto as follows:  (i) other than as
        provided in such Assignment and Acceptance,  such assignor Bank makes no
        representation or warranty and assumes no responsibility with respect to
        any statements,  warranties or representations  made in or in connection
        with   this   Agreement   or   the   execution,    legality,   validity,
        enforceability, genuineness, sufficiency or value of this Agreement, the
        Loan  Documents,  the  Collateral  or any other  instrument  or document
        furnished   pursuant   hereto;   (ii)  such   assignor   Bank  makes  no
        representation or warranty and assumes no responsibility with respect to
        the financial condition of the Borrower,  any Pledgor,  any Guarantor or
        their Affiliates or the performance or observance by the Borrower or any
        such  Pledgor,  Guarantor or Affiliate of any of its  obligations  under
        this Agreement, other Loan Documents or any other instrument or document
        furnished pursuant hereto or thereto;  (iii) such assignee confirms that
        it has received a copy of this  Agreement,  together  with copies of the
        financial  statements  referred  to in  SECTION  15.11  and  such  other
        documents and  information as it has deemed  appropriate to make its own
        credit   analysis  and  decision  to  enter  into  such  Assignment  and
        Acceptance;  (iv) such assignee will, independently and without reliance
        upon the Agent,  such  assignor Bank or any other Bank and based on such
        documents  and  information  as it shall deem  appropriate  at the time,
        continue to make its own credit decisions in taking or not taking action
        under  this  Agreement  or any of the  other  Loan  Documents;  (v) such
        assignee  appoints and authorizes the Agent to take such action as agent
        on its behalf and to exercise  such powers  under this  Agreement as are
        delegated to the Agent by the terms hereof, together with such powers as
        are reasonably incidental thereto; and (vi) such assignee agrees that it
        will perform in accordance with their terms all of the obligations which
        by the terms of this  Agreement  are required to be performed by it as a
        Bank.

24.05   The Agent shall maintain at its address referred to below a copy of each
        Assignment and Acceptance delivered to and accepted by it and records of
        the names and addresses of the Banks and the  Commitment  (including the
        Revolving  Commitment)  of, and principal  amount of the Loan (including
        each portion thereof) owing to, each Bank from time to time. The entries
        in such records shall be conclusive and binding for all purposes, absent
        manifest error, and the Borrower, the Agent and the Banks may treat each
        Person  whose name is recorded in such records as a Bank  hereunder  for
        all  purposes of this  Agreement.  The records  shall be  available  for
        inspection by the Borrower or any Bank at any  reasonable  time and from
        time to time upon reasonable prior notice.

24.06   Upon  its  receipt  of  an  Assignment  and  Acceptance  executed  by an
        assigning Bank and an assignee,  the Agent shall, if such Assignment and
        Acceptance has been completed and is

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        in substantially  the form of EXHIBIT A hereto,  as the case may be, (i)
        accept such  Assignment  and  Acceptance,  (ii)  record the  information
        contained therein, and (iii) give prompt notice thereof to the Borrower.

24.07   Each of the Agent and each Bank which is a signatory  to this  Agreement
        shall  execute  a  Confidentiality  Agreement  in the form of  EXHIBIT S
        attached  hereto  on or  prior  to the  date  of its  execution  of this
        Agreement.   Any  Bank  may,  in  connection   with  any  assignment  or
        participation or proposed  assignment or participation  pursuant to this
        ARTICLE 24 disclose to the assignee or participant or proposed  assignee
        or  participant,  any  information  relating  to  the  Borrower  or  its
        Affiliates furnished to such Bank by or on behalf of the Borrower or its
        Affiliates;  provided  that,  prior to the  disclosure  of  confidential
        information  concerning the Borrower or its Affiliates,  the assignee or
        participant  or  proposed  assignee  or  participant  shall  execute and
        deliver  to the  Borrower  a  Confidentiality  Agreement  in the form of
        EXHIBIT S.

                                     ARTICLE 25.  LANGUAGE

        Each document, instrument,  certificate and statement referred to herein
or to be  delivered  hereunder  shall,  if  not  in  the  English  language,  be
accompanied by an English  translation  thereof. In the case of conflict between
any original  document not in the English  language and the English  translation
thereof, the language of the original document shall prevail.

                                     ARTICLE 26.  NOTICES

        Unless  otherwise  specifically  provided  herein,  any  notice or other
communication  herein  required or permitted to be given shall be in writing and
may be  personally  served,  telecopied,  telexed or sent by courier  service or
first class prepaid mail (airmail if to an address in a foreign country from the
party  writing) and shall be deemed to have been given when  delivered in person
or by courier service, upon transmission of a telecopy or telex or four (4) days
after  deposit  in the mail  (registered,  with  postage  prepaid  and  properly
addressed). Notices to Agent shall not be effective until received by the Agent.
For the purposes hereof, the addresses of the parties hereto (until 15 (fifteen)
days' prior written  notice of a change thereof is delivered as provided in this
ARTICLE 26) shall be as set forth below each party's name on the signature pages
hereof.

