Exhibit
10.6


 


Execution
Copy


 




 


 





$450,000,000


 


CREDIT AGREEMENT


 


AMONG


 


TRONOX INCORPORATED,


 


TRONOX WORLDWIDE
LLC,


 


AS BORROWER,


 


THE SEVERAL LENDERS


 


FROM TIME TO TIME
PARTIES HERETO,


 


 


LEHMAN BROTHERS INC.


AND


CREDIT SUISSE,


 


 


AS ARRANGERS AND


BOOKRUNNERS,


 


ABN AMRO BANK N.V.,


 


AS SYNDICATION
AGENT,


 


 


JPMORGAN CHASE BANK,
N.A.


AND


CITICORP USA, INC.


 


AS CO-DOCUMENTATION
AGENTS


 


 


AND


LEHMAN COMMERCIAL
PAPER INC.,


 


AS ADMINISTRATIVE
AGENT


 


 


DATED AS OF
NOVEMBER 28, 2005


 




 





 





















 


TABLE
OF CONTENTS


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS

  	
   

  	
  1

  
	
  1.1

  	
  Defined Terms

  	
   

  	
  1

  
	
  1.2

  	
  Other Definitional
  Provisions

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  AMOUNT AND TERMS OF
  COMMITMENTS

  	
   

  	
  32

  
	
  2.1

  	
  Term Loan Commitments

  	
   

  	
  32

  
	
  2.2

  	
  Procedure for Term Loan
  Borrowing

  	
   

  	
  32

  
	
  2.3

  	
  Repayment of Term Loans

  	
   

  	
  33

  
	
  2.4

  	
  Revolving Credit
  Commitments

  	
   

  	
  33

  
	
  2.5

  	
  Procedure for Revolving
  Credit Borrowing

  	
   

  	
  34

  
	
  2.6

  	
  Swing Line Commitment

  	
   

  	
  34

  
	
  2.7

  	
  Procedure for Swing Line
  Borrowing; Refunding of Swing Line Loans

  	
   

  	
  35

  
	
  2.8

  	
  Repayment of Loans;
  Evidence of Debt

  	
   

  	
  36

  
	
  2.9

  	
  Commitment Fees, etc

  	
   

  	
  37

  
	
  2.10

  	
  Termination or Reduction
  of Commitments

  	
   

  	
  38

  
	
  2.11

  	
  Optional Prepayments

  	
   

  	
  38

  
	
  2.12

  	
  Mandatory Prepayments

  	
   

  	
  39

  
	
  2.13

  	
  Conversion and
  Continuation Options

  	
   

  	
  40

  
	
  2.14

  	
  Minimum Amounts and
  Maximum Number of LIBO Rate Tranches

  	
   

  	
  41

  
	
  2.15

  	
  Interest Rates and Payment
  Dates

  	
   

  	
  41

  
	
  2.16

  	
  Computation of Interest
  and Fees

  	
   

  	
  42

  
	
  2.17

  	
  Inability to Determine
  Interest Rate

  	
   

  	
  42

  
	
  2.18

  	
  Pro Rata Treatment and
  Payments

  	
   

  	
  43

  
	
  2.19

  	
  Requirements of Law

  	
   

  	
  45

  
	
  2.20

  	
  Taxes

  	
   

  	
  46

  
	
  2.21

  	
  Indemnity

  	
   

  	
  47

  
	
  2.22

  	
  Illegality

  	
   

  	
  48

  
	
  2.23

  	
  Change of Lending Office

  	
   

  	
  48

  
	
  2.24

  	
  Replacement of Lenders
  under Certain Circumstances

  	
   

  	
  49

  
	
  2.25

  	
  Limitation on Additional
  Amounts, etc

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  LETTERS OF CREDIT

  	
   

  	
  50

  
	
  3.1

  	
  L/C Commitment

  	
   

  	
  50

  
	
  3.2

  	
  Procedure for Issuance of
  Letter of Credit

  	
   

  	
  50

  
	
  3.3

  	
  Fees and Other Charges

  	
   

  	
  51

  
	
  3.4

  	
  L/C Participations

  	
   

  	
  51

  
	
  3.5

  	
  Reimbursement Obligation
  of the Borrower

  	
   

  	
  52

  
	
  3.6

  	
  Obligations Absolute

  	
   

  	
  53

  
	
  3.7

  	
  Letter of Credit Payments

  	
   

  	
  53

  
	
  3.8

  	
  Applications

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  	
  54

  
	
  4.1

  	
  Financial Condition

  	
   

  	
  54

  



 





















 


	
  4.2

  	
  No Change

  	
   

  	
  55

  
	
  4.3

  	
  Corporate Existence;
  Compliance with Law

  	
   

  	
  55

  
	
  4.4

  	
  Organizational Power;
  Authorization; Enforceable Obligations

  	
   

  	
  55

  
	
  4.5

  	
  No Legal Bar

  	
   

  	
  56

  
	
  4.6

  	
  No Material Litigation

  	
   

  	
  56

  
	
  4.7

  	
  No Default

  	
   

  	
  56

  
	
  4.8

  	
  Ownership of Property; Liens

  	
   

  	
  56

  
	
  4.9

  	
  Intellectual Property

  	
   

  	
  57

  
	
  4.10

  	
  Taxes

  	
   

  	
  57

  
	
  4.11

  	
  Federal Regulations

  	
   

  	
  57

  
	
  4.12

  	
  Labor Matters

  	
   

  	
  57

  
	
  4.13

  	
  ERISA

  	
   

  	
  58

  
	
  4.14

  	
  Investment Company Act;
  Other Regulations

  	
   

  	
  58

  
	
  4.15

  	
  Subsidiaries

  	
   

  	
  58

  
	
  4.16

  	
  Use of Proceeds

  	
   

  	
  59

  
	
  4.17

  	
  Environmental Matters

  	
   

  	
  59

  
	
  4.18

  	
  Accuracy of Information,
  etc

  	
   

  	
  60

  
	
  4.19

  	
  Security Documents

  	
   

  	
  60

  
	
  4.20

  	
  Solvency

  	
   

  	
  61

  
	
  4.21

  	
  Insurance

  	
   

  	
  61

  
	
  4.22

  	
  Transaction

  	
   

  	
  61

  
	
  4.23

  	
  Real Estate

  	
   

  	
  63

  
	
  4.24

  	
  Permits

  	
   

  	
  63

  
	
  4.25

  	
  Regulation H

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  CONDITIONS PRECEDENT

  	
   

  	
  63

  
	
  5.1

  	
  Conditions to Initial
  Extension of Credit

  	
   

  	
  63

  
	
  5.2

  	
  Conditions to Each
  Extension of Credit

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
  68

  
	
  6.1

  	
  Financial Statements

  	
   

  	
  68

  
	
  6.2

  	
  Certificates; Other
  Information

  	
   

  	
  69

  
	
  6.3

  	
  Payment of Obligations

  	
   

  	
  71

  
	
  6.4

  	
  Conduct of Business and
  Maintenance of Existence, etc

  	
   

  	
  71

  
	
  6.5

  	
  Maintenance of Property;
  Insurance

  	
   

  	
  71

  
	
  6.6

  	
  Inspection of Property;
  Books and Records; Discussions

  	
   

  	
  72

  
	
  6.7

  	
  Notices

  	
   

  	
  72

  
	
  6.8

  	
  Environmental Laws

  	
   

  	
  73

  
	
  6.9

  	
  Additional Collateral, etc

  	
   

  	
  74

  
	
  6.10

  	
  Use of Proceeds

  	
   

  	
  76

  
	
  6.11

  	
  ERISA Documents

  	
   

  	
  76

  
	
  6.12

  	
  Further Assurances

  	
   

  	
  76

  
	
  6.13

  	
  Ratings

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  NEGATIVE COVENANTS

  	
   

  	
  77

  
	
  7.1

  	
  Financial Condition
  Covenants

  	
   

  	
  77

  
	
  7.2

  	
  Limitation on Indebtedness

  	
   

  	
  78

  



 





















 


	
  7.3

  	
  Limitation on Liens

  	
   

  	
  82

  
	
  7.4

  	
  Limitation on Fundamental
  Changes

  	
   

  	
  85

  
	
  7.5

  	
  Limitation on Disposition
  of Property

  	
   

  	
  85

  
	
  7.6

  	
  Limitation on Restricted
  Payments

  	
   

  	
  87

  
	
  7.7

  	
  Limitation on Capital
  Expenditures

  	
   

  	
  89

  
	
  7.8

  	
  Limitation on Investments

  	
   

  	
  89

  
	
  7.9

  	
  Limitation on Optional
  Payments and Modifications of Debt Instruments, etc

  	
   

  	
  92

  
	
  7.10

  	
  Limitation on Transactions
  with Affiliates

  	
   

  	
  92

  
	
  7.11

  	
  Limitation on Sales and
  Leasebacks

  	
   

  	
  93

  
	
  7.12

  	
  Limitation on Changes in
  Fiscal Periods

  	
   

  	
  93

  
	
  7.13

  	
  Limitation on Negative
  Pledge Clauses

  	
   

  	
  93

  
	
  7.14

  	
  Limitation on Restrictions
  on Subsidiary Distributions

  	
   

  	
  94

  
	
  7.15

  	
  Limitation on Lines of
  Business

  	
   

  	
  94

  
	
  7.16

  	
  Limitation on Amendments
  to Transaction Documents

  	
   

  	
  94

  
	
  7.17

  	
  Special Purpose Subsidiary

  	
   

  	
  95

  
	
  7.18

  	
  Limitation on Activities
  of Holdings

  	
   

  	
  95

  
	
  7.19

  	
  Limitation on Activities
  of Tronox Finance

  	
   

  	
  95

  
	
  7.20

  	
  Limitation on Hedge
  Agreements

  	
   

  	
  95

  
	
  7.21

  	
  Post-Closing Deliveries

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  EVENTS OF DEFAULT

  	
   

  	
  96

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  THE AGENTS; THE ARRANGERS

  	
   

  	
  99

  
	
  9.1

  	
  Appointment

  	
   

  	
  99

  
	
  9.2

  	
  Delegation of Duties

  	
   

  	
  100

  
	
  9.3

  	
  Exculpatory Provisions

  	
   

  	
  100

  
	
  9.4

  	
  Reliance by Agents

  	
   

  	
  100

  
	
  9.5

  	
  Notice of Default

  	
   

  	
  100

  
	
  9.6

  	
  Non-Reliance on the
  Arrangers, the Agents and Other Lenders

  	
   

  	
  101

  
	
  9.7

  	
  Indemnification

  	
   

  	
  101

  
	
  9.8

  	
  Arrangers and Agent in
  their Individual Capacities

  	
   

  	
  102

  
	
  9.9

  	
  Successor Administrative
  Agent

  	
   

  	
  102

  
	
  9.10

  	
  Authorization to Release
  Liens and Guarantees

  	
   

  	
  103

  
	
  9.11

  	
  The Arrangers; the
  Syndication Agent and the Documentation Agents

  	
   

  	
  103

  
	
  9.12

  	
  Withholding Tax

  	
   

  	
  103

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  MISCELLANEOUS

  	
   

  	
  103

  
	
  10.1

  	
  Amendments and Waivers

  	
   

  	
  103

  
	
  10.2

  	
  Notices

  	
   

  	
  105

  
	
  10.3

  	
  No Waiver; Cumulative
  Remedies

  	
   

  	
  106

  
	
  10.4

  	
  Survival of
  Representations and Warranties

  	
   

  	
  107

  
	
  10.5

  	
  Payment of Expenses

  	
   

  	
  107

  
	
  10.6

  	
  Successors and Assigns;
  Participations and Assignments

  	
   

  	
  108

  
	
  10.7

  	
  Adjustments; Set-off

  	
   

  	
  111

  
	
  10.8

  	
  Counterparts

  	
   

  	
  112

  
	
  10.9

  	
  Severability

  	
   

  	
  112

  



 





















 


	
  10.10

  	
  Integration

  	
   

  	
  112

  
	
  10.11

  	
  GOVERNING
  LAW

  	
   

  	
  112

  
	
  10.12

  	
  Submission To
  Jurisdiction; Waivers

  	
   

  	
  113

  
	
  10.13

  	
  Acknowledgments

  	
   

  	
  113

  
	
  10.14

  	
  Confidentiality

  	
   

  	
  113

  
	
  10.15

  	
  Release of Collateral and
  Guarantee Obligations

  	
   

  	
  114

  
	
  10.16

  	
  Accounting Changes

  	
   

  	
  115

  
	
  10.17

  	
  Delivery of Lender Addenda

  	
   

  	
  115

  
	
  10.18

  	
  Construction

  	
   

  	
  115

  
	
  10.19

  	
  WAIVERS
  OF JURY TRIAL

  	
   

  	
  116

  
	
  10.20

  	
  Customer Identification –
  USA PATRIOT Act Notice

  	
   

  	
  116

  
	
  10.21

  	
  Transaction/Spin-Off

  	
   

  	
  116

  



 





















 


	
  ANNEXES:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  Pricing
  Grid

  	
   

  	
   

  
	
  B

  	
  Existing
  Letters of Credit

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1(a)

  	
  Electrolytic
  Assets

  	
   

  	
   

  
	
  1.1(b)

  	
  Foreign
  Subsidiary Indebtedness

  	
   

  	
   

  
	
  1.1(c)

  	
  Mortgaged
  Properties

  	
   

  	
   

  
	
  1.1(d)

  	
  Henderson
  Real Estate

  	
   

  	
   

  
	
  4.4

  	
  Consents,
  Authorizations, Filings and Notices

  	
   

  	
   

  
	
  4.6(b)

  	
  Material
  Litigation

  	
   

  	
   

  
	
  4.8(a)

  	
  Real
  Property Title Exceptions

  	
   

  	
   

  
	
  4.10

  	
  Tax
  Filing Exceptions

  	
   

  	
   

  
	
  4.15

  	
  Subsidiaries

  	
   

  	
   

  
	
  4.19(a)-1

  	
  UCC
  Filing Jurisdictions

  	
   

  	
   

  
	
  4.19(a)-2

  	
  UCC
  Financing Statements to Remain on File

  	
   

  	
   

  
	
  4.19(a)-3

  	
  UCC
  Financing Statements to be Terminated

  	
   

  	
   

  
	
  4.19(b)

  	
  Mortgage
  Filing Offices

  	
   

  	
   

  
	
  4.22

  	
  Transaction
  Documentation

  	
   

  	
   

  
	
  4.23

  	
  Owned
  and Leased Real Property

  	
   

  	
   

  
	
  4.24

  	
  Permits

  	
   

  	
   

  
	
  7.2(d)

  	
  Existing
  Indebtedness

  	
   

  	
   

  
	
  7.3(f)

  	
  Existing
  Liens

  	
   

  	
   

  
	
  7.7

  	
  Limitations
  on Capital Expenditures

  	
   

  	
   

  
	
  7.8(m)

  	
  Investments

  	
   

  	
   

  
	
  7.21

  	
  Post-Closing
  Deliveries

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  Form
  of Guarantee and Collateral Agreement

  	
   

  	
   

  
	
  B

  	
  Form
  of Compliance Certificate

  	
   

  	
   

  
	
  C

  	
  Form
  of Closing Certificate

  	
   

  	
   

  
	
  D

  	
  Form
  of Assignment and Acceptance

  	
   

  	
   

  
	
  E-1

  	
  Form
  of Legal Opinion of Covington & Burling

  	
   

  	
   

  
	
  E-2

  	
  Form
  of Legal Opinion of Local or Foreign Counsel

  	
   

  	
   

  
	
  E-3

  	
  Form
  of Legal Opinion of Borrower’s General Counsel

  	
   

  	
   

  
	
  F-1

  	
  Form
  of Term Note

  	
   

  	
   

  
	
  F-2

  	
  Form
  of Revolving Credit Note

  	
   

  	
   

  
	
  F-3

  	
  Form
  of Swing Line Note

  	
   

  	
   

  
	
  G

  	
  Form
  of Exemption Certificate

  	
   

  	
   

  
	
  H

  	
  Form
  of Lender Addendum

  	
   

  	
   

  
	
  I

  	
  Form
  of Borrowing Notice

  	
   

  	
   

  
	
  J

  	
  Form
  of Solvency Certificate

  	
   

  	
   

  
	
  K

  	
  Form
  of Mortgage

  	
   

  	
   

  
						



 





















 


CREDIT AGREEMENT, dated as of November 28, 2005 , among TRONOX
INCORPORATED, a Delaware corporation (“Holdings”),
TRONOX WORLDWIDE LLC, a Delaware limited liability company (the “Borrower”),
the several banks and other financial institutions or entities from time to
time parties to this Agreement (the “Lenders”),
LEHMAN BROTHERS INC. and CREDIT SUISSE, as joint lead arrangers and joint
bookrunners (in such capacity, the “Arrangers”),
ABN AMRO BANK N.V., as syndication agent (in such capacity, the “Syndication Agent”), JPMORGAN CHASE BANK, N.A.
and CITICORP USA, INC., as co-documentation agents (in such capacity, the “Documentation
Agents”), and LEHMAN COMMERCIAL PAPER INC., as administrative agent (in
such capacity, the “Administrative Agent”).


 


W I  T  N  E  S  S  E  T  H:


 


WHEREAS, the Borrower has requested that the Lenders and the Issuing
Lender make available for the purposes specified in this Agreement, a term loan
facility and a revolving line of credit; and


 


WHEREAS, the Lenders are willing to make such credit facilities
available upon and subject to the terms and conditions hereinafter set forth;


 


NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:


 


SECTION 1. DEFINITIONS


 


 


1.1           Defined Terms. 
As used in this Agreement, the terms listed in this Section 1.1 shall
have the respective meanings set forth in this Section 1.1.


 


“Act”:  as defined in Section 10.20.


 


“Administrative Agent”:  as defined in the preamble hereto.


 


“Affiliate”:  as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person.  For purposes
of this definition, “control” of a Person means the power, directly or
indirectly, either to (a) vote at least 10% of the securities having ordinary
voting power for the election of directors (or for persons having similar
functions) of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.


 


“Affiliated Fund”: with respect to
any Lender that is a fund that invests (in whole or in part) in commercial
loans, any other fund that invests (in whole or in part) in commercial loans
and is managed by the same investment advisor as such Lender or by a Lender
Affiliate of such investment advisor.


 


“Agents”:  the collective reference to the Syndication
Agent, the Arrangers, the Documentation Agents and the Administrative Agent.


 


1





















 


“Aggregate Exposure”:  with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender’s Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender’s Term Loans and (ii) the
amount of such Lender’s Revolving Credit Commitment then in effect or, if the
Revolving Credit Commitments have been terminated, the amount of such Lender’s
Revolving Extensions of Credit then outstanding.


 


“Aggregate Exposure Percentage”:  with respect to any Lender at any time, the
ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such
time to the sum of the Aggregate Exposures of all Lenders at such time.


 


“Agreement”:  this Credit Agreement, as amended,
supplemented, replaced or otherwise modified from time to time in accordance
with this Agreement.


 


“Amended S-1”: as defined in Section 5.1(c).


 


“Applicable
Currency” means (i) euro in the case of Revolving Credit Euro Loans
or interest thereon or fees or other Obligations in respect of Letters of
Credit (Euro) or (ii) Dollars in the case of all other Loans or other
Obligations.


 


“Applicable Margin”:  for each Type of Loan under each Facility, at
any time, the rate per annum for such type of Loan determined pursuant to the
Pricing Grid on the basis of the Facility Ratings in effect at such time.


 


“Application”:  an application, in such form as the relevant
Issuing Lender may specify from time to time, requesting such Issuing Lender to
issue a Letter of Credit.


 


“Arrangers”:  as defined in the preamble hereto.


 


“Asset Sale”:  any Disposition of Property or series of
related Dispositions of Property (excluding any such Disposition permitted by
clause (a)(i), (b), (c), (d), (f)(i), (f)(ii) (except to the extent the
proviso thereto requires the application of Net Cash Proceeds thereof), (h),
(i), (j), (k), (l), (m), (n) or (p) of Section 7.5).


 


“Assignee”:  as defined in Section 10.6(c).


 


“Assignment and Acceptance”:  as defined in Section 10.6(c).


 


“Assignor”:  as defined in Section 10.6(c).


 


“Available Revolving Credit Commitment”:  with respect to any Revolving Credit Lender
at any time, an amount equal to the excess, if any, of (a) such Lender’s Revolving
Credit Commitment then in effect over
(b) such Lender’s Revolving Extensions of Credit then outstanding; provided, that in calculating the Revolving
Extensions of Credit of any Lender (other than the Swing Line Lender) for the
purpose of determining such Lender’s Available Revolving Credit Commitment
pursuant to Section 2.9(a), the aggregate principal amount of Swing Line Loans
then outstanding shall be deemed to be zero.


 


2





















 


“Base Rate”:  for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1⁄2 of 1%.  For
purposes hereof:  “Prime Rate” shall mean the prime lending rate as
set forth on the British Banking Association Telerate Page 5 (or such other
comparable page as may, in the opinion of the Administrative Agent, replace
such page for the purpose of displaying such rate), as in effect from time to
time.  The Prime Rate is a reference rate
and does not necessarily represent the lowest or best rate actually
available.  Any change in the Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such change in
the Prime Rate, or the Federal Funds Effective Rate, respectively.


 


“Base Rate Loans”:  Loans for which the applicable rate of
interest is based upon the Base Rate.


 


“Benefitted Lender”:  as defined in Section 10.7.


 


“Board”:  the Board of Governors of the Federal Reserve
System of the United States (or any successor).


 


“Borrower”:  as defined in the preamble hereto.


 


“Borrowing Date”:  any Business Day specified by the Borrower as
a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.


 


“Borrowing Notice”:  with respect to any request for borrowing of
Loans hereunder, a notice from the Borrower, substantially in the form of, and
containing the information prescribed by, Exhibit I, delivered to the
Administrative Agent.


 


“Business Day”:  a day of the year that is: (a) a day
other than a Saturday, Sunday or other day on which commercial banks in New
York City are authorized or required by law to close; and (b) with respect
to any Revolving Euro Loan, in the case of (x) payments or purchases of euro, a
TARGET Business Day and (y) all other purposes, including the giving and
receiving of notices, a TARGET Business Day on which banks are generally open
for business in London, England and Frankfurt, Germany; and (c) with respect to
all notices (except with respect to general matters not relating directly to
funding), determinations and fundings in connection with, and payments of
principal and interest on, LIBO Rate Loans, a day for trading by and between
banks in deposits of the Applicable Currency for such Loans in the London
interbank market.  For purposes of this
definition, a “TARGET Business
Day” is a day when the Trans-European Automated Real-time
Gross Settlement Express Transfer System, or any successor thereto, is
scheduled to be open for business.


 


“Cancelled Foreign Debt”: as defined in Section 7.5(k).


 


“Capital Expenditures”:  for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) which are required to be capitalized under
GAAP on a consolidated balance sheet of such Person and its Subsidiaries provided that, 


 


3





















 


for purposes of calculating compliance with
Section 7.7, the following expenditures shall be excluded, without duplication:  (i) expenditures made to restore or replace
Property to the condition of such Property immediately prior to any damage,
loss, or destruction or condemnation of such Property, to the extent such
expenditure is made with, or subsequently reimbursed out of the proceeds
received from any Recovery Event, (ii) expenditures made by the Borrower or any
of its Subsidiaries constituting an Investment permitted by Sections 7.8(e),
(g) or (h), (iii) expenditures made by the Borrower of any of its Subsidiaries
as a tenant in leasehold improvements, to the extent reimbursed by the landlord
and (iv) expenditures made with the proceeds of any Reinvestment Deferred
Amount or proceeds of Dispositions of Property permitted by clauses (a)(ii),
(e), (f)(ii), (g), (j), (o) or (q) of Section 7.5.


 


“Capital Lease Obligations”:  with respect to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP; and, for the
purposes of this Agreement, the amount of such obligations at any time shall be
the capitalized amount thereof at such time determined in accordance with GAAP.


 


“Capital Stock”:  any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any of the
foregoing.


 


“Cash Equivalents”:  (a) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of one year or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-1 by S&P or P-1 by Moody’s, or carrying an
equivalent rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within nine months from the date of acquisition; (d)
repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than
one year with respect to securities of the type set forth in clause (a) of
this definition; (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing authority
of any such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least
A by S&P or A by Moody’s; (f) securities with maturities of one year or
less from the date of acquisition backed by standby letters of credit issued by
any Lender or any commercial bank satisfying the requirements of clause (b) of
this definition; (g) shares of money market mutual or similar funds which
invest exclusively in assets satisfying the requirements of clauses (a) through
(f) of this definition; (h) shares of money market funds that (i) comply
with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act
of 1940, as amended, (ii) are 


 


4





















 


rated AA by S&P or Aa by Moody’s and
(iii) have portfolio assets of at least $1,000,000; or (i) for purposes of
Sections 7.5 and 7.8, in the case of any Foreign Subsidiary, Investments
of the type and maturity described in clauses (a) through (h) above in obligors
organized under the laws of the jurisdiction in which such Foreign Subsidiary
or another Foreign Subsidiary is organized or under the laws of the United Kingdom
or the People’s Republic of China.


 


“Cash Management Agreement”: any agreement or arrangement
pursuant to which a bank or other financial institution agrees to provide
treasury management services (including controlled disbursement, automated
clearinghouse transactions, return items, overdrafts, interstate depository
network services and purchasing cards).


 


“Change of Control”:  the
occurrence of any of the following events: 
(a) any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)), excluding KMG and its Subsidiaries, shall become
the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the
Exchange Act), directly or indirectly, of more than 35% of the outstanding
common stock of Holdings; (b) the board of directors of Holdings shall cease to
consist of a majority of Continuing Directors; (c) Holdings shall cease to own
and control, of record and beneficially, directly, 100% of each class of outstanding
Capital Stock of the Borrower free and clear of all Liens (except Liens created
by the Guarantee and Collateral Agreement and Permitted Liens); or (d) a
Specified Change of Control.


 


“Closing Date”:  the date on which the conditions precedent
set forth in Section 5.1 shall have been satisfied or waived, which date
shall be not later than December 21, 2005.


 


“Code”:  the Internal Revenue Code of 1986, as amended
from time to time.


 


“Collateral”:  (i) all Personal Property Collateral and
(ii) the Mortgaged Properties.


 


“Commitment”:  with respect to any Lender, the sum of the
Term Loan Commitment and the Revolving Credit Commitment of such Lender.


 


“Commitment Fee Rate”:  at any time, the rate per annum determined
pursuant to the Pricing Grid on the basis of the Facility Ratings in effect at
such time.


 


“Commonly Controlled Entity”:  an entity, whether or not incorporated, that
is under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group that includes the Borrower and that is treated as a
single employer under Section 414 of the Code.


 


“Compliance Certificate”:  a certificate duly executed by a Responsible
Officer, substantially in the form of Exhibit B.


 


“Confidential Information Memorandum”:  the Confidential Information Memorandum dated
November 2005 and furnished to the initial Lenders in connection with the
syndication of the Facilities.


 


5





















 


“Consolidated
EBITDA”:  of any Person for any
period, Consolidated Net Income of such Person and its Subsidiaries for such
period plus, without duplication and to the extent reflected as a charge
in the statement of such Consolidated Net Income for such period, the sum of (a) income tax expense, (b) Consolidated Interest Expense of such Person and its
Subsidiaries; amortization or write-off of debt discount and debt issuance
costs; commissions, discounts and other fees and charges associated with
Indebtedness; (c) depreciation and
amortization expense, (d) amortization of
intangibles (including goodwill) and organization costs, (e) any extraordinary, unusual or non-recurring
expenses or losses (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income for such period,
losses on sales of assets outside of the ordinary course of business), (f) provision for environmental restoration and
remediation (net of reimbursements) for continuing operations to the extent
representing an accrual of or reserve for future cash expenses, (g) non-cash
charges constituting (i) write-downs of property, plant and equipment and other
assets, (ii) impairment of intangible assets, (iii) loss resulting from
cumulative effect of change in accounting principle, (iv) compensation charges,
including those arising from stock options, restricted stock grants or other
equity-incentive programs, (v) loss on sale of accounts receivable under asset
securitization or factoring programs (to the extent comparable to interest
expense), (vi) loss from discontinued operations, (vii) provisions for asset
retirement obligations, (viii) pension and post-retirement costs and (ix)
accretion expenses, (h) shutdown costs associated with the Savannah Sulfate
Facility closure incurred in 2004 in an aggregate amount not to exceed
$29,000,000; (i) all one-time fees, costs and expenses (including cash
compensation payments) incurred in connection with or resulting from Parent’s
separation from KMG, the IPO and the transactions related thereto and the
Distribution and (j) cash expenditures from discontinued operations in an
aggregate amount for such period not to exceed $17,000,000, and minus,
without duplication and to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (a) interest income (except
to the extent deducted in determining Consolidated Interest Expense), (b) any
extraordinary, unusual or non-recurring income or gains (including, whether or
not otherwise includable as a separate item in the statement of such Consolidated
Net Income for such period, gains on the sales of assets outside of the
ordinary course of business), (c) any other non-cash income (including income
arising from cumulative effect of change in accounting principle and income tax
benefit), and (d) income from discontinued operations, all as determined on a
consolidated basis.


 


“Consolidated Interest Coverage Ratio”:  for any period, the ratio of (x) Consolidated
EBITDA of Holdings and its Subsidiaries for such period less (without
duplication) the sum of (a) cash expenditures (net of cash reimbursements not
included in the calculation of Consolidated Net Income of Holdings for that
period), including cash expenditures charged to previously recorded reserves,
for (i) environmental restoration and remediation, (ii) discontinued
operations and (iii) asset retirement obligations, in each case, to the extent
such cash expenditures were not deducted in the calculation of Consolidated Net
Income of Holdings for that period, and (b) any amounts added back
in the calculation of Consolidated EBITDA of Holdings
for that period pursuant to clause (j) of the definition thereof, to (y) Consolidated Interest Expense of
Holdings and its Subsidiaries for such period; provided, that for
purposes for calculating Consolidated EBITDA (and cash expenditures and amounts
specified in clauses (a) and (b)) of Holdings and its Subsidiaries for any
period, (i) the Consolidated EBITDA (and cash expenditures and amounts
specified in clauses (a) and (b) above) of any Person acquired by Holdings or
its Subsidiaries during such period shall be included on a pro forma basis for
such 


 


6





















 


period (assuming for purposes of the
calculation of Consolidated EBITDA (and cash expenditures and amounts specified
in clauses (a) and (b) above) the consummation of such acquisition and the
incurrence or assumption of any Indebtedness in connection therewith occurred
on the first day of such period) and (ii) the Consolidated EBITDA (and cash
expenditures and amounts specified in clauses (a) and (b) above) of any Person
Disposed of by Holdings or its Subsidiaries during such period shall be
excluded from such period (assuming for purposes of the calculation of
Consolidated EBITDA (and cash expenditures and amounts specified in clauses (a)
and (b) above) the consummation of such Disposition and the repayment of any
Indebtedness in connection therewith occurred on the first day of such period).


 


“Consolidated Interest Expense”:  of any Person for any period, total cash
interest expense (including that attributable to Capital Lease Obligations) of
such Person and its Subsidiaries for such period with respect to all
outstanding Indebtedness of such Person and its Subsidiaries (including all
commissions, discounts and other fees and charges owed by such Person with
respect to letters of credit and bankers’ acceptance financing), calculated in
accordance with GAAP.  Consolidated
Interest Expense for any period will be adjusted to (A) exclude the
Consolidated Interest Expense attributable to any Indebtedness repaid or
assumed by a third party (and which became non-recourse to such Person and its
Subsidiaries) in connection with the Disposition of any asset or business that
was disposed of (either directly or as part of an exchange) by such Person or
any of its Subsidiaries during such period (as if such Indebtedness had not
been outstanding on the first day of such period) and (B) include the
Consolidated Interest Expense attributable to any Indebtedness incurred or
assumed in connection with the acquisition of any asset or business that was
acquired (either directly or as part of an exchange) by such Person or any of
its Subsidiaries during such period (as if such Indebtedness had been
outstanding on the first day of such period).


 


“Consolidated Net Income”:  of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; provided, that in calculating Consolidated Net
Income of such Person for any period, there shall be excluded (a) the income
(or deficit) of any Person accrued prior to the date it becomes a Subsidiary of
such Person or is merged into or consolidated with such Person or any of its
Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary of such Person) in which such Person or any of its Subsidiaries has
an ownership interest, except to the extent that any such income is actually
received by such Person or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of such
Person to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation (other than under any Loan Document) or Requirement
of Law applicable to such Subsidiary.


 


“Consolidated Tangible Assets” means total assets (less
accumulated depreciation and valuation reserves and other reserves and items
deductible from gross book value of specific asset accounts under GAAP) after
deducting therefrom all goodwill, trade names, trademarks, patents, unamortized
debt discount, organization expenses and other like intangibles, all as set
forth on the most recent balance sheet of Holdings delivered to the
Administrative Agent, on a consolidated basis, determined in accordance with
GAAP.


 


7





















 


“Consolidated Total Debt”:  at any date, the aggregate principal amount
of all Funded Debt of Holdings and its Subsidiaries at such date, determined on
a consolidated basis in accordance with GAAP.


 


“Consolidated Total Leverage Ratio”:  as at the last day of any period of four
consecutive fiscal quarters of Holdings, the ratio of (a) Consolidated Total
Debt on such day to (b) Consolidated EBITDA of Holdings and its Subsidiaries
for such period; provided that for purposes of calculating Consolidated EBITDA
of Holdings and its Subsidiaries for any period, (i) the Consolidated EBITDA of
any Person acquired by Holdings or its Subsidiaries during such period shall be
included on a pro forma basis for such period (assuming for purposes of the
calculation of Consolidated EBITDA the consummation of such acquisition and the
incurrence or assumption of any Indebtedness in connection therewith occurred
on the first day of such period) and (ii) the Consolidated EBITDA of any Person
Disposed of Holdings or its Subsidiaries during such period shall be excluded
for such period (assuming for purposes of the calculation of Consolidated
EBITDA the consummation of such Disposition and the repayment of any
Indebtedness in connection therewith occurred on the first day of such period).


 


“Continuing
Directors”:  the directors of
Holdings on the Closing Date, after giving effect to the Transactions and the
other transactions contemplated hereby, and each other director of Holdings,
if, in each case, such other director’s nomination for election to the board of
directors of Holdings is recommended by at least a majority of the then
Continuing Directors.


 


“Contractual Obligation”:  with respect to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.


 


“Contributed Business”: 
the business (including assets and liabilities) of Holdings and the
Contributed Subsidiaries on the Closing Date after giving effect to the
Contribution.


 


“Contributed Subsidiaries”: 
the entities that constitute the consolidated Subsidiaries of Holdings
on the Closing Date as specified on Schedule 4.15(a) hereto


 


“Contribution”:  the
contribution and transfer by KMG and its Subsidiaries to (i) Holdings of
100% of the Capital Stock of Borrower and (ii) the Borrower of 100% of the
Capital Stock of the Contributed Subsidiaries (other than the Borrower) owned
on or prior to the Closing Date by KMG and its Subsidiaries, together with the
other contributions and transfers effected pursuant to the Transaction
Agreements (x) necessary to cause the Borrower to own on the Closing Date the
chemical business operated as part of KMG and its subsidiaries prior to the
Closing Date or (y) effected between KMG and Holdings or the Borrower or
subsidiaries thereof on or prior to the Closing Date in connection therewith.


 


“Default”:  any of the events specified in Section 8,
whether or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.


 


“Defaulting Lender”: as defined in
Section 2.24.


 


“Derivatives Counterparty”:  as defined in Section 7.6.


 


8





















 


“Disposition”:  with respect to any Property, any sale, sale
and leaseback, assignment, conveyance, transfer or other disposition thereof (including
by way of a merger or consolidation) of such Property or any interest therein
(including the sale or factoring at maturity or collection of any accounts or
permitting or suffering any other Person to acquire any interest (other than a
Lien permitted under Section 7.3) in such Property; and the terms “Dispose” and “Disposed of” shall
have correlative meanings.


 


“Disqualified Stock”: any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event (other than a change in
control), matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is six months after the Term
Loan Maturity Date, except to the extent that such Capital Stock is redeemable
with, or solely exchangeable for, any Capital Stock of such Person that is not
Disqualified Stock.


 


“Distribution”:  the distribution by Holdings of the net
proceeds of the borrowings under the Term Loan and the Senior Notes and the net
proceeds of the IPO to Kerr-McGee Worldwide, all net of any fees, costs or
expenses relating to the Contribution, the IPO, the offering of the Notes and
the creation of and initial borrowing under the Credit Facilities and
transactions related thereto (it being
understood and agreed that such fees, costs and expenses may be estimated by
Holdings in good faith).


 


“Documentation Agent”:  as defined in the preamble hereto.


 


“Dollar
Equivalent”:  at
the time of determination thereof, (a) in relation to any amount denominated in
euro, the equivalent of such amount in Dollars determined by using the Dollar
Equivalent Exchange Rate on the most recent Valuation Date; or (b) in relation
to any amount denominated in Dollars, the amount thereof.


 


“Dollar Equivalent Exchange Rate”:  on any Valuation Date, the rate of exchange
indicated for the purchase of Dollars with euro on the Bloomberg
Key Cross Currency Rates screen at 11:00 a.m. (New York City time)
on such Valuation Date.


 


“Dollar Loan”:  a Loan denominated in Dollars.


 


“Dollars” and “$”: 
lawful currency of the United States of America.


 


“Domestic Subsidiary”:  any Subsidiary of the Borrower that is organized
under the laws of any jurisdiction within the United States of America.


 


“ECF Percentage”:  with respect to any fiscal year of the
Borrower, 75%; provided, that, with respect to any fiscal year of the Borrower
ending on or after December 31, 2006, the ECF Percentage shall instead be
(i) 50% if the Consolidated Interest Coverage Ratio for the period of four
consecutive fiscal quarters ending on the last day of such fiscal year is
greater than 4.0 to 1.0, (ii) 25% if the Consolidated Interest Coverage Ratio
for the period of four consecutive fiscal quarters ending on the last day of
such fiscal year is greater than 6.0 to 1.0 or (iii) 0% if the Consolidated
Interest Coverage Ratio for the period of the four consecutive fiscal quarters
ending on the last day of such fiscal year is greater than 8.0 to 1.0.


 


9





















 


“Electrolytic Assets”: those assets used in electrolytic
business of the Borrower and its Subsidiaries described in Schedule 1.1(a)
hereto.


 


“Eligible Assignee”: as defined in
Section 10.6(c).


 


“Environmental Laws”: any and all
laws, rules, orders, regulations, statutes, ordinances, guidelines, codes,
decrees, or other legally enforceable requirements (including common law) of
any foreign government, the United States, or any Governmental Authority,
regulating, relating to or imposing liability or standards of conduct
concerning protection of the environment or of human health, employee health
and safety, or Materials of Environmental Concern, as has been, is now, or may
at any time hereafter be, in effect.


 


“Environmental Permits”:  any and all permits, licenses, approvals,
registrations, notifications, exemptions and other authorizations required
under any Environmental Law.


 


“ERISA”:  the Employee Retirement Income Security Act
of 1974, as amended from time to time.


 


“euro” and the sign “€”:  each, the lawful money of the participating
member states of the European Union.


 


“Eurocurrency
Liabilities” has the meaning assigned to that term in
Regulation D.


