EX-10.1






CREDIT AGREEMENT




among




U.S. BANK NATIONAL ASSOCIATION, COMERICA BANK,




HARRIS N.A., JP MORGAN CHASE BANK, N.A.,




THE CIT GROUP/BUSINESS CREDIT, INC., AND WACHOVIA




BANK, NATIONAL ASSOCIATION




as Lenders;




TITANIUM METALS CORPORATION,




as Borrower;




U.S. BANK NATIONAL ASSOCIATION,




as Administrative Agent,




and




WACHOVIA BANK, NATIONAL ASSOCIATION,




As Syndication Agent.




Dated February 17, 2006




1




CREDIT AGREEMENT




This Credit Agreement (the “Agreement”) is entered into on February 17, 2006, between and
among TITANIUM METALS CORPORATION (“TIMET”); U.S. BANK NATIONAL ASSOCIATION, COMERICA BANK, HARRIS
N.A., JP MORGAN CHASE BANK, N.A., THE CIT GROUP/BUSINESS CREDIT, INC., and WACHOVIA BANK, NATIONAL
ASSOCIATION (individually a “Lender” and collectively the “Lenders”); and U.S. BANK NATIONAL
ASSOCIATION, in its capacity as administrative agent for the Lenders (the “Agent”).



RECITALS




A. TIMET has requested the Lenders to provide a revolving credit facility and other credit
accommodations to TIMET. The credit facilities TIMET has requested from the Lenders would replace
and refinance the credit facilities (the “Existing Credit Facilities”) now provided to TIMET by
Wachovia Bank, National Association (successor by merger to Congress Financial Corporation
(Southwest)) and other lenders.



B. The Lenders are prepared to extend a revolving credit facility and related credit
accommodations to TIMET on the basis set forth in this Agreement.



NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the Lenders, TIMET, and the Agent agree as follows:



ARTICLE I




DEFINITIONS




Section 1.1 Defined Terms. As used in this Agreement, the following terms have the
following meanings, which apply to both the singular and plural forms of the terms defined:



"Accounts” has the meaning given to that term in the Uniform Commercial
Code as adopted and in effect in Oregon at the time in question.



"Acquiring Person” means a “person” or “group of persons” within the
meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended.



"Adjusted EBITDA” means, for any period in question, EBITDA minus the
sum of (a) Capital Expenditures of TIMET and its Subsidiaries, (b) federal, state,
and foreign income taxes paid in cash by TIMET and its Subsidiaries to the
applicable taxing authority, and (c) dividends and other distributions to
shareholders paid in cash by TIMET and its Subsidiaries (other than dividends and
other distributions paid by Subsidiaries of TIMET to TIMET, or paid by Subsidiaries
of TIMET to other Subsidiaries of TIMET).



"Adjustment Date” means May 1, 2006, and, thereafter, the first day of
each month following the delivery of the quarterly or annual financial statements
TIMET is required to deliver to the Agent pursuant to Section 9.12(a) and Section
9.12(b) of this Agreement.



"Advance Date” means the Business Day on which any Loan is made (or is
to be made).



"Affiliate” means, with reference to any Person, (a) any Person
controlling, controlled by, or under direct or indirect common control of that
Person, (b) any other Person directly or indirectly holding 10 percent or more of
any class of the Capital Stock (including options, warrants, convertible securities,
and similar rights) of that Person, and (c) any other Person 10 percent or more of
any class of whose Capital Stock (including options, warrants, convertible
securities, and similar rights) is held directly or indirectly by that Person.



"Agent” means U.S. Bank, or any successor thereto appointed in
accordance with Section 14.18 of this Agreement.



"Agent Fee Letter” means the letter agreement dated as of January 9,
2006, between the Agent and TIMET, as it may be amended or replaced from time to
time.



"Agreement” means this Credit Agreement, as amended, extended,
modified, renewed, restated, or supplemented from time to time.



"Applicable Margin” means 112.5 Basis Points for LIBOR Rate Loans, zero
Basis Points for Base Rate Loans, and 17.5 Basis Points for the Unused Commitment
Fee, each from the Closing Date to the first Adjustment Date. Thereafter, the
Applicable Margin shall be determined by measuring TIMET’s Cash Adjusted Leverage
Ratio as of the end of the measurement periods specified in Section 10.3 of this
Agreement and determining which pricing and fee level in the table below is
applicable to the Cash Adjusted Leverage Ratio at the time in question:



	 	 	 	 	 	 	 
	Cash Adjusted	 	 	 	Base Rate	 	Unused
	Leverage Ratio

	 	LIBOR Loan Margin
	 	Loan Margin
	 	Commitment Fee
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	Less than or equal to 1.00

	 	87.5 Basis Points
	 	Zero Basis Points
	 	15 Basis Points
	 
	 	 	 	 	 	 
	Greater than 1.00 and

less than or equal to

1.50

	 	



112.5 Basis Points
	 	



Zero Basis Points
	 	



17.5 Basis Points
	 
	 	 	 	 	 	 
	Greater than 1.50 and

less than or equal to

2.00

	 	



137.5 Basis Points
	 	



Zero Basis Points
	 	



20 Basis Points
	 
	 	 	 	 	 	 
	Greater than 2.00

	 	162.5 Basis Points
	 	Zero Basis Points
	 	25 Basis Points







Changes in the Applicable Margin (if any) shall become effective on the corresponding
Adjustment Date. TIMET shall not be entitled to elect the LIBOR Interest Rate at any time
that an Event of Default exists, or if the applicable Interest Period would extend beyond
the Maturity Date. In addition, notwithstanding anything in this Agreement to the contrary,
if TIMET does not timely provide the Agent with the quarterly (or annual, as applicable)
compliance certificate required pursuant to Section 9.12(d) of this Agreement, the Agent, at
the direction of the Required Lenders, will designate the Default Rate as the LIBOR Interest
Rate.



"Assignment and Assumption Agreement” has the meaning specified in
Section 13.1 of this Agreement.



"Base Interest Rate” means the Base Rate plus the Applicable Margin for
Base Rate Loans.



"Base Rate” means the greater of (a) the Prime Rate, or (b) the Federal
Funds Rate plus 50 Basis Points.



"Base Rate Loans” means any Loan (or portion thereof) bearing interest
at a rate determined with reference to the Base Rate.



"Basis Point” means 1/100th of one percent.



"Borrowing Base” has the meaning specified in Section 2.6 of this
Agreement.



"Borrowing Base Certificate” means a document in form and content
satisfactory to the Agent in its reasonable discretion (which must be certified to
be correct by a Responsible Officer) delivered to and accepted by the Agent pursuant
to Section 9.12(f)(i) of this Agreement that identifies the Borrowing Base as of the
date in question.



"BUCS” means, collectively, the convertible preferred securities
designated the 6 5/8% Convertible Preferred Securities, Beneficial Unsecured
Convertible Securities issued by the Trust, as the same now exist or hereafter may
be amended, modified, supplemented, extended, renewed, restated, or replaced.



"Business Day” means a day on which banks are open for business in
Portland, Oregon, and New York, New York, and, in addition, if such term is used
with reference to the LIBOR Interest Rate, any day on which dealings are effected in
the Eurodollar market in London, England.



"Capital Expenditures” means, with respect to any measurement period in
question, all expenditures (by the expenditure of cash, the incurrence of
Indebtedness, or the accrual of a liability) by the Person in question during any
measuring period for fixed assets or improvements, or for repairs, maintenance,
replacements, substitutions, or additions thereto (including, but not limited to,
expenditures under Capital Leases), that have a useful life of more than one year
and that are capitalized by such Person in accordance with GAAP.



"Capital Leases” means any agreement of a Person to lease or rent any
property (whether real, personal, or mixed) that, in accordance with GAAP, is
accounted for as a capital lease on the balance sheet of such Person.



"Capital Stock” means (a) in the case of a corporation, capital stock,
(b) in the case of an association or business entity, any and all shares, interests,
participations, rights, or other equivalents (however designated) of capital stock,
(c) in the case of a partnership, partnership interests (whether general or
limited), (d) in the case of a limited liability company, membership interests, and
(e) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.



"Cash Adjusted Leverage Ratio” means the ratio of (a) Funded
Indebtedness minus cash and Cash Equivalents of TIMET and its Subsidiaries as of any
date of determination to (b) EBITDA for the 12-month period ending on the date of
determination.



"Cash Equivalent” means the following assets:



(a) negotiable certificates of deposit, time deposits (including sweep
accounts), demand deposits and bankers’ acceptances having a maturity of
nine months or less issued by any financial institution organized under the
laws of (i) the United States of America or any state thereof, or the
District of Columbia, (ii) any member of the European Union or a United
States branch thereof, or (iii) the United Kingdom or a United States branch
thereof, in each case having capital and surplus and undivided profits
aggregating at least $250,000,000 and rated at least prime-one by Moody’s
Investors Services, Inc., or A-1 by Standard & Poors Corporation, or issued
by any Lender;



(b) corporate obligations having a maturity of one year or less and
rated at least prime-one by Moody’s Investors Services, Inc., or A-1 by
Standard & Poors Corporation, or issued by any Lender;



(c) any direct obligation of the United States of America, the District
of Columbia, any member of the European Union, or the United Kingdom, or any
agency or instrumentality thereof, or of any state or municipality thereof,
(i) which has a remaining maturity at the time of purchase of not more than
one year or which is subject to a repurchase agreement with any Lender (or
any other financial institution referred to in clause (a) above) exercisable
within one year from the time of purchase, and (ii) which, in the case of
obligations of any state or municipality, is rated at least Aaa by Moody’s
Investors Services, Inc., or AAA by Standard & Poors Corporation;



(d) any mutual fund or other pooled investment vehicle rated at least
Aa by Moody’s Investors Services, Inc., or AA by Standard & Poors
Corporation that invests principally in obligations described above;



(e) any repurchase agreement secured by any one of the foregoing; and



(f) any “pooled” investment or other investment offered by a Lender.



"Change in Control” means, with respect to any Person, the occurrence
of any of the following: (a) a change in control as reported by such Person in
response to either Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act or Item 1 of Form 8-K promulgated under the Exchange Act, (b) any
“person” (as such term is used in Section 13(d) and Section 14(d)(2) of the Exchange
Act) after the date of this Agreement becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of such
Person representing the Control Percentage (or more) of the combined voting power of
such Person’s then outstanding securities and such person is not a Permitted Holder,
or (c) following the election or removal of directors, a majority of such Person’s
Board of Directors consists of individuals who were not members of such Person’s
Board of Directors immediately prior to such election or removal, unless the
election of each director who was not a director immediately prior to such election
or removal (i) has been approved in advance by directors representing at least a
majority of the directors then in office who were directors immediately prior to
such election or removal, or (ii) has been approved by any Permitted Holder.



"Closing Date” means the date on which all of the conditions precedent
set forth in Section 6.1 of this Agreement have been satisfied (but in no event
shall such date be later than February 17, 2006).



"Code” means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, as the same from time to time may be supplemented or amended
and remain in effect.



"Collateral” means the personal property of TIMET and the Guarantors more
particularly described in the Security Documents.



"Commitment” means, with respect to each Lender, the obligation of such
Lender to make Revolving Loans to TIMET pursuant to this Agreement and to
participate in Letters of Credit and Swingline Loans issued or extended under this
Agreement in an aggregate amount not to exceed the amount set forth beside such
Lender’s name on Schedule 2.2 to this Agreement (or in an Assignment and Assumption
Agreement to which such Lender is a party), as such amount may be adjusted from time
to time in accordance with this Agreement.



"Consolidated” and “Consolidating,” when used with reference to
any term, mean that term as applied to the accounts of TIMET (or other specified
Person) and all of its Subsidiaries (or other specified group of Persons), or such
of its Subsidiaries as may be specified, consolidated (or combined) or consolidating
(or combining), as the case may be, such accounts in accordance with GAAP.



"Control Percentage” means, with respect to any Person, the percentage
of the outstanding Capital Stock of such Person having ordinary voting power that
gives the direct or indirect holder of such stock the power to elect a majority of
the board of directors of such Person.



"Default” means any event or occurrence that with the giving of notice,
or the passage of time, or both, would constitute an Event of Default.



"Default Rate” means a rate (or fee, as applicable) equal to 2 percent
per annum in excess of the rate or rates of interest (or fee, as applicable) in
effect at the time of an Event of Default (which will include any subsequent
fluctuation in the Base Interest Rate) that will be payable on principal from the
date of such Event of Default until the Notes are paid in full, or the Lenders
accept a tendered cure of the Event of Default and restore in writing the interest
rate (or fee, as applicable) that was in effect before the Default Rate.



"Defaulting Lender” means any Lender that (a) has failed to fund any
portion of the Revolving Loans, or participations in Swingline Loans or Letters of
Credit required to be funded by it under this Agreement, within one Business Day of
the date required to be funded by it under this Agreement, (b) otherwise has failed
to pay to the Agent or any other Lender any other amount required to be paid by it
under this Agreement within one Business Day of the date when due, unless the
subject of a good faith dispute, or (c) has been deemed insolvent or become the
subject of a bankruptcy or insolvency case or proceeding.



"Dollar” and “$” mean lawful money of the United States.



"EBITDA” means, with respect to any fiscal period of TIMET, without
duplication and determined in accordance with GAAP, an amount equal to (a) Net
Income (or net loss) for such period, excluding all extraordinary noncash gains or
extraordinary noncash losses of TIMET and its Subsidiaries that were included in
determining such Net income (or loss), plus (b) the sum of the following items, to
the extent these items were deducted in determining such Net Income (or loss): (i)
Interest Expense of TIMET and its Subsidiaries during such period, (ii) income tax
expense of TIMET and its Subsidiaries during such period, (iii) depreciation expense
of TIMET and its Subsidiaries during such period, and (iv) amortization expense of
TIMET and its Subsidiaries during such period.



"Eligible Accounts” means all Accounts of TIMET and the Guarantors
meeting all of the following criteria and in which the Agent, as agent for the
Lenders, has a perfected, first priority security interest:



(a) An Account that arose from a bona fide sale of goods or rendition
of services by TIMET (or a Guarantor, as applicable) in the ordinary course
of its business, which transactions are completed in accordance with the
terms and provisions contained in any documents related thereto;



(b) An Account as to which the amount shown on the books of TIMET (or a
Guarantor, as applicable) and on any invoice or statement delivered to the
Agent or the Lenders is owing to TIMET (or a Guarantor, as applicable) and
no partial payment has been made thereon, except as reflected on the books
of TIMET (or a Guarantor, as applicable);



(c) An Account to the extent that it is not subject to any reduction,
counterclaim, setoff, recoupment, or any present claim for credits,
allowances, or adjustment by the account debtor because of returned,
inferior, or damaged goods (other than pursuant to quality review of the
goods or services provided, in the ordinary course of business), or for any
other reason, except for customary discounts allowed for prompt payment,
volume purchases, or other, similar negotiated arrangements;



(d) An Account as to which the debtor is not an Affiliate of TIMET or a
Guarantor, unless such Account is an Account payable by ValTimet, SAS
(unless ValTimet is a Subsidiary), that was created in the ordinary course
of TIMET’s (or its Subsidiary’s) business with ValTimet, SAS, on terms
substantially similar to terms TIMET (or its Subsidiary) would obtain in a
comparable arm’s length transaction with a Person not an Affiliate;



(e) An Account to the extent that it does not result from, include, or
constitute late charges, service charges, or interest;



(f) An Account that is not more than 60 days past due;



(g) An Account that is not an obligation of an account debtor with more
than 20 percent of the total amount of all Accounts payable by such account
debtor to TIMET (or a Guarantor, as applicable) that are more than 60 days
past due;



(h) An Account that does not arise out of a contract with, or order
from, an account debtor that by its terms forbids or makes the pledge or
assignment of that Account void or unenforceable;



(i) An Account as to which the account debtor is not the United States
of America, or any agency, division, unit, instrumentality, or branch
thereof;



(j) An Account as to which TIMET (or a Guarantor, as applicable) has
not received any note, trade acceptance, draft, or other instrument with
respect to the goods giving rise to the account (unless, if any such
instrument or chattel paper is received, TIMET has notified the Agent and,
at the Agent’s request, has endorsed or assigned such instrument or chattel
paper (or caused it to be endorsed or assigned) and delivered the same to
the Agent);



(k) An Account as to which TIMET (or a Guarantor, as applicable) has
not received any notice of the death of the account debtor, or of the
dissolution, termination of existence, insolvency, business failure,
appointment of a receiver for any part of the property of, assignment for
the benefit of creditors by, or the filing of a petition in bankruptcy or
the commencement of any proceeding under any bankruptcy or insolvency laws
by or against the account debtor (and upon the receipt of any such notice,
TIMET immediately shall advise the Agent of the event or occurrence in
question);



(l) An Account that is payable to TIMET (or a Guarantor, as applicable)
in the United States by an account debtor that resides in, or is organized
under the laws of, a state in the United States (or by an account debtor
that is outside the United States if payment of the Account is assured by a
letter of credit issued to TIMET (or a Guarantor, as applicable) in form and
content acceptable to the Agent in its reasonable discretion by an issuer
acceptable to the Agent in its reasonable discretion), provided, however,
that TIMET may include Accounts payable by account debtors domiciled outside
the United States as Eligible Accounts if (i) such Accounts satisfy the
other requirements specified herein with respect to Eligible Accounts, and
(ii) TIMET demonstrates to the Agent’s reasonable satisfaction that the
foreign account debtor in question is creditworthy;



(m) An Account as to which the account debtor’s obligation to TIMET (or
a Guarantor, as applicable) is denominated and payable in United States
currency;



(n) An Account that does not involve or arise out of an agreement by
TIMET (or a Guarantor, as applicable) for dating of the invoice confirming
the sale of the goods or rendition of the services in question;



(o) An Account as to which the account debtor’s financial condition is
acceptable to the Agent in the Agent’s reasonable discretion;



(p) Accounts from a single account debtor that do not exceed in the
aggregate 20 percent of the total Accounts of TIMET and the Guarantors; and



(q) An Account that is not an Account that the Agent, in the Agent’s
reasonable discretion, determines to be ineligible in whole or in part and
has notified TIMET thereof.



Notwithstanding the foregoing, any Account covered by credit insurance shall be
deemed an Eligible Account, provided that the Agent, in its reasonable discretion,
has determined that the credit insurance is issued by an acceptable insurer and
provides coverage in amounts and on terms satisfactory to the Agent.



"Eligible Assignee” means (a) a commercial lender organized under the
laws of the United States, or any state thereof, and having primary capital of not
less than $250,000,000 and approved by the Agent, the Issuing Bank, and (provided no
Default or Event of Default has occurred and is continuing) TIMET, which approvals
shall not be withheld unreasonably; (b) a commercial lender organized under the laws
of any other country that is a member of the Organization for Economic Cooperation
and Development and having primary capital (or its equivalent) of not less than
$250,000,000 and approved by the Agent, the Issuing Bank, and (provided no Default
or Event of Default has occurred and is continuing) TIMET, which approvals shall not
be withheld unreasonably; (c) a Lender (other than a Defaulting Lender), without
approval of any Person; and (d) an Affiliate of the respective assigning Lender,
without approval of any Person, provided that such Person otherwise meets the
eligibility requirements of (a) or (b) above, or demonstrates to the Agent’s
reasonable satisfaction its ability to comply with the obligations of a Lender under
this Agreement.



"Eligible Equipment” means all Equipment of TIMET and the Guarantors in
which the Agent, as agent for the Lenders, has a perfected, first-priority security
interest, except the following:



(a) Equipment located outside the United States;



(b) Slow-moving, damaged or obsolete Equipment (as determined by the Agent in
its reasonable discretion);



(c) All Equipment that is on consignment;



(d) All Equipment that is leased to or from others by TIMET (or a Guarantor);



(e) Equipment that is located on premises leased or rented by TIMET (or a
Guarantor, as applicable) unless either (i) TIMET has delivered to the Agent a
landlord’s waiver in a form satisfactory to the Agent in the Agent’s reasonable
discretion, or (ii) TIMET has established reserves in an amount satisfactory to the
Agent in its reasonable discretion with respect to potential landlord’s liens;



(f) Equipment located at a location owned by TIMET (or a Guarantor, as
applicable) that is subject to a mortgage in favor of a lender other than the
Lenders, unless TIMET has delivered to the Agent a mortgagee’s waiver in a form
satisfactory to the Agent in the Agent’s reasonable discretion; or



(g) Other Equipment that the Agent, in the Agent’s reasonable discretion,
determines should not be included in the Borrowing Base.



"Eligible Inventory” means all Inventory of TIMET and the Guarantors in
which the Agent, as agent for the Lenders, has a perfected, first-priority security
interest, except the following:



(a) Inventory located outside the United States;



(b) Slow-moving, damaged, or obsolete Inventory (as determined by the
Agent in its reasonable discretion);



(c) Inventory that is not merchantable;



(d) All goods that are leased to or from others by TIMET (or a
Guarantor);



(e) Inventory that is located on premises leased or rented by TIMET (or
a Guarantor, as applicable), unless the Agent has given the Agent’s prior
written consent thereto and unless either (i) TIMET has delivered to the
Agent a landlord’s waiver in a form satisfactory to the Agent in the Agent’s
reasonable discretion, or (ii) TIMET has established reserves in an amount
satisfactory to the Agent in its reasonable discretion with respect to
potential landlord’s liens;



(f) Inventory stored with a consignee, bailee, or warehouseman, unless
either (i) TIMET has delivered to the Agent an acknowledged bailee letter in
a form satisfactory to the Agent in the Agent’s reasonable discretion, or
(ii) TIMET has established reserves in an amount satisfactory to the Agent
in its reasonable discretion with respect to potential claims of the
consignee, bailee, or warehouseman;



(g) Inventory located at a location owned by TIMET (or a Guarantor, as
applicable) that is subject to a mortgage in favor of a lender other than
the Lenders, unless TIMET has delivered to the Agent a mortgagee’s waiver in
a form satisfactory to the Agent in the Agent’s reasonable discretion;



(h) Inventory that is covered by a negotiable document of title, unless
such document and evidence of acceptable insurance covering such inventory
have been delivered to the Agent with all necessary endorsements, free and
clear of all Liens, except those in favor of the Lenders;



(i) Goods that have been returned by the buyer thereof and are not
merchantable; or



(j) Other Inventory that the Agent, in the Agent’s reasonable
discretion, determines should not be included in the Borrowing Base.



"Eligible Real Property” means all real property of TIMET and the
Guarantors in which the Agent, as agent for the Lenders, has a perfected,
first-priority lien, except the following:




(a) Real property located outside the United States;




(b) Real property that does not comply in all material respects with applicable
Environmental Laws;




(c) Real property that is leased from another Person by TIMET (or a Guarantor);




(d) Real property that is leased to another Person by TIMET (or a Guarantor),
if the terms of the lease therefor are not acceptable to the Agent, in its
reasonable discretion;




(e) Real property subject to any Lien that is not acceptable to the Agent, in
the Agent’s reasonable discretion; or




(f) Real property that the Agent, in the Agent’s sole and absolute discretion,
determines is not eligible for inclusion in the Borrowing Base.



"Environmental Laws” means any and all applicable federal, state, and
local environmental, health, or safety statutes, laws, regulations, rules, and
ordinances (whether now existing or hereafter enacted or promulgated), and all
applicable judicial, administrative, and regulatory decrees, judgments, and orders,
including common law rulings and determinations, relating to injury to, or the
protection of, human health or the environment, including, without limitation, all
requirements pertaining to reporting, licensing, permitting, investigation,
remediation, and removal of emissions, discharges, releases, or threatened releases
of Hazardous Materials into the environment, or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or handling
of such Hazardous Materials.



"Equipment” has the meaning given to that term in the Uniform
Commercial Code as adopted and in effect in Oregon at the time in question.



"ERISA” means The Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, collectively, as the same from time to time
may be supplemented or amended and remain in effect.



"Event of Default” has the meaning specified in Section 12.1 of this
Agreement.



"Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute, and the rules and regulations
thereunder.



"Existing Affiliate Transactions” means the transactions specified in
Schedule 1.1 to this Agreement.



"Existing Credit Facilities” has the meaning specified in Recital A of
this Agreement.



"Federal Funds Rate” means, for any day, the rate equal to the weighted
average (rounded to the nearest 1/16 of 1 percent) of (a) the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as such weighted average is published for such day (or, if
such day is not a Business Day, for the immediately preceding Business Day) by the
Federal Reserve Bank of New York, or (b) if such rate is not so published for such
Business Day, quotations received by the Agent from three federal funds brokers of
recognized standing selected by the Agent. Each determination by the Agent of the
Federal Funds Rate shall be conclusive, in the absence of manifest error.



"Fixed Charges” means, for any period in question, the sum of total
Interest Expense and scheduled principal payments on Funded Indebtedness.



"Funded Indebtedness” means, without duplication, the sum of (a) all
Indebtedness of TIMET and its Subsidiaries for borrowed money (including the Loans),
(b) all Indebtedness of TIMET and its Subsidiaries in respect of Capital Lease
obligations, (c) all obligations of TIMET and its Subsidiaries in respect of letters
of credit, and (d) all Guarantees executed by TIMET or its Subsidiaries with respect
to any of the foregoing.



"GAAP” means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, or such other principles
as may be approved by a significant segment of the accounting profession in the
United States, that are applicable to the circumstances as of the date of
determination, consistently applied.



"Governmental Authority” means the government of the United States, any
state or any foreign country (or any political subdivision of any thereof), or any
branch, department, agency, instrumentality, court, tribunal, or regulatory
authority that constitutes a part of or exercises any sovereign power of any of the
foregoing.



"Guarantee Agreement” means the guarantee agreements executed by
Material Domestic Subsidiaries of TIMET pursuant to Section 7.4 of this Agreement
with respect to the Obligations, and includes any amendments, extensions,
modifications, renewals, restatements, and supplements thereof.



"Guarantees” means all guarantees, endorsements (other than
endorsements of negotiable instruments for collection in the ordinary course of
business), or other contingent or surety liabilities with respect to obligations of
others, whether or not reflected on the balance sheet of the Person in question,
including any obligation to furnish funds, directly or indirectly (whether by virtue
of partnership arrangements, by agreement to keep-well, or otherwise), through the
purchase of goods, supplies, or services, or by way of stock purchase, capital
contribution, advance, or loan, or to enter into a contract for any of the
foregoing, for the purpose of payment of obligations of any other Person.



"Guarantor” means each Material Domestic Subsidiary of TIMET that
executes a Guarantee Agreement, whether contemporaneously with this Agreement (as
required by the terms of Section 6.1(a)(iv) and Section 7.4 of this Agreement), or
hereafter in accordance with Section 7.4 of this Agreement.



"Hazardous Material” means any substance (a) the presence of which
requires notification, removal, or remediation under any Environmental Law; (b) that
is or becomes defined as a “hazardous waste”, “hazardous material,” or “hazardous
substance” under any present or future Environmental Law, or amendments thereto,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601, et seq.) and any applicable
local statutes and the regulations promulgated thereunder; (c) that is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic, or otherwise
hazardous and that is or becomes regulated pursuant to any Environmental Law; or (d)
without limitation, that contains gasoline, diesel fuel, or other petroleum
products, asbestos, or polychlorinated biphenyls.



"Highest Lawful Rate” has the meaning specified in Section 5.27 of this
Agreement.