                          ARTICLE 27.  LIMITATION ON SPECIAL DAMAGES

        EACH OF THE BORROWER AND KRONOS TITAN HEREBY WAIVES, RELEASES AND AGREES
NOT TO SUE FOR ANY SPECIAL,  INDIRECT OR CONSEQUENTIAL DAMAGES,  SUFFERED BY THE
BORROWER OR ANY AFFILIATE,  IN CONNECTION  WITH ANY CLAIM  (WHETHER  SOUNDING IN
TORT,  CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED
WITH THIS  AGREEMENT  AND/OR ANY OTHER  LOAN  DOCUMENTS,  WHETHER  SUCH CLAIM IS
ASSERTED  BEFORE  OR AFTER  REPAYMENT  IN FULL OF ALL OF THE  BORROWER'S  AND/OR
KRONOS TITAN'S OBLIGATIONS.


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                 ARTICLE 28.  APPLICABLE LAW; JURISDICTION; SERVICE OF PROCESS

        THIS AGREEMENT,  AND THE RELATIONSHIP OF THE PARTIES ESTABLISHED BY THIS
AGREEMENT,  SHALL BE GOVERNED BY AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAW OF
GERMANY.  EACH OF THE BORROWER AND KRONOS TITAN HEREBY AGREES THAT ALL CLAIMS OR
SUITS OF ANY NATURE, WHETHER IN CONTRACT,  TORT OR OTHERWISE,  ARISING OUT OF OR
RELATING TO THIS  AGREEMENT OR THE  RELATIONSHIP  OF THE PARTIES  ESTABLISHED BY
THIS AGREEMENT SHALL BE RESOLVED  EXCLUSIVELY BEFORE THE LANDGERICHT  MUENCHEN I
(COURT OF MUNICH), IN GERMANY,  AND EACH OF THE BORROWER AND KRONOS TITAN HEREBY
SUBMITS TO THE EXCLUSIVE  JURISDICTION OF SAID COURT. NOTHING IN THIS ARTICLE 28
SHALL  AFFECT  (I) THE  RIGHT OF THE  AGENT  AND THE BANKS TO BRING AN ACTION OR
PROCEEDING  AGAINST THE  BORROWER OR KRONOS  TITAN OR ANY OF ITS  PROPERTIES  OR
AGAINST ANY OF ITS  SUBSIDIARIES IN THE COURT OF ANY OTHER  JURISDICTION OR (II)
THE  RIGHT OF THE  BORROWER  OR KRONOS  TITAN TO BRING AN  ACTION OR  PROCEEDING
AGAINST  THE AGENT OR THE BANKS  ARISING  UNDER  ANY  CONFIDENTIALITY  AGREEMENT
EXECUTED PURSUANT TO SECTION 24.07. The Borrower, in connection
with the Original  Agreement,  and pursuant to a Form of  Designation of Process
Agent dated May 30,  1990,  designated,  appointed  and  empowered  Dr.  Wienand
Meilicke,  with offices at Poppelsdorfer Allee 106, 5300 Bonn 1, Germany, as its
designee,  appointee and agent to secure,  accept and acknowledge for and on its
behalf,  and in respect of its property,  service of any and all legal  process,
summons,  notices  and  documents  which  may be  served  in any such  action or
proceeding.   The  Borrower  hereby  ratifies  and  confirms  such  designation,
appointment and  empowerment,  and hereby agrees to appoint a substitute  person
upon  the  death  or  removal  of  Dr.   Meilicke   pursuant  to  a  designation
substantially  identical to that previously  delivered to the Agent or otherwise
in form and substance reasonably satisfactory to the Agent.

                                   ARTICLE 29.  COUNTERPARTS

        This   Agreement   may  be  executed  and   delivered  in  one  or  more
counterparts,  each of which shall constitute an original, and all of which when
taken  together shall  constitute  one and the same  instrument and shall become
effective  when copies  thereof,  bearing the  signatures of each of the parties
hereto, shall have been received by the Agent and the Borrower.

                                ARTICLE 30.  FURTHER ASSURANCES

        In addition to the acts recited herein and contemplated to be performed,
executed and/or  delivered by the Borrower,  the Borrower hereby agrees,  at any
time,  and from time to time, to perform,  execute  and/or  deliver to the Agent
upon request, any and all such further acts,  additional  agreements,  documents
and instruments  (including,  without limitation,  estoppel certificates stating
that the Loan is in full  force  and  effect  and that  there  are no  defenses,
counterclaims or offsets thereto),  or further assurances as may be necessary or
proper to assure the rights and  remedies  intended to be granted or conveyed to
the Agent and the Banks under this

                                             125

<PAGE>



Agreement or any of the other Loan  Documents;  and create,  perfect,  preserve,
maintain and protect the liens and security  interests created or intended to be
created by the Loan Documents.

                                   ARTICLE 31.  CONSTRUCTION

        The terms and  provisions of this  Agreement and the wording used herein
shall in all cases be interpreted and construed  simply in accordance with their
fair meanings and not strictly for or against any party hereto.