 


“Event of Default”:  any of the events specified in Section 8, provided that any requirement for the giving of
notice, the lapse of time, or both, has been satisfied.


 


“Excess Cash Flow”:  for any fiscal year of Holdings, the excess,
if any, of (a) the amount of “net cash provided by operating activities”,
determined on a consolidated basis in accordance with GAAP and as such amount
is set forth opposite such caption in the consolidated statement of cash flows
of Holdings and its Subsidiaries for such fiscal year (the “Cash Flow
Statement”) plus (b) cash collected on repurchased receivables,
as set forth opposite such caption on the Cash Flow Statement, minus (c)
the sum, without duplication, of (i) except to the extent directly or
indirectly financed by incurring Indebtedness (including the incurrence of
Capital Lease Obligations) or by any capital contribution to, or the issuance
of any Capital Stock of, Holdings, or to the extent constituting a reinvestment
of Net Cash Proceeds of a Reinvestment Event, (A) the aggregate amount
paid in cash by the Borrower and its Subsidiaries during such fiscal year on
account of capital expenditures, as set forth opposite such caption on the Cash
Flow Statement, (B)  the aggregate amount paid in cash (net of cash
acquired) by the Borrower and its Subsidiaries during such fiscal year on
account of acquisitions, as set forth opposite the caption “acquisitions, net
of cash acquired” on the Cash Flow Statement, (C) the aggregate amount
paid in cash by the Borrower and its Subsidiaries during such fiscal year on
account of purchases of long-term investments, as set forth opposite such
caption on the Cash Flow Statement, and (D) the aggregate amount of cash
dividends paid during such fiscal year by Holdings, as set forth opposite the
caption “dividends paid” on the Cash Flow Statement to the extent permitted
under clause (d) of Section 7.6, (ii) the aggregate amount of all
mandatory prepayments of Term Loans during such fiscal year made pursuant to
Section 2.12(b), (f) or (g) with the Net Cash Proceeds of Asset Sales,
Receivable Qualifying Asset Sales or Recovery Events to the extent such Net
Cash Proceeds are included in “net cash provided by operating 


 


10





















 


activities” for such fiscal year,
(iii) the aggregate amount of all prepayments of Revolving Loans and
Swingline Loans and all payments of Reimbursement Obligations during such
fiscal year to the extent accompanying permanent optional reductions of the
Revolving Commitments and all optional prepayments of the Term Loans during
such fiscal year, other than, in each case, prepayments made in connection with
a refinancing of such Indebtedness and (iv) the aggregate amount of all
regularly scheduled principal payments of Funded Debt (including the Term
Loans) of the Borrower and its Subsidiaries made during such fiscal year (other
than in respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder); provided, however,
that, “Excess Cash Flow” shall not include any proceeds from the Incurrence of
Indebtedness by Holdings or any Subsidiary thereof or the issuance by Holdings
of, or capital contributions on, its Capital Stock, in each case pursuant to
the terms hereof.


 


“Excess Cash Flow Application Date”:  as defined in Section 2.12(c).


 


“Exemption Certificate”: 
as defined in Section 2.20(d).


 


“Existing Issuing Lender”: 
collectively, JPMorgan Chase Bank, N.A. and ABN Amro Bank N.V., the
issuing banks in respect of the Existing Letters of Credit.


 


“Existing Letters of Credit”: 
the letter of credits issued under the KMG Existing Credit Agreement or
under the umbrella agreement between ABN AMRO Bank N.V. and KMG, dated as of
November 8, 2000 by the Existing Issuing Lender for the benefit of the Borrower
or a Subsidiary of the Borrower in the respective outstanding face amounts on
the Closing Date specified on Annex B.


 


“Facility”:  each of (a) the Term Loan Commitments and the
Term Loans made thereunder (the “Term Loan Facility”),
and (b) the Revolving Credit Commitments and the extensions of credit made
thereunder (the “Revolving Credit Facility”).


 


“Facility Rating”: a rating of the Credit Facilities by a Rating
Agency.


 


“Federal Funds Effective Rate”:  for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of
the quotations for the day of such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.


 


“Fee Letter”: that certain Fee Letter, dated October 26, 2005,
among KMG, Holdings, the Borrower, Lehman Brothers Inc. and the Arrangers.


 


“Foreign Subsidiary”:  any Subsidiary of the Borrower that is not a
Domestic Subsidiary.


 


“Foreign Subsidiary Debt Amount”: the sum of (i) the aggregate
principal amount of the Indebtedness of Foreign Subsidiaries (and KMEMC) owing
to the Borrower and the 


 


11





















 


Subsidiary Guarantors outstanding on the
Closing Date as specified on Schedule 1.1(b) hereto and (ii) $75,000,000.


 


“FQ1”, “FQ2”,
“FQ3”, and “FQ4”:
when used with a numerical year designation, means the first, second, third or
fourth fiscal quarters, respectively, of such fiscal year of the Borrower.
(e.g., FQ1 2005 means the first fiscal quarter of the Borrower’s 2005 fiscal
year, which ends March 31, 2005).


 


“Funded Debt”:  with respect to any Person, all Indebtedness
of such Person of the types described in clauses (a), (b), (c), (d), (e), (g)
and (h) of the definition of “Indebtedness” in this Section, provided
that Indebtedness referred to in clause (h) shall constitute Funded Debt only
to the extent that it relates to Indebtedness in respect of clauses (a), (b),
(c), (d) or (e) of the definition of “Indebtedness” in this Section.


 


“Funding Office”:  the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower and the
Lenders.


 


“GAAP”:  generally accepted accounting principles in
the United States of America as in effect from time to time, but subject to
Section 10.16 of this Agreement.


 


“Governing Documents”:  collectively, as to any Person, the articles
or certificate of incorporation and bylaws, any shareholders agreement,
certificate of formation, limited liability company agreement, partnership
agreement or other formation or constituent documents of such Person.


 


“Governmental Authority”:  any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.


 


“Guarantee and Collateral Agreement”:  the Guarantee and Collateral Agreement to be
executed and delivered by Holdings, the Borrower and each Subsidiary Guarantor,
substantially in the form of Exhibit A, as the same may be amended,
supplemented, replaced or otherwise modified from time to time.


 


“Guarantee Obligation”:  with respect to any Person (the “guaranteeing person”), any obligation of (a) the
guaranteeing person or (b) another Person (including any bank under any letter
of credit), if to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness (the “primary obligations”) of any other third Person
(the “primary obligor”) in any manner,
whether directly or indirectly, including any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary obligation
or any Property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase Property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the owner of any such primary obligation against
loss in respect thereof; provided, however, that the term 


 


12





















 


Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.


 


“Guarantors”:  the collective reference to Holdings and the
Subsidiary Guarantors.


 


“Hedge Agreements”:  all interest rate or currency swaps, caps or
collar agreements, foreign exchange agreements, commodity contracts or similar
arrangements entered into by Holdings, the Borrower or its Subsidiaries
providing for protection against fluctuations in interest rates, currency
exchange rates, commodity prices or the exchange of nominal interest
obligations, either generally or under specific contingencies.


 


“Henderson Real Estate”: 
the real estate described on Schedule 1.1(d).


 


“Henderson Sale Proceeds”: 
all cash and Cash Equivalents (including any such cash or Cash
Equivalents received by way of distributions in respect of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) received by
the Borrower from The Landwell Company, LP and/or Basic Management, Inc. in
connection with the sale of the Henderson Real Estate by The Landwell Company,
LP and the distribution of the net proceeds of such sale by The Landwell
Company, LP and/or Basic Management, Inc. to its equity holders, net of (i)
taxes paid and/or reasonably estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements) and (ii) all other amounts of the type described in clauses
(a)(i) and (a)(ii) of the definition of “Net Cash Proceeds” to the extent applicable
to Holdings, the Borrower or any of its Subsidiaries in connection with such
sale.


 


“Immaterial Subsidiary”: 
as of any date, any Subsidiary whose total assets, as of the last day of
the most recently ended four full fiscal quarter period for which internal
financial statements are available immediately preceding such date, are less
than $50,000 and whose total revenues for the most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding such date do not exceed $50,000; provided that a Subsidiary will not be considered to be an
Immaterial Subsidiary if it (i) directly or indirectly, guarantees or otherwise
provides direct credit support for any Indebtedness of any of Holdings, the
Borrower or any Subsidiary Guarantor or (ii) owns any Stock Collateral.


 


“Indebtedness”:  of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of Property or
services (other than current trade payables and accrued 


 


13





















 


expenses incurred in the ordinary course of
such Person’s business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such Property), provided that the
amount of such Indebtedness of any Person described in this clause (d) shall,
for the purposes of this Agreement, be deemed to be equal to the lesser of (i)
the aggregate unpaid amount of such Indebtedness and (ii) the fair market value
of the property or asset encumbered, as determined by such Person in good
faith, (e) all Capital Lease Obligations of such Person, (f) all obligations of
such Person, contingent or otherwise, as an account party or applicant under
acceptance, letter of credit or similar facilities, (g) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Disqualified Stock of such Person, provided that
the amount of such Indebtedness of any Person described in this clause (g)
shall, for the purposes of this Agreement, be deemed to be equal to the
liquidation value of such Disqualified Stock, (h) all Guarantee Obligations
of such Person in respect of obligations of the kind referred to in clauses (a)
through (g) above, (i) to the extent not otherwise included pursuant to
clause (a) through (h) above, all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by)
any Lien on Property (including accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the payment
of such obligation, provided that the amount of such Indebtedness of any
Person described in this clause (i) shall, for the purposes of this Agreement,
be deemed to be equal to the lesser of (i) the aggregate unpaid amount of such
Indebtedness and (ii) the fair market value of the property or asset
encumbered, as determined by such Person in good faith, and (j) for the
purposes of Section 8(e) only, all obligations of such Person in respect of
Hedge Agreements (it being understood that obligations of such Person in
respect of Hedge Agreements shall otherwise not be considered Indebtedness for
purposes of this Agreement); provided that
Indebtedness shall not include any earn-out obligations.  The amount of any Indebtedness under clause (j)
shall be the net amount, including any net termination payments, that would be
required to be paid to a counterparty on such date if a termination of the
applicable Hedge Agreement were to occur on such date, rather than the notional
amount of the applicable Hedge Agreement. 
The Indebtedness of any Person shall include, without duplication, the
Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness expressly provide
that such Person is not liable therefor.


 


“Indemnified Liabilities”:  as defined in Section 10.5.


 


“Indemnitee”:  as defined in Section 10.5.


 


“Insolvency”:  with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.


 


“Insolvent”:  pertaining to a condition of Insolvency.


 


14





















 


“Intellectual Property”:  the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, state, multinational or foreign laws or otherwise,
including copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, service-marks, technology, know-how and processes, recipes,
formulas, and all rights to sue at law or in equity for any infringement or
other impairment thereof, including the right to receive all proceeds and
damages therefrom.


 


“Interest Payment Date”:  (a) as to any Base Rate Loan, the last day of
each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any LIBO Rate
Loan having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any LIBO Rate Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan (other than any Revolving Credit Loan that is a
Base Rate Loan (unless all Revolving Credit Loans are being repaid in full in
immediately available funds and the Revolving Credit Commitments terminated)
and any Swing Line Loan), the date of any repayment or prepayment made in
respect thereof.


 


“Interest Period”:  as to any LIBO Rate Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such LIBO Rate Loan and ending one, two, three or six months or (if
available to all Lenders under the relevant Facility, as determined by such
Lenders in their sole discretion) one, two or three weeks or nine or twelve
months thereafter, as selected by the Borrower in its Borrowing Notice or
notice of conversion, as the case may be, given with respect thereto; and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such LIBO Rate Loan and ending one, two, three,
six or (if available to all Lenders under the relevant Facility, as determined
by such Lenders in their sole discretion) one, two or three weeks or nine or
twelve months thereafter, as selected by the Borrower by irrevocable notice to
the Administrative Agent not later than 12:00 noon, New York City time, on the
third Business Day prior to the last day of the then current Interest Period
with respect thereto; provided that, all of
the foregoing provisions relating to Interest Periods are subject to the
following:


 


(a)           if any
Interest Period would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;


 


(b)           any
Interest Period that would otherwise extend beyond the Scheduled Revolving
Credit Termination Date (with respect to the Revolving Credit Facility) or
beyond the date final payment is due on the Term Loans (with respect to the
Term Loan Facility) shall end on the Scheduled Revolving Credit Termination
Date or such due date, as applicable; and


 


(c)           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 


 


15





















 


month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period.


 


“Investments”:  as defined in Section 7.8.


 


“IPO”: the initial public offering of class A common stock of
Holdings.


 


“Issuing Lender”:  the collective reference to each Revolving
Credit Lender (or any Lender Affiliate that becomes a party hereto) from time
to time designated by the Borrower with the consent of such Revolving Credit
Lender and the Administrative Agent (which consent shall not unreasonably be
withheld or delayed), in its capacity as issuer of any Letter of Credit.  The Issuing Lenders, on the date hereof, are,
collectively, ABN Amro Bank N.V. and JPMorgan Chase Bank, N.A.


 


“KMEMC” means Kerr-McGee Environmental Management Corporation, a
Delaware corporation.


 


“KMG”:  Kerr-McGee
Corporation, a Delaware corporation.


 


“KMG Existing Credit
Agreement”:  dated as of May 18, 2005
and amended on November 15, 2005, among KMG, as borrower, the several lenders
party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the
other agents named herein.


 


“Kerr-McGee Worldwide”: 
Kerr-McGee Worldwide Corporation, a Delaware corporation.


 


“KMG Specified Debt Instruments”:  the KMG Existing Credit Agreement and the
Existing Indentures (as defined in the KMG Existing Credit Agreement).


 


“KMG Party”:  (i) KMG;
(ii) Kerr-McGee Worldwide; and (iii) each Subsidiary of KMG (other than
Holdings, the Borrower or its Subsidiaries).


 


“L/C Fee Payment Date”:  the last
day of each March, June, September and December and the last day of the
Revolving Credit Commitment Period.


 


“L/C (Euro)
Obligations”: at any time, an amount equal to the sum of,
without duplication, (a) the aggregate then undrawn and unexpired amount of the
then outstanding Letters of Credit (Euro) and (b) the aggregate amount of
drawings under Letters of Credit (Euro) that have not then been reimbursed
pursuant to Section 3.5.


 


“L/C Obligations”:  at any time, an amount equal to the sum of,
without duplication, (a) the aggregate then undrawn and unexpired amount of the
then outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit that have not then been reimbursed pursuant to Section
3.5.


 


“L/C Participants”:   with respect to any Letter of Credit, the
collective reference to all the Revolving Credit Lenders other than the Issuing
Lender that issued such letter of Credit.


 


16





















 


“Lender Addendum”:  with respect to any initial Lender, a Lender
Addendum, substantially in the form of Exhibit H, to be executed and delivered
by such Lender on the Closing Date as provided in Section 10.17.


 


“Lender Affiliate”: as to any Lender, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Lender.  For purposes
of this definition, “control” of a Person means the power, directly or
indirectly, either to (a) vote at least a majority of the securities having
ordinary voting power for the election of directors (or for persons having
similar functions) of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.


 


“Lenders”:  as defined in the preamble hereto.


 


“Letter Agreement”:  the Letter Agreement, dated
as of February 23, 2005, among the KMG and Lehman Brothers.


 


“Letters of Credit”:  as defined in Section 3.1(a).


 


“Letter of Credit (Euro)”:  any Letters of Credit drawings under which
are payable in euro.


 


“LIBOR”:  with respect to any Interest Period for any
LIBO Rate Loan in an Applicable Currency comprising part of the same Borrowing,
the rate of interest per annum determined by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date that is two Business
Days prior to the beginning of the relevant Interest Period by reference to the
British Bankers’ Association Interest Settlement Rates LIBOR for deposits in
the Applicable Currency (as set forth by the Bloomberg Information Service or
any successor thereto or any other service selected by the Administrative Agent
which has been nominated by the British Bankers’ Association as an authorized
information vendor for the purpose of displaying such rates) for a period equal
to such Interest Period; provided
that, to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, “LIBOR” shall be the interest rate per
annum determined by the Administrative Agent to be the average of the rates per
annum at which deposits in the Applicable Currency in an amount equal to
$5,000,000 or €5,000,000, as the case may be, are offered
for such relevant Interest Period to major banks in the London interbank market
in London, England by the Administrative Agent at approximately 11:00 a.m.
(London time) on the date that is two Business Days prior to the beginning of
such Interest Period.


 


“LIBO Rate”:  with respect to each day during each Interest
Period for any LIBO Rate Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):


 


	
   

  	
  LIBOR

  	
   

  
	
   

  	
  1.00
  – LIBOR Statutory Reserves

  	
   

  



 


“LIBO Rate Dollar
Loan”:  any LIBO
Rate Loan denominated in Dollars.


 


17





















 


“LIBO Rate Loan”:  any Loan for which the applicable rate of
interest is based upon the LIBO Rate.


 


“LIBO Rate Tranche”: the collective reference to
LIBO Rate Loans under a particular Facility the then current Interest Periods
with respect to all of which begin on the same date and end on the same later
date (whether on such Loans shall originally have been made on the same day).


 


“LIBOR Lending
Office”:  with
respect to any Lender, the office of such Lender specified as its “LIBOR Lending Office”
opposite its name on Schedule II or on the Assignment and Acceptance by which
it became a Lender (or, if no such office is specified, its Domestic Lending
Office) or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.


 


“LIBOR Statutory
Reserves”:  the
aggregate of the maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established by the
Federal Reserve Board and any other banking authority, domestic or foreign, to
which the Administrative Agent or any Lender (including any branch, Lender
Affiliate, or other fronting office making or holding a Loan) is subject for
Eurocurrency Liabilities.  Such reserve
percentages shall include those imposed pursuant to Regulation D of the
Board as in effect from time to time. 
LIBO Rate Loans shall be deemed to constitute Eurocurrency Liabilities
and to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under Regulation D of the Board as in effect from time to
time.  LIBOR Statutory Reserves shall be
adjusted automatically on and as of the effective date of any change in any reserve
percentage.


 


“Lien”:  any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), charge
or other security interest (including any conditional sale or other title
retention agreement, any capital lease having substantially the same economic
effect as any of the foregoing).


 


“Loan”:  any loan made by any Lender pursuant to this
Agreement.


 


“Loan Documents”:  this Agreement, the Security Documents and
the Notes.


 


“Loan Parties”:  Holdings, the Borrower and each Subsidiary of
the Borrower that is a party to a Loan Document.


 


“Majority Facility Lenders”:  with respect to any Facility, the holders of
more than 50% of the aggregate unpaid principal amount of the Term Loans or the
Total Revolving Extensions of Credit, as the case may be, outstanding under
such Facility (or, in the case of the Revolving Credit Facility, prior to any
termination of the Revolving Credit Commitments, the holders of more than 50%
of the Total Revolving Credit Commitments).


 


“Majority Revolving Credit Facility Lenders”:  the Majority Facility Lenders in respect of
the Revolving Credit Facility.


 


18





















 


“Master Separation Agreement”: 
the Master Separation Agreement dated on or about the Closing Date by
and among KMG, Kerr-McGee Worldwide, and Holdings.


 


“Material Adverse Effect”:  a material adverse effect on (a) the
business, assets, property or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (b) the validity,
enforceability or priority of the Liens purported to be created by the Security
Documents or (c) the validity or enforceability of the Loan Documents or the
material rights or remedies of the Agents or the Lenders under the Loan
Documents.


 


“Material Contractual Obligations”:  (i) any Material Indebtedness; (ii) any
Contractual Obligation with respect to Holdings, the Borrower or any of its
Subsidiaries that is required to be filed as an exhibit to an annual report on
Form 10-K of Holdings pursuant to paragraph (10) of Item 601(b) of Regulation
S-K; or (iii) any other Contractual Obligation with respect to Holdings, the
Borrower or any of its Subsidiaries for which breach, nonperformance,
cancellation or failure to renew could reasonably be expected to have a
Material Adverse Effect.


 


“Material Indebtedness”: (i) Indebtedness under the Senior Note
Indenture; or (ii) any other Indebtedness of Holdings, the Borrower or any of
its Subsidiaries the outstanding principal amount of which exceeds $25,000,000
in the aggregate.


 


“Materials of Environmental Concern”:  any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products, polychlorinated biphenyls,
urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity
and any other substances of any kind, that is regulated pursuant to or could
give rise to liability under any Environmental Law.


 


“Moody’s”: Moody’s Investors Services, Inc. or its successor.


 


“Mortgaged Properties”:  the real properties and leasehold estates
listed on Schedule 1.1(c) and such other real properties and leaseholds
interests specified after the Closing Date by the Borrower to the
Administrative Agent in a written notice referencing this definition, as to
which the Administrative Agent for the benefit of the Secured Parties shall be
granted a Lien pursuant to the Mortgages.


 


“Mortgages”:  each of the mortgages and deeds of trust made
by any Loan Party in favor of, or for the benefit of, the Administrative Agent
for the benefit of the Secured Parties, substantially in the form to be
provided in accordance with Section 7.21 (which such form of mortgage shall
become Exhibit K hereto (with such changes thereto as shall be advisable under
the law of the jurisdiction in which such mortgage or deed of trust is to be
recorded), as the same may be amended, supplemented, replaced or otherwise
modified from time to time in accordance with this Agreement.


 


“Multiemployer Plan”:  a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.


 


“Net Cash Proceeds”:  (a)  in
connection with any Asset Sale, Receivable Qualifying Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal 


 


19





















 


pursuant to a note or installment receivable
or purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale, Receivable Qualifying Asset Sale or Recovery
Event, net of (i) appraisal fees, survey costs, title insurance premiums,
attorneys’ fees, notarial fees, accountants’ fees, investment banking fees,
amounts required to be applied to the repayment of Indebtedness (together with
any accrued and unpaid interest thereon, premium or penalty or other amount
payable with respect thereto) secured by a Lien expressly permitted hereunder
on any asset which is the subject of such Asset Sale, Receivable Qualifying
Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other reasonable and customary fees and expenses, in each case,
to the extent actually incurred in connection therewith and net of taxes paid
and/or reasonably estimated to be payable as a result thereof (after taking
into account any available tax credits or deductions and any tax sharing
arrangements), and (ii) solely in connection with any such Asset Sale, any
reserve established in accordance with GAAP or amounts deposited in escrow for
adjustment in respect of the sale price of such asset or assets or for indemnities
with respect to such Asset Sale, provided
that any such reserved or escrowed amounts shall be Net Cash Proceeds to the
extent and at the time released to Holdings, the Borrower or any Subsidiary and
not required to be so used; and (b) in connection with any issuance or
sale of debt securities or instruments or the incurrence of loans, the cash
proceeds received from such issuance or incurrence, net of attorneys’ fees,
investment banking fees, accountants’ fees, underwriting discounts and
commissions and fees and expenses, in each case, to the extent actually
incurred in connection therewith and net of taxes paid or reasonably estimated
to be paid as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements).


 


“Non-Excluded Taxes”:  as defined in Section 2.20(a).


 


“Non-U.S. Lender”:  as defined in Section 2.20(d).


 


“Note”:  any promissory note evidencing any Loan.


 


“Obligations”:  the unpaid principal of and interest
(including interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) on the Loans, the
Reimbursement Obligations and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender or Issuing Lender or (in
the case of any Specified Hedge Agreement or Specified Cash Management
Agreement or the Specified Letter of Credit) any Qualified Counterparty,
whether direct or indirect, absolute or contingent, due or to become due, or
now existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement, any other Loan Document, the Letters of
Credit, any Specified Hedge Agreement, any Specified Cash Management Agreement
or the Specified Letter of Credit or any other document made, delivered or given
in connection herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including all
fees, charges and disbursements of counsel to the Arrangers, to the Agents or
to any Lender or to any Qualified Counterparty that are required to be paid by
the Borrower pursuant hereto or pursuant to any other Loan Document, any
Specified Hedge Agreement, any Specified Cash Management Agreement or the
Specified Letter of Credit) or otherwise; provided,
that (i) Obligations of the 


 


20





















 


Borrower or any Subsidiary under any
Specified Hedge Agreement , any Specified Cash Management Agreement and the
Specified Letter of Credit shall be secured and guaranteed pursuant to the
Security Documents only to the extent that, and for so long as, the other
Obligations are so secured and guaranteed and (ii) any release of Collateral or
Guarantors effected in the manner permitted by this Agreement shall not require
the consent of holders of obligations under Specified Hedge Agreements,
Specified Cash Management Agreements or the Specified Letter of Credit or the
Specified Letter of Credit Issuer.


 


“Other Taxes”:  any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.


 


“Participant”:  as defined in Section 10.6(b).


 


“Payment Office”:  the office specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower and the
Lenders.


 


“PBGC”:  the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA (or any successor).


 


“Permits”:  the collective reference to (i) Environmental
Permits, and (ii) any and all other franchises, licenses, leases, permits,
approvals, notifications, certifications, registrations, authorizations, exemptions,
qualifications, easements, and rights of way granted by a Governmental
Authority.


 


“Permitted Acquisitions”:  as defined in Section 7.8(h).


 


“Permitted Liens”:  the collective reference to (i) in the case
of Collateral other than Stock Collateral, Liens permitted by Section 7.3 and
(ii) in the case of Collateral consisting of Stock Collateral, non-consensual
Liens permitted by Section 7.3 to the extent arising by operation of law.


 


“Person”:  an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.


 


“Personal Property Collateral”: any Property of Borrower or any
Guarantor, whether now owned or hereafter acquired, constituting (i) Stock
Collateral; or (ii) inventory, equipment (other than vehicles) or accounts
(each as defined in the UCC) or certain other personal property, in each case
upon which a Lien is purported to be created by any Security Document.


 


“Plan”:  at a particular time, any employee benefit
plan that is covered by ERISA and which the Borrower (or, with respect to any
Single Employer Plan or Multiemployer Plan, any Commonly Controlled Entity)
maintains, administers, contributes to or is required to contribute to or under
which the Borrower (or, with respect to any Single Employer Plan or
Multiemployer Plan, any Commonly Controlled Entity) could incur any liability.


 


21





















 


“Pledged Stock”: as defined in the
Guarantee and Collateral Agreement.


 


“Pricing Grid”:  the pricing grid attached hereto as Annex A.


 


“Pro Forma Balance Sheet”:  as defined in Section 4.1(a).


 


“Projections”:  as defined in Section 6.2(c).


 


“Property”:  any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including Capital Stock.


 


“Qualified Counterparty: 
(i) with respect to any Specified Hedge Agreement or Specified Cash
Management Agreement (other than any Specified Citigroup Cash Management
Agreement), any counterparty thereto that, at the time such Specified Hedge
Agreement or Specified Cash Management Agreement was entered into, was a Lender
or a Lender Affiliate, (ii) with respect to the Specified Letter of Credit, the
Specified Letter of Credit Issuer, or (iii) with respect to any Specified
Citigroup Cash Management Agreement, Citicorp USA, Inc. or the Lender Affiliate
thereof party thereto on the Closing Date, in the case of (i), (ii) or (iii) if
(but only if) such Person has agreed to be bound by the provisions of Section
7.2 of the Guarantee and Collateral Agreement as if it were a party thereto and
by the provisions of Section 9 of this Agreement as if it were a Lender party
hereto.


 


“Rating Agency”: each of (i) Moody’s and (ii) S&P.


 


“Receivables
Assets”: any accounts receivable, instruments, chattel
paper, general intangibles and similar assets (whether now existing or arising
in the future, “Receivables”)
of the Borrower or any of its Subsidiaries, and any assets related thereto
including all collateral securing such Receivables, all contracts, contract
rights and all guarantees or other obligations in respect of such Receivables,
proceeds of such Receivables and any other assets which are customarily
transferred or in respect of which security interests are customarily granted
in connection with asset securitization transactions.


 


“Receivable Asset Sale”: any Disposition of
Receivables Assets permitted by clause (l) of Section 7.5 with respect to a
Receivable Financing Transaction.


 


“Receivable
Financing Transaction”: any transaction or series of
transactions entered into by the Borrower or any of its Subsidiaries pursuant
to which the Borrower or any Subsidiary sells, conveys or otherwise transfers,
directly or indirectly, to (a) a Special Purpose Subsidiary (without recourse
to or guarantee by any Loan Party (excluding any guarantee of obligations
(other than the principal of, or interest on, Indebtedness), or recourse,
pursuant to Standard Securitization Undertakings)) and (b) thereupon such
Special Purpose Subsidiary sells, conveys or otherwise transfers to any other
Person (or grants to any other Person a security interest in), any Receivables
Assets in each case in a manner customary for asset securitization transactions
involving accounts receivable.


 


“Receivable Qualifying Asset Sale”: (i) the initial Receivable
Asset Sale to any Special Purpose Subsidiary and (ii) any subsequent Receivable
Asset Sale to such Special Purpose Subsidiary to the extent (and only to the
extent) the consideration for the Disposition of 


 


22





















 


the Receivables Assets
to such Special Purpose Subsidiary is funded with the proceeds of Indebtedness
or participation certificates or certificates of beneficial interest or like
instruments incurred or issued (other than to the Borrower or its Subsidiaries)
by such Special Purpose Subsidiary or any other Person to which Receivables
Assets are or have been Disposed of.


 


“Recovery Event”: 
any settlement of or payment in respect of any property or casualty
insurance claim or any condemnation proceeding relating to any asset of
Holdings, the Borrower or any of its Subsidiaries.


 


“Refunded Swing Line Loans”:  as defined in Section 2.7(b).


 


“Refunding Date”: 
as defined in Section 2.7(c).


 


“Register”: 
as defined in Section 10.6(d).


 


“Registration Rights Agreement”:  the Registration Rights Agreement, dated the
Closing Date, among the Borrower, Lehman Brothers Inc. and Credit Suisse First
Boston, LLC, with respect to the Senior Notes.


 


“Regulation
D”:  Regulation D of the Board as in
effect from time to time (and any successor to all or a portion thereof).


 


“Regulation H”: 
Regulation H of the Board as in effect from time to time (and any
successor to all or a portion thereof).


 


“Regulation U”: 
Regulation U of the Board as in effect from time to time (and any successor
to all or a portion thereof).


 


“Regulation
X”:  Regulation X of the Board as in
effect from time to time (and any successor to all or a portion thereof).


 


“Reimbursement
Obligation”:  the obligation of the
Borrower to reimburse each Issuing Lender pursuant to Section 3.5 for amounts
drawn under Letters of Credit issued by such Issuing Lender.


 


“Reinvestment Deferred Amount”:  with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by Holdings, the Borrower or any of its
Subsidiaries in connection therewith that are specified in a Reinvestment
Notice as not being required to be initially applied to prepay the Term Loans
pursuant to Section 2.12(b) as a result of the delivery of a Reinvestment
Notice.


 


“Reinvestment Event”:  any Asset Sale or Recovery Event in respect
of which the Borrower has duly delivered a Reinvestment Notice.


 


“Reinvestment
Event Assets”:  the assets that were
the subject of a Reinvestment Event.


 


23





















 


“Reinvestment Notice”:  a written notice executed by a Responsible
Officer of the Borrower stating that no Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion of the Net Cash Proceeds
of an Asset Sale or Recovery Event specified in such notice to acquire or
repair Collateral (or, to the extent the Reinvestment Event Assets were not
Collateral, any assets) owned (or to be owned) by and useful in the business of
the Borrower or a Subsidiary Guarantor (or, if the Reinvestment Event Assets
were not owned by the Borrower or a Subsidiary Guarantor, the Borrower or any
Subsidiary thereof).


 


“Reinvestment Prepayment Amount”:  with respect to any Reinvestment Event, the
Reinvestment Deferred Amount relating thereto less
any amount expended prior to the relevant Reinvestment Prepayment Date to
acquire or repair Collateral (or, to the extent the Reinvestment Event Assets
were not Collateral, any assets) owned (or to be owned) by and useful in the
business of the Borrower or a Subsidiary Guarantor (or, if the Reinvestment
Event Assets were not owned by the Borrower or a Subsidiary Guarantor, the
Borrower or any Subsidiary thereof).


 


“Reinvestment Prepayment Date”:  with respect to any Reinvestment Event, the
earlier of (a) the date occurring one year after such Reinvestment Event and
(b) the date on which the Borrower shall have determined not to, or shall have
otherwise ceased to, with all or any portion of the relevant Reinvestment
Deferred Amount acquire or repair Collateral (or, to the extent the
Reinvestment Event Assets were not Collateral, any assets) owned (or to be
owned) by and useful in the business of the Borrower or a Subsidiary Guarantor (or,
if the Reinvestment Event Assets were not owned by the Borrower or a Subsidiary
Guarantor, the Borrower or any Subsidiary thereof).


 


“Reorganization”: 
with respect to any Multiemployer Plan, the condition that such plan is
in reorganization within the meaning of Section 4241 of ERISA.


 


“Reportable Event”:  any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. § 4043.


 


“Required Lenders”:  at any time, the holders of more than 50% of
(a) until the Closing Date, the Commitments and (b) thereafter, the sum of (i)
the aggregate unpaid principal amount of the Term Loans then outstanding and
(ii) the Total Revolving Credit Commitments then in effect or, if the Revolving
Credit Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding.


 


“Requirement of Law”:  as to any Person, the Governing Documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person
or any of its Property is subject.


 


“Responsible Officer”:  as to any Person, the chief executive officer,
president or chief financial officer or treasurer of such Person, but in any
event, with respect to financial 


 


24





















 


matters, the chief
financial officer or treasurer of such Person. 
Unless otherwise qualified, all references to a “Responsible Officer”
shall refer to a Responsible Officer of the Borrower.


 


“Restricted Payments”:  as defined in Section 7.6.


 


“Revolving Credit Base Rate Loan”:  a Revolving Credit Loan that is a Base Rate
Loan.


 


“Revolving Credit Commitment”:  as to any Lender, the obligation of such
Lender, if any, to make Revolving Credit Loans and participate in Swing Line
Loans and Letters of Credit, in an aggregate principal and/or face amount not
to exceed the amount set forth under the heading “Revolving Credit Commitment”
opposite such Lender’s name on Schedule 1 to the Lender Addendum delivered by
such Lender, or, as the case may be, in the Assignment and Acceptance pursuant
to which such Lender became a party hereto, as the same may be changed from
time to time pursuant to the terms hereof. 
The original aggregate amount of the Total Revolving Credit Commitments
is $250,000,000.


 


“Revolving Credit Commitment Period”:  the period from and including the Closing
Date to the Revolving Credit Termination Date.


 


“Revolving Credit Euro Loan”:  a Revolving Credit Loan denominated in euro.


 


“Revolving Credit Facility”:  as defined in the definition of “Facility” in
this Section 1.1.


 


“Revolving Credit Lender”:  each Lender that has a Revolving Credit
Commitment or that is the holder of Revolving Credit Loans.


 


“Revolving
Credit LIBO Rate Dollar Loan”:  a
Revolving Credit Loan denominated in dollars that is a LIBO Rate Loan.


 


“Revolving Credit Loans”:  as defined in Section 2.4.


 


“Revolving Credit Note”:  as defined in Section 2.8.


 


“Revolving Credit Percentage”:  as to any Revolving Credit Lender at any
time, the percentage which such Lender’s Revolving Credit Commitment then
constitutes of the Total Revolving Credit Commitments (or, at any time after
the Revolving Credit Commitments shall have expired or terminated, the
percentage which the aggregate principal or face amount of such Lender’s
Revolving Extensions of Credit then outstanding constitutes the aggregate
principal or face amount of the Total Revolving Extensions of Credit then
outstanding).


 


“Revolving Credit Termination Date”:  the earliest of (i) the Scheduled Revolving
Credit Termination Date, (ii) the date of termination of the Revolving Credit
Commitments pursuant to Section 2.10 and (iii) the date on which the
Obligations become due and payable pursuant to Section 8.


 


25





















 


“Revolving Extensions of Credit”:  as to any Revolving Credit Lender at any
time, an amount equal to the sum of (a) the Dollar Equivalent of the aggregate
principal amount of all Revolving Credit Loans made by such Lender then
outstanding, (b) such Lender’s Revolving Credit Percentage of the Dollar
Equivalent of the L/C Obligations then outstanding and (c) such Lender’s
Revolving Credit Percentage of the aggregate principal amount of Swing Line
Loans then outstanding.


 


“S&P”:  Standard & Poor’s Ratings Group or its
successor.


 


“Scheduled Revolving Credit Termination Date”:  November 28, 2010, the fifth anniversary
of the Closing Date.


 


“SEC”:  the
Securities and Exchange Commission (or successors thereto or an analogous
Governmental Authority).


 


“Secured Parties”:  collectively, the Arrangers, the
Administrative Agent, the Issuing Lenders, the Lenders, and with respect to any
Specified Hedge Agreement or any Specified Cash Management Agreement or the
Specified Letter of Credit, any Qualified Counterparty that has agreed to be
bound by the provisions of Section 7.2 of the Guarantee and Collateral
Agreement as if it were a party thereto and by the provisions of Section 9
hereof as if it were a Lender party hereto.


 


“Security Documents”:  the collective reference to the Guarantee and
Collateral Agreement, the Mortgages, and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any Property of any
Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.


 


“Senior Note Documentation”:  the Senior Note Indenture and the
Registration Rights Agreement, together with any other instruments and
agreements entered into by the Borrower or its Subsidiaries pursuant thereto
(other than the Loan Documents), as the same may be amended, supplemented,
replaced or otherwise modified from time to time in accordance with this
Agreement.


 


“Senior Note Indenture”:  the Indenture entered into by the Borrower
and certain of its Subsidiaries in connection with the issuance of the Senior
Notes, together with all instruments and other agreements entered into by the
Borrower or such Subsidiaries in connection therewith, as the same may be
amended, supplemented, replaced or otherwise modified from time to time in
accordance with Section 7.9.


 


“Senior Notes”: 
the senior notes of the Borrower and Tronox Finance initially due 2012
issued from time to time pursuant to the Senior Note Indenture.


 


“Senior
Unsecured Debt Documents”:  as
defined in Section 7.2(n).


 


“Senior
Note Refinancing Documents”:  as
defined in Section 7.2(f).


 


“Single Employer Plan”:  any Plan that is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.


 


26





















 


“Solvent”: 
with respect to any Person, as of any date of determination, (a) the
amount of the “present fair saleable value” of the assets of such Person will,
as of such date, exceed the amount of all “liabilities of such Person,
contingent or otherwise”, as of such date, as such quoted terms are determined
in accordance with applicable federal and state laws governing determinations
of the insolvency of debtors, (b) the present fair saleable value (as such term
is defined in clause (a)) of the assets of such Person will, as of such date,
be greater than the amount that will be required to pay the liability of such
Person on its debts as such debts become absolute and matured, (c) such Person
will not have, as of such date, an unreasonably small amount of capital with
which to conduct its business and (d) such Person will be able to pay its debts
as they mature.  For purposes of this
definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any
(x) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or unsecured; provided that, for purposes of this definition,
in computing the amount of any contingent, unliquidated, unmatured or disputed
claim at any time, it is intended that such claims will be computed at the
amount which, in light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an
actual, liquidated or matured claim.


 


“Solvency
Certificate”:  the Solvency
Certificate to be executed and delivered by the chief financial officer of the
Borrower, substantially in the form of Exhibit J, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with this Agreement.