"Indebtedness” means, without duplication, (a) all obligations of TIMET
and its Subsidiaries for borrowed money or other extensions of credit, whether
secured or unsecured, absolute or contingent, including, without limitation,
unmatured reimbursement obligations with respect to letters of credit (other than
any such obligation held by TIMET or a Subsidiary of TIMET), (b) all obligations of
TIMET and its Subsidiaries evidenced by bonds, notes, debentures, or other similar
instruments (other than any such instrument held by TIMET or a Subsidiary of TIMET),
(c) all obligations representing the deferred purchase price of property (except any
such balance that constitutes an account payable to a trade creditor (whether or not
an Affiliate) created, incurred, assumed, or guaranteed by such Person in the
ordinary course of business of such Person in connection with obtaining goods,
materials, or services that is not overdue by more than one hundred twenty (120)
days unless the trade payable is being contested in good faith) (d) all obligations
of TIMET and its Subsidiaries in respect of indebtedness of another Person for
borrowed money or indebtedness of another Person otherwise described in this
definition, which is secured by any consensual lien, security interest, collateral
assignment, conditional sale, mortgage, deed of trust, or other encumbrance on any
asset of TIMET or its Subsidiaries, whether or not such obligations, liabilities, or
indebtedness are assumed by or are a personal liability of TIMET or its
Subsidiaries, (e) that portion of all obligations of TIMET and its Subsidiaries
arising under Capital Leases, (f) mandatory redemption or dividend rights on Capital
Stock (or other equity) of TIMET and its Subsidiaries (other than any such Capital
Stock held by TIMET or a Subsidiary of TIMET), (g) net liabilities of TIMET and its
Subsidiaries under all Interest Rate Contracts and foreign exchange agreements, and
(h) all Guarantees of TIMET and its Subsidiaries in respect of indebtedness of
another Person for borrowed money or indebtedness of another Person otherwise
described in this definition.



"Interest Expense” means, for any fiscal period and determined in
accordance with GAAP, total Consolidated interest expense of TIMET and its
Subsidiaries, including interest expense with respect to any Funded Indebtedness of
TIMET and its Subsidiaries, amounts paid (or required to be paid in the applicable
fiscal period) by TIMET and its Subsidiaries in respect of interest hedge contracts,
but excluding any non-cash interest expense.



"Interest Period” means, with respect to each LIBOR Rate Loan, the
period commencing on the date of the making or continuation of or conversion to such
LIBOR Rate Loan and ending one, two, three, or six months thereafter (as TIMET may
elect in the applicable Notice of Borrowing or Conversion), provided that:



(a) Any Interest Period (other than an Interest Period determined
pursuant to clause (c) below) that otherwise would end on a day that is not
a Business Day shall be extended to the next succeeding Business Day, unless
such next succeeding Business Day falls in the next calendar month, in which
case such Interest Period shall end on the immediately preceding Business
Day;



(b) Any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall, subject
to clause (c) below, end on the last Business Day of a calendar month; and



(c) Any Interest Period that otherwise would end after the Maturity
Date shall end on the Maturity Date.



"Interest Rate Contracts” means interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements, interest rate insurance,
foreign exchange agreements, and other agreements or arrangements designed to
provide protection against fluctuations in interest rates or currency fluctuations.



"Interest Rate Protection Agreement” means an Interest Rate Contract
between TIMET (or a Subsidiary of TIMET) and a Lender (or an Affiliate of a Lender)
that is entered into by TIMET (or its Subsidiary) for hedging purposes with respect
to transactions engaged in by TIMET (or its Subsidiary) in the ordinary course of
business and not for speculative purposes.



"Inventory” has the meaning given to that term in the Uniform
Commercial Code as adopted and in effect in Oregon at the time in question.



"Investment” means the purchase or acquisition of any share of Capital
Stock of any other Person, any loan, advance, or extension of credit (excluding
accounts receivable arising in the ordinary course of business) to any other Person,
contribution to the capital of any other Person, or the acquisition of substantially
all of the assets of any other Person.



"ISP” means, with respect to any Letter of Credit, the “International
Standby Practices 1998” published by the Institute of International Banking Law and
Practice (or such later version thereof as may be in effect at the time of
issuance).



"Issuing Bank” means (a) U.S. Bank and any Successor thereof, and (b)
only to the extent of the Letters of Credit identified in Schedule 3.1 to this
Agreement, Wachovia Bank, National Association, and any Successor thereof.



"Laws” means, collectively, all international, foreign, federal, state,
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes, and
administrative or judicial precedents or authorities, including the interpretation
or administration thereof by any Governmental Authority charged with the
enforcement, interpretation, or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses, authorizations, and
permits of, and agreements with, any Governmental Authority, in each case whether or
not having the force of law.



"Lenders” means (a) the banks and other institutions listed on Schedule
2.2 to this Agreement, and any Successor of any of them, to the extent they continue
to be holders of all or any portion of the Loans, and (b) any Eligible Assignee that
subsequently executes an Assignment and Assumption Agreement and becomes the holder
of all or any portion of the Loans and a party to this Agreement in accordance with
the terms of this Agreement.



"Letter of Credit Commitment” has the meaning specified in Section 3.2
of this Agreement.



"Letter of Credit Exposure” means, at the time in question, the
aggregate amount of Letters of Credit outstanding (as determined in accordance with
Section 3.5 of this Agreement).



"Letter of Credit Fees” has the meaning specified in Section 3.6 of
this Agreement.



"Letters of Credit” has the meaning specified in Section 3.1 of this
Agreement.



"Leverage Ratio” means the ratio of (a) Funded Indebtedness as of any
date of determination to (b) EBITDA for the 12-month period ending on the date of
determination.



"LIBOR” means the average offered rate for deposits in United States
dollars (rounded upwards, if necessary, to the nearest one-sixteenth of 1 percent)
for delivery of such deposits on the first day of an Interest Period, for the number
of days in such Interest Period, which appears on Telerate Page 3750 (or such other
reporting service selected by the Agent in its reasonable discretion) at or about
9:00 a.m. Portland, Oregon, time (or such other time that such rate is available to
the Agent) on the day that is two Business Days preceding the first day of the
Interest Period, or the rate for such deposits determined by the Agent at such time
based on such other published service of general application as shall be selected by
the Agent for such purpose; provided, however, that in lieu of determining the rate
in the foregoing manner, the Agent may determine the rate based on rates offered to
the Agent for deposits in United States dollars (rounded upwards, if necessary, to
the nearest one-sixteenth of 1 percent) in the interbank Eurodollar market at such
time for delivery on the first day of the Interest Period for the number of days in
such Interest Period.



"LIBOR Interest Rate” means the LIBOR Rate plus the Applicable Margin
per annum.



"LIBOR Rate” means a per annum interest rate (rounded upward, if
necessary, to the nearest one-sixteenth of 1 percent) calculated for the Interest
Period in accordance with the following formula (in each instance determined by the
Agent in its reasonable discretion) for the applicable Interest Period:



	 	 	 
	 
	 	 
	
 
	 	LIBOR Rate = LIBOR
	
 
	 	 
	
 
	 	1 – LIBOR Reserve Percentage






The Agent’s determination of the LIBOR Rate for any Interest Period shall be
conclusive in the absence of manifest error.



"LIBOR Rate Loan” means any Loan (or portion thereof) bearing interest
at a rate determined with reference to the LIBOR Rate.



"LIBOR Reserve Percentage” means, for any Interest Period, the
aggregate of the maximum reserve percentages (including any basic, marginal,
special, emergency, or supplemental reserves), expressed as a decimal, established
(or as may be modified or adopted) by the Board of Governors of the Federal Reserve
System and any other domestic or foreign banking authority to which any Lender is
subject with respect to “Eurocurrency Liabilities” (as defined in regulations issued
from time to time by the Board of Governors of the Federal Reserve System), or
applicable to extensions of credit by the Lenders, the rate of interest on which is
determined with regard to rates applicable to “Eurocurrency Liabilities.” The LIBOR
Reserve Percentage shall be adjusted automatically on and as of the effective date
of any change in any such reserve percentage.



"Lien” means any mortgage, deed of trust, pledge, charge,
hypothecation, assignment, deposit arrangement, security interest, attachment,
garnishment, execution, encumbrance (including, but not limited to, easements,
rights of way, and the like), lien (statutory or other), security agreement,
transfer intended as security (including, without limitation, any conditional sale
or other title retention agreement), the interest of a lessor under a Capital Lease,
or any financing lease having substantially the same economic effect as any of the
foregoing, or other voluntary or involuntary lien or charge upon (or affecting the
revenues of) any real property or personal property of the Person in question.



"Loan” means a Revolving Loan or a Swingline Loan.



"Loan Documents” means this Agreement, the Notes, the Swingline Note,
the Guarantee Agreements, the Pledge Agreement, the Security Agreements, and any
other documents executed by TIMET or any Guarantor in favor of the Lenders (and the
Issuing Bank and the Swingline Lender) prior to or contemporaneously with this
Agreement (or after the Closing Date), and all amendments, extensions,
modifications, renewals, restatements, and supplements thereof.



"Material Adverse Effect” means (a) a material adverse effect on the
business, assets, operations, or financial condition of TIMET and the Guarantors,
taken as a whole, (b) a material impairment of the ability of TIMET to pay or
perform its obligations under the Loan Documents in accordance with the terms
thereof, (c) a material impairment of all or any material portion of the Collateral,
the Liens of the Lenders in the Collateral, or the priority of such Liens, or (d) a
material impairment of the Lenders’ rights and remedies under the Loan Documents.



"Material Domestic Subsidiary” means Titanium Hearth Technologies,
Inc., TMCA International, Inc., TIMET Finance Management Company, and any other
domestic Subsidiary of TIMET that has net worth of $2,000,000 (or more) that are
created or acquired after the Closing Date, or, if in existence on the Closing Date,
subsequently has net worth of $2,000,000 (or more), as a result of Investments, or
otherwise. Notwithstanding the foregoing, TIMET Asia, Inc., shall not be treated as
a Material Domestic Subsidiary for purposes of this Agreement.




"Maturity Date” has the meaning specified in Section 2.10 of this Agreement.



"Multiemployer Plan” means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which TIMET or any Subsidiary of TIMET
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.



"Net Income” means, for any 12-month period in question, the net income
of TIMET and its Subsidiaries on a Consolidated basis for such period, determined in
accordance with GAAP, but in any event there shall be excluded or deducted from such
net income (a) any gain or loss arising from any write up of assets, except to the
extent inclusion thereof shall be approved in writing by the Agent in its reasonable
discretion; (b) any extraordinary gains; and (c) the proceeds of any life insurance
policy received during such period.



"Notes” has the meaning specified in Section 2.4 of this Agreement, and
includes any amendments, extensions, modifications, renewals, restatements, and
supplements thereof.



"Notice of Borrowing or Conversion” means notices in form and content
satisfactory to the Agent in its reasonable discretion signed by the Responsible
Officer and given by TIMET to the Agent to request a Loan (or to convert or extend
an existing Loan).



"Obligations” means all of TIMET’s obligations to the Lenders (or an
Affiliate of a Lender pertaining to Interest Rate Protection Agreements), the
Swingline Lender, and the Issuing Bank, including, but not limited to, TIMET’s
obligations pursuant to the Notes, this Agreement, and the other Loan Documents, and
any Interest Rate Protection Agreements.



"Outstanding Amount” means, at the time in question, the aggregate
outstanding principal amount of the Loans and the Letters of Credit (as computed in
accordance with Section 3.5 of this Agreement).



"Participant” has the meaning specified in Section 13.2 of this
Agreement.



"Patriot Act” has the meaning specified in Section 15.17 of this
Agreement, and includes any amendments thereof.



"PBGC” means The Pension Benefit Guaranty Corporation, or any entity
succeeding to any or all of its functions under ERISA.



"Pension Plan” means any “employee pension benefit plan” (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by TIMET or any of its
Subsidiaries, or to which TIMET or any of its Subsidiaries contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.



"Percentage Interest” means with respect to any Lender at any time, the
percentage (carried out to the eighth decimal place) of the Commitments represented
by such Lender’s Commitment at such time. If the Commitments of each Lender to make
Loans and the obligation of the Issuing Bank to issue Letters of Credit have been
terminated pursuant to Section 5.10 or Section 5.11 of this Agreement, or if the
Commitments have expired, then the Percentage Interest of each Lender shall be
determined based on the Percentage Interest of such Lender most recently in effect,
giving effect to any subsequent assignments. The initial Percentage Interest of
each Lender is set forth opposite the name of such Lender on Schedule 2.2 to this
Agreement, or in the Assignment and Assumption Agreement pursuant to which such
Lender becomes a party hereto, as applicable.



"Permitted Holders” means (a) Harold C. Simmons (“Simmons”), (b) the
spouse of Simmons (“Simmons Spouse”), (c) any trust established primarily for the
benefit of Simmons or members of his family (including his spouse and/or his
descendants (whether natural or adopted)) or both (such trusts, collectively, the
“Simmons Trusts,” and such individuals, collectively, the “Simmons Trusts
Beneficiaries”), (d) any trustee of the Simmons Trusts (such individuals,
collectively, the “Simmons Trustees”), (e) any Person controlled in the aggregate by
any one or more of Simmons, Simmons Spouse, the Simmons Trusts, the Simmons Trusts
Beneficiaries, the Simmons Trustees, Tremont LLC, Valhi, Inc., Valhi Holding
Company, the Harold Simmons Foundation, the Simmons Family Foundation, and The
Combined Master Retirement Trust (collectively, the “Simmons Associates” and
together with Simmons, Simmons Spouse, the Simmons Trusts, the Simmons Trusts
Beneficiaries, and the Simmons Trustees, the “Simmons Group”), (f) any managing
director, general partner, director, limited partner, principal, officer, or
employee of any of the Simmons Group, any employee benefit plan or pension fund of
any of the Simmons Group, and any heirs, executors, administrators, testamentary
trustees, legatees, or beneficiaries of any of the Simmons Group, or (g) a trust or
custodianship, to the extent that the beneficiaries of which, or a corporation or
partnership, the stockholders or general or limited partners of which, include only
the Simmons Group, their respective spouses and former spouses and ancestors or
lineal descendants (by blood or adoption). For purposes of this definition, the
term “control” (including the correlative meanings, the terms “controlled by” and
“under common control with”), as used with respect to any Person shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of voting
securities, by contract, or otherwise.



"Permitted Liens” has the meaning specified in Section 11.5 of this
Agreement.



"Person” means an individual, a partnership, a corporation (including a
business trust), a joint stock company, a trust, an unincorporated association, a
joint venture, a limited liability company, a limited liability partnership or other
entity, or a Governmental Authority or any agency, instrumentality, or political
subdivision thereof.



"Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by TIMET or a Subsidiary of TIMET.



"Pledge Agreement” means the Pledge and Security Agreement executed by
TIMET pursuant to Section 7.2 of this Agreement in favor of the Agent, as agent for
the Lenders, and includes any amendments, extensions, modifications, renewals,
restatements, and supplements thereof.



"Pledged Shares” has the meaning specified in Section 7.2 of this
Agreement.



"Prime Rate” means the rate of interest publicly announced from time to
time by the Agent as its “prime rate” or “reference rate.” The Prime Rate is not
necessarily the lowest rate of interest that the Agent charges or collects from any
borrower, or class of borrowers. Any change in the Prime Rate announced by the
Agent shall take effect at the opening of business on the day specified in the
public announcement of such change.



"Prohibited Transaction” means any “prohibited transaction” as defined
in ERISA and Section 4975 of the Code.



"Qualified Investments” means (a) investments in Cash Equivalents, and
(b) advances to employees for business related expenses to be incurred in the
ordinary course of business and consistent with past practices in an amount not to
exceed $20,000 to any single employee.



"Reallocation Payment” has the meaning specified in Section 2.13 of
this Agreement.



"Regulations U and X” means Regulations U and X of the Federal Reserve
Board, as the same are from time to time in effect, and all official rulings and
interpretations thereunder or thereof.



"Reimbursement Obligation” has the meaning specified in Section 3.11 of
this Agreement.



"Reportable Event” means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30-day notice period has been waived.



"Required Lenders” means, as of the date of determination, (a) in the
case of those matters specified in the second sentence of Section 15.2 of this
Agreement, all of the Lenders (except any Defaulting Lender), and (b) in all other
cases, Lenders having more than 51 percent of the aggregate Commitments or, if the
conditional obligation of each Lender to make Loans and the conditional obligation
of the Issuing Bank to issue Letters of Credit have been terminated pursuant to
Section 5.10 or Section 5.11 of this Agreement, Lenders holding in the aggregate
more than 51 percent of the Outstanding Amount (with the aggregate amount of each
Lender’s risk participation and funded participation in Letters of Credit being
deemed “held” by such Lender for purposes of this definition); provided that the
Commitment of, and the portion of the Outstanding Amount held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Lenders.



"Responsible Officer” means the Chief Executive Officer, the Chief
Financial Officer, or the Treasurer of TIMET (or any other officer of TIMET who by
written notice to the Agent is designated by such Chief Executive Officer, Chief
Financial Officer, or Treasurer to sign Notices of Borrowing or Conversion, or to
request Loans pursuant to the terms of this Agreement).



"Restricted Payment” means, without duplication, any dividend,
distribution, loan, advance, guaranty, extension of credit, or other payment,
whether in cash or property to or for the benefit of any Person that holds Capital
Stock in TIMET, and any purchase, redemption, retirement, or other acquisition for
value of any Capital Stock of TIMET, whether now or hereafter outstanding, or of any
options, warrants, or similar rights to purchase such Capital Stock, or any security
convertible into or exchangeable for such Capital Stock.



"Revolving Credit Facility” has the meaning specified in Section 2.1 of
this Agreement.



"Revolving Loans” has the meaning specified in Section 2.1 of this
Agreement.



"SEC” means the Securities and Exchange Commission, and any successor
entity.



"Security Agreements” means the security agreements executed by TIMET
and its Material Domestic Subsidiaries pursuant to Section 7.1 of this Agreement in
favor of the Agent (as agent for the Lenders, the Issuing Bank, and the Swingline
Lender), and the security agreements or deeds of trust executed by TIMET and its
Material Domestic Subsidiaries pursuant to Section 7.5 of this Agreement, and
includes any amendments, extensions, modifications, renewals, restatements, and
supplements of any of the foregoing.



"Security Documents” means the Security Agreements and the Pledge
Agreement, as amended, extended, modified, renewed, restated, or supplemented from
time to time.



"Subsidiary” of a Person means any corporation, association,
partnership or other business entity of which more than 50 percent of the
outstanding Capital Stock having by the terms thereof ordinary voting power under
ordinary circumstances to elect a majority of a board of directors or Persons
performing similar functions (or, if there are no such directors or Person, having
general voting power) of such entity (irrespective of whether or not at the time
Capital Stock of any other class or classes of such entity shall or might have
voting power upon the occurrence of any contingency) is at the time directly or
indirectly owned by such Person, or by one or more Subsidiaries of such Person.



"Subordinated Debentures” means, collectively, the 6 5/8% Convertible
Junior Subordinated Debentures due 2026 of TIMET issued pursuant to the Subordinated
Debenture Indenture, as the same now exist or hereafter may be amended, modified,
supplemented, extended, renewed, restated, or replaced.



"Subordinated Debenture Indenture” means the Indenture, dated as of
November 20, 1996, between TIMET, as issuer, and the Subordinated Debenture Trustee,
as the same now exists or hereafter may be amended, modified, supplemented,
extended, renewed, restated, or replaced.



"Successor” means, for any corporation or banking association, any
successor by merger or consolidation, or by acquisition of substantially all of the
assets or stock of the predecessor.



"Swingline Commitment” has the meaning specified in Section 4.2 of this
Agreement.



"Swingline Lender” means U.S. Bank and any Successor thereof.



"Swingline Loans” has the meaning specified in Section 4.1 of this
Agreement.



"Swingline Note” has the meaning specified in Section 4.5 of this
Agreement and includes any amendments, extensions, modifications, renewals,
restatements, and supplements thereof.



"Tangible Net Worth” means, at any date as of which the amount thereof
shall be determined, without duplication, the total assets of TIMET and its
Subsidiaries minus (a) the total liabilities of TIMET and its Subsidiaries, (b) the
sum of any amounts attributable to (i) any write-up in the book value of assets
resulting from any revaluation thereof subsequent to the date of the most recent
audited annual Consolidated financial statement of TIMET provided to the Agent, (ii)
intercompany accounts with Affiliates (including receivables due from Affiliates)
(to the extent included on a Consolidated basis in TIMET’s total assets and not
included in TIMET’s total liabilities), unless any such intercompany Account is an
Eligible Account (iii) the value, if any, attributable to any Capital Stock of TIMET
and its Subsidiaries held in treasury (to the extent included in total assets of
TIMET and its Subsidiaries), and (iv) the value, if any, attributable to any notes
or subscriptions receivable due from members in respect of membership interests (to
the extent included in total assets of TIMET and its Subsidiaries), and (c) goodwill
of TIMET and its Subsidiaries and all other assets of TIMET and its Subsidiaries
properly classified as intangible assets in accordance with GAAP.



"Tax” means any tax, assessment, duty, levy, or other charge imposed by
any Governmental Authority on any property, revenue, income, or franchise of any
Person, and any interest or penalty with respect to any of the foregoing.



"Termination Event” means (i) the occurrence of a Reportable Event with
respect to a Pension Plan, (ii) the withdrawal of TIMET or a Subsidiary of TIMET
from a Pension Plan during a plan year in which it was a “substantial employer” as
defined in Section 4001(a)(2) of ERISA, (iii) the filing of a notice of intent to
terminate a Pension Plan under Section 4041(c) of ERISA, (iv) the institution of
proceedings to terminate a Pension Plan by the PBGC, or (v) any other event or
condition which constitutes grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan.



"TIMET” means Titanium Metals Corporation, and any Successor thereof.



"Treco Property” means parcel no. 179-18-101-005 and a portion of
parcels 178-13-101-004 and 179-07-301-002 of the real property located in Henderson,
Nevada beneficially owned by Treco LLC.



"Trust” means the TIMET Capital Trust I, a Delaware business trust, and
its successors and assigns.



"Unused Commitment Amount” has the meaning specified in Section 2.9 of
this Agreement.



"Unused Commitment Fee” has the meaning specified in Section 2.9 of
this Agreement.



"U.S. Bank” means U.S. Bank National Association and any Successor or
assign thereof.



Section 1.2 Accounting Terms. Except as otherwise provided in this Agreement,
accounting terms that are not defined specifically in this Agreement shall be interpreted and
construed in accordance with GAAP and all accounting procedures shall be performed in accordance
with GAAP.



Section 1.3 Rules of Construction. For purposes of this Agreement, the following
rules of construction shall apply, unless specifically indicated to the contrary: (a) wherever
from the context it appears appropriate, each term stated in either the singular or plural shall
include the singular and the plural, and pronouns stated in the masculine, feminine, or neuter
gender shall include the masculine, feminine, and neuter genders; (b) the term “or” is not
exclusive; (c) the term “including” (or any form of that term) shall not be limiting or exclusive;
(d) all references to statutes and related regulations shall include any amendments thereof and any
successor statutes and regulations; (e) the words “this Agreement”, “herein”, “hereof”, “hereunder”
or other words of similar import refer to this Agreement as a whole, including any schedules,
exhibits, and annexes hereto, as the same may be amended, modified, or supplemented; (f) all
references in this Agreement to sections, schedules, exhibits, and annexes shall refer to the
corresponding sections, schedules, exhibits, and annexes of or to this Agreement; and (g) all
references to any instruments or agreements, including references to any of the Loan Documents,
shall include any and all amendments, extensions, modifications, renewals, restatements, and
supplements thereof, to the extent permitted under this Agreement.



Section 1.4 Incorporation of Recitals. The Recitals to this Agreement hereby are
incorporated into this Agreement and constitute a part of this Agreement.



ARTICLE II




THE REVOLVING CREDIT FACILITY




Section 2.1 The Loans. Upon the terms and subject to the conditions of this
Agreement, and in reliance upon the representations, warranties, and covenants of TIMET in this
Agreement, the Lenders agree to make loans and advances of credit to TIMET at TIMET’s request from
time to time after the Closing Date and prior to the Maturity Date (each of which loans and
advances is referred to in this Agreement as a “Revolving Loan” and all of which are referred to in
this Agreement collectively as the “Revolving Loans”). The credit facility described in the
preceding sentence is referred to in this Agreement as the “Revolving Credit Facility.”



Section 2.2 Maximum Commitment. The Lenders’ total aggregate Commitments with respect
to the Revolving Credit Facility are set forth in Schedule 2.2 to this Agreement. The maximum
amount of Revolving Loans that may be outstanding to TIMET under the Revolving Credit Facility at
any time (after giving effect to all requested Revolving Loans) is the lesser of (a) the aggregate
amount of the Commitments at the time in question minus the aggregate principal amount of Swingline
Loans and Letters of Credit outstanding at the time in question, or (b), if applicable under the
circumstances described in Section 2.5 of this Agreement, the Borrowing Base minus the aggregate
principal amount of Swingline Loans and Letters of Credit outstanding at the time in question. If
the amount outstanding with respect to the Revolving Credit Facility at any time exceeds the
applicable amount specified in the preceding sentence, TIMET within three Business Days shall pay
the Agent (for distribution to the Lenders in accordance with their Percentage Interests) an amount
equal to such excess (and TIMET’s failure to make such payment shall constitute an Event of
Default).



Section 2.3 Use of Loan Proceeds. The proceeds of Revolving Loans will be used by
TIMET only to repay the entire amount owed in respect of the Existing Credit Facilities on the
Closing Date and, thereafter, for general corporate purposes of TIMET and its Subsidiaries.



Section 2.4 The Notes. Contemporaneously with the execution of this Agreement, TIMET
shall execute and deliver to the Lenders promissory notes (the “Notes”) in substantially identical
form that are satisfactory to the Lenders in their reasonable discretion evidencing TIMET’s
obligation to repay amounts advanced by the Lenders pursuant to the Revolving Credit Facility.
Each Note shall be in the amount of the respective Lender’s maximum Commitment. Amounts advanced
by the Lenders pursuant to the Revolving Credit Facility shall be evidenced by and repaid by TIMET
in accordance with the Notes and the other Loan Documents.



Section 2.5 Conditional Borrowing Base Requirement. If the Outstanding Amount exceeds
60 percent of the aggregate amount of the Commitments, or the Leverage Ratio is greater than 2.00
to 1.00 at any time such ratio is measured in accordance with Section 10.3 of this Agreement, TIMET
acknowledges and agrees that TIMET shall be required to maintain a Borrowing Base (as that term is
defined in Section 2.6 of this Agreement) and that the Outstanding Amount shall not exceed the
lesser of (a) the Borrowing Base, or (b) the aggregate amount of the Commitments (as specified in
the second sentence of Section 2.2 of this Agreement). At any time that TIMET is required to
maintain a Borrowing Base under the circumstances specified in the first sentence of this Section
2.5 of this Agreement, TIMET shall timely deliver to the Agent the Borrowing Base Certificate
required by Section 9.12(f)(i) and/or Section 6.2(a) of this Agreement.



Section 2.6 Computation of the Borrowing Base. As used in this Agreement, the term
“Borrowing Base” means the sum of the following items at the time in question:



(a) 85 percent of the value of Eligible Accounts (as such value is
determined by the Agent in its reasonable discretion);



(b) 55 percent of the value of Eligible Inventory (as such value is
determined by the Agent in its reasonable discretion); and



(c) If TIMET or a Material Domestic Subsidiary of TIMET has satisfied
the requirements of Section 7.5 of this Agreement, 75 percent of the orderly
liquidation value of Eligible Equipment and Eligible Real Property (as such
value is determined by the Agent in its reasonable discretion), provided,
however, that the maximum amount of this component of the Borrowing Base
shall be $40,000,000.



Inventory shall be valued at the lower of the market value or the cost of the Inventory in
question. The Lenders shall not be required to make any advance requested by TIMET at any time
that TIMET has not timely submitted its Borrowing Base Certificate in accordance with Section
9.12(f)(i) of this Agreement.