                                 ARTICLE 32.  ENTIRE AGREEMENT

        This  Agreement  and the other  Loan  Documents  constitute  the  entire
agreement  with  respect to the matters set forth  herein and  therein,  and all
prior  negotiations,  drafts and other writings that do not constitute a part of
the Loan  Documents but which relate to the subject  matter of this Agreement or
the other Loan  Documents  are merged  herein and  therein  and are  superseded,
nullified and canceled by this Agreement and the other Loan Documents; provided,
however,  that the  Original  Agreement  shall remain in effect as to the period
from May 30, 1990 to the First Restatement Date and the First Restated Agreement
shall remain in effect as to the period from the First  Restatement  Date to the
Second  Restatement Date. This Agreement shall become effective as of the Second
Restatement Date when executed by the Borrower,  Kronos Titan, the Agent and the
Majority Banks and, if and when so executed,  shall  constitute an amendment and
restatement of the First Restated Agreement.

                      ARTICLE 33.  SURVIVAL OF WARRANTIES AND AGREEMENTS

        All  statements  contained  in this  Agreement  or any of the other Loan
Documents,  or any  certificate,  financial  statement or other written material
delivered by the Borrower to the Agent or the Banks pursuant to or in connection
with this Agreement or any other Loan Document shall constitute  representations
and warranties made under this Agreement.  All agreements,  representations  and
warranties made herein shall survive,  and shall not be waived by, the execution
and  delivery  of  this  Agreement  and  the  other  Loan  Documents,   and  any
investigation  by the Agent or any Bank.  The  obligations of the Borrower under
ARTICLES  11,  12,  14,  19 and 20 shall  survive,  and not be  waived  by,  the
repayment of Borrower's obligations under this Agreement.

                           ARTICLE 34.  NO THIRD PARTY BENEFICIARIES

        The  covenants  contained  herein and in all other Loan  Documents to be
kept by Borrower  and/or  Kronos  Titan or the Agent and the Banks are  intended
solely for the benefit of the Borrower,  the Agent and the Banks,  respectively,
and are not intended for the benefit of any other  Person.  No Person other than
Borrower may compel the disbursement of Loans  hereunder.  No provisions in this
Agreement or actions taken by the Agent or the Banks under this Agreement  shall
be construed as an  assumption of any  undertaking  to protect third parties and
all such  provisions  and actions are solely for the protection of the Agent and
the Banks.


                                             126

<PAGE>



                                   ARTICLE 35.  NO NOVATION

        This Agreement  shall not result in or be deemed to be a novation of the
Loan or any portion  thereof.  Without limiting the generality of the foregoing,
the division of the Loan into the Term Portion and the  Revolving  Portion,  and
the division of the Revolving  Portion into the Kronos Titan  Revolving  Portion
and the portion that is not the Kronos Titan Revolving Portion, shall not result
in or be deemed to be a  repayment  or an  extinguishment  of any portion of the
Loan.

                                  ARTICLE 36.  MISCELLANEOUS

36.01   The  parties  hereto  agree  that a matter  that is not a breach  of the
        representation set forth in SECTION 15.21(E) shall not be, or be claimed
        to be, a breach of the representation set forth in SECTION 15.21(A).

36.02   The Banks hereby agree that the  consummation of the Kronos  (US)/Kronos
        Flip shall not, in and of itself,  be deemed to result in a "Kronos MAC"
        as such term is defined in the Original Agreement.

36.03   Subject to the Borrower's  compliance with Section 8.01(a) and the other
        terms  of this  Agreement,  the  Agent  shall  have  the  authority  and
        obligation to release any  Collateral (a) consisting of the Stock of any
        Pledged  Subsidiary,  which Stock is transferred  to another  Subsidiary
        with the approval of the  Majority  Banks  pursuant to Section  16.09(f)
        (except to the extent that such approval is  conditioned  upon there not
        being a release of such Collateral),  (b) consisting of the Stock of any
        Pledged  Subsidiary  that  is a  party  to a  merger  permitted  by (and
        approved in accordance  with, if  applicable)  Section 16.10 if (i) such
        Pledged Subsidiary is not the surviving entity in such merger, (ii) such
        release  occurs  concurrently  with  or  after  such  merger  and  (iii)
        concurrently  with such  release,  the Agent  (on  behalf of the  Banks)
        receives  a valid and  enforceable  first  priority  perfected  security
        interest  in the Stock of the  entity  surviving  such  merger,  and (c)
        consisting  of all of the issued and  outstanding  Stock of any  Pledged
        Subsidiary  owned  by the  Borrower  if  (i)  such  Stock  is  sold,  in
        compliance with this  Agreement,  to a Person who is not an Affiliate of
        the  Borrower  for an amount  equal to or greater  than its fair  market
        value and (ii) all Net Proceeds  from such sale shall be,  promptly upon
        the occurrence of such sale and concurrently with such release, applied,
        first, as a prepayment of the principal of the Loan in the manner stated
        in Section  8.01(b),  second (if any such Net Proceeds  remain after all
        principal of the Loan is paid in full) to interest accrued and unpaid on
        the Loan and, third (if any such Net Proceeds  remain after all interest
        accrued on the Loan is paid in full), to pay any additional  amounts due
        and owing to the Agent and/or any Bank under the Loan Documents.


