Document:

Exhibit 10.1

                                                           Execution Copy

                           DATED 25 June 2002

                       KRONOS TITAN GMBH & CO. OHG
                         KRONOS EUROPE S.A./N.V.
                             KRONOS TITAN AS
                                   and
                               TITANIA AS
                              as Borrowers

                       KRONOS TITAN GMBH & CO. OHG
                         KRONOS EUROPE S.A./N.V.
                                   and
                             KRONOS NORGE AS
                              as Guarantors

                           KRONOS DENMARK APS
                          as Security Provider

                            DEUTSCHE BANK AG
                        as Mandated Lead Arranger

                      DEUTSCHE BANK LUXEMBOURG S.A.
                       as Agent and Security Agent

                                   and

                               KBC BANK NV
                            as Fronting Bank

                                   and

                                 Others

            ----------------------------------------------------
                              EUR 80,000,000
                            FACILITY AGREEMENT
            ----------------------------------------------------

<PAGE>
                                    CONTENTS

CLAUSE                                                      PAGE

1.    Definitions And Interpretation..................................1

2.    The Facility...................................................17

3.    Purpose........................................................17

4.    Conditions Of Utilisation......................................17

5.    Utilisation....................................................19

6.    Optional Currencies............................................20

7.    Letters of Credit..............................................20

8.    Repayment......................................................22

9.    Borrower's Liabilities In Relation To Letters Of Credit........22

10.   Prepayment And Cancellation....................................23

11.   Interest.......................................................26

12.   Default Interest...............................................26

13.   Interest Periods and Terms.....................................27

14.   Changes To The Calculation Of Interest.........................27

15.   Fees...........................................................28

16.   Tax Gross Up And Indemnities...................................30

17.   Increased Costs................................................33

18.   Other Indemnities..............................................34

19.   Mitigation By The Lenders......................................35

20.   Costs And Expenses.............................................35

21.   Guarantee And Indemnity........................................37

22.   Representations................................................40

23.   Information Undertakings.......................................43

24.   Financial Covenants............................................45

25.   General Undertakings...........................................46

26.   Events Of Default..............................................52
<PAGE>

27.   Changes To The Lenders.........................................56

28.   Changes To The Obligors........................................59

29.   Role Of The Agent, the Security Agent And
        The Mandated Lead Arranger...................................60

30.   Conduct Of Business By The Finance Parties.....................67

31.   Sharing Among The Finance Parties..............................67

32.   The Lenders and the Fronting Bank..............................68

33.   Payment Mechanics..............................................71

34.   Set-Off........................................................73

35.   Notices........................................................73

36.   Calculations And Certificates..................................75

37.  Partial Invalidity..............................................75

38.   Remedies And Waivers...........................................76

39.   Amendments And Waivers.........................................76

40.   Governing Law..................................................78

41.   Enforcement....................................................78

SCHEDULE 1  The Original Lenders.....................................79

SCHEDULE 2  Conditions Precedent.....................................80

SCHEDULE 3  Utilisation Request......................................83

SCHEDULE 4  Mandatory Cost Formulae..................................84

SCHEDULE 5 Form of Transfer Certificate..............................87

SCHEDULE 6 Form of Compliance Certificate............................91

SCHEDULE 7  Existing Security........................................93

SCHEDULE 8 Existing Financial Indebtedness...........................94

SCHEDULE 9 Timetables................................................95

SCHEDULE 10 Form of Combining Schedule...............................97

SCHEDULE 11 Form of Confidentiality Undertaking.....................131

SCHEDULE 12 Form of Letter of Credit................................135

SCHEDULE 13 Form of Auditor's Report................................137

<PAGE>

THIS AGREEMENT is dated 25 June 2002 and made between:

(1)   KRONOS  TITAN  GMBH & CO.  OHG  (the  "German  Borrower"),  KRONOS  EUROPE
      S.A./N.V.  (the  "Belgian  Borrower"),  KRONOS  TITAN  AS (the  "Norwegian
      Borrower  1") and TITANIA AS (the  "Norwegian  Borrower  2") as  borrowers
      (each a "Borrower" and together the "Borrowers");

(2)   KRONOS  TITAN  GMBH & CO.  OHG (the  "German  Guarantor"),  KRONOS  EUROPE
      S.A./N.V.  (the "Belgian  Guarantor")  and KRONOS NORGE AS (the "Norwegian
      Guarantor")   as  guarantors   (each  a   "Guarantor"   and  together  the
      "Guarantors");

(3)   KRONOS DENMARK APS as additional security provider ("Kronos Denmark");

(4)   DEUTSCHE BANK AG as mandated lead arranger (the "Mandated Lead Arranger");

(5)   KBC BANK NV as fronting bank (the "Fronting Bank");

(6)   THE FINANCIAL  INSTITUTIONS listed in Schedule 1 as lenders (the "Original
      Lenders"); and

(7)   DEUTSCHE BANK  LUXEMBOURG  S.A. as agent of the other Finance Parties (the
      "Agent")  and as Security  Agent for the Secured  Parties  (the  "Security
      Agent").

IT IS AGREED as follows:

                                    SECTION 1
                                 INTERPRETATION

1.    Definitions And Interpretation

1.1   Definitions
      In this Agreement:

      "Additional  Cost  Rate"  has  the  meaning  given  to  it in  Schedule  4
      (Mandatory Cost formulae).

      "Affiliate"  means, in relation to any person, a Subsidiary of that person
      or a  Holding  Company  of that  person or any  other  Subsidiary  of that
      Holding Company.

      "Agent's  Spot Rate of  Exchange"  means the Agent's spot rate of exchange
      for the purchase of the relevant  currency  with the Base  Currency in the
      European  foreign  exchange  market at or about 11:00 a.m. on a particular
      day.

      "Applicable GAAP" means:

      (b)   in relation to any Obligor whose  jurisdiction of  incorporation  is
            the  Federal  Republic  of Germany,  generally  accepted  accounting
            principles in the Federal Republic of Germany;

      (c)   in relation to any Obligor whose  jurisdiction of  incorporation  is
            Belgium, generally accepted accounting principles in Belgium;

      (d)   in relation to any Obligor whose  jurisdiction of  incorporation  is
            Norway, generally accepted accounting principles in Norway; and

                                      -1-
<PAGE>

      (e)   in  relation  to  Kronos  Denmark,   generally  accepted  accounting
            principles in Denmark; and

      (f)   in relation to the Parent, US GAAP.

      "Authorisation"  means an authorisation,  consent,  approval,  resolution,
      licence, exemption, filing, notarisation or registration.

      "Availability Period" means the period from and including the date of this
      Agreement to and including the Business Day falling immediately before the
      Termination Date.

      "Available Commitment" means a Lender's Commitment minus:

      (a)   the Base Currency  Amount of its  participation  in any  outstanding
            Loans and Letters of Credit; and

      (b)   in relation to any proposed Utilisation, the Base Currency Amount of
            its participation in any Loans and Letters of Credit that are due to
            be made on or before the proposed Utilisation Date,

      other than that Lender's  participation in any Loans and Letters of Credit
      that are due to be repaid,  prepaid  or expire on or before  the  proposed
      Utilisation Date.

      "Available  Facility"  means  the  aggregate  for the  time  being of each
      Lender's Available Commitment.

      "Base Currency" means euros.

      "Base Currency Amount" means, in relation to a Loan or a Letter of Credit,
      the amount  specified in the Utilisation  Request  delivered by a Borrower
      for that Loan or a Letter of Credit  (or,  in the case of a Loan only,  if
      the amount requested is not denominated in the Base Currency,  that amount
      converted  into the Base  Currency at the Agent's Spot Rate of Exchange on
      the date which is three Business Days before the Utilisation Date adjusted
      to reflect any repayment or prepayment of the Loan).

      "Break Costs" means the amount (if any) by which:

      (a)   the interest which a Lender should have received for the period from
            the date of  receipt  of all or any part of its  participation  in a
            Loan or Unpaid Sum to the last day of the current Interest Period in
            respect  of that Loan or Unpaid  Sum,  had the  principal  amount or
            Unpaid  Sum  received  been  paid on the last  day of that  Interest
            Period;

      exceeds:

      (b)   the amount  which that Lender  would be able to obtain by placing an
            amount equal to the principal amount or Unpaid Sum received by it on
            deposit with a leading bank in the Relevant  Interbank  Market for a
            period  starting on the Business Day  following  receipt or recovery
            and ending on the last day of the current Interest Period.

      "Business Day" means:

      (a)   (in relation to any day other than a date for the payment,  purchase
            of, or rate fixing relating to euro) a day, other than a Saturday or

                                      -2-
<PAGE>

            Sunday,  on which banks are open for general business in Luxembourg,
            (in relation to the Letter of Credit) the principal financial centre
            of the country of the Facility  Office of the Fronting  Bank and (in
            relation  to any date for  payment or  purchase  of, or rate  fixing
            relating to, a sum  denominated  in a currency  other than euro) the
            principal financial centre of the country of that currency; or

      (b)   (in  relation to any date for  payment,  purchase of, or rate fixing
            relating to euro) any TARGET Day.

      "Capital Lease" means any lease or hire purchase  contract which would, in
      accordance with Applicable GAAP, be treated as a finance or capital lease.

      "Cash  Collateral"  means,  in  relation  to any  Letter  of Credit or L/C
      Proportion of a Letter of Credit, a deposit in an interest-bearing account
      or accounts  with the Fronting  Bank as the Agent (with the consent of the
      Fronting  Bank) may  specify,  that  deposit  and account to be secured in
      favour of, and on terms and  conditions  acceptable  to, the Agent and the
      Fronting Bank.

      "Cash Collateral  Documents" means any documents as the Agent may specify,
      to be entered into in relation to the Cash Collateral.

      "Cash Equivalent Investments" means:

      (a)   debt   securities   (including   money   market  funds  that  invest
            substantially all of their assets in debt securities) denominated in
            euros, sterling or dollars or kroner ("Accepted Currency") issued by
            any member state of the European Union, Norway and the United States
            of  America  which  are  not  convertible  into  any  other  form of
            security;

      (b)   debt   securities   (including   money   market  funds  that  invest
            substantially all of their assets in debt securities) denominated in
            any Accepted  Currency which are not convertible into any other form
            of  security,  rated P-1  (Moody's  Investor  Services  Inc.) or A-1
            (Standard & Poors' Corporation) which in each case are not issued or
            guaranteed by any member of the Group;

      (c)   certificates  of  deposit  and  time  deposits  denominated  in  any
            Accepted   Currency   issued  by,  and   acceptances   by,   banking
            institutions  authorised under applicable  legislation of any member
            state of the European Union,  the United States of America or Norway
            which  at the  time  of  making  such  issue  or  acceptances,  have
            outstanding debt securities rated as provided in paragraph (b) above
            or which have minimum capital of EUR 250,000,000; and

      (d)   such other  securities  (if any) as are  approved  in writing by the
            Agent.

      "Charged Property" means all the assets of the Borrowers or Kronos Denmark
      which from time to time are,  or are  expressed  to be, the subject of the
      Transaction Security.

      "Combining Schedule" means a schedule substantially in the form set out in
      part I of Schedule 10 (Form of Combining Schedule) when delivered pursuant
      to  Clause  23.3(a)(i)  and part II of  Schedule  10  (Form  of  Combining
      Schedule)  when  delivered  pursuant to Clause  23.3(a)(ii),  in each case
      combining the financial  information  of the Parent  including each of the
      Obligors and its  Subsidiaries  (on a legal entity basis) which is used to
      prepare  and  corresponds  with the  Parent's  (audited,  in the case of a
      financial  year)  consolidated  balance sheet and statements of income and
      cash flows for the relevant  financial  year or financial  quarter (as the
      case may be), in each case prepared using US GAAP.

                                      -3-
<PAGE>

      "Commitment" means:

      (a)   in relation to an Original  Lender,  the amount in the Base Currency
            set opposite its name under the heading  "Commitment"  in Schedule 1
            (The  Original  Lenders)  and the  amount  of any  other  Commitment
            transferred to it under this Agreement; and

      (b)   in relation to any other Lender,  the amount in the Base Currency of
            any Commitment transferred to it under this Agreement,

      to the  extent not  cancelled,  reduced  or  transferred  by it under this
      Agreement.

      "Compliance Certificate" means a certificate substantially in the form set
      out in part I of Schedule 6 (Form of Compliance Certificate).

      "Confidentiality   Undertaking"   means  a   confidentiality   undertaking
      substantially  as  set  out  in  Schedule  11  (Form  of   Confidentiality
      Undertaking)  or in any other form agreed between the German  Borrower and
      the Agent.

      "Default" means an Event of Default or any event or circumstance specified
      in Clause 26 (Events of  Default)  which would (with the expiry of a grace
      period,  the giving of notice,  the making of any determination  under the
      Finance  Documents or any combination of any of the foregoing) be an Event
      of Default.

      "Environmental Claim" means any claim,  proceeding or investigation by any
      person in respect of any Environmental Law.

      "Environmental  Law" means any applicable law in any jurisdiction in which
      any member of the Group  conducts  business which relates to the pollution
      or protection  of the  environment  or harm to or the  protection of human
      health or the health of animals or plants.

      "Environmental Permits" means any permit, licence,  consent,  approval and
      other  authorisation  and  the  filing  of  any  notification,  report  or
      assessment  required under any  Environmental Law for the operation of the
      business of any member of the Group  conducted  on or from the  properties
      owned or used by the relevant member of the Group.

      "EURIBOR" means, in relation to any Loan in euro:

      (a)   the applicable Screen Rate; or

      (b)   (if no Screen  Rate is  available  for the  Interest  Period of that
            Loan) the  arithmetic  mean of the rates  (rounded  upwards  to four
            decimal  places) as supplied  to the Agent at its request  quoted by
            the  Reference  Banks to  leading  banks in the  European  interbank
            market,

      as of the Specified Time on the Quotation Day for the offering of deposits
      in euro for a period  comparable  to the  Interest  Period of the relevant
      Loan.

      "Event of Default"  means any event or  circumstance  specified as such in
      Clause 26 (Events of Default).

      "Expiry  Date"  means,  in relation  to any Letter of Credit,  the date on
      which the maximum aggregate liability under that Letter of Credit is to be
      reduced  to zero  provided  that any such date  will end on or before  the
      Termination Date.

                                      -4-
<PAGE>

      "Facility"  means the  revolving  loan and letter of credit  facility made
      available under this Agreement as described in Clause 2 (The Facility).

      "Facility  Office" means the office or offices notified by a Lender to the
      Agent in writing on or before the date it becomes a Lender (or,  following
      that date,  by not less than five Business  Days'  written  notice) as the
      office or offices through which it will perform its obligations under this
      Agreement.

      "Fee  Letter"  means any letter or  letters  dated on or about the date of
      this Agreement  between the Mandated Lead Arranger and the German Borrower
      (or the  Agent  and the  German  Borrower  or the  Fronting  Bank  and the
      relevant  Borrower)  setting out any of the fees  referred to in Clause 15
      (Fees).

      "Finance  Document"  means this  Agreement,  the Security  Documents,  the
      Subordination  Agreement, any Fee Letter and any other document designated
      as such by the Agent and the German Borrower.

      "Finance Party" means the Agent, the Mandated Lead Arranger,  the Fronting
      Bank, the Security Agent or a Lender.

      "Financial Indebtedness" means any indebtedness for or in respect of:

      (a)   moneys borrowed;

      (b)   any  amount  raised  by  acceptance  under  any  acceptance   credit
            facility;

      (c)   any amount  raised  pursuant  to any note  purchase  facility or the
            issue  of  bonds,  notes,  debentures,  loan  stock  or any  similar
            instrument;

      (d)   the amount of any liability in respect of any Capital Lease;

      (e)   receivables  sold or discounted  (other than any  receivables to the
            extent they are sold on a non-recourse basis);

      (f)   any amount under any other  transaction  (including any forward sale
            or purchase  agreement)  having the commercial effect of a borrowing
            as defined in paragraphs (a) or (c) above (which,  for the avoidance
            of doubt,  shall not include deferred payment  obligations which are
            standard   within  the  industry  and  in  the  ordinary  course  of
            business);

      (g)   any  derivative  transaction  and the  resulting  net  liability  as
            determined  from time to time,  if any,  entered into in  connection
            with protection  against or benefit from  fluctuation in any rate or
            price  (and,   when   calculating   the  value  of  any   derivative
            transaction,  only the  marked to market  value  shall be taken into
            account);

      (h)   any   counter-indemnity   obligation  in  respect  of  a  guarantee,
            indemnity,  bond,  standby  or  documentary  letter of credit or any
            other instrument issued by a bank or financial institution; and

      (i)   the amount of any liability in respect of any guarantee or indemnity
            for any of the items referred to in paragraphs (a) to (h) above.

      "Fronting Bank" means KBC Bank NV.

                                      -5-

<PAGE>

      "Group" means each of the Obligors and their Subsidiaries.

      "Holding  Company"  means,  in relation to a company or  corporation,  any
      other company or corporation in respect of which it is a Subsidiary.

      "Information  Memorandum"  means the document in the form  approved by the
      German Borrower concerning the Group and the Parent which, at the Parent's
      and the Borrowers'  request and on their behalf,  was prepared in relation
      to this  transaction  and  distributed  by the Mandated  Lead  Arranger to
      selected financial institutions before the date of this Agreement.

      "Intellectual  Property"  means all patents,  trade marks,  service marks,
      trade  names,  design  rights,  copyright  (including  rights in  computer
      software and moral rights and in published and unpublished work),  titles,
      rights to know-how and other  intellectual  property rights,  in each case
      whether  registered or  unregistered  and including  applications  for the
      grant of any of the foregoing and all rights or forms of protection having
      equivalent  or similar  effect to any of the  foregoing  which may subsist
      anywhere in the world.

      "Interest  Period" means, in relation to a Loan, each period determined in
      accordance with Clause 13 (Interest Periods) and, in relation to an Unpaid
      Sum,  each period  determined  in  accordance  with  Clause 12.1  (Default
      interest periods).

      "Intra-group  Loan"  means a borrowing  of money as defined in  paragraphs
      (a),  (c) and (f) of the  definition  of Financial  Indebtedness  from the
      Parent or any other member of the NL Group by any member of the Group.

      "L/C Amount" means:

      (a)   each  sum  paid  or due  and  payable  by the  Fronting  Bank to the
            beneficiary  of a Letter  of  Credit  pursuant  to the terms of that
            Letter of Credit; and

      (b)   all liabilities,  costs (including,  without  limitation,  any costs
            incurred  in funding any amount  which  falls due from the  Fronting
            Bank under a Letter of  Credit),  claims,  losses and  out-of-pocket
            expenses  which the Fronting  Bank incurs or sustains in  connection
            with a Letter of Credit,

      in  each  case  which  has  not  been  reimbursed  pursuant  to  Clause  9
      (Borrower's liabilities in relation to Letters of Credit).

      "L/C Commission Rate" means a letter of credit commission rate of 1.75 per
      cent. per annum.

      "L/C  Proportion"  means, in relation to a Lender in respect of any Letter
      of Credit and save as otherwise provided in this Agreement, the proportion
      (expressed as a percentage) borne by that Lender's Available Commitment to
      the Available  Facility  immediately  prior to the issue of that Letter of
      Credit.

      "Legal Opinions" means the legal opinions  delivered to the Agent pursuant
      to Clause 4.1 (Initial conditions precedent).

      "Legal Reservations" means:

      (a)   the principle that  equitable  remedies may be granted or refused at
            the  discretion of a court,  the  limitation of  enforcement by laws
            relating  to  insolvency,  reorganisation  and other laws  generally
            affecting the rights of creditors; and

                                      -6-
<PAGE>

      (b)   the time bearing of claims,  defences of set-off or counterclaim and
            similar  principles  which  are set  out in the  Legal  Opinions  as
            qualifications as to matters of law.