Section 2.7 Interest Options in Respect of the Revolving Credit Facility. Except as
specified in the following sentence, Revolving Loans shall bear interest at either the Base
Interest Rate, or the LIBOR Interest Rate, as selected by TIMET (or determined) in accordance with
Section 5.13 of this Agreement. Notwithstanding the foregoing, Revolving Loans shall bear interest
at the Default Rate following the occurrence and during the existence of a Default or an Event of
Default, if such rate is invoked by the Required Lenders in accordance with Section 12.2 of this
Agreement (or becomes effective upon the occurrence of an Event of Default under Section 12.1(k) of
this Agreement).



Section 2.8 Revolving Nature of the Revolving Credit Facility. The Revolving Credit
Facility is a revolving credit facility. Therefore, subject to the terms and conditions of this
Agreement, TIMET may borrow, pay, repay, and re-borrow amounts under the Revolving Credit Facility.



Section 2.9 The Unused Commitment Fee. On the first Business Day of each calendar
quarter, and on the Maturity Date, TIMET shall pay the Agent (for distribution to the Lenders in
accordance with their Percentage Interests) a fee (the “Unused Commitment Fee”) equal to the Unused
Commitment Amount for the immediately preceding calendar quarter (or portion thereof) multiplied by
the Applicable Margin (pro rated to take into account the fact that this fee is paid quarterly by
TIMET). As used in this Agreement, the term “Unused Commitment Amount” means the average of the
difference on each day in the immediately preceding calendar quarter (or, in the case of the fee
payable on the Maturity Date, on each day after the end of the prior calendar quarter through the
Maturity Date) between (a) the aggregate amount of the Commitments and (b) the aggregate principal
amount of Revolving Loans and Letters of Credit outstanding.



Section 2.10 Maturity Date of the Revolving Credit Facility. On the earlier of (a)
February 17, 2011, or (b) acceleration of the Obligations following an Event of Default, if any,
under this Agreement, the Commitments shall terminate. The earlier of the dates specified in the
preceding sentence of this Agreement is referred to in this Agreement as the “Maturity Date.” On
the Maturity Date, TIMET shall be obligated to pay in full the entire balance of principal,
interest, and fees owed pursuant to the Notes, this Agreement, and the other Loan Documents.



Section 2.11 No Borrowing Under the Revolving Credit Facility During Pendency of an Event
of Default. TIMET shall not be entitled to borrow under the Revolving Credit Facility at any
time that a Default or an Event of Default exists.



Section 2.12 Possible Increase in the Amount of the Revolving Credit Facility.
Provided that no Default or Event of Default exists, TIMET may request that the maximum principal
amount of the Commitments be increased from time to time on or after the Closing Date by an
aggregate amount up to $25,000,000, subject to conditions to be agreed upon by TIMET and the Agent.
Those conditions shall include, but shall not be limited to, the requirements that (a) TIMET first
shall offer to the existing Lenders the right to commit to the increased Commitment amount,
(although no existing Lender shall be required to commit to any such increased amount), (b) TIMET
shall obtain such increased or additional Commitments from existing Lenders, or from financial
institutions qualifying as Eligible Assignees, (c) any Person (other than an Existing Lender) that
extends a Commitment to TIMET pursuant to this Section 2.12 of this Agreement shall execute and
deliver to the Agent an Assignment and Assumption Agreement in accordance with Section 13.1 of this
Agreement, and (d) contemporaneously with the execution and delivery of the Assignment and
Assumption Agreement, each Person (whether that Person is an existing Lender or a new party to this
Agreement) making an additional Commitment shall make a Reallocation Payment (as that term is
defined in Section 2.13 of this Agreement) to the Agent. No increase in the Commitments pursuant
to this Section 2.12 of this Agreement shall increase either the Swingline Commitment or the Letter
of Credit Commitment. Upon satisfaction of the conditions specified in the first two sentences of
this Section 2.12 of this Agreement, any Person that made a new or additional Commitment in
accordance with this Section 2.12 of this Agreement shall be a Lender for purposes of this
Agreement.



Section 2.13 Readjustment of Revolving Loan Outstandings. Except as specified in the
second following sentence, when either an existing Lender or a new Lender increases its Commitment,
or makes a new Commitment, as applicable, under Section 2.12 of this Agreement, the respective
amounts of the Revolving Loans owned by the Lenders must be reallocated so that the Lenders’ shares
of the outstanding Revolving Loans match their Percentage Interests following an increase in the
aggregate Commitments under Section 2.12 of this Agreement. This Section 2.13 of this Agreement
sets forth the procedure to be followed by the Agent and the Lenders to assure that the Lenders’
Percentage Interests of the outstanding Revolving Loans are correct following an increase in the
aggregate amount of the Commitments under Section 2.12 of this Agreement. The reallocation
procedure outlined herein shall not be applicable or required if an aggregate increase in the
Commitments under Section 2.12 of this Agreement is effected by an increase in each of the existing
Lenders’ Commitments by an amount that results in their Percentage Interests after the increase in
the Commitments being equal to their Percentage Interests immediately before the increase in the
Commitments. At the time a new Lender becomes a party to this Agreement in accordance with Section
2.12 of this Agreement, or at the time any existing Lender increases its Commitment in accordance
with Section 2.12 of this Agreement, each such Lender shall make a payment to the Agent in an
amount equal to the following:



(a) In the case of a new Lender, the Percentage Interest of such new Lender
(based upon the increased aggregate Commitments) multiplied by the aggregate
principal amount of Revolving Loans outstanding at such time; and



(b) In the case of an existing Lender, the positive difference between (i) such
Lender’s Percentage Interest immediately after the increase in the aggregate
Commitments and (ii) that Lender’s Percentage Interest immediately before the
increase in the aggregate Commitments multiplied by the aggregate principal amount
of Revolving Loans outstanding at such time.



The amounts new Lenders under Section 2.12 of this Agreement and existing Lenders that increase
their Commitments under Section 2.12 of this Agreement are required to pay pursuant to the
preceding sentence are referred to in this Agreement as “Reallocation Payments.” Upon receipt of a
Reallocation Payment (or Reallocation Payments) hereunder, the Agent shall use the Reallocation
Payment (or Reallocation Payments) to pay each existing Lender whose Percentage Interest decreased
as a result of the aggregate increase in Commitments an amount equal to the positive difference
between (x) such Lender’s Percentage Interest immediately before the increase in the aggregate
Commitments, and (y) that Lender’s Percentage Interest immediately after the increase in the
aggregate Commitments multiplied by the aggregate principal amount of Revolving Loans outstanding
at such time. TIMET acknowledges and agrees that it shall be required to compensate the Lenders
for any cost or loss sustained or incurred by the Lenders (including, but not limited to,
break-funding compensation), as more particularly specified in Section 5.23 of this Agreement, as a
result of the reallocation procedure described in this Section 2.13 of this Agreement.



ARTICLE III




THE LETTER OF CREDIT FACILITY




Section 3.1 Letter of Credit Commitment. Upon the terms and subject to the conditions
of this Agreement, and in reliance upon the representations, warranties, and covenants of TIMET in
this Agreement, the Issuing Bank agrees to issue stand-by letters of credit (the “Letters of
Credit”) for the account of TIMET (for its own benefit or for the benefit of any of its
Subsidiaries or Affiliates) in such form as may be requested from time to time by TIMET and agreed
to by the Issuing Bank. TIMET shall request Letters of Credit solely to support contingent
obligations of TIMET (other than obligations in respect of borrowed money) and, in the case of
Letters of Credit issued for the joint and several account of TIMET and a Subsidiary or Affiliate
of TIMET, to support contingent obligations of such Subsidiary or Affiliate (other than obligations
in respect of borrowed money). TIMET agrees that it shall execute any documents that the Issuing
Bank reasonably requires TIMET to execute in relation to Letters of Credit, including, but not
limited to, a letter of credit reimbursement agreement. In addition to Letters of Credit issued
hereunder on or after the Closing Date, references in this Agreement to Letters of Credit shall
include the three letters of credit described in Schedule 3.1 to this Agreement, until such time
that those Letters of Credit are replaced with Letters of Credit issued hereunder (as required by
Section 3.22 of this Agreement).



Section 3.2 Limit on Letters of Credit. The maximum amount (after giving effect to
all requested Letters of Credit) of outstanding Letters of Credit (as calculated in accordance with
Section 3.5 of this Agreement) issued by the Issuing Bank for the account of TIMET shall not at any
time exceed $10,000,000 (the “Letter of Credit Commitment”). Furthermore, the Outstanding Amount
(after giving effect to all requested and outstanding Loans and to all requested and outstanding
Letters of Credit (as calculated in accordance with Section 3.5 of this Agreement) issued by the
Issuing Bank for the account of TIMET) shall not at any time exceed the lesser of (a) the aggregate
Commitments at the time in question, or (b), if applicable under the circumstances described in
Section 2.5 of this Agreement, the Borrowing Base at the time in question.



Section 3.3 Requests for Letters of Credit. At least three Business Days prior to the
proposed issuance date of any Letter of Credit, TIMET shall deliver to the Agent and the Issuing
Bank a written request for the Letter of Credit in question setting forth the maximum drawing
amount of such Letter of Credit, the proposed language of the requested Letter of Credit, and such
other information as the Issuing Bank shall require. No Letter of Credit shall be issued,
increased, or extended unless such Letter of Credit has an expiration date not later than one year
after the date of issuance thereof. Except as permitted under Section 3.10 of this Agreement, no
Letter of Credit shall have an expiration date later than the Maturity Date. Each request by TIMET
for the issuance of a Letter of Credit under this Agreement shall constitute a representation and
warranty by TIMET that the conditions set forth in Section 6.1 and Section 6.2 of this Agreement
have been satisfied as of the date of such request. The Agent shall notify the Lenders of the
issuance of each Letter of Credit and shall furnish to any Lender such information with respect
thereto as such Lender reasonably shall request.



Section 3.4 Reduction in Availability. Upon issuance of a Letter of Credit under the
Letter of Credit subfacility provided pursuant to this Article III of this Agreement, the amount of
availability under the Revolving Credit Facility shall be reduced by an equivalent amount, but no
interest shall be payable by TIMET on such amount unless and until a drawing is made on such Letter
of Credit.



Section 3.5 Letter of Credit Amounts. Unless otherwise specified in this Agreement,
the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter
of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that
by its terms, or the terms of any document related thereto, provides for one or more automatic
increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all such increases,
whether or not such maximum stated amount is in effect at the time in question.



Section 3.6 Letter of Credit Fees. TIMET shall pay to the Agent for the account of
each Lender in accordance with its Percentage Interest a fee (the “Letter of Credit Fee”) with
respect to each Letter of Credit issued by the Issuing Bank equal to the Applicable Margin with
respect to LIBOR Rate Loans multiplied by the maximum amount available to be drawn under such
Letter of Credit. For purposes of computing the daily amount available to be drawn under any
Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with
Section 3.5 of this Agreement. Letter of Credit Fees shall be computed on a quarterly basis in
arrears. Letter of Credit Fees shall be due and payable on the first Business Day of each calendar
quarter, on the expiration date of the Letter of Credit in question, and, thereafter, on demand.
Notwithstanding anything to the contrary contained in this Agreement, upon the request of the
Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the
Default Rate.



Section 3.7 Fronting Fees and Documentary and Processing Charges Payable to the Issuing
Bank. TIMET shall pay directly to the Issuing Bank for the Issuing Bank’s own account a
fronting fee of one-eighth of 1 percent per annum with respect to each Letter of Credit, computed
on the daily amount available to be drawn under such Letter of Credit on a quarterly basis in
arrears. The fronting fees owed by TIMET to the Issuing Bank shall be due and payable on the first
Business Day of each calendar quarter, on the expiration date of the Letter of Credit in question,
and, thereafter, on demand. For purposes of computing the daily amount available to be drawn under
any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with
Section 3.5 of this Agreement. In addition, TIMET shall pay directly to the Issuing Bank for the
Issuing Bank’s own account the customary presentation, amendment, and other processing fees, and
other standard costs and charges, of the Issuing Bank relating to Letters of Credit as from time to
time in effect. Such customary fees and standard costs and charges are due and payable to the
Issuing Bank upon demand by the Issuing Bank and are nonrefundable.



Section 3.8 Conflict with Issuer Documents. In the event of any conflict between the
terms of this Agreement and the terms of any reimbursement agreement, or any other documents
executed by TIMET in favor of the Issuing Bank, the terms of this Agreement shall control.



Section 3.9 Limitations on Issuance. The Issuing Bank shall not be under any
obligation to issue any Letter of Credit if:



(a) any order, judgment, or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the Issuing Bank from issuing such
Letter of Credit, or any Law applicable to the Issuing Bank or any request or
directive (whether or not having the force of law) from any Governmental Authority
with jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing
Bank refrain from, the issuance of letters of credit generally, or such Letter of
Credit in particular, or shall impose upon the Issuing Bank with respect to such
Letter of Credit any restriction, reserve, or capital requirement (for which the
Issuing Bank is not otherwise compensated under this Agreement) not in effect on the
Closing Date, or shall impose upon the Issuing Bank any unreimbursed loss, cost, or
expense that was not applicable on the Closing Date and that the Issuing Bank in
good faith deems material to it;



(b) the issuance of such Letter of Credit would violate one or more policies of
the Issuing Bank applicable generally to requests by customers or potential
customers of the Issuing Bank for issuance of stand-by letters of credit;



(c) such Letter of Credit is to be denominated in a currency other than
Dollars;



(d) such Letter of Credit contains any provisions for automatic reinstatement
of the stated amount after any drawing thereunder; or



(e) a default of any Lender’s obligations to fund its participation under
Section 3.16 of this Agreement exists, or any Lender is at such time a Defaulting
Lender under this Agreement, unless the Issuing Bank has entered into satisfactory
arrangements with TIMET and either such Lender, or the other Lenders, to eliminate
the Issuing Bank’s risk with respect to such Lender.



Section 3.10 Cash Collateral After the Maturity Date. If any Letters of Credit are to
remain outstanding on or after the Maturity Date, but all other non-contingent obligations of TIMET
under this Agreement have been paid in full and no Default or Event of Default has occurred and is
continuing, TIMET shall provide cash collateral to the Agent on or before the Maturity Date having
an aggregate fair market value equal to the aggregate undrawn face amount of such outstanding
Letters of Credit and such cash collateral shall secure TIMET’s continuing obligations in respect
of such outstanding Letters of Credit. If the Agent receives such cash collateral on or before the
date required, the Agent promptly shall release the Collateral (other than the cash collateral just
received by the Agent from TIMET); provided, however, that the Collateral shall not be released,
and TIMET shall not be obligated to provide such cash collateral if, on or before the earlier of
the Maturity Date, or the date of the proposed release of the Collateral, any Default or Event of
Default specified in Section 12.1(k) of this Agreement shall have occurred and be continuing. In
the event that, for whatever reason, TIMET fails to provide cash collateral as required pursuant to
this Section 3.10 of this Agreement, the Agent may, at its discretion and in addition to any other
rights it may have under the Loan Documents and applicable law in respect of any unpaid Obligations
then due and payable, sell, transfer, dispose of, or otherwise liquidate all or any portion of the
Collateral and hold the proceeds thereof as cash collateral to secure TIMET’s contingent
obligations in respect of the outstanding Letters of Credit.



Section 3.11 Reimbursement Obligation of TIMET. In order to induce the Issuing Bank
to issue, extend, and renew each Letter of Credit, TIMET hereby agrees to reimburse or pay to the
Issuing Bank, for the account of the Issuing Bank, with respect to each Letter of Credit issued,
extended, or renewed by the Issuing Bank in accordance with this Agreement on each date that any
draft presented under any Letter of Credit is honored by the Issuing Bank (or the Issuing Bank
otherwise makes payment with respect thereto), (a) the amount paid by the Issuing Bank under or
with respect to such Letter of Credit, and (b) the amount of any taxes, fees, charges, or other
costs and expenses whatsoever incurred by the Issuing Bank in connection with any payment made by
the Issuing Bank under, or with respect to, such Letter of Credit. Each such payment shall be made
by TIMET to the Issuing Bank at the Issuing Bank’s head office in immediately available funds.
Interest on any and all amounts remaining unpaid by TIMET under this Section 3.11 of this Agreement
at any time from the date such amounts become due and payable (whether as stated in this Section
3.11 of this Agreement, by acceleration, or otherwise) until payment in full shall be payable to
the Issuing Bank, for the account of the Issuing Bank (or, as the case may be, for the account of
the Lenders following a participation under Section 3.15 of this Agreement), on demand of the
Required Lenders at the Default Rate. TIMET’s obligation to repay amounts owed in respect of
Letters of Credit is referred to in this Agreement as the “Reimbursement Obligation.”



Section 3.12 Letter of Credit Obligations Absolute. The obligation of TIMET to
reimburse the Issuing Bank for each drawing under each Letter of Credit and to repay each
Reimbursement Obligation shall be absolute, unconditional, and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement and any reimbursement agreement executed by
TIMET in favor of the Issuing Bank under all circumstances, including the following:



(a) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;



(b) the existence of any claim, counterclaim, setoff, defense, or other right
that TIMET or any Subsidiary or Affiliate may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom any
such beneficiary or any such transferee may be acting), the Issuing Bank, or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby, or by such Letter of Credit (or any agreement or instrument
relating thereto), or any unrelated transaction;



(c) any draft, demand, certificate, or other document presented under such
Letter of Credit proves to be forged, fraudulent, invalid, or insufficient in any
respect, or any statement therein is untrue or inaccurate in any respect;



(d) any loss or delay in the transmission or other presentation or delivery of
any document required in order to make a drawing under such Letter of Credit;



(e) any payment by the Issuing Bank under such Letter of Credit against
presentation of a draft or certificate that does not comply strictly with the terms
of such Letter of Credit;



(f) any payment made by the Issuing Bank under such Letter of Credit to any
Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for
the benefit of creditors, liquidator, receiver, or other representative of or
successor to any beneficiary or any transferee of such Letter of Credit, including
any arising in connection with any proceeding under any insolvency case or
proceeding, except to the extent such payment constitutes gross negligence or
willful misconduct by the Issuing Bank; or



(g) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that otherwise might
constitute a defense available to, or a discharge of, TIMET or any Subsidiary or
Affiliate.



Nothing contained in this Section 3.12 of this Agreement shall be deemed to constitute a waiver of
any remedies of TIMET against the beneficiary of any Letter of Credit.



Section 3.13 Expiration of the Letter of Credit Commitment. The Issuing Bank’s
commitment to issue Letters of Credit pursuant to the terms of this Agreement shall expire on the
Maturity Date.



Section 3.14 Letter of Credit Payments. If any Reimbursement Obligation shall remain
outstanding at 9:00 a.m. (Portland, Oregon time) on the Business Day such Reimbursement Obligation
is payable by TIMET and by such time on such Business Day the Agent has not received either (a) a
Notice of Borrowing or Conversion delivered pursuant to Section 5.13 of this Agreement requesting
that a Revolving Loan be made pursuant to Section 2.1 of this Agreement on such date in an amount
at least equal to the aggregate principal amount of such unpaid Reimbursement Obligation, or (b)
any other notice indicating TIMET’s intent to timely repay such unpaid Reimbursement Obligation
with funds obtained from other sources, then the Agent shall be deemed to have received a Notice of
Borrowing or Conversion from TIMET pursuant to Section 5.13 of this Agreement requesting that a
Revolving Loan be made pursuant to Section 2.1 of this Agreement (with interest to accrue thereon
at the Base Interest Rate) on the date such unpaid Reimbursement Obligation is due under this
Agreement in an amount equal to such unpaid Reimbursement Obligation, and the procedures set forth
in Section 5.16 of this Agreement shall be followed in making such a Revolving Loan. The proceeds
of a Revolving Loan made in accordance with the preceding sentence shall be used to pay the
associated Reimbursement Obligation owed by TIMET to the Issuing Bank. A Revolving Loan of the
type described in this Section 3.14 of this Agreement shall be made notwithstanding TIMET’s failure
to satisfy all of the conditions set forth in Section 6.2 of this Agreement.



Section 3.15 Participations in Unpaid Reimbursement Obligation. If it is legally
impossible or impracticable (as determined by the Agent in its reasonable discretion) for TIMET to
obtain a Revolving Loan under the circumstances described in Section 3.14 of this Agreement
(whether due to a termination or expiration of the Revolving Credit Facility, the bankruptcy of
TIMET, or otherwise) the Agent promptly shall notify the Issuing Bank and each Lender of that
situation. Upon such notice (but without any further action), the Issuing Bank hereby agrees to
grant to each Lender, and each Lender hereby agrees to acquire from the Issuing Bank, a
participation in each unpaid Reimbursement Obligation equal to such Lender’s Percentage Interest.



Section 3.16 Payments by the Lenders Pursuant to Participations in Letters of Credit.
Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided in
Section 3.15 of this Agreement, immediately to pay the Agent, for the account of the Issuing Bank,
such Lender’s Percentage Interest of each unpaid Reimbursement Obligation that is not repaid when
due. Each Lender acknowledges and agrees that its obligation to acquire participations in unpaid
Reimbursement Obligations pursuant to Section 3.15 and Section 3.16 of this Agreement is absolute
and unconditional and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or an Event of Default, and that each payment made to
purchase such a participation shall be made without any offset, abatement, withholding, or
reduction whatsoever. Each Lender shall comply with its obligation under this Section 3.16 of this
Agreement by wire transfer of immediately available funds to the Agent in the same manner as
provided in Section 5.16 of this Agreement and the Agent promptly shall pay to the Issuing Bank any
such amounts received by the Agent from the Lenders.



Section 3.17 Procedure Following Purchase of Participations in an Unpaid Reimbursement
Obligation. The Agent shall notify TIMET of any participations in any unpaid Reimbursement
Obligation acquired by the Lenders pursuant to Section 3.15 of this Agreement. Thereafter,
payments by TIMET in respect of such unpaid Reimbursement Obligation shall be made to the Agent
(for the account of the Lenders in accordance with their Percentage Interests) and not to the
Issuing Bank. Any amounts received by the Issuing Bank in respect of an unpaid Reimbursement
Obligation after receipt by the Issuing Bank of the proceeds of a sale of participations in such
unpaid Reimbursement Obligation shall be remitted promptly by the Issuing Bank to the Agent. Any
amounts received by the Agent in accordance with the preceding sentence shall be remitted promptly
by the Agent to the Lenders that have made their payments pursuant to Section 3.16 of this
Agreement and to the Issuing Bank, as their interests may appear.



Section 3.18 Consequence of TIMET’s Failure to Repay Reimbursement Obligation. If
TIMET fails to repay a Reimbursement Obligation, and that obligation cannot be repaid in accordance
with the terms of Section 3.14 of this Agreement and becomes the subject of participations
purchased by the Lenders in accordance with Section 3.15 and Section 3.16 of this Agreement, an
Event of Default shall occur, unless TIMET repays the unpaid Reimbursement Obligation in question
within three Business Days upon demand after the date on which the Lenders obtain the
participations in such unpaid Reimbursement Obligation. TIMET’s failure to repay a Reimbursement
Obligation that is repaid with a Revolving Loan in accordance with Section 3.14 of this Agreement
shall not constitute an Event of Default. However, TIMET acknowledges and agrees that following
TIMET’s failure to repay a Reimbursement Obligation in the manner required by the terms of Section
3.11 of this Agreement, the Issuing Bank without prior, written notice to TIMET may refuse in its
sole and absolute discretion to issue additional Letters of Credit for the account of TIMET.



Section 3.19 TIMET’s Duty to Review Letters of Credit. TIMET promptly shall examine a
copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event
of any claim of noncompliance with TIMET’s instructions or any other irregularity in a Letter of
Credit (or an amendment thereof), TIMET promptly shall notify the Issuing Bank. TIMET shall be
deemed to have waived any such claim against the Issuing Bank and its correspondents unless such
notice is given promptly as specified in the preceding sentence.



Section 3.20 No Issuance of Letters of Credit During Pendency of an Event of Default.
TIMET shall not be entitled to obtain Letters of Credit at any time that a Default or an Event of
Default exists.



Section 3.21 Applicability of ISP. Unless otherwise expressly agreed by the Issuing
Bank and TIMET when a Letter of Credit is issued, the rules of the ISP shall apply to each Letter
of Credit.



Section 3.22 Replacement of Existing Letters of Credit. TIMET and each Issuing Bank
shall take all actions reasonably necessary to cause the three Letters of Credit described in
Schedule 3.1 to this Agreement to be replaced as soon as reasonably practicable with Letters of
Credit issued hereunder by U.S. Bank, as the Issuing Bank.



ARTICLE IV




THE SWINGLINE CREDIT FACILITY




Section 4.1 Swingline Loans. Upon the terms and subject to the conditions of this
Agreement, and in reliance upon the representations, warranties, and covenants of TIMET in this
Agreement, the Swingline Lender agrees to make short-term loans (the “Swingline Loans”) to TIMET at
TIMET’s request from time to time after the Closing Date and prior to the Maturity Date. TIMET
shall use proceeds of Swingline Loans only for general corporate purposes of TIMET and its
Subsidiaries. Notwithstanding anything in this Agreement to the contrary, the Swingline Lender
shall not be obligated to make any Swingline Loans if the Swingline Lender has elected in its sole
discretion not to make Swingline Loans and has notified TIMET in writing or by telephone of such
election at least three Business Days in advance.



Section 4.2 Maximum Swingline Commitment. The maximum amount of Swingline Loans
outstanding at any time (after giving effect to all requested Swingline Loans) shall not exceed
$15,000,000 (the “Swingline Commitment”). Furthermore, the Outstanding Amount (after giving effect
to all requested Revolving Loans, Letters of Credit, and Swingline Loans) shall not at any time
exceed the lesser of (a) the aggregate amount of the Lenders’ Commitments, or (b), if applicable
under the circumstances described in Section 2.5 of this Agreement, the Borrowing Base at such
time. If the amount outstanding with respect to the Swingline Note at any time exceeds the
Swingline Commitment, TIMET within three Business Days shall pay the Swingline Lender an amount
equal to such excess (and TIMET’s failure to make such payment shall constitute an Event of
Default).



Section 4.3 Interest Rate in Respect of Swingline Loans. Interest shall accrue on
Swingline Loans (and shall be paid by TIMET as more particularly specified below and in the
Swingline Note) at the rate charged by the Swingline Lender.



Section 4.4 Revolving Nature of the Swingline Credit Facility. The Swingline Credit
Facility is a revolving credit facility. Therefore, subject to the terms of this Agreement, TIMET
may pay, repay, and re-borrow amounts under that credit facility.



Section 4.5 The Swingline Note. Contemporaneously with the execution of this
Agreement, TIMET shall execute and deliver to the Swingline Lender a promissory note (the
“Swingline Note”) in form and content satisfactory to the Swingline Lender in its reasonable
discretion evidencing TIMET’s obligation to repay the Swingline Loans. Amounts advanced by the
Swingline Lender pursuant to the Swingline Note shall be evidenced by and repaid by TIMET in
accordance with the Swingline Note and the other Loan Documents.



Section 4.6 Expiration of the Swingline Commitment. The Swingline Commitment shall
terminate on the Maturity Date. On the Maturity Date, TIMET shall be obligated to pay in full the
entire balance of principal, interest, and fees owed pursuant to the Swingline Note.