 


“Special Purpose Subsidiary”:  any Subsidiary of the Borrower (other than a
Subsidiary Guarantor):


 


(a)           which
has been created by the Borrower or any of its Subsidiaries for the sole
purpose of facilitating, and which engages in no activities other than in
connection with, Receivable Financing Transactions;


 


(b)           which
is designated by a Responsible Officer of the Borrower (as provided below) as a
Special Purpose Subsidiary;


 


(c)           no
portion of the Indebtedness or any other obligations (contingent or otherwise)
of which (i) is guaranteed by the Borrower or any other Subsidiary (excluding
guarantees of obligations (other than the principal of, or interest on,
Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is
recourse to or obligates the Borrower or any other Subsidiary in any way other
than pursuant to Standard Securitization Undertakings or (iii) subjects any
property or asset of the Borrower or any other Subsidiary, directly or
indirectly, contingently or otherwise, to the satisfaction thereof, other than
pursuant to Standard Securitization Undertakings;


 


(d)           with
which neither the Borrower nor any other Subsidiary has any material contract,
agreement, arrangement or understanding (except in connection with a 


 


27





















 


Receivable Financing Transaction) other than on terms no
less favorable to the Borrower or such other Subsidiary than those that might
be obtained at the time from persons that are not Affiliates of the Borrower,
other than as may be customary in accounts receivable transactions including
fees payable in connection with servicing accounts receivable;


 


(e)           to
which neither the Borrower nor any other Subsidiary has any obligation to
maintain or preserve such entity’s financial condition or cause such entity to
achieve certain levels of operating results; and


 


(f)            which
has no Subsidiaries.


 


Any
such designation by a Responsible Officer of the Borrower shall be evidenced to
the Administrative Agent by filing with the Administrative Agent a certificate
of the Borrower certifying, to the best of such officer’s knowledge and belief
after consulting with counsel, that such designation complies with the
foregoing conditions.


 


“Specified
Cash Management Agreement’:  as
defined in the Guarantee and Collateral Agreement.


 


“Specified Change of Control”:  a “Change of Control” or similar event
(howsoever defined) as defined in the Senior Note Indenture.


 


“Specified
Citigroup Cash Management Agreement”: 
as defined in the Guarantee and Collateral Agreement.


 


“Specified Hedge Agreement”:  any Hedge Agreement (a) entered into by (i)
any Loan Party and (ii) any Qualified Counterparty and (b) which has been
designated by such Lender and the Borrower, by notice to the Administrative
Agent not later than 90 days after the execution and delivery thereof by any
such Loan Party as a Specified Hedge Agreement; provided
that the designation of any Hedge Agreement as a Specified Hedge Agreement
shall not create in favor of any Lender or Qualified Counterparty that is a
party thereto any rights in connection with the management or release of any
Collateral or of the obligations of any Guarantor under the Guarantee and
Collateral Agreement.


 


“Specified
Letter of Credit”:  as defined in the
Guarantee and Collateral Agreement.


 


“Specified
Letter of Credit Issuer”:  as defined
in the Guarantee and Collateral Agreement.


 


“Spin-Off/Split-Off”:  the pro rata or non pro rata transfer by KMG
to its stockholders of 100% of the outstanding class B common stock of Holdings
in a distribution intended to be tax free under Section 355 and 368(a)(1)(D) of
the Internal Revenue Code.


 


“Standard Securitization Undertakings”:  representations, warranties, covenants and
indemnities entered into by the Borrower or any Subsidiary transferring
Receivables Assets to a Special Purpose Subsidiary in connection with a
Receivable Financing Transaction which are reasonably customary and market in
an accounts receivable securitization transaction.


 


28





















 


“Stock
Collateral”: (i) with respect to Borrower or any Domestic Subsidiary
thereof (other than a Special Purpose Subsidiary), all Capital Stock thereof;
or (ii) with respect to any direct Foreign Subsidiary (other than a Special
Purpose Subsidiary) of the Borrower or any Subsidiary Guarantor, (x) 65% of the
voting Capital Stock thereof and (y) 100% of the non-voting Capital Stock
thereof.


 


“Subordinated
Debt Documents”:  as defined in
Section 7.2(o).


 


“Subsidiary”: 
as to any Person, a corporation, partnership, limited liability company
or other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which
is otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. 
Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries”
in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.


 


“Subsidiary Guarantor”:  at any time, (i) Tronox Finance and
(ii) each direct or indirect Domestic Subsidiary of the Borrower other
than (x) KMEMC and (y) any Domestic Subsidiary of the Borrower that
is either (A) an Immaterial Subsidiary or Special Purpose Subsidiary at such
time, or (B) not a party to the Guarantee and Collateral Agreement as “Grantor”
and “Guarantor” thereunder at such time.


 


“Swing Line Commitment”:  the obligation of the Swing Line Lender to
make Swing Line Loans pursuant to Section 2.6 in an aggregate principal amount
at any one time outstanding not to exceed $25,000,000.


 


“Swing Line Lender”:  Lehman Commercial Paper Inc. or such other
Lender (in its capacity as the lender of Swing Line Loans) as may be appointed
by the Borrower with the consent of the Administrative Agent (which consent
shall not be unreasonably withheld or delayed).


 


“Swing Line Loans”:  as defined in Section 2.6.


 


“Swing Line Note”: as defined in Section 2.8(e).


 


“Swing Line Participation Amount”:  as defined in Section 2.7(c).


 


“Syndication Agent”:  as defined in the preamble hereto.


 


“Syndication Date”:  the date which is 90 days after the Closing
Date or such earlier date that the Administrative Agent determines the
syndication is complete.


 


“Syndication Letter Agreement”:  the engagement letter agreement, dated as of
October 26, 2005 among KMG, Holdings, the Borrower, Lehman Commercial
Paper Inc. and the Arrangers relating to the syndication of the Facilities.


 


29





















 


“Term Loan”: 
as defined in Section 2.1.


 


“Term Loan Commitment”:  as to any Lender, the obligation of such
Lender, if any, to make a Term Loan to the Borrower hereunder in a principal
amount not to exceed the amount set forth under the heading “Term Loan
Commitment” opposite such Lender’s name on Schedule 1 to the Lender Addendum
delivered by such Lender, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same may
be changed from time to time pursuant to the terms hereof.  The original aggregate amount of the Term Loan
Commitments is $200,000,000.


 


“Term Loan Facility”:  as defined in the definition of “Facility” in
this Section 1.1.


 


“Term Loan Lender”:  each Lender that has a Term Loan Commitment
or is the holder of a Term Loan.


 


“Term Loan Maturity Date”:  November 28, 2011, the sixth anniversary
of the Closing Date.


 


“Term Loan Percentage”:  as to any Term Loan Lender at any time, the
percentage which such Lender’s Term Loan Commitment then constitutes of the
aggregate Term Loan Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender’s Term Loans
then outstanding constitutes of the aggregate principal amount of the Term
Loans then outstanding).


 


“Term Notes”: 
as defined in Section 2.8(e).


 


“Total Revolving Credit Commitments”:  at any time, the aggregate amount of the
Revolving Credit Commitments then in effect.


 


“Total Revolving Extensions of Credit”:  at any time, the aggregate amount of the
Revolving Extensions of Credit of the Revolving Credit Lenders outstanding at
such time.


 


“Transaction”:  the Contribution, the IPO, the Distribution
and, if applicable, the Spin-Off/Split-Off.


 


“Transaction Agreements”:  (i) that certain Assignment, Assumption and
Indemnity Agreement, dated December 31, 2002, by and between the Borrower and
Kerr-McGee Oil & Gas Corporation, a Delaware corporation and an indirect
wholly-owned subsidiary of KMG, (ii) the Master Separation Agreement, (iii)
that certain Registration Rights Agreement dated on or about the Closing Date
by and between KMG and Holdings, (iv) that certain Transitional License
Agreement dated on or about the Closing Date by and among Kerr McGee Worldwide
and Holdings, (v) that certain Tax Sharing Agreement dated on or about the
Closing Date by and between KMG and Holdings, (vi) that certain Employee
Benefits Agreement dated on or about the Closing Date by and between KMG and
Holdings, and (vii) that certain Transition Services Agreement dated on or
about the Closing Date by and among KMG, Kerr-McGee Worldwide and Holdings, in
each case, as the same may be amended, supplemented, replaced or otherwise
modified from time to time in accordance with Section 7.16.


 


30





















 


“Transaction Documentation”:  collectively, the Transaction Agreements and
all schedules, exhibits, annexes and amendments thereto and all side letters
and agreements affecting the terms thereof or entered into in connection
therewith, in each case, as amended, supplemented, replaced or otherwise
modified from time to time in accordance with this Agreement.


 


“Transferee”: 
as defined in Section 10.14.


 


“Tronox
Finance”:  Tronox Finance Corp., a
Delaware corporation.


 


“Type”:  as
to any Loan, its nature as a Base Rate Loan or a LIBO Rate Loan.


 


“UCC”:  the
Uniform Commercial Code, as in effect in any jurisdiction from time to time.


 


“Valuation Date”: (i) the date
three Business Days prior to the making of any Revolving Credit LIBO Rate
Dollar Loan, the continuation of any Revolving Credit LIBO Rate Dollar Loan,
the conversion of any Revolving Credit Base Rate Loan into a Revolving Credit
LIBO Rate Dollar Loan, the conversion of any Revolving Credit LIBO Rate Dollar
Loan into a Revolving Credit Base Rate Loan  or issuance of any
Letter of Credit denominated in Dollars, (ii) the date three Business Days
prior to the making of any Revolving Credit Euro
Loan, the continuation of any Revolving Credit Euro Loan
or the issuance of any Letter of Credit (Euro), (iii) the date two Business
Days prior to the making of any Revolving Credit Base Rate Loan, (iv) the last
Business Day of any calendar quarter, and (v) any other date designated by the
Administrative Agent.


 


“Wholly Owned Subsidiary”:  as to any Person, any other Person all of the
Capital Stock of which (other than directors’ qualifying shares required by
law) is owned by such Person directly or through other Wholly Owned
Subsidiaries.


 


“Wholly Owned Subsidiary Guarantor”:  any Subsidiary Guarantor that is a Wholly
Owned Subsidiary of the Borrower.


 


1.2           Other Definitional Provisions.  (a) Unless otherwise specified therein, all
terms defined in this Agreement shall have the defined meanings when used in
the other Loan Documents or any certificate or other document made or delivered
pursuant hereto or thereto.


 


(b)           As used herein and in the other Loan
Documents, and any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms relating to Holdings, the Borrower and its
Subsidiaries not defined in Section 1.1 and accounting terms partly defined in
Section 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP.


 


(c)           The words “hereof”, “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified.


 


31





















 


(d)           The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of
such terms.


 


(e)           All calculations of financial ratios
set forth in Section 7.1 shall be calculated to the same number of decimal
places as the relevant ratios are expressed in and shall be rounded upward if
the number in the decimal place immediately following the last calculated
decimal place is five or greater and shall be rounded down if the number in the
decimal place immediately following the last calculated decimal place is four
or lower.  For example, if the relevant
ratio is to be calculated to the hundredth decimal place and the calculation of
the ratio is (i) 5.126, the ratio will be rounded up to 5.13 and (ii) 5.124,
the ratio will be rounded down to 5.12.


 


(f)            The expressions “payment in full,” “paid
in full” and any other similar terms or phrases when used herein with respect
to the Obligations shall mean the payment in full, in immediately available
funds, of all of the Obligations (other than Obligations in respect of any
Specified Hedge Agreement and unmatured contingent reimbursement and
indemnification Obligations).


 


(g)           The words “including” and “includes”
and words of similar import when used in this Agreement shall not be limiting
and shall mean “including without limitation” or “includes without limitation”,
as the case may be.


 


(h)           In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each mean “to but
excluding” and the word “through” means “to and including.”


 


(i)            References in this Agreement to any
statute, law, treaty, rule or regulation of any Governmental Authority shall be
to such statute, law, treaty, rule or regulation of any Governmental Authority
as amended or modified and in effect at the time any such reference is
operative.


 


(j)            References in this Agreement to any
agreements or other Contractual Obligations shall, unless otherwise specified,
be deemed to refer to such agreements or Contractual Obligations as amended,
supplemented, restated or otherwise modified from time to time.


 


(k)           The terms “Lender” and “Administrative
Agent” include their respective successors.


 


(l)            The words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, Capital
Stock, securities, revenues, accounts, leasehold interests and contract rights.


 


SECTION
2.                                AMOUNT AND TERMS OF
COMMITMENTS


 


2.1           Term Loan Commitments.  Subject to the terms and conditions hereof,
the Term Loan Lenders severally agree to make term loans (each, a “Term Loan”) denominated in 


 


32





















 


Dollars to the Borrower on the
Closing Date in an amount for each Term Loan Lender not to exceed the amount of
the Term Loan Commitment of such Lender. 
The Term Loans may from time to time be LIBO Rate Loans or Base Rate
Loans, as determined by the Borrower and notified to the Administrative Agent
in accordance with Sections 2.2 and 2.13.


 


2.2           Procedure for Term Loan Borrowing.  The Borrower shall deliver to the
Administrative Agent a Borrowing Notice (which Borrowing Notice must be
received by the Administrative Agent prior to 10:00 A.M., New York City time on
the anticipated Closing Date) requesting that the Term Loan Lenders make the
Term Loans on the Closing Date and specifying the amount to be borrowed.  The Term Loans made on the Closing Date shall
initially be Base Rate Loans and no Term Loans may be converted into a LIBO
Rate Loan prior to the date that is 7 days after the Closing Date.  Upon receipt of such Borrowing Notice the
Administrative Agent shall promptly notify each Term Loan Lender thereof.  Not later than 12:00 Noon, New York City
time, on the Closing Date each Term Loan Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the Term Loan or Term Loans to be made by such Lender.  The Administrative Agent shall make available
to the Borrower the aggregate of the amounts made available to the
Administrative Agent by the Term Loan Lenders, in like funds as received by the
Administrative Agent.


 


2.3           Repayment of Term Loans.  The Term Loan of each Term Loan Lender shall
mature in 24 consecutive quarterly installments, commencing on March 31, 2006,
each of which shall be in an amount equal to such Lender’s Term Loan Percentage
multiplied by the percentage set forth below opposite such installment of the
aggregate principal amount of Term Loans made on the Closing Date:


 


	
  Installment

  	
   

  	
  Percentage

  	
   

  
	
  March 31, 2006

  	
   

  	
  0.25

  	
  %

  
	
  June 30, 2006

  	
   

  	
  0.25

  	
  %

  
	
  September 30, 2006

  	
   

  	
  0.25

  	
  %

  
	
  December 31, 2006

  	
   

  	
  0.25

  	
  %

  
	
  March 31, 2007

  	
   

  	
  0.25

  	
  %

  
	
  June 30, 2007

  	
   

  	
  0.25

  	
  %

  
	
  September 30, 2007

  	
   

  	
  0.25

  	
  %

  
	
  December 31, 2007

  	
   

  	
  0.25

  	
  %

  
	
  March 31, 2008

  	
   

  	
  0.25

  	
  %

  
	
  June 30, 2008

  	
   

  	
  0.25

  	
  %

  
	
  September 30, 2008

  	
   

  	
  0.25

  	
  %

  
	
  December 31, 2008

  	
   

  	
  0.25

  	
  %

  
	
  March 31, 2009

  	
   

  	
  0.25

  	
  %

  
	
  June 30, 2009

  	
   

  	
  0.25

  	
  %

  
	
  September 30, 2009

  	
   

  	
  0.25

  	
  %

  
	
  December 31, 2009

  	
   

  	
  0.25

  	
  %

  
	
  March 31, 2010

  	
   

  	
  0.25

  	
  %

  
	
  June 30, 2010

  	
   

  	
  0.25

  	
  %

  
	
  September 30, 2010

  	
   

  	
  0.25

  	
  %

  
	
  December 31, 2010

  	
   

  	
  0.25

  	
  %

  
	
  March 31, 2011

  	
   

  	
  23.75

  	
  %

  



 


33





















 


	
  Installment

  	
   

  	
  Percentage

  	
   

  
	
  June 30, 2011

  	
   

  	
  23.75

  	
  %

  
	
  September 30, 2011

  	
   

  	
  23.75

  	
  %

  
	
  Term Loan Maturity

  	
   

  	
  23.75

  	
  %

  
	
  Date

  	
   

  	
   

  	
   

  



 


2.4           Revolving Credit Commitments.  (a) Subject to the terms and conditions
hereof, the Revolving Credit Lenders severally agree to make revolving credit
loans (“Revolving Credit Loans”)
denominated in Dollars or (subject to Sections 2.17 or 2.22) euro to the
Borrower from time to time during the Revolving Credit Commitment Period in an
aggregate amount having a Dollar Equivalent at any one time outstanding for
each Revolving Credit Lender which, when added to such Lender’s Revolving
Credit Percentage of the sum of (i) the Dollar Equivalent of the L/C
Obligations then outstanding and (ii) the aggregate principal amount of the
Swing Line Loans then outstanding, does not exceed such Lender’s Revolving
Credit Commitment (or, prior to the first Business Day after the Closing Date,
such Lender’s Revolving Credit Percentage of $25,000,000).  During the Revolving Credit Commitment Period
the Borrower may use the Revolving Credit Commitments by borrowing, prepaying
the Revolving Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof. 
The Revolving Credit Loans may from time to time be LIBO Rate Loans or
Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.5 and 2.13, provided that all Revolving Euro Loans shall be
made as LIBO Rate Loans and shall not be available as Base Rate Loans.


 


(b)           The Borrower shall repay all
outstanding Revolving Credit Loans on the Revolving Credit Termination Date.


2.5           Procedure for Revolving Credit Borrowing.  The Borrower may borrow under the Revolving
Credit Commitments on any Business Day during the Revolving Credit Commitment
Period, provided that the Borrower shall
deliver to the Administrative Agent a Borrowing Notice (which Borrowing Notice
must be received by the Administrative Agent (a) prior to 12:00 Noon, New York
City time, three Business Days prior to the requested Borrowing Date, in the
case of LIBO Rate Loans, (b) prior to 10:00 A.M. New York City time , on the
requested Borrowing Date, in the case of Base Rate Loans), specifying (i) the
Applicable Currency and the amount and Type of Revolving Credit Loans to be
borrowed, (ii) the requested Borrowing Date and (iii) in the case of LIBO Rate
Loans, the length of the initial Interest Period therefor.  Each borrowing of Revolving Credit Loans
under the Revolving Credit Commitments shall be in an amount equal to (x) in
the case of Base Rate Loans, $1,000,000 or a whole multiple thereof (or, if the
then aggregate Available Revolving Credit Commitments is less than $1,000,000,
such lesser amount), (y) in the case of LIBO Rate Loans denominated in Dollars,
$1,000,000 or a whole multiple of $1,000,000 in excess thereof, and (z) in the
case of Revolving Euro Loans, €1,000,000 or a whole multiple of €1,000,000 in excess thereof; provided, that the Swing Line Lender may request,
on behalf of the Borrower, borrowings of Base Rate Loans under the Revolving
Credit Commitments in other amounts pursuant to Section 2.7.  Upon receipt of any such Borrowing Notice
from the Borrower, the Administrative Agent shall promptly notify each
Revolving Credit Lender thereof.  Each
Revolving Credit Lender will make its Revolving Credit Percentage of the amount
of each borrowing of Revolving Credit Loans 


 


34





















 


available to the Administrative
Agent in the Applicable Currency for the account of the Borrower at the Funding
Office prior to 12:00 Noon, New York City time, or 12:00 Noon, London time (in
the case of Revolving Euro Loans) on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent.  Such borrowing will then be made available to
the Borrower by the Administrative Agent in like funds as received by the
Administrative Agent.


 


2.6           Swing Line Commitment.  (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees that, during the Revolving Credit
Commitment Period, it will make available to the Borrower in the form of swing
line loans (“Swing Line Loans”)
denominated in Dollars a portion of the credit otherwise available to the
Borrower under the Revolving Credit Commitments; provided
that (i) the aggregate principal amount of Swing Line Loans outstanding at any
time shall not exceed the Swing Line Commitment then in effect (notwithstanding
that the Swing Line Loans outstanding at any time, when aggregated with the
Swing Line Lender’s other outstanding Revolving Credit Loans hereunder, may
exceed the Swing Line Commitment then in effect or such Swing Line Lender’s
Revolving Credit Commitment then in effect) and (ii) the Borrower shall not
request, and the Swing Line Lender shall not make, any Swing Line Loan if,
after giving effect to the making of such Swing Line Loan, the aggregate amount
of the Available Revolving Credit Commitments at such time would be less than
zero.  During the Revolving Credit
Commitment Period, the Borrower may use the Swing Line Commitment by borrowing,
repaying and reborrowing, all in accordance with the terms and conditions
hereof.  Swing Line Loans shall be Base
Rate Loans only.


 


(b)           The Borrower shall repay all
outstanding Swing Line Loans on the Revolving Credit Termination Date.


 


2.7           Procedure for Swing Line
Borrowing; Refunding of Swing Line Loans. 
(a)  The Borrower may borrow under
the Swing Line Commitment on any Business Day during the Revolving Credit
Commitment Period, provided, the Borrower
shall give the Swing Line Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swing Line
Lender not later than 1:00 P.M., New York City time, on the proposed Borrowing
Date), specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date.  Each borrowing under the
Swing Line Commitment shall be in an amount equal to $500,000 or a whole
multiple of $100,000 in excess thereof. 
Not later than 3:00 P.M., New York City time, on the Borrowing Date
specified in the borrowing notice in respect of any Swing Line Loan, the Swing
Line Lender shall make available to the Administrative Agent at the Funding
Office an amount in immediately available funds equal to the amount of such
Swing Line Loan.  The Administrative
Agent shall make the proceeds of such Swing Line Loan available to the Borrower
on such Borrowing Date in like funds as received by the Administrative Agent.


 


(b)           The Swing Line Lender, at any time
and from time to time in its sole and absolute discretion may, on behalf of the
Borrower (which hereby irrevocably directs the Swing Line Lender to act on its
behalf), on one Business Day’s notice given by the Swing Line Lender no later
than 12:00 Noon, New York City time, request each Revolving Credit Lender to
make, and each Revolving Credit Lender hereby agrees to make, a Revolving Credit
Loan (which shall initially be a Base Rate Loan), in an amount equal to such
Revolving Credit Lender’s Revolving


 


35





















 


Credit Percentage of the aggregate amount of the Swing
Line Loans (the “Refunded Swing Line Loans”)
outstanding on the date of such notice, to repay the Swing Line Lender.  Each Revolving Credit Lender shall make the
amount of such Revolving Credit Loan available to the Administrative Agent at
the Funding Office in immediately available funds, not later than 10:00 A.M.,
New York City time, one Business Day after the date of such notice.  The proceeds of such Revolving Credit Loans
shall be made immediately available by the Administrative Agent to the Swing
Line Lender for application by the Swing Line Lender to the repayment of the
Refunded Swing Line Loans.  The Borrower
irrevocably authorizes the Swing Line Lender to charge the Borrower’s accounts
with the Administrative Agent (up to the amount available in each such account)
in order to pay the amount of such Refunded Swing Line Loans when due and
payable by the Borrower pursuant to Section 2.6(b) to the extent amounts
received from the Revolving Credit Lenders are not sufficient to repay in full
such Refunded Swing Line Loans.


 


(c)           If prior to the time a Revolving
Credit Loan would have otherwise been made pursuant to Section 2.7(b), one of
the events described in Section 8(f) shall have occurred and be continuing with
respect to the Borrower, or if for any other reason, as determined by the Swing
Line Lender in its sole discretion, Revolving Credit Loans may not be made as
contemplated by Section 2.7(b), each Revolving Credit Lender shall, on the date
such Revolving Credit Loan was to have been made pursuant to the notice
referred to in Section 2.7(b) (the “Refunding Date”), purchase for cash
an undivided participating interest in the then outstanding Swing Line Loans by
paying to the Swing Line Lender an amount (the “Swing
Line Participation Amount”) equal to (i) such Revolving Credit Lender’s
Revolving Credit Percentage times (ii) the sum of the aggregate principal
amount of Swing Line Loans then outstanding which were to have been repaid with
such Revolving Credit Loans.


 


(d)           Whenever, at any time after the Swing
Line Lender has received from any Revolving Credit Lender such Lender’s Swing
Line Participation Amount, the Swing Line Lender receives any payment on
account of the Swing Line Loans, the Swing Line Lender will distribute to such
Lender its Swing Line Participation Amount (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s
participating interest was outstanding and funded and, in the case of principal
and interest payments, to reflect such Lender’s pro
rata portion of such payment if such
payment is not sufficient to pay the principal of and interest on all Swing
Line Loans then due); provided, however, that in the event that such payment
received by the Swing Line Lender is required to be returned, such Revolving
Credit Lender will return to the Swing Line Lender any portion thereof
previously distributed to it by the Swing Line Lender.


 


(e)           Each Revolving Credit Lender’s
obligation to make the Loans referred to in Section 2.7(b) and to purchase
participating interests pursuant to Section 2.7(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including (i) any
setoff, counterclaim, recoupment, defense or other right which such Revolving
Credit Lender or the Borrower may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any
of the other conditions specified in Section 5; (iii) any adverse change in the
condition (financial or otherwise) of the Borrower; (iv) any breach of this
Agreement or any other Loan Document by the Borrower, any other Loan Party or
any other Revolving Credit 


 


36





















 


Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.


 


2.8           Repayment of Loans; Evidence of
Debt.  (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Revolving Credit Lender or Term Loan Lender, as the case may
be, (i) the then unpaid principal amount of each Revolving Credit Loan of such
Revolving Credit Lender on the Revolving Credit Termination Date (or on such
earlier date on which the Loans become due and payable pursuant to Section 8),
(ii) the then unpaid principal amount of each Swing Line Loan of such Swing
Line Lender on the Revolving Credit Termination Date (or on such earlier date
on which the Loans become due and payable pursuant to Section 8) and (iii) the
principal amount of each Term Loan of such Term Loan Lender in installments
according to the amortization schedule set forth in Section 2.3 (or on such
earlier date on which the Loans become due and payable pursuant to Section 8).  The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 2.15.


 


(b)           Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of the Borrower to such Lender resulting from each Loan of such
Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.


 


(c)           The Administrative Agent, on behalf
of the Borrower, shall maintain the Register pursuant to Section 10.6(d), and a
subaccount therein for each Lender, in which shall be recorded (i) the amount
and Applicable Currency of each Loan made hereunder and any Note evidencing
such Loan, the Type of such Loan and each Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder and (iii) both the
amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender’s share thereof.


 


(d)           The entries made in the Register and
the accounts of each Lender maintained pursuant to Section 2.8(b) shall, to the
extent permitted by applicable law, be prima
facie evidence of the existence and amounts
of the obligations of the Borrower therein recorded; provided,
however, that the failure of any Lender or
the Administrative Agent to maintain the Register or any such account, or any
error therein, shall not in any manner affect the obligation of the Borrower to
repay (with applicable interest) the Loans made to the Borrower by such Lender
in accordance with the terms of this Agreement.


 


(e)           The Borrower agrees that, upon the
request to the Administrative Agent and the Borrower by any Lender, the
Borrower will promptly execute and deliver to such Lender a promissory note of
the Borrower evidencing any Term Loans, Revolving Credit Loans or Swing Line
Loans, as the case may be, of such Lender, substantially in the forms of
Exhibit F-1, F-2 or F-3, respectively (a “Term Note”,
“Revolving Credit Note” or “Swing Line Note”, respectively), with
appropriate insertions as to date and principal amount; provided, that delivery
of Notes shall not be a condition precedent to the occurrence of the Closing
Date or the making of the Loans on the Closing Date.


 


37





















 


2.9           Commitment Fees, etc.  (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender (other
than any Defaulting Lender) a commitment fee for the period from and including
the Closing Date to the last day of the Revolving Credit Commitment Period,
computed at the Commitment Fee Rate on the average daily amount of the
Available Revolving Credit Commitment of such Lender during the period for
which payment is made, payable quarterly in arrears on the last day of each
March, June, September and December and on the Revolving Credit Termination
Date, commencing on the first of such dates to occur after the Closing Date.


 


(b)           Holdings and the  Borrower agrees to pay to the Arrangers on
the Closing Date the fees in the amounts previously agreed to in writing by the
Borrower and the Arrangers.


 


(c)           The Borrower agrees to pay to the
Administrative Agent the fees in the amounts and on the dates from time to time
agreed to in writing by the Borrower and the Administrative Agent.


 


2.10         Termination or Reduction of
Commitments.  (a) The Borrower shall
have the right, upon not less than three Business Days’ notice to the
Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the aggregate amount of the Revolving Credit Commitments;
provided that no such termination or
reduction of Revolving Credit Commitments shall be permitted if, after giving
effect thereto and to any prepayments of the Revolving Credit Loans and Swing
Line Loans made on the effective date thereof, the Total Revolving Extensions
of Credit would exceed the Total Revolving Credit Commitments.  Any such reduction shall be in an amount
equal to $5,000,000, or an integral multiple of $1,000,000 in excess thereof,
and shall reduce permanently the Revolving Credit Commitments then in
effect.  The Commitments with respect to
the Term Loans shall be reduced to zero upon the funding of the Term Loans on
the Closing Date.


 


2.11         Optional Prepayments.  (a) The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Administrative Agent no later than
12:00 Noon New York City time on the third Business Day prior thereto in the
case of LIBO Rate Loans no later than 10:00 A.M. New York City time, on such
day, in the case of Base Rate Loans, which notice shall (i) designate whether
the Borrower is prepaying Swing Line Loans, Revolving Credit Loans and/or Term
Loans and (ii) specify the date and amount of such prepayment, and whether the
prepayment is of LIBO Rate Loans or Base Rate Loans and the Applicable Currency
thereof; provided, that  (i) if a LIBO Rate Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower
shall also pay any amounts owing pursuant to Section 2.21 and (ii) no prior
notice is required for the prepayment of Swing Line Loans.  Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.  If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein, together with (except in the case of Loans (unless all Revolving
Credit Loans are being repaid and the Revolving Credit Commitments terminated)
that are Base Rate Loans and Swing Line Loans) accrued interest to such date on
the amount prepaid.  Partial prepayments
of Term Loans and Revolving Credit Loans shall be in an aggregate principal
amount of amount equal to (i) if the Applicable Currency is Dollars, $5,000,000,
or an 


 


38





















 


integral multiple of $1,000,000
in excess thereof or (ii) if a Revolving Euro Loan, €5,000,000, or an integral
multiple of €1,000,000 thereof.  Partial
prepayments of Swing Line Loans shall be in an aggregate principal amount of
$500,000 or an integral multiple of $100,000 in excess thereof.  Notwithstanding anything in Section 2.10 or
2.11 to the contrary, a notice of prepayment or termination or reduction of
Revolving Credit Commitments may state that such notice is conditioned upon
effectiveness of other financing, in which case such notice may be revoked by
notice to the Administrative Agent on or prior to the specified effective date
if such condition is not satisfied.


 


2.12         Mandatory Prepayments.  (a) If any Indebtedness shall be incurred by
Holdings, the Borrower or any of its Subsidiaries (excluding any Indebtedness
incurred in accordance with clauses (a) through (m) or clauses (q), (r) or (s)
of Section 7.2), then not later than five Business Days after the date of
such incurrence, an amount equal to 100% of the Net Cash Proceeds thereof shall
be applied toward the prepayment of the Term Loans as set forth in Section
2.12(d).  The provisions of this Section
do not constitute a consent to the incurrence of any Indebtedness by Holdings,
the Borrower or any of its Subsidiaries not permitted by Section 7.2.


 


(b)           If on any date Holdings, the Borrower
or any of its Subsidiaries shall receive Net Cash Proceeds from any Asset Sale
or Recovery Event, then, unless a Reinvestment Notice shall be delivered in
respect thereof, within five Business Days of the date of receipt by Holdings,
the Borrower or such Subsidiary of such Net Cash Proceeds, such Net Cash
Proceeds shall be applied toward the prepayment of the Term Loans as set forth
in Section 2.12(d); provided, that,
notwithstanding the foregoing, (i) no prepayment shall be required by this
paragraph (b) in respect of any Asset Sale or Recovery Event that generates Net
Cash Proceeds of less than or equal to $5,000,000, and (ii) on each
Reinvestment Prepayment Date an amount equal to the Reinvestment Prepayment
Amount with respect to the relevant Reinvestment Event shall be applied on such
date toward the prepayment of the Term Loans as set forth in Section
2.12(d).  The provisions of this Section
do not constitute a consent to the consummation of any Disposition not
permitted by Section 7.5.


 


(c)           If, for any fiscal year of the
Borrower commencing with the fiscal year ending December 31, 2006, there
shall be Excess Cash Flow, then, on the relevant Excess Cash Flow Application
Date, the Term Loans shall be prepaid in an amount equal to the ECF Percentage
of such Excess Cash Flow,  as set forth
in Section 2.12(d).  Each such prepayment
shall be made on a date (an “Excess Cash Flow
Application Date”) no later than five Business Days after the
earlier of (i) the date on which the financial statements of the Borrower
referred to in Section 6.1(a), for the fiscal year with respect to which such
prepayment is made, are required to be delivered to the Lenders and (ii) the
date such financial statements are actually delivered.


 


(d)           Amounts to be applied pursuant to
Section 2.12 (a), (b), (c), (f) and (g) shall be applied to the prepayment of
the Term Loans.  The application of any
prepayment pursuant to Section 2.11 or this Section 2.12 shall be made, first, to Base Rate Loans and, second, to LIBO Rate Loans, in each case in a
manner which, in the Administrative Agent’s reasonable judgment, following
consultation with the Borrower, (which shall be conclusive) minimizes the
amount of any payments required to be made by the Borrower pursuant to Section
2.21.  Each prepayment of the Loans under
Section 2.11 and this Section 2.12 (except in the case of Revolving Credit
Loans (unless the Revolving Credit Loans are being repaid in full and the 


 


39





















 


Revolving Credit Commitments terminated) that are Base
Rate Loans and Swing Line Loans) shall be accompanied by accrued interest to
the date of such prepayment to the applicable Lender on the amount prepaid.


 


(e)           If on any Valuation Date the
Administrative Agent shall determine and notify the Borrower that the aggregate
Revolving Extensions of Credit on such Valuation Date exceed 105% of the Total
Revolving Credit Commitments on such Valuation Date (such notice to provide the
euro/Dollar exchange rate used in such calculation, which shall be the Dollar
Equivalent Exchange Rate on such Valuation Date), then the Borrower shall, on
the third Business Day (such day, the “Payment Date”) following receipt
by it of such notice from the Administrative Agent, provide cash collateral for
the Letters of Credit in the manner set forth in Section 8 and/or prepay
Swingline Loans or Revolving Credit Loans, in such combination and amounts as
the Borrower may determine in its sole discretion, to the extent necessary to
ensure that, after giving effect to any borrowings or prepayments to be made by
the Borrower on or prior to such Payment Date, the aggregate Revolving
Extensions of Credit (measured using the Dollar Equivalent Exchange Rate specified
in such notice) outstanding on such Payment Date do not exceed the Total
Revolving Credit Commitments on such Payment Date.  If, on any date subsequent to such Payment
Date, the Administrative Agent reasonably determines that any cash collateral
for Letters of Credit provided pursuant to this Section 2.12(e) is no longer
required, the Administrative Agent, with the consent of each Issuing Lender
that has issued a Letter of Credit that is outstanding as of such date (which
consent shall not be unreasonably withheld or delayed), shall promptly return
such cash collateral to the Borrower.


 


(f)            If Holdings, the Borrower or any of
its Subsidiaries shall receive any Henderson Sale Proceeds, then not later than
five Business Days after the date of receipt of such Henderson Sale Proceeds by
such Person, an amount equal to 100% of such Henderson Sale Proceeds shall be
applied toward the prepayment of the Term Loans as set forth in Section
2.12(d).


 


(g)           If on any date Holdings, the Borrower
or any of its Subsidiaries shall receive Net Cash Proceeds from any Receivable
Qualifying Asset Sale, then, within five Business Days of the date of receipt
by Holdings, the Borrower or such Subsidiary of such Net Cash Proceeds, 50% of
such Net Cash Proceeds shall be applied toward the prepayment of the Term Loans
as set forth in Section 2.12(d).  The
provisions of this Section do not constitute a consent to the consummation of
any Disposition not permitted by Section 7.5.


 


2.13         Conversion and Continuation Options.  (a) The Borrower may elect from time to time
to convert LIBO Rate Dollar Loans to Base Rate Loans by giving the
Administrative Agent prior irrevocable notice of such election no later than
12:00 noon, New York City time, on the proposed conversion date, provided that any such conversion of LIBO Rate
Loans may be made only on the last day of an Interest Period with respect
thereto.  The Borrower may elect (subject
to Sections 2.17 and 2.22) from time to time to convert Base Rate Loans to LIBO
Rate Dollar Loans by giving the Administrative Agent prior irrevocable notice
any of such election (which notice shall specify the length of the initial
Interest Period therefor) no later than 12:00 noon New York City time, on the
third Business Day prior to the proposed conversion date, provided that no Base Rate Loan under a
particular Facility may be converted into a LIBO Rate Dollar Loan (i) when
any Event of Default has occurred and is continuing and 


 


40





















 


the Administrative Agent has,
or the Majority Facility Lenders in respect of such Facility have, determined
in its or their sole discretion not to permit such conversion or
(ii) after the date that is one month prior to the final scheduled
termination or maturity date of such Facility. 
Upon receipt of any such notice the Administrative Agent shall promptly
notify each relevant Lender thereof.


 


(b)           The Borrower may elect (subject to
Sections 2.17 and 2.22) to continue any LIBO Rate Loan as such upon the
expiration of the then current Interest Period with respect thereto for an
additional Interest Period in the same Applicable Currency by giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term “Interest Period” set forth in Section 1.1,
of the length of the next Interest Period to be applicable to such Loans; provided that no LIBO Rate Loan under a
particular Facility may be continued as such (i) for any Interest Period
of any length (in the case of LIBO Rate Dollar Loans) or any Interest Period in
excess of one month (in the case of Revolving Credit Euro Loans) when any Event
of Default has occurred and is continuing and the Administrative Agent has, or
the Majority Facility Lenders in respect of such Facility have, determined in its
or their sole discretion not to permit such continuation or (ii) after the
date that is one month prior to the final scheduled termination or maturity
date of such Facility; and provided, further, that if the Borrower shall fail to give
any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso, any such Loans
(other than Revolving Credit Euro Loans) shall be converted automatically to
Base Rate Loans and Revolving Credit Euro Loans shall, if otherwise permitted
under this Agreement, be continued as Revolving Credit Euro Loans with an
Interest Period of one month, in each case on the last day of such then
expiring Interest Period.  Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.


 


(c)           Revolving Credit Euro Loans may not
be converted into Revolving Credit Dollar Loans.


 


2.14         Minimum Amounts and Maximum Number
of LIBO Rate Tranches. 
Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments of LIBO Rate
Loans and all selections of Interest Periods shall be in such amounts and be
made pursuant to such elections so that, (a) after giving effect thereto, the
aggregate principal amount of the LIBO Rate Loans comprising each LIBO Rate
Tranche (x) if the Applicable Currency is Dollars, shall be equal to $1,000,000
or a whole multiple of $1,000,000 in excess thereof, and (y) if a Revolving
Euro Loan, shall be equal to €1,000,000, or an integral multiple of €1,000,000
thereof and (b) no more than twelve LIBO Rate Tranches shall be outstanding at
any one time.