      "Lender" means:

      (a)   any Original Lender; and

      (b)   any bank, financial  institution,  trust, fund or other entity which
            has become a Party in  accordance  with  Clause 27  (Changes  to the
            Lenders),

      which in each  case has not  ceased to be a Party in  accordance  with the
      terms of this Agreement.

      "Letter of Credit"  means a letter of credit issued or to be issued by the
      Fronting  Bank  under the  Facility  substantially  in the form set out in
      Schedule 12 (Form of Letter of Credit) or in such other form  requested by
      the Borrower which is acceptable to the Agent and the Fronting Bank.

      "LIBOR" means:

      (a)   in  relation to any Loan  (other  than a Loan  denominated  or to be
            denominated in sterling), the applicable Screen Rate; or

      (b)   in relation to (i) any Loan  denominated  in or to be denominated in
            sterling or (ii) any other Loan if no Screen Rate is  available  for
            the currency or Interest  Period of that other Loan,  the arithmetic
            mean of the  rates  (rounded  upwards  to four  decimal  places)  as
            supplied to the Agent at its request  quoted by the Reference  Banks
            to leading banks in the London interbank market,

      as of the Specified Time on the Quotation Day for the offering of deposits
      in the currency of that Loan and for a period  comparable  to the Interest
      Period for that Loan.

      "Loan" means a loan made or to be made under the Facility or the principal
      amount outstanding for the time being of that loan.

      "LMA" means the Loan Market Association.

      "Majority Lenders" means:

      (a)   until the Total  Commitments  have been reduced to zero, a Lender or
            Lenders  whose  Commitments  aggregate  more  than 51% of the  Total
            Commitments (or, if the Total  Commitments have been reduced to zero
            and  there  are no Loans or  Letters  of  Credit  then  outstanding,
            aggregated more than 51% of the Total Commitments  immediately prior
            to the reduction); or

      (b)   at any other time, a Lender or Lenders whose  participations  in the
            Outstandings aggregate more than 51% of all the Outstanding.

      "Mandatory  Cost" means the  percentage  rate per annum  calculated by the
      Agent in accordance with Schedule 4 (Mandatory Cost formulae).

      "Margin" means 1.75 per cent. per annum.

      "Material Adverse Effect" means a material adverse effect on the business,
      assets or financial condition of the German Borrower, the Belgian Borrower
      or the Group taken as a whole.

                                      -7-
<PAGE>

      "Material  Contracts" means any agreements  including  licence  agreements
      entered into by any member of the Group which is  reasonably  likely to be
      material to the  business  or  financial  condition  of any Obligor or the
      Group taken as a whole.

      "Material Subsidiary" means Unterstutzungskasse  Kronos Titan GmbH and any
      other Subsidiary of any Obligor:

      (a)   whose total assets represent 5 per cent. or more of the consolidated
            total assets of the Group; or

      (b)   whose total operating  income  represents 5 per cent. or more of the
            consolidated total operating income of the Group,

      all as shown (in the case of any  Subsidiary) in its most recent annual or
      half  yearly  accounts  (consolidated,  as  the  case  may  be,  if it has
      Subsidiaries) and (in the case of the Group) the most recent annual or, as
      the case may be, half yearly  Combining  Schedules of the Group,  provided
      that:

            (i)   if any  Material  Subsidiary  sells,  transfers  or  otherwise
                  disposes of the majority of its undertaking or assets (whether
                  by a single  transaction or a number of related  transactions)
                  to any other member of the Group:

                  (1)   that other member of the Group shall be deemed to become
                        a Material  Subsidiary on the date of the relevant sale,
                        transfer or disposal; and

                  (2)   any  Material  Subsidiary  which  sells,   transfers  or
                        otherwise disposes of the majority of its undertaking or
                        assets  (whether by a single  transaction or a number of
                        related  transactions)  shall no  longer  be a  Material
                        Subsidiary on the date of the relevant sale, transfer or
                        disposal,

                  until the Material  Subsidiaries  are next determined from the
                  annual or half yearly accounts referred to above;

            (ii)  if any  Material  Subsidiary  does not  satisfy  either of the
                  tests set out in  paragraphs  (a) and (b)  above  for  reasons
                  other than those referred to under  paragraph (i) above,  then
                  such  Material   Subsidiary  shall  cease  to  be  a  Material
                  Subsidiary from the point of time that the non-satisfaction of
                  such tests can be determined from the annual audited  accounts
                  or the half yearly unaudited accounts referred to above; and

            (iii) if a Subsidiary  has been acquired  since the date as of which
                  the latest  consolidated annual or half yearly accounts of the
                  Group were prepared,  such accounts shall be adjusted in order
                  to take into account the acquisition of such Subsidiary.

      "Month" means a period  starting on one day in a calendar month and ending
      on the numerically  corresponding  day in the next calendar month,  except
      that:

      (a)   if the  numerically  corresponding  day is not a Business  Day, that
            period shall end on the next Business Day in that calendar  month in
            which that  period is to end if there is one, or if there is not, on
            the immediately preceding Business Day; and

                                      -8-
<PAGE>

      (b)   if there is no numerically  corresponding  day in the calendar month
            in which that period is to end,  that  period  shall end on the last
            Business Day in that calendar month.

      The above exceptions will only apply to the last Month of any period.

      "NL Group" means NL Industries Inc. and its  Subsidiaries  (other than any
      such Subsidiaries which form part of the Group).

      "Norwegian  Borrowers"  means the  Norwegian  Borrower 1 and the Norwegian
      Borrower 2.

      "Obligor" means a Borrower or a Guarantor.

      "Optional  Currency" means a currency (other than the Base Currency) which
      complies with the conditions set out in Clause 4.3 (Conditions relating to
      Optional Currencies).

      "Original Financial Statements" means:

      (a)   in relation to the  Norwegian  Guarantor,  its audited  consolidated
            financial  statements  for the financial year ended 31 December 2001
            prepared using Applicable GAAP;

      (b)   in relation to each Obligor,  its audited  unconsolidated  financial
            statements  for the  financial  year ended 31 December 2001 prepared
            using Applicable GAAP; and

      (c)   in relation to the Group,  a Combining  Schedule  for the  financial
            year ended 31 December 2001 prepared using US GAAP.

      "Outstandings"  means at any  time,  the  aggregate  of the Base  Currency
      Amounts of the outstanding  Loans and the amount of the maximum actual and
      contingent  liabilities  of the  Lenders in  respect  of each  outstanding
      Letter of Credit.

      "Parent" means Kronos International, Inc., a Delaware corporation.

      "Participating  Member  State"  means  any  member  state of the  European
      Communities  that adopts or has adopted the euro as its lawful currency in
      accordance with legislation of the European Community relating to Economic
      and Monetary Union.

      "Party" means a party to this Agreement.

      "Permitted  Affiliate  Transactions"  means any  transaction  entered into
      between any member of the Group and the Parent or any other  member of the
      NL Group either (i) in the  ordinary  course of trading or business and in
      accordance  with past  practice or (ii) which is necessary to  accommodate
      legal or regulatory requirements of such member of the Group.

      "Permitted Financial Indebtedness" means Financial  Indebtedness,  without
      duplication:

      (a)   arising under or permitted pursuant to the Finance Documents;

      (b)   incurred with the prior written consent of the Majority  Lenders and
            any Refinancing thereof;

      (c)   existing  on the date of this  Agreement  and  listed in  Schedule 8
            (Existing  Financial  Indebtedness)  and  any  Refinancing  thereof,
            provided  that the Financial  Indebtedness  referred to in item 1 of
            Schedule 8 (Existing  Financial  Indebtedness)  (or any  Refinancing

                                      -9-
<PAGE>

            thereof) is repaid upon the first Utilisation Date and the Financial
            Indebtedness referred to in item 7 of Schedule 8 (Existing Financial
            Indebtedness)  (or any Refinancing  thereof) is repaid no later than
            120 days from the date of this  Agreement and provided  further that
            any Refinancing of the Financial Indebtedness referred to in items 2
            and 3 of Schedule 8 (Existing Financial  Indebtedness) is subject to
            a subordination  agreement between the debtor,  the creditor and the
            Security   Agent  on   substantially   the  same  terms  as  in  the
            Subordination Agreement;

      (d)   arising under any derivative  transaction entered into by any member
            of the Group in respect of Financial Indebtedness of such members of
            the Group and any Refinancing  thereof provided that such derivative
            transactions  are (i) entered  into to protect  members of the Group
            from  fluctuations  in  interest  rates  on  outstanding   Financial
            Indebtedness  to the extent the  notional  principal  amount of such
            derivative  transactions  does  not,  at the time of the  incurrence
            thereof,  exceed the principal amount of the Financial  Indebtedness
            to which such derivative  transaction  relates and (ii) entered into
            in the ordinary  course of business of such members of the Group and
            not for investment of speculative purposes;

      (e)   arising  under  any  commodity  agreements  or  currency  agreements
            entered  into by any  member of the Group  provided  that (i) in the
            case of any such  currency  agreements  which  relate  to  Financial
            Indebtedness  or trade  payables  of any member of the  Group,  such
            currency  agreements  do  not  increase  the  outstanding  Financial
            Indebtedness  or trade  payables of such member of the Group  (other
            than as a result of fluctuations in foreign currency  exchange rates
            or  by  reason  of  fees,   indemnities  and  compensation   payable
            thereunder) and (ii) in the case of any such commodity agreements or
            currency  agreements,  such  agreements  are  entered  into  in  the
            ordinary course of business of such members of the Group and not for
            investment or speculative purposes;

      (f)   owed by any Obligor to any other Obligor;

      (g)   owed by any member of the Group which is not an Obligor to any other
            member of the Group which is not an Obligor or to an Obligor, unless
            incurred in violation of this Agreement;

      (h)   arising under any Intra-group Loans provided that the payment claims
            of the Parent or any other  member of the NL Group in respect of any
            such Intra-group  Loans have been  subordinated to the claims of the
            Finance Parties pursuant to the Subordination Agreement; and

      (i)   arising  from  the   honouring  by  a  Lender  or  other   financial
            institution of a cheque,  draft or similar  instrument  inadvertedly
            (except  in  the  case  of  daylight   overdrafts)   drawn   against
            insufficient funds in the ordinary course of business, provided that
            such Financial Indebtedness is extinguished within two Business Days
            of incurrence;

      (j)   consisting of  guarantees,  indemnities or obligations in respect of
            customary   purchase  price   adjustments  in  connection  with  the
            acquisition of or disposal over assets up to an aggregate  amount of
            EUR 2,000,000 (or its equivalent in another currency or currencies);

      (k)   incurred  by the  Norwegian  Borrower  2 in the  ordinary  course of
            business to finance the purchase price for the  acquisition of heavy
            earth moving equipment or other similar  equipment related to mining
            by it or any  Refinancing  thereof up to an aggregate  amount of EUR
            10,000,000 (or its equivalent in another currency or currencies);

                                      -10-
<PAGE>

      (l)   incurred  by any member of the Group the  principal  amount of which
            (when  aggregated  with the principal  amount of all other Financial
            Indebtedness  incurred  by the  members of the Group  other than any
            Financial  Indebtedness permitted under paragraphs (a) to (k) above)
            does not exceed EUR 5,000,000 (or its equivalent in another currency
            or currencies).

      "Permitted Loans and Guarantees" means:

      (a)   any guarantee or indemnity granted by any member of the Group or any
            assumption  of liability in respect of any  obligation  of any other
            person made by any member of the Group in the ordinary course of its
            trading  or  business  and  upon  terms  usual  for such  trade  but
            excluding any such  guarantees or indemnities or such  assumption of
            liability  granted in favour of or for the  benefit of the Parent or
            any other member of the NL Group;

      (b)   any  guarantee or  assumption  of  liability  granted or made by any
            member of the Group in favour of  indebtedness  other than Financial
            Indebtedness of the Parent or any other member of the NL Group;

      (c)   any  indemnity  granted by any  member of the Group in the  ordinary
            course  of  its  trading  or  business  under  Permitted   Affiliate
            Transactions;

      (d)   any  guarantee  or  indemnity  required  under  any of  the  Finance
            Documents;

      (e)   any loan,  grant of credit,  guarantee or indemnity or assumption of
            any  liability  in respect of any other  person  which is granted or
            made by any  member of the Group who is not an Obligor to or for the
            benefit of an Obligor;

      (f)   any Permitted Obligor Loan;

      (g)   any loan,  grant of credit,  guarantee or indemnity or assumption of
            any  liability  in respect of any other  person  which is granted or
            made by any Obligor to or for the benefit of any other Obligor; and

      (h)   any loan granted by any Obligor to any wholly-owned subsidiary being
            a member of the Group which is not an Obligor (including the sale or
            discounting  of receivables by any member of the Group to the German
            Borrower) up to an aggregate amount of EUR 5,000,000.

      "Permitted  Obligor  Loan"  means any loan,  interim  dividend,  return on
      capital or repayment of capital contribution (the "Interim Payments") made
      by an  Obligor to the Parent or Kronos  Denmark in any  financial  year of
      such  Obligor  in order to bridge the  amount of any  dividend  payable in
      respect of such  financial year (whether or not it will be paid during the
      next  financial  year)  provided  that (a) such Obligor shall not make any
      such  Interim  Payment  in any  financial  year  to the  extent  that  the
      aggregate  amount of all such Interim Payments in any financial year shall
      exceed 75% of the net profit of the Group for the period  starting  on the
      first day of such  financial  year and ending on the last day of the month
      of the then  current  financial  year  preceding  the  month in which  the
      Interim  Payment is to be made;  (b) any  repayment  claim of the relevant
      Obligor in respect of any such  Interim  Payments  will be set off against
      dividends  which are made by the Obligors to the Parent or Kronos  Denmark
      (as the case may be) at the time at which such dividends are made; and (c)
      any repayment claim of the relevant Obligor in respect of any such Interim
      Payments or any Interim Payments made in excess of 100% of the net profits
      of the Group for the relevant  financial year will be  (re-)payable in any

                                      -11-
<PAGE>

      event by the Parent or Kronos  Denmark  upon the  earlier of the date upon
      which a dividend  payment is  actually  made and the date  falling 45 days
      after the date upon which the financial statements of the relevant Obligor
      are required to be delivered in accordance with paragraph (a)(i) of Clause
      23.1 (Financial Statements of the Obligors)

      "Quotation  Day"  means,  in  relation to any period for which an interest
      rate is to be determined:

      (a)   (if the  currency  is euro) two TARGET  Days before the first day of
            that period; or

      (b)   (for any other  currency)  two Business Days before the first day of
            that period,

      unless  market  practice  differs in the Relevant  Interbank  Market for a
      currency,  in which  case the  Quotation  Day for  that  currency  will be
      determined by the Agent in accordance with market practice in the Relevant
      Interbank  Market (and if  quotations  would  normally be given by leading
      banks in the Relevant Interbank Market on more than one day, the Quotation
      Day will be the last of those days).

      "Reference  Banks" means Deutsche Bank  Luxembourg  S.A. and the principal
      offices of Commerzbank  Aktiengesellschaft and Dexia Bank Belgium NV/SA or
      such  other bank or banks as may from time to time be agreed  between  the
      German  Borrower and the Agent acting on the  instructions of the Majority
      Lenders.

      "Refinance" means, in respect of any Financial Indebtedness,  to refinance
      in whole or in part the  amount of such  Financial  Indebtedness  on arms'
      length  terms  and in  accordance  with  market  standards  and the  terms
      "Refinanced" and "Refinancing" shall be construed accordingly.

      "Relevant  Interbank  Market"  means in  relation  to euro,  the  European
      interbank  market  and,  in  relation  to any other  currency,  the London
      interbank market.

      "Relevant Jurisdiction" means:

      (a)   the jurisdiction of incorporation of each member of the Group; and

      (b)   the  jurisdiction  where  any asset  subject  to or  intended  to be
            subject to the Transaction Security is situated.

      "Repeating  Representations"  means each of the representations set out in
      Clauses 22.1 (Status) to 22.6 (Governing law and enforcement), Clause 22.9
      (No default), Clause 22.13 (No proceedings pending or threatened),  Clause
      22.19 (Legal and beneficial owner) and Clause 22.20 (No winding up).

      "Restricted   Payments"  means,  without   duplication,   any  payment  or
      declaration  of any  dividend,  return on  capital,  repayment  of capital
      contributions  or other  distributions  (including,  for the  avoidance of
      doubt,  any payment made under any profit and loss transfer  agreement) or
      any other distribution of assets or other payment whatsoever in respect of
      share  capital or any payment  (including  the provision or repayment of a
      loan,  payment  of  interest  on a  loan,  granting  of any  guarantee  or
      voluntary  assumption of any liability in respect of any other person when
      and to the extent drawn, performed or paid) (the "Relevant  Distribution")
      made,  whether  directly or indirectly,  by any member of the Group to the
      Parent  or any  other  member  of the  NL  Group  but  excluding  (i)  any
      transaction entered into between any member of the Group and the Parent or
      any other  member of the NL Group in the  ordinary  course of  trading  or
      business on arms' length terms, (ii) any Relevant  Distribution  which has
      subsequently  been  reinvested by the relevant member of the NL Group in a

                                      -12-

<PAGE>

      member of the Group by way of a  repayment  of a Permitted  Obligor  Loan,
      providing a new Intra-group  Loan or by way of providing new equity to the
      extent that such Intra-group Loans or equity (as the case may be) have not
      been  repaid,  (iii) any Relevant  Distribution  made to the Parent or any
      other  member  of the NL  Group  by a  member  of the  Group to fund a tax
      payment  owing by the Parent or such other  member of the Group (a) in its
      capacity as partner of the German  Borrower (in the case of the Parent) or
      (b) otherwise as a result of a tax structuring as a consequence of which a
      tax that would  otherwise  be owed by a member of the Group is owed by the
      Parent or any other member of the NL Group,  (iv) any partial repayment by
      the German  Borrower of amounts due by it to the Parent pursuant to a note
      dated 30 December 1998 up to a maximum  amount of EUR  15,000,000  and (v)
      any  interest  paid or payable by any member of the Group to the Parent or
      any other member of the NL Group, provided such amount of interest paid or
      payable is included in Net Interest when  determining the amount in Clause
      24.2(b)(ii).

      "Rollover Loan" means one or more Loans:

      (a)   made or to be made on the same day that a:

            (i)   maturing Loan is due to be repaid; or

            (ii)  demand in respect of a Letter of Credit is due to be met;

      (b)   the aggregate  amount of which is equal to or less than the maturing
            Loan or Letter of Credit;

      (c)   in the same  currency  as the  maturing  Loan  (unless it arose as a
            result  of  the  operation  of  Clause  6.2   (Unavailability  of  a
            currency)) or Letter of Credit; and

      (d)   made or to be made to the same Borrower for the purpose of:

            (i)   refinancing a maturing Loan; or

            (ii)  satisfying  any demand made by the  Fronting  Bank through the
                  Agent pursuant to a drawing under a Letter of Credit.

      "Screen Rate" means:

      (a)   in  relation  to any  amount to be  advanced  or owing in euro,  the
            percentage  rate per annum  determined by the Banking  Federation of
            the European Union for the relevant period; and

      (b)   in all other  respects,  the British  Bankers  Association  Interest
            Settlement Rate for the relevant currency and period,

      displayed on the  appropriate  page of the Reuters  screen.  If the agreed
      page is replaced or service ceases to be available,  the Agent may specify
      another page or service  displaying  the  appropriate  rate in the Agent's
      reasonable  discretion  with the  approval of the German  Borrower  (which
      approval  shall  not  be  unreasonably  withheld  or  delayed)  and  after
      consultation with the Lenders.