Section 4.7 Payment of Swingline Loan With a Revolving Loan. If any Swingline Loans
shall remain outstanding at 9:00 a.m. (Portland time) on the Business Day on which such loans are
payable by TIMET in accordance with TIMET’s agreement with the Swingline Lender regarding repayment
of Swingline Loans, and by such time on such day the Agent has not received either (a) a Notice of
Borrowing or Conversion delivered pursuant to Section 5.13 of this Agreement requesting that a
Revolving Loan be made pursuant to Section 2.1 of this Agreement on such date in an amount at least
equal to the aggregate principal amount of such Swingline Loans, or (b) any other notice indicating
TIMET’s intent to repay such Swingline Loans with funds obtained from other sources, then the Agent
shall be deemed to have received a Notice of Borrowing or Conversion from TIMET pursuant to Section
5.13 of this Agreement requesting that a Revolving Loan be made pursuant to Section 2.1 of this
Agreement (with interest to accrue thereon at the Base Interest Rate) on the date such Swingline
Loans are due hereunder in an amount equal to such Swingline Loans, and the procedures set forth in
Section 5.16 of this Agreement shall be followed in making such Revolving Loan. The proceeds of a
Revolving Loan made in accordance with the preceding sentence shall be used to repay the associated
Swingline Loan (or Swingline Loans) owed by TIMET to the Swingline Lender. A Revolving Loan of the
type described in this Section 4.7 of this Agreement shall be made notwithstanding TIMET’s failure
to satisfy all of the conditions set forth in Section 6.2 of this Agreement.



Section 4.8 Participations in Swingline Loans. If it is legally impossible or
impracticable (as determined by the Agent in its reasonable discretion) for TIMET to obtain a
Revolving Loan under the circumstances described in Section 4.7 above (whether due to a termination
or expiration of the Revolving Credit Facility, the bankruptcy of TIMET, or otherwise), the
Swingline Lender promptly shall notify the Agent of TIMET’s failure to repay the Swingline Loans in
question and the Agent in turn shall notify each Lender of that situation. Upon such notice (but
without any further action), the Swingline Lender hereby agrees to grant to each Lender, and each
Lender hereby agrees to acquire from the Swingline Lender, a participation in each Swingline Loan
not repaid in accordance with Section 4.7 of this Agreement equal to such Lender’s Percentage
Interest.



Section 4.9 Payments by the Lenders Pursuant to Participations in Swingline Loans.
Each Lender hereby agrees that, upon receipt of notice as provided in Section 4.8 of this
Agreement, the Lender immediately shall pay the Agent, for the account of the Swingline Lender,
such Lender’s Percentage Interest of each Swingline Loan that is not repaid when due. Each Lender
acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant
to Section 4.8 and Section 4.9 of this Agreement is absolute and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default or an Event of
Default, and that each payment made to purchase such a participation shall be made without any
offset, abatement, withholding, or reduction whatsoever. Each Lender shall comply with its
obligation under this Section 4.9 of this Agreement by wire transfer of immediately available funds
to the Agent in the same manner as provided in Section 5.16 of this Agreement and the Agent
promptly shall pay to the Swingline Lender any such amounts received by the Agent from the Lenders.



Section 4.10 Procedure Following Purchase of Participations in a Swingline Loan. The
Agent shall notify TIMET of any participations in any Swingline Loan acquired by the Lenders
pursuant to Section 4.8 of this Agreement. Thereafter, payments by TIMET in respect of such
Swingline Loan shall be made to the Agent (for the account of the Lenders in accordance with their
Percentage Interests) and not to the Swingline Lender. Any amounts received by the Swingline
Lender in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a
sale of participations in such Swingline Loan shall be remitted promptly by the Swingline Lender to
the Agent. Any amounts received by the Agent pursuant to the preceding sentence shall be remitted
promptly by the Agent to the Lenders that have made their payments pursuant to Section 4.9 of this
Agreement and to the Swingline Lender, as their interests may appear.



Section 4.11 Consequence of TIMET’s Failure to Repay a Swingline Loan. If TIMET fails
to repay any Swingline Loans as agreed herein, and such loans cannot be repaid in accordance with
the terms of Section 4.7 of this Agreement and become the subject of participations purchased by
the Lenders in accordance with Section 4.8 and Section 4.9 of this Agreement, an Event of Default
shall occur, unless TIMET repays the Swingline Loans in question within three Business Days of the
date on which the Lenders obtain the participations in such Swingline Loans. TIMET’s failure to
repay a Swingline Loan that is repaid with a Revolving Loan in accordance with Section 4.7 of this
Agreement shall not constitute an Event of Default. However, TIMET acknowledges and agrees that
following TIMET’s failure to repay a Swingline Loan when due, the Swingline Lender without prior,
written notice to TIMET may refuse in its sole and absolute discretion to make additional Swingline
Loans to TIMET.



Section 4.12 No Borrowing Under the Swingline Facility During Pendency of an Event of
Default. TIMET shall not be entitled to obtain Swingline Loans at any time that a Default or
an Event of Default exists.



ARTICLE V




TERMS APPLICABLE TO ALL LOANS




Section 5.1 Payments of Interest. Each Loan that is a Base Rate Loan shall bear
interest on the outstanding principal amount thereof at the Base Interest Rate, which rate shall
change contemporaneously with any change in the Base Interest Rate. TIMET shall pay the Agent, for
the ratable benefit of the Lenders, interest accrued on Base Rate Loans quarterly in arrears on the
first Business Day of each calendar quarter, commencing April 3, 2006. Each Loan that is a LIBOR
Rate Loan shall bear interest on the outstanding principal amount thereof, for each Interest Period
applicable thereto, at a rate per annum equal to the LIBOR Interest Rate. Except as specified in
the following sentence, TIMET shall pay the Agent, for the ratable benefit of the Lenders, interest
accrued on LIBOR Rate Loans on the last day of the Interest Period for each such Loan.
Notwithstanding the foregoing, if TIMET selects an Interest Period of six months with respect to
any LIBOR Rate Loan, TIMET shall pay the Agent, for the ratable benefit of the Lenders, interest
accrued on the principal amount of such LIBOR Rate Loan on the last day of the third month of that
Interest Period and on the last day of the Interest Period for such LIBOR Rate Loan.



Section 5.2 Computation of Interest and Fees. All computations of interest and fees
owed by TIMET under this Agreement shall be made on the basis of a 360-day year and actual days
elapsed. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not
accrue on a Loan for the day on which the Loan is paid, provided that any Loan that is repaid on
the same day on which it is made shall bear interest for one day. If the due date for any payment
of principal is extended by operation of law, interest shall be payable for such extended time. If
any payment required by this Agreement becomes due on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day (subject to the definition of the term
Interest Period), and such extension shall be included in computing interest in connection with
such payment.



Section 5.3 Determination of Interest Rates. The Agent promptly shall notify TIMET
and the Lenders of the interest rate applicable to any Interest Period for LIBOR Rate Loans upon
determination of such interest rate. The determination of the LIBOR Rate by the Agent shall be
conclusive in the absence of manifest error. At any time that Base Rate Loans are outstanding, the
Agent shall notify TIMET and the Lenders of any change in the Base Interest Rate promptly following
the public announcement of such change.



Section 5.4 Default Rate of Interest. Following the occurrence of an Event of Default
and during the continuance thereof, interest shall accrue (and shall be payable by TIMET) on the
principal balance outstanding under the Loans at the Default Rate automatically if the Event of
Default occurred under Section 12.1(k) of this Agreement, or upon the occurrence of another Event
of Default, at the request of the Required Lenders in accordance with Section 12.2 of this
Agreement.



Section 5.5 Fees. TIMET shall pay the following fees to the Agent (either for the
Agent’s own account, or for distribution to the Lenders, in accordance with the agreements of the
parties):



(a) On or before the Closing Date, the arrangement fee and the other fees owed
pursuant to the Agent Fee Letter;



(b) On or before the Closing Date, all upfront fees payable by TIMET in
accordance with the agreement of the parties;



(c) The Unused Commitment Fee, as specified in Section 2.9 of this Agreement;



(d) The Letter of Credit Fees, as specified in Section 3.6 of this Agreement,
and the fronting fees and other fees and charges owed pursuant to Section 3.7 of
this Agreement; and



(e) An administrative fee owed to the Agent in accordance with the Agent Fee
Letter, which shall be due and payable on the Closing Date and on the first Business
Day of 2007 and each year thereafter through the Maturity Date.



Section 5.6 Limitations on Amounts of Loans and Numbers of LIBOR Rate Loans. TIMET
shall be entitled to LIBOR Rate Loans in a minimum amount for each such Loan of $1,000,000 in
principal (and in integral multiples of $500,000 in excess of such minimum amount). TIMET shall be
entitled to Base Rate Loans in a minimum amount for each such Loan of $1,000,000 in principal (and
in integral multiples of $100,000 in excess of such minimum amount). At no time shall there be
more than 10 LIBOR Rate Loans outstanding.



Section 5.7 Conversion of Loans. Upon the terms and subject to the conditions of this
Agreement, TIMET may convert all or any part (in the minimum principal amount of $1,000,000 and in
integral multiples of $500,000 in excess of such minimum amount) of any outstanding Loan of one
type into a Loan of another type on any Business Day (which, in the case of a conversion of an
outstanding LIBOR Rate Loan shall be the last day of the Interest Period applicable to such LIBOR
Rate Loan). TIMET shall give the Agent prior notice of each such conversion (which notice shall be
effective upon receipt) in accordance with Section 5.13 of this Agreement.



Section 5.8 Voluntary Prepayments. TIMET may, upon notice to the Agent, at any time
or from time to time voluntarily prepay Loans in whole or in part without premium or penalty;
provided that (a) such notice must be received by the Agent not later than 9:00 a.m. Portland,
Oregon time (i) three Business Days prior to any date of prepayment of LIBOR Rate Loans and (ii) on
the date of prepayment of Base Rate Loans; (b) any prepayment of LIBOR Rate Loans shall be in a
principal amount of $1,000,000 or an integral multiple of $500,000 in excess thereof; and (c) any
prepayment of Base Rate Loans shall be in a principal amount of $1,000,000 or an integral multiple
of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then
outstanding. Each such notice shall specify the date and amount of such prepayment and the type of
Loan or Loans to be prepaid. The Agent promptly shall notify each Lender of the Agent’s receipt of
each such notice and of the amount of such Lender’s Percentage Interest of such prepayment. If
such notice is given by TIMET, TIMET shall make such prepayment and the payment amount specified in
such notice shall be due and payable on the date specified therein. Any prepayment of a LIBOR Rate
Loan shall be accompanied by all accrued interest on the amount prepaid, together with any
additional amounts required to be paid by TIMET pursuant to Section 5.23 of this Agreement. Each
such prepayment shall be applied to the Loans of the Lenders in accordance with their respective
Percentage Interests.



Section 5.9 Mandatory Prepayments. If at any time the Agent shall notify TIMET that
the Outstanding Amount exceeds the lesser of (a) the aggregate amount of the Lenders’ Commitments,
or (b), if applicable under the circumstances described in Section 2.5 of this Agreement, the
Borrowing Base at the time in question, then within one Business Day of the Agent’s receipt of such
notice, TIMET shall prepay Loans, together with accrued interest on the principal amount prepaid to
the date of such prepayment and amounts, if any, required to be paid pursuant to Section 5.23 of
this Agreement as a result of such prepayment being made on such date (and, if necessary after all
Loans have been prepaid, cash collateralize the outstanding Letters of Credit), so that,
immediately following such prepayment (or cash collateralization, if applicable), TIMET shall be in
compliance with the provisions of this Agreement that limit the Outstanding Amount.



Section 5.10 Mandatory Termination of Commitments. The Commitments shall terminate on
the Maturity Date. Upon termination of the Commitments, (a) the Lenders shall have no further
obligation to extend credit under this Agreement and any unutilized portion of any Commitment no
longer shall be available to TIMET, (b) the Issuing Bank shall have no further obligation to issue
Letters of Credit, and (c) the Swingline Lender shall have no further obligation to make Swingline
Loans.



Section 5.11 Voluntary Termination or Reductions of Commitments. Upon notice to the
Agent, TIMET may terminate the Commitments, or from time to time permanently reduce the
Commitments, provided that (a) any such notice shall be received by the Agent not later than 9:00
a.m. Portland, Oregon time five Business Days prior to the date of termination or reduction, (b)
any such partial reduction shall be in an aggregate amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof, and (c) after giving effect to the proposed termination or permanent
reduction of the Commitments, and to any concurrent prepayments hereunder, the Outstanding Amount
would not exceed the proposed reduced Commitment amount. The Agent promptly shall notify the
Lenders of any such notice of termination or reduction of the aggregate Commitments. Any reduction
of the aggregate Commitments shall be applied to the Commitment of each Lender according to its
Percentage Interest. All Commitment Fees accrued until the effective date of any termination of
the aggregate Commitments shall be paid on the effective date of such termination.



Section 5.12 The Lenders’ Note Records. TIMET irrevocably authorizes each of the
Lenders to make or cause to be made, at or about the time of any Loan, or at the time of receipt of
any payment on the Notes, an appropriate notation in its records reflecting (as the case may be)
the making of such Loan or the receipt of such payment. The outstanding amount of the Loans set
forth in the records of the Lenders shall be prima facie evidence of the amount thereof owing and
unpaid to the Lenders. Notwithstanding the foregoing, the failure of any Lender to record (or any
error in so recording) the amount of any Loan or payment in the Lender’s records shall not limit or
otherwise affect the obligations of TIMET under this Agreement, or under any Note, to make payments
of principal of or interest on any Note when due.



Section 5.13 Notice of Borrowing or Conversion of Loans. Whenever TIMET desires to
obtain or continue a Loan under this Agreement, or to convert an outstanding Loan into a Loan of
another type, TIMET shall give the Agent a written Notice of Borrowing or Conversion in the form of
Schedule 5.13 to this Agreement (or a telephonic notice promptly confirmed by a written Notice of
Borrowing or Conversion), which notice shall be irrevocable and which must be received no later
than (a) 9:00 a.m. (or, in the case of a Swingline Loan, 1 p.m. if TIMET maintains its operating
account at U.S. Bank, and noon if TIMET maintains its operating account with another bank)
Portland, Oregon time on the Business Day on which the requested Loan is to be made as or converted
to a Base Rate Loan, and (b) 9:00 a.m. (or, in the case of a Swingline Loan, 1 p.m. if TIMET
maintains its operating account at U.S. Bank, and noon if TIMET maintains its operating account
with another bank) Portland, Oregon time on the date that is two Business Days before the day on
which the requested Loan is to be made, continued as, or converted to a LIBOR Rate Loan. Such
Notice of Borrowing or Conversion shall specify (x) the effective date and amount of each Loan or
portion thereof requested to be made, continued, or converted, (y) the interest rate option
requested to be applicable thereto, and (z) the duration of the applicable Interest Period, if any
(subject to the provisions of the definition of the term Interest Period). If any Notice of
Borrowing or Conversion fails to specify the interest rate option to be applicable to the requested
Loan, then TIMET shall be deemed to have requested a Base Rate Loan. If no Interest Period is
specified in a Notice of Borrowing or Conversion with respect to a requested LIBOR Loan, then TIMET
shall be deemed to have selected an Interest Period of one month’s duration, and the Agent promptly
shall notify TIMET of such selection. If the Agent receives a Notice of Borrowing or Conversion
after the time specified in the first sentence of this Section 5.13 of this Agreement, such Notice
of Borrowing or Conversion shall not be effective. If the Agent does not receive an effective
Notice of Borrowing or Conversion with respect to an outstanding LIBOR Rate Loan, or if, when such
Notice of Borrowing or Conversion must be given prior to the end of the Interest Period applicable
to an outstanding LIBOR Rate Loan, TIMET shall have failed to satisfy any of the conditions hereof,
TIMET shall be deemed to have elected to convert such outstanding LIBOR Rate Loan in whole into a
Base Rate Loan on the last day of the then current Interest Period with respect to the LIBOR Rate
Loan in question. If the written confirmation of any telephonic notification differs in any
material respect from the action taken by the Agent, the records of the Agent shall control, absent
manifest error.



Section 5.14 No LIBOR Rate Loans When Default Exists. Notwithstanding any contrary
provisions of this Agreement, and without limiting any other rights of any Lender, if a Default or
an Event of Default has occurred and is continuing, (a) TIMET may not select a LIBOR Rate Loan, (b)
TIMET may not convert a Base Rate Loan to a LIBOR Rate Loan, and (c) no LIBOR Rate Loan may
continue as a LIBOR Rate Loan for a new Interest Period. If a Default or an Event of Default has
occurred and is continuing, each LIBOR Rate Loan automatically shall convert to a Base Rate Loan at
the expiration of the applicable Interest Period.



Section 5.15 Funding of Loans. Loans shall be made by the Lenders in accordance with
their respective Percentage Interests. The failure of any Lender to make any Loan shall not
relieve any other Lender of its obligation to lend under this Agreement (it being understood,
however, that no Lender shall be responsible for the failure of any other Lender to make any Loan
required to be made by such other Lender).



Section 5.16 Funding Notifications. The Agent shall notify the Lenders of any
requested Loan and of the Advance Date thereof and the amount of each Lender’s Percentage Interest
of such Loan. If such notice is given by the close of the Agent’s business on the Business Day on
which the Agent receives an effective Notice of Borrowing or Conversion as provided in Section 5.13
of this Agreement, each Lender not later than noon Portland, Oregon time on the proposed Advance
Date of such Loan, shall make available to the Agent, at its Portland, Oregon head office, in
immediately available funds, such Lender’s Percentage Interest of the amount of the requested Loan.
Upon receipt by the Agent of such amount, the Agent shall make available to TIMET the aggregate
amount of such Loan by transferring the proceeds of the Loan to the operating checking account
designated by TIMET. Unless notified to the contrary by any Lender prior to an Advance Date, the
Agent may assume that each Lender has made available to the Agent on such Advance Date the amount
of such Lender’s Percentage Interest of the Loan to be made on such Advance Date, and, in reliance
upon such assumption, the Agent may (but shall not be required to) make available to TIMET a
corresponding amount. If any Lender makes available to the Agent such amount on a date after such
Advance Date, such Lender shall pay to the Agent on demand an amount equal to the product of (a)
the average, computed for the period referred to in clause (c) below, of the weighted average
interest rate paid by the Agent for federal funds acquired by the Agent during each day included in
such period, times (b) the amount of such Lender’s Percentage Interest of any such Loan times (c) a
fraction, the numerator of which is the number of days that elapse from and including such Advance
Date to the date on which the amount of such Lender’s Percentage Interest of such Loan shall become
immediately available to the Agent, and the denominator of which is 360. A statement of the Agent
submitted to such Lender with respect to any amounts owing under this Section 5.16 of this
Agreement shall be prima facie evidence of the amount due and owing to the Agent by such Lender.
If the amount of such Lender’s Percentage Interest of such Loan is not made available to the Agent
by such Lender within three Business Days following such Advance Date, the Agent shall be entitled
to recover such amount from TIMET on demand, with interest thereon at the rate per annum applicable
to the Loan made on such Advance Date.



Section 5.17 Method of Payments. All payments of principal of and interest by TIMET
in respect of Loans and any other amounts due by TIMET to the Lenders under this Agreement shall be
made by TIMET to the Agent (for the benefit of the Lenders in accordance with their Percentage
Interests) at the Agent’s Seattle, Washington, office (or at such other location that the Agent may
from time to time designate), in each case in immediately available funds. All payments by TIMET
under this Agreement and under any of the other Loan Documents shall be made without set-off or
counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions, or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof
or taxing or other authority therein, unless TIMET is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon TIMET with respect to any amount payable by it
under this Agreement or under any of the other Loan Documents, TIMET shall pay to each Lender such
additional amount in Dollars as shall be necessary to enable such Lender to receive the same net
amount that such Lender would have received on such due date had no such obligation been imposed
upon TIMET. TIMET promptly shall deliver to the Agent certificates or other valid vouchers or
evidence of payment satisfactory to the Agent in its reasonable discretion for all taxes or other
charges deducted from or paid with respect to payments made by TIMET under this Agreement or under
such other Loan Document. At such time that TIMET establishes bank accounts at U.S. Bank, TIMET
hereby authorizes the Agent to debit TIMET’s main account at U.S. Bank (or such other account that
TIMET maintains at U.S. Bank as its primary operating account) to make the payments owed by TIMET
pursuant to this Agreement. The Agent shall not be obligated to debit the above-referenced account
to collect the payments owed by TIMET pursuant to this Agreement and the Agent’s failure to do so
shall not relieve TIMET of its obligation to make the payments in question. Any payment received
by the Agent after noon, Portland, Oregon time shall be deemed to have been made on the next
following Business Day and interest shall accrue to that day. The Agent shall make reasonable
efforts to wire transfer each Lender’s Percentage Interest of all payments and recoveries on the
same Business Day if received by the Agent by noon, Portland, Oregon time, or on the next Business
Day if received after noon, Portland, Oregon time (or on a day other than a Business Day).



Section 5.18 Allocation of Payments. If the Commitments shall have been terminated,
or the Obligations shall have been declared immediately due and payable pursuant to Section 12.2 of
this Agreement, all funds received from or on behalf of TIMET (including proceeds of Collateral) by
any Lender in respect of the Obligations immediately shall be remitted to the Agent. All funds
received by the Agent pursuant to the preceding sentence, together with all other funds received by
the Agent from or on behalf of TIMET (including proceeds of Collateral) in respect of the
Obligations following termination of the Commitments or acceleration of the Obligations, shall be
applied by the Agent in the following manner and order: (a) first, to reimburse the Agent and the
Lenders, in that order, for any amounts payable pursuant to Section 15.8 and Section 15.9 of this
Agreement; (b) second, to the payment of any fees owed by TIMET pursuant to this Agreement; (c)
third, to the payment of interest due on the Loans; (d) fourth, to the payment of the outstanding
principal balance of the Loans; (e) fifth, to the payment of any remaining Obligations (other than
those arising out of or related to Interest Rate Protection Agreements), including, but not limited
to, unpaid participation interests in Reimbursement Obligations and Swingline Loans under Section
3.15 and 4.8, respectively, of this Agreement, (f) sixth, to the payment of any amoungs payable by
TIMET pursuant to Interest Rate Protection Agreements; and (g) finally, any remaining funds shall
be returned to TIMET or paid to the Person entitled thereto, or distributed as a court of competent
jurisdiction shall direct.



Section 5.19 Receipt of Excess Payment. Each of the Lenders and the Agent hereby
agrees that if it should receive any amount (whether by voluntary payment, by realization upon
security, by the exercise of the right of set-off or Lender’s lien, by counterclaim or cross
action, by the enforcement of any right under the Loan Documents, or otherwise) in respect of
principal of, or interest on, the Loans or any fees that are to be shared pro rata among the
Lenders, which, as compared to the amounts theretofore received by the other Lenders with respect
to such principal, interest, or fees, is in excess of such Lender’s Percentage Interest of such
principal, interest, or fees, such Lender shall share such excess, less the costs and expenses
(including, reasonable attorneys’ fees and disbursements) incurred by such Lender in connection
with such realization, exercise, claim, or action, pro rata with all other Lenders in proportion to
their respective Percentage Interests. Such sharing shall be deemed a purchase (without recourse)
by such sharing party of participation interests in the Loan or such fees, as the case may be, owed
to the recipients of such shared payments to the extent of such shared payments; provided, however,
that if all or any portion of such excess amount thereafter is recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of such recovery, but
without interest.



Section 5.20 Increased Costs Generally. If any change in Law shall:



(a) impose, modify, or deem applicable any reserve, special deposit,
compulsory loan, insurance charge, or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in
by, any Lender or the Issuing Bank;



(b) subject any Lender or the Issuing Bank to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any LIBOR Loan made by it, or change
the basis of taxation of payments to such Lender or the Issuing Bank in
respect thereof; or



(c) impose on any Lender, the Issuing Bank, or the London interbank
market any other condition, cost, or expense affecting this Agreement or
LIBOR Loans made by such Lender or any Letter of Credit or participation
therein;



and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any LIBOR Loan (or of maintaining its obligation to make any such Loan), or to increase
the cost to such Lender or the Issuing Bank of participating in, issuing, or maintaining any Letter
of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or
to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank under
this Agreement (whether of principal, interest, or any other amount) then, upon request of such
Lender or the Issuing Bank, TIMET will pay to such Lender or the Issuing Bank, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case
may be, for such additional costs incurred or reduction suffered.



Section 5.21 Capital Requirements. If any Lender or the Issuing Bank determines that
any change in Law affecting such Lender or the Issuing Bank, or such Lender’s or the Issuing Bank’s
holding company, if any, regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender’s or the Issuing Bank’s capital, or on the capital of such
Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement, the
Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by,
such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such
Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have
achieved but for such change in Law (taking into consideration such Lender’s or the Issuing Bank’s
policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to
capital adequacy), then from time to time TIMET shall pay to such Lender or the Issuing Bank, as
the case may be, such additional amount or amounts as will compensate such Lender or the Issuing
Bank, or such Lender’s or the Issuing Bank’s holding company, for any such reduction suffered.



Section 5.22 Delay in Requests. Any failure or delay on the part of any Lender or the
Issuing Bank to demand compensation pursuant to Section 5.20 or Section 5.21 of this Agreement
shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such
compensation, provided that TIMET shall not be required to compensate a Lender or the Issuing Bank
pursuant to Section 5.20 or Section 5.21 of this Agreement for any increased costs incurred or
reductions suffered more than nine months prior to the date that such Lender or the Issuing Bank,
as the case may be, notifies TIMET of the change in Law giving rise to such increased costs or
reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor
(except that, if the change in Law giving rise to such increased costs or reductions is
retroactive, then the nine-month period referred to above shall be extended to include the period
of retroactive effect thereof).



Section 5.23 Funding Losses. Upon demand of any Lender (with a copy to the Agent)
from time to time, TIMET promptly shall compensate such Lender for (and hold such Lender harmless
from) any loss, cost, or expense incurred by it as a result of any of the following:



(a) any continuation, conversion, payment, or prepayment of a LIBOR Rate Loan
on a day other than the last day of the Interest Period for such Loan (whether
voluntary, mandatory, automatic, by reason of acceleration, or otherwise);



(b) any failure by TIMET (for a reason other than the failure of such Lender to
make a Loan) to prepay, borrow, continue, or convert a LIBOR Rate Loan on the date
or in the amount notified by TIMET; or



(c) any reallocation of Revolving Loans outstanding at the LIBOR Interest Rate
in accordance with Section 2.13 of this Agreement;



including any loss of anticipated profits and any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain such Loan, or from fees payable to terminate the
deposits from which such funds were obtained. TIMET also shall pay any customary administrative
fees charged by such Lender in connection with the foregoing. For purposes of calculating amounts
payable by TIMET to the Lenders under this Section 5.23 of this Agreement, each Lender shall be
deemed to have funded each LIBOR Rate Loan made by it at the LIBOR Rate for such Loan by a matching
deposit or other borrowing in the London interbank Eurodollar market for a comparable amount and
for a comparable period, whether or not such LIBOR Rate Loan was in fact so funded.



Section 5.24 Changed Circumstances. Notwithstanding any other provision of this
Agreement, in the event that:



(a) on any date on which the LIBOR Rate otherwise would be set the Agent shall
have determined in good faith (which determination shall be final and conclusive,
unless not made in good faith) that adequate and fair means do not exist for
ascertaining the LIBOR Rate, or



(b) at any time the Agent or any Lender shall have determined in good faith
(which determination shall be final and conclusive, unless not made in good faith,
and, if made by any Lender, shall have been communicated to the Agent in writing)
that:



(i) the making or continuation of or conversion of any Loan to a LIBOR
Rate Loan has been made impracticable or unlawful by (A) the occurrence of a
contingency that materially and adversely affects the interbank Eurodollar
market, or (B) compliance by the Agent or such Lender in good faith with any
applicable Law or governmental regulation, guideline or order or
interpretation or change thereof by any Governmental Authority charged with
the interpretation or administration thereof, or with any request or
directive of any such Governmental Authority (whether or not having the
force of Law); or



(ii) the LIBOR Rate no longer shall represent the effective cost to the
Agent or such Lender for Dollar deposits in the interbank market for
deposits in which it regularly participates;



then, and in any such event, the Agent promptly shall notify TIMET thereof. Until the Agent
notifies TIMET that the circumstances giving rise to such notice no longer apply, the obligation of
the Lenders to allow selection by TIMET of the type of Loan affected by the contingencies described
in this Section 5.24 of this Agreement shall be suspended. If at the time TIMET receives a notice
from the Agent pursuant to the preceding sentence TIMET previously has given the Agent a Notice of
Borrowing or Conversion with respect to one or more affected Loans, but such Loans have not yet
been made, such notification shall be deemed to be a request for Base Rate Loans.