                                             127

<PAGE>



36.04   If and to the extent that such approval is  necessary,  the Banks hereby
        approve consummation of the following transactions:

        (a)    the  cross-licensing  and  transfer  of  technology  between  the
               "Kronos  Group" and the  "Tioxide  Group",  and the  licensing of
               technology  to the joint  venture  that will acquire the plant of
               Kronos   Louisiana,   Inc.,   pursuant  to  that  certain  Master
               Technology  Exchange  Agreement  dated  October  15,  1993  among
               Kronos,  the  Borrower,  Kronos  Louisiana,  Inc.,  Tioxide Group
               Limited and Tioxide Group
               Services Limited;

        (b)    the  execution  of an amendment  to that  certain  Trademark  Use
               Agreement  among  Kronos  (US),  Kronos,  Kronos Titan and Kronos
               Titan  A/S  dated  as of May  30,  1990 to  take  account  of the
               assignment of trademarks from Kronos (US) to Kronos;

        (c)    the execution of an amendment to that certain  License  Agreement
               between  Kronos and Kronos Titan A/S dated as of October 1, 1966,
               pursuant to which the royalty rate payable by Kronos Titan A/S to
               Kronos is reduced from 7% to 5% of annual net sales; and

        (d)    the execution of  supplementary  agreements  dated as of December
               27,  1990  and July  16,  1991  implementing  the  mechanism  for
               paragraphs  II.G and II.H of the Amended and Restated  Technology
               Transfer and License  Agreement  between  Kronos and Kronos Titan
               dated as of May 30, 1990.

        IN WITNESS WHEREOF the hands of the duly authorized  representatives  of
the parties hereto the day and year first before written.


                                             128

<PAGE>



THE BORROWER                                KRONOS INTERNATIONAL, INC.


                                            By:    /s/ E. Gaertner
                                            Name:  E. Gaertner
                                            Title: President


                                            By:    /s/ V. Roth
                                            Name:  V. Roth
                                            Title: Vice President/Controller

                              Address for Notices:

                                            Peschstrasse 5
                                            51373 Leverkusen 1
                                            Germany
                                            Attention:  Volker Roth
                                            Telefax:      0214-42150

                                            Copy to:

                                            NL Industries, Inc.
                                            70 East 55th Street
                                            New York, New York 10022
                                            Attention: Susan E. Alderton
                                            Telefax: 212-421-7209


                                             129

<PAGE>



        The  undersigned,  Kronos Titan - GmbH,  executes this Agreement for the
limited  purposes of agreeing to all of the terms and  provisions  contained  in
this Agreement in any way relating to or in connection with (a) the Kronos Titan
Revolving Portion,  including,  without limitation,  the borrowing of the Kronos
Titan  Revolving  Portion and the repayment of the principal of the Kronos Titan
Revolving  Portion,  the payment of interest  accrued on such  principal and the
payment of all fees accrued with respect to the Kronos Titan  Revolving  Portion
in accordance with SECTION 2.04, ARTICLE 8 and SECTION 19.03 and (b) ARTICLES 27
and 28.

KRONOS TITAN                                KRONOS TITAN - GMBH


                                            By:    /s/ E. Gaertner
                                            Name:  E. Gaertner
                                            Title: Company Manager


                                            By:    
                                            Name:
                                            Title:

                              Address for Notices:

                                            51373 Leverkusen 1
                                            Germany
                                            Attention:  Volker Roth
                                            Telefax:      0214-42150

                                            Copy to:

                                            NL Industries, Inc.
                                            70 East 55th Street
                                            New York, New York 10022
                                            Attention: Susan E. Alderton
                                            Telefax: 212-421-7209

                                             130

<PAGE>



THE AGENT AND A BANK                HYPOBANK INTERNATIONAL S.A.


                                    By:    /s/ Michael Bisch
                                    Name:  Michael Bisch
                                    Title: Charge de Service



                                    By:    /s/ Erwin Moos
                                    Name:  Erwin Moos
                                    Title: Vice President

                                    Address for Notices:

                                    4, rue Alphonse Weicker
                                    L-2099 Luxembourg
                                    Attention:     Michael Bisch
                                    Phone:         011-352-4272-2151
                                    Fax:           011-352-4272-4510

                                    Lending Office:

                                    4, rue Alphonse Weicker
                                    L-2099 Luxembourg
                                    Attention:     Michael Bisch
                                    Phone:         011-352-4272-2151
                                    Fax:           011-352-4272-4510


                                             131

<PAGE>



                                            ABN-AMRO BANK (DEUTSCHLAND) AG
                                            NIEDERLASSUNG DUESSELDORF


                                            By:
                                                   Volker Haubrich
                                            Title:


                                            By:
                                                   Roland Lukas
                                            Title:

                              ADDRESS FOR NOTICES:

                                            Berliner Allee 41
                                            D-40212 Duesseldorf
                                            Attention:    Volker Haubrich
                                                          Roland Lukas
                                            Phone:        49-211-8770-117
                                            Fax:          49-211-8770-125

                                 LENDING OFFICE:

                                            Berliner Allee 41
                                            D-40212 Duesseldorf
                                            Attention:    Volker Haubrich
                                                          Roland Lukas
                                            Phone:        49-211-8770-117
                                            Fax:          49-211-8770-125

                                             132

<PAGE>



                                    ARAB BANKING CORPORATION B.S.C.