      "Secured  Parties" means the Security Agent,  the Agent, the Fronting Bank
      and each Lender from time to time party to this Agreement.

      "Security"  means a  mortgage,  charge,  pledge,  lien or  other  security
      interest  securing any obligation of any person or any other  agreement or
      arrangement having a similar effect.

                                      -13-
<PAGE>

      "Security  Document"  means each of the  documents  delivered to the Agent
      listed in Section 4 of Schedule 2 (Conditions Precedent) together with any
      other document  entered into by a Borrower or Kronos  Denmark  creating or
      expressed to create Security over all or any part of its assets in respect
      of  the  obligations  of  any of the  Obligors  under  any of the  Finance
      Documents.

      "Senior  Notes" means the senior  secured  notes issued or to be issued by
      the Parent the  aggregate  principal  amount of which is not less than EUR
      250,000,000  and which are due to mature no less than seven years from the
      date of issuance.

      "Specified  Time" means a time  determined in  accordance  with Schedule 9
      (Timetables).

      "Structure  Chart" means a chart  showing the Parent and its  Subsidiaries
      and  any  direct   shareholders  of  any  member  of  the  Group  and  the
      relationship between all such entities.

      "Subordination  Agreement" means the subordination  agreement entered into
      between the Security Agent, the Parent and the German Borrower.

      "Subsidiary" means in relation to any company or corporation, a company or
      corporation:

      (a)   which is controlled,  directly or indirectly, by the first mentioned
            company or corporation;

      (b)   more than half the issued  share  capital  of which is  beneficially
            owned,  directly or  indirectly  by the first  mentioned  company or
            corporation; or

      (c)   which is a Subsidiary of another  Subsidiary of the first  mentioned
            company or corporation,

      and for this purpose,  a company or corporation  shall be treated as being
      controlled  by  another if that other  company or  corporation  is able to
      direct its  affairs  and/or to  control  the  composition  of its board of
      directors or equivalent body.

      "TARGET" means Trans-European Automated Real-time Gross Settlement Express
      Transfer payment system.

      "TARGET Day" means any day on which TARGET is open for the  settlement  of
      payments in euro.

      "Tax" means any tax, levy, impost,  duty or other charge or withholding of
      a similar nature  (including any penalty or interest payable in connection
      with any failure to pay or any delay in paying any of the same).

      "Term"  means,  in relation  to any Letter of Credit,  the period from its
      Utilisation Date until its Expiry Date.

      "Termination Date" means the date falling 36 Months after the date of this
      Agreement.

      "Total  Commitments"  means the  aggregate of the  Commitments,  being EUR
      80,000,000 at the date of this Agreement.

      "Transaction  Security"  means the  Security  created or  expressed  to be
      created  in  favour of the  Security  Agent  and/or  the  Secured  Parties
      pursuant to the Security Documents or this Agreement.

                                      -14-
<PAGE>

      "Transfer  Certificate"  means a certificate  substantially  in one of the
      forms set out in  Schedule 5 (Form of Transfer  Certificate)  or any other
      form agreed between the Agent and the German Borrower.

      "Transfer Date" means, in relation to a transfer, the later of:

      (a)   the proposed  Transfer Date  specified in the Transfer  Certificate;
            and

      (b)   the date on which the Agent executes the Transfer Certificate.

      "Unpaid Sum" means any sum due and payable but unpaid by an Obligor  under
      the Finance Documents.

      "US GAAP" means  generally  accepted  accounting  principles in the United
      States of America.

      "Utilisation" means a utilisation of the Facility,  whether by way of Loan
      or Letter of Credit.

      "Utilisation  Date"  means  the date of a  Utilisation,  being the date on
      which a Loan  is to be made or the  relevant  Letter  of  Credit  is to be
      issued.

      "Utilisation  Request" means a notice substantially in the form set out in
      Schedule 3 (Utilisation Request).

1.2   Construction

      (a)   Unless  a  contrary  indication  appears,   any  reference  in  this
            Agreement to:

            (i)   the "Agent",  the  "Mandated  Lead  Arranger",  the  "Security
                  Agent", any "Finance Party", any "Lender",  the "Parent",  any
                  "Obligor"  or any "Party"  shall be construed so as to include
                  its  successors  in title,  permitted  assigns  and  permitted
                  transferees;

            (ii)  "assets" includes present and future properties,  revenues and
                  rights of every description;

            (iii) the "European interbank market" means the interbank market for
                  euro operating in Participating Member States;

            (iv)  a "Finance Document" or any other agreement or instrument is a
                  reference  to that  Finance  Document  or other  agreement  or
                  instrument as amended or novated;

            (v)   "indebtedness"  includes any obligation  (whether  incurred as
                  principal or as surety) for the payment or repayment of money,
                  whether present or future, actual or contingent;

            (vi)  a Lender's "participation", in relation to a Letter of Credit,
                  shall  be   construed   as  a  reference  to  the  rights  and
                  obligations  of that  Lender  in  relation  to that  Letter of
                  Credit as are expressly set out in this Agreement;

            (vii) a "person"  includes any individual,  person,  firm,  company,
                  corporation, unincorporated organisation, government, state or
                  agency of a state or any association,  trust, joint venture or
                  partnership (whether or not having separate legal personality)
                  or two or more of the foregoing;

                                      -15-
<PAGE>

            (viii)a  "regulation"   includes  any  regulation,   rule,  official
                  directive,  request or  guideline  (whether  or not having the
                  force  of  law)  of  any  governmental,  intergovernmental  or
                  supranational   body,   agency,   department  or   regulatory,
                  self-regulatory or other authority or organisation;

            (ix)  a provision of law is a reference to that provision as amended
                  or re-enacted; and

            (x)   a time of day is a reference to Luxembourg time.

      (b)   Section,  Clause and  Schedule  headings  are for ease of  reference
            only.

      (c)   Unless a  contrary  indication  appears,  a term  used in any  other
            Finance  Document or in any notice given under or in connection with
            any Finance  Document has the same meaning in that Finance  Document
            or notice as in this Agreement.

      (d)   A Default (other than an Event of Default) is "continuing" if it has
            not been remedied or waived and an Event of Default is  "continuing"
            if it has not been waived.

1.3   Currency Symbols and Definitions
      "$" and "dollars"  denote lawful currency of the United States of America,
      "(pound)" and  "sterling"  denote lawful  currency of the United  Kingdom,
      "NOK" and "kroner"  denote lawful  currency of Norway and "EUR" and "euro"
      means the single currency unit of the Participating Member States.

                                      -16-
<PAGE>

                                    SECTION 2
                                  THE FACILITY

2.    The Facility

2.1   The Facility
      Subject to the terms of this Agreement,  the Lenders make available to the
      Borrowers a multicurrency  revolving loan and letter of credit facility in
      an aggregate amount equal to the Total Commitments.

2.2   Finance Parties' rights and obligations

      (a)   The  obligations  of each Finance Party under the Finance  Documents
            are several.  Failure by a Finance Party to perform its  obligations
            under the Finance  Documents does not affect the  obligations of any
            other  Party  under  the  Finance  Documents.  No  Finance  Party is
            responsible for the obligations of any other Finance Party under the
            Finance Documents.

      (b)   The rights of each  Finance  Party under or in  connection  with the
            Finance  Documents are separate and independent  rights and any debt
            arising  under the  Finance  Documents  to a Finance  Party  from an
            Obligor shall be a separate and independent debt.

      (c)   A Finance  Party  may,  except as  otherwise  stated in the  Finance
            Documents,   separately   enforce  its  rights   under  the  Finance
            Documents.

3.    Purpose

3.1   Purpose
      Each  Borrower  shall apply all amounts  borrowed by it under the Facility
      towards  (i) its  general  corporate  purposes,  being  mainly its working
      capital  requirements  and  (ii)  refinancing  its  existing  indebtedness
      (including, for the avoidance of doubt, any existing indebtedness which is
      owed by it to the Parent or any other member of the NL Group).

3.2   Monitoring
      No Finance  Party is bound to monitor  or verify  the  application  of any
      amount borrowed pursuant to this Agreement.

4.    Conditions Of Utilisation

4.1   Initial conditions precedent
      No  Borrower  may  deliver  a  Utilisation  Request  unless  the Agent has
      received  all of the  documents  and other  evidence  listed in Schedule 2
      (Conditions  precedent) in form and substance  satisfactory  to the Agent,
      except for the  evidence  referred  to in  paragraph  3 (a) of Schedule 2,
      provided that such evidence must be received by the Agent no later than on
      the Utilisation Date and prior to the first  Utilisation.  The Agent shall
      notify  the  German  Borrower  and the  Lenders  promptly  upon  being  so
      satisfied.

4.2   Further conditions precedent
      The  Lenders  and the  Fronting  Bank will only be obliged to comply  with
      Clause 5.4 (Lenders' and Fronting  Bank  participation)  if on the date of
      the Utilisation Request and on the proposed Utilisation Date:

                                      -17-
<PAGE>

      (a)   no Default is  continuing  or would result from the proposed Loan or
            Letter of Credit, as the case may be; and

      (b)   the Repeating  Representations to be made by each Obligor and Kronos
            Denmark are true in all material respects.

4.3   Conditions relating to Optional Currencies

      (a)   A currency  will  constitute  an Optional  Currency in relation to a
            Loan if:

            (i)   it is  readily  available  in the amount  required  and freely
                  convertible  into the Base Currency in the Relevant  Interbank
                  Market on the Quotation Day and the Utilisation  Date for that
                  Loan; and

            (ii)  it is either (y) dollars or kroner or (z) some other  currency
                  that  has  been   approved   by  the  Agent   (acting  on  the
                  instructions of all the Lenders) on or prior to receipt by the
                  Agent of the relevant Utilisation Request for that Loan.

      (b)   If the Agent has  received a written  request  from a Borrower for a
            currency to be approved under  paragraph  (a)(ii)  above,  the Agent
            will confirm to that Borrower by the Specified Time:

            (i)   whether or not the Lenders have granted their approval; and

            (ii)  if approval has been  granted,  the minimum  amount  (and,  if
                  required,  integral multiples) for any subsequent  Utilisation
                  in that currency.

4.4   Maximum number of Loans

      (a)   A Borrower may not deliver a  Utilisation  Request if as a result of
            the proposed Utilisation 8 or more Loans and/or 6 or more Letters of
            Credit would be outstanding.

      (b)   Any Loan made by a single Lender under Clause 6.2 (Unavailability of
            a currency) shall not be taken into account in this Clause 4.

                                      -18-
<PAGE>

                                    SECTION 3
                                   UTILISATION

5.    Utilisation

5.1   Delivery of a Utilisation Request
      A Borrower  may  utilise  the  Facility by delivery to the Agent of a duly
      completed Utilisation Request not later than the Specified Time.

5.2   Completion of a Utilisation Request

      (a)   Each Utilisation  Request is irrevocable and will not be regarded as
            having been duly completed unless:

            (i)   the  proposed  Utilisation  Date is a Business  Day within the
                  Availability Period;

            (ii)  the currency and amount of the Utilisation  comply with Clause
                  5.3 (Currency and amount); and

            (iii) the  proposed  Interest  Period  or Term,  as the case may be,
                  complies with Clause 13 (Interest Periods and Terms).

      (b)   Only  one  Loan  or  Letter  of  Credit  may be  requested  in  each
            Utilisation Request.

5.3   Currency and amount

      (a)   The  currency  specified in a  Utilisation  Request must be the Base
            Currency or, in the case of Loans only, an Optional Currency.

      (b)   The amount of the proposed Loan or Letter of Credit must be:

            (i)   (in  respect of a Loan) if the  currency  selected is the Base
                  Currency,  a  minimum  of  EUR  5,000,000  or,  if  less,  the
                  Available Facility; or

            (ii)  if the currency selected is dollars,  a minimum of $ 5,000,000
                  or, if less, the Available Facility; or

            (iii) if  the  currency   selected  is  kroner,  a  minimum  of  NOK
                  50,000,000, or, if less, the Available Facility; or

            (iv)  if the currency  selected is an Optional  Currency  other than
                  dollars or kroner,  the  minimum  amount  (and,  if  required,
                  integral   multiple)   specified  by  the  Agent  pursuant  to
                  paragraph  (b)(ii)  of  Clause  4.3  (Conditions  relating  to
                  Optional  Currencies)  or,  if less,  the  Available  Facility
                  provided  that the minimum  amount so  specified  by the Agent
                  does not  materially  exceed  the  minimum  amount  set out in
                  sub-paragraphs (i) of paragraph (b) above;

            (v)   (in  respect  of a Letter of  Credit)  an amount  which,  when
                  aggregated  with the  amount of  Outstandings  in  respect  of
                  Letters of Credit at such time, does not exceed EUR 5,000,000;
                  and

            (vi)  in any event such that its Base  Currency  Amount is less than
                  or equal to the Available Facility.

                                      -19-
<PAGE>

5.4   Lenders' and Fronting Bank participation

      (a)   If the  conditions set out in this Agreement have been met, (i) each
            Lender shall make its  participation  in each Loan  available by the
            Utilisation Date through its Facility Office,  and (ii) the Fronting
            Bank shall issue each Letter of Credit through its Facility Office.

      (b)   The  amount  of each  Lender's  participation  in each Loan and each
            Letter  of  Credit  will be  equal  to the  proportion  borne by its
            Available  Commitment to the Available Facility immediately prior to
            making the Loan or issuing the Letter of Credit.

      (c)   The Agent  shall  determine  the Base  Currency  Amount of each Loan
            which is to be made in an Optional  Currency  and shall  notify each
            Lender of the amount,  currency and the Base Currency Amount of each
            Loan and the amount of its  participation in that Loan, in each case
            by the Specified Time.

6.    Optional Currencies

6.1   Selection of currency
      A Borrower shall select the currency of a Loan in a Utilisation Request.

6.2   Unavailability of a currency
      If before the Specified Time on any Quotation Day:

      (a)   a Lender  notifies the Agent that the Optional  Currency (other than
            an Optional  Currency  which is dollars or kroner)  requested is not
            readily available to it in the amount required; or

      (b)   a Lender  notifies the Agent that  compliance with its obligation to
            participate  in a  Loan  in the  proposed  Optional  Currency  would
            contravene a law or regulation applicable to it,

      the Agent will give notice to the relevant  Borrower to that effect by the
      Specified  Time on that day. In this event,  any Lender that gives  notice
      pursuant to this Clause 6.2 will be required to participate in the Loan in
      the Base Currency (in an amount equal to that  Lender's  proportion of the
      Base Currency Amount or, in respect of a Rollover Loan, an amount equal to
      that Lender's  proportion of the Base Currency Amount of the maturing Loan
      that  is due to be  made)  and its  participation  will  be  treated  as a
      separate  Loan  denominated  in the Base  Currency  during  that  Interest
      Period.

6.3   Participation in a Loan
      Each  Lender's  participation  in a Loan will be  determined in accordance
      with   paragraph   (b)  of  Clause  5.4   (Lenders'   and  Fronting   Bank
      participation).

7.    Letters of Credit

7.1   Completion of Letters of Credit
      The Fronting Bank is authorised to issue any Letter of Credit  pursuant to
      Clause 5 (Utilisation) by:

      (a)   completing  the  issue  date and the  proposed  Expiry  Date of that
            Letter of Credit; and

      (b)   executing  and  delivering  that  Letter of  Credit to the  relevant
            recipient on the Utilisation Date.

                                      -20-
<PAGE>

7.2   Renewal of a Letter of Credit

      (a)   Not less than three Business Days before the Expiry Date of a Letter
            of Credit the Borrower may, by written notice to the Agent,  request
            that the Term of that Letter of Credit be extended.

      (b)   The  Finance  Parties  shall  treat the request in the same way as a
            Utilisation  Request  for a  Letter  of  Credit  in the  amount  and
            maturity of the Letter of Credit (as to be extended).

      (c)   The terms of each  renewed  Letter  of  Credit  shall be the same as
            those of the  relevant  Letter  of Credit  immediately  prior to its
            renewal, save that its Term shall commence on the date which was the
            Expiry  Date of that  Letter  of  Credit  immediately  prior  to its
            renewal and shall end on the proposed  Expiry Date  specified in the
            request.

      (d)   The  Fronting  Bank is  authorised  to amend  any  Letter  of Credit
            pursuant to a request if the  conditions  set out in this  Agreement
            have been complied with.

7.3   Restrictions on participation in Letters of Credit
      If at any time  prior to the  issue of a Letter of  Credit  any  Lender is
      prohibited  by law or pursuant to any request from or  requirement  of any
      central bank or other fiscal,  monetary or other authority from having any
      right or obligation under this Agreement in respect of a Letter of Credit,
      that Lender  shall notify the Agent on or before the Business Day prior to
      the proposed Utilisation Date and:

      (a)   the maximum actual and  contingent  liabilities of the Fronting Bank
            under that Letter of Credit  shall be reduced by an amount  equal to
            an amount  which  would  have been the amount of that  Lender's  L/C
            Proportion  of that  Letter  of Credit  if the  prohibition  had not
            occurred;

      (b)   the L/C  Proportion  of that  Lender in  relation  to that Letter of
            Credit shall be nil; and

      (c)   that  Lender's  Available  Commitment  shall be reduced by an amount
            equal to an amount which would have been the amount of that Lender's
            L/C  Proportion of the Letter of Credit if the  prohibition  had not
            occurred.

                                      -21-

<PAGE>

                                    SECTION 4
                     REPAYMENT, PREPAYMENT AND CANCELLATION
8.    Repayment

8.1   Repayment of Loans
      Each Borrower which has drawn a Loan shall repay that Loan on the last day
      of its Interest Period.

9.    Borrower's Liabilities In Relation To Letters Of Credit

9.1   Demands under Letters of Credit
      If a demand is made under a Letter of Credit or the  Fronting  Bank incurs
      in connection with a Letter of Credit any other  liability,  cost,  claim,
      loss or expense which is to be reimbursed pursuant to this Agreement,  the
      Fronting Bank shall promptly notify the Agent of the amount of such demand
      or such liability,  cost,  claim, loss or expense and the Letter of Credit
      to which it relates  and the Agent  shall  promptly  make  demand upon the
      relevant  Borrower  in  accordance  with this  Agreement  and  notify  the
      Lenders.

9.2   Borrowers' indemnity to Fronting Banks
      The relevant Borrower shall irrevocably and  unconditionally  as a primary
      obligation  indemnify  (within three Business Days of demand of the Agent)
      the Fronting Bank at its request against:

      (a)   any sum paid or due and  payable  by the  Fronting  Bank  under  the
            Letter of Credit; and

      (b)   all liabilities,  costs (including,  without  limitation,  any costs
            incurred  in funding any amount  which  falls due from the  Fronting
            Bank  under any  Letter of  Credit  or in  connection  with any such
            Letter of Credit),  claims, losses and out-of-pocket  expenses which
            the  Fronting  Bank may at any time incur or  sustain in  connection
            with or arising out of any such Letter of Credit.

9.3   Borrowers' indemnity to Lenders
      The relevant Borrower shall irrevocably and  unconditionally  as a primary
      obligation  indemnify  (within three Business Days of demand of the Agent)
      each Lender against:

      (a)   any sum paid or due and payable by that Lender (whether under Clause
            32.1  (Lenders'  Indemnity) or  otherwise)  in connection  with that
            Letter of Credit; and

      (b)   all liabilities,  costs (including,  without  limitation,  any costs
            incurred in funding  any amount  which falls due from that Lender in
            connection with that Letter of Credit),  claims, losses and expenses
            which that  Lender  may at any time  incur or sustain in  connection
            with any Letter of Credit.