Section 5.25 Prepayment Due to Illegality. In the event of a determination of
illegality pursuant to Section 5.24 above, TIMET shall, with respect to the outstanding affected
Loans, prepay the same, together with interest thereon and any amounts required to be paid pursuant
to Section 5.23 of this Agreement, on such date as shall be specified in the Agent’s notice to
TIMET (which shall not be earlier than the date such notice is given) and may, subject to the
conditions of this Agreement, obtain a Base Rate Loan in accordance with this Agreement by giving a
Notice of Borrowing or Conversion pursuant to Section 5.13 of this Agreement.



Section 5.26 Mitigation. Each Lender agrees that as promptly as practicable after it
becomes aware of the occurrence or existence of an event that would give rise to a claim of
illegality, impracticality, or increased cost under Section 5.24 of this Agreement, the Lender
shall use reasonable efforts to make, fund, or maintain the affected Loan (or relevant part
thereof) through another lending or booking office if that action shall avoid such illegality or
impracticality, or materially reduce the additional cost to TIMET.



Section 5.27 Usury. It is the intention of the parties to this Agreement to conform
strictly to applicable usury laws. Accordingly, if any transactions contemplated by this Agreement
would be usurious under applicable law (including the laws of the United States of America, or of
any other jurisdiction whose laws may be applicable), then, in that event, notwithstanding anything
to the contrary in this Agreement, or any other agreement entered into in connection with this
Agreement, it is agreed that the aggregate amount of all consideration that constitutes interest
under applicable law that is contracted for, charged, or received under this Agreement, or under
any of the other aforesaid agreements or otherwise in connection with this Agreement, shall under
no circumstances exceed the maximum amount of interest allowed by applicable law, and any excess
shall be credited to TIMET by the Lenders in accordance with their Percentage Interests (or, if
such consideration shall have been paid in full, such excess shall be refunded to TIMET by the
Lenders in accordance with their Percentage Interests). All sums paid, or agreed to be paid, to
TIMET by the Lenders pursuant to the preceding sentence shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the full term of such
indebtedness until payment in full so that the actual rate of interest is uniform, but does not
exceed the Highest Lawful Rate (as that term is defined below), throughout the full term thereof.
The maximum lawful interest rate, if any, referred to in the preceding portion of this Section 5.27
of this Agreement that may accrue pursuant to this Agreement is referred to herein as the “Highest
Lawful Rate.” If at any time the applicable interest rate that, for purposes of this Section 5.27
of this Agreement only, shall be deemed to include any other fees, charges, or other forms of
consideration that constitute interest under applicable law that is contracted for, charged, or
received under this Agreement, or any other agreement entered into in connection with this
Agreement, exceeds the Highest Lawful Rate, the rate of interest to accrue pursuant to this
Agreement shall be limited, notwithstanding anything to the contrary in this Agreement, to the
Highest Lawful Rate, but any subsequent reductions in the interest rate otherwise provided for in
this Agreement shall not reduce the interest to accrue pursuant to this Agreement below the Highest
Lawful Rate until the total amount of interest accrued pursuant to this Agreement equals the amount
of interest that would have accrued if a varying rate per annum equal to the otherwise applicable
interest rate had at all times been in effect.



ARTICLE VI




CONDITIONS OF LENDING




Section 6.1 Conditions Precedent. The obligations of the Lenders, the Issuing Bank,
and the Swingline Lender to make Loans, to issue Letters of Credit, and to make Swingline Loans,
respectively, are subject to the satisfaction of each and all of the following conditions precedent
on or before February 17, 2006:



(a) The Agent shall have received the following agreements, documents,
certificates, and opinions in form and substance satisfactory to the Agent and the
Lenders in their reasonable discretion and, where applicable, duly executed and
delivered by the parties thereto:



(i) this Agreement;



(ii) (A) a Note payable to the order of each Lender in the amount of
the Lender’s original Commitment, and (B) the Swingline Note payable to the
Swingline Lender;



(iii) the Security Documents;



(iv) The Guarantee Agreements from Material Domestic Subsidiaries of
TIMET in existence on the Closing Date;



(v) a certificate of the Secretary or an Assistant Secretary of TIMET
with respect to resolutions of the Board of Directors of TIMET authorizing
the execution and delivery of the Loan Documents and identifying the officer
or officers authorized to execute, deliver, and take all other actions
required under this Agreement, and providing specimen signatures of such
officer or officers;



(vi) the Articles of Incorporation and by-laws of TIMET, and all
amendments and supplements thereto, certified by the Secretary or an
Assistant Secretary of TIMET as being a true and correct copy thereof;



(vii) certificates from the appropriate Governmental Authority
certifying as to the good standing, existence, and authority of TIMET in the
jurisdiction where TIMET is organized;



(viii) a certificate of the Secretary or an Assistant Secretary of each
Guarantor with respect to resolutions of the Board of Directors of the
Guarantor authorizing the execution and delivery of the Security Agreements
and the Guarantee Agreements and identifying the officer or officers
authorized to execute, deliver, and take all other actions required under
those agreements, and providing specimen signatures of such officer or
officers;



(ix) the Articles of Incorporation and by-laws of each Guarantor, and
all amendments and supplements thereto, certified by the Secretary or an
Assistant Secretary of the Guarantor as being a true and correct copy
thereof;



(x) certificates from the appropriate Governmental Authority certifying
as to the good standing, existence, and authority of each Guarantor in the
jurisdiction where the Guarantor is organized; and



(xi) such other documents, instruments, opinions, and certificates, and
completion of such other matters, as the Agent or any Lender reasonably may
deem necessary or appropriate;



(b) The Agent shall have received the original stock certificates for the
Pledged Shares, stock powers for such shares, and an executed Form U-1;



(c) TIMET shall have paid to the Agent the fees owed as of the Closing Date
pursuant to Section 5.5 of this Agreement and the Agent Fee Letter;



(d) All necessary filings and recordings against the Collateral shall have been
completed and the Agent’s liens on the Collateral shall have been perfected, as
contemplated by the Security Documents;



(e) The Agent shall have received a legal opinion from in-house counsel and, as
necessary, outside counsel for TIMET and the Guarantors with respect to the validity
and enforceability of the Loan Documents (and the agreements provided for therein)
in form and content satisfactory to the Agent in its reasonable discretion;



(f) No litigation, arbitration, proceeding, or investigation shall be pending
or threatened that questions the validity or legality of the transactions
contemplated by any Loan Document, or seeks a restraining order, injunction, or
damages in connection therewith, or which, in the reasonable judgment of the Agent,
would be expected to have a Material Adverse Effect;



(g) TIMET shall have provided the Agent evidence that TIMET and its
Subsidiaries have insurance coverage that complies with the requirements of (i)
Section 9.9 of this Agreement, and (ii) the Security Documents;



(h) TIMET shall deliver to the Agent a certificate of a Responsible Officer
confirming that no Material Adverse Effect exists or has occurred as of the Closing
Date;



(i) The Agent shall have received a written certification of a Responsible
Office that the representations and warranties of TIMET set forth in Article VIII of
this Agreement are accurate as of the Closing Date;



(j) The Agent shall have determined that, as of the Closing Date, no event has
occurred, and no situation exists, that in the reasonable judgment of the Agent
would be likely to impair the syndication of the Revolving Credit Facility;



(k) As of the date of this Agreement, no Default or Event of Default exists;



(l) Wachovia Bank, National Association, has released (or irrevocably committed
to release) its Liens in the Collateral; and



(m) The Agent shall have received such other statements, opinions,
certificates, documents, and information with respect to the matters contemplated by
this Agreement as the Agent reasonably may request.



If all of the above-referenced conditions are satisfied by February 17, 2006, this Agreement and
the Loan Documents shall become effective. If any of the above-referenced conditions precedent are
not satisfied by February 17, 2006, and such conditions are not waived or deferred (in writing) by
all of the Lenders, this Agreement shall not become effective.



Section 6.2 Ongoing Conditions. Following the Closing Date, the obligations of the
Lenders, the Issuing Bank, and the Swingline Lender to make Loans, to issue Letters of Credit, and
to make Swingline Loans, respectively, are subject to the following conditions:



(a) Timely receipt by the Agent of a Notice of Borrowing or Conversion (and, if
required hereunder, a Borrowing Base Certificate);



(b) The outstanding Loans and Letters of Credit do not (and, after giving
effect to any requested Loan or Letter of Credit, will not) exceed the limitations
set forth in this Agreement;



(c) The representations and warranties contained in Article VIII of this
Agreement shall be true and accurate in all material respects on and as of the date
of the Notice of Borrowing or Conversion, and on the effective date of the making of
each Loan (or issuance of each Letter of Credit) as though made at and as of each
such date (except to the extent that such representations and warranties expressly
relate to an earlier date); and



(d) No Default or Event of Default shall have occurred and be continuing at the
time of and immediately after the making of such requested Loan (or the issuance of
such requested Letter of Credit).



TIMET’s request for each Loan, and TIMET’s request for each Letter of Credit, shall be deemed to be
a representation and warranty by TIMET on the date of the making, continuation, or conversion of
such Loan (or Letter of Credit) as to the accuracy of the facts referred to in subsection (c) of
this Section 6.2 of this Agreement and of the satisfaction of all of the conditions set forth in
this Section 6.2 of this Agreement.



ARTICLE VII




COLLATERAL FOR TIMET’S OBLIGATIONS




Section 7.1 Security Interests in Personal Property. Contemporaneously with the
execution of this Agreement, TIMET and each Material Domestic Subsidiary of TIMET in existence on
the Closing Date shall execute and deliver to the Agent a security agreement in form and content
satisfactory to the Agent in its reasonable discretion granting the Agent (for the ratable benefit
of the Lenders, the Issuing Bank, and the Swingline Lender) a first priority security interest
(subject only to Permitted Liens) in all personal property (other than Equipment, shares in TIMET
UK Ltd. (except the Pledged Shares), and equity interests in any other Person) of TIMET and those
Subsidiaries of TIMET to secure the Obligations. TIMET hereby agrees that, if following the
Closing Date TIMET forms or acquires any Material Domestic Subsidiary in addition to those
identified specifically in the definition of the term “Material Domestic Subsidiary,” TIMET shall
cause each such additional Material Domestic Subsidiary to execute and deliver to the Agent a
security agreement in form and content satisfactory to the Agent in its reasonable discretion
granting the Agent (for the ratable benefit of the Lenders, the Issuing Bank, and the Swingline
Lender) a first priority security interest (subject only to Permitted Liens) in all personal
property (other than Equipment and equity interests in any other Person) of each such additional
Material Domestic Subsidiary to secure the Obligations. References in this Agreement to the
Security Agreements shall include the documents executed pursuant to the two preceding sentences of
this Agreement.



Section 7.2 Pledge of TIMET UK Ltd. Stock. Contemporaneously with the execution of
this Agreement, TIMET shall execute and deliver to the Agent a Pledge and Security Agreement in
form and content satisfactory to the Agent (the “Pledge Agreement”) granting the Agent (for the
ratable benefit of the Lenders, the Issuing Bank, and the Swingline Lender) a perfected, first
priority security interest in the 65 percent of the shares of stock of TIMET UK Ltd. described in
Schedule 7.2 to this Agreement (the “Pledged Shares”) to secure the Obligations.



Section 7.3 Delivery of Stock Certificates and Related Materials. Contemporaneously
with the execution of this Agreement, TIMET shall deliver to the Agent the original stock
certificates with respect to the Pledged Shares, stock powers with respect to those shares of
stock, and an executed Form U-1.



Section 7.4 Guaranty Agreements from Existing and Subsequently Created Material Domestic
Subsidiaries. Contemporaneously with the execution of this Agreement, TIMET shall cause each
of its existing Material Domestic Subsidiaries to execute and deliver to the Agent a guarantee
agreement in form and content satisfactory to the Agent in its reasonable discretion with respect
to the Obligations. In addition, TIMET hereby agrees that if, following the Closing Date, a Person
becomes a Material Domestic Subsidiary, TIMET shall cause each such additional Material Domestic
Subsidiary to execute and deliver to the Agent a guarantee agreement in form and content
satisfactory to the Agent in its reasonable discretion with respect to the Obligations. References
in this Agreement to the Guarantors shall mean and include the Material Domestic Subsidiaries
specifically identified in the definition of the term “Material Domestic Subsidiary” and any Person
that becomes a Material Domestic Subsidiary following the Closing Date. Furthermore, references in
this Agreement to the Guarantee Agreements shall mean and include all such documents executed by
Material Domestic Subsidiaries of TIMET pursuant to the first two sentences of this Section 7.4 of
this Agreement.



Section 7.5 Possible Pledge of Fixed Assets. TIMET (or a Material Domestic Subsidiary
of TIMET) may request that some or all of the Equipment and real property owned by TIMET (or a
Material Domestic Subsidiary of TIMET) be included in the computation of the Borrowing Base. Such
assets of TIMET (or a Material Domestic Subsidiary of TIMET) may be included in the Borrowing Base
(on the basis specified in Section 2.6 of this Agreement) only if the following conditions are
satisfied:



(a) TIMET demonstrates to the Agent’s satisfaction that the proposed Equipment
or real estate collateral is Eligible Equipment, or Eligible Real Property, as
applicable;



(b) The owner of the Eligible Equipment or Eligible Real Property has executed
and delivered to the Agent a security agreement with respect to Eligible Equipment,
or a deed of trust (or similar document) with respect to Eligible Real Property, in
each case acceptable to the Agent in its reasonable discretion;



(c) The Agent, at TIMET’s expense, has obtained an appraisal of the proposed
Equipment or real property collateral that is acceptable to the Agent in its
reasonable discretion that identifies the orderly liquidation value of the asset or
assets in question;



(d) In the case of proposed real estate collateral, the Agent, at TIMET’s
expense, has obtained a Phase I environmental report with respect to the real
property that demonstrates to the Agent’s satisfaction that the real property is not
materially adversely affected by or contaminated by Hazardous Materials;



(e) In the case of proposed real estate collateral, the Agent has obtained, at
TIMET’s expense, a lender’s extended coverage title insurance policy in an amount
and from an insurer satisfactory to the Agent in its reasonable discretion, insuring
the status and condition of title to the real property in a manner satisfactory to
the Agent, in its reasonable discretion; and



(f) If the owner of the equipment or real estate pledged to the Agent hereunder
is a Material Domestic Subsidiary of TIMET, that Subsidiary also shall be a
Guarantor.



References in this Agreement to the Security Agreements shall mean any security agreements,
deeds of trust, or similar documents executed by TIMET or its Material Domestic Subsidiary
pursuant to this Section 7.5 of this Agreement.



Section 7.6 Other Documents. TIMET hereby agrees that until TIMET satisfies the
Obligations in full, and the Commitments have terminated, TIMET promptly shall execute and deliver
to the Agent (and shall cause the Guarantors to execute and deliver to the Agent) all documents
deemed necessary or desirable by the Agent or any Lender in its reasonable discretion to create,
evidence, perfect, or continue the security interests and liens of the Agent (for the ratable
benefit of the Lenders, the Issuing Bank, and the Swingline Lender) in the Collateral. In
addition, TIMET hereby authorizes the Agent to file financing statements with respect to TIMET and
the Guarantors describing the Collateral, and to perform all other acts that the Agent deems
necessary or appropriate to perfect and continue its security interest in, and to protect and
preserve, the Collateral. Furthermore, TIMET shall cooperate with the Agent following the Closing
Date to cause Wachovia Bank, National Association, as soon as reasonably practicable, to enter into
a Deposit Account Control Agreement in favor of the Agent with respect to deposit accounts of TIMET
and its Material Domestic Subsidiaries at Wachovia Bank, National Association.



Section 7.7 Right of Setoff. In addition to any rights now or hereafter granted under
this Agreement, applicable law, or otherwise, and not by way of limitation of any such rights, upon
the occurrence and continuance of an Event of Default, and subject to the provisions of Section
15.1 of this Agreement, each Lender hereby is authorized at any time, or from time to time, without
presentment, demand, protest, or other notice of any kind to TIMET or to any other Person, any such
notice being hereby expressly waived, to set off any Indebtedness at any time held or owing by such
Lender (including, without limitation, by branches and agencies of such Lender wherever located) to
or for the credit or the account of TIMET against and on account of the Obligations and liabilities
of TIMET to such Lender or any other Lender under this Agreement, irrespective of whether or not
such Lender shall have made any demand under this Agreement and although the Obligations may not
have matured. Each Lender hereby is designated as the agent of all of the Lenders for purposes of
effecting a setoff pursuant to this Section 7.7 of this Agreement. Any amounts received by the
Agent or any Lender in accordance with the preceding sentence of this Agreement shall be held for
and distributed to the Lenders in accordance with the provisions of Section 15.1 of this Agreement.
Promptly after any Lender takes any action pursuant to this Section 7.7 of this Agreement, such
Lender shall notify TIMET and the Agent of such action (it being understood that the failure to
give any such notice shall not diminish TIMET’s obligations under this Agreement, or prevent such
Lender from taking the action in question, or any further action under this Section 7.7 of this
Agreement, or otherwise).



Section 7.8 Appraisals and Collateral Examinations. TIMET hereby acknowledges and
agrees that the Agent, upon reasonable prior notice to TIMET and at reasonable times, may conduct
such examinations of the Collateral (including, but not limited to, collateral examinations and,
after a request by TIMET pursuant to Section 7.5 of this Agreement, environmental surveys), as the
Agent deems necessary or desirable in its reasonable discretion. TIMET is aware that, if TIMET is
required to maintain a Borrowing Base in accordance with Section 2.5 of this Agreement, the Agent
expects to conduct up to two collateral examinations (focused on Accounts and Inventory) each year.
TIMET further acknowledges and agrees that TIMET shall pay the reasonable charges for any
collateral examinations conducted in accordance with the preceding sentence, any environmental
surveys conducted pursuant to Section 7.5 of this Agreement, and any other examinations or
inspections of all or any portion of the Collateral required by applicable law or the Agent’s
generally-applicable policies (which payment shall be due within 30 days of TIMET’s receipt of a
bill for any such amount, or on the Maturity Date, whichever occurs sooner).



Section 7.9 Ratable Interests of the Lenders in the Collateral. The parties to this
Agreement acknowledge and agree that the Lenders share their interests in the Collateral on a
ratable basis in accordance with their Percentage Interests.



Section 7.10 Duration of Liens. The Collateral shall stand as one general, continuing
collateral security for all Obligations and may be retained by the Agent until all Obligations have
been satisfied in full and all Commitments of the Lenders have terminated.



ARTICLE VIII




REPRESENTATIONS AND WARRANTIES




TIMET represents and warrants to the Agent and the Lenders as follows:



Section 8.1 Existence of Power of TIMET. TIMET is a corporation validly existing and
in good standing under the laws of Delaware, and is qualified to do business in each other
jurisdiction where the failure to be so qualified reasonably would be expected to have a Material
Adverse Effect. Furthermore, TIMET has full power, authority, and legal right to carry on its
business as presently conducted, to own and operate its properties and assets, and to execute,
deliver, and perform this Agreement, the Notes, and the other Loan Documents.



Section 8.2 Existing Subsidiaries of TIMET. As of the Closing Date, the domestic
Subsidiaries owned by TIMET are those Persons listed in Schedule 8.2 to this Agreement.



Section 8.3 Existence and Power of Guarantors. Each Guarantor is a corporation or
other business entity validly existing and in good standing under the laws of the state in which it
was organized, and is qualified to do business in each other jurisdiction where the failure to be
so qualified reasonably would be expected to have a Material Adverse Effect. Furthermore, each
Guarantor has full power, authority, and legal right to carry on its business as presently
conducted, to own and operate its properties and assets, and to execute, deliver, and perform any
Guarantee Agreements and Security Agreements executed by such Person.



Section 8.4 Authorization of TIMET. The execution, delivery, and performance by TIMET
of this Agreement, the Notes, and the other Loan Documents have been duly authorized by all
necessary corporate action of TIMET, do not require any shareholder approval, or the approval or
consent of any trustee or the holders of any Indebtedness of TIMET, do not contravene any Law,
regulation, rule, or order binding on TIMET, or TIMET’s organizational documents, and do not
contravene the provisions of or constitute a default under any indenture, mortgage, contract, or
other agreement or instrument to which TIMET is a party, or by which TIMET, or any of TIMET’s
properties, may be bound or affected, the lack of which approval or consent, or such contravention,
reasonably would be expected to have a Material Adverse Effect.



Section 8.5 Authorization of the Guarantors. The execution, delivery, and performance
by the Guarantors of the Security Agreements and the Guarantee Agreements have been duly authorized
by all necessary action of the Guarantors, do not require any shareholder approval, or the approval
or consent of any trustee or the holders of any Indebtedness of any Guarantor, do not contravene
any Law, regulation, rule, or order binding on the Guarantors, or any Guarantor’s organizational
documents, and do not contravene the provisions of or constitute a default under any indenture,
mortgage, contract, or other agreement or instrument to which any Guarantor is a party, or by which
the Guarantors, or any of the Guarantors’ properties, may be bound or affected, the lack of which
approval or consent, or such contravention, reasonably would be expected to have a Material Adverse
Effect.



Section 8.6 Valid Obligations of TIMET. The Loan Documents and all of their
respective terms and provisions are the legal, valid, and binding obligations of TIMET, enforceable
in accordance with their respective terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the enforcement of creditors’ rights
generally, and except as the remedy of specific performance or of injunctive relief is subject to
the discretion of the court before which any proceeding therefor may be brought. The Loan
Documents shall have created in favor of the Agent, the Lenders, the Issuing Lender, and the
Swingline Lender legal, valid, and binding security interests and liens in the Collateral
enforceable in accordance with their terms, and, upon completion of all filings required under the
Uniform Commercial Code, such security interests and liens are fully perfected, first priority
security interests (except such liens and security interests that may not be perfected by filing
under the Uniform Commercial Code) and are subject only to Permitted Liens.



Section 8.7 Valid Obligations of the Guarantors. The Security Agreements and the
Guarantee Agreements and all of their respective terms and provisions are the legal, valid, and
binding obligations of the Guarantors, enforceable in accordance with their respective terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws
affecting the enforcement of creditors’ rights generally, and except as the remedy of specific
performance or of injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought. The Security Agreements shall have created in favor of the
Agent, the Lenders, the Issuing Lender, and the Swingline Lender, legal, valid, and binding
security interests and liens in the Collateral enforceable in accordance with their terms, and,
upon completion of all filings required under the Uniform Commercial Code, such security interests
and liens are fully perfected, first priority security interests (except such liens and security
interests that may not be perfected by filing under the Uniform Commercial Code) and are subject
only to Permitted Liens.



Section 8.8 Consents or Approvals. The execution, delivery, and performance of this
Agreement, the Notes, and the other Loan Documents, and the transactions contemplated thereby by
TIMET and the Guarantors, do not require any approval or consent of, or filing or registration
with, any Governmental Authority, any other agency or authority, or any other Person, except any
that have been obtained and any the lack of which reasonably would not be expected to have a
Material Adverse Effect.



Section 8.9 Title to Properties; Absence of Liens. TIMET and the Guarantors have good
title to all of the properties, assets, and rights of every kind and nature purported to be owned
by TIMET (or a Guarantor, as applicable) free from all Liens (except Permitted Liens), and free
from all defects of title that reasonably would be expected to have a Material Adverse Effect.



Section 8.10 Financial Statements. The audited Consolidated balance sheet of TIMET
and its Subsidiaries as of December 31, 2004, and the related audited Consolidated statements of
income, changes in stockholders’ equity, and cash flows of TIMET and its Subsidiaries for the
fiscal year then ended, copies of which have been furnished to the Agent and the Lenders, fairly
present, subject to the assumptions set forth therein, the Consolidated financial condition of
TIMET and its Subsidiaries at such date and the Consolidated results of the operations of TIMET and
its Subsidiaries for the period ended on such date, and such Consolidated balance sheets and
Consolidated statements of income, changes in stockholders’ equity, and cash flows were prepared in
accordance with GAAP.



Section 8.11 True and Complete Disclosure. The Form 10-K most recently filed by TIMET
with the SEC and TIMET’s quarterly report on Form 10-Q most recently filed with the SEC, copies of
which have been furnished by TIMET to the Agent and the Lenders, did not, as of the respective
dates such Form 10-K and Form 10-Q were filed with the SEC, contain any untrue statement of a
material fact, or omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading and, from the date of filing the
TIMET Form 10-K or any subsequent Form 10-Q, no event or condition exists or has occurred that has
required or would require TIMET to amend such disclosure.



Section 8.12 Changes. Since December 31, 2004, there have been no changes in the
assets, liabilities, financial condition, business, or prospects of TIMET or its Subsidiaries,
other than changes in the ordinary course of business, or changes that would not reasonably be
expected to have a Material Adverse Effect.



Section 8.13 Other Agreements. Neither TIMET nor any of its Subsidiaries is in
material breach of or default under any agreement to which TIMET or a Subsidiary of TIMET is a
party, or that is binding on TIMET or any of TIMET’s assets (or any Subsidiary of TIMET or the
Subsidiary’s assets), that reasonably would be expected to have a Material Adverse Effect.



Section 8.14 Litigation. Except as set forth in Schedule 8.14 to this Agreement,
there is no litigation, arbitration, proceeding, or investigation pending, or, to the knowledge of
TIMET, threatened in writing against TIMET or any Subsidiary of TIMET that, if adversely
determined, reasonably would be expected to have a Material Adverse Effect.



Section 8.15 Government Regulation. Neither TIMET nor any of its Subsidiaries is
subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act,
the Investment Company Act, the Interstate Commerce Act, or any statute or regulation that
regulates the incurring by TIMET or any of its Subsidiaries of Funded Indebtedness as contemplated
and permitted by this Agreement and the other Loan Documents.



Section 8.16 Compliance. Each of TIMET and its Subsidiaries has all necessary
permits, approvals, authorizations, consents, licenses, franchises, registrations, and other rights
and privileges (including patents, trademarks, trade names, copyrights, and other intellectual
property) to allow TIMET (or its Subsidiary) to own and operate TIMET’s business (or the business
of TIMET’s Subsidiary, as applicable) without any violation of law or the rights of others, except
to the extent that any such violation would not reasonably be expected to have a Material Adverse
Effect. Each of TIMET and its Subsidiaries is duly authorized, qualified, and licensed under and
in compliance with all applicable laws, regulations, authorizations, and orders of public
authorities, except to the extent that any such failure to be so authorized, qualified, licensed,
or in compliance would not reasonably be expected to have a Material Adverse Effect. Furthermore,
to the knowledge of TIMET, no event has occurred that permits, or after notice or the lapse of
time, or both, would permit the revocation or termination of any such license, franchise, or other
right, or which affects the rights of TIMET or any of its Subsidiaries thereunder, that would be
likely to result in a Material Adverse Effect.



Section 8.17 ERISA. Each of TIMET and its Subsidiaries is in compliance in all
material respects with ERISA and the provisions of the Code applicable to Pension Plans. Neither
TIMET nor any of it Subsidiaries has engaged in a Prohibited Transaction that would subject TIMET,
any of its Subsidiaries, or any Pension Plan to a material Tax or penalty imposed on a Prohibited
Transaction. No Pension Plan has incurred any “accumulated funding deficiency” (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived, except to the extent that
any such deficiency would not reasonably be expected to have a Material Adverse Effect. Neither
TIMET nor any Subsidiary of TIMET has incurred any liability to the PBGC that reasonably would be
expected to have a Material Adverse Effect. Neither TIMET nor any Subsidiary of TIMET has
terminated any Pension Plan in a manner that likely would result in the imposition of a Lien on the
property of TIMET (or one of its Subsidiaries) that reasonably would be expected to have a Material
Adverse Effect. Neither TIMET nor any Subsidiary of TIMET has contributed, or been obligated to
contribute, to any Multiemployer Plan on or after September 26, 1980.