                                    By:    /s/ Wahid O. Bugaighis
                                    Name:  Wahid O. Bugaighis
                                    Title: Fist Vice President


                                    By:    /s/ Stephen A. Plauche
                                    Name:  Stephen A. Plauche
                                    Title: Vice President


                      ADDRESS FOR NOTICES:

                                    277 Park Avenue, 32nd Floor
                                    New York, New York 10172
                                    Attention:    R. Hassan/Susan Williams
                                    Phone:        212-583-4770/71
                                    Fax:          212-583-0921/32

                         LENDING OFFICE:

                                    Arab Banking Corporation (B.S.C.)
                                    Grand Cayman Branch
                                    c/o 277 Park Avenue, 32nd Floor
                                    New York, New York 10172
                                    Attention:    R. Hassan/Susan Williams
                                    Phone:        212-583-4770/71
                                    Fax:          212-583-0921/32
                                    

                                             133

<PAGE>



                                            BAHRAIN MIDDLE EAST BANK E.C.


                                            By:    /s/ Albert I. Kittaneh
                                            Name:  Albert I. Kittaneh
                                            Title: Chief Executive

                              ADDRESS FOR NOTICES:

                                            BMB Centre, Diplomatic Area
                                            P. O. Box 797
                                            Manama, Bahrain
                                            Attention:    K.S. Ganesh
                                                          Vice President
                                            Phone:        973-528138
                                            Fax:          973-536312

                                 LENDING OFFICE:

                                            BMB Center, Diplomatic Area
                                            P. O.Box 797
                                            Manama, Bahrain
                                            Attention:    K.S. Ganesh
                                                          Vice President
                                            Phone:        973-528138
                                            Fax:          973-536312

                                             134

<PAGE>



                                BANK HAPOALIM BM


                                            By:    /s/ Conrad Wager
                                            Name:  Conrad Wagner
                                            Title: First Vice President


                                            By:    /s/ Shaun Breidbart
                                            Name:  Shaun Breidbart
                                            Title: Assistant Vice President

                              ADDRESS FOR NOTICES:

                                            1177 Avenue of the Americas
                                            New York, New York 10036
                                            Attention:    Conrad Wagner
                                            Phone:        212-782-2176
                                            Fax:          212-782-2187

                                 LENDING OFFICE:

                                            1177 Avenue of the Americas
                                            New York, New York 10036
                                            Attention:    Conrad Wagner
                                            Phone:        212-782-2176
                                            Fax:          212-782-2187

                                             135

<PAGE>



                                            BANK OF AMERICA NATIONAL TRUST AND
                                            SAVINGS ASSOCIATION


                                            By:    /s/ A. G. Tucker
                                            Name:  A. G. Tucker
                                            Title: Vice President

                              ADDRESS FOR NOTICES:

                                            1, Alie Street
                                            London EC1 8DE
                                            England
                                            Attention:    A. G. Tucker
                                            Phone:        44-171-634-4728
                                            Fax:          44-171-634-4968

                                 LENDING OFFICE:

                                            1, Alie Street
                                            London EC1 8DE
                                            Attention: A. G. Tucker
                                            Phone: 44-171-634-4728
                                            Fax: 44-171-634-4968

                                             136

<PAGE>



                                 BANK OF MONTREAL


                                 By:    /s/ Michael J. Solski
                                 Name:  Michael J. Solski
                                 Title: Director

                   ADDRESS FOR NOTICES:

                                 115 South LaSalle Street, 11th Floor
                                 Chicago, Illinois 60603
                                 Attention:    Farid Ali
                                 Phone:        312-750-3727
                                 Fax:          312-750-3798

                      LENDING OFFICE:

                                 Corporate and Institutional Financial Services
                                 24th Floor, First Bank Tower
                                 First Canadian Place, P. O. Box 1
                                 Toronto, Ontario M5X 1A1
                                 Attention:    Michael J. Solski
                                 Phone:        416-867-6968
                                 Fax:          417-867-6366

                                             137

<PAGE>



                                            BANK OF SCOTLAND


                                            By:    /s/ Catherine M. Oniffrey
                                            Name:  Catherine M. Oniffrey
                                            Title: Vice President

                              ADDRESS FOR NOTICES:

                                            565 Fifth Avenue, 5th Floor
                                            New York, New York 10017
                                            Attention:    Catherine M. Oniffrey
                                            Fax:          212-557-9460

                                 WITH A COPY TO:

                                            Bank of Scotland
                                            Houston Representative Office
                                            1750 Two Allen Center
                                            1200 Smith Street
                                            Houston, Texas 77002
                                            Attention:    Justin M. Alexander
                                            Phone:        713-651-1870
                                            Fax:          713-651-9714