9.4   Preservation of rights
      Neither the obligations of the relevant  Borrower set out in this Clause 9
      nor the rights,  powers and remedies  conferred  on the  Fronting  Bank or
      Lender  by this  Agreement  or by law  shall be  discharged,  impaired  or
      otherwise affected by:

      (a)   the winding-up,  dissolution,  administration or  re-organisation of
            the Fronting  Bank,  any Lender or any other person or any change in
            its status, function, control or ownership;

      (b)   any of the obligations of the Fronting Bank, any Lender or any other
            person  under this  Agreement or under any Letter of Credit or under

                                      -22-

<PAGE>

            any other  security taken in respect of its  obligations  under this
            Agreement or otherwise in  connection  with a Letter of Credit being
            or becoming  illegal,  invalid,  unenforceable or ineffective in any
            respect;

      (c)   time or other  indulgence  being  granted or agreed to be granted to
            the Fronting  Bank, any Lender or any other person in respect of its
            obligations  under this  Agreement or under or in connection  with a
            Letter of Credit or under any other security;

      (d)   any  amendment  to, or any  variation,  waiver or  release  of,  any
            obligation  of the  Fronting  Bank,  any Lender or any other  person
            under a Letter of Credit or this Agreement;

      (e)   any other act, event or omission which, but for this Clause 9, might
            operate  to  discharge,  impair  or  otherwise  affect  any  of  the
            obligations of the relevant Borrower set out in this Clause 9 or any
            of the rights,  powers or remedies conferred upon that Fronting Bank
            or any Lender by this Agreement or by law.

      The obligations of the relevant Borrower set out in this Clause 9 shall be
      in addition to and  independent of every other security which the Fronting
      Bank or any  Lender  may at any time  hold in  respect  of the  Borrower's
      obligations under this Agreement.

9.5   Settlement conditional
      Any settlement or discharge between the relevant Borrower and the Fronting
      Bank or a Lender shall be  conditional  upon no security or payment to the
      Fronting Bank or Lender by the Borrower,  or any other person on behalf of
      the  Borrower,  being avoided or reduced by virtue of any laws relating to
      bankruptcy, insolvency, liquidation or similar laws of general application
      and,  if any such  security  or  payment is so  avoided  or  reduced,  the
      Fronting  Bank or Lender  shall be entitled to recover the value or amount
      of such  security or payment  from the  Borrower  subsequently  as if such
      settlement or discharge had not occurred.

9.6   Right to make payments under Letters of Credit
      The Fronting Bank shall be entitled to make any payment in accordance with
      the terms of the  relevant  Letter of Credit  without any  reference to or
      further authority from the relevant Borrower or any other investigation or
      enquiry. The relevant Borrower irrevocably authorises the Fronting Bank to
      comply  with any  demand  under a Letter of  Credit  which is valid on its
      face.

10.   Prepayment And Cancellation

10.1  Illegality
      If it becomes  unlawful after the date of this Agreement in any applicable
      jurisdiction  for a Lender  or the  Fronting  Bank to  perform  any of its
      obligations  as  contemplated  by this  Agreement  or to  fund,  issue  or
      participate  in any Loan or Letter of Credit and without  prejudice to its
      rights and obligations under Clause 19 (Mitigation by the Lenders):

      (a)   that Lender or the Fronting Bank, as the case may be, shall promptly
            notify the Agent upon becoming aware of that event;

      (b)   upon the Agent  notifying  the  German  Borrower  (on  behalf of the
            Borrowers),  the  Commitment  of that  Lender  will  be  immediately
            cancelled; and

      (c)   upon cancellation of such Lender's Commitment, each Borrower shall:

            (i)   repay that  Lender's  participation  in the Loans made to that
                  Borrower; and

                                      -23-

<PAGE>

            (ii)  ensure that the  liabilities  of that  Lender or the  Fronting
                  Bank under or in respect of each  Letter of Credit are reduced
                  to zero or otherwise  secured by providing Cash  Collateral in
                  an  amount  equal to such  Lender's  L/C  Proportion  of those
                  Letters of Credit or the Fronting  Bank's  maximum  actual and
                  contingent  liabilities  under  that  Letter  of Credit in the
                  currency of those Letters of Credit

            on the last day of the  Interest  Period  for each  Loan or Term for
            each  Letter of Credit,  as the case may be,  outstanding  as at the
            date upon which the Agent has so notified the German Borrower or, if
            earlier, the date specified by the Lender in the notice delivered to
            the Agent  (being  no  earlier  than the last day of any  applicable
            grace period permitted by law).

10.2  Voluntary cancellation

      (a)   The  German  Borrower  may,  if it gives the Agent not less than ten
            (10)  days' (or such  shorter  period as the  Majority  Lenders  may
            agree) prior written  notice,  cancel the whole or any part (being a
            minimum  amount of EUR  10,000,000) of the Available  Facility.  Any
            cancellation  under this Clause 10.2 shall reduce the Commitments of
            the Lenders rateably.

      (b)   The relevant  Borrower may give the Agent not less than ten Business
            Days' prior  notice of its  intention  to procure  that the Fronting
            Bank's  liability  under a  Letter  of  Credit  is  reduced  to zero
            (whereupon it shall do so)

10.3  Right of repayment and cancellation in relation to a single Lender

      (a)   If:

            (i)   any sum  payable  to any  Lender  or the  Fronting  Bank by an
                  Obligor is required  to be  increased  under  Clause 16.2 (Tax
                  gross-up); or

            (ii)  any Lender or the Fronting  Bank claims  indemnification  from
                  the Borrowers under Clause 16.3 (Tax indemnity) or Clause 17.1
                  (Increased costs); or

            (iii) any  Lender  or  Fronting  Bank  notifies  the  Agent  of  its
                  Additional   Cost  Rate  under   paragraph  3  of  Schedule  4
                  (Mandatory Cost formulae),

            the German  Borrower may,  whilst (in the case of paragraphs (i) and
            (ii)  above) the  circumstance  giving  rise to the  requirement  or
            indemnification  continues or (in the case of paragraph (iii) above)
            that the Additional  Cost Rate is greater than zero,  give the Agent
            notice:

            (1)   of  cancellation  of the  Commitment  of that  Lender  and its
                  intention   to  procure  the   repayment   of  that   Lender's
                  participation in the Loans; or

            (2)   (if  such  circumstance  relates  to  the  Fronting  Bank)  of
                  cancellation  of the  Letters  of Credit or of the  Borrower's
                  intention  to  provide  Cash  Collateral  in  respect  of  the
                  Fronting Bank's liability under such Letters of Credit.

      (b)   On  receipt  of a notice  from the German  Borrower  referred  to in
            paragraph (a) above, the Commitment of that Lender shall immediately
            be reduced to zero.

                                      -24-

<PAGE>

      (c)   On the last day of each Interest Period or Term, as the case may be,
            which  ends  after  the  German  Borrower  has  given  notice  under
            paragraph  (a) above (or,  if  earlier,  the date  specified  by the
            German  Borrower in that  notice),  each Borrower to which a Loan or
            Letter  of  Credit  is   outstanding   shall  repay  that   Lender's
            participation  in that  Loan and  shall  procure  either  that  such
            Lender's L/C Proportion of each relevant Letter of Credit be reduced
            to zero (by  reduction  of the amount of that Letter of Credit in an
            amount  equal  to  that  Lender's  L/C   Proportion)  or  that  Cash
            Collateral  be  provided  to the  Agent in an  amount  equal to such
            Lender's  L/C  Proportion  of that  Letter of  Credit);  and (if the
            circumstance  relates  to the  Fronting  Bank)  the  Borrower  shall
            procure  that the  Fronting  Bank's  liability  under any Letters of
            Credit  issued by it shall  either be reduced  to zero or  otherwise
            secured by the Borrower providing Cash Collateral in an amount equal
            to the Fronting  Bank's maximum  actual and  contingent  liabilities
            under those Letters of Credit.

10.4  Restrictions

      (a)   Any notice of  cancellation  or prepayment  given by any Party under
            this  Clause  10  shall  be  irrevocable   and,  unless  a  contrary
            indication  appears in this  Agreement,  shall  specify  the date or
            dates upon which the relevant  cancellation  or  prepayment is to be
            made and the amount of that cancellation or prepayment.

      (b)   Any  prepayment  under this  Agreement  shall be made  together with
            accrued  interest on the amount  prepaid  and,  subject to any Break
            Costs, without premium or penalty.

      (c)   Unless a contrary indication appears in this Agreement,  any part of
            the Facility  which is prepaid may be reborrowed in accordance  with
            the terms of this Agreement.

      (d)   The  Borrowers  shall  not  repay or  prepay  all or any part of the
            Outstandings or cancel all or any part of the Commitments  except at
            the  times  and  in  the  manner  expressly  provided  for  in  this
            Agreement.

      (e)   No amount of the Total  Commitments  cancelled  under this Agreement
            may be subsequently reinstated.

      (f)   If the  Agent  receives  a  notice  under  this  Clause  10 it shall
            promptly forward a copy of that notice to either the German Borrower
            or the affected Lender, as appropriate.

                                      -25-

<PAGE>

                                    SECTION 5
                              COSTS OF UTILISATIONS
11.   Interest

11.1  Calculation of interest
      The  rate of  interest  on each  Loan  for  each  Interest  Period  is the
      percentage rate per annum which is the aggregate of the applicable:

      (a)   Margin;

      (b)   LIBOR or, in relation to any Loan in euro, EURIBOR; and

      (c)   Mandatory Cost, if any.

11.2  Payment of interest
      The  Borrower to which a Loan has been made shall pay accrued  interest on
      that Loan on the last day of each  Interest  Period (and,  if the Interest
      Period is longer  than six  Months,  on the dates  falling at six  monthly
      intervals after the first day of the Interest Period).

12.   Default Interest

12.1  Default interest periods
      If any sum due and payable by an Obligor  hereunder is not paid on the due
      date therefor in accordance with Clause 33.1 (Payments to the Agent) or if
      any sum due and payable by an Obligor  under any  judgment of any court in
      connection  herewith is not paid on the date of such judgment,  the period
      beginning  on such  due date  or,  as the  case  may be,  the date of such
      judgment and ending on the date upon which the  obligation of such Obligor
      to pay such sum is discharged  shall be divided into  successive  periods,
      each of which  (other  than the first)  shall start on the last day of the
      preceding  such period and the duration of each of which shall  (except as
      otherwise provided in this Clause 12) be selected by the Agent.

12.2  Default interest
      An Unpaid Sum shall  bear  interest,  or,  insofar as it relates to unpaid
      interest,  shall give rise to a claim for lump sum  damages,  during  each
      Interest  Period in respect thereof at the rate per annum which is one per
      cent. per annum above the percentage rate which would apply if it had been
      a Loan in the  amount  and  currency  of such  Unpaid Sum and for the same
      Interest  Period  (provided  that in the  case of lump  sum  damages,  the
      Obligor  shall be free to prove that no damage  has arisen or that  damage
      has not  arisen in the  asserted  amount,  whereas in the case of lump sum
      damages and default interest the Finance Party shall be entitled to assert
      further damages), provided that if such Unpaid Sum relates to a Loan which
      became due and  payable  on a day other  than the last day of an  Interest
      Period relating thereto:

12.2.1      the first Interest Period  applicable to such Unpaid Sum shall be of
      a duration equal to the unexpired  portion of the current  Interest Period
      relating to that Loan; and

12.2.2      the percentage rate of interest applicable thereto from time to time
      during such period shall be that which  exceeds by one per cent.  the rate
      which would have been applicable to it had it not so fallen due.

12.3  Payment of default interest
      Any interest which shall have accrued under Clause 12.2 (Default Interest)
      in respect of an Unpaid Sum shall be due and  payable and shall be paid by

                                      -26-

<PAGE>

      the Obligor owing such Unpaid Sum on the last day of each Interest  Period
      in  respect  thereof or on such  other  dates as the Agent may  specify by
      notice to such Obligor.

12.4  Notification of rates of interest
      The Agent shall promptly  notify the Lenders and the relevant  Borrower of
      the determination of a rate of interest under this Agreement.

13.   Interest Periods and Terms

13.1  Selection of Interest Periods and Terms

      (a)   A Borrower may select an Interest Period for a Loan and a Term for a
            Letter of Credit in the Utilisation  Request for that Loan or Letter
            of Credit, as the case may be.

      (b)   Subject to this Clause 13, a Borrower may select an Interest  Period
            of one,  two,  three or six Months or any other period not exceeding
            twelve Months agreed  between such Borrower and the Agent (acting on
            the instructions of all the Lenders).

      (c)   The  Borrower  may  select a Term for a Letter of Credit of a period
            not exceeding  twelve  months,  ending on or before the  Termination
            Date.

      (d)   An  Interest  Period  for a Loan and a Term for a Letter  of  Credit
            shall not extend beyond the Termination Date.

      (e)   Each Interest Period for a Loan and each Term for a Letter of Credit
            shall start on the Utilisation Date.

      (f)   A Loan has one Interest Period only.

13.2  Non-Business Days
      If an Interest  Period or Term would otherwise end on a day which is not a
      Business  Day,  that  Interest  Period or Term,  as the case may be,  will
      instead end on the next Business Day in that  calendar  month (if there is
      one) or the preceding Business Day (if there is not).

14.   Changes To The Calculation Of Interest

14.1  Absence of quotations
      Subject to Clause 14.2 (Market  disruption),  if LIBOR or, if  applicable,
      EURIBOR is to be  determined  by  reference to the  Reference  Banks but a
      Reference  Bank does not supply a quotation by the  Specified  Time on the
      Quotation Day, the applicable  LIBOR or EURIBOR shall be determined on the
      basis of the quotations of the remaining Reference Banks.

14.2  Market disruption

      (a)   If a Market  Disruption  Event  occurs in relation to a Loan for any
            Interest Period, then the rate of interest on each Lender's share of
            that Loan for the Interest  Period shall be the rate per annum which
            is the sum of:

            (i)   the Margin;

            (ii)  the  rate  notified  to the  Agent by that  Lender  as soon as
                  practicable and in any event before interest is due to be paid
                  in respect of that Interest Period, to be that which expresses
                  as a  percentage  rate per  annum  the cost to that  Lender of

                                      -27-

<PAGE>

                  funding its participation in that Loan from whatever source it
                  may reasonably select; and

            (iii) the  Mandatory  Cost,  if any,  applicable  to  that  Lender's
                  participation in the Loan.

      (b)   In this Agreement "Market Disruption Event" means:

            (i)   at or  about  noon  on the  Quotation  Day  for  the  relevant
                  Interest  Period the Screen Rate is not  available and none or
                  only one of the Reference  Banks  supplies a rate to the Agent
                  to determine LIBOR or, if applicable, EURIBOR for the relevant
                  currency and Interest Period; or

            (ii)  before close of business in  Luxembourg  on the  Quotation Day
                  for  the  relevant   Interest   Period,   the  Agent  receives
                  notifications  from a Lender or Lenders (whose  participations
                  in a Loan  exceed 35 per cent.  of that Loan) that the cost to
                  it of obtaining  matching  deposits in the Relevant  Interbank
                  Market would be in excess of LIBOR or, if applicable, EURIBOR.

14.3  Alternative basis of interest or funding

      (a)   If a Market  Disruption  Event  occurs  and the Agent or the  German
            Borrower so requires,  the Agent and the German Borrower shall enter
            into negotiations (for a period of not more than thirty days) with a
            view to  agreeing a  substitute  basis for  determining  the rate of
            interest.

      (b)   Any alternative  basis agreed pursuant to paragraph (a) above shall,
            with the prior  consent of all the Lenders and the German  Borrower,
            be binding on all Parties.

14.4  Break Costs
      Each  Borrower  shall,  within three  Business Days of demand by a Finance
      Party (which  demand shall be  accompanied  by a certificate  showing,  in
      reasonable  detail,  the  calculation  of the Break Costs incurred by such
      Finance  Party in respect of the relevant  Interest  Period),  pay to that
      Finance Party its Break Costs attributable to all or any part of a Loan or
      Unpaid Sum being paid by that Borrower on a day other than the last day of
      an Interest Period for that Loan or Unpaid Sum.

15.   Fees

15.1  Commitment fee

      (a)   Each of the  Borrowers  shall jointly and severally pay to the Agent
            (for the account of each Lender) a fee in the Base Currency computed
            at the rate of 0.75 per cent.  per annum on that Lender's  Available
            Commitment  for  the  Availability  Period,  provided  that  the two
            Norwegian  Borrowers  shall  only be liable to the  extent  which is
            permitted under the Norwegian Companies Act 1997 Section 8-7.

      (b)   The  accrued  commitment  fee is  payable  on the  last  day of each
            successive period of three Months which ends during the Availability
            Period, on the last day of the Availability Period and, if cancelled
            in full, on the cancelled amount of the relevant Lender's Commitment
            at the time the cancellation is effective.

                                      -28-

<PAGE>

15.2  Utilisation fee

      (a)   If at any time the total amount of the Loans exceeds 66 per cent. of
            the Total Commitments then the Borrowers shall pay to the Agent (for
            the account of each Lender) a  utilisation  fee in the Base Currency
            computed at the rate of 0.25 per cent. per annum of the total amount
            of such Loans calculated on a daily basis.

      (b)   The fee referred to in sub-clause (a) above shall be payable jointly
            and  severally by each of the  Borrowers in the Base Currency on the
            last  day of each  successive  period  of  three  Months  and on the
            Termination  Date,  provided that the two Norwegian  Borrowers shall
            only be liable to the extent which is permitted  under the Norwegian
            Companies Act 1997 Section 8-7.

15.3  Agency and security handling fee
      Each of the  Borrowers  shall  jointly and  severally pay to Deutsche Bank
      Luxembourg  S.A. for its own account in its capacity as Agent and Security
      Agent an agency and  security  handling fee in the amount and at the times
      agreed in a Fee Letter  provided  that the two Norwegian  Borrowers  shall
      only be liable  to the  extent  which is  permitted  under  the  Norwegian
      Companies Act 1997 Section 8-7.

15.4  Letter of Credit Commission

      (a)   The relevant  Borrower  shall,  in respect of each Letter of Credit,
            pay to the Agent (for the account of each Lender) (for  distribution
            in  proportion  to each  Lender's L/C  Proportion  of that Letter of
            Credit) a letter of credit  commission at the L/C Commission Rate on
            the maximum actual and  contingent  liabilities of the Fronting Bank
            under the relevant Letter of Credit.

      (b)   The letter of credit  commission shall be paid in advance in respect
            of each successive period of three Months (or such shorter period as
            shall end on the relevant  Expiry Date) which begins during the Term
            of the relevant  Letter of Credit,  the first  payment to be made on
            the Utilisation Date for that Letter of Credit and after that on the
            first day of each such period.

15.5  Fronting Bank Fee
      The relevant  Borrower shall, in respect of each Letter of Credit,  pay to
      the  Fronting  Bank a fee in the amounts and at the times  agreed  between
      such Fronting Bank and the Borrower.

15.6  Arrangement and Participation Fee
      Each of the  Borrowers  shall joinly and severally pay to Deutsche Bank AG
      for  its  own  account  in its  capacity  as  Mandated  Lead  Arranger  an
      arrangement and participation fee in the amount and at the times agreed in
      a Fee Letter,  provided  that the two  Norwegian  Borrowers  shall only be
      liable to the extent which is permitted under the Norwegian  Companies Act
      1997 Section 8-7.

                                      -29-

<PAGE>

                                    SECTION 6
                         ADDITIONAL PAYMENT OBLIGATIONS

16.   Tax Gross Up And Indemnities

16.1  Definitions
      In this Agreement:

      "Qualifying  Lender"  means  any  Lender  which  is a  bank  or  financial
      institution  and which is  incorporated  or  resident  or acting  out of a
      Facility Office in a member state of the European Union (but excluding the
      United Kingdom of Great Britain and Northern Ireland),  provided that with
      regard to any Original Lender, Qualifying Lender means any Original Lender
      which  is a bank  or  financial  institution  and is a  resident  for  tax
      purposes in either  Germany,  Norway,  Luxembourg or the Netherlands or is
      acting out of a Facility  Office,  registered with the Belgian Banking and
      Finance Commission, in Belgium.