 


2.15         Interest Rates and Payment Dates.  (a) Each LIBO Rate Loan shall bear interest
for each day during each Interest Period with respect thereto at a rate per
annum equal to the LIBO Rate determined for such day plus the Applicable Margin
in effect for such day.


 


(b)           Each Base Rate Loan shall bear
interest for each day on which it is outstanding at a rate per annum equal to
the Base Rate in effect for such day plus the Applicable Margin in effect for
such day.


 


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(c)           (i) 
If all or a portion of the principal amount of any Loan or Reimbursement
Obligation shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount (to the extent legally
permitted) shall bear interest at a rate per annum that is equal to (x) in the
case of the LIBO Rate Loans, a rate per annum equal to the LIBO Rate determined
for such day plus the highest Applicable Margin for LIBO Rate Loans plus 2.0%,
(y) in the case of the Base Rate Loans, a rate per annum equal to the Base Rate
determined for such day plus the highest Applicable Margin for Base Rate Loans
plus 2.0%, or (z) in the case of Reimbursement Obligations, the rate applicable
to Base Rate Loans under the Revolving Credit Facility calculated at the
highest Applicable Margin for such Loans plus 2.0%, and (ii) if all or a
portion of any interest payable on any Loan or Reimbursement Obligation or any
commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the rate then
applicable to Base Rate Loans under the relevant Facility calculated at the
highest Applicable Margin for such Loans plus 2.0% (or, in the case of any such
other amounts that do not relate to a particular Facility, the rate then applicable
to Base Rate Loans under the Revolving Credit Facility calculated at the
highest Applicable Margin for such Loans plus 2.0%), in each case, with respect
to clauses (i) and (ii) above, from the date of such non payment until such
amount is paid in full (after as well as before judgment).


 


(d)           Interest shall be payable in arrears
on each Interest Payment Date, provided that interest accruing pursuant to
paragraph (c) of this Section shall be payable from time to time on demand.


 


(e)           Interest on any Loan or other
Obligation shall be payable in same currency as the currency in which such Loan
or other Obligation is payable.


 


2.16         Computation of Interest and Fees.  (a) Interest, fees and commissions payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to Base Rate Loans on which
interest is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day year
for the actual days elapsed.  The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of each determination of a LIBO Rate.  Any change in the interest rate on a Loan
resulting from a change in the Base Rate or the LIBOR Statutory Reserves shall
become effective as of the opening of business on the day on which such change
becomes effective.  The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant Lenders
of the effective date and the amount of each such change in interest rate.


 


(b)           Each determination of an interest
rate by the Administrative Agent pursuant to any provision of this Agreement
shall be conclusive and binding on the Borrower and the Lenders in the absence
of manifest error.  The Administrative
Agent shall, at the request of the Borrower, deliver to the Borrower a
statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.16(a).


 


2.17         Inability to Determine Interest Rate.  If prior to the first day of any Interest
Period:


 


42





















 


(a)           the Administrative Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the LIBO Rate for
such Interest Period, or


 


(b)           the Administrative Agent shall have
received notice from the Majority Facility Lenders in respect of the relevant
Facility that the LIBO Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their affected
Loans during such Interest Period,


 


the Administrative Agent shall
give telecopy or telephonic notice thereof to the Borrower and the relevant
Lenders as soon as practicable thereafter. 
If such notice is given:  (i) if
the affected Loans are LIBO Rate Dollar Loans, (w) any LIBO Rate Dollar
Loans under the relevant Facility requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (x) any Base Rate Loans under
the relevant Facility that were to have been converted on the first day of such
Interest Period to LIBO Rate Dollar Loans shall be continued as Base Rate
Loans, (y) any outstanding LIBO Rate Dollar Loans under the relevant Facility
shall be converted, on the last day of the then current Interest Period with
respect thereto, to Base Rate Loans and (z) the obligations of the Lenders
to make or continue LIBO Rate Dollar Loans or to convert Base Rate Loans into
LIBO Rate Dollar Loans shall be suspended until such notice has been withdrawn
by the Administrative Agent; and (ii) if the affected Loans are Revolving
Credit Euro Loans, (x) Revolving Credit Euro Loans will automatically, on
the last day of the current Interest Period for such Loan, become due and
payable and (y) the obligations of the Lenders to make or continue Revolving
Euro Credit Loans shall be suspended until such notice has been withdrawn by
the Administrative Agent.


 


2.18         Pro Rata Treatment and Payments.  (a) Each borrowing by the Borrower from the
Lenders hereunder, each payment by the Borrower on account of any commitment
fee, and any reduction of the Commitments of the Lenders, shall be made pro  rata
according to the respective Term Loan Percentages or Revolving Credit
Percentages, as the case may be, of the relevant Lenders.  Subject to Section 2.18(c), each payment
(other than prepayments as set forth in Sections 2.18(b) or (c)) in respect of
principal or interest in respect of the Term Loans and each payment in respect
of fees or expenses payable hereunder shall be applied to the amounts of such
obligations owing to the Lenders pro  rata according to the respective amounts then due
and owing to the Lenders.  The
application of any prepayment pursuant to this Section 2.18 shall be made, first, to Base Rate Loans and, second, to LIBO Rate Loans.


 


(b)           Each payment (including each
prepayment) of the Term Loans outstanding under the Term Loan Facility shall be
allocated among the Term Loan Lenders holding such Term Loans pro rata based on
the principal amount of such Term Loans held by such Term Loan Lenders, and
shall be applied to reduce the then remaining installments of such Term Loans pro
rata based upon the then remaining installments thereof.  Amounts prepaid on account of the Term Loans
may not be reborrowed.


 


(c)           Each payment (including each
prepayment) by the Borrower on account of principal of and interest on the
Revolving Credit Loans shall be made pro  rata according to the 


 


43





















 


respective outstanding principal amounts of the Revolving
Credit Loans then held by the Revolving Credit Lenders. Each payment in respect
of Reimbursement Obligations in respect of any Letter of Credit shall be made
to the Issuing Lender that issued such Letters of Credit.


 


(d)           The application of any payment of
Loans under any Facility (including optional and mandatory prepayments) shall
be made, first, to Base Rate Loans under
such Facility and, second, to LIBO Rate
Loans under such Facility.  Each payment
of the Loans (except in the case of Swing Line Loans and Revolving Credit Loans
that are Base Rate Loans) shall be accompanied by accrued interest to the date
of such payment on the amount paid.


 


(e)           All payments (including prepayments)
to be made by the Borrower hereunder, whether on account of principal,
interest, fees or otherwise, shall be made without setoff or counterclaim and
shall be made prior to 1:00 p.m., New York City time, on the due date thereof
to the Administrative Agent, for the account of the relevant Lenders, at the
Payment Office, in the Applicable Currency and in immediately available
funds.  The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received.  If any payment hereunder
(other than payments on the LIBO Rate Loans) becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next
succeeding Business Day.  If any payment
on a LIBO Rate Loan becomes due and payable on a day other than a Business Day,
the maturity thereof shall be extended to the next succeeding Business Day
unless the result of such extension would be to extend such payment into
another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.  In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.


 


(f)            Unless the Administrative Agent
shall have been notified in writing by any Lender prior to a borrowing that
such Lender will not make the amount that would constitute its share of such
borrowing available to the Administrative Agent, the Administrative Agent may
assume that such Lender is making such amount available to the Administrative
Agent, and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount.  If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available
to the Administrative Agent.  A certificate
of the Administrative Agent submitted to any Lender with respect to any amounts
owing under this paragraph shall be conclusive in the absence of manifest
error.  If such Lender’s share of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days after such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to Base Rate Loans under the relevant Facility, on demand,
from the Borrower.


 


(g)           Unless the Administrative Agent shall
have been notified in writing by the Borrower prior to the date of any payment
being made by the Borrower hereunder that the Borrower will not make such
payment to the Administrative Agent, the Administrative Agent may assume that
the Borrower is making such payment, and the Administrative Agent may, but 


 


44





















 


shall not be required to, in reliance upon such
assumption, make available to the Lenders their respective pro  rata
shares of a corresponding amount.  If
such payment is not made to the Administrative Agent by the Borrower within
three Business Days of such required date, the Administrative Agent shall be
entitled to recover, on demand, from each Lender to which any amount which was
made available pursuant to the preceding sentence, such amount with interest
thereon at the rate per annum equal to the daily average Federal Funds
Effective Rate.  Nothing herein shall be
deemed to limit the rights of the Administrative Agent or any Lender against
the Borrower.


 


(h)           The Administrative Agent reserves the
right to apply against the repayment of any Obligations owing in any currency,
any repayment and other amounts that may be applied in accordance with other
provisions of this Agreement to repay such Obligations, regardless of the
currency in which such repayments and amounts were received or are held.


 


2.19         Requirements of Law.  (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:


 


(i)            shall
impose, modify or hold applicable any reserve, special deposit, compulsory loan
or similar requirement against assets held by, deposits or other liabilities in
or for the account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender that is not otherwise
included in the determination of the LIBO Rate hereunder; or


 


(ii)           shall
impose on such Lender any other condition;


 


and the result of any of the
foregoing is to increase the cost to such Lender, by an amount which such
Lender deems to be material, of making, converting into, continuing or
maintaining LIBO Rate Dollar or Revolving Credit Euro Loans or issuing or
participating in Letters of Credit, or to reduce any amount receivable by such
Lender hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its written demand (which shall include the
certificate described in Section 2.19(c)), any additional amounts necessary to
compensate such Lender on an after-tax basis for such increased cost or reduced
amount receivable.  If any Lender becomes
entitled to claim any additional amounts pursuant to this Section, it shall
promptly notify the Borrower (with a copy to the Administrative Agent) of the
event by reason of which it has become so entitled.


 


(b)           If any Lender shall have determined
that the adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance by such
Lender or any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have the effect
of reducing the rate of return on such Lender’s or such corporation’s capital
as a consequence of its obligations hereunder or under or in respect of any
Letter of Credit to a level below that which such Lender or such corporation
could have achieved but for such adoption, change or compliance (taking into
consideration such Lender’s or such corporation’s policies with respect to
capital adequacy) 


 


45





















 


by an amount deemed by such Lender to be material, then
from time to time, after submission by such Lender to the Borrower (with a copy
to the Administrative Agent) of a written request therefor (which request shall
include the certificate described in Section 2.19(c)), the Borrower shall pay
to such Lender within 15 days of receipt of such notice such additional amount
or amounts as will compensate such Lender on an after-tax basis for such
reduction.


 


(c)           A certificate as to any additional
amounts payable pursuant to this Section submitted by any Lender to the
Borrower (with a copy to the Administrative Agent) with reasonable detail
demonstrating how such amounts were derived shall be conclusive in the absence
of manifest error.  The obligations of
the Borrower pursuant to this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.


 


2.20         Taxes.  (a) All payments made by the Borrower under
this Agreement or any other Loan Documents shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding net income taxes
and franchise taxes (imposed in lieu of net income taxes) imposed on the
Arrangers, any Agent or any Lender as a result of a present or former
connection between the Arrangers, such Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Arrangers’, such Agent’s or such Lender’s
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document).  If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) or any Other Taxes are
required to be withheld from any amounts payable to the Arrangers, any Agent or
any Lender hereunder, the amounts so payable to the Arrangers, such Agent or
such Lender shall be increased to the extent necessary to yield to the
Arrangers, such Agent or such Lender (after payment of all Non-Excluded Taxes
and Other Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement; provided,
however, that the Borrower or any Guarantor
shall not be required to increase any such amounts payable to the Arrangers,
any Agent or any Lender with respect to any Non-Excluded Taxes (i) that are
attributable to the Arrangers’, such Agent’s or such Lender’s failure to comply
with the requirements of paragraph (d) or (e) of this Section or (ii) in the
case of any Non-U.S. Lender, that are United States withholding taxes imposed
on amounts payable to the Arrangers, such Agent or such Lender at the time the
Arrangers, such Agent or such Lender becomes a party to this Agreement, except
to the extent that the Arrangers’, such Agent’s or such Lender’s assignor (if
any) was entitled, at the time of assignment, to receive additional amounts
from the Borrower with respect to such Non-Excluded Taxes pursuant to this
paragraph (a).  The Borrower or the
applicable Guarantor shall make any required withholding and pay the full
amount withheld to the relevant tax authority or other Governmental Authority
in accordance with applicable Requirements of Law.


 


(b)           In addition, the Borrower shall pay
any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.


 


46





















 


(c)           Whenever any Non-Excluded Taxes or
Other Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for the account of the relevant
Arranger, Agent or Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof.  If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Arrangers, the Agents
and the Lenders for any incremental taxes, interest or penalties that may
become payable by the Arrangers, any Agent or any Lender as a result of any
such failure.  The agreements in this
Section shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.


 


(d)           Each Lender (or Transferee) that is
not a citizen or resident of the United States of America, a corporation,
partnership or other entity created or organized in or under the laws of the
United States of America (or any jurisdiction thereof), or any estate or trust
that is subject to federal income taxation regardless of the source of its
income (a “Non U.S. Lender”) shall deliver
to the Borrower and the Administrative Agent (or, in the case of a Participant,
to the Lender from which the related participation shall have been purchased)
two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI
(or successor form), or, in the case of a Non U.S. Lender claiming exemption
from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of “portfolio interest” a statement substantially in
the form of Exhibit G (the “Exemption Certificate”) to the effect that
such Lender is eligible for a complete exemption from withholding of U.S. taxes
under Section 871(h) or 881(c) of the Code and a Form W-8BEN, or any subsequent
versions thereof or successors thereto properly completed and duly executed by
such Non U.S. Lender claiming complete exemption from, or a reduced rate of,
U.S. federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents. 
Such forms shall be delivered by each Non-U.S. Lender on or before the
date it becomes a party to this Agreement (and in the case of any Participant,
on or before the date such Participant purchases the related participation).  In addition, each Non-U.S. Lender shall
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Lender. 
Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of this
paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Lender is not legally able to deliver.


 


(e)           A Lender that is entitled to an
exemption from or reduction of non-U.S. withholding tax under the law of the
jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law or reasonably requested by the Borrower,
such properly completed and executed documentation prescribed by applicable law
as will permit such payments to be made without withholding or at a reduced
rate, provided that such Lender is legally entitled to complete, execute and
deliver such documentation and in such Lender’s reasonable judgment such
completion, execution or submission would not materially prejudice the legal
position of such Lender.


 


47





















 


2.21         Indemnity.  The Borrower agrees to indemnify each Lender
for, and to hold each Lender harmless from, any loss or expense that such
Lender may sustain or incur as a consequence of (a) default by the Borrower in
making a borrowing of, conversion into or continuation of LIBO Rate Loans after
the Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of LIBO Rate Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment or conversion of LIBO Rate Loans on a day that is not the last day
of an Interest Period with respect thereto. 
Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest that would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the date of
such prepayment or of such failure to borrow, convert or continue to the last day
of such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included
therein, if any) over (ii) the amount of
interest (as reasonably determined by such Lender) that would have accrued to
such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market.  A certificate as to any amounts payable
pursuant to this Section, with reasonable detail demonstrating how such amounts
were derived, submitted to the Borrower by any Lender shall be conclusive in
the absence of manifest error.  This
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.


 


2.22         Illegality.  Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain LIBO Rate Dollar Loans or Revolving Credit Euro Loans as
contemplated by this Agreement, (a) if the affected Loans are LIBO Rate Dollar
Loans, (x) the commitment of such Lender hereunder to make LIBO Rate
Dollar Loans, continue LIBO Rate Dollar Loans as such and convert Base Rate
Loans to LIBO Rate Dollar Loans shall forthwith be canceled, and such Lender
shall make a Base Rate Loan as part of any requested Borrowing of LIBO Rate
Dollar Loans, and (y) such Lender’s Loans then outstanding as LIBO Rate Dollar
Loans, if any, shall be converted automatically to Base Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law; or (b) if the affected
Loans are Revolving Credit Euro Loans, (x) the commitment of such Lender
hereunder to make Revolving Credit Euro Loans or continue Revolving Credit Euro
Loans as such shall forthwith be canceled and such Lender shall make a
Revolving Credit Base Rate Loan as part of any requested borrowing of Revolving
Credit Euro Loans and (y) if Revolving Credit Euro Loans are then outstanding,
the Borrower shall repay each such Loan on the respective last days of the then
current Interest Periods with respect to such Loans or within such earlier
period as required by law.  If any such
conversion of a LIBO Rate Dollar Loan or repayment of a Revolving Credit Euro
Loan occurs on a day which is not the last day of the then current Interest
Period with respect thereto, the Borrower shall pay to such Lender such
amounts, if any, as may be required pursuant to Section 2.21.


 


2.23         Change
of Lending Office.  Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
Section 2.19, 2.20(a) or 2.22 with respect to such Lender, it will, if
requested by the 


 


48





















 


Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to file any
certificate or document reasonably requested by the Borrower or to designate
another lending office for any Loans affected by such event, in each case, with
the object of avoiding the consequences of such event; provided,
that such designation is made on terms that, in the sole judgment of such
Lender, cause such Lender and its lending office(s) to suffer no economic,
legal or regulatory disadvantage, and provided,
further, that nothing in this Section shall
affect or postpone any of the obligations of any Borrower or the rights of any
Lender pursuant to Section 2.19, 2.20(a) or 2.22.


 


2.24         Replacement
of Lenders under Certain Circumstances. 
The Borrower shall be permitted to replace any Lender that (w) requests
reimbursement for amounts owing pursuant to Section 2.19 or 2.20(a) or has
invoked Section 2.22, (x) is in default of its obligation to make Loans
hereunder (a “Defaulting Lender”), (y) becomes insolvent and its assets
become subject to a receiver, liquidator, trustee, custodian or other Person
having similar powers or (z) becomes a “Non-Consenting Lender” (as defined
below), with a replacement financial institution; provided
that (i) such replacement does not conflict with any Requirement of Law, (ii)
no Event of Default shall have occurred and be continuing at the time of such
replacement, (iii) in the event of a replacement of a Non-Consenting Lender, in
order for the Borrower to be entitled to replace such a Lender, such
replacement must take place no later than 180 days after the date the
Non-Consenting Lender shall have notified the Borrower and the Administrative
Agent of its failure to agree to any requested consent, waiver or amendment,
(iv) in the event of a replacement of a Lender that requested reimbursement
pursuant to Section 2.19 or 2.20(a) or that invoked Section 2.22, prior to any
such replacement, such Lender shall have taken no action under Section 2.23 so
as to eliminate the continued need for payment of amounts owing pursuant to
Section 2.19 or 2.20(a) or the effect of Section 2.22, (v) the replacement
financial institution shall purchase, at par, all Loans and other amounts owing
to such replaced Lender on or prior to the date of replacement, (vi) the
Borrower shall be liable to such replaced Lender under Section 2.21 (as though
Section 2.21 were applicable) if any LIBO Rate Loan owing to such replaced
Lender shall be purchased other than on the last day of the Interest Period
relating thereto, (vii) the replacement financial institution, if not already a
Lender, shall be reasonably satisfactory to the Administrative Agent, and, in
the case of a replacement of a Revolving Credit Lender in respect of all or any
portion of a Revolving Credit Commitment or a Revolving Credit Loan, each
Issuing Lender, (viii)  the replaced
Lender shall be obligated to make such replacement in accordance with the
provisions of Section 10.6 (provided that the Borrower shall be obligated to
pay the registration and processing fee referred to therein), (ix) until such
time as such replacement shall be consummated the Borrower shall pay all
additional amounts (if any) required pursuant to Section 2.19 or 2.20(a), as
the case may be, and (x) any such replacement shall not be deemed to be a
waiver of any rights that the Borrower, the Administrative Agent or any other
Lender shall have against the replaced Lender.


 


In the
event that (A) the Borrower or the Administrative Agent has requested the
Lenders to consent to a departure or waiver of any provisions of the Loan
Documents or to agree to any amendment thereto, (B) the consent, waiver or
amendment in question requires the agreement of all Lenders in accordance with
the terms of Section 10.1 or all the Lenders with respect to a certain class of
the Loans and (C) Required Lenders or more than 50% of the class of such
Lenders have agreed to such consent, waiver or amendment, then any Lender who
does not agree to such consent, waiver or amendment shall be deemed a “Non-Consenting
Lender”.  The Borrower’s right to replace
a Defaulting Lender pursuant to this Section 2.24 is, and shall be, in 


 


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addition to, and not in
lieu of, all other rights and remedies available to the Borrower against such
Defaulting Lender under this Agreement, at law, in equity, or by statute.


 


2.25         Limitation
on Additional Amounts, etc. 
Notwithstanding anything to the contrary contained in Sections 2.19,
2.20 or 2.22 of this Agreement, unless the Administrative Agent or a Lender
gives notice to the Borrower that it is obligated to pay an amount under any
such Section within 90 days after the later of (x) the date the Lender incurs
the respective increased costs, Non-Excluded Taxes, Other Taxes, loss, expense
or liability, reduction in amounts received or receivable or reduction in
return on capital or (y) the date such Lender has actual knowledge of its
incurrence of the respective increased costs, Non-Excluded Taxes, Other Taxes,
loss, expense or liability, reductions in amounts received or receivable or
reduction in return on capital, such Lender shall not be entitled to be
compensated for interest and penalties by the Borrower pursuant to Sections
2.19, 2.20, or 2.22, as the case may be, to the extent such interest or
penalties are incurred or suffered on or after such date.  This Section 2.25 shall have no applicability
to any Section of this Agreement other than Sections 2.19, 2.20 or 2.22.


 


SECTION
3.           LETTERS OF CREDIT


 


3.1           L/C
Commitment.  (a) Prior to the Closing
Date, the Existing Issuing Lender has issued the Existing Letters of Credit
which, from and after the Closing Date, shall constitute Letters of Credit
hereunder.  Subject to the terms and
conditions hereof, each Issuing Lender, in reliance on the agreements of the
other Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue
letters of credit (the letters of credit issued on and after the Closing Date
pursuant to this Section 3, together with the Existing Letters of Credit,
collectively, the “Letters of Credit”) for
the account of the Borrower on any Business Day during the Revolving Credit
Commitment Period in such form as may be approved from time to time by such
Issuing Lender; provided, that no Issuing
Lender shall have any obligation to issue any Letter of Credit if, after giving
effect to such issuance, the aggregate amount of the Available Revolving Credit
Commitments at such time would be less than zero.  Each Letter of Credit shall (i) be
denominated in Dollars or in euro and (ii) except as otherwise provided in
Annex B with respect to certain Existing Letters of Credit, expire no later
than the earlier of (x) the first anniversary of its date of issuance and (y)
the date which is five Business Days prior to the Scheduled Revolving Credit
Termination Date; provided that (i) any
Letter of Credit with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above), and (ii) no Issuing Lender shall be under any
obligation to issue a Letter of Credit (Euro) if the obligation of any Lender
to make Revolving Credit Euro Loans is suspended at such time pursuant to
Section 2.17 or Section 2.22.


 


(b)           No
Issuing Lender shall at any time be obligated to issue any Letter of Credit
hereunder if such issuance would conflict with, or cause such Issuing Lender or
any L/C Participant to exceed any limits imposed by, any applicable Requirement
of Law.


 


3.2           Procedure
for Issuance of Letter of Credit. 
The Borrower may from time to time request that an Issuing Lender issue
a Letter of Credit by delivering to such Issuing Lender, with a copy to the
Administrative Agent, at their addresses for notices specified herein an
Application therefor, completed to the satisfaction of such Issuing Lender, and
such other certificates, documents and other papers and information as such
Issuing Lender may reasonably 


 


50





















 


request.  Upon receipt of any Application, an Issuing
Lender will process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall promptly issue the Letter of Credit
requested thereby by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed to by such Issuing Lender and
the Borrower (but in no event shall any Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other
papers and information relating thereto). 
Promptly after issuance by an Issuing Lender of a Letter of Credit, such
Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower
and the Administrative Agent.  Each
Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in turn promptly furnish to the Lenders, notice of the issuance of each Letter
of Credit issued by such Issuing Lender (including the amount thereof).


 


3.3           Fees
and Other Charges.  (a) The Borrower
will pay a fee in the Applicable Currency on the aggregate drawable amount of
all outstanding Letters of Credit at a per annum rate equal to the Applicable
Margin then in effect with respect to LIBO Rate Loans of the Applicable
Currency under the Revolving Credit Facility, shared ratably among the
Revolving Credit Lenders in accordance with their respective Revolving Credit
Percentages and payable quarterly in arrears on each L/C Fee Payment Date after
the issuance date of such Letter of Credit. 
In addition, the Borrower shall pay to the relevant Issuing Lender for
its own account a fronting fee in the Applicable Currency on the aggregate
drawable amount of all outstanding Letters of Credit issued by it of 1/8 of 1%
per annum, payable quarterly in arrears on each L/C Fee Payment Date after the
issuance of such Letter of Credit.


 


(b)           In
addition to the foregoing fees, the Borrower shall pay or reimburse each
Issuing Lender for such normal and customary costs and expenses as are incurred
or charged by such Issuing Lender in issuing, negotiating, effecting payment
under, amending or otherwise administering any Letter of Credit.


 


3.4           L/C
Participations.  (a) Each Issuing
Lender irrevocably agrees to grant and hereby grants to each L/C Participant,
and, to induce each Issuing Lender to issue Letters of Credit hereunder, each
L/C Participant irrevocably agrees to accept and purchase and hereby accepts
and purchases from each Issuing Lender, on the terms and conditions hereinafter
stated, for such L/C Participant’s own account and risk, an undivided interest
equal to such L/C Participant’s Revolving Credit Percentage in each Issuing
Lender’s obligations and rights under each Letter of Credit issued by such
Issuing Lender hereunder and the amount of each draft paid by such Issuing
Lender thereunder.  Each L/C Participant
unconditionally and irrevocably agrees with each Issuing Lender that, if a
draft is paid under any Letter of Credit issued by such Issuing Lender for
which such Issuing Lender is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, such L/C Participant shall pay to
such Issuing Lender, regardless of the occurrence or continuance of a Default
or Event of Default or the failure to satisfy any of the other conditions
specified in Section 5, upon demand at the Administrative Agent’s address for
notices specified herein (and thereafter, the Administrative Agent shall
promptly pay to the Issuing Lender) an amount in the Applicable Currency equal
to such L/C Participant’s Revolving Credit Percentage of the amount of such
draft, or any part thereof, that is not so reimbursed.


 


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(b)           If any
amount required to be paid by any L/C Participant to an Issuing Lender pursuant
to Section 3.4(a) in respect of any unreimbursed portion of any payment made by
such Issuing Lender under any Letter of Credit is paid to such Issuing Lender
within three Business Days after the date such payment is due, the Issuing
Lender shall so notify the Administrative Agent, who shall promptly notify the
L/C Participants and each such L/C Participant shall pay to the Administrative
Agent, for the account of the Issuing Lender on demand (and thereafter the
Administrative Agent shall promptly pay to the Issuing Lender) an amount equal
to the product of (i) such amount, times (ii) (x) if the Applicable
Currency is Dollars, the daily average Federal Funds Effective Rate or (y) if
the Applicable Currency is euro, the rate per annum applicable to Revolving
Credit Euro Loans with Interest Periods of one month, in each case during the
period from and including the date such payment is required to the date on
which such payment is immediately available to such Issuing Lender, times (iii)
a fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. 
If any such amount required to be paid by any L/C Participant pursuant
to Section 3.4(a) is not made available to the Administrative Agent, for the
account of such Issuing Lender by such L/C Participant within three Business
Days after the date such payment is due, the Administrative Agent, on behalf of
such Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, (x) if the Applicable Currency is Dollars, such amount with interest
thereon calculated from such due date at the rate per annum applicable to Base
Rate Loans under the Revolving Credit Facility and (y) if the Applicable
Currency is euro, such amount with interest thereon calculated from such due
date at the rate per annum applicable to Revolving Credit Euro Loans with
Interest Periods determined by the Administrative Agent under the Revolving
Credit Facility.  A certificate of the
Administrative Agent on behalf of such Issuing Lender submitted to any L/C
Participant with respect to any such amounts owing under this Section shall be
conclusive in the absence of manifest error.


 


(c)           Whenever,
at any time after an Issuing Lender has made payment under any Letter of Credit
and has received from the Administrative Agent any L/C Participant’s pro  rata
share of such payment in accordance with Section 3.4(a), such Issuing Lender
receives any payment related to such Letter of Credit (whether directly from
the Borrower or otherwise, including proceeds of collateral applied thereto by
such Issuing Lender), or any payment of interest on account thereof, such
Issuing Lender will distribute to the Administrative Agent for the account of
such L/C Participant (and thereafter, the Administrative Agent will promptly
distribute to such L/C Participant) its pro
rata share thereof; provided,
however, that in the event that any such
payment received by such Issuing Lender shall be required to be returned by
such Issuing Lender, such L/C Participant shall return to the Administrative
Agent for the account of such Issuing Lender the portion thereof previously
distributed by such Issuing Lender to it.


 


3.5           Reimbursement
Obligation of the Borrower.  The
Borrower agrees to reimburse each Issuing Lender, no later than 1:00 p.m., New
York City time, on the Business Day, if the Applicable Currency is Dollars, and
on the third Business Day, if the Applicable Currency is euro, following the
Business Day on which such Issuing Lender notifies the Borrower of the date and
amount of a draft presented under any Letter of Credit and paid by such Issuing
Lender, for the amount of (a) such draft so paid and (b) any taxes, fees,
charges or other costs or expenses incurred by such Issuing Lender in
connection with such payment (the amounts described in the foregoing clauses
(a) and (b) in respect of any drawing, collectively, the “Payment Amount”).  Each such payment shall be made to such
Issuing Lender at its address for 


 


52





















 


notices specified herein in the
Applicable Currency and in immediately available funds.  Interest shall be payable on each Payment
Amount from the date of the applicable drawing until payment in full at the
rate of interest applicable during such period to Revolving Credit Loans that
are (i) if the Applicable Currency is Dollars, Base Rate Loans or (ii) if
the Applicable Currency is euro, Revolving Credit Euro Loans with Interest
Periods of one month, plus, in each case, for the period from the third
Business Day following the date of the applicable drawing, 2% per annum.  Each drawing under any Letter of Credit shall
(unless an event of the type described in clause (i) or (ii) of Section 8(f)
shall have occurred and be continuing with respect to the Borrower, in which
case the procedures specified in Section 3.4 for funding by L/C Participants
shall apply) constitute a request by the Borrower to the Administrative Agent
for a borrowing pursuant to Section 2.5 of (i) if the Applicable Currency
is Dollars, Base Rate Loans (or, at the option of the Administrative Agent and
the Swing Line Lender in their sole discretion, a borrowing pursuant to Section
2.7 of Swing Line Loans) or (ii) if the Applicable Currency is euro, Revolving
Credit Euro Loans with Interest Periods of one month, in each case in the
amount of such drawing.  The Borrowing
Date with respect to such borrowing shall be the first date on which a borrowing
of (i) if the Applicable Currency is Dollars, Base Rate Loans (or, if
applicable, Swing Line Loans) or (ii) if the Applicable Currency is euro,
Revolving Credit Euro Loans could be made, pursuant to Section 2.5 (or, if
applicable, Section 2.7), if the Administrative Agent had received a notice of
such borrowing at the time the Administrative Agent receives notice from the
relevant Issuing Lender of such drawing under such Letter of Credit.


 


3.6           Obligations
Absolute.  The Borrower’s obligations
under this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment that the Borrower may have or have had against any Issuing Lender, any
beneficiary of a Letter of Credit or any other Person.  The Borrower also agrees with each Issuing
Lender that such Issuing Lender shall not be responsible for, and the Borrower’s
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements thereon,
even though such documents shall in fact prove to be invalid, fraudulent or
forged, or any dispute between or among the Borrower and any beneficiary of any
Letter of Credit or any other party to which such Letter of Credit may be
transferred or any claims whatsoever of the Borrower against any beneficiary of
such Letter of Credit or any such transferee. 
No Issuing Lender shall be liable for any error, omission, interruption
or delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for those
resulting from a breach of standard of care specified in the UCC of the State
of New York.  The Borrower agrees that
any action taken or omitted by an Issuing Lender under or in connection with
any Letter of Credit issued by it or the related drafts or documents, if done
in accordance with the standards of care specified in the UCC of the State of
New York, shall be binding on the Borrower and shall not result in any
liability of such Issuing Lender to the Borrower.


 


3.7           Letter
of Credit Payments.  If any draft
shall be presented for payment under any Letter of Credit, the relevant Issuing
Lender shall promptly (and in any event within one Business Day) notify the
Administrative Agent and the Borrower of the date and amount thereof.  The responsibility of the relevant Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly provided
for in such Letter of Credit issued by such Issuing Lender, be limited to
determining that the documents (including each draft) delivered under such
Letter of 


 


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Credit in connection with such
presentment are substantially in conformity with such Letter of Credit.


 


3.8           Applications.  To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Agreement or the other Loan Documents, the provisions of this Agreement
or the other Loan Documents shall apply.


 


SECTION
4.           REPRESENTATIONS AND
WARRANTIES


 


To
induce the Arrangers, the Agents and the Lenders to enter into this Agreement
and to make the Loans and issue or participate in the Letters of Credit,
Holdings and the Borrower hereby jointly and severally represent and warrant to
the Arrangers, each Agent and each Lender that:


 


4.1           Financial
Condition.  (a) The unaudited pro
forma consolidated balance sheet of Holdings and its consolidated Subsidiaries
as at September 30, 2005 (including the
notes thereto) (the “Pro Forma Balance Sheet”),
copies of which have heretofore been furnished to each Lender, has been
prepared giving effect (as if such events had occurred on such date) to
(i) the consummation of the Transaction, (ii) the Loans to be made and the
Senior Notes to be issued on the Closing Date and the use of proceeds thereof
and (iii) the payment of fees and expenses in connection with the
foregoing.  The Pro Forma Balance Sheet
has been prepared based on the information available to Holdings and the
Borrower as of the date of delivery thereof and on good faith estimates and
assumptions believed by it to be reasonable as of the date of delivery thereof,
and presents fairly in all material respects on a pro
forma basis the estimated financial
position of Holdings and its consolidated Subsidiaries as at September 30,
2005, assuming that the events specified in the preceding sentence had actually
occurred at such date, subject to normal year-end adjustments and the absence
of footnotes of the type typically included in audited statements prepared in
accordance with GAAP.


 


(b)           The
audited combined balance sheets of “Tronox” as at December 31, 2004 and
December 31, 2003 and the related combined statements of operations and of
cash flows for each of the three years in the period ended December 31, 2004,
included in the Confidential Information Memorandum and reported on by and
accompanied by an unqualified report from Ernst & Young, LLP, present fairly
in all material respects the combined financial condition of Holdings and the
Contributed Subsidiaries as at such date, and the combined results of its
operations and its combined cash flows for the respective fiscal years then
ended.  The unaudited combined balance
sheet of “Tronox” as at September 30, 2005, and the related unaudited
combined statements of income and cash flows for the nine-month period ended on
such date, included in the registration statement on Form S-1 filed with the
SEC contemporaneously herewith, present fairly in all material respects the
combined financial condition of Holdings and the Contributed Subsidiaries as at
such date, and the combined results of its operations and its combined cash
flows for the nine-month period then ended (subject to normal year end audit
adjustments and the absence of footnotes). 
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein and, in the case of the unaudited
financial statements, subject to normal year-end audit adjustments and the
absence of footnotes).


 


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(c)           Holdings,
the Borrower and its Subsidiaries do not have any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including any interest rate
or foreign currency swap or exchange transaction or other obligation in respect
of derivatives, in each case which is material and required by GAAP to be, but
that is not, reflected or disclosed in the most recent financial statements
referred to in Section 4.1(b).  During
the period from December 31, 2004 to and including the date hereof none of
Holdings, the Borrower or any Contributed Subsidiary has Disposed of any
material part of its business or Property.


 


(d)           The
financial statements specified in Section 4.1(b) reflect the combined financial
position and combined results of operations of the Contributed Business as of
the dates and for the periods specified therein in all material respects in
accordance with GAAP and on the basis described in Section 4.1(b).


 


4.2           No
Change.  Since December 31, 2004
there has been no development or event that has had or could reasonably be
expected to have a Material Adverse Effect, except for the matter described on
Schedule 4.6(b) hereto.


 


4.3           Corporate
Existence; Compliance with Law.  Each
of Holdings, the Borrower and its Subsidiaries (a) is duly organized, validly
existing and in good standing (if applicable) under the laws of the
jurisdiction of its organization, (b) has the corporate or limited liability
company, as applicable, power and authority and the legal right, to own and
operate its Property, to lease the Property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation (or other entity) and in good standing (if applicable)
under the laws of each jurisdiction where its ownership, lease or operation of
Property or the conduct of its business requires such qualification, except to
the extent that the failure to so qualify could not reasonably be expected to
have a Material Adverse Effect and (d) is in compliance with all Requirements
of Law except to the extent that the failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.


 


4.4           Organizational
Power; Authorization; Enforceable Obligations.  Each Loan Party has the corporate or limited
liability company, as applicable, power and authority, and the legal right, to
make, deliver and perform the Loan Documents and Transaction Documentation to
which it is a party and, in the case of the Borrower, to borrow hereunder.  Each Loan Party has taken all necessary
corporate or other organizational action to authorize the execution, delivery
and performance of the Loan Documents and Transaction Documentation to which it
is a party and, in the case of the Borrower, to authorize the borrowings on the
terms and conditions of this Agreement. 
No material consent or material authorization of, material filing with,
material notice to, material Permit from or other material act by or in respect
of, any Governmental Authority and no material consent or material
authorization of, material filing with, material notice to or other material
act by or in respect of any other Person is required in connection with the
Transaction,  the borrowings hereunder or
the execution, delivery, performance, validity or enforceability of this
Agreement or any of the other Loan Documents or the Transaction Documentation
except (i) consents, authorizations, filings and notices which have been
obtained or made and are in full force and effect and (to the extent obtained or
made in respect of any Loan Documents) are described in Schedule 4.4  and (ii) filings in respect of 


 


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Liens created pursuant to the
Security Documents.  Each Loan Document
and each item of Transaction Documentation has been duly executed and delivered
on behalf of each Loan Party that is a party thereto.  This Agreement and each Transaction Document
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each Loan Party that is a party thereto,
enforceable against each such Loan Party in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).


 


4.5           No
Legal Bar.  The execution, delivery
and performance of this Agreement and the other Loan Documents, the Senior Note
Documentation, the Transaction Documentation, the issuance of Letters of
Credit, the borrowings hereunder and the use of the proceeds thereof will not
violate in any material respect any material Requirement of Law or any Material
Contractual Obligation of Holdings, the Borrower or any of its Subsidiaries and
will not result in, or require, the creation or imposition of any Lien on any
of their respective properties or revenues pursuant to any such material
Requirement of Law or any such Material Contractual Obligation (other than the
Liens created by the Security Documents).


 


4.6           No
Material Litigation.  No litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of Holdings or the Borrower,
threatened by or against Holdings, the Borrower or any of its Subsidiaries or
against any of their respective properties or revenues (a) with respect to any
of the Loan Documents, the Transaction Documentation or any of the transactions
contemplated hereby or thereby that could reasonably be expected to be
materially adverse to the Agents or the Lenders, or (b) except for the matter
described on Schedule 4.6(b) hereto, that could reasonably be expected to have
a Material Adverse Effect.