                                 LENDING OFFICE:

                                            Bank of Scotland
                                            Grand Cayman Branch
                                            565 Fifth Avenue, 5th Floor
                                            New York, New York 10017
                                            Attention:    Catherine M. Oniffrey
                                            Fax:          212-557-9460

                                             138

<PAGE>



                                   BANKERS TRUST COMPANY


                                   By:     /s/ Michael Dent
                                   Name:   M. Dent
                                   Title:  Managing Director

                     ADDRESS FOR NOTICES:

                                   1 Appold Street, Broadgate
                                   London EC2A 2HE
                                   Attention:    Simon Alloway/Robert Foulston
                                   Phone:        44-171-982-3302
                                   Fax:          44-171-982-1902

                        LENDING OFFICE:

                                   1 Appold Street, Broadgate
                                   London EC2A 2HE
                                   Attention:    Simon Alloway/Robert Foulston
                                   Phone:        44-171-982-3302
                                   Fax:          44-171-982-5833

                                             139

<PAGE>



                                        BANQUE ET CAISSE D'EPARGNE DE L'ETAT,
                                        LUXEMBOURG


                                        By:    /s/ John Dhur  
                                        Name:  John Dhur
                                        Title: Sous Director

                          ADDRESS FOR NOTICES:

                                        1, place de Metz
                                        L-2954 Luxembourg
                                        Attention:    Jean Pierre Thein
                                        Phone:        352-4015-4337
                                        Fax:          352-4015-4284

                             LENDING OFFICE:

                                        1, place de Metz
                                        L-2954 Luxembourg
                                        Attention:    Jean Pierre Thein
                                        Phone:        352-4015-4337
                                        Fax:          352-4015-4284

                                             140

<PAGE>



                                       BANQUE INDOSUEZ


                                       By:    /s/ Jerome Sanzo
                                       Name:  Jerome Sanzo
                                       Title: First Vice President


                                       By:    /s/ Jaime Silver
                                       Name:  Jaime Silver
                                       Title: Vice President

                         ADDRESS FOR NOTICES:

                                       1211 Avenue of the Americas
                                       New York, New York 10036
                                       Attention:    Jaime Silver/Raymond Wright
                                       Phone:        212-278-2544
                                       Fax:          212-278-2759

                            LENDING OFFICE:

                                       1211 Avenue of the Americas
                                       New York, New York 10036
                                       Attention:    Raymond Wright
                                                     Loan Department
                                       Phone:        212-278-2000
                                       Fax:          212-278-2502

                                             141

<PAGE>



                                      BANQUE INTERNATIONALE A LUXEMBOURG
                                      S.A.


                                      By:     /s/ Yves Lahaye
                                      Name:   Yves Lahaye
                                      Title:  Vice President

                                      By:     /s/ Claude Lehnertz
                                      Name:   Claude Lehnertz
                                      Title:  Vice President

                        ADDRESS FOR NOTICES:

                                      69, route d'Esch
                                      L-2953 Luxembourg
                                      Attention:    Guy Denys/Simon Hauxwell
                                      Phone:        352-4590-2564
                                      Fax:          352-4590-3855

                        LENDING OFFICE:

                                      69, route d'Esch
                                      L-2953 Luxembourg
                                      Attention:    Guy Denys/Simon Hauxwell
                                      Phone:        352-4590-2564
                                      Fax:          352-4590-3855

                                             142

<PAGE>



                                            CHRISTIANIA BANK OG KREDITKASSE ASA


                                            By:    /s/ Stein H. Offenberg
                                            Name:  Stein H. Offenberg
                                            Title: Senior Vice President

                              ADDRESS FOR NOTICES:

                                            P. O. Box 1166 Sentrum
                                            N-0107 Oslo
                                            Norway
                                            Attention:    Stein H. Offenberg
                                            Phone:        47-22-48-69-59
                                            Fax:          47-22-56-40-83

                                 WITH A COPY TO:

                                            International Loan Administration
                                            P. O. Box 1166 Sentrum
                                            N-0107 Oslo
                                            Norway
                                            Attention:    Aud Sandnes
                                            Phone:        47-22-48-47-26
                                            Fax:          47-22-48-54-97

                                 LENDING OFFICE:

                                            P. O. Box 1166 Sentrum
                                            N-0107 Oslo
                                            Norway
                                            Attention:    Stein H. Offenberg
                                            Phone:        47-22-48-69-59
                                            Fax:          47-22-56-40-83

                                             143

<PAGE>



                                            DLJ CAPITAL FUNDING, INC.