16.2  Tax gross-up
      All payments to be made by an Obligor to any Finance Party hereunder shall
      be made free and clear of and without  deduction  for or on account of Tax
      unless  such  Obligor is  required  to make such a payment  subject to the
      deduction  or  withholding  of Tax,  in which case the sum payable by such
      Obligor (in respect of which such  deduction or withholding is required to
      be made) shall be  increased  to the extent  necessary to ensure that such
      Finance Party receives a sum net of any  withholding or deduction equal to
      the sum which it would have received had no such  deduction or withholding
      been made or required to be made.

16.3  Tax indemnity
      Without  prejudice to Clause 16.2 (Tax Gross-up),  if any Finance Party is
      required  to make any payment of or on account of Tax on or in relation to
      any sum received or receivable hereunder (including any sum deemed for the
      purposes of Tax to be received or receivable by such Finance Party whether
      or not actually  received or receivable) or if any liability in respect of
      any such  payment is  asserted,  imposed,  levied or assessed  against any
      Finance Party,  the Borrowers  shall,  upon demand of the Agent,  promptly
      indemnify  the Finance Party which suffers a loss or liability as a result
      against such payment or liability  together with any interest,  penalties,
      costs and expenses payable or incurred in connection  therewith,  provided
      that this Clause 16.3 shall not apply to:

      (a)   any Tax imposed on and  calculated  by  reference  to the net income
            actually  received or receivable by such Finance Party (but, for the
            avoidance of doubt, not including any sum deemed for purposes of Tax
            to be received or  receivable by such Finance Party but not actually
            receivable)  by the  jurisdiction  in which  such  Finance  Party is
            incorporated; or

      (b)   any Tax imposed on and  calculated by reference to the net income of
            the  Facility  Office of such  Finance  Party  actually  received or
            receivable by such Finance  Party (but,  for the avoidance of doubt,
            not  including  any sum deemed for purposes of Tax to be received or
            receivable by such Finance party but not actually receivable) by the
            jurisdiction in which its Facility Office is located.

16.4  Claims by Finance Parties
16.4.1......A  Finance Party  intending to make a claim  pursuant to Clause 16.3
      (Tax  indemnity)  shall  notify the Agent of the event  giving rise to the
      claim, whereupon the Agent shall notify the Borrowers thereof.

                                      -30-
<PAGE>

16.4.2......A Lender and each Obligor which makes a payment or would be required
      to make a payment  under this  Clause 16 (Tax  Gross-Up  and  Indemnities)
      shall  co-operate in completing any procedural  formalities  necessary for
      that Obligor to (i) obtain  authorisation  to make that payment  without a
      deduction or withholding,  and (ii) provide any relevant information which
      would be required by any relevant  taxation  authority from the Obligor or
      the  Lender in order to  justify a payment  made  without a  deduction  or
      withholding.

16.5  Notification of requirement to deduct Tax
      If, at any time,  an Obligor is required by law to make any  deduction  or
      withholding  from any sum payable by it hereunder (or if thereafter  there
      is any change in the rates at which or the manner in which such deductions
      or withholdings  are  calculated),  such Obligor shall promptly notify the
      Agent.

16.6  Evidence of payment of Tax
      If an  Obligor  makes any  payment  hereunder  in  respect  of which it is
      required  to make any  deduction  or  withholding,  it shall  pay the full
      amount  required to be deducted  or withheld to the  relevant  taxation or
      other authority  within the time allowed for such payment under applicable
      law and shall  deliver  to the Agent for each  Lender,  within  sixty days
      after it has made such payment to the  applicable  authority,  an original
      receipt (or a certified copy thereof) issued by such authority  evidencing
      the payment to such authority of all amounts so required to be deducted or
      withheld in respect of that Lender's share of such payment.

16.7  Excluded Claims
      If any  Lender  is not or  ceases  to be a  Qualifying  Lender,  or if the
      circumstances  set out in Clause  27.2(g)  apply or if any Lender fails to
      cooperate as required under Clause  16.4.2,  no Obligor shall be liable to
      pay to that Lender  under  Clause 16.2 (Tax  gross-up) or Clause 16.3 (Tax
      indemnity) any amount in respect of Taxes  asserted,  assessed,  levied or
      imposed in excess of the amount it would have been  obliged to pay if that
      Lender  had  been or had  not  ceased  to be a  Qualifying  Lender  or had
      cooperated  provided  that this Clause 16.7  (Excluded  claims)  shall not
      apply (and each  Obligor  shall be obliged to comply with its  obligations
      under Clause 16.2 (Tax gross-up) or Clause 16.3 (Tax indemnity)) if:

      (a)   after the date  hereof  and after  the date when such  Lender  first
            becomes a Lender for the  purposes  of this  Agreement,  there shall
            have  been  any  introduction  of,  change  in,  or  change  in  the
            interpretation,   administration  or  application  of,  any  law  or
            regulation or order or governmental  rule or treaty or any published
            practice or published  concession  of any relevant tax authority and
            it is as a result thereof that such Lender was not or ceased to be a
            Qualifying Lender; or

      (b)   such  Lender is not or ceases to be a  Qualifying  Lender  but would
            have been or would not have ceased to be, a Qualifying  Lender,  had
            all   representations,   confirmations   and  other   documents  and
            information  provided by each Obligor to any Finance Party been true
            and accurate.

16.8  Tax credit payment
      If an  additional  payment  is made  under  Clause  16 (Tax  gross-up  and
      indemnities) by an Obligor for the benefit of any Finance Party, including
      for the  avoidance  of doubt any  payment in respect of any  deduction  or
      withholding,  and  such  Finance  Party,  in  its  reasonable  discretion,
      determines  that it has obtained a credit  against,  a relief or remission
      for,  or  repayment  of, any tax,  then,  if and to the  extent  that such
      Finance Party, in its sole opinion, determines that:

                                      -31-

<PAGE>

16.8.1......such  credit,  relief,  remission  or  repayment is in respect of or
      calculated  with  reference to the  additional  payment  made  pursuant to
      Clause 16 (Tax gross-up and indemnities); and

16.8.2......its  tax  affairs  for its year in  respect  of which  such  credit,
      relief, remission or repayment was obtained have been finally settled,

      such  Finance  Party  shall,  to the  extent  that  it  can do so  without
      prejudice to the retention of the amount of such credit, relief, remission
      or repayment, pay to such Obligor such amount as such Finance Party shall,
      in its  reasonable  opinion,  determine  to be the amount which will leave
      such Finance  Party (after such  payment) in no worse  after-tax  position
      than it would have been in had the additional payment in question not been
      required to be made by such Obligor.

16.9  Tax credit clawback
      If any Finance  Party  makes any payment to an Obligor  pursuant to Clause
      16.8 (Tax credit payment) and such Finance Party subsequently  determines,
      in its reasonable opinion, that the credit, relief, remission or repayment
      in respect of which such  payment was made was not  available  or has been
      withdrawn or that it was unable to use such credit,  relief,  remission or
      repayment in full,  such Obligor shall  reimburse  such Finance Party such
      amount as such Finance Party  determines,  in its reasonable  opinion,  is
      necessary to place it in the same after-tax position as it would have been
      in if such credit,  relief,  remission or repayment  had been obtained and
      fully used and retained by such Finance Party.

16.10 Tax and other affairs
      Subject to the  provisions  of Clause 19  (Mitigation  by the  Lenders) no
      provision of this Agreement  shall interfere with the right of any Finance
      Party to arrange its tax or any other affairs in whatever manner it thinks
      fit,  oblige any Finance Party to claim any credit,  relief,  remission or
      repayment  in respect of any payment  under  Clause 16 (Tax  gross-up  and
      indemnities)  in  priority  to any  other  credit,  relief,  remission  or
      repayment  available  to it nor oblige any Finance  Party to disclose  any
      information  relating to its tax or other affairs or any  computations  in
      respect thereof.

16.11 Stamp taxes
      The  Borrowers  shall  pay and,  within  three  Business  Days of  demand,
      indemnify  each Finance  Party  against any cost,  loss or liability  that
      Finance Party incurs in relation to all stamp duty, registration and other
      similar Taxes payable in respect of any Finance Document.

16.12 Value added tax

      (a)   All  consideration  expressed to be payable under a Finance Document
            by any Party to a Finance  Party shall be deemed to be  exclusive of
            any VAT.  If VAT is  chargeable  on any supply  made by any  Finance
            Party to any Party in connection with a Finance Document, that Party
            shall pay to the Finance  Party (in addition to and at the same time
            as paying the  consideration)  an amount  equal to the amount of the
            VAT.

      (b)   Where a Finance  Document  requires any Party to reimburse a Finance
            Party for any costs or  expenses,  that Party shall also at the same
            time pay and indemnify the Finance Party against all VAT incurred by
            the Finance  Party in respect of the costs or expenses to the extent
            that the Finance Party reasonably determines that it is not entitled
            to credit or repayment of the VAT.

                                      -32-

<PAGE>

17.   Increased Costs

17.1  Increased costs

      (a)   Subject to Clause 17.3  (Exceptions)  the  Borrowers  shall,  within
            three Business Days of a demand by the Agent, pay for the account of
            a Finance Party the amount of any Increased  Costs  incurred by that
            Finance  Party  or any of its  Affiliates  as a  result  of (i)  the
            introduction  of  or  any  change  in  (or  in  the  interpretation,
            administration  or  application  of) any law or  regulation  or (ii)
            compliance  with any law or  regulation  made after the date of this
            Agreement.

      (b)   In this Agreement "Increased Costs" means:

            (i)   a reduction  in the rate of return  from the  Facility or on a
                  Finance Party's (or its Affiliate's) overall capital;

            (ii)  an additional or increased cost; or

            (iii) a reduction  of any amount due and  payable  under any Finance
                  Document,

            which is  incurred  or  suffered  by a  Finance  Party or any of its
            Affiliates  to the extent that it is  attributable  to that  Finance
            Party having  entered into its  Commitment  or funding or performing
            its obligations under any Finance Document or Letter of Credit.

17.2  Increased cost claims

      (a)   A Finance  Party  intending to make a claim  pursuant to Clause 17.1
            (Increased costs) shall notify the Agent of the event giving rise to
            the  claim,  following  which the Agent  shall  promptly  notify the
            Borrowers.

      (b)   Each Finance Party shall,  as soon as practicable  after a demand by
            the Agent, provide a certificate  confirming the amount of and basis
            for its  Increased  Costs  and  showing  in  reasonable  detail  the
            calculation thereof.

            In  determining  such Increased  Costs,  each Finance Party will act
            reasonably and in good faith and on a non-discretionary basis.

17.3  Exceptions

      (a)   Clause  17.1  (Increased  costs)  does not apply to the  extent  any
            Increased Cost is:

            (i)   attributable to a Tax Deduction  required by law to be made by
                  an Obligor;

            (ii)  compensated  for by Clause 16.3 (Tax indemnity) (or would have
                  been compensated for under Clause 16.3 (Tax indemnity) but was
                  not so compensated  solely because the exclusion in paragraphs
                  (a) and (b) of Clause 16.3 (Tax indemnity) applied);

            (iii) compensated for by the payment of the Mandatory Cost; or

            (iv)  attributable  to the  wilful  breach by the  relevant  Finance
                  Party or its Affiliates of any law or regulation.

                                      -33-

<PAGE>

      (b)   In this Clause  17.3,  a reference  to a "Tax  Deduction"  means any
            deduction  or  withholding  for or on  account of Tax from a payment
            under a Finance Document

18.   Other Indemnities

18.1  Currency indemnity

      (a)   If any sum due  from an  Obligor  under  the  Finance  Documents  (a
            "Sum"), or any order, judgment or award given or made in relation to
            a Sum, has to be converted from the currency (the "First  Currency")
            in which that Sum is payable  into  another  currency  (the  "Second
            Currency") for the purpose of:

            (i)   making or filing a claim or proof against that Obligor;

            (ii)  obtaining or enforcing an order, judgment or award in relation
                  to any  litigation or  arbitration  proceedings,

            that  Obligor  shall  as an  independent  obligation,  within  three
            Business Days of demand,  indemnify  each Finance Party to whom that
            Sum is due against any cost, loss or liability  arising out of or as
            a result of the conversion including any discrepancy between (A) the
            rate of exchange  used to convert  that Sum from the First  Currency
            into the  Second  Currency  and (B) the  rate or  rates of  exchange
            available to that person at the time of its receipt of that Sum.

      (b)   To the extent  permitted by applicable  law, each Obligor waives any
            right it may have in any  jurisdiction  to pay any amount  under the
            Finance  Documents in a currency or currency unit other than that in
            which it is expressed to be payable.

18.2  Other indemnities
      The Borrowers shall, within three Business Days of demand,  indemnify each
      Finance Party against any cost, loss or liability incurred by that Finance
      Party as a result of:

      (a)   the occurrence of any Event of Default;

      (b)   a  failure  by an  Obligor  to pay any  amount  due  under a Finance
            Document on its due date,  including without  limitation,  any cost,
            loss or  liability  arising as a result of Clause 31 (Sharing  among
            the Finance Parties);

      (c)   funding, or making arrangements to fund, its participation in a Loan
            requested  by a Borrower  in a  Utilisation  Request but not made by
            reason of the operation of any one or more of the provisions of this
            Agreement  (other  than by reason of default or  negligence  by that
            Finance Party alone);

      (d)   issuing or making arrangements to issue a Letter of Credit requested
            by the Borrower in a Utilisation Request but not issued by reason of
            the  operation  of  any  one  or  more  of the  provisions  of  this
            Agreement; or

      (e)   a Loan (or part of a Loan) not being  prepaid in  accordance  with a
            notice of prepayment given by a Borrower.

18.3  Indemnity to the Agent
      The Borrowers shall promptly indemnify the Agent against any cost, loss or
      liability incurred by the Agent (acting reasonably) as a result of:

                                      -34-

<PAGE>

      (a)   investigating  any event which it reasonably  believes is a Default;
            or

      (b)   acting or relying on any  notice,  request or  instruction  which it
            reasonably  believes  to  be  genuine,   correct  and  appropriately
            authorised.

19.   Mitigation By The Lenders

19.1  Mitigation

      (a)   Each  Finance  Party  shall,  in  consultation   with  the  relevant
            Borrower,  take all reasonable  steps to mitigate any  circumstances
            which arise and which would  result in any amount  becoming  payable
            under or pursuant to, or  cancelled  pursuant to, any of Clause 10.1
            (Illegality),  Clause 16 (Tax gross-up and  indemnities),  Clause 17
            (Increased  costs) or  paragraph  3 of  Schedule 4  (Mandatory  Cost
            formulae) including (but not limited to) transferring its rights and
            obligations  under the Finance  Documents  to another  Affiliate  or
            Facility Office or to another Lender which is willing to accept such
            transfer.

      (b)   Paragraph (a) above does not in any way limit the obligations of any
            Obligor under the Finance Documents.

19.2  Limitation of liability

      (a)   Prior  to  taking  any of  the  steps  referred  to in  Clause  19.1
            (Mitigation)  the  relevant  Finance  Party  will  consult  with the
            relevant  Borrower and  following a request from such  Borrower will
            provide  the  relevant  Borrower  with an  estimate of any costs and
            expenses  which are  likely to be  incurred  by it as a result of it
            taking such steps.  The  Borrower  shall then be entitled to request
            that the relevant Finance Party does not take those steps.

      (b)   The relevant  Borrower  shall  indemnify  each Finance Party for all
            costs and expenses  reasonably  incurred by that Finance  Party as a
            result of steps taken by it under Clause 19.1 (Mitigation).

      (c)   A Finance  Party is not obliged to take any steps under  Clause 19.1
            (Mitigation)  if,  in the  opinion  of that  Finance  Party  (acting
            reasonably),  to do so might be  prejudicial to it. The incurring of
            minor  costs and  expenses of an  administrative  nature will not be
            regarded as prejudicial to such Finance Party.

20.   Costs And Expenses

20.1  Transaction expenses
      Each of the Borrowers shall promptly on demand pay the Agent, the Mandated
      Lead  Arranger  and  the  Security  Agent  the  amount  of all  reasonable
      out-of-pocket costs and expenses (including legal fees of outside counsel)
      reasonably  incurred by any of them in  connection  with the  negotiation,
      preparation, printing, execution and syndication and perfection of:

      (a)   this  Agreement,  the  Security  Documents  and any other  documents
            referred to in this Agreement and the Transaction Security; and

      (b)   any  other  Finance  Documents  executed  after  the  date  of  this
            Agreement.

                                      -35-

<PAGE>

20.2  Amendment costs
      If (a) an  Obligor  requests  an  amendment,  waiver or  consent or (b) an
      amendment is required  pursuant to Clause 33.9 (Change of currency),  each
      of the Borrowers  shall,  within three Business Days of demand,  reimburse
      the  Agent  for the  amount  of all  reasonable  out-of-pocket  costs  and
      expenses  (including  reasonable legal fees of outside counsel) reasonably
      incurred  by the  Agent  in  responding  to,  evaluating,  negotiating  or
      complying with that request or requirement.

20.3  Enforcement costs
      Each of the Borrowers shall,  within three Business Days of demand, pay to
      each  Secured  Party and the  Mandated  Lead  Arranger  the  amount of all
      reasonable   out-of-pocket  costs  and  expenses  (including  legal  fees)
      reasonably incurred by that Secured Party or the Mandated Lead Arranger in
      connection  with the  enforcement  of, or the  preservation of any rights,
      powers  and  remedies  under  any  Finance  Document  and the  Transaction
      Security and any  proceedings  instituted by or against the Security Agent
      as a  consequence  of  taking  or  holding  the  Transaction  Security  or
      enforcing those rights, powers and remedies.

20.4  Limitation
      Notwithstanding  anything to the  contrary in any  Finance  Document,  the
      Borrower  shall not be obliged to pay any losses,  costs or expenses under
      any Finance Document arising from or relating to disputes solely among the
      Agent and the  Lenders,  or losses,  costs or expenses of the Agent or any
      Lender resulting from its gross negligence or wilful misconduct.

                                      -36-

<PAGE>

                                    SECTION 7
            GUARANTEE ON FIRST DEMAND (GARANTIE AUF ERSTES ANFORDERN)

21.   Guarantee And Indemnity

21.1  Guarantee and indemnity
      Each Guarantor irrevocably and unconditionally jointly and severally:

      (a)   guarantees  (garantiert) to each Finance Party punctual  performance
            by each  Borrower  of all  that  Borrower's  obligations  under  the
            Finance Documents;

      (b)   undertakes with each Finance Party that whenever a Borrower does not
            pay any  amount  when due under or in  connection  with any  Finance
            Document, that Guarantor shall immediately on demand pay that amount
            as if it was the principal obligor (Garantie auf erstes  Anfordern);
            and

      (c)   indemnifies  each Finance Party  immediately  on demand  against any
            cost,  loss or  liability  suffered  by that  Finance  Party  if any
            obligation guaranteed by it is or becomes unenforceable,  invalid or
            illegal. The amount of the cost, loss or liability shall be equal to
            the amount  which  that  Finance  Party  would  otherwise  have been
            entitled to recover.

21.2  Continuing guarantee
      This  guarantee is a continuing  guarantee and will extend to the ultimate
      balance  of sums  payable  by any  Obligor  under the  Finance  Documents,
      regardless of any intermediate payment or discharge in whole or in part.