 


4.7           No
Default.  Neither Holdings, the
Borrower nor any of its Subsidiaries is in default under or with respect to any
of its Contractual Obligations in any respect that could reasonably be expected
to have a Material Adverse Effect.  No
Default or Event of Default has occurred and is continuing.


 


4.8           Ownership
of Property; Liens.  (a) Except
as set forth on Schedule 4.8(a), each of Holdings, the Borrower and its
Subsidiaries is the sole owner of, legally and beneficially, and has good
marketable and insurable title in fee simple to, or a valid leasehold interest
in, all its material real property, and good title to, or a valid leasehold
interest in, all its material other Property used in its business as currently
conducted, and none of such
Property is subject to any Liens except for Permitted Liens.  None of the Collateral is subject to any Lien
except for Permitted Liens.


 


(b)           All
material leases and agreements necessary for the conduct of the business of the
Borrower and its Subsidiaries are valid and subsisting, in full force and
effect, and there exists no default or event or circumstance which with the
giving of notice or the passage of time or both, would give rise to a default
on the part of the Borrower or any of its Subsidiaries, under any such lease or
leases, which would affect in any material respect the conduct of the business
of the Borrower and its Subsidiaries, taken as a whole.


 


56





















 


(c)           The
rights and properties presently owned, leased or licensed by the Borrower and
its Subsidiaries, including all easements and rights of way, include all rights
and properties necessary to permit the Borrower and its Subsidiaries to conduct
their business in all material respects in the same manner as their business
has been conducted prior to the date hereof.


 


(d)           All of
the properties of the Borrower and its Subsidiaries which are reasonably
necessary for the operation of their business are in good working condition and
are maintained in accordance with prudent business standards.


 


4.9           Intellectual
Property.  Except as, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect:
(a) Holdings, the Borrower and each of its Subsidiaries owns, or is licensed to
use, all Intellectual Property necessary for the conduct of its business as
currently conducted, (b) no material claim has been asserted and is pending by
any Person challenging or questioning the use of any Intellectual Property or
the validity or effectiveness of any Intellectual Property and (c) to the
knowledge of the Borrower the use of Intellectual Property by Holdings, the
Borrower and its Subsidiaries does not infringe on the rights of any Person in
any material respect.


 


4.10         Taxes.  All U.S. Federal and other material tax
returns that are required to be filed by or on behalf of Holdings, the Borrower
and each of its Subsidiaries or by any consolidated group of which Holdings,
the Borrower or any of its Subsidiaries is or has been a member have been duly
filed except as set forth on Schedule 4.10 hereto; all material taxes shown to
be due and payable on said returns or on any material assessments made against
Holdings, the Borrower or any Subsidiary thereof or any Property of any thereof
and all other material taxes, fees or other charges imposed on Holdings, the
Borrower or any Subsidiary thereof or any Property of any thereof by any
Governmental Authority have been paid (other than any tax the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have
been provided on the books of Holdings, the Borrower or its Subsidiaries, as
the case may be); the contents of all such material tax returns are correct and
complete in all material respects; no material tax Lien has been filed that
would not be a Permitted Lien.  No Loan
Party and no Subsidiary thereof (i) intends to treat the Loans, the
Transaction, or any other transaction contemplated hereby as being a “reportable
transaction” (within the meaning of Treasury Regulation 1.6011-4) or (ii) is
aware of any facts or events that would result in such treatment.


 


4.11         Federal
Regulations.  No part of the proceeds
of any Loans, and no other extensions of credit hereunder, will be used in
violation of Regulation U as now and from time to time hereafter in effect.


 


4.12         Labor
Matters. There are no strikes, stoppages or slowdowns or other labor
disputes against Holdings, the Borrower or any of its Subsidiaries pending or,
to the knowledge of Holdings or the Borrower, threatened that (individually or
in the aggregate) could reasonably be expected to have a Material Adverse Effect.  Hours worked by and payment made to employees
of Holdings, the Borrower and its Subsidiaries have not been in violation of
the Fair Labor Standards Act or any other applicable Requirement of Law dealing
with such matters that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse 


 


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Effect.  All payments due from Holdings, the Borrower
or any of its Subsidiaries on account of employee health and welfare insurance
that (individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of Holdings, the Borrower or the relevant Subsidiary.


 


4.13         ERISA.  Neither a Reportable Event nor an “accumulated
funding deficiency” (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code, except to the extent any non-compliance could not
reasonably be expected to have a Material Adverse Effect.  No termination of a Single Employer Plan has
occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period.  The present value of
all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits
by a material amount.  Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan that has resulted or could reasonably be
expected to result in a material liability under ERISA, and, to the knowledge
of the Borrower, neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any
such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the date on
which this representation is made or deemed made.  No such Multiemployer Plan is in
Reorganization or Insolvent.


 


4.14         Investment
Company Act; Other Regulations.  No
Loan Party is an “investment company”, within the meaning of the Investment
Company Act of 1940, as amended.  No Loan
Party is subject to regulation under any material Requirement of Law (other
than Regulation X) which limits or conditions its ability to incur Indebtedness
under the Loan Documents.


 


4.15         Subsidiaries.  (a) The Subsidiaries listed on Schedule
4.15(a) constitute (x) all the Subsidiaries of the Borrower and Holdings
as of the Closing Date and (y) all of the Contributed Subsidiaries.  Schedule 4.15(a) sets forth as of the Closing
Date and after giving effect to the Transaction, the exact legal name (as
reflected on the certificate of incorporation (or formation) and jurisdiction
of incorporation (or formation) of each Subsidiary of Holdings and, as to each
such Subsidiary, the percentage and number of each class of Capital Stock owned
by each Loan Party and its Subsidiaries and whether such Subsidiary is a
Foreign Subsidiary, Immaterial Subsidiary or Special Purpose Subsidiary.


 


(b)           As of
the Closing Date, other than as listed on Schedule 4.15(b), there are no
outstanding subscriptions, options, warrants, calls, rights or other agreements
or commitments (other than stock options granted to employees or directors and
directors’ qualifying shares) of any nature relating to any Capital Stock of
the Borrower or any Subsidiary.  As of
the Closing Date, neither the Borrower nor any of its Subsidiaries has issued
any Disqualified Stock.


 


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(c)           Holdings
has no direct Subsidiary other than the Borrower.  As of the Closing Date, each Subsidiary of
the Borrower is (x) except as specified on Schedule 4.15(a), a Wholly
Owned Subsidiary and (y) except for any Foreign Subsidiary, Special Purpose
Subsidiary, Immaterial Subsidiary or KMEMC, a Wholly Owned Subsidiary
Guarantor.


 


4.16         Use
of Proceeds.  The proceeds of the
Term Loans shall be used to finance a portion of the Distribution and to pay
related fees and expenses.  The proceeds
of the Revolving Credit Loans and the Swing Line Loans, and the Letters of
Credit, shall be used for general corporate purposes.


 


4.17         Environmental
Matters.  Other than exceptions to
any of the following that could not, individually or in the aggregate,
reasonably be expected have a Material Adverse Effect and except for the matter
specified in Schedule 4.6(b) hereto:


 


(a)           There
are no environmental assessments, audits or other written environmental reports
that have been prepared as to any Mortgaged Property that are in the possession
of Holdings, the Borrower or any of its Subsidiaries and reveal the presence of
Materials of Environmental Concern in such amounts as could reasonably be
expected to have a Material Adverse Effect, that have not been provided to the
Administrative Agent.


 


(b)           Holdings,
the Borrower and its Subsidiaries:  (w)
are, and within the period of all applicable statutes of limitation have been,
in compliance with all applicable Environmental Laws; (x) hold all
Environmental Permits (each of which is in full force and effect) required for
any of their current or intended operations or for any property owned, leased,
or otherwise operated by any of them; (y) are, and within the period of all
applicable statutes of limitation have been, in compliance with all of their
Environmental Permits; and (z) reasonably believe that:  each of their Environmental Permits will be
timely renewed and complied with any additional Environmental Permits that may
be required of any of them will be timely obtained and complied with and
compliance with any Environmental Law that is or is expected to become
applicable to any of them will be timely attained and maintained.


 


(c)           Materials
of Environmental Concern are not present at, on, under, in, or about any real
property now or formerly owned, leased or operated by Holdings, the Borrower or
any of its Subsidiaries, or at any other location (including any location to
which Materials of Environmental Concern have been sent for re-use or recycling
or for treatment, storage, or disposal) which could reasonably be expected to
(x) give rise to liability of Holdings, the Borrower or any of its Subsidiaries
under any applicable Environmental Law or otherwise result in costs to
Holdings, the Borrower or any of its Subsidiaries, or (y) interfere with
Holdings, the Borrower’s or any of its Subsidiaries’ continued operations, or
(z) impair the fair saleable value of any real property owned or leased by
Holdings, the Borrower or any of its Subsidiaries.


 


(d)           There
is no pending or, to the Knowledge of Holdings, the Borrower or any of its
Subsidiaries, threatened, judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or relating to
any Environmental Law to which Holdings, the Borrower or any of its
Subsidiaries is, or to the knowledge of Holdings, the Borrower or any of its
Subsidiaries will be, named as a party.


 


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(e)           Neither
Holdings, the Borrower nor any of its Subsidiaries has received any written
request for information, or been notified that it is a potentially responsible
party under or relating to the federal Comprehensive Environmental Response,
Compensation, and Liability Act or any similar Environmental Law, or with
respect to any Materials of Environmental Concern.


 


(f)            Neither
Holdings, the Borrower nor any of its Subsidiaries has entered into or agreed
to any consent decree, order, or settlement or other agreement, or is subject
to any judgment, decree, order, settlement or other agreement relating to
compliance with or liability under any Environmental Law.


 


(g)           Neither
Holdings, the Borrower nor any of its Subsidiaries has assumed or retained by
contract or, to the knowledge of the Borrower, operation of law, any
liabilities of any kind, fixed or contingent, under any Environmental Law or
with respect to any Material of Environmental Concern.


 


4.18         Accuracy
of Information, etc.  (a) No
statement or information contained in this Agreement, any other Loan Document,
the Confidential Information Memorandum or any other document, certificate or
statement (excluding any projections, pro forma financial information or
estimates included in any such statement, document or certificate) relating to
any Loan Party furnished to the Administrative Agent, the Arrangers, the Agents
or the Lenders or any of them, by or on behalf of any Loan Party for use in
connection with the transactions contemplated by this Agreement or the other
Loan Documents, (taken together with all information so furnished and as
modified or supplemented by the other information so furnished, including the
registration statement on Form S-1 filed and effective contemporaneously
herewith), contained as of the date such statement, information, document or
certificate was so furnished, any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
contained herein or therein not misleading. 
The projections, pro  forma financial information and estimates
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of Holdings and the Borrower to be
reasonable at the time made, it being recognized by the Agents, Arrangers and
Lenders that such financial information as it relates to future events is not
to be viewed as fact and that actual results during the period or periods
covered by such financial information may differ from the projected results set
forth therein by a material amount.


 


(b)           As of
the Closing Date, the representations and warranties made by Holdings and its
Subsidiaries contained in the Transaction Agreements are true and correct in
all material respects, except for representations and warranties expressly
stated to relate to a specific earlier date, in which case such representations
and warranties are true and correct in all material respects as of such earlier
date.


 


4.19         Security
Documents.  (a) The Guarantee and
Collateral Agreement is effective to create in favor of the Administrative
Agent, for the benefit of the Secured Parties, a legal, valid, binding and
enforceable security interest in the Personal Property Collateral and proceeds
and products thereof, to the extent contemplated by the Guarantee and
Collateral Agreement.  In the case of the
Stock Collateral, when any stock certificates representing such Stock
Collateral are delivered to the Administrative Agent, and in the case of the
other Personal 


 


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Property Collateral, when
financing statements in appropriate form are filed in the offices specified on
Schedule 4.19(a)-1 (which financing statements may be filed by the
Administrative Agent) at any time and such other filings as are specified on
Schedule 3 to the Guarantee and Collateral Agreement have been completed (all
of which filings may be filed by the Administrative Agent) at any time, the
Guarantee and Collateral Agreement shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
such Personal Property Collateral and the proceeds and products thereof, to the
extent contemplated by the Guarantee and Collateral Agreement, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person (except Permitted
Liens).  As of the Closing Date, Schedule
4.19(a)-2 lists each UCC Financing Statement that (i) names any Loan Party as
debtor and (ii) will remain on file after the Closing Date.  As of the Closing Date, Schedule 4.19(a)-3
lists each UCC Financing Statement that (i) names any Loan Party as debtor and
(ii) will be terminated on or prior to the Closing Date; and on or prior to the
Closing Date, the Borrower will have delivered to the Administrative Agent, or
caused to be filed, duly completed UCC termination statements, authorized by
the relevant secured party, in respect of each such UCC Financing Statement.


 


(b)           Each of
the Mortgages is (or, in the case of any Mortgage to be executed and delivered
pursuant to Section 7.21 will be upon execution and delivery) effective to
create in favor of the Administrative Agent, for the benefit of the Secured
Parties, a legal, valid, binding and enforceable Lien on the Mortgaged
Properties described therein and proceeds and products thereof; and when the
Mortgages are filed in the offices specified on Schedule 4.19(b) (in the case
of Mortgages to be executed and delivered on the Closing Date) or in the
recording office designated in Schedule 7.21 (in the case of any Mortgage
to be executed and delivered pursuant to Section 7.21), each Mortgage
shall constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in the Mortgaged Properties
described therein and the proceeds and products thereof, to the extent
contemplated by such Mortgage, as security for the Obligations (as defined in
the relevant Mortgage), in each case prior and superior in right to the rights
of any other Person (other than Persons holding Liens or other encumbrances or
rights permitted by the relevant Mortgage and other than Permitted Liens).


 


4.20         Solvency.  As of the Closing Date, the Borrower,
together with the Subsidiary Guarantors taken as a whole, is, and after giving
effect to the Transaction and the incurrence of all Indebtedness and
obligations being incurred in connection herewith and therewith, will be and
will continue to be, Solvent.


 


4.21         Insurance.  Each of Holdings, the Borrower and its
Subsidiaries is insured, in accordance with Section 6.5 hereof, by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are, when considered in its entirety, in the good faith judgment of
the Borrower, prudent and customary in the businesses in which it is engaged,
including at least $100,000,000 of product liability insurance.


 


4.22         Transaction.  (a) As of the Closing Date, the Transaction
Documentation listed on Schedule 4.22
attached hereto constitutes all of the material agreements, instruments and
undertakings to which Holdings, the Borrower or any of its Subsidiaries is
bound or by which such Person or any of its property or assets is bound or affected
relating to, or arising out of, the Transaction (including any agreements,
instruments or undertakings assumed pursuant to 


 


61





















 


the Transaction
Agreements).  As of the Closing Date,
none of such material agreements, instruments or undertakings have been
amended, supplemented or otherwise modified, and all such material agreements,
instruments and undertakings are in full force and effect.  As of the Closing Date, no party to any
Transaction Documentation is currently in default thereunder and no party
thereto, or any other Person, has the right to terminate any Transaction
Documentation.


 


(b)           After
giving effect to consummation of the Transaction, no event of default exists
under (i) any of the Transaction Agreements, (ii) the Senior Notes, (iii) any
other Material Indebtedness or (iv) for such time as Holdings is a Subsidiary
of KMG, the KMG Specified Debt Instruments.


 


(c)           On the
Closing Date, there is no indebtedness owing by Holdings or any of the Contributed
Subsidiaries to KMG or any of its Subsidiaries (other than Holdings and the
Contributed Subsidiaries).


 


(d)           Each
KMG Party has the corporate or limited liability company, as applicable, power
and authority, and the legal right, to make, deliver and perform the
Transaction Documentation to which it is a party.  Each KMG Party has taken all necessary
corporate or other organizational action to authorize the execution, delivery
and performance of the Transaction Documentation to which it is a party.  No material consent or material authorization
of, material filing with, material notice to material Permit from or other
material act by or in respect of, any Governmental Authority and no material
consent or material authorization of, material filing with, material notice to
or other material act by or in respect of any other Person is required in
connection with the Transaction, or the execution, delivery, performance,
validity or enforceability of any of the Transaction Documentation except
consents, authorizations, filings and notices which have been obtained or made
and are in full force and effect.  Each
item of Transaction Documentation has been duly executed and delivered on
behalf of each KMG Party that is a party thereto.  Each Transaction Document constitutes a
legal, valid and binding obligation of each KMG Party that is a party thereto,
enforceable against each such KMG Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).


 


(e)           The
execution, delivery and performance of the Transaction Documentation will not
violate in any material respect any material Requirement of Law or any material
contractual obligation of KMG or any of its Subsidiaries (other than Holdings
and the Contributed Subsidiaries) and will not result in, or require, the creation
or imposition of any Lien on any of the properties or revenues of Holdings, the
Borrower or any of its Subsidiaries pursuant to any such material Requirement
of Law or any such material contractual obligation (other than the Liens
created by the Security Documents and other than Permitted Liens).


 


(f)            As of
the Closing Date, no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of
Holdings or the Borrower, threatened by or against KMG or any of its
Subsidiaries or against any of their respective properties or revenues with
respect to any of the Transaction Documentation or any of the transactions
contemplated thereby.


 


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(g)           The
Borrower has delivered to the Administrative Agent a complete and correct copy
of the Transaction Agreements and the Senior Note Documentation and any Senior
Unsecured Debt Documents, any Subordinated Debt Documents and any Senior Note
Refinancing Documents, in each case, including any amendments, supplements or
modifications with respect to any of the foregoing.


 


(h)           Each of
Holdings, the Borrower and any Subsidiary thereof either (i) constitutes an “Unrestricted
Subsidiary” under and as defined in the KMG Existing Credit Agreement or (ii)
is not a Subsidiary of KMG.


 


4.23         Real
Estate.  As of the Closing Date, Schedule 4.23 
includes a list of all real property that has a fair market value (as
determined by the Borrower in good faith without the need to procure appraisals
or update any existing appraisals) in excess of $25,000,000 and located within
the United States and (i) owned by any Loan Party or its Subsidiaries in fee
simple or (ii) leased by any Loan Party or its Subsidiaries and used by such
Loan Party and Subsidiary as a distribution or manufacturing facility.


 


4.24         Permits.  Other than as disclosed on Schedule 4.24
and other than exceptions to any of the following that could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect:  (i) each of Holdings, the
Borrower and its Subsidiaries has obtained and holds all Permits required for
any property owned, leased or otherwise operated by or on behalf of, or for the
benefit of, such Person and for the operation of each of its businesses as
presently conducted and as proposed to be conducted, (ii) all such Permits are
in full force and effect, and each Loan Party has performed and observed all
requirements of such Permits, (iii) no event has occurred which allows or
results in, or after notice or lapse of time would allow or result in,
revocation or termination by the issuer thereof or in any other impairment of
the rights of the holder of any such Permit, (iv) no Loan Party has received
any written notice that any of its Permits will not be timely renewed and
complied with, without material expense, or that any additional Permits that
may be required of such Person will not be timely obtained and complied with,
without material expense.


 


4.25         Regulation
H.  No Mortgage encumbers improved
real property which is located in an area that has been identified by the
Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available under the National
Flood Insurance Act of 1968 (except any Mortgaged Properties as to which such
flood insurance as required by Regulation H has been obtained and is in full
force and effect as required by this Agreement).


 


SECTION
5.           CONDITIONS PRECEDENT


 


5.1           Conditions
to Initial Extension of Credit.  The
agreement of each Lender to make the initial extension of credit requested to
be made by it hereunder is subject to the satisfaction, prior to or
concurrently with the making of such extension of credit on the Closing Date, of
the following conditions precedent:


 


(a)           Loan Documents.  The Administrative Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized officer of each
of Holdings and the 


 


63





















 


Borrower, (ii) the Guarantee and Collateral Agreement,
executed and delivered by a duly authorized officer of Holdings, the Borrower
and each Domestic Subsidiary thereof (other than KMEMC and any Immaterial
Subsidiary), (iii), except as contemplated by Section 7.21 hereof, a
Mortgage covering each of the Mortgaged Properties, executed and delivered by a
duly authorized officer of each party thereto, (iv) a Lender Addendum
executed and delivered by each Lender and accepted by the Borrower, and (v) if
requested by any Lender, for the account of such Lender, Notes conforming to
the requirements hereof and executed and delivered by a duly authorized officer
of the Borrower.


 


In the event that any one or
more of the Lenders have not executed and delivered its Lender Addendum on the
date scheduled to be the Closing Date (each such Person being referred to
herein as a “Non-Executing Lender”), the condition referred to in clause
(a)(iv) above shall nevertheless be deemed satisfied if on such date the
Borrower and the Administrative Agent shall have designated one or more Persons
(the “Designated Lenders”) to assume, in the aggregate, all of the
Commitments that would have been held by the Non-Executing Lenders (subject to
each such Designated Lender’s consent and its execution and delivery of a
Lender Addendum).


 


(b)           Transaction, etc.  The following conditions in respect of the
Transaction shall have been satisfied:


 


(i)            Each of the Contribution, the IPO, the Distribution, the offering of the
Notes and, if consummated on or prior to the Closing Date, the
Spin-Off/Split-Off shall have been consummated pursuant to the Transaction
Documentation, in each case on terms and conditions reasonably satisfactory to
the Administrative Agent; and, in particular:


 


(A)          KMG and its Subsidiaries shall have contributed all of its right, title
and interest in the Capital Stock of the Borrower to Holdings and all of its
right, title and interest in the Capital Stock of the Contributed Subsidiaries
(other than the Borrower) owned on or prior to the Closing Date by KMG and its
Subsidiaries to the Borrower; and in each case such Capital Stock shall
constitute all of the outstanding capital stock of each such entity owned on or
prior to the Closing Date by KMG and its Subsidiaries; and


 


(B)           On the Closing Date, there shall be no indebtedness owing by Holdings or
any of the Contributed Subsidiaries to KMG or any of its Subsidiaries (other
than Holdings and the Contributed Subsidiaries);


 


(ii)           Holdings shall have received gross cash proceeds from the IPO in an amount
not less than 27% of the aggregate gross proceeds of (x) borrowings under the
Term Loan and the Senior Notes and (y) the IPO;


 


(iii)          the Borrower shall have received at least $250,000,000 in gross cash
proceeds from the issuance of the Senior Notes on terms and pursuant to
documentation reasonably satisfactory to the Arrangers;


 


(iv)          the capital structure of each Loan Party after giving effect to the
Transaction shall be as described in Schedule 4.15(a); and


 


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(v)           the cash and cash equivalents of Holdings and its consolidated
subsidiaries on hand on the Closing Date after giving effect to the
Distribution and excluding any funds borrowed under the Revolving Credit
Facility shall be at least $40,000,000.


 


(c)           Pro Forma Balance Sheet; Financial Statements.  Consolidated EBITDA of Holdings
derived from the financial statements specified in Section 4.1(b) for the
twelve-month period ended September 30, 2005, of not less than $185
million.


 


(d)           Approvals.  All material governmental and third party
approvals necessary in connection with the Transaction, the continuing
operations of Holdings, the Borrower and its Subsidiaries and the transactions
contemplated hereby shall have been obtained and be in full force and effect,
and all applicable waiting periods shall have expired without any action being
taken or threatened by any Governmental Authority which would restrain, prevent
or otherwise impose material adverse conditions on the Transaction or the
financing contemplated hereby.


 


(e)           Related
Agreements; No Defaults.  The Administrative Agent shall have received
true and correct copies, certified as to authenticity by the Borrower, of (i)
the Senior Note Documentation and (ii) the Transaction Agreements.  No provision of any of the Senior Note
Documentation or the Transaction Agreements shall have been waived, amended,
supplemented or otherwise modified in a manner material and adverse to the
Lenders without the written consent of the Administrative Agent.  There shall not exist (pro forma
for the Transactions and the financing thereof) any default or event of default
under any Transaction Document or the Senior Note Indenture therefor or any
other Material Indebtedness of the Borrower or its Subsidiaries or under any
KMG Specified Debt Instrument.


 


(f)            Fees.  The Lenders, the Arrangers and the Agents
shall have received payment on the Closing Date of all fees, and the
Administrative Agent and the Arrangers shall have received reimbursement of all
expenses (including reasonable fees, disbursements and other charges of counsel
to the Agents), required to be paid by Borrowers or Holdings for which invoices
have been presented at least two Business Days prior to the Closing Date.  All such amounts will be paid with proceeds
of Loans made on the Closing Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or before the
Closing Date.


 


(g)           Solvency .  The Lenders shall have received a Solvency
Certificate which shall document the solvency of the Borrower and the
Subsidiary Guarantors considered as a whole after giving effect to the
Transaction and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith.


 


(h)           Budget.  The Lenders shall have received a budget for
the Borrower and its Subsidiaries for the 2006 fiscal year.


 


(i)            Lien Searches.  The Administrative Agent shall have received
the results of a recent lien search in each of the jurisdictions or offices
within the United States in which UCC financing statement should be made to
evidence or perfect (with the priority required under the Loan Documents)
security interests in all Collateral of the Loan Parties or any jurisdiction or



 


65





















 


office within the United States in which an existing
effective filing may exist with respect to any Collateral of any Loan Party,
and such search shall reveal no Liens on any of the assets of the Loan Party,
except for Permitted Liens or Liens set forth on Schedule 4.19(a)-3.


 


(j)            Ratings.  The Facilities shall have
received a rating from each of Moody’s and S&P.


 


(k)           Closing Certificate.  The Administrative Agent shall have received
a certificate of Holdings, the Borrower and each Subsidiary Guarantor, dated
the Closing Date, substantially in the form of Exhibit C, with appropriate
insertions and attachments.


 


(l)            Other Certifications.  The Administrative Agent shall have received
the following:


 


(i)            a copy of the Governing Documents of each Loan Party (other than a Loan
Party that is not Holdings, the Borrower or a Subsidiary Guarantor) and each
amendment thereto, certified (as of a date reasonably near the date of the
initial extension of credit) as being a true and correct copy thereof by the
Secretary of State or other applicable Governmental Authority of the
jurisdiction in which such Loan Party is organized;


 


(ii)           a copy of a certificate of the Secretary of State or other applicable
Governmental Authority of the jurisdiction in which each Loan Party (other than
a Loan Party that is not Holdings, the Borrower or a Subsidiary Guarantor) is
organized dated reasonably near the date of the initial extension of credit,
listing the Governing Documents of such Loan Party and each amendment thereto
on file in such office and certifying that (A) such amendments are the only
amendments to such Loan Party’s charter on file in such office, (B) such Loan
Party has paid all franchise taxes to the date of such certificate and (C) such
Loan Party is duly organized and in good standing under the laws of such
jurisdiction; and


 


(iii)          an electronic confirmation from the Secretary of State or other applicable
Governmental Authority of each jurisdiction in which each such Loan Party
referred to in clause (ii) above is organized certifying that such Loan Party
is duly organized and in good standing under the laws of such jurisdiction on
the date of the initial extension of credit; prepared by, or on behalf of, a
filing service acceptable to the Administrative Agent.


 


(iv)          a copy of a certificate of the Secretary of State or other applicable
Governmental Authority of each of Georgia, Oklahoma, Mississippi, and Nevada,
dated reasonably near the date of the initial extension of credit, stating
that, with respect to each Loan Party (other than a Loan Party that is not
Holdings, the Borrower or a Subsidiary Guarantor) that is required to be
qualified as a foreign corporation or entity in such jurisdiction, each Loan
Party (other than a Loan Party that is not Holdings, the Borrower or a
Subsidiary Guarantor) is duly qualified and in good standing as a foreign
corporation or entity in each such jurisdiction and has filed all annual
reports required to be filed to the date of such certificate.


 


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(m)          Legal Opinions.  The Administrative Agent shall have received
the following executed legal opinions:


 


(i)            the legal opinion of Covington & Burling, counsel to KMG, Holdings,
the Borrower and its Subsidiaries, substantially in the form of Exhibit E-1;


 


(ii)           opinions of such local counsel (in Georgia, Mississippi and Nevada) and
foreign counsel (in Denmark, Luxembourg and Australia) to Holdings, the
Borrower and its Subsidiaries as may be reasonably requested by the Administrative
Agent, substantially in the form of Exhibit E-2;


 


(iii)          the legal opinion of Roger Addison, Esq., Senior Vice President, General
Counsel and Secretary of Holdings and the Borrower, substantially in the form
of Exhibit E-3; and


 


(iv)          to the extent consented to by the relevant counsel, a copy of each legal
opinion, if any, delivered in connection with the Transaction.


 


(n)           Pledged Stock; Stock Powers; Acknowledgment and Consent.  The Administrative Agent shall
have received (i) the certificates, if any, representing the shares of Capital
Stock pledged pursuant to the Guarantee and Collateral Agreement, together with
an undated stock power, if applicable, for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof; (ii) an
Acknowledgment and Consent, substantially in the form of Annex II to the
Guarantee and Collateral Agreement, duly executed by any issuer of Capital
Stock (other than any Foreign Subsidiary (except to extent necessary to ensure
perfection or priority of the Liens under the Security Documents in Collateral
constituting Capital Stock issued thereby)) pledged pursuant to the Guarantee
and Collateral Agreement that is not itself a party to the Guarantee and
Collateral Agreement; and (iii) each promissory note pledged pursuant to the
Guarantee and Collateral Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank satisfactory to the
Administrative Agent) by the pledgor thereof.


 


(o)           Filings, Registrations and Recordings.  Except as otherwise expressly
contemplated elsewhere in this Agreement or in any other Loan Document, each
document (including any UCC financing statement) required by the Security
Documents (other than the Mortgages) or under law or reasonably requested by
the Administrative Agent to be filed, registered or recorded in order to create
in favor of the Administrative Agent, for the benefit of the Secured Parties, a
perfected Lien on the Collateral described therein, prior and superior in right
to any other Person (other than with respect to Permitted Liens), shall be in
proper form, and have been delivered to the Administrative Agent, for filing,
registration or recordation.


 


(p)           Insurance.  The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 6.5(d)(i) of this
Agreement.


 


(q)           Release
from Existing Credit Facilities.  The Administrative Agent shall have received
evidence satisfactory to the Administrative Agent that Holdings, the Borrower
and its Subsidiaries shall be released from all of their obligations under the
KMG Existing Credit Agreement.


 


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5.2           Conditions
to Each Extension of Credit.  The
agreement of each Lender to make any extension of credit requested to be made
by it hereunder on any date (including its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:


 


(a)           Representations and Warranties.  Each of the representations and warranties made
by any Loan Party in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of such date as if made on and as of
such date, except for representations and warranties expressly stated to relate
to a specific earlier date, in which case such representations and warranties
shall be true and correct in all material respects as of such earlier date.


 


(b)           No Default.  No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.


 


Each
borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by Holdings and the
Borrower as of the date of such extension of credit that the conditions
contained in this Section 5.2 have been satisfied.


 


SECTION
6.           AFFIRMATIVE COVENANTS


 


Holdings
and the Borrower hereby jointly and severally agree that, so long as the
Commitments remain in effect, any Letter of Credit remains outstanding or any
Loan or other amount (excluding Obligations in respect of any Specified Hedge
Agreement, Specified Cash Management Agreement or the Specified Letter of
Credit and unmatured contingent reimbursement and indemnification Obligations)
is owing to any Lender, any Agent or the Arrangers hereunder, each of Holdings
and the Borrower shall and shall cause each of its Subsidiaries to:


 


6.1           Financial
Statements.  Furnish to each Agent
and each Lender:


 


(a)           as soon
as available, but in any event within 120 days after the end of each fiscal
year of Holdings, a copy of the audited consolidated balance sheet of Holdings
and its consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of operations and of cash flows for such year,
setting forth in each case in comparative form the figures as of the end of and
for the previous year, reported on without a “going concern” or like
qualification or exception, or qualification arising out of the scope of the audit,
by Ernst & Young LLP or other independent certified public accountants of
nationally recognized standing; and


 


(b)           as soon
as available, but in any event not later than 60 days after the end of each of
the first three quarterly periods of each fiscal year of Holdings, the
unaudited consolidated balance sheet of Holdings and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures as of the end of and for the
corresponding period in the 


 


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previous year, certified by a Responsible Officer as
being fairly stated in all material respects (subject to normal year end audit
adjustments and the absence of footnotes);


 


all such financial statements
to be complete and correct in all material respects and to be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein and with prior periods (except as approved by
such accountants or officer, as the case may be, and disclosed therein and
subject in the case of financial statements delivered pursuant to Section
6.1(b), normal year end adjustments and the absence of footnotes).


 


6.2           Certificates;
Other Information.  Furnish to the
Administrative Agent (which shall in turn be promptly distributed by the
Administrative Agent to each Lender) or, in the case of clause (j), to the
relevant Lender:


 


(a)           concurrently
with the delivery of the financial statements referred to in Section 6.1(a), a
certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except as
specified in such certificate (it being understood that such certificate shall
be limited to the items that independent certified public accountants are
permitted to cover in such certificates pursuant to their professional
standards and customs of the profession);


 


(b)           concurrently
with the delivery of any financial statements pursuant to Section 6.1, (i) a
certificate of a Responsible Officer stating that, to the best of such
Responsible Officer’s knowledge, no Default or Event of Default has occurred
and is continuing except as specified in such certificate and (ii) (x) a
Compliance Certificate containing all information and calculations necessary
for determining compliance by Holdings, the Borrower and its Subsidiaries with
the provisions of Section 7.1 of this Agreement referred to therein as of the
last day of the fiscal quarter or fiscal year of Holdings, as the case may be, (y)
to the extent not previously disclosed to the Administrative Agent, in writing,
a description of any change in the jurisdiction of
organization or formation of any Subsidiary and of any change in the ownership
of any Subsidiary, a description of any subscriptions, options, warrants,
calls, rights or other agreements or commitments (other than directors’
qualifying shares) related to the Capital Stock of any Subsidiary, in each case
since the date of the most recent report so delivered since the Closing Date (or, in the case of the first such list so delivered, since the Closing
Date) and (z) any UCC financing statements or other filings specified in such
Compliance Certificate as being required to be delivered therewith;


 


(c)           as soon
as available, and in any event no later than 60 days after the end of each
fiscal year of Holdings, a detailed consolidated budget for the following
fiscal year (including a projected consolidated balance sheet of Holdings and
its Subsidiaries as of the end of the following fiscal year, and the related
consolidated statements of projected cash flow, projected changes in financial
position and projected income (and a description of the principal underlying
assumptions applicable thereto) for such following fiscal year) (collectively,
the “Projections”), which Projections
shall in each case be accompanied by a certificate of a Responsible Officer
stating that such Projections are based upon
good faith estimates and assumptions believed by management of the Borrower to
be reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to 


 


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be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount;


 


(d)           within
five Business Days after delivery thereof, any accountants’ letters having
substantially similar purpose or effect as those letters formerly known as “management
letters” that are delivered to the board of directors of Holdings or the
Borrower (or their respective audit committees);


 


(e)           no
later than five Business Days prior to the effectiveness thereof (or such
shorter period agreed to by the Administrative Agent), copies of substantially
final drafts of any proposed amendment, supplement, waiver or other
modification with respect to the Senior Note Indenture or the Transaction
Documentation;


 


(f)            within
five Business Days after the same are sent, copies of all financial statements
and reports that Holdings, the Borrower or any of its Subsidiaries sends to the
holders of any class of its debt securities or public equity securities and,
within five Business Days after the same are filed, copies of all financial
statements and reports (other than any exhibits thereto and any registration
statements on Form S-8 or its equivalent) that Holdings, the Borrower or any of
its Subsidiaries may make to, or file with, the SEC;


 


(g)           on the
Business Day following the occurrence thereof, notice that (i) any or all of
the obligations under the Senior Note Indenture have been accelerated, or (ii)
the trustee or the required holders of Senior Notes has given notice that any
or all such obligations are to be accelerated;


 


(h)           to the
extent not included in clauses (a) through (g) above, no later than the date
the same are required to be delivered thereunder, copies of all agreements,
documents or other instruments (including, if any, (i) audited and unaudited,
pro forma and other financial statements, reports, forecasts, and projections,
together with any required certifications thereon by independent public
auditors or officers of Holdings, the Borrower or any of its Subsidiaries or
otherwise, (ii) press releases, (iii) statements or reports furnished to any
other holder of the securities of Holdings, the Borrower or any of its
Subsidiaries, and (iv) regular, periodic and special securities reports) that
Holdings, the Borrower or any of its Subsidiaries is required to provide
pursuant to the terms of the Senior Note Documentation;


 


(i)            concurrently
with any delivery of financial statements under Section 6.1(a) and (b), a
certificate of a Responsible Officer, in form and substance satisfactory to the
Administrative Agent, setting forth as of the last Business Day of such fiscal
quarter or fiscal year, a true and complete list of all Hedge Agreements of the
Borrower and each of its Subsidiaries, the material terms thereof (i.e. the type, term, effective date, termination date and
notional amounts or volumes), the net mark to market value therefor, any credit
support agreements relating thereto, any margin required or supplied under any
credit support document, and the counterparty to each such agreement; and


 


(j)            promptly,
upon receiving from the Lenders such assurances of confidential treatment as
the Borrower may reasonably request, such additional financial and other
information regarding the performance of this Agreement or the financial
position or business of 


 


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Holdings, the Borrower or any of its Subsidiaries, as the
Administrative Agent, at the request of any Lender, may from time to time
reasonably request.


 


Information required to be
delivered pursuant to Section 6.1 or 6.2 shall be deemed to have been delivered
if (i) such information shall have been posted by the Administrative Agent on
an IntraLinks or similar site to which each Lender has been granted access or
(ii) in the case of Section 6.1 or 6.2(f), such information, or one or more
annual or quarterly reports of the Borrower containing such information, shall
be available on the website of the SEC; provided that the Borrower shall
deliver paper copies of such copies to any Lender that requests such
delivery.  Information delivered pursuant
to Section 6.1 or 6.2 may also be delivered by electronic communications
pursuant to procedures approved by the Administrative Agent.


 


6.3           Payment
of Obligations.  To the extent not
otherwise prohibited hereunder or prohibited by any subordination or
intercreditor provisions thereof, pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature (not incurred in violation hereof),
except where the amount or validity thereof is currently being contested in
good faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of Holdings, the Borrower or
its Subsidiaries, as the case may be.


 


6.4           Conduct
of Business and Maintenance of Existence, etc.  (a) (i) Preserve, renew and keep in full
force and effect its corporate or other existence and (ii) take all reasonable
action to maintain all rights, privileges, franchises, Permits and licenses
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 7.4 and except, in the case of clause
(ii) above, to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect; and (b) comply with (i) all Material
Contractual Obligations and (ii) all Permits and Requirements of Law,
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.


 


6.5           Maintenance
of Property; Insurance.


 


(a)           Keep
all Property and systems useful and necessary, in such Person’s reasonable
business judgment, in its business in good working order and condition,
ordinary wear and tear and damage caused by casualty excepted.


 


(b)           Maintain
with financially sound and reputable insurance companies insurance on all its
Property (including, without limitation, all inventory, equipment and vehicles)
in at least such amounts and against at least such risks as are usually insured
against in the same general area by companies engaged in the same or a similar
business; and furnish to the Administrative Agent, upon written request,
certificates providing evidence of such insurance coverage.