                                            By:    /s/ Stephen P. Hickey
                                            Name:  Stephen P. Hickey
                                            Title: Managing Director

                              ADDRESS FOR NOTICES:

                                            525 Washington Boulevard
                                            Newport Tower
                                            Jersey City, NJ 07310
                                            Attention:    Ed Vowinkel
                                            Phone:        201-610-1971
                                            Fax:          201-610-1965

                                 WITH A COPY TO:

                                            c/o DLJ International
                                            Moorgate Hall, 155 Moorgate
                                            London, EC 2M 6XB
                                            Attention:    Pam Carter
                                            Phone:        44-171-628-0869
                                            Fax:          44-171-814-7224

                                            and

                                            DLJ Capital Funding, Inc.
                                            277 Park Avenue, 9th Floor
                                            New York, New York 10172
                                            Attention:    Mr. Donald Pollard
                                            Phone:        212-892-5475
                                            Fax:          212-892-5286

                                 LENDING OFFICE:

                                            525 Washington Boulevard
                                            Newport Tower
                                            Jersey City, NJ 07310
                                            Attention:    Ed Vowinkel
                                            Phone:        201-610-1971
                                            Fax:          201-610-1965

                                             144

<PAGE>



                                      FUJI BANK (LUXEMBOURG) S.A.


                                      By:    /s/ Tadashi Omiya
                                      Name:  Tadashi Omiya
                                      Title: Managing Director

                        ADDRESS FOR NOTICES:

                                      29, Avenue de la Porte Neuve
                                      2227 Luxembourg
                                      Attention:    Loan Department
                                      Phone:        352-474-681
                                      Fax:          352-474-688

                           WITH A COPY TO:

                                      The Fuji Bank, Limited
                                      One Houston Center, Suite 4100
                                      1221 McKinney Street
                                      Houston, Texas 77010
                                      Attention:    Philip C. Lauinger, III
                                      Phone:        713-650-7852
                                      Fax:          713-759-0048

                           LENDING OFFICE:

                                      29, Avenue de la Porte Neuve
                                      2227 Luxembourg
                                      Attention:    Loan Department
                                      Phone:        352-474-681
                                      Fax:          352-474-688

                                             145

<PAGE>



                                       IBJ SCHRODER BANK & TRUST COMPANY


                                       By:    /s/ Frederik W. Aase
                                       Name:  Frederik W. Aase
                                       Title: Vice President



                                       By:
                                       Name:
                                       Title:

                              ADDRESS FOR NOTICES:

                                       Grand Cayman Branch
                                       One State Street
                                       New York, New York 10004
                                       Attention: Frank DeLillo/Frederik W. Aase
                                       Phone: 212-858-2786
                                       Fax: 212-858-2115

                                 LENDING OFFICE:

                                       Grand Cayman Branch
                                       One State Street
                                       New York, New York 10004
                                       Attention: Frank DeLillo/Frederik W. Aase
                                       Phone: 212-858-2786
                                       Fax: 212-858-2222

                                             146

<PAGE>



                               MERITA BANK LTD.
   

                               By:    /s/ Esa Tuomi
                               Name:  Esa Tuomi
                               Title: Vice President

                               By:    /s/ Aimo Vitie
                               Name:  Aimo Vitie
                               Title: Vice President

                 ADDRESS FOR NOTICES:

                               2627 International Credits
                               FIN-00020 Merita
                               Attention:    Pirkko Relander/Borje Lindblom
                               Phone:        358-9-165-55590
                               Fax:          358-9-165-52820

                    LENDING OFFICE:

                               2627 International Credits
                               FIN-00020 Merita
                               Attention:    Pirkko Relander/Borje Lindblom
                               Phone:        358-9-165-55590
                               Fax:          358-9-165-52820

                                             147

<PAGE>



                                            SCHRODER MUENCHMEYER HENGST & CO.


                                            By:    /s/ Thomas W. Benger
                                            Name:  Thomsa W. Benger
                                            Title:


                                            By:    /s/ David E. Watson
                                            Name:  David E. Watson
                                            Title:

                              ADDRESS FOR NOTICES:

                                            Friedensstrasse 6-10
                                            D-60311 Frankfurt am Main
                                            Attention:    Thomas W. Benger
                                            Phone:        49-69-2179-562
                                            Fax:          49-69-2179-591

                                 LENDING OFFICE:


                                            Friedensstrasse 6-10
                                            D-60311 Frankfurt am Main
                                            Attention:    Thomas W. Benger
                                            Phone:        49-69-2179-562
                                            Fax:          49-69-2179-591

                                             148

<PAGE>



                                            SWISS BANK CORPORATION
                                            New York and Cayman Islands Branches


                                            By:    /s/ Nicolas T Erni
                                            Name:  Nicolas T. Erni
                                            Title: Director


                                            By:    /s/ William A. Roche
                                            Name:  William A. Roche
                                            Title: Restructuring

                              ADDRESS FOR NOTICES:

                                            New York and Cayman Islands Branches
                                            222 Broadway
                                            New York, New York 10038
                                            Attention:    Elizabeth Burnett
                                            Phone:        212-574-3000
                                            Fax:          212-574-3162

                                 LENDING OFFICE:

                                            New York and Cayman Islands Branches
                                            222 Broadway
                                            New York, New York 10038
                                            Attention:    Nicolas T. Erni
                                            Phone:        212-574-3443
                                            Fax:          212-574-3162

                                             149

<PAGE>



                                   THE BANK OF NOVA SCOTIA


                                   By:    /s/ R. A. Millard
                                   Name:  R. A. Millard
                                   Title: Relationship Manager

                     ADDRESS FOR NOTICES:

                                   1100 Louisiana Street
                                   Houston, Texas 77002
                                   Attention:    Bryan Bulawa
                                   Phone:        713-752-0900
                                   Fax:          713-752-2425

                        LENDING OFFICE:

                                   Scotia House
                                   33 Finsbury Square
                                   London EC2A 1BB
                                   Attention:    R. A. Millard/J.W. Stevens
                                   Phone:        44-171-454-5758
                                   Fax:          44-171-454-9019

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                                            THE CHUO TRUST AND BANKING CO., LTD.