21.3  Reinstatement
      If any  payment by an Obligor or any  discharge  given by a Finance  Party
      (whether in respect of the  obligations of any Obligor or any security for
      those  obligations  or  otherwise)  is  avoided  or reduced as a result of
      insolvency or any similar event:

      (a)   the  liability  of each  Obligor  shall  continue as if the payment,
            discharge, avoidance or reduction had not occurred; and

      (b)   each Finance  Party shall be entitled to recover the value or amount
            of that  security or payment from each  Obligor,  as if the payment,
            discharge, avoidance or reduction had not occurred.

21.4  Waiver of defences
      The  obligations  of each  Guarantor  under  this  Clause  21 will  not be
      affected by an act, omission,  matter or thing which, but for this Clause,
      would  reduce,  release or  prejudice  any of its  obligations  under this
      Clause  21  (without  limitation  and  whether  or not  known to it or any
      Finance Party) including:

      (a)   any time,  waiver or consent  granted to, or  composition  with, any
            Obligor or other person;

      (b)   the release of any other Obligor or any other person under the terms
            of any composition or arrangement with any creditor of any member of
            the Group;

      (c)   the taking, variation,  compromise, exchange, renewal or release of,
            or refusal or neglect to  perfect,  take up or  enforce,  any rights
            against,  or security over assets of, any Obligor or other person or
            any  non-presentation  or  non-observance  of any formality or other
            requirement  in respect of any  instrument or any failure to realise
            the full value of any security;

                                      -37-

<PAGE>

      (d)   any incapacity or lack of power,  authority or legal  personality of
            or  dissolution  or change in the members or status of an Obligor or
            any other person;

      (e)   any amendment  (however  fundamental)  or  replacement  of a Finance
            Document or any other document or security;

      (f)   any unenforceability,  illegality or invalidity of any obligation of
            any person  under any  Finance  Document  or any other  document  or
            security; or

      (g)   any insolvency or similar proceedings.

21.5  Immediate recourse
      Each Guarantor waives any right it may have of first requiring any Finance
      Party (or any  trustee  or agent on its  behalf)  to  proceed  against  or
      enforce  any other  rights or security  or claim  payment  from any person
      before  claiming  from that  Guarantor  under this  Clause 21. This waiver
      applies  irrespective of any law or any provision of a Finance Document to
      the contrary.

21.6  Appropriations
      Until all amounts which may be or become  payable by the Obligors under or
      in connection  with the Finance  Documents have been  irrevocably  paid in
      full, each Finance Party (or any trustee or agent on its behalf) may after
      the occurrence of a Default:

      (a)   refrain from  applying or enforcing  any other  moneys,  security or
            rights  held or received  by that  Finance  Party (or any trustee or
            agent on its  behalf)  in  respect  of those  amounts,  or apply and
            enforce  the same in such  manner and order as it sees fit  (whether
            against  those  amounts  or  otherwise)  and no  Guarantor  shall be
            entitled to the benefit of the same; and

      (b)   hold in an  interest-bearing  suspense  account any moneys  received
            from any Guarantor or on account of any Guarantor's  liability under
            this Clause 21.

21.7  Deferral of Guarantors' rights
      Until all amounts which may be or become  payable by the Obligors under or
      in connection  with the Finance  Documents have been  irrevocably  paid in
      full and unless the Agent  otherwise  directs,  no Guarantor will exercise
      any  rights  which  it may  have by  reason  of  performance  by it of its
      obligations under the Finance Documents:

      (a)   to be indemnified by an Obligor;

      (b)   to claim any contribution  from any other guarantor of any Obligor's
            obligations under the Finance Documents; and/or

      (c)   to take the  benefit  (in  whole or in part  and  whether  by way of
            subrogation or otherwise) of any rights of the Finance Parties under
            the Finance  Documents or of any other  guarantee or security  taken
            pursuant to, or in  connection  with,  the Finance  Documents by any
            Finance Party.

21.8  Additional security
      This  guarantee is in addition to and is not in any way  prejudiced by any
      other guarantee or security now or subsequently held by any Finance Party.

                                      -38-

<PAGE>

21.9  Guarantee Limitation Norway
      Notwithstanding  anything to the contrary contained in this Clause 21, the
      obligation of the Norwegian  Guarantor  under this Clause 21 in respect of
      the  obligations of any Borrower other than a Norwegian  Borrower shall be
      deemed to be granted and incurred by the Norwegian  Guarantor  only to the
      extent which is permitted  under the Norwegian  Companies Act 1997 Section
      8-7.

                                      -39-

<PAGE>

                                    SECTION 8
               REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

22.   Representations

      Each Obligor and, in the case of Clauses 22.1 through 22.6,  22.8,  22.12,
      22.17  through  22.19,   Kronos  Denmark  makes  the  representations  and
      warranties set out in this Clause 22 as to itself and its Subsidiaries (in
      each case to the extent  applicable)  to each Finance Party on the date of
      this Agreement.

22.1  Status

      (a)   It is a corporation,  duly  incorporated  and validly existing under
            the law of its jurisdiction of incorporation.

      (b)   It and each of its  Subsidiaries has the power to own its assets and
            carry on its business as it is being conducted.

22.2  Binding obligations
      The obligations  expressed to be assumed by it in each Finance Document to
      which it is a party are, subject to any general principles of law limiting
      its obligations  which are  specifically  referred to in any legal opinion
      delivered pursuant to Clause 4 (Conditions of Utilisation),  legal, valid,
      binding and enforceable obligations.

22.3  Non-conflict with other obligations
      The entry into and performance by it of, and the transactions contemplated
      by, the Finance  Documents  to which it is a party and the granting of the
      Security  under the  Security  Documents to which it is a party do not and
      will not conflict with:

      (a)   any law or regulation applicable to it;

      (b)   its and each of its Subsidiaries' constitutional documents; or

      (c)   any  agreement  or  instrument   binding  upon  it  or  any  of  its
            Subsidiaries  or any of its or any of its  Subsidiaries'  assets the
            violation of which would  reasonably  be expected to have a Material
            Adverse Effect.

22.4  Power and authority
      It has the power to enter  into,  perform and  deliver,  and has taken all
      necessary action to authorise its entry into, performance and delivery of,
      the  Finance  Documents  to  which  it is a  party  and  the  transactions
      contemplated by those Finance Documents.

22.5  Validity and admissibility in evidence
      All Authorisations required or desirable:

      (a)   to enable it lawfully to enter into,  exercise its rights and comply
            with  its  obligations  in the  Finance  Documents  to which it is a
            party; and

      (b)   to make the Finance  Documents to which it is a party  admissible in
            evidence in each Relevant Jurisdiction,

      have been obtained or effected and are in full force and effect.

                                      -40-

<PAGE>

22.6  Governing law and enforcement

      (a)   Subject to any general principles of law affecting the choice of the
            governing  law  which  are  specifically  referred  to in any  legal
            opinion delivered  pursuant to Clause 4 (Conditions of Utilisation),
            the choice of the  governing  law  specified  in each of the Finance
            Documents to which it is a party will be recognised  and enforced in
            each Relevant Jurisdiction.

      (b)   Subject to any general  principles of law affecting the  recognition
            and enforcement of judgments which are  specifically  referred to in
            any legal  opinion  delivered  pursuant to Clause 4  (Conditions  of
            Utilisation),  any  judgment  obtained  in Germany in  relation to a
            Finance  Document  to which  it is a party  will be  recognised  and
            enforced in each Relevant Jurisdiction.

22.7  Deduction of Tax
      Subject to the Legal  Reservations,  it is not  required  under the law of
      each Relevant  Jurisdiction to make any deduction for or on account of Tax
      from any payment it may make under any Finance Document.

22.8  No filing or stamp taxes
      Under the law of each Relevant  Jurisdiction  it is not necessary that the
      Finance  Documents  to which it is a party be filed,  recorded or enrolled
      with any court or other authority in that  jurisdiction or that any stamp,
      registration  or  similar  tax be paid on or in  relation  to the  Finance
      Documents to which it is a party or the transactions  contemplated by such
      Finance  Documents  except for Belgian stamp duties of EUR 0.15 payable on
      any loan or credit agreement and any pledge agreement executed in Belgium,
      subject to the  conditions  of the  Belgian  Stamp  Duties  Code  (Wetboek
      Zegelrechten)  of 26 June 1947 and Belgian  registration,  stamp and other
      duties payable in respect of any Belgian law floating charge.

22.9  No default

      (a)   No Default is continuing  or would  reasonably be expected to result
            from the making of any Utilisation.

      (b)   No other event or  circumstance is outstanding  which  constitutes a
            default under any other agreement or instrument  which is binding on
            it or any of its Subsidiaries or to which its (or its Subsidiaries')
            assets are  subject  which  would  reasonably  be expected to have a
            Material Adverse Effect.

22.10 No misleading information

      (a)   Any factual information heretofore or contemporaneously furnished by
            or on behalf of the  Parent or any member of the Group in writing to
            any Finance Party (including,  without  limitation,  any information
            contained in the Information Memorandum) (other than the projections
            as to which  paragraph  (b) below  applies)  for  purposes  of or in
            connection   with  the   Finance   Documents   or  any   transaction
            contemplated  therein is true and accurate in all material  respects
            on the date as of which such  information  is dated or certified and
            not  incomplete by omitting to state any fact necessary to make such
            information not misleading in any material respect at such time.

      (b)   The financial  projections  contained in the Information  Memorandum
            have been prepared on the basis of recent historical information and
            on the basis of reasonable assumptions.

                                      -41-

<PAGE>

22.11 Financial statements

      (a)   Its Original  Financial  Statements were prepared in accordance with
            Applicable GAAP consistently applied.

      (b)   Its Original  Financial  Statements  fairly  represent its financial
            condition and operations  (consolidated in the case of the Norwegian
            Guarantor) during the relevant financial year.

      (c)   There has been no material adverse change in the business, assets or
            financial condition of the German Borrower,  the Belgian Borrower or
            the Group taken as a whole since the date of the Original  Financial
            Statements.

22.12 Pari passu ranking
      Save as provided in Clause 22.17 (Ranking),  its payment obligations under
      the Finance Documents to which it is a party rank at least pari passu with
      the claims of all its other unsecured and unsubordinated creditors, except
      for  obligations  mandatorily  preferred  by  law  applying  to  companies
      generally.

22.13 No proceedings pending or threatened
      No litigation,  arbitration or administrative proceedings of or before any
      court,  arbitral  body or agency  which,  if adversely  determined,  would
      reasonably be expected to have a Material Adverse Effect have been started
      or (to the best of its knowledge and belief) threatened in writing against
      it or any of its Subsidiaries.

22.14 Environmental compliance
      Each  member of the Group  has  performed  and  observed  in all  material
      respects  all  Environmental  Law,  Environmental  Permits  and all  other
      material  covenants,  conditions,  restrictions or agreements  directly or
      indirectly  concerned  with any  contamination,  pollution or waste or the
      release or  discharge of any toxic or  hazardous  substance in  connection
      with  any real  property  which is or was at any  time  owned,  leased  or
      occupied  by any  member of the Group or on which any  member of the Group
      has  conducted  any activity  where  failure to do so would  reasonably be
      expected to have a Material Adverse Effect.

22.15 Environmental Claims
      No Environmental Claim has been commenced or (to the best of its knowledge
      and belief) is threatened in writing against any member of the Group where
      that claim would be reasonably  likely, if determined  against that member
      of the Group, to have a Material Adverse Effect.

22.16 No Security
      No Security  exists over all or any of the present or future assets of any
      Obligor  other than any Security  permitted  under  Clause 25.3  (Negative
      pledge).

22.17 Ranking
      Subject to the Legal Reservations, each Security Document to which it is a
      party has or will have first ranking priority and it is not subject to any
      prior ranking or pari passu ranking Security.

22.18 Transaction Security
      Subject to the Legal Reservations, each Security Document to which it is a
      party  validly  creates the  Security  which is expressed to be created by
      that  Security  Document  and  evidences  the  Security it is expressed to
      evidence.

                                      -42-

<PAGE>

22.19 Legal and beneficial owner
      It is the absolute legal and beneficial owner of the assets subject to the
      Transaction  Security  created or expressed to be created  pursuant to the
      Security Documents to which it is a party.

22.20 No winding-up
      None of the events  described in Clause 26.6  (Insolvency) and Clause 26.7
      (Insolvency proceedings) have occurred in relation to any Obligor.

22.21 Structure Chart
      The Structure  Chart dated June 2002 provided by the Obligors prior to the
      date of this  Agreement  is true,  complete  and  accurate in all material
      respects as at the date hereof and nothing has occurred or been omitted as
      at the date hereof that renders the information contained in the Structure
      Chart untrue or misleading in any material respect.

22.22 Repetition
      The  Repeating  Representations  are to be made by each Obligor and Kronos
      Denmark by reference to the facts and  circumstances  then existing on the
      date of each Utilisation Request and the first day of each Interest Period
      by delivery of a Certificate to that effect.

23.   Information Undertakings

      The  undertakings  in this Clause 23 remain in force from the date of this
      Agreement  for so long as any  amount is  outstanding  under  the  Finance
      Documents or any Commitment is in force.

23.1  Financial statements of the Obligors

      (a)   Each Obligor shall supply to the Agent in sufficient  copies for all
            the Lenders as soon as the same become  available,  but in any event
            within 150 days after the end of each of its financial years (i) its
            audited  consolidated  financial  statements for that financial year
            (if any) and (ii) its audited  unconsolidated  financial  statements
            for that financial year.

      (b)   Any financial  statements to be delivered  pursuant to paragraph (a)
            above shall (i) be prepared using Applicable GAAP, (ii) be certified
            by the Chief Executive  Officer and/or the Chief  Financial  Officer
            (or equivalent position) of the relevant Obligor,  together with one
            of its authorised signatories,  as fairly representing its financial
            condition as at the date as at which those financial statements were
            drawn up and (iii) be certified by the relevant  Obligor's  external
            auditors.

23.2  Financial statements of the Parent

      (a)   The Borrowers shall supply to the Agent in sufficient copies for all
            the Lenders:

            (i)   as soon as the same become available,  but in any event within
                  100 days  after the end of each  financial  year of the Parent
                  the audited  consolidated  financial  statements of the Parent
                  for that financial year; and

            (ii)  as soon as the same become available,  but in any event within
                  55 days after the end of each quarter of each  financial  year
                  of the Parent the unaudited  consolidated financial statements
                  of the Parent for that period.

      (b)   Any financial  statements to be delivered  pursuant to paragraph (a)
            above shall be prepared using Applicable GAAP.

                                      -43-

<PAGE>

23.3  Combining financial information

      (a)   The Borrowers shall supply to the Agent in sufficient copies for all
            the Lenders:

            (i)   as soon as they become available,  but in any event within 120
                  days  after the end of each  financial  year of the  Parent an
                  unaudited Combining Schedule for that financial year;

            (ii)  as soon as they become  available,  but in any event within 60
                  days after the end of each quarter of each  financial  year of
                  the Parent, an unaudited  Combining Schedule for the period as
                  of the  beginning  of the  financial  year and  ending on such
                  quarter.

      (b)   Each of the  Obligors  shall  procure  that  each  of the  Combining
            Schedules  delivered pursuant to paragraph (a) above are prepared by
            the Parent and the Obligors using US GAAP.

      (c)   Any  Combining  Schedule to be delivered  pursuant to paragraph  (a)
            above shall (i) be prepared using US GAAP,  (ii) be certified by the
            Chief  Executive   Officer  and/or  Chief   Financial   Officer  (or
            equivalent  position)  of  the  Parent,  together  with  one  of its
            authorised   signatories,   as  fairly  representing  the  financial
            condition  of the Group as at the date as at which  those  Combining
            Schedules  were  drawn up and  (iii)  in the  case of the  Combining
            Schedule to be delivered  pursuant to Clause  23.3(a)(i)  above,  be
            accompanied by a report from the Parent's  external  auditors in the
            form of Schedule 13 (Form of Auditor's Report).

23.4  Compliance Certificate

      (a)   The  Borrowers  shall  supply  to the  Agent,  with  each  Combining
            Schedule delivered pursuant to paragraphs (a) and (b) of Clause 23.3
            (Combining financial information),  a Compliance Certificate setting
            out (in reasonable detail) computations as to compliance with Clause
            24 (Financial  covenants) as at the date as at which those Combining
            Schedules were prepared.

      (b)   Each Compliance  Certificate  shall be signed by the Chief Executive
            and/or Chief Financial  Officer (or equivalent  position),  together
            with one authorised  signatory of the German  Borrower,  who in each
            case will sign on behalf of all Borrowers which hereby authorise the
            aforementioned  persons to do so, and,  (in the case of a Compliance
            Certificate delivered pursuant to Clause 23.3 (a) (i)),  accompanied
            by a letter from the Parent's  external auditors in the form set out
            in part II of Schedule 6 (Form of Compliance Certificate).

23.5  Information: miscellaneous
      The Obligors shall (through the German  Borrower)  supply to the Agent (in
      sufficient copies for all the Lenders, if the Agent so requests):

      (a)   all documents dispatched by any of the Obligors or the Parent to its
            creditors generally at the same time as they are dispatched;

      (b)   promptly upon becoming aware of them, the details of any litigation,
            arbitration  or   administrative   proceedings  which  are  current,
            threatened or pending against any member of the Group, and which, if
            adversely  determined,  would  reasonably  be  expected  to  have  a
            Material Adverse Effect; and

                                      -44-

<PAGE>

      (c)   promptly,   such  further   information   regarding   the  financial
            condition, business and operations of any member of the Group as any
            Finance Party (through the Agent) may reasonably request.

23.6  Notification of default

      (a)   Each  Obligor  shall notify the Agent of any Default (and the steps,
            if any,  being taken to remedy it) promptly upon  becoming  aware of
            its occurrence (unless that Obligor is aware that a notification has
            already been provided by another Obligor).

      (b)   Promptly upon a request by the Agent,  the Borrower  shall supply to
            the Agent a  certificate  signed by two of its  directors  or senior
            officers on its behalf  certifying that no Default is continuing (or
            if a Default is continuing, specifying the Default and the steps, if
            any, being taken to remedy it).

24.   Financial Covenants

24.1  Financial definitions
      In this Clause 24:

      "EBIT" means,  for any Relevant  Period the income of the Group before Net
      Interest for such period and before any provision on account of taxation.

      "EBITDA"   means,   for  any  Relevant   Period  EBIT  before  any  amount
      attributable to the amortisation of intangible  assets and depreciation of
      tangible assets.

      "Financial  Quarter"  means  the  period  commencing  on the day after one
      Quarter Date and ending on the next Quarter Date.

      "Net  Interest"  means in respect of any Relevant  Period,  the  aggregate
      amount of the interest (including the interest element of leasing and hire
      purchase payments and capitalised interest),  commission,  fees, discounts
      and  other  finance  payments  payable  by any  member  of the  Group on a
      Combining Schedule  (including any commission,  fees,  discounts and other
      finance  payments  payable by any member of the Group  under any  interest
      rate hedging arrangement but deducting any commission, fees, discounts and
      other  finance  payments  receivable  by any member of the Group under any
      interest  rate  hedging  instrument)  but  deducting  any  other  interest
      receivable by any member of the Group on any deposit or bank account.

      "Net  Secured  Debt"  means  at  any  time  the  aggregate  amount  of all
      obligations of the Group for or in respect of Financial Indebtedness which
      is secured by any Security  (and so that no amount shall be included  more
      than once).

      "Quarter  Date"  means  each of 31 March,  30 June,  30  September  and 31
      December.

      "Relevant  Period"  means each period of twelve  months ending on the last
      day of the Group's  financial year and each period of twelve months ending
      on the last day of each of the first,  second and third Financial  Quarter
      of the Group's financial year.

      "Rolling  Basis" means the calculation of a ratio or an amount made at the
      end of a Financial  Quarter in respect of that Financial  Quarter and each
      of the preceding three Financial Quarters.