Section 8.18 Labor Relations. There is (a) no unfair labor practice complaint pending
against TIMET or any Subsidiary of TIMET or, to the best knowledge of TIMET, threatened in writing,
before the National Labor Relations Board, and no grievance or arbitration proceeding arising out
of or under any collective bargaining agreement is so pending against TIMET or any Subsidiary of
TIMET or, to the best knowledge of TIMET, threatened in writing, except for such complaints,
grievances, and arbitration proceedings that, if adversely decided, would not reasonably be
expected to have a Material Adverse Effect, and (b) no strike, labor dispute, slowdown, or stoppage
pending against TIMET or any Subsidiary of TIMET or, to the best knowledge of TIMET, threatened in
writing against TIMET or any Subsidiary of TIMET, except for any such labor action as would not
reasonably be expected to have a Material Adverse Effect.



Section 8.19 Federal Reserve Regulations. Neither TIMET nor any Subsidiary of TIMET
is engaged principally or as one of its important activities in the business of extending credit
for the purpose of purchasing or carrying any margin stock (within the meaning of Federal Reserve
Regulation U), and no part of the proceeds of any Loan will be used by TIMET or any Subsidiary of
TIMET to purchase or carry any such margin stock in violation of Regulations U and X, or to extend
credit to others for the purpose of purchasing or carrying any such margin stock, or for any other
purpose that violates the applicable provisions of any Federal Reserve regulation.



Section 8.20 Solvency. After giving effect to the Loans and after giving effect to
the application of the proceeds of such Loans, (a) the assets of TIMET, at a fair valuation, shall
exceed TIMET’s debts and liabilities (whether subordinated, unliquidated, unmatured, contingent, or
otherwise); (b) TIMET shall be able to pay (and does not intend to incur debts beyond its ability
to pay) its debts and liabilities (whether subordinated, unliquidated, unmatured, contingent, or
otherwise), as such debts and liabilities become absolute and mature; and (c) TIMET shall not have
unreasonably small capital with which to conduct the business in which it is engaged, as such
business now is conducted and is proposed to be conducted following the Closing Date.



Section 8.21 Stock of TIMET UK Ltd. As of the date of this Agreement, TIMET owns the
Pledged Shares free and clear of all Liens (other than the Lien granted to the Agent pursuant to
this Agreement). The Pledged Shares represent 65 percent of the total outstanding Capital Stock of
TIMET UK Ltd.



Section 8.22 No Partnerships or Joint Ventures. As of the Closing Date, neither TIMET
nor any domestic Subsidiary of TIMET is a partner in any general partnership or limited
partnership, or a joint venturer in any joint venture, except as set forth on Schedule 8.22 to this
Agreement.



Section 8.23 Continuing Representations. TIMET hereby acknowledges and agrees that
the representations of TIMET in this Article VIII of this Agreement are continuing representations
and that each request for a Loan or a Letter of Credit by TIMET under this Agreement constitutes a
reaffirmation by TIMET that such representations are accurate as of the date of the Loan or the
Letter of Credit requested by TIMET.



ARTICLE IX




AFFIRMATIVE COVENANTS




Until TIMET has paid the Obligations in full, and the Lenders have no further obligation to
extend credit to TIMET, TIMET agrees to all of the following, unless the Agent and the Required
Lenders otherwise shall consent in writing (which consent shall not be withheld without reasonable
cause):



Section 9.1 Use of Proceeds. The proceeds of Loans shall be used by TIMET only for
general corporate purposes of TIMET and its Subsidiaries and, on the Closing Date, to repay the
Existing Credit Facilities.



Section 9.2 Payments. TIMET shall pay the principal of and interest on the Loans in
accordance with the terms of this Agreement, the Notes, and the Swingline Note and shall pay when
due all other amounts payable by TIMET under this Agreement and the other Loan Documents.



Section 9.3 Preservation of TIMET’s Corporate Existence. TIMET shall preserve and
maintain its corporate existence, rights, franchises, and privileges in Delaware and shall qualify
and remain qualified as a foreign organization in each jurisdiction where the lack of such
qualification reasonably would be expected to have a Material Adverse Effect.



Section 9.4 Keeping Books and Records. TIMET shall keep (and shall cause each of its
Subsidiaries to keep) adequate records and books of account in which complete entries shall be
made, in accordance with GAAP, reflecting all material financial transactions of TIMET (or a
Subsidiary of TIMET, as applicable).



Section 9.5 Other Obligations. Subject to the right of TIMET and its Subsidiaries to
contest any Indebtedness or other obligations in good faith, TIMET shall pay and discharge (and
shall cause its Subsidiaries to pay and discharge) before the same shall become delinquent all
Indebtedness, and other obligations for which TIMET (or a Subsidiary of TIMET) is liable, or to
which its income or property is subject, if the failure to pay and discharge the same reasonably
would be expected to have a Material Adverse Effect.



Section 9.6 Conducting Business. TIMET shall conduct (and shall cause each of the
Guarantors to conduct) its business and affairs in the ordinary course of business without material
change in the nature of business operations as currently conducted.



Section 9.7 Compliance with Laws. Subject to the right of TIMET and its Subsidiaries
to contest any Laws in good faith by appropriate legal proceedings, and provided that TIMET (or the
Subsidiary in question) establishes and maintains adequate reserves to the extent required by GAAP
in relation to the matter being contested, TIMET shall comply (and shall cause its Subsidiaries to
comply) in all material respects with all Laws, except where any failure to comply would not
reasonably be expected to have a Material Adverse Effect.



Section 9.8 Maintenance of Assets. TIMET shall maintain (and shall cause each of its
Subsidiaries to maintain) its properties in good repair, working order, and condition as required
for the normal conduct of TIMET’s business, or the business of the Subsidiary in question to the
extent failure to do so reasonably would be expected to have a Material Adverse Effect.



Section 9.9 Insurance. TIMET shall maintain (and shall cause each of its Subsidiaries
to maintain) insurance with responsible and reputable insurance companies or associations in such
amounts and covering such risks as are usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which TIMET (or its Subsidiary)
operates, except where failure to maintain any such insurance would not reasonably be expected to
have a Material Adverse Effect; provided that TIMET (or its Subsidiary) may self-insure to the
extent and in the manner normal for similarly situated companies of like size, type, and financial
condition that are part of a group of companies under common control.



If TIMET fails to maintain the insurance required hereby or by the Security Documents with
respect to the Collateral, the Agent may arrange for such insurance if such failure is not cured
after 30 days’ notice to TIMET, but at TIMET’s expense and without any responsibility on the
Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of
the coverage, or the collection of claims. In that regard, Oregon law, ORS 746.201, requires that
TIMET be given the following notice:



WARNING





Unless you provide us with evidence of the insurance coverage as required by our
contract or loan agreement, we may purchase insurance at your expense to protect our
interest. This insurance may, but need not, also protect your interest. If the collateral
becomes damaged, the coverage we purchase may not pay any claim you make or any claim made
against you. You may later cancel this coverage by providing evidence that you have
obtained property coverage elsewhere.




You are responsible for the cost of any insurance purchased by us. The cost of this
insurance may be added to your contract or loan balance. If the cost is added to your
contract or loan balance, the interest rate on the underlying contract or loan will apply to
this added amount. The effective date of coverage may be the date your prior coverage
lapsed or the date you failed to provide proof of coverage.




The coverage we purchase may be considerably more expensive than insurance you can
obtain on your own and may not satisfy any need for property damage coverage or any
mandatory liability insurance requirements imposed by applicable law.



Section 9.10 Taxes. TIMET shall pay (and shall cause its Subsidiaries to pay) all
Taxes, assessments, or governmental charges on or against TIMET or a Subsidiary of TIMET (or
TIMET’s (or a Subsidiary’s) income or properties) at or prior to the time when they become
delinquent, except for any Tax, assessment, or charge (a) that is being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been established and are
being maintained to the extent required by GAAP, or (b) the non-payment of which would not
reasonably be expected to have a Material Adverse Effect.



Section 9.11 Inspection. TIMET shall permit (and shall cause its Subsidiaries to
permit) the Agent, any Lender, and their designees, at any reasonable time and at reasonable
intervals of time, and upon reasonable notice (or if a Default or Event of Default shall have
occurred and is continuing, at any time and without prior notice), to (a) visit and inspect the
properties of TIMET or a Subsidiary of TIMET, (b) make copies of and take abstracts from the books
and records of TIMET or a Subsidiary of TIMET, and (c) discuss the affairs, finances, and accounts
of TIMET or a Subsidiary of TIMET with appropriate officers, employees, and accountants of TIMET
(or its Subsidiary), provided, however, that the Lenders agree that before they request information
from TIMET’s outside accountants, the Lenders shall request the information in question from TIMET
and shall seek such information from TIMET’s accountants only if TIMET fails to provide the
information to the Lenders reasonably promptly. Without limiting the generality of the foregoing,
TIMET shall permit periodic reviews (as determined by the Agent in its reasonable discretion) of
the books and records of TIMET or a Subsidiary of TIMET to be carried out by the Agent. The Agent
and the Lenders shall make reasonable efforts to cause their inspections, visitations, and
examinations under this Agreement to be conducted jointly. TIMET shall reimburse the Agent for all
costs incurred by the Agent in connection with any inspections or other inquiries under this
Section 9.11 of this Agreement, and shall reimburse any Lender for all costs incurred by such
Lender hereunder following the occurrence of and during the existence of an Event of Default, all
as more particularly specified in Section 15.8 of this Agreement.



Section 9.12 Financial Reports and Other Information. TIMET shall deliver to the
Agent and the Lenders the statements and other information listed below:



(a) Within 90 days following the end of each fiscal year of TIMET, a copy of
the annual audit report for such year for TIMET and its Subsidiaries, including
therein audited Consolidated and unaudited consolidating balance sheets for TIMET
and its Subsidiaries as of the end of such fiscal year and audited Consolidated and
unaudited consolidating statements of income and retained earnings and of cash flows
of TIMET and its Subsidiaries for such fiscal year, in each case certified by an
independent certified public accounting firm of recognized standing acceptable to
the Agent in its reasonable discretion;



(b) Within 45 days after the end of each of TIMET’s first three fiscal quarters
each year, the Consolidated and consolidating balance sheets of TIMET and its
Subsidiaries as of the end of such quarter and the Consolidated and consolidating
statements of income and retained earnings and cash flows of TIMET and it
Subsidiaries for the period commencing at the end of the previous year and ending
with the end of such quarter, all in reasonable detail and duly certified with
respect to such Consolidated statements (subject to year-end audit adjustments) by a
Responsible Officer as having been prepared in accordance with GAAP;



(c) At the time TIMET furnishes each set of financial statements pursuant to
paragraphs (a) and (b) above, a compliance certificate of a Responsible Officer to
the effect that no Default or Event of Default has occurred and is continuing (or,
if any Default or Event of Default has occurred and is continuing, describing the
same in reasonable detail and describing the action that TIMET has taken or proposes
to take with respect thereto);



(d) At the time TIMET furnishes each set of financial statements pursuant to
paragraph (a) and (b) above, a written report calculating (i) the performance of
TIMET with respect to the financial covenants set forth in Section 10.1, Section
10.2, and Section 10.3 of this Agreement, and (ii) the Cash Adjusted Leverage Ratio,
which reports shall be in a form satisfactory to the Agent in its reasonable
discretion, shall include reasonable detail regarding the manner in which the
covenants and the Cash Adjusted Leverage Ratio were calculated, and shall be
accompanied by a certificate of a Responsible Officer that the report is accurate in
all material respects;



(e) Promptly after the sending or filing thereof, copies of all proxy material,
reports, and other information TIMET sends to any of its security holders pursuant
to the Exchange Act, and copies of all reports and registration statements that
TIMET or any Subsidiary files with the SEC, including, but not limited to, reports
on Form 10-Q and Form 10-K;



(f) At any time TIMET is required to maintain a Borrowing Base, as specified in
Section 2.5 and Section 2.6 of this Agreement, TIMET shall deliver the following
items to the Agent:



(i) Within 25 days after the end of each fiscal quarter of TIMET, a
report (the “Borrowing Base Certificate”) describing in reasonable detail
TIMET’s calculation of the Borrowing Base as of the end of the immediately
preceding fiscal quarter of TIMET, which shall be in a form satisfactory to
the Agent in its reasonable discretion and shall be certified by a
Responsible Officer to be accurate in all material respects;



(ii) Within 25 days after the end of each fiscal quarter of TIMET, a
report with respect to TIMET’s Accounts as of the end of the immediately
preceding fiscal quarter of TIMET, which reports shall include reasonable
detail regarding the aging of such Accounts and shall be in a form
satisfactory to the Agent in its reasonable discretion; and



(iii) Within 25 days after the end of each fiscal quarter of TIMET, a
report with respect to TIMET’s Inventory as of the end of the immediately
preceding fiscal quarter of TIMET, which reports shall include reasonable
detail regarding such Inventory and shall be in a form satisfactory to the
Agent in its reasonable discretion;



(g) Not later than 60 days after the start of each fiscal year of TIMET,
TIMET’s annual operating plan for such fiscal year, which plan shall be in form and
substance acceptable to the Agent in its reasonable discretion;



(h) Prompt notice of any Default or Event of Default and of the occurrence of
any Material Adverse Effect;



(i) Periodic (and not less than annual) reports of all pending and threatened
claims, litigation, and governmental proceedings against TIMET or any Subsidiary of
TIMET that if adversely determined reasonably would be expected to result in an
aggregate liability of more than $1,000,000; and



(j) Within a reasonable time, such additional information as and when
reasonably requested by any Lender regarding the business and financial condition of
TIMET or any of its Subsidiaries.



Section 9.13 Notification of Change of Name or Jurisdiction of Organization. TIMET
shall notify the Agent in writing at least ten Business Days before (a) TIMET (or any Guarantor)
changes its name in any manner, or (b) TIMET (or any Guarantor) changes the state under the laws of
which it is organized.



Section 9.14 Changes Affecting Collateral. Except with respect to in-transit
inventory or inventory on consignment, TIMET shall notify the Agent in writing of any change in the
location of any material portion of the Collateral that is tangible property to a place other than
a store, office, or warehouse of TIMET (or a Guarantor) of which the Agent has prior written
notice, and of the change in the location of any of its places of business, or of the establishment
of any new, or the discontinuance of any existing, place of business within 45 days following any
such change, establishment, or discontinuance, if a material portion of the Collateral is or was
located in such place or places of business.



Section 9.15 ERISA Reports. With respect to any Pension Plan, TIMET shall furnish to
the Agent promptly (a) written notice of the occurrence of a “reportable event” (as defined in
Section 4043 of ERISA), excluding any such event notice of which has been waived by regulation, (b)
a copy of any request for a waiver of the funding standards or an extension of the amortization
periods required under Section 412 of the Code and Section 302 of ERISA, (c) a copy of any notice
of intent to terminate any Pension Plan, (d) notice that TIMET (or a Subsidiary of TIMET) will or
may incur any material liability to or on account of a Pension Plan under ERISA, excluding
liability for contributions to the Pension Plan in the ordinary course, (e) notice of any complete
or partial withdrawal from any Multiemployer Plan, (f) a copy of any notice with respect to a
Multiemployer Plan that such plan is terminated or is “insolvent” (as defined in Section 4245 of
ERISA), or in “reorganization” (as defined in Section 4241 of ERISA, and (g) a copy of any
assessment of withdrawal liability (or preliminary estimate thereof following a complete or partial
withdrawal by TIMET) with respect to a Multiemployer Plan. Any notice to be provided to the Agent
under this Section 9.15 of this Agreement shall include a certificate of the Responsible Officer
setting forth details as to such occurrence and the action, if any, that TIMET (or its Subsidiary)
is required or proposes to take, together with any notices required or proposed to be filed with or
by TIMET (or its Subsidiary), the PBGC, the Internal Revenue Service, the trustee, or the plan
administrator with respect thereto. Promptly after the adoption of any Pension Plan, TIMET shall
notify the Agent and the Lenders of such adoption.



Section 9.16 Environmental Compliance. TIMET shall comply (and shall cause its
Subsidiaries to comply) with all applicable Environmental Laws in all jurisdictions in which TIMET
(or any of its Subsidiaries) operates now or in the future, and TIMET shall comply (and shall cause
its Subsidiaries to comply) with all such Environmental Laws that may in the future be applicable
to TIMET’s (or its Subsidiaries’) business or properties, if failure to comply reasonably would be
expected to have a Material Adverse Effect. If TIMET or any of its Subsidiaries shall (a) receive
written notice that any material violation of any Environmental Law may have been committed or is
about to be committed by TIMET (or any of its Subsidiaries), (b) receive written notice that any
administrative or judicial complaint or order has been filed or is about to be filed against TIMET
(or any of its Subsidiaries) alleging a material violation of any Environmental Law, or requiring
TIMET (or any of its Subsidiaries) to take any material action in connection with the release of
Hazardous Materials into the environment, (c) receive any written notice from a Governmental
Authority or private party alleging that such Person may be liable or responsible for any material
amount of costs associated with a response to or cleanup of a release of Hazardous Materials into
the environment or any damages caused thereby, or (d) receive written notice of any investigative
proceedings commenced by a Governmental Authority against TIMET (or any of its Subsidiaries)
regarding any material violation or potential material violation of Environmental Laws, TIMET
promptly shall inform the Agent thereof (and shall provide the Agent with a copy of any such
notice) and of any action being or proposed to be taken with respect thereto.



Section 9.17 New Subsidiaries. TIMET promptly shall inform the Agent in writing of
the existence of any Material Domestic Subsidiary of TIMET in addition to the Persons identified in
Schedule 8.2 to this Agreement. In addition, TIMET shall cause any Person that becomes a Material
Domestic Subsidiary of TIMET after the Closing Date to execute a Security Agreement and a Guaranty
Agreement, as required by Section 7.1 and Section 7.4, respectively, of this Agreement, promptly
after such Person becomes a Material Domestic Subsidiary.



ARTICLE X




FINANCIAL COVENANTS




Section 10.1 Tangible Net Worth. As of March 31, 2006, and the last day of each
calendar quarter thereafter, TIMET shall have Tangible Net Worth of not less than the sum of (a) 80
percent of TIMET’s Consolidated Tangible Net Worth as of December 31, 2005, and, (b) 50 percent of
TIMET’s positive Net Income during the period from January 1, 2006, through the measurement date in
question (which means that the covenant level specified herein shall not be reduced if, during any
applicable measurement period, TIMET has a net loss), and (c) 100 percent of the proceeds of equity
issuances by TIMET (or its Subsidiaries) on or after January 1, 2006. Notwithstanding anything in
the preceding sentence of this Agreement to the contrary, the calculation required under the
preceding sentence to determine the minimum level of Tangible Net Worth that TIMET must maintain
under this Agreement shall exclude fiscal year-end non-cash adjustments to TIMET’s Consolidated Net
Income in fiscal year 2006, and subsequent fiscal years, in an amount up to $50,000,000 in the
aggregate and shall exclude any changes in Consolidated Tangible Net Worth resulting from other
comprehensive income earned after December 31 2005.



Section 10.2 Fixed Charge Coverage Covenant. TIMET shall not permit the ratio of
Adjusted EBITDA to Fixed Charges to be less than 1.20 to 1.00 for the 12-month period ending March
31, 2006, or on the last day of each calendar quarter thereafter.



Section 10.3 Leverage Ratio. TIMET shall maintain a Leverage Ratio that is less than
or equal to 2.50 to 1.00 for the 12-month period ending on March 31, 2006, and on the last day of
each calendar quarter thereafter.



ARTICLE XI




NEGATIVE COVENANTS




Until TIMET has paid the Obligations in full, and the Lenders have no further obligation to
extend credit to TIMET, TIMET shall comply with the following covenants, unless the Agent and the
Required Lenders otherwise shall consent in writing (which consent shall not be withheld without
reasonable cause):



Section 11.1 Liquidation or Sale of Assets. TIMET shall not (and TIMET shall not
allow any Guarantor to) (a) liquidate or dissolve (except as permitted by Section 11.2 of this
Agreement); or (b) sell, lease, enter into a sale-leaseback transaction or securitization, or
otherwise dispose of all or any material portion of its business or assets, except (i) sales or
dispositions between or among TIMET and its Subsidiaries, provided, however, that if a proposed
sale or other transfer of assets (not including a sale or transfer in the ordinary course of
business consistent with past practices or on arm’s length terms or the transfer of the stock of
Loterios Spa to a foreign Subsidiary) by TIMET or a Guarantor to a foreign Subsidiary of TIMET
would cause the aggregate amount of sales or transfers of assets (not including sales or transfers
in the ordinary course of business consistent with past practices or on arm’s length terms or the
transfer of the stock of Loterios Spa to a foreign Subsidiary) by TIMET and the Guarantors to
TIMET’s foreign Subsidiaries to exceed $10,000,000 in any calendar year, TIMET must demonstrate to
the Agent’s reasonable satisfaction that, at the time in question, the availability under the
Borrowing Base (i.e., the amount by which the Borrowing Base exceeds the Outstanding Amount
(regardless of whether TIMET is required to maintain a Borrowing Base at such time)) would be
greater than $35,000,000 after giving effect to the proposed sale or transfer, (ii) the sale by
TIMET of the Capital Stock of ValTimet, SAS, or MZI, LLC, (iii) the grant of licenses for the use
of any intellectual property, (iv) sales of Inventory in the ordinary course of business, (v) the
sale or trade-in of used, surplus, or obsolete equipment for reasonably equivalent value, (vi) the
sale of Accounts as to which collection is doubtful in the ordinary course of TIMET’s (or the
Guarantor’s) business, consistent with past practice, (vii) sales or dispositions permitted under
Sections 11.3, 11.4, 11.5, 11.6, and 11.7 of this Agreement, (viii) the transfer of legal title by
TIMET to TRECO LLC (or a designee of TRECO LLC) of the TRECO Property), (ix) the sale or transfer
by TIMET of any land (other than the TRECO Property) in the vicinity of TIMET’s Henderson, Nevada,
plant, which land is not currently used or reasonably expected to be used in the foreseeable future
for TIMET’s titanium metals operations, (x) the transfer or sale by either TMCA of the Capital
Stock of Loterios SpA, or by TFMC of any Capital Stock or other assets, or (xi) other sales or
dispositions of assets not exceeding $10,000,000 in the aggregate in any calendar year.



Section 11.2 Merger or Consolidation. TIMET shall not merge or consolidate with or
into (and shall not allow any Guarantor to merge or consolidate with or into) any other Person,
provided, however, that if no Default or Event of Default exists or would result from such merger
or consolidation, TIMET or a Guarantor may merge with any other Person if (a) TIMET or a Guarantor
is the surviving corporation of such merger or consolidation, and (b) the assets of the Person
merging with or into TIMET or such Guarantor exceed the liabilities of such Person.



Section 11.3 Transactions with Affiliates. TIMET shall not enter into or make (and
shall not permit any Subsidiary of TIMET to enter into or make), directly or indirectly: (a) any
transfer, sale, lease, assignment, or other disposal of any assets to any Affiliate of TIMET or any
purchase or acquisition of assets from any such Affiliates; or (b) any arrangement or other
transaction directly or indirectly with or for the benefit of any such Affiliates (including,
without limitation, guaranties and assumptions of obligations of any Affiliate), provided that (x)
TIMET (or a Subsidiary of TIMET) may enter into any such arrangement or transaction with an
Affiliate if such arrangement or transaction is on terms substantially similar to terms that TIMET
(or its Subsidiary) would obtain in a comparable arm’s length arrangement or transaction with a
Person not an Affiliate, (y) TIMET (or a Subsidiary of TIMET) may guaranty or otherwise assume
obligations of an Affiliate to the extent permitted under Section 11.4 of this Agreement, and (z)
the foregoing prohibitions shall not apply to the Existing Affiliate Transactions, or to any
transfer, sale, lease, assignment, or other disposal of any assets, or any arrangement or other
transactions, between or among TIMET and any of its Subsidiaries.



Section 11.4 Indebtedness. Neither TIMET nor any of its Subsidiaries shall create,
incur, assume, guarantee, or be or remain liable with respect to any Indebtedness, other than the
following:



(a) The Obligations;



(b) Indebtedness existing as of the date of this Agreement;



(c) Indebtedness assumed or otherwise acquired by TIMET or any of its
Subsidiaries as a result of an acquisition of another Person (or the assets of
another Person) permitted by Section 11.2 or Section 11.7 of this Agreement (i.e.,
pre-existing Indebtedness of such other Person, but not Indebtedness incurred by
TIMET or a Subsidiary to pay some or all of the purchase price thereof);



(d) Indebtedness under Interest Rate Protection Agreements;



(e) Other Indebtedness of TIMET and its Subsidiaries incurred after the Closing
Date in an amount not greater than $75,000,000 in the aggregate outstanding at any
time; and



(f) Indebtedness incurred to refinance any Indebtedness permitted by this
Section 11.4 of this Agreement (provided that such refinancing is on comparable or
better terms, as determined by the Agent in its reasonable discretion).



Section 11.5 Liens. Neither TIMET nor any Subsidiary of TIMET shall create, incur,
assume, or suffer to exist any Lien of any kind, including the Lien or retained security title of a
conditional vendor upon or with respect to any of TIMET’s property or assets (or the property or
assets of a Subsidiary of TIMET), or assign or otherwise convey any right to receive income, except
the following (“Permitted Liens”):



(a) Liens in favor of the Agent (for the benefit of the Lenders, the Issuing
Bank, and the Swingline Lender) to secure the Obligations;



(b) Liens existing as of the date of this Agreement and disclosed in Schedule
11.5 to this Agreement;



(c) Purchase money security interests securing Indebtedness permitted under
this Agreement, provided that each such purchase money security interest does not
extend to any other property;



(d) Liens for Taxes, assessments, or other governmental charges not delinquent
or being contested in good faith and by appropriate proceedings and with respect to
which proper reserves have been taken by TIMET (or its Subsidiary) to the extent
required by GAAP;



(e) Landlords’ and lessors’ liens in respect of rent or liens in respect of
pledges or deposits under worker’s compensation, unemployment insurance, social
security laws, or similar legislation (other than ERISA), or in connection with
appeal and similar bonds incidental to litigation;



(f) Liens of mechanics, materialmen, warehousemen, carriers, landlords, or
other like liens securing obligations incurred in the ordinary course of business
that are not yet due and payable or delinquent or are subject to contest in good
faith by proper proceedings;



(g) Liens securing statutory obligations or surety, indemnity, performance, or
other similar bonds or deposits incidental to the conduct of TIMET’s (or a
Subsidiary’s) business in the ordinary course;



(h) Liens arising solely by virtue of any statutory or common law provision
relating to banker’s liens, rights of set-off, or similar rights and remedies as to
deposited funds;



(i) Judgment liens that do not constitute an Event of Default under Section
12.1(f) of this Agreement;



(j) Rights of lessors under Capital Leases (to the extent such Capital Leases
are permitted under this Agreement);



(k) Liens, encumbrances, and other matters affecting title to any real property
of TIMET or its Subsidiaries as of the Closing Date; easements, rights of way,
restrictions, and other similar charges or Liens relating to real property and not
interfering in a material way with the ordinary conduct of TIMET’s business (or a
Subsidiary’s business);



(l) Liens between or among TIMET and its Subsidiaries;



(m) Liens against assets acquired by TIMET or any of its Subsidiaries as a
result of an acquisition of another Person (or the assets of another Person)
permitted by Section 11.2 or Section 11.7 of this Agreement (i.e., pre-existing
Liens created or incurred by such other Person before the acquisition of that
Person, or its assets, by TIMET or a Subsidiary of TIMET);



(n) Liens other than those described above securing obligations in the
aggregate of not more than $5,000,000; and



(o) Liens constituting a renewal, extension, or replacement of any Permitted
Lien.