                                            By:    /s/ Mr. Y. Ueda
                                            Name:  Mr. Y. Ueda
                                            Title: Deputy General Manager

                              ADDRESS FOR NOTICES:

                                            Woolgate House
                                            Coleman Street
                                            London EC2R 5AT
                                            Attention:    Paul Glynn/R. Weir
                                            Phone:        44-171-726-6050
                                            Fax:          44-171-606-8061

                                 LENDING OFFICE:

                                 Woolgate House
                                 Coleman Street
                                 London EC2R 5AT
                                            Attention:    Paul Glynn/R. Weir
                                            Phone:        44-171-726-6050
                                            Fax:          44-171-606-8061

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                                          SCHEDULE 1



                                             152

<PAGE>




SCHEDULE 2

INDEBTEDNESS



                                             153

<PAGE>



SCHEDULE 3

LIENS



                                             154

<PAGE>



SCHEDULE 4

CERTAIN LEGAL MATTERS



                                             155

<PAGE>



SCHEDULE 5

LITIGATION



                                             156

<PAGE>



SCHEDULE 6

ERISA AND NON-U.S. EMPLOYEE PLANS



                                             157

<PAGE>



SCHEDULE 7

SUBSIDIARIES



                                             158

<PAGE>



SCHEDULE 8

LICENSE AGREEMENTS AND INTELLECTUAL PROPERTY RIGHTS



                                             159

<PAGE>



SCHEDULE 9

AFFILIATE TRANSACTIONS



                                             160

<PAGE>



SCHEDULE 10

INSURANCE



                                             161

<PAGE>



SCHEDULE 11

TAX INFORMATION



                                             162

<PAGE>



SCHEDULE 12

CERTAIN LOAN AGREEMENTS



                                             163

<PAGE>



SCHEDULE 13

CERTAIN MATERIAL ASSETS



                                             164

<PAGE>



EXHIBIT A

FORM OF ASSIGNMENT AND ACCEPTANCE



                                             165

<PAGE>



EXHIBIT B

FORM OF MIRROR NOTES



                                             166

<PAGE>



EXHIBIT C

SUBORDINATED LOAN DOCUMENTS



                                             167

<PAGE>



EXHIBIT D

FORMS OF AMENDMENTS AND/OR REAFFIRMATIONS
OF PLEDGE AGREEMENTS



                                             168

<PAGE>



EXHIBIT E

FORMS OF AMENDMENTS AND/OR
REAFFIRMATIONS OF GUARANTIES



                                             169

<PAGE>



EXHIBIT F

FORM OF SECOND AMENDED AND RESTATED TECHNOLOGY
AND TRADEMARK UNDERTAKING



                                             170

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EXHIBIT G

FORM OF AMENDMENT AND/OR REAFFIRMATION OF
SUBORDINATION AND CONTRIBUTION AGREEMENT



                                             171

<PAGE>



EXHIBIT H

FORM OF SECOND AMENDED AND
RESTATED LIQUIDITY UNDERTAKING



                                             172

<PAGE>



EXHIBIT I

FORM OF ACKNOWLEDGMENT OF LIMITATION
OF SPECIAL DAMAGES



                                             173

<PAGE>



EXHIBIT J

FORM OF NL GUARANTY



                                             174

<PAGE>



EXHIBIT K

FORM OF CANADIAN SECURITY DOCUMENTS



                                             175

<PAGE>



EXHIBIT L

FORM OF NORDENHAM MORTGAGE



                                             176

<PAGE>



EXHIBIT M

FORMS OF CASH PLEDGE
AGREEMENTS OF THE BORROWER



                                             177

<PAGE>



EXHIBIT N

FORMS OF CASH PLEDGE AGREEMENTS
OF THE CANADIAN SUBSIDIARIES



                                             178

<PAGE>



EXHIBIT O

FORM OF SOLVENCY CERTIFICATE



                                             179

<PAGE>



EXHIBIT P

FORM OF NOTICE OF BORROWING



                                             180

<PAGE>



EXHIBIT Q

FORM OF CERTIFICATE OF CHIEF FINANCIAL OFFICER
OF BORROWER AS TO ANNUAL FINANCIAL STATEMENTS



                                             181

<PAGE>



EXHIBIT R

FORM OF CERTIFICATE OF CHIEF FINANCIAL OFFICER OF
BORROWER AS TO QUARTERLY FINANCIAL STATEMENTS



                                             182

<PAGE>


EXHIBIT S

FORM OF CONFIDENTIALITY AGREEMENT

                                             183

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