 


(c)           Cause
the Administrative Agent to be named as a loss payee on all insurance policies
of each Loan Party and any Subsidiary thereof covering any Collateral and cause
each such insurance policy to provide that the insurer will give prior notice
of any cancellation to the Borrower and (unless such insurer as a matter of its
policies generally 


 


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applicable to insureds is unwilling) to the
Administrative Agent.  The Borrower and
its Subsidiaries shall bear the risk of loss and shall be responsible for the
repair and replacement, if any, of any loss or damage to the insured
property.  Losses, if any, with respect to said insurance policies shall be adjusted
with the respective insurance companies by the Borrower and its
Subsidiaries.  Any payment under any of
said insurance policies shall be directed to be made to the Borrower or its
Subsidiaries, unless (i) an Event of Default has occurred and is continuing and
(ii) the Administrative Agent has delivered notice to the Borrower that such
payment may not be made to the Borrower or its Subsidiaries.


 


(d)           Deliver
to the Administrative Agent on behalf of the Secured Parties, (i) on the
Closing Date, a certificate dated such date showing the amount and types of
insurance coverage as of such date, (ii) promptly following receipt of
notice from any insurer, a copy of any notice of cancellation or material
change in coverage from that existing on the Closing Date, (iii) promptly,
notice of any cancellation or nonrenewal of coverage by any Loan Party or
Subsidiary thereof, and (iv) promptly after such claim is made by any of the
Loan Parties, a description in reasonable detail of any claim for an amount in
excess of $5,000,000 with respect to any property and casualty insurance policy
maintained by any Loan Party or Subsidiary thereof.


 


6.6           Inspection
of Property; Books and Records; Discussions.  (a) Keep proper books of records and account
in which full, true and correct entries in conformity in all material respects
with GAAP and all Requirements of Law shall be made of all dealings and
transactions in relation to its business and activities and (b) permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time, with reasonable advance notice, and as often as may reasonably be desired
and to discuss the business, operations, properties and financial and other
condition of Holdings, the Borrower and its Subsidiaries with officers and
employees of Holdings, the Borrower and its Subsidiaries and with their
respective independent certified public accountants, provided that the
Administrative Agent or such Lender shall notify the Borrower prior to any
contact with such accountants and give the Borrower the opportunity to
participate in such discussions and, so long as no Event of Default shall have
occurred and be continuing, such discussions with such accountants shall not
take place more than once in any calendar year.


 


6.7           Notices.  Give notice to the Administrative Agent and
each Lender:


 


(a)           within
five Business Days after a Responsible Officer becomes aware of the occurrence
of any Default or Event of Default if such Default or Event of Default, as
applicable, is still continuing;


 


(b)           promptly
of any event of default under any Material Indebtedness of Holdings, the
Borrower or any of its Subsidiaries;


 


(c)           promptly
of any litigation, or proceeding against or instituted by, Holdings, the
Borrower or any of its Subsidiaries (i) if the litigation or proceeding
does not involve any Environmental Law, in which the amount involved could
reasonably be expected to be $10,000,000 or more and not covered by insurance,
(ii) if the litigation or proceeding involves 


 


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any Environmental Law, in which the amount involved that
is not covered by insurance could reasonably be expected to be $50,000,000 or
more, or (iii) which involves any Loan Document.


 


(d)           within
30 days after a Responsible Officer of Holdings or the Borrower knows
thereof:  (i) the occurrence of any
Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan
or any withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (ii) the institution of proceedings or the taking of
any other action by the PBGC or the Borrower or any Commonly Controlled Entity
or any Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan;


 


(e)           within
30 days after a Responsible Officer of Holdings or the Borrower knows
thereof:  (i) any Governmental Authority
has identified Holdings, the Borrower or any of its Subsidiaries as a
potentially responsible party with respect to any material liability under any
Environmental Law for the cleanup of Materials of Environmental Concern at any
location, whether or not owned, leased, or operated by such Person, (ii) any
Governmental Authority may deny any material Environmental Permit held by, or
refuse to renew any material Environmental Permit sought by, Holdings, the
Borrower or any of its Subsidiaries or (iii) any property owned, leased, or
operated by Holdings, the Borrower or any of its Subsidiaries is being listed
on, or proposed for listing on, any list maintained by any Governmental
Authority, including the National Priorities List and the Comprehensive
Environmental Response, Compensation and Liability Information System
maintained by the U.S. Environmental Protection Agency and any similar list
maintained by any other federal, state, local, or other authority; and


 


(f)            promptly
of any development or event that has had or could reasonably be expected to
have a Material Adverse Effect.


 


Information required to be
delivered pursuant to this Section shall be deemed to have been delivered if
such information shall have been posted by the Administrative Agent on an
IntraLinks or similar site to which each Lender has been granted access;
provided that the Borrower shall deliver paper copies of such copies to any
Lender that requests such delivery.  Each
notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings, the Borrower or the relevant Subsidiary
proposes to take with respect thereto.


 


6.8           Environmental
Laws.  Except, in each case, where
failure to comply could not reasonably be expected to have a Material Adverse
Effect:


 


(a)           Comply
with, and take all reasonable steps to ensure compliance in all material
respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws and Environmental Permits, and obtain, maintain, and take
all reasonable steps to ensure that tenants and subtenants obtain and maintain
all required Environmental Permits.


 


(b)           Conduct
and complete in all material respects all investigations, studies, sampling and
testing, and all remedial, removal and other actions, if any, required under Environmental
Laws or Environmental Permits (other than such actions that being challenged in



 


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good faith, so long as the pendency of such challenge
could not reasonably be expected to have a Material Adverse Effect).


 


(c)           Promptly
comply with all orders and directives of all Governmental Authorities regarding
Environmental Laws (other than those it is challenging in good faith, so long
as the pendency of such challenges could not reasonably be expected to have a
Material Adverse Effect).


 


(d)           Generate,
use, treat, store, release, dispose of, and otherwise manage Materials of
Environmental Concern in a manner that could not reasonably be expected to
result in a liability to the Borrower or any of its Subsidiaries or to affect
any real property owned or leased by any of them; and take reasonable efforts
to prevent any of its tenants, subtenants, contractors, subcontractors and
invitees from generating, using, treating, storing, releasing, disposing of, or
otherwise managing Materials of Environmental Concern in a manner that could
reasonably be expected to result in a liability to, or affect any real property
owned or operated by, the Borrower or any of its Subsidiaries.


 


6.9           Additional
Collateral, etc.  (a) With respect to
any Property acquired after the Closing Date by Holdings, the Borrower or any
Subsidiary Guarantor that constitutes Collateral described in the Guarantee and
Collateral Agreement with respect to such Loan Party (other than (w) any real property,
(x) any Property described in paragraph (b), (c) and (d) of this Section, (y)
any Property subject to a Lien expressly permitted by Section 7.3(g) and (z)
Property acquired by a Special Purpose Subsidiary or an Immaterial Subsidiary)
as to which the Administrative Agent, for the benefit of the Secured Parties,
does not have a perfected Lien, promptly (and, in any event, within 30 days
following the date of such acquisition) (i) execute and deliver or cause
execution and delivery to the Administrative Agent of such amendments to the
Guarantee and Collateral Agreement or such other documents as the
Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Secured Parties, a security
interest in such Property to the extent constituting Collateral described in
the Guarantee and Collateral Agreement with respect to such Loan Party and (ii)
take all actions necessary or advisable to grant to the Administrative Agent,
for the benefit of the Secured Parties, a perfected first priority security
interest in such Property to the extent constituting Collateral described in
the Guarantee and Collateral Agreement and to the extent required under the
Guarantee and Collateral Agreement with respect to such Loan Party (subject
only to Permitted Liens), including the filing of UCC financing statements in
such jurisdictions as may be required by the Guarantee and Collateral Agreement
or by law or as may be reasonably requested by the Administrative Agent.


 


(b)           With respect
to any new Subsidiary (other than a Foreign Subsidiary or a Special Purpose
Subsidiary) created or acquired after the Closing Date (which, for the purposes
of this paragraph, shall include any existing Subsidiary that ceases to be a
Foreign Subsidiary or a Special Purpose Subsidiary), by Holdings, the Borrower
or any of its Subsidiaries, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
as the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is
owned by Holdings, the Borrower or any of its Subsidiaries and required to be
pledged pursuant to the Guarantee and Collateral 


 


74





















 


Agreement, (ii) deliver to the Administrative Agent the
certificates, if any, representing such Capital Stock, together with undated
stock powers, if applicable, in blank, executed and delivered by a duly
authorized officer of Holdings, the Borrower or such Subsidiary, as the case
may be, (iii) unless such Subsidiary is an Immaterial Subsidiary, cause such
new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement
and (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Secured Parties a perfected first
priority security interest in the Collateral described in the Guarantee and
Collateral Agreement with respect to such new Subsidiary as contemplated by the
Guarantee and Collateral Agreement, including the filing of UCC financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be reasonably requested by the
Administrative Agent, and (iv) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.


 


(c)           With
respect to any new Foreign Subsidiary (other than a Special Purpose Subsidiary)
created or acquired after the Closing Date by Holdings, the Borrower or any of
its Subsidiaries (other than by any Foreign Subsidiary) (which, for purposes of
this paragraph, shall include any existing Foreign Subsidiary (other than a
Special Purpose Subsidiary) that becomes owned by Holdings, the Borrower of any
of its Subsidiaries (other than any Foreign Subsidiary)), promptly (i) execute
and deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement or such other documents as the Administrative Agent deems
necessary or advisable in order to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
the Capital Stock of such new Foreign Subsidiary that is owned by Holdings, the
Borrower or any of its Subsidiaries (other than any Foreign Subsidiary) that is
required to be pledged pursuant to the Guarantee and Collateral Agreement
(provided that in no event shall more than 65% of the total outstanding voting
Capital Stock of any such new Foreign Subsidiary be required to be so pledged),
(ii) deliver to the Administrative Agent the certificates representing such
Capital Stock, if any, together with undated stock powers, if applicable in
blank, executed and delivered by a duly authorized officer of Holdings, the
Borrower or such Subsidiary, as the case may be, and take such other action as
may be necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Lien of the Administrative Agent thereon as contemplated by the
Guarantee and Collateral Agreement, and (iii)  if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Administrative Agent.


 


(d)           Notwithstanding
anything to the contrary herein, in no event shall this Section 6.9 or Section
6.12 require a Lien on any property to the extent that such grant of a security
interest is prohibited by any Requirements of Law of a Governmental Authority,
requires a consent not obtained of any Governmental Authority pursuant to such
Requirement of Law or is prohibited by, or constitutes a breach or default
under or results in the termination of or requires any consent not obtained
under, any contract, license, agreement, instrument or other document
evidencing or giving rise to such property or, in the case of any pledged
Capital Stock or promissory notes, any applicable shareholder or similar
agreement, except to the extent that such Requirement of Law or the term in
such contract, license, agreement, instrument or other 


 


75





















 


document or shareholder or similar agreement providing
for such prohibition, breach, default or termination or requiring such consent
is ineffective under applicable law.


 


(e)           With
respect to any Subsidiary that ceases to be an Immaterial Subsidiary (other
than any Foreign Subsidiary or Special Purpose Subsidiary), promptly (i) cause
such Subsidiary to (A) become a party to the Guarantee and Collateral
Agreement and (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Secured Parties a perfected first
priority security interest in the Collateral described in the Guarantee and
Collateral Agreement with respect to such Subsidiary as contemplated by the
Guarantee and Collateral Agreement, including the filing of UCC financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be reasonably requested by the
Administrative Agent, and (ii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.


 


(f)            Notwithstanding
anything to the contrary in this Section 6.9, paragraphs (a), (b), (c) and
(e) of this Section 6.9 shall not apply to any Property, new Subsidiary or new
Foreign Subsidiary created or acquired, or Subsidiary ceasing to be an
Immaterial Subsidiary, after the Closing Date, as applicable, as to which the
Administrative Agent has determined in its sole discretion that the collateral
value thereof is insufficient to justify the difficulty, time and/or expense of
obtaining a perfected security interest therein.


 


6.10         Use
of Proceeds.  Use the proceeds of the
Loans only for the purposes specified in Section 4.16.


 


6.11         ERISA
Documents.  The Borrower will cause
to be delivered to the Administrative Agent, promptly upon the Administrative
Agent’s request, any or all of the following: 
(i) a copy of each Plan (or, where any such Plan is not in writing, a
complete description thereof) and, if applicable, related trust agreements or
other funding instruments and all amendments thereto, and any summary plan
descriptions and summaries of material modifications thereof that have been
distributed to employees or former employees of the Borrower or any of its
Subsidiaries; (ii) the most recent determination letter, if any, issued by the
Internal Revenue Service with respect to each Plan; (iii) for the three most
recent plan years preceding the Administrative Agent’s request, Annual Reports
on Form 5500 Series required to be filed with any governmental agency for each
Plan; (iv) a listing of all Multiemployer Plans, with the aggregate amount of
the most recent annual contributions required to be made by the Borrower or any
Commonly Controlled Entity to each such Plan and copies of the collective
bargaining agreements requiring such contributions; (v) any information that
has been provided to the Borrower or any Commonly Controlled Entity regarding
withdrawal liability under any Multiemployer Plan; (vi) the aggregate amount of
payments made under any employee welfare benefit plan (as defined in Section
3(1) of ERISA) to any retired employees of the Borrower or any of its
Subsidiaries (or any dependents thereof) during the most recently completed
fiscal year; and (vii) documents reflecting any agreements between the PBGC and
the Borrower or any Commonly Controlled Entity with respect to any Plan.


 


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6.12         Further
Assurances.  (a) From time to time
execute and deliver, or cause to be executed and delivered, such additional
instruments, certificates or documents, and take all such actions, as the
Administrative Agent may reasonably request for the purposes of implementing or
effectuating the provisions of this Agreement and the other Loan Documents, or
of more fully perfecting or renewing the rights of the Administrative Agent and
the Lenders with respect to the Collateral (or with respect to any additions
thereto or replacements or proceeds or products thereof or with respect to any
other property or assets hereafter acquired by Holdings, the Borrower or any
Subsidiary which may be deemed to be part of the Collateral) pursuant hereto or
thereto.


 


(b)           Preserve
and protect the Lien status of each respective Mortgage and, if any Lien (other
than Liens permitted under Section 7.3 that arise by operation of law and other
Permitted Liens is asserted against a Mortgaged Property, promptly and at its
expense, give the Administrative Agent a detailed written notice of such Lien
and pay the underlying claim in full or take such other action so as to cause
it to be released or bonded over in a manner reasonably satisfactory to the
Administrative Agent.


 


(c)           If
requested by any Lender or the Administrative Agent, furnish to the
Administrative Agent and each Lender a statement to the effect specified in
Section 4.11 in conformity with the requirements of FR Form G-3 or FR Form U 1
referred to in Regulation U.


 


6.13         Ratings.  Take reasonable efforts to cause the Loans at
all times to have a publicly available senior secured debt rating from each of
Moody’s and S&P.


 


SECTION
7.           NEGATIVE COVENANTS


 


Holdings
and the Borrower hereby jointly and severally agree that, so long as the
Commitments remain in effect, any Letter of Credit remains outstanding or any
Loan or other amount (excluding Obligations in respect of any Specified Hedge
Agreement, Specified Cash Management Agreement or the Specified Letter of
Credit and unmatured contingent reimbursement and indemnification Obligations)
is owing to any Lender, any Agent or the Arrangers hereunder, each of Holdings
and the Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly:


 


7.1           Financial
Condition Covenants.


 


(a)           Consolidated
Total Leverage Ratio.  Permit the Consolidated Total Leverage Ratio
as at the last day of any period of four consecutive fiscal quarters of
Holdings ending with the last day of any fiscal quarter in any fiscal year of
Holdings listed below to exceed the ratio set forth below opposite such fiscal
year:


 


	
  Fiscal Year

  	
   

  	
  Consolidated Total

  Leverage Ratio

  	
   

  
	
  Fiscal Year 2006

  	
   

  	
  3.75

  	
  x 

  
	
  Fiscal Year 2007

  	
   

  	
  3.50

  	
  x 

  
	
  Fiscal Year 2008

  	
   

  	
  3.00

  	
  x 

  
	
  Fiscal Year 2009

  	
   

  	
  2.50

  	
  x 

  
	
  Fiscal Year 2010

  	
   

  	
  2.50

  	
  x 

  
	
  Fiscal Year 2011

  	
   

  	
  2.50

  	
  x 

  



 


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(b)           Consolidated Interest Coverage Ratio.  Permit the Consolidated Interest Coverage
Ratio for any period of four consecutive fiscal quarters of Holdings ending
with the last day of any fiscal quarter in any fiscal year of Holdings listed
below to be less than the ratio set forth below opposite such fiscal year:


 


	
  Fiscal Year

  	
   

  	
  Consolidated

  Interest Coverage Ratio

  	
   

  
	
  Fiscal Year 2006

  	
   

  	
  2.00

  	
  x 

  
	
  Fiscal Year 2007

  	
   

  	
  3.00

  	
  x 

  
	
  Fiscal Year 2008

  	
   

  	
  4.00

  	
  x 

  
	
  Fiscal Year 2009

  	
   

  	
  4.00

  	
  x 

  
	
  Fiscal Year 2010

  	
   

  	
  4.00

  	
  x 

  
	
  Fiscal Year 2011

  	
   

  	
  4.00

  	
  x 

  



 


(c)           Certain
Calculations.  With respect to any period during which a
Permitted Acquisition or Asset Sale or Investment occurs, for purposes of
determining compliance with the covenants set forth in Section 7.1,
Consolidated EBITDA and the components of Consolidated Total Leverage Ratio
shall be calculated with respect to such period on a pro forma basis including pro forma
adjustments arising out of events which are directly attributable to a specific
transaction, are factually supportable and are expected to have a continuing
impact, in each case determined on a basis consistent with Article 11 of
Regulation S-X promulgated under the Securities Act of 1933, as amended, and as
interpreted by the staff of the SEC, (which pro
forma adjustments shall be certified by the Chief Financial Officer of the
Borrower), using the historical financial statements of the Person or business
acquired or sold or to be acquired or sold and the consolidated financial
statements of the Borrower and its Subsidiaries which shall be reformulated as
if such Permitted Acquisition or Asset Sale, and any Indebtedness or other
liabilities incurred in connection with any such acquisition or sale had been
consummated or incurred at the beginning of such period (and assuming that such
Indebtedness bears interest during any portion of the applicable measurement
period prior to the relevant Permitted Acquisition or Asset Sale, at the
weighted average of the interest rates applicable to outstanding Loans during
such period; provided that if such assumed Indebtedness is to remain as
permanent financing, the actual interest rate will be used in the calculation),
all such calculations to be in form and substance reasonably satisfactory to
the Administrative Agent.


 


7.2           Limitation
on Indebtedness.  Create, incur,
assume or suffer to exist any Indebtedness, except:


 


(a)           Indebtedness
of any Loan Party created under any Loan Document (including in respect of any
Existing Letters of Credit);


 


(b)           Indebtedness
of (i) the Borrower to any Subsidiary Guarantor, (ii) any Subsidiary Guarantor
to the Borrower or any Subsidiary Guarantor, (iii) any Foreign Subsidiary (or
KMEMC) to any other Foreign Subsidiary (or KMEMC), and (iv) any Foreign
Subsidiary (or KMEMC) to the Borrower or any Subsidiary Guarantor in an
aggregate principal amount (for all 


 


78





















 


such Indebtedness permitted pursuant to this clause
(b)(iv)) not to exceed the Foreign Subsidiary Debt Amount (less the aggregate
amount of any Cancelled Foreign Debt that was permitted to have been
outstanding pursuant to this clause (b)(iv) and that was cancelled pursuant to
Section 7.5(k)) at any one time outstanding (provided that all such
Indebtedness pursuant to this clause (b)(iv) shall be evidenced by “floating
balance” promissory notes not requiring notations having terms reasonably
satisfactory to Administrative Agent, the sole originally executed counterparts
of which shall be pledged and delivered to Administrative Agent as Collateral);


 


(c)           Indebtedness
(including Capital Lease Obligations) secured by Liens permitted by Section
7.3(g) in an aggregate principal amount not to exceed $25,000,000 at any one
time outstanding;


 


(d)           Indebtedness
(other than the Indebtedness (x) of Foreign Subsidiaries owing to the Borrower
and Subsidiary Guarantors on the Closing Date as specified on Schedule 1.1(b)
hereto or (y) referred to in Section 7.2(f)) outstanding on the date hereof and
listed on Schedule 7.2(d) and any refinancings, refundings, renewals or
extensions thereof (without any increase in the principal amount thereof (other
than any increase not exceeding the amount of any fees, premium, if any, and
financing costs relating to such refinancing) or any shortening of the maturity
of any principal amount thereof);


 


(e)           (x) Guarantee
Obligations made by (i) Holdings or any Subsidiary thereof of any
Indebtedness (other than Disqualified Stock) of the Borrower or any Subsidiary
Guarantor permitted pursuant to any other clause of this Section 7.2; or
(ii) any Foreign Subsidiary of any Indebtedness of any Foreign Subsidiary
permitted pursuant to any other clause of this Section 7.2 (provided
that a Subsidiary shall not create, incur, assume or suffer to exist any
Guarantee Obligation with respect to any Indebtedness of the Borrower or any
Guarantor unless such Subsidiary shall have also guaranteed the Obligations
pursuant to the Guarantee and Collateral Agreement); and (y) any Guarantee
Obligation that is made by Holdings or any Subsidiary thereof with respect to
any Indebtedness of any Foreign Subsidiary (or KMEMC) permitted under Section
7.2(r) or (s);


 


(f)            (i) Indebtedness
of the Borrower and Tronox Finance in respect of the Senior Notes;
(ii) Guarantee Obligations of Holdings and any Subsidiary Guarantor in
respect of such Indebtedness ; and (iii) unsecured indebtedness of the Borrower
and/or Tronox Finance that refinances the Senior Notes and Guarantee
Obligations of Holdings and any Subsidiary Guarantor in respect of such
refinancing indebtedness; provided that (A) the maturity date of such
refinancing Indebtedness shall be no earlier than six months after the Term
Loan Maturity Date, (B) the covenants and defaults, taken as a whole, contained
in the documents, instruments and agreements governing or evidencing such
refinancing Indebtedness (“Senior Note Refinancing Documents”) shall be
no less favorable to the Borrower and the Guarantors than the terms of the
Senior Notes and (C) the principal amount of such refinancing Indebtedness (net
of any fees, premium, if any, and financing costs related thereto) does not
exceed the principal amount of the Senior Notes refinanced thereby;


 


(g)           Indebtedness
of a Person at the time such Person becomes a Subsidiary of the Borrower, or is
merged or consolidated with or into the Borrower of any of its Subsidiaries in
a transaction permitted under this Agreement, in an aggregate principal amount
not to exceed 


 


79





















 


$25,000,000 at any one time outstanding for all
Indebtedness incurred pursuant to this clause (g), and extensions, renewals,
refinancings, refundings and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof (other than any increase not
exceeding the amount of any fees, premium, if any, and financing costs relating
to such refinancing); provided that (i) such Indebtedness (other than
any such extension, renewal, refinancing, refunding or replacement) exists at
the time such Person becomes a Subsidiary and is not created in contemplation
of such event, (ii) other than the Guarantee Obligations permitted by paragraph
(e) of this Section 7.2 , neither Holdings nor any of its other Subsidiaries
shall be liable for such Indebtedness and (iii) Holdings is in compliance, on a
pro  forma basis after giving effect to the incurrence of such
Indebtedness and the use of proceeds thereof, with the covenants contained in
Section 7.1, in each case recomputed as at the last day of the most recently
ended fiscal quarter of Holdings for which the relevant information is
available as if such incurrence had occurred on the first day of each relevant
period for testing such compliance;


 


(h)           obligations
of a Special Purpose Subsidiary incurred and outstanding pursuant to a
Receivable Financing Transaction permitted by Section 7.5(l) that are not
recourse to Holdings, the Borrower or any other Subsidiary of the Borrower
(other than pursuant to Standard Securitization Undertakings (it being
understood and agreed that to the extent such Standard Securitization
Undertakings constitute Guarantee Obligations or Indebtedness such Standard
Securitization Undertakings shall be permitted under this Section 7.2 and 7.8);


 


(i)            Indebtedness
of the Borrower or any Subsidiary to the seller representing all or part of the
purchase price of an Investment or acquisition permitted hereunder, or assumed
by the Borrower or any of its Subsidiaries in connection therewith, and
extensions, renewals, refinancings, refundings and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof
(other than any increase not exceeding the amount of any fees, premium, if any,
and financing costs relating to such refinancing), provided that (i) as
to any such assumed Indebtedness, such Indebtedness (other than any extension,
renewal, refinancing, refunding or replacement thereof) exists at the time of
such acquisition and is not created in contemplation of such event and (ii) the
aggregate principal amount of all such Indebtedness shall not exceed
$50,000,000 at any one time outstanding for all Indebtedness incurred pursuant
to this clause (i);


 


(j)            Indebtedness
arising from judgments or orders in circumstances not constituting an Event of
Default;


 


(k)           Indebtedness
resulting from the endorsement of negotiable instruments in the ordinary course
of business or arising from the honoring of a check, draft or similar
instrument presented by Holdings or any of its Subsidiaries in the ordinary
course of business against insufficient funds;


 


(l)            Indebtedness
in respect of (i) workers’ compensation claims and self-insurance obligations
in the ordinary course of business, (ii) the financing of insurance premiums in
customary amounts consistent with the operations and businesses of the Borrower
and its Subsidiaries and (iii) surety, appeal and performance bonds, provided
that such bonds are entered into in the ordinary course of business and are not
in respect of Indebtedness;


 


80





















 


(m)          Indebtedness
arising from or representing deferred compensation to employees of Holdings or
its Subsidiaries that constitute or are deemed to be Indebtedness under GAAP
and that are incurred in the ordinary course of business;


 


(n)           Indebtedness
of the Borrower and/or Tronox Finance (including any Indebtedness of the
Borrower and/or Tronox Finance that extends, renews, refinances, refunds,
replaces or is in exchange for existing Indebtedness of the Borrower and/or
Tronox Finance permitted by this paragraph) and Guarantee Obligations of any
Guarantors in respect of such Indebtedness, provided that, with respect to all
Indebtedness permitted by this paragraph (n) (including (except in the case of
clause (vi) below) any extension, renewal, refinancing, refunding or
replacement thereof), (i) such Indebtedness is unsecured, (ii) such
Indebtedness has no scheduled principal payments prior to the date that is six
months after the Term Loan Maturity Date, (iii) the covenants and defaults,
taken as a whole, contained in the documents, instruments and agreements
governing or evidencing such Indebtedness (the “Senior Unsecured Debt
Documents”) are no more restrictive than those applicable to offerings of “high-yield”
debt by similar issuers of similar debt at or about the same time (but in any
event no more restrictive than this Agreement and not including (x) financial
maintenance covenants or (y) defaults (other than cross-defaults arising from
non-payment of Indebtedness after the expiration of any applicable grace
period) arising from defaults under documentation governing other Indebtedness
unless such other Indebtedness is accelerated), (iv) no Default or Event of
Default has occurred and is continuing or would result from the Incurrence of
such Indebtedness, (v) Holdings is in compliance, on a pro  forma
basis after giving effect to the incurrence of such Indebtedness and the use of
proceeds thereof, with the covenants contained in Section 7.1, in each case
recomputed as at the last day of the most recently ended fiscal quarter of
Holdings for which the relevant information is available as if such incurrence
had occurred on the first day of each relevant period for testing such
compliance, (vi) the Net Cash Proceeds of the incurrence of such Indebtedness
are applied in accordance with Section 2.12(a) and (vii) the aggregate
principal amount of such Indebtedness incurred the Net Cash Proceeds of which
are not applied to the prepayment of the Term Loans under Section 2.12(a),
shall not exceed $100,000,000;


 


(o)           subordinated
Indebtedness of the Borrower and/or Tronox Finance (including any subordinated
Indebtedness of the Borrower and/or Tronox Finance that extends, renews,
refinances, refunds, replaces or is in exchange for existing subordinated
Indebtedness of the Borrower and/or Tronox Finance permitted by this paragraph)
and Guarantee Obligations of any Guarantor in respect of such Indebtedness,
provided that, with respect to all Indebtedness permitted by this paragraph (o)
(including (except in the case of clause (vii) below) any extension, renewal,
refinancing, refunding or replacement thereof), (i) such Indebtedness is
unsecured, (ii) such Indebtedness has no scheduled principal payments prior to
the date that is six months after the Term Loan Maturity Date, (iii) the
covenants and defaults, taken as a whole, contained in the documents, instruments
and agreements governing or evidencing such Indebtedness (the “Subordinated
Debt Documents”) are no more restrictive than those applicable to offerings
of “high-yield” subordinated debt by similar issuers of similar debt at or
about the same time (but in any event no more restrictive than this Agreement
and not including (x) financial maintenance covenants or (y) defaults (other
than cross-defaults arising from non-payment of Indebtedness after the
expiration of any applicable grace period) arising from defaults under
documentation governing other Indebtedness unless such other Indebtedness is
accelerated), (iv) the Subordinated Debt Documents contain subordination terms
that are no less 


 


81





















 


favorable in any material respect to the Lenders than
those applicable to offerings of “high-yield” subordinated debt by similar
issuers of similar debt at or about the same time, (v) no Default or Event of
Default has occurred and is continuing or would result from the Incurrence of
such Indebtedness, (vi) Holdings is in compliance, on a pro  forma
basis after giving effect to the incurrence of such Indebtedness and the use of
proceeds thereof, with the covenants contained in Section 7.1, in each case
recomputed as at the last day of the most recently ended fiscal quarter of
Holdings for which the relevant information is available as if such incurrence
had occurred on the first day of each relevant period for testing such
compliance, (vii) the Net Cash Proceeds of the incurrence of such Indebtedness
are applied in accordance with Section 2.12(a) and (viii) the
aggregate principal amount of any such Indebtedness incurred the Net Cash
Proceeds of which are not applied to the prepayment of the Term Loans under
Section 2.12(a) shall not exceed $250,000,000;


 


(p)           Disqualified
Stock of Holdings or the Borrower, provided that, at the time of issuance
thereof, (i) no Default or Event of Default has occurred and is continuing or
would result therefrom, (ii) Holdings is in compliance, on a pro forma basis
after giving effect to such issuance and the use of proceeds thereof, with the
covenants contained in Section 7.1, in each case recomputed as at the last day
of the most recently ended fiscal quarter of Holdings for which the relevant
information is available as if such issuance had occurred on the first day of
each relevant period for testing such compliance, and (iii) the Net Cash
Proceeds of such issuance are applied in accordance with Section 2.12(a);


 


(q)           Indebtedness
arising pursuant to clause (i) of the definition thereof as a result of Liens
permitted under Section 7.3(a), (b), (c), (d), (i) and (o);


 


(r)            Indebtedness
of Foreign Subsidiaries (other than Indebtedness permitted by other clauses of
this Section 7.2), which, when incurred and aggregated with the then
outstanding principal amount of all other Indebtedness of Foreign Subsidiaries
incurred pursuant to this Section 7.2(r), shall not exceed the greater of (i)
$30,000,000 and (b) 5.0% of the combined Consolidated Tangible Assets of the
Foreign Subsidiaries (as of the most recently ended fiscal quarter for which
financial statements have been delivered pursuant to Section 6.1) (less the
aggregate amount of any Cancelled Foreign Debt that was permitted to have been
outstanding pursuant to this clause (r) and that was cancelled pursuant to
Section 7.5(k));


 


(s)           additional
Indebtedness of the Borrower or any of its Subsidiaries in an aggregate
principal amount (for the Borrower and all Subsidiaries) not to exceed $35,000,000
at any one time outstanding; and


 


(t)            Indebtedness
of Holdings to the Borrower incurred pursuant to the last sentence of Section
7.6 in lieu of Restricted Payments otherwise permitted under Section 7.6(d),
(e), (f) or (l)(ii).


 


7.3           Limitation
on Liens.  Create, incur, assume or
suffer to exist any Lien upon any of its Property, whether now owned or
hereafter acquired, except for:


 


(a)           (i)
Liens for taxes, assessments or other governmental charges not yet due or which
are being contested in good faith by appropriate proceedings, provided that adequate 


 


82





















 


reserves with respect thereto are maintained on the books
of the Borrower or its Subsidiaries, as the case may be, in conformity with
GAAP and (ii) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payments of customs duties in connection with the
importation of goods;


 


(b)           statutory
landlord’s liens, vendors’, carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s, suppliers’, workers’ construction or other like Liens arising in
the ordinary course of business;


 


(c)           pledges
or deposits in connection with workers’ compensation, unemployment insurance
and other social security, old age pension or public liability obligations or
any other liabilities of like nature;


 


(d)           deposits
of cash or securities by or on behalf of the Borrower or any of its
Subsidiaries to secure the performance of letters of intent or purchase
agreements permitted under this Agreement, bids, tenders, trade contracts
(other than for borrowed money), government contracts, leases, statutory
obligations, regulatory obligations, surety and appeal bonds, performance and
return of money bonds and other obligations of a like nature;


 


(e)           easements,
rights-of-way, restrictions, reservations (to the extent existing immediately
prior to the Closing Date which reservations include conveyances or leases
of oil, gas or other minerals (whether similar or dissimilar to hydrocarbons,
such as coal, sand, gravel or hard rock minerals)), servitudes, permits,
conditions, covenants and other encumbrances incurred in the ordinary
course of business which, in the aggregate, do not materially detract from the
value of the Property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower and of its Subsidiaries, taken as a
whole;


 


(f)            Liens
in existence on the date hereof listed on Schedule 7.3(f), securing
Indebtedness permitted by Section 7.2(d) or other obligations (not constituting
Indebtedness) of the Borrower and its Subsidiaries, provided
that no such Lien is spread to cover any additional Property after the Closing
Date (other than after acquired title in or on such
property and proceeds of the existing collateral in accordance with the
instrument creating such Lien (without any modification thereof after the
Closing Date)) and that, to the extent such
Liens secure Indebtedness, the amount of Indebtedness secured thereby is not
increased except (A) as permitted by Section 7.2(d) and (B) pursuant to the
instrument creating such Lien (without any modification thereof after the
Closing Date);


 


(g)           Liens
securing Indebtedness of the Borrower or any of its Subsidiaries incurred
pursuant to Section 7.2(c) to finance the acquisition, construction or
improvement of fixed or capital assets, provided
that (i) such Liens shall be created within 365 days of the acquisition,
construction or improvement of such fixed or capital assets, (ii) such Liens do
not at any time encumber any Property other than the Property financed by such
Indebtedness, (iii) the amount of Indebtedness secured thereby is not increased
and (iv) the amount of Indebtedness initially secured thereby is not more than
100% of the purchase price of such fixed and capital assets;


 


(h)           Liens
created pursuant to the Security Documents;


 


83





















 


(i)            any
interest or title of a lessor under any lease entered into by the Borrower or
any of its Subsidiaries and covering only the assets so leased;


 


(j)            Liens
consisting of customary rights of set-off of or banker’s liens on amounts on
deposit at banks, to the extent arising by operation of law or otherwise,
incurred in the ordinary course of business;


 


(k)           Liens
on the assets of a Person at the time such Person becomes a Subsidiary of the
Borrower, or is merged or consolidated with or into the Borrower or a
Subsidiary thereof, in a transaction permitted by this Agreement; provided
that (i) such Liens shall not be created in contemplation of such event, (ii)
such Liens do not at any time encumber any property other than such assets and
(iii) such Liens may secure extensions, renewals, refinancings, refundings and
replacements of any Indebtedness of such Person permitted under Section 7.2(g);


 


(l)            Liens
existing on any asset prior to the acquisition thereof by the Borrower or any
of its Subsidiaries in a transaction permitted by this Agreement, provided that
(i) such Liens shall not be created in contemplation of such event, (ii) such
Liens do not at any time encumber any property other than such asset and (iii)
such Liens may secure extensions, renewals, refinancings, refundings and
replacements of any Indebtedness in respect of such asset permitted under
Section 7.2(i);


 


(m)          any
obligations or duties affecting any of the property of the Borrower or its
Subsidiaries to any municipality or public authority or Governmental Authority
with respect to any franchise, grant, license or Permit;


 


(n)           (i)
Liens arising from precautionary Uniform Commercial Code financing statement
filings with respect to operating leases or consignment arrangements entered
into by the Borrower or any of its Subsidiaries in the ordinary course of
business or Liens on property which is the subject of a Disposition permitted
by Section 7.5 relating to such Disposition (so long such Liens are not
perfected prior to the completion of such Disposition) and (ii) Liens
encumbering property or assets under construction in the ordinary course of
business for purchase by a customer from Borrower or its Subsidiaries arising
from progress or partial payments by such customer to the Borrower or its
Subsidiaries relating solely to such property or assets;


 


(o)           Liens
on property of the Borrower or any of its Subsidiaries in favor of others
securing licenses, subleases and leases permitted hereunder and granted to
others and not interfering in any material respect in the business of the
Borrower or any of its Subsidiaries;


 


(p)           judgment
and attachment Liens not constituting an Event of Default;


 


(q)           Liens
on Receivables Assets of a Special Purpose Subsidiary subject to a Receivable
Financing Transaction permitted by Section 7.5(l);


 


(r)            Liens
on any assets of a Foreign Subsidiary securing Indebtedness incurred pursuant
to Section 7.2(r) and Section 7.2(s);


 


84





















 


(s)           Liens
not otherwise permitted by this Section 7.3 so long as the aggregate principal
amount of the obligations secured thereby does not exceed (as to the Borrower
and all Subsidiaries) $15,000,000 at any one time outstanding;


 


(t)            Liens
to secure obligations under commodity Hedge Agreements permitted under Sections
7.8(n) and 7.20 provided that the amount of cash and the fair market value of
the Property, other than cash, that is subject to the Liens permitted by this
Section 7.3(t) shall not exceed $10,000,000 in the aggregate at any one time
outstanding; and


 


(u)           Liens on
assets of Foreign Subsidiaries to secure (i) Indebtedness to banks with respect
to overdrafts by Foreign Subsidiaries in the ordinary course of business with
respect to deposit accounts maintained outside the United States in an
aggregate principal amount not to exceed $35,000,000 at any one time
outstanding (provided that no such overdraft shall be outstanding for more than
one Business Day after the date on which such overdraft is incurred); and
(ii) Guarantee Obligations of the Borrower with respect to Indebtedness
permitted under clause (i) of this Section 7.3(u).


 


7.4           Limitation
on Fundamental Changes.  Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or Dispose of all or substantially
all of its Property or business, except that:


 


(a)           any
Subsidiary of the Borrower may be merged or consolidated (x) with or into the
Borrower (provided that the Borrower shall
be the continuing or surviving corporation) or with or into any Subsidiary
Guarantor (provided that (i) such
Subsidiary Guarantor shall be the continuing or surviving corporation or
(ii) simultaneously with such transaction, the continuing or surviving
corporation shall become a Subsidiary Guarantor and the Borrower shall comply
with Section 6.9 in connection therewith) or (y) with or into any Subsidiary (provided
that neither Subsidiary is a Subsidiary Guarantor);


 


(b)           any
Subsidiary of the Borrower may Dispose of any or all of its assets (i) to the Borrower or any Subsidiary Guarantor (upon voluntary liquidation or
otherwise), (ii) to any other Subsidiary (provided that neither
Subsidiary is a Subsidiary Guarantor) (upon voluntary liquidation or otherwise)
or (iii) pursuant to a Disposition permitted by Section 7.5;


 


(c)           the
Capital Stock of any Subsidiary of the Borrower may be transferred to the
Borrower or any Subsidiary Guarantor or, in the case of any Capital Stock of
any Subsidiary that is not a Subsidiary Guarantor, to any Subsidiary; and


 


(d)           any
Investment expressly permitted by Section 7.8, or Disposition expressly
permitted by Section 7.5, may be structured as a merger, consolidation or
amalgamation.