Section 11.6 Restricted Payments. TIMET shall not pay, make, declare, or authorize
any Restricted Payment, except, without duplication:



(a) Restricted Payments in respect of BUCS and preferred and common stock of
TIMET, provided that no Default or Event of Default has occurred and is continuing
and, provided further, that no Default or Event of Default would result from the
declaration or payment of any such dividend or distribution;



(b) Reasonable compensation paid to employees, officers, and directors in the
ordinary course of business and consistent with prudent business practices;



(c) Arms-length transactions with Affiliates in the ordinary course of TIMET’s
business; and



(d) Redemption of outstanding BUCS or Series A Preferred Stock of TIMET,
provided that no Default or Event of Default has occurred and is continuing and,
provided further, that no Default or Event of Default would result from the
redemption.



Section 11.7 Investments. Neither TIMET nor any of its Subsidiaries shall make any
Investments, other than:



(a) Qualified Investments;



(b) Investments by a Subsidiary in TIMET or by TIMET or a Subsidiary in (i) a
Subsidiary, subject to the obligations specified in this Agreement for any Material
Domestic Subsidiary to become a Guarantor, and (ii) any newly formed or newly
existing Subsidiary, subject to the obligations specified in this Agreement for any
Material Domestic Subsidiary to become a Guarantor, provided, however, in the case
of each of (i) and (ii) above, that if a proposed Investment by TIMET or a Guarantor
in a foreign Subsidiary of TIMET (other than the contribution or other Investment of
the stock of Loterios Spa to a foreign Subsidiary) would cause the aggregate amount
of Investments by TIMET and the Guarantors in TIMET’s foreign Subsidiaries (other
than the contribution or other Investment of the stock of Loterios Spa to a foreign
Subsidiary) to exceed $10,000,000 in any calendar year, TIMET must demonstrate to
the Agent’s reasonable satisfaction that, at the time in question, the availability
under the Borrowing Base (i.e., the amount by which the Borrowing Base exceeds the
Outstanding Amount (regardless of whether TIMET is required to maintain a Borrowing
Base at such time)) would be greater than $35,000,000 after giving effect to the
proposed Investment.



(c) Investments by TIMET or a Subsidiary of TIMET in MZI, LLC, ValTimet, SAS or
Xi’an Baotimet Valinox Tubes Co. Ltd. pursuant to the terms of agreements with other
holders of equity interests as in effect on the date hereof;



(d) An acquisition of the assets or a majority of the Capital Stock of a
Person, provided that (i) the acquisition target is engaged in a similar, related,
or complimentary business to TIMET, (ii) no Default or Event of Default exists prior
to the proposed acquisition, or would result from the proposed acquisition, (iii) if
any such proposed acquisition involves a payment or other consideration by TIMET (or
its Subsidiary) greater than $20,000,000, then at least 10 Business Days prior to
the consummation of the proposed acquisition TIMET must demonstrate to the Agent’s
reasonable satisfaction that following the proposed acquisition TIMET would be in
compliance (on a pro-forma basis) with the financial covenants set forth in Article
X of this Agreement, (iv) the total consideration paid or otherwise provided by
TIMET (or its Subsidiaries) for any proposed acquisition does not exceed
$75,000,000, and (v) (A) if at the time in question TIMET is required to maintain a
Borrowing Base under Section 2.5 of this Agreement, the availability under the
Borrowing Base (i.e. the amount by which the Borrowing Base exceeds the Outstanding
Amount) would be greater than $35,000,000 after giving effect to the proposed
acquisition, or (B) if at the time in question TIMET is not required to maintain a
Borrowing Base, the aggregate Commitments exceed the Outstanding Amount by at least
$35,000,000;



(e) A purchase of securities that are traded in a nationally recognized market
in the United States, provided that, (i) no Default or Event of Default exists prior
to the proposed Investment, or would result from the proposed Investment, (ii) if
the cost of any such proposed Investment, together with other Investments made by
TIMET (or a Subsidiary of TIMET) on or after the date of this Agreement in
accordance with this Section 11.7(e) of this Agreement, would exceed $75,000,000,
then at least 10 Business Days prior to making the proposed Investment, TIMET must
demonstrate to the Agent’s reasonable satisfaction that following the proposed
Investment TIMET would be in compliance (on a pro-forma basis) with the financial
covenants set forth in Article X of this Agreement, and (iv) (A) if at the time in
question TIMET is required to maintain a Borrowing Base under Section 2.5 of this
Agreement, the excess availability under the Borrowing Base would be greater than
$35,000,000 after giving effect to the proposed Investment, or (B) if at the time in
question TIMET is not required to maintain a Borrowing Base, the aggregate
Commitments exceed the Outstanding Amount by at least $35,000,000;



(f) Assets acquired with expenditures permitted under this Agreement (including
those related to Capital Leases permitted under this Agreement);



(g) Purchases of Inventory in the ordinary course of business;



(h) Investments held as of the date of this Agreement;



(i) Normal trade credit extended in the ordinary course of business and
consistent with prudent business practice; or



(j) Other Investments by TIMET and its Subsidiaries that do not exceed
$20,000,000 in the aggregate during TIMET’s fiscal year 2006, or any subsequent
fiscal year of TIMET.



Section 11.8 ERISA Compliance. Neither TIMET, any of its Subsidiaries, nor any
Pension Plan shall (a) engage in any Prohibited Transaction that reasonably would be expected to
have a Material Adverse Effect, (b) incur any “accumulated funding deficiency” (as defined in
Section 412(a) of the Code and Section 302 of ERISA) whether or not waived that reasonably would be
expected to have a Material Adverse Effect, (c) fail to satisfy any additional funding requirements
set forth in Section 412 of the Code and Section 302 of ERISA, or to make any other contribution
required under the terms of any Pension Plan or any collective bargaining agreement with respect to
a multiemployer Pension Plan that reasonably would be expected to have a Material Adverse Effect,
(d) terminate any Pension Plan in a manner that results in the imposition of a lien on any property
of TIMET (or any of its Subsidiaries); or (e) withdraw (in a complete or partial withdrawal within
the meaning of Section 4203 or Section 4205 of ERISA, respectively) from a multiemployer Pension
Plan if such withdrawal reasonably would be expected to have a Material Adverse Effect. Each
Pension Plan shall comply in all material respects with ERISA, except to the extent failure to
comply in any instance reasonably would not be expected to have a Material Adverse Effect.



Section 11.9 Fiscal Year and Accounting Changes. TIMET shall not (a) change its
fiscal year, or (b) make any significant change (i) in accounting treatment and reporting practices
(except as required by GAAP or any change consistent with GAAP that TIMET’s independent certified
public accounting firm has determined is preferable), or (ii) in tax reporting treatment (except as
required or permitted by law).



Section 11.10 Change of Location. Neither TIMET nor any Guarantor shall change the
state in which it is incorporated (or, if such person is not a corporation, the state in which such
person is organized).



Section 11.11 Margin Stock. TIMET shall not directly or indirectly use any part of
the proceeds of the Loans to purchase or carry any “margin stock” in violation of Regulation U of
the Board of Governors of the Federal Reserve System, or any regulations, interpretations, or
rulings thereunder.



Section 11.12 Issuance of Stock by Subsidiaries. Except as permitted by Sections
11.1, 11.2, and 11.7 of this Agreement, no Subsidiary of TIMET shall issue or sell any shares of
its Capital Stock or other evidence of beneficial ownership to any Person other than (a) TIMET (or
any wholly-owned Subsidiary of TIMET), or (b) directors of such Subsidiary as qualifying shares
under applicable law.



Section 11.13 No Restrictions on Certain Subsidiary Distributions. TIMET shall not
permit TIMET UK Ltd. to enter into or be bound by any agreement (including covenants requiring the
maintenance of specified amounts of net worth or working capital) restricting the right of TIMET UK
Ltd. to make distributions or extensions of credit to TIMET (directly or indirectly through another
Subsidiary), other than TIMET UK Ltd.’s existing agreement with The Bank of Scotland, or any such
agreement with a successor lender on terms not more restrictive than those in the agreement with
The Bank of Scotland as of the Closing Date.



Section 11.14 Change in Control. TIMET shall not permit a Change of Control to occur
with respect to TIMET, or, except as permitted by Section 11.1 or 11.2 of this Agreement, any
Material Domestic Subsidiary.



ARTICLE XII




EVENTS OF DEFAULT




Section 12.1 Events of Default. The occurrence of any of the following events shall
constitute an “Event of Default” under this Agreement:



(a) TIMET shall fail to pay (i) any amount of principal payable under the Notes
or this Agreement on the date that such payment is due, or (ii) any interest, fees,
costs, or any other amount payable by TIMET under the Notes or this Agreement within
three Business Days of the date that such payment is due;



(b) Any representation or warranty of TIMET made in this Agreement, any other
Loan Document, or any certificate, notice, or other writing delivered hereunder or
thereunder shall prove to have been false in any material respect upon the date when
made or deemed to have been made and such breach shall have a Material Adverse
Effect;



(c) TIMET shall fail to have complied with (i) any of the provisions of Section
9.1 of this Agreement, or (ii) any of the provisions of Article X or Sections 11.1
through 11.7 and Section 11.14 of this Agreement;



(d) TIMET shall fail to perform or observe any other covenant, obligation, or
term of this Agreement, or any of the Loan Documents (except those governed by
Section 12.1(a) through Section 12.1(c) above), and such failure shall remain
unremedied for more than 30 days after written notice thereof shall have been given
to TIMET by the Agent or, if after TIMET becomes aware of any such occurrence
(unless TIMET reasonably believes that the event or occurrence in question does not
constitute a Default or an Event of Default), TIMET fails to give the Agent timely
notice of any such occurrence, then 30 days after TIMET became aware of the
occurrence of the Default or Event of Default;



(e) TIMET shall fail to pay any principal of or premium or interest on its
Indebtedness that is outstanding in a principal amount of at least $10,000,000
individually or when aggregated with all such Indebtedness of TIMET so in default (but
excluding Indebtedness of TIMET under the Loan Documents) when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise), except if such payment may be deferred by the terms of any such
Indebtedness, and such failure shall continue after the applicable grace period, if
any, specified in the agreement or instrument relating to such Indebtedness; or any
other event shall occur or condition shall exist under any agreement or instrument
relating to Indebtedness of TIMET, which Indebtedness is outstanding in a principal
amount of at least $10,000,000 individually or when aggregated with all such
Indebtedness of TIMET so in default, and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required prepayment), prior
to the stated maturity thereof;



(f) Any judgment or order for payment of money in excess of $10,000,000 shall
be rendered against TIMET and there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect;



(g) Any Termination Event with respect to a Pension Plan shall have occurred,
and, 30 days after notice thereof shall have been given to TIMET, (i) such
Termination Event shall not have been corrected and (ii) the then present value of
such Pension Plan’s vested benefits exceeds the then current value of assets
accumulated in such Pension Plan by more than the amount of $10,000,000 (or in the
case of a Termination Event involving the withdrawal of a “substantial employer” (as
defined in Section 4001(a)(2) of ERISA), the withdrawing employer’s proportionate
share of such excess shall exceed such amount);



(h) TIMET as employer under a Multiemployer Plan shall have made a complete or
partial withdrawal from such Multiemployer Plan and the plan sponsor of such
Multiemployer Plan shall have notified such withdrawing employer that such employer
has incurred a withdrawal liability in an annual amount exceeding $10,000,000;



(i) Any event that has had or reasonably would be expected to have a Material
Adverse Effect (as determined by the Required Lenders);



(j) The occurrence of a Change in Control with respect to TIMET; and



(k) TIMET shall admit in writing its inability to pay its debts, or shall make
a general assignment for the benefit of creditors; or any proceeding shall be
instituted by TIMET in any jurisdiction seeking to adjudicate TIMET bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, or composition of
TIMET, or its debts under any law relating to bankruptcy, insolvency, or
reorganization or relief of debtors, or seeking appointment of a receiver, trustee,
or other similar official for TIMET, or for such part of its property as in the good
faith opinion of the Agent is a substantial part; or any such proceeding shall be
instituted against TIMET that is not dismissed within 60 days after the institution
thereof; or TIMET shall take any corporate action to authorize any of the actions
set forth above in this Section 12.1(k); or any Governmental Authority shall declare
or take any action that operates as a moratorium on the payment of debts of TIMET.



Section 12.2 Consequences of Default. If any Event of Default shall occur and be
continuing, then in any such case and at any time thereafter so long as any such Event of Default
shall be continuing, the Required Lenders may invoke the Default Rate and interest shall accrue and
be payable by TIMET on the Notes at that rate thereafter until the Event of Default is cured. The
Required Lenders may, at their option, declare the principal of and the interest on the Notes and
all other sums payable by TIMET under this Agreement or under the Notes to be immediately due and
payable, whereupon the same shall become immediately due and payable (with interest accruing and
payable thereon at the Default Rate) without protest, presentment, notice, or demand, all of which
TIMET expressly waives. If an Event of Default occurs, the Agent, at the request of the Required
Lenders, shall terminate the Commitments. Furthermore, upon the occurrence of an Event of Default
pursuant to Section 12.1(k) of this Agreement, all of the Obligations shall be immediately due and
payable (with interest accruing and payable thereon at the Default Rate) and the Commitments shall
be terminated.



Section 12.3 Remedies Following Acceleration. Upon the occurrence of an Event of
Default and acceleration of TIMET’s obligations under this Agreement and the Notes in accordance
with Section 12.2 of this Agreement, the Agent (at the direction of the Required Lenders) from time
to time may exercise any rights and remedies available to it under the Uniform Commercial Code and
any other applicable law in addition to, and not in lieu of, any rights and remedies expressly
granted in this Agreement or in any of the Loan Documents and all of the Agent’s and the Lenders’
rights and remedies shall be cumulative and non-exclusive to the extent permitted by law.



ARTICLE XIII




ASSIGNMENT AND PARTICIPATION




Section 13.1 Assignment of the Loans. Each Lender shall have the right to assign at
any time, upon prompt written notice to TIMET, all or any portion of its Commitment under this
Agreement and its interests in the risk relating to any Loans in an amount equal to or greater than
$5,000,000 (and in integral multiples of $1,000,000) to any Eligible Assignee, provided that any
Lender that proposes to assign less than its total Commitment must retain a Commitment of at least
$5,000,000. Each Eligible Assignee shall execute and deliver to the Agent and TIMET an Assignment
and Assumption Agreement substantially in the form of Exhibit 13.1 to this Agreement (each an
“Assignment and Assumption Agreement”) and shall pay to the Agent, solely for the account of the
Agent, an assignment fee of $3,500. Upon the execution and delivery of an Assignment and
Assumption Agreement, (a) such Eligible Assignee shall, on the date and to the extent provided in
the Assignment and Assumption Agreement, become a Lender party to this Agreement and the other Loan
Documents for all purposes of this Agreement and the other Loan Documents and shall have all rights
and obligations of a Lender with a Commitment as set forth in the Assignment and Assumption
Agreement, and the assigning Lender shall, on the date and to the extent provided in the Assignment
and Assumption Agreement, be released from its obligations under this Agreement and under the other
Loan Documents to a corresponding extent (and, in the case of an assignment covering all of the
remaining portion of an assigning Lender’s rights and obligations under this Agreement, such
transferor shall cease to be a party to this Agreement but shall continue to be entitled to the
benefits of Section 15.9 of this Agreement and to any fees accrued for its account under this
Agreement and not yet paid); (b) this Agreement and the Loan Documents shall be deemed
appropriately amended to reflect (i) the status of such Eligible Assignee as a party to this
Agreement, and (ii) the status and rights of the Lenders under this Agreement; and (c) TIMET shall
take such action as the Agent reasonably may request to perfect any security interests in favor of
the Lenders, including any Eligible Assignee that becomes a party to this Agreement.



Section 13.2 Participations. Each Lender shall have the right to grant participations
to one or more Lenders or other Persons (a “Participant”) in all or any part of any Loan owing to
such Lender and the Notes held by such Lender, provided that each such participation shall be in
the minimum principal amount of $5,000,000. Each Lender shall retain the sole right to approve,
without the consent of any participant, any amendment, modification, or waiver of any provision of
the Loan Documents, provided that the documents evidencing any such participation may provide that,
except with the consent of such Participant, such Lender will not consent to (a) the reduction in
or forgiveness of the stated principal of or rate of interest on or commitment fee with respect to
the portion of any Loan subject to such participation, (b) the extension or postponement of any
stated date fixed for payment of principal or interest or commitment fee with respect to the
portion of any Loan subject to such participation, (c) the waiver or reduction of any right to
indemnification of such Lender under this Agreement, or (d) except as otherwise permitted under
this Agreement, the release of any Collateral. Notwithstanding the foregoing, no participation
shall operate to increase the total Commitments under this Agreement, or otherwise alter the
substantive terms of this Agreement. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender’s obligations under this Agreement shall remain unchanged,
such Lender shall remain solely responsible for the performance thereof, such Lender shall remain
the holder of such Notes for all purposes under this Agreement, and TIMET and the Agent shall
continue to deal solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.



Section 13.3 Identity of Eligible Assignee or Participant. If an Eligible Assignee or
a Participant is organized under the laws of a jurisdiction other than the United States or any
state thereof, such Eligible Assignee shall execute and deliver to the Agent, simultaneously with
or prior to such Eligible Assignee’s execution and delivery of an Assignment and Assumption
Agreement, and such Participant shall execute and deliver to the Lender granting the participation,
two copies of United States Internal Revenue Service Form 4224 or Form 1001 (or any successor
form), appropriately completed, wherein such Eligible Assignee or Participant claims entitlement to
complete exemption from United States federal withholding tax on all interest payments under this
Agreement and the Notes and all fees and other charges payable pursuant to any of the Loan
Documents. In addition, if applicable, each Eligible Assignee or Participant organized under the
laws of a jurisdiction other than the United States (or any state thereof) shall deliver to the
Agent an Internal Revenue Service Form W-8 or W-9 or successor applicable form, as the case may be,
to establish an exemption from United States backup-withholding tax, and any other governmental
forms that are necessary or required under an applicable tax treaty or otherwise by law to reduce
or eliminate any withholding tax, which have been reasonably requested by TIMET. Each Lender that
delivers to TIMET and the Agent a Form 1001 or 4224 and Form W-8 or W-9 pursuant to this Section
13.3 of this Agreement further undertakes to deliver to TIMET and the Agent two further copies of
Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such form expires or becomes
obsolete, or after the occurrence of any event requiring a change in the most recent form
previously delivered by it to TIMET and the Agent, and such extensions or renewals thereof as
reasonably may be requested by TIMET and the Agent certifying in the case of a Form 1001 or 4224
that such Lender is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes. If an event (including, without limitation,
any change in treaty, law, or regulation) has occurred prior to the date on which any delivery
required by the preceding sentence otherwise would be required that renders all such forms
inapplicable, or that would prevent any Lender from duly completing and delivering any such letter
or form with respect to it, and such Lender advises TIMET and the Agent that it is not capable of
receiving payments without any deduction or withholding of United States federal income tax, and in
the case of a Form W-8 or W-9, establishing an exemption from United States backup-withholding tax,
such Lender shall not be required to deliver such forms. TIMET shall withhold tax at the rate and
in the manner required by the laws of the United States with respect to payments made to a Lender
failing to timely provide the requisite Internal Revenue Service forms pursuant to this Section
13.3 of this Agreement.



Section 13.4 Confidentiality in Connection with Process of Assignment or
Participation. Each Lender may furnish any information concerning TIMET and its Subsidiaries
in the possession of such Lender from time to time to Eligible Assignees and Participants
(including prospective Eligible Assignees and Participants); provided that, prior to any such
disclosure, the Eligible Assignee or Participant (or proposed Eligible Assignee or Participant)
shall agree in writing to preserve the confidentiality of any confidential information relating to
TIMET and its Subsidiaries received by it from such Lender on the same terms as set forth in
Section 15.18 of this Agreement and applicable to the Lenders. Any Lender that provides
information regarding TIMET and its Subsidiaries to an Eligible Assignee or Participant (or
proposed Eligible Assignee or Participant) promptly shall deliver to TIMET a signed copy of the
confidentiality agreement executed by such Eligible Assignee or Participant (or prospective
Eligible Assignee or Participant).



ARTICLE XIV




THE AGENT




Section 14.1 Appointment of the Agent; Powers and Immunities. Each Lender hereby
appoints and authorizes the Agent to act as the Lender’s representative and agent under this
Agreement and under the other Loan Documents. Each Lender authorizes the Agent to take such action
on its behalf and to exercise all such powers as expressly are delegated to the Agent under this
Agreement and in the other Loan Documents and all related documents, together with such other
powers as are reasonably incidental thereto. The obligations of the Agent under this Agreement are
only those obligations expressly set forth in this Agreement. The Agent shall not have any duties
or responsibilities, except those expressly set forth in this Agreement. Furthermore, the Lenders
recognize and agree that the Agent does not have any fiduciary relationship with, or fiduciary duty
or obligation to, any Lender.



Section 14.2 General Duties of the Agent. The Agent shall serve as designated agent
for the Lenders under this Agreement and the other Loan Documents with respect to the structuring,
preparation, and negotiation of the Loan Documents and amendments and modifications thereto and
with respect to the filing, recordation, and perfection of Liens, the management of deposit
accounts, and the receipt and disbursement of funds to, from, and on behalf of TIMET and the
Lenders, and the other administrative functions specifically assigned to the Agent in this
Agreement and the other Loan Documents. The Agent shall serve as designated agent for the Lenders
with respect to matters involving Borrowing Base reporting, review, and evaluation, collateral
inspection, and other functions specifically set forth in this Agreement as assigned to the Agent.



Section 14.3 Limited Responsibility of the Agent. Neither the Agent nor the Agent’s
directors, officers, employees, attorneys, or agents shall be responsible for any action taken or
omitted to be taken by any of them under or in connection with this Agreement, except for their own
gross negligence or willful misconduct. Without limiting the generality of the foregoing, neither
the Agent nor any of the Agent’s directors, officers, employees, attorneys, agents, or Affiliates
shall be responsible to the Lenders for, or have any duty to ascertain, inquire into, or verify:
(a) any recitals, statements, representations, or warranties made by TIMET, or any other Person
(whether contained in this Agreement or otherwise); (b) the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of this Agreement, the other Loan Documents, or any
other document referred to or provided for herein or therein; (c) the performance or observance by
TIMET of any covenants, representations, or agreements contained in this Agreement, in any other
Loan Document, or in any other document or instrument creating or evidencing any of the
Obligations; (d) any failure by TIMET, or any other Person, to perform its obligations under any of
the Loan Documents; (e) the satisfaction of any conditions specified in Article VI of this
Agreement, other than receipt of the documents, certificates, and opinions specified in Section 6.1
of this Agreement; (f) the existence, value, collectability, or adequacy of the Collateral, or any
part thereof, or the validity, effectiveness, perfection, or relative priority of the Liens of the
Lenders in the Collateral; or (g) the existence or possible existence of any Default or Event of
Default.



Section 14.4 Compensation. TIMET shall pay the Agent an administrative fee in
accordance with the Agent Fee Letter for services rendered by the Agent in the execution of the
agency hereby created and in the exercise and performance of any of the powers and duties of the
Agent under this Agreement and the Loan Documents. TIMET’s payment to the Agent for 2006 shall be
due and payable on the Closing Date. TIMET shall pay the Agent its administrative fee for 2007
(and each year thereafter) on or before January 10 of the year in question. The Agent’s
compensation under this Agreement shall not be limited by any provisions of law in regard to the
compensation of a trustee of an express trust, and if an Event of Default shall occur and be
continuing, the Agent shall be entitled to receive compensation reasonable in relation to its
responsibilities under this Agreement.



Section 14.5 The Agent’s Right to Employ and Rely on Advisors. The Agent may employ
agents, attorneys, and other experts to assist the Agent in the performance of the Agent’s duties
under this Agreement. The Lenders hereby agree that the Agent shall not be responsible to any
Lender for the negligence or misconduct of any such agent, attorneys, or experts selected by the
Agent with reasonable care, and shall not be liable to any Lender for any action taken, omitted to
be taken, or suffered in good faith by the Agent in accordance with the advice of such agent,
attorneys, and other experts.



Section 14.6 The Agent in its Capacity as Lender. With respect to the Loans, U.S.
Bank shall have the rights and powers specified in this Agreement for a Lender and may exercise the
same rights and powers as though the Agent was not performing the duties of the Agent herein; and
the terms Lender, Required Lenders, or any similar terms shall, unless the context clearly
indicates otherwise, include U.S. Bank in its capacity as Lender. U.S. Bank and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of banking, trust, or other
business with TIMET, or any Affiliate of TIMET, as if U.S. Bank was not performing the duties of
the Agent pursuant to this Agreement, and may accept fees and other consideration from TIMET (or
any Affiliate of TIMET) for services in connection with this Agreement, and otherwise, without
having to account for the same to the Lenders.



Section 14.7 Actions by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement as the Agent reasonably deems appropriate, unless
the Agent first shall have received such advice or concurrence of the Required Lenders and shall be
indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense
that may be incurred by the Agent by reason of taking or continuing to take any such action. The
Agent in all cases shall be fully protected in acting, or in refraining from acting, under this
Agreement or any of the Loan Documents in accordance with a request of the Required Lenders, and
such request and any action taken or failure to act pursuant thereto shall be binding upon the
Lenders and all future holders of the Notes. Without limiting the generality of the foregoing, as
among the Agent and the Lenders (but not for the benefit of TIMET), if and when the Agent exercises
remedies under this Agreement and the Loan Documents with respect to all or any portion of the
Collateral, the Agent shall follow the directions, if any, of the Required Lenders in determining
which items and types of Collateral to dispose of and in what order.



Section 14.8 Protection of the Collateral. Whether or not an Event of Default shall
have occurred, the Agent from time to time may exercise such rights of the Agent and the Lenders
under the Loan Documents as the Agent in good faith determines may be necessary or desirable to
protect the Collateral and the interests of the Agent and the Lenders therein and under the Loan
Documents.



Section 14.9 Reliance on Instructions. Neither the Agent nor any of the Agent’s
directors, officers, employees, or agents shall incur any liability by acting in reliance on any
notice, consent, certificate, statement, or other writing (which may be a telex, facsimile
transmission, electronic transmission, or similar writing) believed in good faith by any of them to
be genuine or to be signed by the proper party or parties.



Section 14.10 Consultation With the Lenders. Whenever pursuant to the provisions of
this Agreement or any other Loan Document the Agent is exercising any right given it, including
that any party hereto obtain the consent or approval of the Agent, or that any matter prove
satisfactory to the Agent, the Agent, prior to exercising such right, including giving any such
consent or approval, or indicating its satisfaction with any such matter (except where the failure
to do so, in the Agent’s good faith judgment, would imperil the Collateral or the Liens of the
Lenders therein) shall be required to consult with the Lenders in a manner deemed reasonable by the
Agent, and the Agent shall be protected in following the direction of the Required Lenders with
respect thereto. To the extent that the provisions of this Agreement impose a standard of
reasonableness (or a similar standard) with respect to an action to be taken by the Agent, the
Lenders shall be subject to the same standard in so directing the Agent. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the Agent as a result of the
Agent acting or refraining from acting under this Agreement or under any other Loan Document in
accordance with the instructions of the Required Lenders.