24.2  Financial condition
      Each Borrower shall ensure that:

                                      -45-

<PAGE>

      (a)   The  ratio of (i) Net  Secured  Debt of the  Group at the end of the
            applicable Relevant Period to (ii) the amount equal to EBITDA of the
            Group less any Restricted  Payments made by the Group, in both cases
            during  the  applicable  Relevant  Period,  calculated  on a Rolling
            Basis,  shall not in  respect  of any  Relevant  Period be more than
            1.5:1.

      (b)   The ratio of (i) the  amount  equal to EBITDA of the Group  less any
            Restricted  Payments  made by the Group,  in both  cases  during the
            applicable  Relevant Period to (ii) Net Interest of the Group during
            the Applicable  Relevant  Period,  calculated on a Rolling Basis, in
            respect of any Relevant Period shall be greater than 8:1.

24.3  Financial testing
      The financial covenants set out in Clause 24.2 (Financial condition) shall
      be tested quarterly in accordance with US GAAP by reference to each of the
      Combining Schedules as evidenced by each Compliance  Certificate delivered
      pursuant to Clause 23.4 (Compliance certificate).

25.   General Undertakings

      The  undertakings  in this Clause 25 remain in force from the date of this
      Agreement  for so long as any  amount is  outstanding  under  the  Finance
      Documents or any Commitment is in force.

25.1  Authorisations
      Each Obligor shall promptly:

      (a)   obtain, comply with and do all that is necessary to maintain in full
            force and effect; and

      (b)   supply certified copies to the Agent of,

      any  Authorisation  required  under any law or  regulation of the Relevant
      Jurisdictions  to enable it to perform its  obligations  under the Finance
      Documents  to which it is a party and to ensure  the  legality,  validity,
      enforceability or admissibility in evidence in each Relevant  Jurisdiction
      of incorporation of any Finance Document.

25.2  Compliance with laws
      Each Obligor shall comply in all material  respects with all laws to which
      it may be subject,  if failure so to comply  would  materially  impair its
      ability to perform its obligations under the Finance Documents.

25.3  Negative pledge

      (a)   No Obligor  shall (and each  Obligor  shall  ensure that none of its
            Subsidiaries will) create or permit to subsist any Security over any
            of its assets.

      (b)   No Obligor  shall (and each  Obligors  shall  ensure  that no of its
            Subsidiaries will):

            (i)   sell,  transfer or  otherwise  dispose of any of its assets on
                  terms whereby they are or may be leased to or  re-acquired  by
                  an Obligor or any other member of the Group;

            (ii)  sell,  transfer or otherwise dispose of any of its receivables
                  on recourse terms other than to the German  Borrower and where
                  such   transaction   is  not  otherwise   prohibited  by  this
                  Agreement;

                                      -46-

<PAGE>

            (iii) enter into any arrangement under which money or the benefit of
                  a bank  or  other  account  may be  applied,  set-off  or made
                  subject to a combination of accounts; or

            (iv)  enter into any other preferential arrangement having a similar
                  effect,

            in  circumstances  where the  arrangement  or transaction is entered
            into primarily as a method of raising  Financial  Indebtedness or of
            financing the acquisition of an asset.

      (c)   Paragraphs (a) and (b) above do not apply to:

            (i)   any  Security   listed  in  Schedule  7  (Existing   Security)
                  (including  any Security  which has been  Refinanced  provided
                  that the assets  subject to such Security have not  materially
                  changed in any way) except to the extent the principal  amount
                  secured by that  Security  exceeds  the amount  stated in that
                  Schedule;

            (ii)  any netting or set-off  arrangement entered into by any member
                  of  the  Group  in  the   ordinary   course  of  its   banking
                  arrangements  for the  purpose  of  netting  debit and  credit
                  balances;

            (iii) any Security  entered into in the ordinary  course of business
                  under customary general business conditions;

            (iv)  any lien arising by operation of law or regulatory requirement
                  and in the ordinary  course of business and not as a result of
                  a default howsoever described;

            (v)   any  Security  arising  by  operation  of law in favour of any
                  government, state or local authority in respect of Taxes which
                  are either  (a) not yet due and unpaid or (b) being  contested
                  in  good  faith  by  appropriate  proceedings  and  for  which
                  adequate reserves have been made;

            (vi)  any Security over or affecting any asset  acquired by a member
                  of the Group after the date of this Agreement if:

                  (1) the  Security  was not  created  in  contemplation  of the
                  acquisition of that asset by a member of the Group; and

                  (2) the  principal  amount  secured has not been  increased in
                  contemplation  of, or since the acquisition of that asset by a
                  member of the Group;

            (vii) any Security  over or affecting any asset of any company which
                  becomes  a  member  of  the  Group  after  the  date  of  this
                  Agreement,  where the Security is created prior to the date on
                  which that company becomes a member of the Group, if:

                  (1) the  Security  was not  created  in  contemplation  of the
                  acquisition of that company; and

                  (2)  the  principal   amount  secured  has  not  increased  in
                  contemplation of or since the acquisition of that company;

            (viii)the Transaction Security;

                                      -47-

<PAGE>

            (ix)  any  Security  which  has  been  approved  in  writing  by the
                  Majority Lenders;

            (x)   any Security  incurred or deposits made in the ordinary course
                  of  business  in  connection   with   workers'   compensation,
                  unemployment  insurance  and other  types of social  security,
                  including  any Security  securing  letters of credit issued in
                  the  ordinary  course  of  business  in  accordance  with past
                  practice;

            (xi)  any Security over assets of the Norwegian  Borrower 2 acquired
                  with Financial  Indebtedness  permitted under paragraph (k) of
                  the definition of Permitted  Financial  Indebtedness  provided
                  that such  Security is removed upon the full  discharge of the
                  relevant Permitted Financial  Indebtedness incurred to finance
                  the payment of the purchase price for such asset; or

            (xii) any Security  securing  indebtedness  the principal  amount of
                  which (when  aggregated with the principal amount of any other
                  indebtedness  which has the benefit of  Security  given by any
                  member of the Group other than any permitted under  paragraphs
                  (i)  to  (ix)  above)  does  not  exceed  EUR   5,000,000  its
                  equivalent in another currency or currencies).

25.4  Disposals

      (a)   No Obligor  shall (and each  Obligor  shall  ensure that none of its
            Subsidiaries  will),  enter into a single transaction or a series of
            transactions  (whether  related  or not) and  whether  voluntary  or
            involuntary  to sell,  lease,  transfer or otherwise  dispose of any
            asset.

      (b)   Paragraph (a) above does not apply to any sale,  lease,  transfer or
            other disposal:

            (i)   which is made on arm's  length terms and for fair market value
                  in the ordinary course of trading or business of the disposing
                  entity;

            (ii)  of assets which are obsolete;

            (iii) which is made from any Obligor to another Obligor;

            (iv)  which is made from any  Obligor to a  wholly-owned  subsidiary
                  being a member of the Group which is not an Obligor,  provided
                  that the fair  market  value of the assets to be  disposed  of
                  does not,  when  aggregated  with the fair market value of all
                  other assets  disposed of pursuant to this  paragraph  (b)(iv)
                  exceed EUR 5,000,000 (or its  equivalent in any other currency
                  or currencies);

            (v)   of assets in exchange for other assets  comparable or superior
                  as to type, value and quality;

            (vi)  which is a Permitted Affiliate Transaction;

            (vii) made  in  connection  with  the  granting  of a  non-exclusive
                  licence to use any  Intellectual  Property owned by members of
                  the Group  provided that any such licences do not prohibit any
                  of the  member  of  the  Group  from  using  any  Intellectual
                  Property which is material to its business;

            (viii)      made  with the prior  written  consent  of the  Majority
                  Lenders;

                                      -48-

<PAGE>

            (ix)  of non-core assets which is made on arm's length terms and for
                  fair market value provided that the  consideration  receivable
                  (when  aggregated  with the  consideration  receivable for any
                  other sale, lease, transfer or other disposal,  other than any
                  permitted  under  paragraphs  (i) to  (viii)  above)  does not
                  exceed EUR 10,000,000  (or its equivalent in another  currency
                  or currencies) in any financial year;

            (x)   of cash  other  than by way of a payment  to any member of the
                  Group  which is not an  Obligor  as equity  payment,  it being
                  understood,  however,  that  payments  to  Unterstutzungskasse
                  Kronos Titan GmbH up to an aggregate  amount of EUR  1,000,000
                  (or its equivalent in another currency or currencies) shall be
                  permitted,  and provided  that such  disposal is not otherwise
                  prohibited by this Agreement; and

            (xi)  of Cash Equivalent Investments on arms' length terms.

25.5  Disposals of Plant
      No  Obligor  shall  sell,  lease,  transfer  or  otherwise  dispose of its
      respective manufacturing plant at Langerbrugge,  Leverkusen, Nordenham and
      Frederikstad to any other Obligor unless it has received the prior written
      consent of the Majority Lenders.

25.6  Indebtedness
      Each  Obligor  shall  ensure that  neither it nor any of its  Subsidiaries
      shall incur or permit to subsist  any  Financial  Indebtedness  other than
      Permitted Financial Indebtedness.

25.7  Merger
      No  Obligor  shall  (and  each  Obligor  shall  ensure  that  none  of its
      Subsidiaries  will)  enter  into any  amalgamation,  demerger,  merger  or
      corporate  reconstruction other than (a) a solvent  reorganisation between
      members  of  the  Group   (other   than  any   Obligor),   (b)  a  solvent
      reorganisation  between members of the Group and a Borrower  provided that
      the  Borrower  is the  surviving  entity  and (c) the  solvent  conversion
      (formwechselnde  Umwandlung) of the German  Borrower from a GmbH & Co. OHG
      into  a GmbH  (Gesellschaft  mit  beschrankter  Haftung)  pursuant  to the
      Transformation Act (Umwandlungsgesetz).

25.8  Change of business
      The  Obligors  shall  procure  that no  substantial  change is made to the
      general  nature of the business of any of the  Borrowers or the Group from
      that carried on at the date of this  Agreement  and that there shall be no
      cessation of any substantial part of such business.

25.9  Insurance
      Each  Obligor  shall  (and  each  Obligor  shall  ensure  that each of its
      Subsidiaries will) maintain  insurances on and in relation to its business
      and assets with  reputable  underwriters  or insurance  companies  against
      those  risks and to the extent as is usual for  companies  carrying on the
      same or substantially similar business.

25.10 Environmental compliance
      Each Obligor (and each Obligor shall ensure that each of its  Subsidiaries
      will)  comply in all material  respects  with all  Environmental  Laws and
      obtain and  maintain  any  Environmental  Permits and take all  reasonable
      steps  in   anticipation  of  known  or  expected  future  changes  to  or
      obligations  under the same  where  failure to do so would  reasonably  be
      expected to have a Material Adverse Effect.

                                      -49-

<PAGE>

25.11 Environmental Claims
      The  Obligors  shall  inform the Agent in  writing  as soon as  reasonably
      practicable upon becoming aware of the same:

      (a)   if any  Environmental  Claim has been  commenced or is threatened in
            writing against any member of the Group; or

      (b)   of any facts or circumstances which will or are reasonably likely to
            result in any  Environmental  Claim being  commenced  or  threatened
            against any member of the Group,

      where the claim would be reasonably  likely,  if  determined  against that
      member of the Group, to have a Material Adverse Effect.

25.12 Acquisition
      No  Obligor  shall  (and  each  Obligor  shall  ensure  that  none  of its
      Subsidiaries will):

      (a)   purchase,  subscribe  for or otherwise  acquire any shares (or other
            securities (but excluding Cash Equivalent Investments) or interests)
            in, or  incorporate,  any other  company,  including any  additional
            shares or other  interests  in any member of the Group who is not an
            Obligor but excluding Unterstutzungskasse Kronos Titan GmbH or agree
            to do any of the foregoing; or

      (b)   purchase or otherwise acquire all or substantially all of the assets
            of a company or a business unit or agree to do so; or

      (c)   form, or enter into, any partnership,  consortium,  joint venture or
            other like arrangement or agree to do so,

      in each case other than: (i) any such  investment made between two or more
      Obligors,  or (ii) if the aggregate amount of any such investments made by
      members of the Group would not exceed EUR 5,000,000 (or its  equivalent in
      another  currency  or  currencies,   as  measured  at  the  time  of  such
      investment).

      This  Clause  25.12  does not  apply to any  acquisitions  resulting  from
      settlements  or  compromises  of accounts  receivable  or trade  payables,
      acquisitions  in  securities  of trade  creditors  or  customers  received
      pursuant to any plan of  reorganisation  or similar  arrangement  upon the
      bankruptcy or  insolvency of such trade  creditors or customers or in good
      faith  settlements of delinquent  obligations  of such trade  creditors or
      customers,  in each case in the  ordinary  course of business and provided
      that  the  aggregate  face  value of  accounts  receivables  and/or  trade
      payables and/or  delinquent  obligations shall in aggregate not exceed EUR
      5,000,000 (or its equivalent in another currency or currencies).

25.13 Pari passu
      Each  Obligor  shall  ensure  that at all times the claims of the  Finance
      Parties  against it under this Agreement rank at least pari passu with the
      claims of all of its other  unsecured and  unsubordinated  creditors  save
      those whose claims are  preferred  solely by any  bankruptcy,  insolvency,
      liquidation or other similar laws of general application.

25.14 Loans and Guarantees
      No  Obligor  shall  (and  each  Obligor  shall  ensure  that  none  of its
      Subsidiaries will) make any loans or grant any credit (in each case of the
      type  described  in  paragraphs  (a),  (c)  and (f) of the  definition  of
      Financial  Indebtedness)  or give any guarantee or indemnity to or for the

                                      -50-

<PAGE>

      benefit of any person  (including,  for the avoidance of doubt, any member
      of the NL Group) or otherwise  voluntarily  assume any liability,  whether
      actual or  contingent,  in respect of any  obligation  of any person other
      than  Permitted  Loans  and  Guarantees  and,  as long as no  Default  has
      occurred  which is  continuing  or would  occur as a result of making such
      loan,  granting  such  credit or giving such  guarantee  or  indemnity  or
      assuming such liability, Restricted Payments and Permitted Obligor Loans.

25.15 Transactions with members of the NL Group
      No  Obligor  shall  (and  each  Obligor  shall  ensure  that  none  of its
      Subsidiaries  will)  enter  into any  transaction  with a member of the NL
      Group unless such  transaction is (i) a Permitted  Affiliate  Transaction,
      (ii)  concluded on arm's length terms and for fair market value,  or (iii)
      with regard to the payment of cash and as long as no Default has  occurred
      which is  continuing  or would  occur as a result of such  transaction,  a
      Restricted Payment or a Permitted Obligor Loan.

25.16 Profit and loss transfer agreements
      No  Obligor  shall  (and  each  Obligor  shall  ensure  that  none  of its
      Subsidiaries  will)  enter  into a  profit  and  loss  transfer  agreement
      (Ergebnis   abfuhrungsvertrag),   any   partnership   agreements   (stille
      Beteiligungen),  any other intercompany agreement (Unternehmensvertrag) or
      any other similar  arrangement  resulting in any person not being a member
      of the Group  being  entitled to share in the profits of any member of the
      Group or being  entitled to exercise  control over any member of the Group
      provided  that in the event that the  German  Borrower  changes  its legal
      status into a limited  liability  company  (Gesellschaft  mit beschrankter
      Haftung) it shall be  permitted  to enter into a profit and loss  transfer
      agreement with the Parent for the purpose of sharing Taxes.

25.17 Intellectual Property
      Each  Obligor  shall  (and the  Obligors  shall  ensure  that  each of its
      Subsidiaries will):

      (a)   observe and comply with all material  obligations  and laws to which
            it in its capacity as registered proprietor, beneficial owner, user,
            licensor  or  licensee  of the  Intellectual  Property  required  to
            conduct its business or any part of it is subject  where  failure to
            do so  would  reasonably  be  expected  to have a  Material  Adverse
            Effect;

      (b)   do all acts as are necessary to maintain, protect and safeguard such
            Intellectual  Property  where  failure to do so would  reasonably be
            expected to have a Material  Adverse Effect and not  discontinue the
            use of any of such Intellectual  Property nor allow it to be used in
            such a way that it is put at risk by  becoming  generic  or by being
            identified as disreputable if in each case to do so would reasonably
            be expected to have a Material Adverse Effect; and

      (c)   (save where a licence is granted to terminate or prevent litigation)
            not after the date of this Agreement grant any licence to any person
            to use the Intellectual Property required to conduct the business of
            any member of the Group if to do so would  reasonably be expected to
            have a Material Adverse Effect.

25.18 Compliance with Material Contracts
      Each  Obligor  shall  (and  each  Obligor  shall  ensure  that each of its
      Subsidiaries will):

      (a)   comply in all  material  respects  with its  obligations  under each
            Material Contract to which it is party and take all action necessary
            to ensure the continued  validity and  enforceability  of its rights
            thereunder;

                                      -51-

<PAGE>

      (b)   not amend,  vary, novate or supplement any such Material Contract in
            any material respect;

      (c)   not terminate,  revoke, transfer, assign or otherwise dispose of its
            rights and obligations  under any such Material  Contract during the
            term of this Agreement,

      if such  non-compliance,  failure to take  action,  amendment,  variation,
      novation,  supplement,  termination,  revocation,  transfer, assignment or
      other disposal, as the case may be, would be reasonably expected to have a
      Material Adverse Effect.

26.   Events Of Default

      Each of the  events or  circumstances  set out in Clause 26 is an Event of
      Default.

26.1  Non-payment
      An Obligor or Kronos  Denmark  does not pay on the due date any amount due
      and payable  pursuant to a Finance  Document to which it is a party at the
      place  at and in the  currency  in  which it is  expressed  to be  payable
      unless:

      (a)   in the case of principal  or interest due under a Finance  Document,
            its failure to pay is caused by  administrative  or technical  error
            and payment is made within 3 Business Days of its due date; and

      (b)   in the case of any  amount due under a Finance  Document  other than
            principal or interest,  payment is made within 3 Business Days after
            written  notice of such  non-payment  has been  given to the  German
            Borrower.

26.2  Financial covenants
      Any requirement of Clause 24 (Financial covenants) is not satisfied.

26.3  Other obligations

      (a)   An Obligor or Kronos  Denmark does not comply with any  provision of
            the  Finance  Documents  to which it is a party  (other  than  those
            referred to in Clause 26.1  (Non-payment) and Clause 26.2 (Financial
            covenants)).

      (b)   No Event of  Default  under  paragraph  (a) above will occur if such
            breach is capable of remedy and is remedied within thirty (30) days.

26.4  Misrepresentation

      (a)   Any representation or statement made by an Obligor or Kronos Denmark
            in the Finance  Documents or any other  document  delivered by or on
            behalf of any Obligor or Kronos Denmark under or in connection  with
            any  Finance  Document  is or  proves  to  have  been  incorrect  or
            misleading in any material respect when made.

      (b)   No Event of  Default  under  paragraph  (a) above will occur if such
            misrepresentation  is capable of remedy  and is  remedied  within 15
            Business Days.

26.5  Cross default

      (a)   Any Financial  Indebtedness of the Parent or any member of the Group
            is not paid at maturity, whether by acceleration or otherwise.

                                      -52-

<PAGE>

      (b)   Any Financial  Indebtedness of the Parent or any member of the Group
            is declared to be or otherwise  becomes due and payable prior to its
            specified  maturity  as a result  of an event  of  default  (however
            described).

      (c)   Any commitment for any Financial  Indebtedness  of the Parent or any
            member of the Group is  cancelled  or suspended by a creditor of the
            Parent or any member of the Group as a result of an event of default
            (however described).