 


7.5           Limitation
on Disposition of Property.  Dispose
of any of its Property (including receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary of Holdings,
issue or sell any shares of such Subsidiary’s Capital Stock to any Person,
except:


 


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(a)           the
Disposition of (i) obsolete or worn out Property in the ordinary course of
business or (ii) Property that is no longer useful in the
conduct of the Borrower’s business in the ordinary course of such business, provided
that, in the case of clause (ii), an amount equal to the Net Cash Proceeds
thereof is applied as and to the extent required by Section 2.12(b);


 


(b)           the
sale of inventory in the ordinary course of business;


 


(c)           Dispositions
permitted by Section 7.4(a) or (c) or clauses (i) and (ii) of Section 7.4(b);


 


(d)           the
sale or issuance of (i) any Subsidiary’s Capital Stock to (x) the Borrower or
any Subsidiary Guarantor or (y) any other
Subsidiary (provided that neither Subsidiary is a Subsidiary Guarantor) or (ii) Capital Stock (other than Disqualified Stock) of the Borrower to
Holdings, in each case in a transaction expressly permitted by Section 7.8;


 


(e)           the
Disposition by the Borrower and its Subsidiaries of other assets having a fair
market value not to exceed $35,000,000 in the aggregate for any fiscal year of
the Borrower provided that at least 75% of the consideration received in
respect thereof shall be in the form of cash and Cash Equivalents;


 


(f)            (i) the
Disposition of any Investment made pursuant to Section 7.8(b), (h), or (n)
or (ii) the Disposition of any Investment permitted pursuant to Section 7.8(i);
provided that
in the case of clause (ii), unless such Investment permitted under Section
7.8(i) was acquired in a Disposition under a clause specified in the
parenthetical of the definition of “Asset Sale”, an amount equal to the Net
Cash Proceeds of such Disposition is applied as and to the extent required by
Section 2.12(b);


 


(g)           Dispositions
resulting from a Recovery Event, provided,
that the requirements of Section 2.12(b) are complied with in connection
therewith;


 


(h)           (i) the
discount, write-off or sale of overdue accounts receivables and (ii) the factoring
at maturity or collection of any account receivables, in each case in the
ordinary course of business;


 


(i)            the
lease or license (or sublease or sublicense) of real or personal property
(including Intellectual Property) in the ordinary course of business;


 


(j)            the
sale or exchange of specific items of Property, so long as the purpose of each
such sale or exchange is to acquire (and results within 365 days of such sale
or exchange in the acquisition of) replacement items of Property which are, in
the reasonable business judgment of the Borrower, the functional equivalent of
the items of Property so sold or exchanged;


 


(k)           the
cancellation of any Indebtedness constituting an Investment permitted pursuant
to Section 7.8 (other than any Indebtedness of any Foreign Subsidiary to the
Borrower or any Subsidiary Guarantor (other than any such Indebtedness
cancelled in connection with the sale of such Foreign Subsidiary to a Person
other than the Borrower and its Subsidiaries) (any 


 


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such cancelled Indebtedness of a Foreign Subsidiary, “Cancelled
Foreign Debt”)) which the Borrower reasonably believes to be uncollectible;


 


(l)            the
sale, contribution, transfer or other Disposition of Receivables Assets to a
Special Purpose Subsidiary for the fair market value of those assets, less
amounts required to be established as reserves and customary discounts pursuant
to contractual agreements with entities that are not Affiliates of the
Borrower, entered into as part of a Receivable Financing Transaction, so long
as no Event of Default under Section 8(a) or 8(f) has occurred and is
continuing at the time of such Disposition;


 


(m)          the
Disposition of Receivables Assets by a Special Purpose Subsidiary in a
Receivable Financing Transaction;


 


(n)           issuances
of Stock by a Special Purpose Subsidiary to the Borrower or a Subsidiary in
connection with a Receivable Financing Transaction;


 


(o)           Dispositions
permitted by Section 7.11, provided that (i) at least 75% of the
consideration received in respect thereof shall be in the form of cash and Cash
Equivalents and (ii) an amount equal to the Net Cash Proceeds thereof is
applied as and to the extent required by Section 2.12(b); and


 


(p)           issuances
by the Borrower or Holdings of its Disqualified Stock permitted by Section
7.2(p); and


 


(q)           Dispositions
of the Electrolytic Assets; provided that (i) at least 75% of the consideration
received in respect thereof shall be in the form of cash and Cash Equivalents,
(ii) an amount equal to the Net Cash Proceeds thereof is applied as and to the
extent required by Section 2.12(b) and (iii) Holdings is in compliance, on a pro
forma basis after giving effect to such Disposition and the use of
proceeds thereof, with the covenants contained in Section 7.1, in each case
recomputed as at the last day of the most recently ended fiscal quarter of
Holdings for which the relevant information is available as if such incurrence
had occurred on the first day of each relevant period for testing such
compliance.


 


7.6           Limitation
on Restricted Payments.  Declare or
pay any dividend (other than dividends payable solely in Capital Stock
(excluding Disqualified Stock) of the Person making such dividend) on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any Capital Stock of Holdings, the Borrower or any of its Subsidiaries,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of Holdings, the Borrower or any of its Subsidiaries (other than
payments solely in Capital Stock (excluding Disqualified Stock) of the Person),
or enter into any derivatives or other transaction with any financial
institution, commodities or stock exchange or clearinghouse (a “Derivatives Counterparty”) obligating Holdings,
the Borrower or any Subsidiary to make payments to such Derivatives
Counterparty as a result of any change in market value of any such Capital
Stock (collectively, “Restricted Payments”),
except that:


 


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(a)           any
Subsidiary may make Restricted Payments to the Borrower or any Subsidiary
Guarantor (or, if such Subsidiary is not a Subsidiary Guarantor, to any
Subsidiary);


 


(b)           any
non-Wholly Owned Subsidiary may make Restricted Payments ratably with respect
to its Capital Stock;


 


(c)           Holdings
may make Restricted Payments in the form of Capital Stock (other than
Disqualified Stock) of Holdings;


 


(d)           the
Borrower may pay dividends to Holdings to permit Holdings to pay, and Holdings
may pay, dividends to shareholders of Holdings not
to exceed $5,000,000 in the aggregate in any fiscal quarter so long as, at the
time of declaration, and,
if paid more than 60 days after the date of declaration, the time of payment, (x) no Event of Default is continuing and (y) if the
Total Revolving Commitments have not been terminated or expired, the excess of
the Total Revolving Credit Commitments at such time over the aggregate
Revolving Extensions of Credit at such time is equal to or greater than the
amount of such dividend;


 


(e)           Holdings,
the Borrower and its Subsidiaries may make Restricted Payments pursuant to and
in connection with stock option plans or other benefit plans or arrangements
involving Capital Stock of Holdings or options for Capital Stock of Holdings
established for directors, officers, employees or consultants of Holdings, the
Borrower and its Subsidiaries, provided, that the aggregate amount of
payments under this clause (e) subsequent to the Closing Date (net of any
proceeds received by Holdings subsequent to the date hereof in connection with
resales of any Capital Stock of Holdings or options for Capital Stock of
Holdings so purchased) shall not exceed $5,000,000 in any twelve-month period
(with unused amounts in any twelve-month period being carried over to the next
(and only the next) succeeding twelve month period);


 


(f)            the
Borrower may pay dividends to Holdings to permit Holdings to (i) pay corporate
overhead, legal, accounting and administrative expenses incurred in the
ordinary course of business not to exceed $3,000,000 in any fiscal year, (ii) pay
franchise taxes and other tax obligations or fees required in each case to
maintain its corporate existence and (iii) pay any taxes which are due and
payable by Holdings and the Borrower as part of a consolidated group or due to
ownership of any interests in Subsidiaries that are not treated as corporations
for applicable tax purposes;


 


(g)           Holdings
may effect repurchases of Capital Stock of Holdings upon the exercise of stock
options or warrants or vesting of restricted stock to the extent deemed to
occur on the non-cash exercise of permitted stock options and warrants or the
withholding obligations with respect to such exercise or vesting;


 


(h)           Holdings
may repurchase or exchange its Capital Stock to the extent funded with Net Cash
Proceeds which are received from and substantially concurrently with the
issuance of its Capital Stock;


 


(i)            Holdings
may make Restricted Payments in any fiscal year financed solely with the
proceeds of an issuance of Capital Stock of Holdings (subject to Section 8(k))
to the extent such proceeds have not been used for other purposes hereunder;


 


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(j)            Holdings
may (and, to the extent of the portion of the Distribution constituting net
proceeds of borrowings under the Term Loan and the Senior Notes, the Borrower
may pay a dividend to Holdings to permit Holdings to) effect the Distribution
on the Closing Date (and other Restricted Payments, to the extent of the net
proceeds of sale of common stock of Holdings in the IPO pursuant to an
over-allotment option, within 45 days thereafter);


 


(k)           the
Borrower and its Subsidiaries may make Restricted Payments constituting
purchases by (i) the Borrower or any Subsidiary Guarantor of the Capital Stock
of any Subsidiary of the Borrower or (ii) any Subsidiary that is not a
Subsidiary Guarantor of any other Subsidiary’s Capital Stock, in each case,
pursuant to a transaction expressly permitted by Section 7.8; and


 


(l)            (i) the
Borrower or Holdings may declare and pay quarterly dividends on its
Disqualified Stock permitted by Section 7.2(p) in the ordinary course of
business; and (ii) Borrower may declare and pay dividends to Holdings to
permit Holdings to pay dividends permitted under clause (i) above, provided
that, in case of clauses (i) and (ii), at the time of declaration of such
dividend, no Default or Event of Default shall have occurred and be continuing
or would result therefrom.


 


Any Restricted Payment by
Borrower to Holdings otherwise permitted by clauses (d), (e), (f) or (l)(ii) of
this Section 7.6 may be effected in the form of an advance by Borrower to
Holdings; provided that the amount of such advance shall thereafter be
deemed and treated as a “dividend” and “Restricted Payment” for purposes of the
limitations specified in clauses (d), (e), (f) and (l)(ii) of this Section 7.6.


 


7.7           Limitation
on Capital Expenditures.  Make or
commit to make any Capital Expenditure, except (a) expenditures in respect of
Capital Lease Obligations permitted by Section 7.2(c) and (b) other (i) Capital
Expenditures of the Borrower and its Subsidiaries funded by the proceeds of an
issuance of Capital Stock of Holdings (subject to Section 8(k)) to the extent
such proceeds have not been used for other purposes hereunder or (ii) Capital
Expenditures of the Borrowers and its Subsidiaries not exceeding in any fiscal
year the amount set forth in Schedule 7.7 for such fiscal year; provided, that (x) up to 50% of any such amount
referred to above in clause (b)(ii), if not so expended in the fiscal year for
which it is permitted, may be carried over for expenditure in the next succeeding
fiscal year and (y) Capital Expenditures made pursuant to clause (b)(ii) during
any fiscal year shall be deemed made, first,
in respect of amounts permitted for such fiscal year as provided above and second, in respect of amounts carried over from
the prior fiscal year pursuant to subclause (x) above.


 


7.8           Limitation
on Investments.  Make any advance,
loan, extension of credit or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
substantially constituting an ongoing business from, or make any other
investment in, any other Person (all of the foregoing, “Investments”),
except:


 


(a)           extensions
of trade credit in the ordinary course of business;


 


(b)           Investments
in Cash Equivalents;


 


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(c)           Guarantee
Obligations permitted by Section 7.2;


 


(d)           loans
and advances to employees of Holdings, the Borrower or any Subsidiaries of the
Borrower in the ordinary course of business (including for travel,
entertainment and relocation expenses) in an aggregate amount for Holdings, the
Borrower and Subsidiaries of the Borrower not to exceed $1,000,000 at any one
time outstanding;


 


(e)           Investments
made with the proceeds of any Reinvestment Deferred Amount;


 


(f)            Investments
by (i) Holdings, the Borrower or any of its Subsidiaries in the Borrower
or any Subsidiary Guarantor; (ii) any Subsidiary that is not a Subsidiary
Guarantor in any other Subsidiary; and (iii) Investments by the Borrower or any
Subsidiary Guarantor in any Foreign Subsidiary (or KMEMC) in an aggregate
amount (for all Investments permitted pursuant to this clause (f)(iii)) not to
exceed $25,000,000 (less the aggregate amount of any Cancelled Foreign Debt
that was permitted to have been outstanding pursuant to this clause (f)(iii) and
that was cancelled pursuant to Section 7.5(k)) at any one time outstanding;


 


(g)           in
addition to Investments otherwise expressly permitted by this Section,
Investments by the Borrower or any Subsidiary thereof constituting an
acquisition of any Person engaged primarily in, or assets substantially
constituting an ongoing business consisting primarily of, one or more lines of
businesses permitted under Section 7.15 (“Permitted Acquisitions”); provided
that:


 


(i)            immediately prior to and after giving affect to any such Permitted
Acquisition, no Default or Event of Default shall have occurred and be
continuing and the Borrower shall have certified the same to the Administrative
Agent in writing;


 


(ii)           if such Permitted Acquisition is structured as a stock acquisition, then
either (A) the Person so acquired becomes a Subsidiary of Borrower or (B) such
Person is merged with and into either the Borrower or a Subsidiary thereof
(with the Borrower or such Subsidiary being the surviving Person in such
merger);


 


(iii)          all of the provisions of Section 6.9 have been or will be complied with in
all material respects in respect of such Permitted Acquisition;


 


(iv)          after giving pro  forma effect to the proposed Permitted
Acquisition in accordance with Section 7.1(e), the Borrower shall be in
compliance with the financial covenants set forth in Section 7.1;


 


(v)           the consideration for such Permitted Acquisition shall be limited to a
maximum amount of $25,000,000 per Permitted Acquisition and $75,000,000 for all
Permitted Acquisitions during the term of this Agreement; provided, however,
that in each case, such calculation shall exclude any portion of consideration
funded with the proceeds of the issuance of Capital Stock of Holdings (subject
to Section 8(k)) (to the extent such proceeds have not been used for other
purposes hereunder) or consisting of the issuance of such Capital Stock of
Holdings to the seller; and


 


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(vi)          any Indebtedness of the Borrower or any Subsidiary thereof (including any
Person becoming a Subsidiary of Borrower as a result of such Permitted
Acquisition) that exists immediately after consummation of such Permitted
Acquisition is permitted under Section 7.2;


 


(h)           Investments
received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with, customers and suppliers;


 


(i)            the
Borrower and its Subsidiaries may receive and own securities or other
Investments acquired pursuant to Dispositions, mergers, consolidations,
amalgamations, liquidations, wind-ups or dissolutions permitted pursuant to
Sections 7.4 or 7.5, provided that, if any such Investment constitutes
an Investment by any Loan Party in a Foreign Subsidiary, such Investment is
permitted pursuant to clause (f)(iii) or clause (s) of this Section 7.8;


 


(j)            Investments
consisting of endorsements for collection or deposit in the ordinary course of
business;


 


(k)           Investments
in deposit accounts opened and maintained in the ordinary course of business;


 


(l)            Investments
made using the Capital Stock of Holdings (subject to Section 8(k)) or the
proceeds received by Holdings any of its Subsidiaries from the issuance of
Capital Stock of Holdings (subject to Section 8(k)) to the extent such proceeds
have not been used for other purposes hereunder, provided that, after
giving pro  forma effect to the proposed Investment in accordance
with Section 7.1(c), the Borrower shall be in compliance with the financial
covenants set forth in Section 7.1;


 


(m)          Investments
(other than Investments by any Loan Party in any Foreign Subsidiary) in
existence on the Closing Date and, in the case of any Investment in excess of
$25,000,000, listed on Schedule 7.8(m), and extensions, renewals, modifications,
or restatements or replacements thereof, provided that no such extension,
renewal, modification, restatement or replacement shall (i) increase the amount
of the original Investment or (ii) adversely affect the interests of the
Lenders with respect to such original Investment, or the interests of the
Lenders under this Agreement and the other Loan Documents, in any material
respect;


 


(n)           Investments
in Hedge Agreements relating to the businesses and finances of the Borrower in
or any of its Subsidiaries and not for purposes of speculation;


 


(o)           Investments
by the Borrower or any of its Subsidiaries in joint ventures engaged primarily
in one or more businesses in which the Borrower and its Subsidiaries are
engaged or generally related thereto in an aggregate amount (valued at cost,
without regard to any write-ups or write-downs thereof) not to exceed
$10,000,000 in any fiscal year of Holdings; provided that, at the time of and
after giving effect to such Investments, no Default or Event of Default shall
have occurred and be continuing or would result therefrom;


 


(p)           Investments
permitted by Section 7.2(e), 7.2(q), 7.6 (other than clause (k) thereof) and
7.7;


 


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(q)           any
Investment by the Borrower or a Subsidiary of the Borrower in a Special Purpose
Subsidiary, or any Investment by a Special Purpose Subsidiary in any other
Person, in each case in connection with a Receivables Financing Transaction and
in a manner, and for consideration, customary for transactions of that type;


 


(r)            in
addition to Investments otherwise expressly permitted by this Section,
Investments by the Borrower or any of its Subsidiaries (other than in Holdings)
in an aggregate amount not to exceed $25,000,000 at any one time outstanding;


 


(s)           Investments
constituting Indebtedness of any Foreign Subsidiary (or KMEMC) to the Borrower
or any Subsidiary Guarantor permitted pursuant to Section 7.2(b)(iv) or Section
7.2(r) or (s); and


 


(t)            Investments
constituting Indebtedness of Holdings to the Borrower permitted pursuant to
Section 7.2(t).


 


The outstanding amount of any
Investment on any date of determination shall be calculated after giving effect
to all cash returns of principal or capital thereon, cash dividends or other
cash returns on the Investments thereon, received by the Loan Party or
Subsidiary which made such Investment and applied in a manner not prohibited by
this Agreement.


 


7.9           Limitation
on Optional Payments and Modifications of Debt Instruments, etc.  (a) Make any optional or voluntary payment,
prepayment, repurchase or redemption of, or otherwise voluntarily or optionally
defease, the Senior Notes, any Indebtedness incurred as permitted by Section
7.2(n) or (o) or any Disqualified Stock, or segregate funds for any such payment,
prepayment, repurchase, redemption or defeasance, or enter into any derivative
or other transaction with any Derivatives Counterparty obligating Holdings, the
Borrower or any Subsidiary to make payments to such Derivatives Counterparty as
a result of any change in market value of the Senior Notes, any Indebtedness
incurred as permitted by Section 7.2(n) or (o) or any Disqualified Stock,
except for prepayments, repurchases, redemptions, defeasances or segregations
of funds with the proceeds of refinancings or replacements thereof permitted by
Section 7.2 (f) (in the case of refinancings or replacements of the Senior
Notes), (n) (in the case of refinancings or replacements of Indebtedness
incurred as permitted by Section 7.2(n)) or (o) (in the case of refinancings
or replacements of Indebtedness incurred as permitted by Section 7.2(o)) or
with the issuance or sale of Capital Stock (other than Disqualified Stock) of
the Borrower or Holdings, (b) amend, modify or otherwise change, or consent or
agree to any amendment, modification, waiver or other change to, any of the
terms of the Senior Notes or the Senior Note Indenture, any Senior Unsecured
Debt Documents, any Subordinated Debt Documents or any Senior Note Refinancing
Documents (other than any such amendment, modification, waiver or other change
which (i) would extend the maturity or reduce the amount of any payment of
principal thereof, reduce the rate or extend the date for payment of interest
thereon or relax any covenant or other restriction applicable to Holdings, the
Borrower or any of its Subsidiaries or (ii) is not otherwise materially adverse
to the interests of the Lenders hereunder), or (c) amend its Governing
Documents in any manner materially adverse to the interests of the Lenders
hereunder.


 


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7.10         Limitation
on Transactions with Affiliates. 
Enter into any transaction, including any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than Holdings,
the Borrower or any Subsidiary) unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of business of
Holdings, the Borrower or such Subsidiary, as the case may be, and (c) upon
fair and reasonable terms no less favorable to Holdings, the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm’s
length transaction with a Person that is not an Affiliate; provided, however,
that the Borrower or any of its Subsidiaries may enter into any transaction
with a Person in which it has a joint venture interest involving an aggregate
amount (or, in the case of any loan, an aggregate principal amount) of less
than $2,500,000.  Notwithstanding the
foregoing, (i) any Special Purpose Subsidiary may enter into any
transaction with any Person in which such Special Purpose Subsidiary has an
Investment in connection with a Receivable Financing Transaction and (ii)
Holdings and the Borrower and its Subsidiaries may perform their respective
obligations under the Transaction Documentation.


 


7.11         Limitation
on Sales and Leasebacks.  Enter into
any arrangement with any Person providing for the leasing by Holdings, the
Borrower or any of its Subsidiaries of real or personal property which has been
or is to be sold or transferred by Holdings, the Borrower or such Subsidiary to
such Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such Property or rental obligations
of Holdings, the Borrower or such Subsidiary unless (i) the sale of such
Property is permitted by Section 7.5 and (ii) any Capital Lease Obligations or
Liens arising in connection therewith are permitted by Sections 7.2(c) and
7.3(g) or (i), respectively.


 


7.12         Limitation
on Changes in Fiscal Periods.  Permit
the fiscal year of the Borrower to end on a day other than December 31 or
change the Borrower’s method of determining fiscal quarters.


 


7.13         Limitation
on Negative Pledge Clauses.  Enter
into or suffer to exist or become effective any agreement that prohibits or
limits the ability of Holdings, the Borrower or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of its Property or
revenues, whether now owned or hereafter acquired, to secure the Obligations
or, in the case of any guarantor, its obligations under the Guarantee and
Collateral Agreement, other than (a) this Agreement and the other Loan
Documents, (b) the Senior Note Indenture, (c) any agreements governing any
purchase money Liens or Capital Lease Obligations otherwise permitted hereby
(in which case, any prohibition or limitation shall only be effective against
the assets financed thereby), (d) any agreements evidencing a Receivable
Financing Transaction permitted by Section 7.5(l), (e) any agreements of any
Foreign Subsidiary governing Indebtedness of such Foreign Subsidiary incurred
pursuant to Section 7.2 (in which case, any prohibition or limitation shall
only be effective against the assets of such Foreign Subsidiary and its Foreign
Subsidiaries), (f) any agreements with respect to any Subsidiary acquired in a
transaction permitted by Section 7.8 (in which case, any prohibition or
limitation shall only be effective against the assets of such Subsidiary) and
(g) any agreements governing Indebtedness permitted by Section 7.2 incurred by
the Borrower or any Domestic Subsidiary (provided that any such prohibition or
limitation shall in any event permit Liens securing (i) the Indebtedness and
other obligations under the Loan Documents (as such agreements may be amended, 


 


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including any amendment and
restatement thereof, supplemented or otherwise modified from time to time,
including by one or more agreements extending the maturity of, refinancing,
replacing or otherwise restructuring, all or any portion of Indebtedness under
such agreements or any successor or replacement agreements and whether by the
same or any other agent, lender, or group of lenders), and any Guarantee
Obligations in respect of such Indebtedness and other obligations, in an
aggregate principal amount at least equal to the then aggregate of the
outstanding aggregate principal amount loans, face amount of outstanding
letters of credit and then undrawn revolving credit commitments under the
Facilities (including any refinancings, refundings, renewals or extensions
thereof that do not increase the principal amount thereof), (ii) Hedge
Agreements with any Lender or Lender Affiliate, and any Guarantee Obligations
in respect of such Hedge Agreements, and (iii) Cash Management Agreements with
any Qualified Counterparty and any Guarantee Obligations in respect of such
Cash Management Agreements).


 


7.14         Limitation
on Restrictions on Subsidiary Distributions.  Enter into or suffer to exist or become
effective any consensual encumbrance or restriction on the ability of any
Subsidiary of the Borrower to (a) make Restricted Payments in respect of any
Capital Stock of such Subsidiary held by, or pay any Indebtedness owed the
Borrower or any other Subsidiary, (b) make Investments in the Borrower or any
other Subsidiary of the Borrower or (c) transfer any of its assets to the
Borrower or any other Subsidiary of the Borrower, except for (i) such
encumbrances or restrictions existing under or by reason of any restrictions
existing under the Loan Documents, (ii) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement that has been entered into in
connection with the Disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary, (iii) any encumbrances or restrictions
arising from any applicable law, rule, regulation or order or any other
agreement in effect or entered into at the Closing Date, (iv) with respect to
clause (c) only, restrictions on transfers of assets subject to any Lien
permitted under Sections 7.3(c), (d), (g), (i), (k), (l), (o) or (q),
(v) any restrictions on a Special Purpose Subsidiary that arise pursuant
to the terms of any agreement entered into in connection with any Receivable
Financing Transaction and apply only to such Special Purpose Subsidiary, (vi)
any restrictions with respect to any Foreign Subsidiary (and its Foreign
Subsidiaries) contained in agreements governing Indebtedness of such Foreign
Subsidiary incurred pursuant to Section 7.2, (vii) any encumbrances or
restrictions imposed by reason of customary provisions contained in leases,
licenses, joint ventures agreements and similar agreements entered into in the
ordinary course of business, (viii) any encumbrances or restrictions that are
or were created by virtue of any transfer of, agreement to transfer or option
or right with respect to any property, assets or Capital Stock not otherwise
prohibited by this Agreement (which encumbrances or restrictions are limited to
such property, assets or Capital Stock); (ix) any restrictions in a contractual
obligation incurred in the ordinary course of business and on customary terms
which prohibit transfer of asserts subject of the applicable contractual
obligation, (x) restrictions on cash or other deposits or net worth imposed by
customers, suppliers or, in the ordinary course of business, other third
parties (other than holders of Indebtedness), and (xi) any restrictions
contained in agreements related to Indebtedness permitted by Section 7.2
(provided that no such agreement shall be more restrictive, in any material
respect, than this Agreement with respect to any transaction described in
clause (a), (b) or (c) above).


 


7.15         Limitation
on Lines of Business.  Enter into any
business, either directly or through any Subsidiary, except for those
businesses that are of the same general type in which 


 


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the Borrower and its
Subsidiaries are engaged on the Closing Date (after giving effect to the
Transaction) or that are reasonably related or incidental thereto.


 


7.16         Limitation
on Amendments to Transaction Documents. 
Amend, supplement or otherwise modify or fail to enforce the terms and
conditions of any of the Transaction Documentation except to the extent that
any such amendment, supplement or modification or failure to enforce both (i)
could not reasonably be expected to have a Material Adverse Effect and (ii)
would not materially adversely affect, as a whole, the rights of the Lenders
hereunder.


 


7.17         Special
Purpose Subsidiary.  Permit (a) any
Special Purpose Subsidiary to engage in any business other than Receivable
Financing Transactions and activities directly related thereto or (b) recourse
at any time to Holdings, the Borrower or any of its Subsidiaries (other than a
Special Purpose Subsidiary) or any of their respective assets for any
liability, direct or indirect, contingent or otherwise, in respect of any
obligation of a Special Purpose Subsidiary whether arising under or in
connection with any Receivable Financing Transaction or otherwise (other than
pursuant to Standard Securitization Undertakings).


 


7.18         Limitation
on Activities of Holdings.  In the
case of Holdings, notwithstanding anything to the contrary in this Agreement or
any other Loan Document, (a) conduct, transact or otherwise engage in any
business or operations other than those incidental to its ownership of the
Capital Stock of the Borrower or those activities customarily carried out or
required of a publicly-owned holding company (including in connection with the
issuance of any Capital Stock and the appointment and employment of officers
and employees), (b) incur, create, assume or suffer to exist any Indebtedness
or other financial obligations, except (i) nonconsensual obligations imposed by
operation of law, (ii) pursuant to (x) the Loan Documents to which it is a
party and the Senior Note Indenture, (y) Guarantee Obligations permitted
pursuant to Section 7.2(e), (f), (n) or (o) and/or (z) Indebtedness permitted
pursuant to Section 7.2(t) and (iii) obligations with respect to its Capital
Stock, or (c) own, lease, manage or otherwise operate any properties or assets
(other than cash (including cash received by it in connection with dividends
and other Restricted Payments made by the Borrower in accordance with Section
7.6 pending application in the manner contemplated by said Section and
including pursuant to the Specified Cash Management Agreements), Cash
Equivalents and other assets reasonably incidental to the conduct of its
activities as a publicly traded holding company) and other than in connection
with the ownership of shares of Capital Stock of the Borrower.


 


7.19         Limitation
on Activities of Tronox Finance.  In
the case of Tronox Finance, notwithstanding anything to the contrary in this
Agreement or any other Loan Document, (a) conduct, transact or otherwise engage
in, or commit to conduct, transact or otherwise engage in, any business or
operations other than those incidental to its status as guarantor of the
Obligations and co-issuer of the Senior Notes or other Indebtedness permitted
pursuant to Section 7.2(e), (f), (n) or (o), (b) incur, create, assume or
suffer to exist any Indebtedness or other financial obligations, except (i)
nonconsensual obligations imposed by operation of law, (ii) pursuant to the
Loan Documents to which it is a party and the Senior Note Indenture or other
Indebtedness permitted pursuant to Section 7.2(e), (f), (n) or (o) and (iii)
obligations with respect to its Capital Stock, or (c) own, lease, manage or
otherwise operate any properties or assets (including cash and Cash
Equivalents).


 


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7.20         Limitation
on Hedge Agreements.  Enter into any
Hedge Agreement other than Hedge Agreements entered into in the ordinary course
of business, and not for speculative purposes, to protect against or mitigate
changes in interest rates or foreign exchange rates or commodity prices.


 


7.21         Post-Closing
Deliveries.  Fail to (a) deliver to
the Administrative Agent each item set forth in Schedule 7.21, in form and
substance reasonably satisfactory to the Administrative Agent and together with
each certificate or other document ancillary thereto and reasonably requested
by the Administrative Agent and (b) perform each action set forth in Schedule
7.21 in a manner reasonably satisfactory to the Administrative Agent and
together with each ancillary action reasonably requested by the Administrative
Agent to be performed by any Loan Party in connection therewith, in each case
(x) within the periods set forth opposite each such item or action on such
Schedule and (y) unless otherwise agreed by the Administrative Agent in respect
of any such item or action.


 


SECTION
8.           EVENTS OF DEFAULT


 


If any
of the following events shall occur and be continuing:


 


(a)           The
Borrower shall fail to pay any principal of any Loan or Reimbursement
Obligation when due in accordance with the terms hereof; or the Borrower shall
fail to pay any interest on any Loan or Reimbursement Obligation or shall fail
to pay any fees payable hereunder within five Business Days after any such
interest or fees becomes due in accordance with the terms hereof or thereof; or
any Loan Party shall fail to pay any other amount payable hereunder or under
any other Loan Documents within 10 Business Days after the date on which the
Administrative Agent provided notice to the Borrower that such amount has
become due in accordance with the terms hereof or thereof; or


 


(b)           Any
representation or warranty made or deemed made by any Loan Party herein or in
any other Loan Document or that is contained in any certificate delivered
pursuant to Section 6.2(b)(i) or Section 6.2(b)(ii)(x) shall prove to have been
inaccurate in any material respect on or as of the date made or deemed made; or


 


(c)           Any
Loan Party shall default in the observance or performance of any agreement
contained in clause (i) of Section 6.4(a) (with respect to Holdings and the
Borrower only), Section 6.7(a) or Section 7; or


 


(d)           Any
Loan Party shall default in the observance or performance of any covenant or
other agreement contained in this Agreement or any other Loan Document (other
than as provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of 30 days from the date on
which the Administrative Agent provided notice of such default to such Loan
Party referencing this Section 8(d); or


 


(e)           Holdings,
the Borrower or any of its Subsidiaries shall (i) default in making any payment
of any principal of any Indebtedness, including any Guarantee Obligation, but
excluding the Loans and Reimbursement Obligations) beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness
was created; or (ii) default in making any payment of any interest on any such
Indebtedness beyond the period of 


 


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grace, if any, provided in the instrument or agreement
under which such Indebtedness was created; or (iii) default in the observance
or performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event shall occur or condition exist, unless
waived or cured as provided in the instrument or agreement under which such
Indebtedness was created, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity, any applicable grace period having expired, or
(in the case of any such Indebtedness constituting a Guarantee Obligation) to
become payable, any applicable grace period having expired; provided, that a default, event or condition
described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any
time constitute an Event of Default unless, at such time, one or more defaults,
events or conditions (without duplication as to the same item of Indebtedness)
of the type described in clauses (i), (ii) and (iii) of this paragraph (e)
shall have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate $25,000,000; or


 


(f)            (i)  Holdings, the Borrower or any of its
Subsidiaries (other than any Immaterial Subsidiary) shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial part
of its assets, or Holdings, the Borrower or any of its Subsidiaries (other than
any Immaterial Subsidiary) shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against Holdings, the Borrower
or any of its Subsidiaries (other than any Immaterial Subsidiary) any case,
proceeding or other action of a nature referred to in clause (i) above that (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period
of 60 days; or (iii) there shall be commenced against Holdings, the Borrower or
any of its Subsidiaries (other than any Immaterial Subsidiary) any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief that shall
not have been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) Holdings, the Borrower or any of its
Subsidiaries (other than any Immaterial Subsidiary) shall take any corporate
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) Holdings, the Borrower or any of its Subsidiaries (other than any
Immaterial Subsidiary) shall not, or shall be unable to, or shall admit in
writing its inability to, generally pay its debts as they become due; or


 


(g)           (i)  Any Person shall engage in any “prohibited
transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any “accumulated funding deficiency” (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, or any Lien in favor of the PBGC or a Plan shall arise on the assets of
the Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with 


 


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respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is likely to result in the termination
of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA without the approval of the
Internal Revenue Service and the PBGC, (v) the Borrower or any Commonly Controlled
Entity shall incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan, (vi) the Borrower, or
any of its Subsidiaries or any Commonly Controlled Entity shall be required to
make during any fiscal year of the Borrower payments pursuant to any employee
welfare benefit plan (as defined in Section 3.1 of ERISA) that provides
benefits to retired employees (or their dependents) or (vii)  the
Borrower, or any of its Subsidiaries or any Commonly Controlled Entity shall be
required to make during any fiscal year of the Borrower contributions to any
defined benefit pension plan subject to Title IV of ERISA (including any
Multiemployer Plan); and in each case in clauses (i) through (vii) above, such
event or condition, together with all other such events or conditions, if any,
would reasonably be expected to have a Material Adverse Effect; or


 


(h)           One or
more judgments or decrees shall be entered against Holdings, the Borrower or
any of its Subsidiaries involving for Holdings, the Borrower and its
Subsidiaries taken as a whole a liability (not paid or fully covered by
insurance) of $25,000,000 or more, and all such judgments or decrees shall not
have been vacated, discharged, stayed or bonded pending appeal within 60 days
from the entry thereof; or


 


(i)            Any of
the Security Documents covering a material portion of the Collateral shall
cease, for any reason (unless released by the Administrative Agent or as
otherwise permitted by this Agreement or the other Loan Documents), to be in
full force and effect, or any Loan Party shall so assert in writing, or any
Lien created by any of the Security Documents covering any material portion of
the Collateral shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or


 


(j)            The
guarantee contained in Section 2 of the Guarantee and Collateral Agreement
shall cease, for any reason (other than by reason of the express release
thereof pursuant to Section 10.15), to be in full force and effect in any
material respect or any Loan Party shall so assert in writing; or


 


(k)           Any
Change of Control shall occur;


 


then, and in any such event, (A) if such event is
an Event of Default specified in clause (i) or (ii) of paragraph (f) above with
respect to the Borrower, automatically the Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken:  (i) with the consent of the
Majority Revolving Credit Facility Lenders, the Administrative Agent may, or
upon the request of the Majority Revolving Credit Facility Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Revolving
Credit 


 


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Commitments to be terminated forthwith, whereupon
the Revolving Credit Commitments shall immediately terminate; and (ii) with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable.  Upon
the occurrence and during the continuation of an Event of Default, the
Administrative Agent and the Lenders shall be entitled to exercise any and all
remedies available under the Security Documents, including the Guarantee and
Collateral Agreement, or otherwise available under applicable law or
otherwise.  With respect to all Letters
of Credit with respect to which presentment for honor shall not have occurred
at the time of an acceleration pursuant to this paragraph, the Borrower shall
at such time deposit in a cash collateral account opened by the Administrative
Agent an amount in immediately available funds in the Applicable Currency equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit
(and the Borrower hereby grants to the Administrative Agent, for the ratable
benefit of the Secured Parties, a continuing security interest in all amounts
at any time on deposit in such cash collateral account to secure the undrawn
and unexpired amount of such Letters of Credit and all other Obligations).  If at any time the Administrative Agent
reasonably determines that any funds held in such cash collateral account are
subject to any senior or pari-passu right or claim of any Person other than the
Administrative Agent and the Secured Parties or that the total amount of such
funds in the Applicable Currency is less than the aggregate undrawn and
unexpired amount of outstanding Letters of Credit, the Borrower shall,
forthwith upon demand by the Administrative Agent, pay to the Administrative
Agent, as additional funds to be deposited and held in such cash collateral
account, an amount in the Applicable Currency equal to the excess of (a) such
aggregate undrawn and unexpired amount over (b) the total amount of funds, if
any, then held in such cash collateral account that the Administrative Agent
reasonably determines to be free and clear of any such right and claim.  Amounts held in such cash collateral account
shall be applied by the Administrative Agent to the payment of drafts drawn
under such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay other obligations of the Borrower hereunder and under the other
Loan Documents.  After all such Letters
of Credit shall have expired or been fully drawn upon, all Reimbursement
Obligations shall have been satisfied and all other Obligations of the Borrower
hereunder and under the other Loan Documents (excluding Obligations in respect
of any Specified Hedge Agreement and unmatured contingent reimbursement and
indemnification Obligations) shall have been paid in full, the balance, if any,
in such cash collateral account shall be returned to the Borrower (or such
other Person as may be lawfully entitled thereto).


 


SECTION
9.           THE AGENTS; THE ARRANGERS


 


9.1           Appointment.  Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each Lender irrevocably authorizes each Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are 


 


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reasonably incidental
thereto.  Notwithstanding any provision
to the contrary elsewhere in this Agreement, no Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.  By execution hereof, Citicorp USA, Inc.
acknowledges and agrees that each of (i) any Qualified Counterparty to each
Citigroup Cash Management Agreement, and (ii) the Specified Letter of Credit
Issuer, has agreed to be bound by the provisions of Section 7.2 of the
Guarantee and Collateral Agreement as if it were a party thereto and by the
provisions of Section 9 hereof as if it were a Lender party hereto.


 


9.2           Delegation
of Duties.  Each Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.  No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.