Section 14.11 Indemnification of the Agent. Without limiting the obligations of TIMET
under this Agreement or under any other Loan Document, the Lenders agree to indemnify the Agent,
ratably in accordance with their respective Percentage Interests, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements of any kind or nature whatsoever that may at any time be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of this Agreement or any other
Loan Document, any documents contemplated by or referred to herein or therein, the transactions
contemplated hereby or thereby, or the enforcement of any of the terms hereof or thereof or of any
such other documents; provided, that no Lender shall be liable for any of the foregoing to the
extent they result from the gross negligence or willful misconduct of the Agent. Without limiting
the foregoing, each Lender agrees to reimburse the Agent promptly on demand in proportion to such
Lender’s Percentage Interests for any out-of-pocket expenses, including attorney fees, including,
without limitation, fees incurred at trial, on appeal or review, or in a bankruptcy case or
proceeding, or by the Agent in connection with the negotiation, preparation, execution, delivery,
modification, administration, enforcement, or preservation of any Loan Document.



Section 14.12 Reimbursement. The Lenders and the Agent hereby agree that the Agent
shall not be obliged to make available to any Lender any sum that the Agent is expecting to receive
for the account of that Lender until the Agent has determined that the Agent has received that sum.
However, the Agent may disburse funds prior to determining that the sums that the Agent expects to
receive have been finally and unconditionally paid to the Agent if the Agent wishes to do so. If
and to the extent that the Agent does disburse funds to a Lender and it later becomes apparent that
the Agent did not receive a payment in an amount equal to the sum paid out, then any Lender to whom
the Agent made the funds available shall, on demand from the Agent, refund to the Agent the sum
paid to that Lender. If the Agent in good faith concludes that the distribution of any amount
received by the Agent in such capacity under this Agreement or under the other Loan Documents might
involve the Agent in or expose the Agent to liability, the Agent may refrain from making such
distribution until its right to make distribution shall have been adjudicated by a court of
competent jurisdiction. If a court of competent jurisdiction shall adjudge that any amount
received and distributed to a Lender by the Agent is to be repaid, each Lender to whom any such
distribution shall have been made either shall repay to the Agent such Lender’s Percentage Interest
of the amount so adjudged to be repaid, or shall pay over the same in such manner and to such
Persons as shall be determined by such court.



Section 14.13 Non-Reliance on the Agent and Other Lenders. Each Lender represents
that it has, independently and without reliance on the Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own assessment, analysis, and
appraisal of the financial condition and affairs of TIMET and its own decision to enter into this
Agreement and the other Loan Documents and agrees that it will, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own assessments, analyses, appraisals, and decisions
in taking or not taking action under this Agreement or any other Loan Document. The Agent shall
not be required to keep informed as to the performance or observance by TIMET of this Agreement,
the other Loan Documents, or any other document referred to or provided for herein or therein or by
any other Person under any other agreement, or to make inquiry of, or to inspect the properties or
books of, any Person. Except for notices, reports, and other documents and information expressly
required to be furnished to the Lenders by the Agent under this Agreement, the Agent shall not have
any duty or responsibility to provide any Lender with any information concerning TIMET or any other
Person that may come into the possession of the Agent, or any of the Agent’s Affiliates, employees,
or agents. Each Lender shall have access at reasonable times and following reasonable notice to
all documents relating to the Agent’s performance of its duties under this Agreement at such
Lender’s request. Unless any Lender shall object to any action taken by the Agent under this
Agreement (other than actions that constitute gross negligence or willful misconduct by the Agent)
promptly after obtaining notice thereof, such Lender shall be presumed conclusively to have
approved the same.



Section 14.14 Holders. The Agent may deem and treat the payee of any Note as the
owner of the Note for all purposes unless and until a written notice of the assignment, transfer,
or endorsement thereof, as the case may be, shall have been filed with the Agent. Any request,
authority, or consent of any Person that, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent
holder, transferee, Eligible Assignee, or endorsee, as the case may be, of such note, or of any
note or notes issued in exchange therefor.



Section 14.15 Payments Pro Rata. The Agent agrees that promptly after its receipt of
each payment from or on behalf of TIMET in respect of all or any part of the Obligations, the Agent
shall, except as otherwise provided in this Agreement, distribute such payment to the Lenders in
accordance with each Lender’s Percentage Interest of such payment.



Section 14.16 Removal of the Agent. The Agent may be removed at any time by an
instrument or concurrent instruments in writing signed and acknowledged by the Required Lenders and
delivered to the Agent and TIMET. The provisions of this Article XIV of this Agreement and Section
15.9 of this Agreement shall continue in effect for the benefit of the Agent that was removed in
accordance with the preceding sentence of this Agreement (and its Affiliates and sub-agents) in
respect of any actions taken or omitted to be taken by any of them while the removed Agent was
acting as Agent.



Section 14.17 Resignation of the Agent. The Agent may give notice of its resignation
to the Lenders, the Issuing Bank, the Swingline Lender, and TIMET. The provisions of this Article
XIV of this Agreement and Section 15.9 of this Agreement shall continue in effect for the benefit
of such retiring Agent (and its Affiliates and sub-agents) in respect of any actions taken or
omitted to be taken by any of them while the retiring Agent was acting as Agent.



Section 14.18 Appointment of Successor Agent. After removal of an Agent under Section
14.16 of this Agreement, or upon receipt of any notice of resignation from the Agent under Section
14.17 of this Agreement, the Required Lenders shall have the right, in consultation with TIMET, to
appoint a successor Agent, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States, with combined capital and surplus
in excess of $250,000,000. If no such Person shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring Agent gives notice of
its resignation, then the Agent retiring under Section 14.17 of this Agreement may on behalf of the
Lenders and the Issuing Bank, appoint a successor Agent meeting the qualifications set forth above;
provided that if the Agent shall notify TIMET and the Lenders that no qualifying Person has
accepted such appointment, then such resignation nonetheless shall become effective in accordance
with such notice and (a) the retiring Agent shall be discharged from its duties and obligations
under this Agreement and under the other Loan Documents, and (b) all payments, communications, and
determinations provided to be made by, to, or through the Agent instead shall be made by or to each
Lender and the Issuing Bank directly, until such time as the Required Lenders appoint a successor
Agent as provided for above in this Section 14.18 of this Agreement. Upon the acceptance of a
successor’s appointment as Agent under this Agreement, such successor shall succeed to and become
vested with all of the rights, powers, privileges, and duties of the retiring (or retired) Agent,
and the retiring Agent shall be discharged from all of its duties and obligations under this
Agreement or under the other Loan Documents (if not already discharged therefrom as provided above
in this Section 14.18 of this Agreement). The fees payable by TIMET to a successor Agent shall be
the same as those payable to its predecessor, unless otherwise agreed between TIMET and such
successor.



Section 14.19 Resignation of the Agent as the Issuing Bank. Any resignation by U.S.
Bank as the Agent pursuant to Section 14.17 of this Agreement also shall constitute U.S. Bank’s
resignation as the Issuing Bank. Upon the acceptance of a successor’s appointment as the Agent
under this Agreement, (a) such successor shall succeed to and become vested with all of the rights,
powers, privileges, and duties of the retiring Issuing Bank, (b) the retiring Issuing Bank shall be
discharged from all of its respective duties and obligations under this Agreement or under the
other Loan Documents, and (c) the successor Issuing Bank shall issue Letters of Credit in
substitution for the Letters of Credit issued by the retiring Issuing Bank that were outstanding at
the time of such succession, or make other arrangement satisfactory to the retiring Issuing Bank to
assume the obligations of the retiring Issuing Bank with respect to such Letters of Credit.



ARTICLE XV




MISCELLANEOUS TERMS AND CONDITIONS




Section 15.1 Lenders’ Agreement to Be Paid Uniformly. The Lenders hereby acknowledge
and agree that it is their intention and agreement that the Loans be repaid in a uniform fashion in
accordance with each Lender’s Percentage Interest of the aggregate amount of principal and interest
owed in respect of the Loans. Each of the Lenders agrees that, if it should receive any amount
(whether by voluntary payment, by realization upon security, by the exercise of the right of setoff
or banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Loan
Documents, or otherwise) that is applicable to the payment of the principal of, or interest on, a
Loan, or of a sum that with respect to the related sum or sums received by other Lenders is in a
greater proportion than the total of such Obligations then owed and due to such Lender bears to the
total of such Obligation then owed and due to all of the Lenders immediately prior to such receipt,
then the Lender receiving such excess payment shall purchase for cash without recourse or warranty
from the other Lenders an interest in the Obligations in such amount or amounts as shall result in
a proportional participation by all of the Lenders in such amount; provided that if all or any
portion of such excess amount thereafter is recovered from such Lender, or paid by such Lender and
distributed to the other Lenders in such a manner that all of the Lenders have received payment
exactly in accordance with their Percentage Interests, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.



Section 15.2 Amendment. Except where this Agreement or any of the other Loan
Documents authorizes or permits the Agent to act alone, and except as otherwise expressly provided
in this Section 15.2 of this Agreement, any action to be taken (including the giving of notice) by
the Agent, on behalf of the Lenders, may be taken, and any consent or approval required or
permitted by this Agreement or any other Loan Document to be given by the Lenders may be given, and
any term of this Agreement, any other Loan Document, or any other instrument, document, or
agreement related to this Agreement or the other Loan Documents or mentioned therein may be
amended, and the performance or observance by TIMET or any other Person of any of the terms thereof
and any Default or Event of Default (as defined in any of the above-referenced documents or
instruments) may be waived (either generally or in a particular instance and either retroactively
or prospectively) or be the subject of forbearance by the Lenders, in each case only with the
written consent of the Required Lenders; provided, however, that no such consent or amendment that
affects the rights, duties, or liabilities of the Agent shall be effective without the written
consent of the Agent. Notwithstanding the foregoing, no amendment, waiver, or consent shall do any
of the following, unless it is in writing and signed by all of the Lenders:



(a) increase the amount of the Loans or the Commitments (or otherwise subject
the Lenders to any additional obligations) (except as specified in Section 2.12 of
this Agreement);



(b) extend the Maturity Date of the Loans;



(c) increase the Letter of Credit Commitment beyond $10,000,000;



(d) increase the Swingline Commitment beyond $15,000,000;



(e) reduce the principal of or interest (either the amount or the rate) on any
of the Notes (including, without limitation, interest on overdue amounts), or any
fees or charges payable under this Agreement;



(f) postpone or delay any date fixed for any payment in respect of principal of
or interest (including, without limitation, interest on overdue amounts) on the
Notes, or any fees (other than fees payable to the Agent or the Issuing Bank)
payable under this Agreement (or waive or otherwise forgive TIMET’s obligation to
make any payment of principal, interest, or fees);



(g) release any part of the Collateral having a value greater than $10,000,000
(as determined by the Agent in its good faith discretion);



(h) amend the definition of Applicable Margin;



(i) amend the definition of Borrowing Base;



(j) amend the definition of Percentage Interest;



(k) amend the definition of Required Lenders;



(l) change the conditions precedent specified in Section 6.1 or Section 6.2 of
this Agreement;



(m) amend this Section 15.2 of this Agreement, or any other provision in this
Agreement providing for the consent or other action of all of the Lenders; or



(n) change the allowed uses of the proceeds of Loans made under this Agreement.



Furthermore, notwithstanding anything in this Agreement to the contrary, no provisions of this
Agreement affecting the rights of the Swingline Lender or the Issuing Bank shall be modified or
amended without the prior, written consent of the Swingline Lender or the Issuing Bank, as
applicable.



Section 15.3 No Waivers; Remedies Cumulative. No failure by the Agent or any Lender
to exercise any right, power, or remedy under this Agreement or any Loan Document, and no delay by
the Agent or any Lender in exercising any right, power, or remedy under this Agreement or any Loan
Document, shall operate as a waiver thereof. No single or partial exercise of any right, power, or
remedy of the Agent or any Lender under this Agreement or any Loan Document shall preclude any
other or further exercise thereof, or the exercise of any other right, power, or remedy of the
Agent or any Lender. The exercise of any right, power, or remedy of the Agent or any Lender shall
in no event constitute a cure or waiver of any Event of Default under this Agreement or the Notes,
or a waiver of the right of the Agent or any Lender or the holder of any of the Notes to exercise
any other right under this Agreement or the Notes, unless in the exercise of such right, all
obligations of TIMET under this Agreement and the Notes are paid in full. The rights and remedies
provided in this Agreement and the Loan Documents are cumulative and are not exclusive of any right
or remedy provided by law. Time is of the essence and the provisions of this Agreement and the
other Loan Documents shall be enforced strictly.



Section 15.4 Governing Law. This Agreement and the other Loan Documents shall be
governed by and construed in accordance with the laws of the state of Oregon, without regard to
conflicts of law principles.



Section 15.5 Consent to Venue and Jurisdiction; Waiver of Immunities. TIMET hereby
irrevocably submits to the venue and jurisdiction of any state or federal court sitting in
Portland, Oregon, in any action or proceeding brought to enforce or otherwise arising out of or
relating to this Agreement, the Notes, or any other Loan Document. TIMET irrevocably waives to the
fullest extent permitted by law any objection that TIMET now or hereafter may have to the laying of
venue in any such action or proceeding in any such forum, and hereby further irrevocably waives any
claim that any such forum is an inconvenient forum. TIMET agrees that a final judgment in any such
action or proceeding may be enforced in any other jurisdiction by suit on the judgment, or in any
other manner provided by law. Nothing in this Section 15.5 of this Agreement shall impair the
right of the Agent or any Lender, or the holder of any of the Notes, to bring any action or
proceeding against TIMET or its property in the courts of any other jurisdiction. In that regard,
TIMET irrevocably submits to the nonexclusive jurisdiction of the appropriate courts of the
jurisdiction in which TIMET is organized, or sitting in any place where property or an office of
TIMET is located.



Section 15.6 Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other communications provided for in
this Agreement shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail, or sent by telecopier or electronic communication as
specified in Schedule 15.6 to this Agreement, and all notices and other communications expressly
permitted under this Agreement to be given by telephone shall be made to the applicable telephone
number specified in Schedule 15.6 to this Agreement. Notices sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been given when
received; notices sent by telecopier shall be deemed to have been given upon receipt of electronic
confirmation of a successful transmission by the sending party (except that, if not given during
normal business hours for the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient). Notices delivered through electronic
communications to the extent provided in Section 15.7 of this Agreement shall be effective as
provided therein.



Section 15.7 Electronic Communication. Notices and other communications to the
Lenders and the Issuing Bank under this Agreement may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to procedures approved
by the Agent, provided that the foregoing shall not apply to notices to any Lender or the Issuing
Bank if such Lender or the Issuing Bank, as applicable, has notified the Agent that it is incapable
of receiving notices under Article V of this Agreement by electronic communications. The Agent or
TIMET may, in its discretion, agree in writing to accept notices and other communications to it
under this Agreement by electronic communications pursuant to procedures approved by it, provided
that approval of such procedures may be limited to particular notices and communications. Unless
the Agent otherwise prescribes, (a) notices and other communications sent to an e-mail address
shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient
(such as by the “return receipt requested” function, as available, return e-mail or other written
acknowledgment), provided that if such notice or other communication is not sent during the normal
business hours of the recipient, such notice or communication shall be deemed to have been sent at
the opening of business of the next Business Day for the recipient, and (b) notices or
communications posted to an Internet or intranet website shall be deemed received upon the deemed
receipt by the intended recipient at its e-mail address as described in the foregoing clause (a) of
notification that such notice of communication is available and identifying the website address
therefore.



Section 15.8 Expenses. TIMET hereby agrees to reimburse (a) the Agent for all
reasonable out-of-pocket costs, fees, and disbursements (including all attorneys’ fees, due
diligence investigation expenses, and syndication expenses) incurred or expended by the Agent in
connection with (i) the preparation, negotiation, execution, delivery, filing, or recording of this
Agreement or any Loan Document, (ii) the administration or interpretation of this Agreement and the
other Loan Documents, (iii) the consummation of the transactions contemplated hereby, or (iv) any
amendment, modification, approval, consent, or waiver hereof or thereof, and (b) the Agent and all
of the Lenders for all reasonable out-of-pocket costs, fees, and disbursements (including all
attorneys fees, appraisal and collateral examination fees, and collection expenses) incurred or
expended in connection with the enforcement of any Obligations, the exercise of any remedies under
any Loan Documents, or with respect to the Collateral or the satisfaction of any Obligations of
TIMET hereunder or thereunder, or in connection with any litigation, proceeding, or dispute in any
way related to this Agreement. TIMET shall pay any taxes (including any interest and penalties in
respect thereof), other than the Lenders’ federal and state income taxes, payable on or with
respect to the transactions contemplated by the Loan Documents (TIMET hereby agreeing to indemnify
the Agent and the Lenders with respect thereto). For purposes of this Agreement and the other Loan
Documents, attorneys’ fees shall mean and include the reasonable fees and disbursements of
attorneys (including all paralegals and other staff employed by such attorneys and the reasonably
allocated costs of internal counsel), whether incurred at arbitration, trial, on appeal, in a
bankruptcy case or proceeding, or in any other way relating to the Obligations, the Loan Documents,
and the transactions contemplated thereby, including, without limitation, as provided in this
Section 15.8 and Section 15.9 of this Agreement. The amounts owed by TIMET pursuant to this
Section 15.8 of this Agreement shall be paid by TIMET within ten days of the date the Agent (or one
of the Lenders) bills TIMET for such amounts.



Section 15.9 Indemnification of the Agent and the Lenders by TIMET. TIMET agrees to
indemnify and hold harmless the Agent and the Lenders, as well as their respective shareholders,
directors, officers, agents, attorneys, subsidiaries, and Affiliates, from and against all damages,
losses, settlement payments, obligations, liabilities, claims, suits, penalties, assessments,
citations, directives, demands, judgments, actions, or causes of action, whether statutorily
created or under the common law, all reasonable costs and expenses (including, without limitation,
attorneys’ fees), and all other liabilities whatsoever (including, without limitation, liabilities
under Environmental Laws) that at any time or times shall be incurred, suffered, sustained, or
required to be paid by any such indemnified Person (except any of the foregoing to the extent that
they result from the gross negligence or willful misconduct of the indemnified Person) on account
of, in relation to, or in any way in connection with any of the arrangements or transactions
contemplated by, associated with, or ancillary to this Agreement, the other Loan Documents, or any
other documents executed or delivered in connection herewith or therewith, all as the same may be
amended from time to time, whether or not all or part of the transactions contemplated by,
associated with, or ancillary to this Agreement, any of the other Loan Documents, or any such other
documents ultimately are consummated. In any investigation, proceeding, or litigation, or the
preparation therefor, the Lenders shall select their own counsel and, in addition to the foregoing
indemnity, TIMET agrees to pay promptly the reasonable fees and expenses of such counsel. In the
event of the commencement of any such proceeding or litigation, TIMET shall be entitled to
participate in such proceeding or litigation with counsel of its choice at its own expense,
provided that such counsel shall be satisfactory to the Agent, in the Agent’s reasonable
discretion. The provisions of this Section 15.9 of this Agreement shall survive payment (or
satisfaction of payment) of all amounts owing with respect to the Notes, any other Loan Document,
or any other Obligation.



Section 15.10 Waiver of Consequential Damages. To the fullest extent permitted by
applicable law, TIMET hereby agrees not to assert, and TIMET hereby waives, any claim against any
indemnitee under Section 15.9 of this Agreement on any theory of liability for special, indirect,
consequential, or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Loan Document, or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter
of Credit, or the use of the proceeds thereof.



Section 15.11 Payments Set Aside. To the extent any payments in respect of the
Obligations (or any proceeds of any Collateral, including, but not limited to, the proceeds
received by the Lenders as a result of any enforcement proceeding or setoff), or any part thereof,
subsequently are invalidated, declared to be fraudulent or preferential, set aside, and/or required
to be repaid to a trustee, receiver, or any other Person under any law or equitable cause, then, to
the extent of such repayment, the Obligation or part thereof originally intended to be satisfied,
and all rights and remedies therefor, shall be revived and shall continue in full force and effect,
and the Agent’s and the Lenders’ rights, powers, and remedies under this Agreement and the Loan
Documents shall continue in full force and effect, as if such payment had not been made, or such
enforcement proceeding or setoff had not occurred. In such event, each Loan Document automatically
shall be reinstated and TIMET shall take such action as reasonably may be requested by the Agent
and the Lenders to effect such reinstatement.



Section 15.12 Survival of Covenants. Unless otherwise stated in this Agreement, all
covenants, agreements, representations, and warranties made in this Agreement, in the other Loan
Documents, or in any documents or other papers delivered by or on behalf of TIMET pursuant to this
Agreement shall be deemed to have been relied upon by the Agent and the Lenders, notwithstanding
any investigation heretofore or hereafter made by any of them, shall survive the making by the
Lenders of the Loans as contemplated in this Agreement, and shall continue in full force and effect
so long as any Obligation remains outstanding and unpaid. All statements contained in any
certificate or other writing delivered by or on behalf of TIMET pursuant to this Agreement, or in
connection with the transactions contemplated by this Agreement, shall constitute representations
and warranties by TIMET under this Agreement.



Section 15.13 Amendments and Waivers. No term, provision, or condition of this
Agreement, the Notes, or any of the other Loan Documents may be amended, waived, discharged, or
terminated, except by a written instrument signed by the Required Lenders and, in the case of
amendments, by TIMET.



Section 15.14 Counterparts. This Agreement and any amendment of this Agreement may be
executed in several counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, but all of which together shall constitute one
document. In proving this Agreement, it shall not be necessary to produce or account for more than
one such counterpart signed by the party against whom enforcement is sought.



Section 15.15 Waiver of Jury Trial. TIMET, THE AGENT, AND THE LENDERS HEREBY WAIVE
THEIR RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, THE NOTES, OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. TIMET (a)
CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF THE AGENT OR THE LENDERS HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE AGENT OR THE LENDERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVERS AND (b) ACKNOWLEDGES THAT THE AGENT AND THE LENDERS HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH EACH IS A PARTY BECAUSE
OF, AMONG OTHER THINGS, TIMET’S WAIVERS AND CERTIFICATIONS CONTAINED IN THIS AGREEMENT.



Section 15.16 Assignment of Rights or Obligations. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective Successors and permitted assigns.
TIMET may not assign or otherwise transfer all or any part of its rights or obligations under this
Agreement without the prior, written consent of the Lenders (and, in the case of Letters of Credit,
the Issuing Bank), and any such assignment or transfer purported to be made without such consent
shall be ineffective. The Lenders at any time may assign or otherwise transfer all or any part of
their interest under this Agreement, the Notes, and the other Loan Documents (including assignments
for security and sales of participations) in accordance with Article XIII of this Agreement.



Section 15.17 USA Patriot Act Notice. Each Lender that is subject to the Patriot Act
(as hereinafter defined), the Issuing Bank, and the Agent (for itself and not on behalf of any
Lender) hereby notifies TIMET that pursuant to the requirements of the USA Patriot Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to
obtain, verify, and record information that identifies TIMET, which information includes the name
and address of TIMET and other information that will allow such Lender, the Issuing Bank, or the
Agent, as applicable, to identify TIMET in accordance with the Patriot Act.



Section 15.18 Treatment of Certain Information; Confidentiality. Each Lender, the
Issuing Bank, and the Agent agrees (on behalf of itself and each of its subsidiaries, Affiliates,
directors, officers, employees, and representatives) to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any information
supplied to it by TIMET pursuant to this Agreement, provided that nothing in this Agreement shall
limit the disclosure of any such information (a) to the extent required by statute, rule,
regulation, or judicial process, (b) to counsel for any of the Lenders, the Issuing Bank, or the
Agent, (c) to bank examiners, auditors, accountants, or other professional advisors, (d) to the
Agent, the Issuing Bank, or any other Lender, (e) in connection with any litigation to which any
one or more of the Lenders, the Issuing Bank, or the Agent is a party, (f) to the extent such
information otherwise becomes publicly available (other than by any violation of this
confidentiality agreement), or (g) to any Eligible Assignee or Participant (or prospective Eligible
Assignee or Participant), as provided in Section 13.4 of this Agreement. Unless specifically
prohibited by applicable Law or court order, each Lender, the Issuing Bank, and the Agent to the
extent practicable in the circumstances, prior to disclosure thereof, shall notify TIMET of any
request for disclosure of any such non-public information by any Governmental Authority, or
pursuant to legal process. In no event shall any Lender, the Issuing Bank, or the Agent be
obligated or required to return any materials furnished by TIMET. The obligations of any Eligible
Assignee that has executed a confidentiality agreement required by Section 13.4 of this Agreement
shall be superseded by this Section 5.18 of this Agreement upon the date that such Eligible
Assignee becomes a Lender under this Agreement pursuant to Section 13.1 of this Agreement.



Section 15.19 Severability. Any provision of this Agreement, the Notes, or any other
Loan Document that is prohibited or unenforceable in any jurisdiction shall as to such jurisdiction
be ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, or affecting the validity or enforceability of such
provision in any other jurisdiction. To the extent permitted by applicable law, the parties to
this Agreement hereby waive any provision of law that renders any provision of this Agreement
prohibited or unenforceable in any respect.



Section 15.20 Entire Agreement. This Agreement and the Loan Documents set forth and
constitute the entire agreement between and among the Agent, the Lenders, the Issuing Bank, and
TIMET with respect to the Loans and the security for the Loans. No oral promise or agreement of
any kind or nature, other than those that have been reduced to writing and have been set forth in
this Agreement and in the Loan Documents, has been made between or among the Agent, the Lenders,
and TIMET with respect to the Loans and the security for the Loans.



Section 15.21 Interpretation. This Agreement is a negotiated agreement. In the event
of any ambiguity in this Agreement, such ambiguity shall not be subject to a rule of contract
interpretation that would cause the ambiguity to be construed against any of the parties to this
Agreement.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




Section 15.22



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Headings. The headings of the various provisions of this Agreement are for
convenience of reference only, do not constitute a part of this Agreement, and shall not affect the
meaning or construction of any provision of this Agreement.



Section 15.23 Construction. In the event of any conflict between the terms,
conditions, and provisions of this Agreement and those of any other document referred to in this
Agreement, the terms, conditions, and provisions of this Agreement shall control.



Section 15.24 Statutory Notice. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES, AND
COMMITMENTS MADE BY THE LENDERS CONCERNING LOANS AND OTHER CREDIT EXTENSIONS THAT ARE NOT FOR
PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY A BORROWER’S RESIDENCE, MUST BE IN
WRITING, EXPRESS CONSIDERATION, AND BE SIGNED BY THE LENDERS TO BE ENFORCEABLE.



	 	 	 
	U.S. BANK NATIONAL ASSOCIATION, as

Agent, as a Lender, as an Issuing

Bank, and as the Swingline Lender

	 	



TITANIUM METALS CORPORATION
	 
	 	 
	By /s/ Janice T. Thede

	 	By /s/ John St. Wrba
	 

	 	 
	Janice T. Thede

Vice President

	 	Name: John St. Wrba

Title: Vice President
	 
	 	 
	COMERICA BANK

	 	HARRIS N.A.
	 
	 	 
	By /s/ Janet L. Wheeler

	 	By /s/ Thad D. Rasche
	 

	 	 
	Name: Janet L. Wheeler

Title: Assistant Vice President

	 	Name: Thad D. Rasche

Title: Director
	 
	 	 
	JP MORGAN CHASE BANK, N.A.

	 	THE CIT GROUP/BUSINESS CREDIT,

INC.
	 
	 	 
	By /s/ D. Scott Harvey

	 	By /s/ C. Graham Sones
	 

	 	 
	Name: D. Scott Harvey

Title: Vice President

	 	Name: C. Graham Sones

Title: Vice President
	 
	 	 
	
 
	 	WACHOVIA BANK, NATIONAL

ASSOCIATION, as a Lender and as an

Issuing Bank
	 
	 	 
	
 
	 	By /s/ Thomas F. Snider
	
 
	 	 
	
 
	 	Name: Thomas F. Snider

Title: Senior Vice President
	 
	 	 







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