 


9.3           Exculpatory
Provisions.  Neither the Arrangers,
any Agent nor any of its officers, directors, partners, employees, agents,
attorneys and other advisors, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except to the extent that any of the foregoing are found by a final decision
of a court of competent jurisdiction to have resulted from its or such Person’s
own gross negligence or willful misconduct) or (ii) responsible in any manner
to any of the Lenders for any recitals, statements, representations or
warranties made by any Loan Party or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement
or other document referred to or provided for in, or received by the Arrangers
or the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party party thereto to perform its obligations hereunder or
thereunder.  The Agents shall not be
under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions of,
this Agreement or any other Loan Document, or to inspect the properties, books
or records of any Loan Party.


 


9.4           Reliance
by Agents.  Each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including counsel to any Loan Party), independent accountants and other
experts selected by such Agent.  The
Agents may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Administrative Agent.  Each Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders or the requisite Lenders required under Section 10.1 to
authorize or require such action (or, if so specified by this Agreement, all
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any


 


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such action.  Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders or
the requisite Lenders required under Section 10.1 to authorize or require such
action (or, if so specified by this Agreement, all Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.


 


9.5           Notice
of Default.  No Agent shall be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless such Agent shall have received notice from a Lender,
Holdings or the Borrower referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent
shall receive such a notice, the Administrative Agent shall give notice thereof
to the Lenders.  The Administrative Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders or the requisite Lenders
required hereunder to authorize or require such action (or, if so specified by
this Agreement, all Lenders; provided that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.


 


9.6           Non-Reliance
on the Arrangers, the Agents and Other Lenders.  Each Lender expressly acknowledges that
neither the Arrangers, any of the Agents nor any of their respective officers,
directors, employees, agents, attorneys and other advisors, partners,
attorneys-in-fact or affiliates have made any representations or warranties to
it and that no act by any Agent hereafter taken, including any review of the
affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to
constitute any representation or warranty by the Arrangers, any Agent to any
Lender.  Each Lender represents to the
Agents and the Arrangers that it has, independently and without reliance upon
the Arrangers, any Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition, prospects and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans (and in the case of any
Issuing Lender, to issue its Letters of Credit) hereunder and enter into this
Agreement.  Each Lender also represents
that it will, independently and without reliance upon the Arrangers, any 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 credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition, prospects and creditworthiness of the Loan Parties and their
affiliates.  Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, no Arranger and no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Arrangers or Agent or any
of its officers, directors, employees, agents, attorneys and other advisors,
partners, attorneys-in-fact or affiliates.


 


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9.7           Indemnification.  The Lenders agree to indemnify the Arrangers
and each Agent in its capacity as such (to the extent not reimbursed by
Holdings or the Borrower and without limiting the obligation of Holdings or the
Borrower to do so), ratably according to their respective Aggregate Exposure
Percentages in effect on the date on which indemnification is sought under this
Section (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with such Aggregate Exposure Percentages immediately
prior to such date), from and against, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever that may at any time (including at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against the Arrangers or such Agent in any way relating to or arising out of,
the Commitments, this Agreement, any of the other Loan Documents, the
Transaction Documentation, or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Arrangers or such Agent under or in connection
with any of the foregoing; provided that no Lender
shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted solely and proximately
from the Arrangers’ or such Agent’s gross negligence or willful misconduct in
breach of a duty owed to such Lender. 
The agreements in this Section 9.7 shall survive the payment of the
Loans and Letters of Credit and all other amounts payable hereunder.


 


9.8           Arrangers
and Agent in their Individual Capacities. 
The Arrangers and each Agent and its affiliates may make loans to,
accept deposits from and generally engage in any kind of business with any Loan
Party as though the Arrangers or such Agent were not an Arranger or an
Agent.  With respect to its Loans made or
renewed by it and with respect to any Letter of Credit issued or participated
in by it, the Arrangers and each Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not an Arranger or an Agent, and the terms “Lender”
and “Lenders” shall include the Arrangers and the Agent in their individual
capacities.


 


9.9           Successor
Administrative Agent.  The
Administrative Agent may resign as Administrative Agent upon 30 days’ notice to
the Lenders and the Borrower.  If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term “Administrative Agent”
shall mean such successor agent effective upon such appointment and approval,
and the former Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans or issuers of Letters of Credit.  If no successor agent has accepted
appointment as Administrative Agent by the date that is 30 days following a
retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of 


 


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the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above.  The Syndication Agent may, at any time, by
notice to the Lenders and the Administrative Agent, resign as Syndication Agent
hereunder, whereupon the duties, rights, obligations and responsibilities of
the Syndication Agent hereunder shall automatically be assumed by, and inure to
the benefit of, the Administrative Agent, without any further act by the
Arrangers, any Agent or any Lender. 
After any retiring Agent’s resignation as Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement and the other Loan
Documents.


 


9.10         Authorization
to Release Liens and Guarantees.  The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
release any Lien covering any Property of Holdings or any of its Subsidiaries
that is the subject of a Disposition which is permitted by the Loan Documents
or which has been consented to in accordance with Section 10.1 or to effect any
other release in accordance with Section 10.15.


 


9.11         The
Arrangers; the Syndication Agent and the Documentation Agents.  The Arrangers, the Syndication Agent and the
Documentation Agents, in their respective capacities as such, shall have no
duties or responsibilities, and shall incur no liability, under this Agreement
and the other Loan Documents.


 


9.12         Withholding
Tax.  (a) To the extent required by
any applicable law, the Administrative Agent may withhold from any interest
payment to any Lender an amount equivalent to any applicable withholding tax.  If the forms or other documentation required
by Section 2.20(d) or (e) are not delivered to the Administrative Agent, then
the Administrative Agent may withhold from any interest payment to any Lender
not providing such forms or other documentation, an amount equivalent to the
applicable withholding tax.


 


(b)           If the
Internal Revenue Service or any authority of the United States or other
jurisdiction asserts a claim that the Administrative Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify the Administrative Agent of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax
ineffective, or for any other reason), such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax or otherwise, including penalties and interest,
together with all expenses incurred, including legal expenses, allocated staff
costs and any out of pocket expenses.


 


(c)           If any
Lender sells, assigns, grants a participation in, or otherwise transfers its
rights under this Agreement, the purchaser, assignee, participant or transferee,
as applicable, shall comply and be bound by the terms of Sections 2.20(d) and
(e) and 9.12; provided that with respect to any Participant, as set forth in
Section 10.6(b), such Participant shall only be required to comply with the
requirements of Sections 2.12(d) and (e) and 9.12 if such Participant seeks to
obtain the benefits of Section 2.20.


 


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SECTION
10.         MISCELLANEOUS


 


10.1         Amendments
and Waivers.  Neither this Agreement
nor any other Loan Document nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1.  The Required Lenders and
each Loan Party party to the relevant Loan Document may, or (with the written
consent of the Required Lenders) the Administrative Agent and each Loan Party
party to the relevant Loan Document may, from time to time, (a) enter into
written amendments, supplements or modifications hereto and to the other Loan
Documents (including amendments and restatements hereof or thereof) for the
purpose of adding any provisions to this Agreement or the other Loan Documents
or changing in any manner the rights of the Lenders or of the Loan Parties
hereunder or thereunder or (b) waive, on such terms and conditions as may be
specified in the instrument of waiver, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and
its consequences; provided, however,
that no such waiver and no such amendment, supplement or modification shall:


 


(i)            forgive the principal amount or extend the final scheduled date of
maturity of any Loan or Reimbursement Obligation, extend the scheduled date of
any amortization payment in respect of any Term Loan, reduce the stated rate of
any interest or fee payable hereunder (except in connection with the waiver of
applicability of any post-default increase in interest rates (which waiver
shall be effective with the consent of the Majority Facility Lenders of each
adversely affected Facility)) or extend the scheduled date of any payment thereof
or reduce the amount of any scheduled amortization of any Term Loan, in each
case without the consent of each Lender directly affected thereby;


 


(ii)           increase the amount or extend the expiration date of any Commitment of any
Lender without the consent of such Lender (it being understood that waivers or
modifications of covenants, Defaults or Events of Default or of mandatory
reductions of Commitments, if any, shall not constitute an increase in the Commitment
of any Lender);


 


(iii)          amend, modify or waive any provision of this Section or reduce any
percentage specified in the definition of Required Lenders, consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, release all or substantially
all of the Collateral, release all or substantially all of the Subsidiary
Guarantors from their guarantee obligations under the Guarantee and Collateral
Agreement or release Holdings from its guarantee obligations under the
Guarantee and Collateral Agreement, in each case without the consent of all
Lenders unless otherwise expressly permitted herein or in any other Loan
Document;


 


(iv)          amend, modify or waive any condition precedent to any extension of credit
under the Revolving Credit Facility set forth in Section 5.2 (including the
waiver of an existing Default or Event of Default required to be waived in
order for such extension of credit to be made) without the consent of the Majority
Revolving Credit Facility Lenders;


 


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(v)           reduce the percentage specified in the definition of Majority Facility
Lenders with respect to any Facility without the written consent of all Lenders
under such Facility;


 


(vi)          amend, modify or waive any provision of Section 9 or any other provision
of any Loan Document relating to the obligations of the Arrangers or any Agent
without the consent of the Arrangers or Agent directly affected thereby;


 


(vii)         amend, modify or waive any provision of Section 2.6 or 2.7 without the
written consent of the Swing Line Lender;


 


(viii)        amend, modify or waive any provision of Section 2.18 relating solely to
the pro rata treatment of Lenders without the consent of each Lender directly
and adversely affected thereby; or


 


(ix)           amend, modify or waive any provision of Section 3 without the consent of
each Issuing Lender adversely affected thereby.


 


Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Loan Parties, the Lenders, the Arrangers,
the Agents and all future holders of the Loans. 
In the case of any waiver, the Loan Parties, the Lenders, the Arrangers
and the Agents shall be restored to their former position and rights hereunder
and under the other Loan Documents, and any Default or Event of Default waived
shall be deemed to be cured and not continuing; but no such waiver shall extend
to any subsequent or other Default or Event of Default, or impair any right
consequent thereon.  Any such waiver,
amendment, supplement or modification shall be effected by a written instrument
signed by the parties required to sign pursuant to the foregoing provisions of
this Section; provided, that delivery of an
executed signature page of any such instrument by facsimile transmission shall
be effective as delivery of a manually executed counterpart thereof.


 


In
addition, notwithstanding the foregoing, this Agreement may be amended with the
written consent of the Administrative Agent, the Borrower and the Lenders
providing the relevant Replacement Term Loans (as defined below) to permit the
refinancing, replacement or modification of all outstanding Term Loans (“Refinanced
Term Loans”) with a replacement term loan tranche hereunder (“Replacement
Term Loans”), provided that (a) the aggregate principal amount of
such Replacement Term Loans shall not exceed the aggregate principal amount of
such Refinanced Term Loans, (b) the Applicable Margin for such Replacement Term
Loans shall not be higher than the Applicable Margin for such Refinanced Term
Loans and (c) the weighted average life to maturity of such Replacement Term
Loans shall not be shorter than the weighted average life to maturity of such
Refinanced Term Loans at the time of such refinancing.


 


10.2         Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed (a) in the case of Holdings, the Borrower, the
Arrangers and the Agents, as follows and (b) in the case of the Lenders, as set
forth in an administrative 


 


105





















 


questionnaire delivered to the
Administrative Agent or on Schedule I to the Lender Addendum to which such
Lender is a party or, in the case of a Lender which becomes a party to this
Agreement pursuant to an Assignment and Acceptance, in such Assignment and
Acceptance or (c) in the case of any party, to such other address as such party
may hereafter notify to the other parties hereto:


 


	
   

  	
  Holdings
  or the Borrower:

  	
  Tronox
  Incorporated

  
	
   

  	
   

  	
  123
  Robert S. Kerr Avenue

  
	
   

  	
   

  	
  Oklahoma
  City, OK 73102

  
	
   

  	
   

  	
  Attention:
  Chief Financial Officer

  
	
   

  	
   

  	
  Telecopy:
  

  	
  (405)
  270-3474

  
	
   

  	
   

  	
  Telephone:
  

  	
  (405)
  270-2498

  
	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
  General
  Counsel

  
	
   

  	
   

  	
  Telecopy:
  

  	
  (405)
  270-3866

  
	
   

  	
   

  	
  Telephone:
  

  	
  (405)
  270-2869

  
	
   

  	
   

  	
   

  
	
   

  	
  The
  Administrative Agent:

  	
  Lehman
  Commercial Paper Inc.

  
	
   

  	
   

  	
  745
  Seventh Avenue

  
	
   

  	
   

  	
  New
  York, New York 10019

  
	
   

  	
   

  	
  Attention:
  Paul Arzouian

  
	
   

  	
   

  	
  Telecopy:
  

  	
  (646)
  758-4980

  
	
   

  	
   

  	
  Telephone:
  

  	
  (212)
  526-5803

  
	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
  Akin
  Gump Strauss Hauer & Feld LLP

  
	
   

  	
   

  	
  1111
  Louisiana Street, Suite 4400

  
	
   

  	
   

  	
  Houston,
  Texas 77002

  
	
   

  	
   

  	
  Attention:
  Eugene F. Cowell III

  
	
   

  	
   

  	
  Telecopy:
  

  	
  (713)
  236-0822

  
	
   

  	
   

  	
  Telephone:
  

  	
  (713)
  220-8185

  
	
   

  	
   

  	
   

  
	
   

  	
  Issuing
  Lender:

  	
  As
  notified by such Issuing Lender to the Administrative

  
	
   

  	
   

  	
  Agent
  and the Borrower

  



 


 


provided that any notice, request or demand to or upon Holdings, the Borrower, the
Arrangers, any Agent, the Issuing Lender or any Lender shall not be effective
until received.


 


10.3         No
Waiver; Cumulative Remedies.  No
failure to exercise and no delay in exercising, on the part of any party hereto
or under the Loan Documents, any right, remedy, power or privilege hereunder or
under the other Loan Documents shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.  The
rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.


 


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10.4         Survival
of Representations and Warranties. 
All representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the making of the Loans and other extensions of credit
hereunder.


 


10.5         Payment
of Expenses.  The Borrower agrees (a)
to pay or reimburse the Arrangers and the Agents for all their reasonable out
of pocket costs and expenses incurred in connection with the syndication of the
Facilities (other than fees payable to syndicate members) and the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including the reasonable fees
and disbursements and other charges of counsel to the Administrative Agent
(which shall be limited to one counsel for the Administrative Agent except as
to local law matters) and the charges of Intralinks, (b) to pay or reimburse
each Lender, the Arrangers and the Agents for all their costs and expenses
incurred in connection with the enforcement of any rights under this Agreement,
the other Loan Documents and any other documents prepared in connection
herewith or therewith, including the fees and disbursements of counsel
(including the allocated fees and disbursements and other charges of in-house
counsel) to each Lender and of counsel to the Agents, (c), without duplication
of the Borrower’s obligations under Section 2.20(b) hereof, to pay and
indemnify each Lender, the Arrangers and the Agents for, and hold each Lender,
the Arrangers and the Agents harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay
in paying, stamp, excise and other similar taxes, if any, which may be payable
or determined to be payable in connection with the execution and delivery of,
or consummation or administration of any of the transactions contemplated by,
or any amendment, supplement or modification of, or any waiver or consent under
or in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) without duplication of the Borrower’s obligations under
Section 2.20(b) hereof, to pay, indemnify or reimburse each Lender, the
Arrangers, each Agent, and their respective officers, directors, partners,
trustees, employees, affiliates, shareholders, attorneys and other advisors,
attorneys-in-fact, agents and controlling persons (each, an “Indemnitee”) for, and hold each Indemnitee
harmless from and against, any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to or arising out of any claim,
proceeding, litigation, or other action concerning or relating to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including any
of the foregoing relating to the use of proceeds of the Loans or Letters of
Credit, the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of Holdings, the Borrower any of
its Subsidiaries or any of the Properties and to reimburse them for all
reasonable fees and disbursements and other charges of legal counsel in
connection with claims, actions or proceedings by any Indemnitee against the
Borrower hereunder (all the foregoing in this clause (d), collectively, the “Indemnified Liabilities”), provided, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found by a final decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnitee.  No
Indemnitee shall be liable for any damages arising from the use by unauthorized
persons of Information or other materials sent through electronic,
telecommunications or other 


 


107





















 


information transmission
systems that are intercepted by such persons, except to the extent resulting
from the gross negligence or willful misconduct of such indemnitee, as
determined by a final decision of a court of competent jurisdiction or for any
special, indirect, consequential or punitive damages in connection with the
Facilities.  Without limiting the
foregoing but subject to the proviso of the second preceding sentence, and to
the extent permitted by applicable law, each of Holdings and the Borrower
agrees not to assert and to cause its Subsidiaries not to assert, and hereby
waives and agrees to cause its Subsidiaries so to waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, under or related to Environmental Laws,
that any of them might have by statute or otherwise against any
Indemnitee.  All amounts due under this
Section shall be payable not later than ten Business Days after written demand
therefor.  Statements payable by the
Borrower pursuant to this Section shall be submitted to the Borrower in
accordance with Section 10.2, or to such other Person or address as may be
hereafter designated by the Borrower in a written notice to the Administrative
Agent.  The agreements in this Section
shall survive repayment of the Loans and all other amounts payable hereunder.


 


10.6         Successors
and Assigns; Participations and Assignments.  (a) This Agreement shall be binding upon and
inure to the benefit of Holdings, the Borrower, the Lenders, the Arrangers, the
Agents, all future holders of the Loans and Letters of Credit and their
respective successors and assigns permitted hereby, except that neither
Holdings nor the Borrower may assign or transfer any of their respective rights
or obligations under this Agreement without the prior written consent of the
Administrative Agent and each Lender.


 


(b)           Any
Lender may, without the consent of the Borrower or any other Person, in
accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a “Participant”)
participating interests in any Loan owing to such Lender, any Commitment of
such Lender or any other interest of such Lender hereunder and under the other
Loan Documents.  In the event of any such
sale by a Lender of a participating interest to a Participant, such Lender’s
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for
all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Agents shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement and the other Loan Documents. 
In no event shall any Participant under any such participation have any
right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal of, or
interest on, the Loans or any fees payable hereunder, or postpone the date of
the final maturity of the Loans, in each case to the extent subject to such
participation.  The Borrower agrees that
if amounts outstanding under this Agreement and the Loans are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided
that, in purchasing such participating interest, such Participant shall be
deemed to have agreed to share with the Lenders the proceeds 


 


108





















 


thereof as provided in Section 10.7(a) as fully as if
such Participant were a Lender hereunder. 
The Borrower also agrees that each Participant shall be entitled to the
benefits of Sections 2.19, 2.20 and 2.21 with respect to its participation in
the Commitments and the Loans outstanding from time to time as if such
Participant were a Lender; provided that, in the
case of Section 2.20, such Participant shall have complied with the
requirements of Section 2.20(e); and provided,
further, that no Participant shall be entitled to
receive any greater amount pursuant to any such Section than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.


 


(c)           Any
Lender (an “Assignor”) may, in accordance
with applicable law and upon written notice to the Administrative Agent, at any
time and from time to time assign to (i) an Arranger and its affiliates, (ii)
any Lender or any Lender Affiliate or Affiliated Fund of the assigning Lender
or another Lender thereof (in the case of (i) and (ii), each, an “Eligible Assignee”), or (iii) with the consent
of (x) the Administrative Agent, (y) in the case of an assignment of all or any
portion of a Revolving Credit Commitment or a Revolving Credit Loan, each
Issuing Lender, and (z) if no Event of Default has occurred and is continuing,
the Borrower (which, in each case, shall not be unreasonably withheld or
delayed), to an additional bank, financial institution or other entity (an “Assignee”) all or any part of its rights and
obligations under this Agreement pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit D (an “Assignment
and Acceptance”), executed by such Assignee and such Assignor (and,
where the consent of the Borrower, each Issuing Lender or the Administrative
Agent is required pursuant to the foregoing provisions, by the Borrower and
such other Persons) and delivered to the Administrative Agent for its
acceptance and recording in the Register together with a processing and
recordation fee of $3,500; provided that no such
assignment to an Assignee (other than any Lender or any Lender Affiliate
thereof or Affiliated Fund of any Lender) shall be in an aggregate principal
amount of less than $1,000,000 (with respect to Term Loans and Term Loan
Commitments and $2,500,000 with respect to all other Loans and Commitments
(other than, in each case, in the case of an assignment of all of a Lender’s
interests under this Agreement), unless otherwise agreed by the Borrower and
the Administrative Agent.  Any such assignment
need not be ratable as among the Facilities. 
Upon such execution, delivery, acceptance and recording, from and after
the effective date determined pursuant to such Assignment and Acceptance, (x)
the Assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with Commitments and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and Acceptance,
be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor’s rights and obligations
under this Agreement, such Assignor shall cease to be a party hereto, except as
to Section 2.19, 2.20, 2.21, 9.12 and 10.5 in respect of the period prior to
such effective date).  Notwithstanding
any provision of this Section, the consent of the Borrower shall not be
required for any assignment that occurs at any time when any Event of Default shall
have occurred and be continuing.


 


(d)           The
Administrative Agent shall, on behalf of the Borrower, maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance delivered
to it and a register (the “Register”) for
the recordation of the names and addresses of the Lenders and the Commitment
of, and principal amount of the Loans owing to, each Lender from time to
time.  


 


109





















 


The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, each Agent and the Lenders shall
treat each Person whose name is recorded in the Register as the owner of the
Loans and any Notes evidencing such Loans recorded therein for all purposes of
this Agreement.  Any assignment of any
Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide).  Any
assignment or transfer of all or part of a Loan evidenced by a Note shall be
registered on the Register only upon surrender for registration of assignment
or transfer of the Note evidencing such Loan, accompanied by a duly executed
Assignment and Acceptance; thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the designated Assignee (if requested by
such Assignee), and the old Notes shall be returned by the Administrative Agent
to the Borrower marked “canceled”.  The
Register shall be available for inspection by the Borrower or any Lender (with
respect to any entry relating to such Lender’s Loans) at any reasonable time
and from time to time upon reasonable prior notice.


 


(e)           Upon
its receipt of an Assignment and Acceptance executed by an Assignor and an
Assignee (and, in any case where the consent of any other Person is required by
Section 10.6(c), by each such other Person) together with any tax forms
required under Section 2.20 and payment to the Administrative Agent of a
registration and processing fee of $3,500 (except that no such registration and
processing fee shall be payable in the case of an Assignee which is already a
Lender or is a Lender Affiliate or an Affiliated Fund (and in the case of
assignments on the same day from a Lender to more than one fund managed or
advised by the same investment advisor (which funds are not then Lenders
hereunder), only a single $3,500 registration and processing fee shall be
payable for all such assignments by such Lender to such funds)), the
Administrative Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such
acceptance and recordation to the Borrower. 
On or prior to such effective date, the Borrower, at its own expense,
upon request, shall execute and deliver to the Administrative Agent (in
exchange for the Revolving Credit Note and/or applicable Term Notes, as the
case may be, of the assigning Lender) a new Revolving Credit Note and/or
applicable Term Notes, as the case may be, such Assignee or its registered
assigns in an amount equal to the Revolving Credit Commitment and/or applicable
Term Loans, as the case may be, assumed or acquired by it pursuant to such
Assignment and Acceptance and, if the Assignor has retained a Revolving Credit
Commitment and/or Term Loans, as the case may be, upon request, a new Revolving
Credit Note or Term Note, as the case may be, the Assignor or its registered
assigns in an amount equal to the Revolving Credit Commitment or applicable
Term Loans, as the case may be, retained by it hereunder.  Such new Note or Notes shall be dated the
Closing Date and shall otherwise be in the form of the Note or Notes replaced
thereby.


 


(f)            For the
avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section concerning assignments of Loans and Notes relate
only to absolute assignments and that such provisions do not prohibit
assignments creating security interests in Loans and Notes, including any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve
Bank in accordance with applicable law, provided that no such pledge or
assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or Assignee for such
Lender as a party hereto.   In the case
of any Lender that is a fund that invests in bank loans, such Lender may,
without the 


 


110





















 


consent of the Borrower or the Administrative Agent,
assign or pledge all or any portion of its rights under this Agreement,
including the Loans and Notes or any other instrument evidencing its rights as
a Lender under this Agreement, to any holder of, trustee for, or any other
representative of holders of, obligations owed or securities issued, by such
fund as security for such obligations or securities; provided that any
foreclosure or similar action by such trustee or representative shall be
subject to the provisions of this Section 10.6 concerning assignments.


 


(g)           Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose
funding vehicle (an “SPC”), identified as
such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrower, the option to provide to the Borrower all or any part
of any Loan that such Granting Lender would otherwise be obligated to make to
the Borrower pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to make any
Loan and (ii) if an SPC elects not to exercise such option or otherwise fails
to provide all or any part of such Loan, the Granting Lender shall be obligated
to make such Loan pursuant to the terms hereof. 
The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender.  Each party hereto
hereby agrees that no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender).  In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any state thereof.  In
addition, notwithstanding anything to the contrary in this Section 10.6(g), any
SPC may (A) with notice to, but without the prior written consent of, the
Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender, or with the prior written consent of the Borrower and the Administrative
Agent (which consent shall not be unreasonably withheld) to any financial
institutions providing liquidity and/or credit support to or for the account of
such SPC to support the funding or maintenance of Loans, and (B) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC; provided that non-public
information with respect to Holdings, the Borrower and its Subsidiaries may be
disclosed only with the Borrower’s consent which will not be unreasonably
withheld.  This paragraph (g) may not be
amended without the written consent of any SPC with Loans outstanding at the
time of such proposed amendment.


 


10.7         Adjustments;
Set-off.  (a) Except to the extent
that this Agreement provides for payments to be allocated to a particular
Lender or to the Lenders under a particular Facility, if any Lender (a “Benefitted Lender”) shall at any time receive
any payment of all or part of the Obligations owing to it, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set
off, pursuant to events or proceedings of the nature referred to in Section
8(f), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender’s Obligations, such Benefitted Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other Lender’s
Obligations, or shall provide such other Lenders with the 


 


111





















 


benefits of any such
collateral, as shall be necessary to cause such Benefitted Lender to share the
excess payment or benefits of such collateral ratably with each of the Lenders;
provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and
the purchase price and benefits returned, to the extent of such recovery, but
without interest.


 


(b)           In
addition to any rights and remedies of the Lenders provided by law, if an Event
of Default shall have occurred and be continuing under Section 8(a) or 8(f),
each Lender and each Lender Affiliate shall have the right, without prior
notice to Holdings or the Borrower, any such notice being expressly waived by
Holdings and the Borrower to the extent permitted by applicable law, upon any
amount to the extent due and payable by Holdings or the Borrower hereunder
(whether at the stated maturity or by acceleration), to set off and appropriate
and apply against such amount any and all deposits (general or special, time or
demand, provisional or final, other than trust accounts), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or Lender Affiliate, as applicable, or any branch
or agency thereof to or for the credit or the account of Holdings or the
Borrower, as the case may be.  Each
Lender agrees to notify promptly the Borrower and the Administrative Agent
after any such setoff and application made by such Lender or Lender Affiliate, provided that the failure to give such notice shall not
affect the validity of such setoff and application.


 


10.8         Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.  Delivery of an
executed signature page of this Agreement or of a Lender Addendum by facsimile
transmission shall be effective as delivery of a manually executed counterpart hereof.
A set of the copies of this Agreement signed by all the parties shall be lodged
with the Borrower and the Administrative Agent.


 


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


 


10.10       Integration.  This Agreement, together with the Fee Letter
(other than Section 2 thereof), Sections 5, 6, 8 and 10 of the Syndication
Letter Agreement, the Letter Agreement and the other Loan Documents represent
the entire agreement of Holdings, the Borrower, the Agents, the Arrangers and
the Lenders with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the Arrangers,
any Agent or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.


 


10.11       GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED 


 


112





















 


BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.


 


10.12       Submission
To Jurisdiction; Waivers.  Each of
the parties hereto hereby irrevocably and unconditionally:


 


(a)           submits
for itself and its Property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the non
exclusive general jurisdiction of the courts of the State of New York located
in the borough of Manhattan, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;


 


(b)           consents
that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same;


 


(c)           agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such party at its address specified
in Section 10.2;


 


(d)           agrees
that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other
jurisdiction; and


 


(e)           waives,
to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.


 


10.13       Acknowledgments.  Each of the parties hereto hereby
acknowledges that:


 


(a)           it has
been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents;


 


(b)           neither
the Arrangers, any Agent nor any Lender has any fiduciary relationship with or
duty to Holdings or the Borrower arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship between the
Arrangers, the Agents and the Lenders, on one hand, and Holdings and the
Borrower, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and


 


(c)           no
joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Arrangers,
the Agents and the Lenders or among Holdings, the Borrower and the Lenders.


 


10.14       Confidentiality.  Each of the Arrangers, the Agents and the
Lenders agrees to keep confidential all non-public information provided to it
by any Loan Party or any of such Loan Party’s attorneys, agents or accountants
pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall
prevent the Arrangers, any 


 


113





















 


Agent or any Lender from
disclosing any such information (a) to (i) the Arrangers, any Agent or any
other Lender or (ii) any Lender Affiliate of any thereof that is obligated to
hold such information in confidence (subject, in the case of such disclosure to
any Lender Affiliate of an Agent, Arranger or Lender, to the applicable
Arranger, Agent or Lender being responsible for compliance by such Lender
Affiliate with the provisions of this Section 10.14), (b) to any Participant or
Assignee (each, a “Transferee”) or
prospective Transferee that agrees to comply with the provisions of this
Section 10.14, (c) to any of its employees, directors, consultants and
representatives who are informed of the confidential nature of such information
and are directed to hold such information in confidence, (d) to any financial
institution that is a direct or indirect contractual counterparty in swap
agreements or such contractual counterparty’s professional advisor (so long as
such contractual counterparty agrees to be bound by the provisions of this
Section 10.14) (e) upon the request or demand of any Governmental Authority
having jurisdiction over it, (f) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (g) if requested or required to do so in connection with
any litigation or similar proceeding, (h) that has been publicly disclosed
other than in breach of this Section, (i) to the National Association of
Insurance Commissioners or any similar organization or any nationally
recognized rating agency that requires access to information about a Lender’s
investment portfolio in connection with ratings issued with respect to such
Lender or (j) in connection with the exercise of any remedy hereunder or under
any other Loan Document.  The agreements
in this Section 10.14 shall survive repayment of the Loans and all other
amounts payable hereunder.


 


10.15       Release
of Collateral and Guarantee Obligations. 
(a) If any of the Collateral shall be Disposed of by any Loan Party in a
transaction permitted by this Agreement and the other Loan Documents, or upon
the effectiveness of any written consent to the release of any Lien created
under any Security Document in respect of any Collateral pursuant to and in
accordance with the requirements of this Agreement and the other Loan
Documents, all Liens created hereunder in such Collateral shall be
automatically released, all without delivery of any instrument or performance
of any act by any party.  Any Subsidiary
Guarantor shall be automatically released from its obligations hereunder and
under the other Loan Documents, and all Liens created hereunder in the
Collateral owned by, and in the Capital Stock issued by, such Guarantor shall
be automatically released, all without delivery of any instrument or
performance of any act by any party, upon consummation of any transaction
permitted by this Agreement as a result of which such Guarantor ceases to be a
Subsidiary.  In connection with any
termination or release pursuant to this paragraph (a), the Administrative Agent
shall execute and deliver to each applicable Loan Party, at such Loan Party’s
sole expense, all documents as such Loan Party shall reasonably request to
evidence such termination or release; provided that the Borrower shall have
delivered to the Administrative Agent, at least five Business Days prior to the
date of the proposed termination or release (or such shorter period agreed to
by the Administrative Agent), a written request for termination or release
identifying the relevant Collateral being Disposed of in such Disposition or
Subsidiary ceasing to be such and the terms thereof in reasonable detail,
including the date thereof and the price thereof, together with a certification
by the Borrower stating that such transaction is in compliance with this
Agreement and the other Loan Documents and that the proceeds of such
Disposition will be applied in accordance with this Agreement and the other
Loan Documents.


 


114





















 


(b)           Notwithstanding
anything to the contrary contained herein or any other Loan Document, when all
Obligations (other than Obligations in respect of any Specified Hedge Agreement,
Specified Cash Management Agreement or the Specified Letter of Credit and any
unmatured contingent reimbursement and indemnification Obligations) have been
paid in full, all Commitments have terminated or expired and no Letter of
Credit shall be outstanding, the Collateral shall be automatically released
from the Liens created hereby, and the Guarantee Obligations hereunder or under
any Loan Document of any Guarantor shall be terminated.  At the request of any Loan Party, the
Administrative Agent shall (without notice to, or vote or consent of, any
Lender, or any Qualified Counterparty) take such actions as shall be reasonably
necessary or desirable to release its security interest in all Collateral, and
to release all guarantee obligations provided for in any Loan Document, whether
or not on the date of such release there may be outstanding Obligations in
respect of Specified Hedge Agreements, Specified Cash Management Agreement or
the Specified Letter of Credit.  Any such
release of guarantee obligations shall be deemed subject to the provision that
such guarantee obligations shall be reinstated if after such release any
portion of any payment in respect of the Obligations guaranteed thereby shall
be rescinded or must otherwise be restored or returned upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payment had not been made.


 


10.16       Accounting
Changes.  In the event that any “Accounting
Change” (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement and if the Borrower notifies the Administrative Agent that the
Borrower wishes to or the Administrative Agent notifies the Borrower that the
Required Lenders wish to, amend any financial covenants, standards or terms in
this Agreement to eliminate the effect of such Accounting Change, then
Holdings, the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Change with the desired result that the
criteria for evaluating Holdings’ and the Borrower’s financial condition shall
be the same after such Accounting Change as if such Accounting Change had not
been made.  Until such time as such an
amendment shall have been executed and delivered by Holdings and the Borrower,
the Administrative Agent and the Required Lenders (or the Borrower or the
Administrative Agent, as the case may be, shall have withdrawn their request
for an amendment), all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such Accounting
Change had not occurred.  “Accounting
Change” refers to any change in accounting principles required or permitted by
the promulgation of any rule, regulation, pronouncement or opinion by the
Financial Accounting Standards Board of the American Institute of Certified
Public Accountants or, if applicable, the SEC.


 


10.17       Delivery
of Lender Addenda.  Each initial
Lender shall become a party to this Agreement by delivering to the
Administrative Agent a Lender Addendum duly executed by such Lender, the
Borrower and the Administrative Agent.


 


10.18       Construction.  Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision)


 


115





















 


be deemed to excuse compliance
with any other covenant.  Where any
provision herein refers to action to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such Person.


 


10.19       WAIVERS OF JURY TRIAL.  HOLDINGS, THE BORROWER,
THE ARRANGERS, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.


 


10.20       Customer
Identification – USA PATRIOT Act Notice. 
The Administrative Agent (for itself and not on behalf of any other
party), the Syndication Agent (for itself and not on behalf of any other party)
and each Lender hereby notifies the Loan Parties that, pursuant to the
requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56, signed into
law October 26, 2001 (the “Act”), it is
required to obtain, verify and record information that identifies the Loan
Parties, which information includes the name and address of the Loan Parties
and other information that will allow the Administrative Agent, the Syndication
Agent or such Lender, as applicable, to identify the Loan Parties in accordance
with the Act.


 


10.21       Transaction/Spin-Off.  Nothing in this Agreement or the other Loan
Documents shall prohibit the consummation of the Transaction.


 


116





















 


IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.


 


	
   

  	
  TRONOX
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary
  Mikkelson

  	
   

  
	
   

  	
   

  	
  Name: Mary
  Mikkelson

  
	
   

  	
   

  	
  Title:
  Senior Vice President and Chief

  
	
   

  	
   

  	
  Financial
  Officer

  
	
   

  	
   

  
	
   

  	
  TRONOX
  WORLDWIDE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary
  Mikkelson

  	
   

  
	
   

  	
   

  	
  Name: Mary
  Mikkelson

  
	
   

  	
   

  	
  Title:
  Senior Vice President and Chief

  
	
   

  	
   

  	
  Financial
  Officer

  
	
   

  	
   

  
	
   

  	
  LEHMAN
  COMMERCIAL PAPER INC.,

  
	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laurie
  B. Perper

  	
   

  
	
   

  	
   

  	
  Name: Laurie
  B. Perper

  
	
   

  	
   

  	
  Title: EVP

  
	
   

  	
   

  
	
   

  	
  LEHMAN
  BROTHERS INC.,

  
	
   

  	
  as Joint
  Lead Arranger

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laurie
  B. Perper

  	
   

  
	
   

  	
   

  	
  Name: Laurie
  B. Perper

  
	
   

  	
   

  	
  Title: EVP

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE,

  
	
   

  	
  Cayman
  Islands Branch,

  
	
   

  	
  as Joint
  Lead Arranger

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vanessa
  Gomez

  	
   

  
	
   

  	
   

  	
  Name:
  Vanessa Gomez

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nupur
  Kumar

  	
   

  
	
   

  	
   

  	
  Name: Nupur
  Kumar

  
	
   

  	
   

  	
  Title:
  Associate

  



 


[Signature Page to Credit Agreement]


 





















 


	
   

  	
  ABN AMRO
  BANK N.V.,

  
	
   

  	
  as
  Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jamie
  Conn

  	
   

  
	
   

  	
   

  	
  Name: Jamie
  Conn

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joshua
  Wolf

  	
   

  
	
   

  	
   

  	
  Name: Joshua
  Wolf

  
	
   

  	
   

  	
  Title: Vice
  President

  



 


[Signature Page to Credit Agreement]


 





















 


Annex A


 


PRICING GRID FOR APPLICABLE
MARGINS

AND COMMITMENT FEE RATE


 


	
  Facility Rating

  S&P Moody’s

  	
   

  	
  Applicable Margin

  LIBOR Loans-

  	
   

  	
  Commitment

  Fee Rate

  	
   

  	
  Applicable Margin-

  Base Rate Loans

  	
   

  
	
  1.

  	
  >BBB–

  	
  Baa3

  	
   

  	
  1.00

  	
  %

  	
  0.20

  	
  %

  	
  0.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  BB+

  	
  Ba1

  	
   

  	
  1.25

  	
  %

  	
  0.25

  	
  %

  	
  0.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  BB

  	
  Ba2

  	
   

  	
  1.50

  	
  %

  	
  0.375

  	
  %

  	
  0.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  BB–

  	
  Ba3

  	
   

  	
  1.75

  	
  %

  	
  0.375

  	
  %

  	
  0.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  <B+

  	
  B1

  	
   

  	
  2.00

  	
  %

  	
  0.50

  	
  %

  	
  1.00

  	
  %

  



 


If each of Moody’s and S&P
shall not have in effect a rating for the Credit Facilities, then each of such
rating agencies shall be deemed to have established a rating in category
5.  If the ratings of Moody’s and S&P
for the Credit Facilities shall fall within different categories, the
Applicable Margins and the Commitment Fee Rate shall be based on the lower of
the ratings, unless one of the ratings is two or more categories lower than the
other, in which case the Applicable Margins and the Commitment Fee Rate shall
be determined by reference to the category next above that of the lower of the
ratings; provided, however, that if only one of Moody’s or
S&P shall have established a rating for the Credit Facilities, then the
Applicable Margins and the Commitment Fee Rate shall be determined by reference
to such available rating.


 


Notwithstanding the foregoing,
at all times after maturity or acceleration of the maturity of the Loans or
during the occurrence and continuance of an Event of Default, the Applicable
Margins and the Commitment Fee Rate set forth in category 5 shall apply.