      (d)   Any  creditor  of the  Parent or any  member  of the  Group  becomes
            entitled to declare any Financial  Indebtedness of the Parent or any
            member of the Group due and payable prior to its specified  maturity
            as a result of an event of default (however described).

      (e)   No Event  of  Default  will  occur  under  this  Clause  26.5 if the
            aggregate  amount  of  Financial   Indebtedness  or  commitment  for
            Financial Indebtedness falling within paragraphs (a) to (d) above is
            less than EUR 5,000,000 (or its  equivalent in any other currency or
            currencies).

26.6  Insolvency

      (a)   Any Obligor,  Material  Subsidiary or the Parent is unable or admits
            inability  to pay its debts which have fallen due or its debts which
            will fall due in the future,  suspends making payments on any of its
            debts  or,  in the  case  of the  German  Borrower  or any  Material
            Subsidiary  whose  jurisdiction  of  incorporation  is  Germany,  is
            overindebted (Uberschuldung).

      (b)   A  moratorium  is  declared  in respect of any  indebtedness  of any
            Obligor,  Material  Subsidiary  or  the  Parent  in  excess  of  EUR
            5,000,000.

26.7  Insolvency proceedings
      Any corporate  action,  legal  proceedings  or other  procedure or step is
      taken in relation to:

      (a)   the suspension of payments,  the opening of insolvency  proceedings,
            winding-up, dissolution, administration or reorganisation (by way of
            voluntary  arrangement,  scheme of  arrangement or otherwise) of any
            Obligor,  Material  Subsidiary  or the  Parent  other than a solvent
            liquidation  or  reorganisation  of any member of the Group which is
            not an Obligor;

      (b)   a composition, assignment or arrangement with any creditor involving
            indebtedness  in excess of EUR  5,000,000 of any  Obligor,  Material
            Subsidiary or the Parent;

      (c)   the appointment of a liquidator  (other than in respect of a solvent
            liquidation  of a  member  of the  Group  which  is  not an  Obligor
            permitted under this Agreement),  receiver,  administrator including
            an insolvency  administrator,  administrative  receiver,  compulsory
            manager or other similar officer in respect of any Obligor, Material
            Subsidiary  or the Parent or any of its assets where such asset have
            an aggregated fair market value in excess of EUR 5,000,000; or

      (d)   enforcement of any Security over any assets of any Obligor, Material
            Subsidiary or the Parent where such assets have an  aggregated  fair
            market value in excess of EUR 5,000,000,

      or any analogous procedure or step is taken in any jurisdiction.

                                      -53-

<PAGE>

26.8  Creditors' process
      Any expropriation,  attachment,  sequestration,  distress,  enforcement or
      execution  affects any asset or assets of the  Parent,  any Obligor or any
      Material  Subsidiary having an aggregate value of EUR 5,000,000 and is not
      discharged within 45 days.

26.9  Ownership of the Obligors
      An Obligor is not or ceases to be a Subsidiary of the Parent.

26.10 Unlawfulness
      It is or becomes  unlawful for an Obligor or Kronos Denmark to perform any
      of its obligations under the Finance Documents if the effect thereof would
      reasonably be expected to have a Material Adverse Effect.

26.11 Transaction Security

      (a)   Any Obligor or Kronos  Denmark  fails duly to perform or comply with
            any of the  obligations  assumed  by it in the  Security  Documents,
            provided  that no Event of  Default  under this  paragraph  (a) will
            occur if such  breach is capable of remedy  and is  remedied  within
            fifteen (15) Business  Days after written  notice of such breach has
            been  given to the  German  Borrower  by the  Agent or the  relevant
            Obligor or Kronos  Denmark,  as the case may be, has obtained actual
            knowledge of such breach, whichever is the earlier.

      (b)   At any time of the Transaction Security is or becomes unlawful or is
            not,  or  ceases to be  legal,  valid,  binding  or  enforceable  or
            otherwise  ceases  to be  effective  if  the  effect  thereof  would
            reasonably be expected to have a Material Adverse Effect.

26.12 Repudiation
      An Obligor or Kronos Denmark  repudiates a Finance  Document or any of the
      Transaction  Security or  evidences  an  intention  to repudiate a Finance
      Document or any of the Transaction Security.

26.13 Material Contracts
      Any  Material  Contract is not or ceases to be in full force and effect if
      this would reasonably be expected to have a Material Adverse Effect.

26.14 Material adverse change
      There  occurs  a  material  adverse  change  in the  business,  assets  or
      financial condition of any of the German Borrower, the Belgian Borrower or
      of the Group taken as a whole.

26.15 Acceleration
      On and at any time after the  occurrence  of an Event of Default  which is
      continuing  the  Agent  may,  and  shall if so  directed  by the  Majority
      Lenders, by notice to the Borrowers:

      (a)   cancel the Total  Commitments  whereupon  they shall  immediately be
            cancelled;

      (b)   declare  that  all or  part  of the  Loans,  together  with  accrued
            interest,  and all other amounts  accrued or  outstanding  under the
            Finance  Documents be  immediately  due and payable,  whereupon they
            shall become immediately due and payable;

      (c)   declare  that  all or  part  of the  Loans  be  payable  on  demand,
            whereupon  they shall  immediately  become  payable on demand by the
            Agent on the instructions of the Majority Lenders; and/or

                                      -54-

<PAGE>

      (d)   require the  relevant  Borrower to procure that the  liabilities  of
            each of the  Lenders  and the  Fronting  Bank under  each  Letter of
            Credit are promptly reduced to zero; and/or

      (e)   require the relevant  Borrower to provide Cash  Collateral  for each
            Letter  of Credit  in an  amount  specified  by the Agent and in the
            currency of that Letter of Credit;

      (f)   exercise,  or direct the Security  Agent to exercise,  any or all of
            its rights, remedies, powers or discretions under any of the Finance
            Documents.

                                      -55-

<PAGE>

                                    SECTION 9
                               CHANGES TO PARTIES

27.   Changes To The Lenders

27.1  Assignments and transfers by the Lenders

      (a)   Subject to this Clause 27, a Lender (the "Existing Lender") may:

            (i)   assign (Abtretung) any of its rights; or

            (ii)  transfer  by  way  of  assignment   and   assumption  of  debt
                  (Vertragsubernahme) any of its rights and obligations,

            to another  bank or  financial  institution  or to a trust,  fund or
            other entity which is regularly  engaged in or  established  for the
            purpose of making,  purchasing or investing in loans,  securities or
            other financial assets (the "New Lender").

27.2  Conditions of assignment or transfer

      (a)   Any such  assignment or transfer shall be in a minimum amount of EUR
            4,000,000  except in the case of an assignment or transfer which has
            the effect of reducing the  participation  of the relevant Lender to
            zero.

      (b)   The consent of the German  Borrower is required for an assignment or
            transfer  by a Lender,  unless  the  assignment  or  transfer  is to
            another  Lender or an  Affiliate of a Lender or unless a Default has
            occurred which is continuing.

      (c)   The consent of the German Borrower to an assignment or transfer must
            not be unreasonably withheld or delayed. The German Borrower will be
            deemed to have given its consent five Business Days after the Lender
            has requested it unless  consent is expressly  refused by the German
            Borrower within that time.

      (d)   The consent of the Fronting  Bank is required for an  assignment  or
            transfer by a Lender in relation to a Letter of Credit.

      (e)   An  assignment  will only be  effective  on  receipt by the Agent of
            written  confirmation  from the New  Lender  (in form and  substance
            satisfactory  to the Agent) that the New Lender will assume the same
            obligations  to the other  Finance  Parties  and the  other  Secured
            Parties as it would have been under if it was an Original Lender.

      (f)   A transfer will only be effective if the procedure set out in Clause
            27.5 (Procedure for transfer) is complied with.

      (g)   If:

            (i)   a Lender assigns or transfers any of its rights or obligations
                  under the Finance  Documents or changes its  Facility  Office;
                  and

            (ii)  as  a  result  of  circumstances  existing  at  the  date  the
                  assignment,  transfer or change  occurs,  an Obligor  would be
                  obliged to make a payment  to the New Lender or Lender  acting
                  through its new Facility  Office under Clause 16 (Tax gross-up
                  and indemnities) or Clause 17 (Increased Costs),

                                      -56-

<PAGE>

            then the New Lender or Lender acting through its new Facility Office
            is only entitled to receive  payment under those Clauses to the same
            extent as the Existing  Lender or Lender acting through its previous
            Facility  Office  would  have been if the  assignment,  transfer  or
            change had not occurred.

27.3  Assignment or transfer fee
      The New Lender  shall,  on the date upon which an  assignment  or transfer
      takes effect, pay to the Agent (for its own account) a fee of EUR 3,500.

27.4  Limitation of responsibility of Existing Lenders

      (a)   Unless expressly agreed to the contrary, an Existing Lender makes no
            representation  or warranty and assumes no  responsibility  to a New
            Lender for:

            (i)   the   legality,   validity,    effectiveness,    adequacy   or
                  enforceability  of  the  Finance  Documents,  the  Transaction
                  Security or any other documents;

            (ii)  the financial condition of any Obligor;

            (iii) the  performance  and  observance  by any  Obligor  or  Kronos
                  Denmark of its obligations  under the Finance Documents or any
                  other documents; or

            (iv)  the accuracy of any statements  (whether written or oral) made
                  in or in  connection  with any  Finance  Document or any other
                  document,

            and any representations or warranties implied by law are excluded.

      (b)   Each New  Lender  confirms  to the  Existing  Lender  and the  other
            Finance Parties that it:

            (i)   has made (and  shall  continue  to make)  its own  independent
                  investigation  and  assessment of the financial  condition and
                  affairs of each Obligor and its related entities in connection
                  with its  participation  in this  Agreement and has not relied
                  exclusively on any information  provided to it by the Existing
                  Lender in connection with any Finance Document; and

            (ii)  will  continue to make its own  independent  appraisal  of the
                  creditworthiness  of each  Obligor  and its  related  entities
                  whilst any amount is or may be  outstanding  under the Finance
                  Documents or any Commitment is in force.

      (c)   Nothing in any Finance Document obliges an Existing Lender to:

            (i)   accept a  re-transfer  from a New  Lender of any of the rights
                  and obligations  assigned or transferred under this Clause 27;
                  or

            (ii)  support any losses directly or indirectly  incurred by the New
                  Lender by  reason of the  non-performance  by any  Obligor  or
                  Kronos Denmark of its obligations  under the Finance Documents
                  or otherwise.

27.5  Procedure for transfer

      (a)   Subject to the  conditions  set out in Clause  27.2  (Conditions  of
            assignment  or transfer) a transfer is effected in  accordance  with
            paragraph  (b)  below  when the Agent  executes  an  otherwise  duly
            completed  Transfer  Certificate  delivered  to it by  the  Existing

                                      -57-

<PAGE>

            Lender and the New Lender.  The Agent shall,  as soon as  reasonably
            practicable  after  receipt  by  it  of a  duly  completed  Transfer
            Certificate  appearing  on its face to comply with the terms of this
            Agreement  and  delivered  in  accordance  with  the  terms  of this
            Agreement, execute that Transfer Certificate.

      (b)   On the Transfer Date:

            (i)   to the extent that in the  Transfer  Certificate  the Existing
                  Lender  seeks to transfer by  assignment  and  assumption  its
                  rights  (the   "Transferred   Rights")  and  obligations  (the
                  "Transferred  Obligations") under the Finance Documents and in
                  respect of the  Transaction  Security each of the Obligors and
                  Kronos Denmark and the Existing  Lender shall be released from
                  further  obligations  towards  one  another  under the Finance
                  Documents and in respect of the Transaction Security;

            (ii)  the  Transferred  Rights  of  the  Existing  Lender  shall  be
                  transferred to the New Lender and the Transferred  Obligations
                  of the  Existing  Lender shall be assumed by the New Lender so
                  that  each of the  Obligors  and  Kronos  Denmark  and the New
                  Lender shall have those obligations and/ or rights towards one
                  another;

            (iii) the Agent, the Mandated Lead Arranger, the Security Agent, the
                  New Lender, the other Lenders and the Fronting Bank shall have
                  the same rights and the same  obligations  between  themselves
                  and in respect of the Transaction  Security as they would have
                  had,  had the New  Lender  been an  Original  Lender  with the
                  rights and/or obligations transferred to or assumed by it as a
                  result of the  transfer  and to that  extent  the  Agent,  the
                  Mandated Lead Arranger,  the Existing  Lender and the Fronting
                  Bank shall each be released from further  obligations  to each
                  other under this Agreement; and

            (iv)  the New Lender shall become a Party as a "Lender".

            For the  avoidance of doubt it is hereby  agreed that the benefit of
            the  guarantees  and  indemnities  granted  pursuant  to  Clause  21
            (Guarantee  and  Indemnity)  and the benefit of each of the Security
            Documents  shall  be  transferred  to the  New  Lender  following  a
            transfer pursuant to this Clause 27.

27.6  Disclosure of information
      Any Lender may disclose to any of its Affiliates and any other person:

      (a)   to (or  through)  whom that  Lender  assigns  or  transfers  (or may
            potentially  assign  or  transfer)  all or any  of  its  rights  and
            obligations under this Agreement;

      (b)   with (or through) whom that Lender  enters into (or may  potentially
            enter  into)  any  sub-participation  in  relation  to, or any other
            transaction  under which  payments are to be made by  reference  to,
            this Agreement or any Obligor; or

      (c)   to whom,  and to the extent  that,  information  is  required  to be
            disclosed by any applicable law or regulation,

      any information about any Obligor,  the Group and the Finance Documents as
      that Lender shall consider  appropriate  if, in relation to paragraphs (a)
      and (b)  above,  the  person  to whom the  information  is to be given has
      entered into a Confidentiality Undertaking.

                                      -58-

<PAGE>

28.   Changes To The Obligors

      No Obligor may assign any of its rights or  transfer  any of its rights or
      obligations under the Finance Documents.

                                      -59-

<PAGE>

                                   SECTION 10
                               THE FINANCE PARTIES

29.   Role Of The Agent, the Security Agent And The Mandated Lead Arranger

29.1  Appointment of the Agent and the Security Agent

      (a)   Each other Finance Party  appoints the Agent to act as its agent and
            the Security Agent to act as its trustee and administrator under and
            in connection with the Finance Documents (provided that, in the case
            of any  Transaction  Security which is accessory in nature and which
            is granted  pursuant to any Security  Document  which is governed by
            German law, the Security Agent shall act as administrator only).

      (b)   Each other Finance Party authorises the Agent and the Security Agent
            to  exercise  the  rights,   powers,   authorities  and  discretions
            specifically  given to the Agent and the Security  Agent under or in
            connection  with the  Finance  Documents  together  with  any  other
            incidental rights,  powers,  authorities and discretions.  The Agent
            and the Security Agent shall be released from the  restrictions  set
            out in  section  181 of the  German  Civil  Code.  The Agent and the
            Security  Agent can grant  substitute  power of attorney and release
            any sub-agents from the  restrictions  set out in section 181 of the
            German Civil Code and revoke such power of attorney.

29.2  Definitions: For the purposes of Section 10 (The Finance Parties):

      "Agent's  and  Security   Agent's   Liabilities"   means  all  liabilities
      (including  any  liability  in  respect of tax),  to which the Agent,  the
      Security  Agent or any person  appointed  by any of them under any Finance
      Document  becomes  subject by reason of it acting as agent or holding  the
      Transaction Security under the Finance Document;

      "German  Security"  means any security  assumed and accepted by or through
      the Security Agent or the Finance Parties, as the case may be, pursuant to
      any Security  Document  governed by German law and held or administered by
      the  Security  Agent on  behalf  of or in trust  for the  Finance  Parties
      hereunder and any addition or replacement or substitution thereof.

29.3  Administering of Transaction Security:
      The Security  Agent shall hold and administer  the  Transaction  Security.
      Each  Lender  hereby  authorises  the  Security  Agent  to  accept  as its
      representative  (Stellvertreter)  any  security  created in favour of such
      Lender.

29.4  Administration of German Security
      The Security Agent shall in relation to the German Security

      (a)   hold and administer any German  Security which is security  assigned
            (Sicherungseigentum/Sicherungsabtretung)  or  otherwise  transferred
            under  a   non-accessory   security   right   (nicht   akzessorische
            Sicherheit)  to it as trustee  (Treuhander)  for the  benefit of the
            Secured Parties;

      (b)   administer  any German  Security which is pledged  (Verpfandung)  or
            otherwise transferred to a Secured Party under an accessory security
            right (akzessorische Sicherheit) as agent.

                                      -60-

<PAGE>

29.5  Acts of Agent and Security Agent:
      In additional to Clause 29.3 (Administering of Transaction Security):

      (a)   each of the  Security  Agent and the Agent  shall be at  liberty  to
            place any Finance  Document and any other documents  delivered to it
            in connection  therewith in any safe or receptacle or with any bank,
            any company whose business includes  undertaking the safe custody of
            documents  or any firm of  lawyers  of good  repute and shall not be
            responsible for any loss thereby incurred;

      (b)   the Security Agent, whenever it thinks fit, may delegate by power of
            attorney  or  otherwise  to any person or persons  all or any of the
            rights, trusts, powers,  authorities and discretions vested in it by
            a Finance  Document and such  delegation may be made upon such terms
            and subject to such  conditions  and subject to such  regulations as
            the Security Agent may think fit;

      (c)   each of the  Security  Agent and the Agent may refrain from doing or
            do  anything  which  would or might in its opinion be contrary to or
            necessary to comply with any relevant law of any jurisdiction;

      (d)   each of the Security Agent and the Agent and every  attorney,  agent
            or other  person  appointed  by it under any  Finance  Document  may
            indemnify  itself or himself out of the Charged Property against all
            the  Agent's  and  Security  Agent's  Liabilities,  subject  to  the
            provisions of the Security Document; and

      (e)   the Security  Agent shall have the rights to, but shall not be under
            any obligation to, insure any of the Charged  Property and shall not
            be responsible for any loss which may be suffered by any person as a
            result of the lack of or  inadequacy  or  insufficiency  of any such
            insurance.

29.6  Parallel Debt

29.6.1      Each of the Obligors  hereby agrees and covenants  with the Security
      Agent  by  way  of  an  abstract   acknowledgement   of  debt  (abstraktes
      Schuldanerkenntnis) that each of them shall pay to the Security Agent sums
      equal to, and in the currency of, any sums owing by it to a Secured  Party
      (other than the Security Agent) under any Finance Document (the "Principal
      Obligations") as and when the same fall due for payment under the relevant
      Finance Document (the "Parallel Obligations").

29.6.2      The  Security Agent shall have its own  independent  right to demand
      payment of the Parallel  Obligations  by the  Obligors.  The rights of the
      Secured  Parties  to  receive  payment of the  Principal  Obligations  are
      several  from the rights of the  Security  Agent to receive  the  Parallel
      Obligations.

29.6.3      The  payment  by an  Obligor  of  its  Parallel  Obligations  to the
      Security  Agent  in  accordance  with  this  Clause  29.6  shall be a good
      discharge of the corresponding Principal Obligations and the payment by an
      Obligor of its corresponding  Principal Obligations in accordance with the
      provisions  of the  Finance  Documents  shall be a good  discharge  of the
      relevant Parallel Obligations.

29.6.4      Despite the foregoing,  any such payment shall be made to the Agent,
      unless the Agent directs such payment to be made to the Security Agent.

                                      -61-

<PAGE>

29.7  Duties of the Agent and the Security Agent

      (a)   The Agent and the Security Agent shall  promptly  forward to a Party
            the  original or a copy of any  document  which is  delivered to the
            Agent or the Security Agent for that Party by any other Party.

      (b)   Except where a Finance Document specifically provides otherwise, the
            Agent is not  obliged to review or check the  adequacy,  accuracy or
            completeness of any document it forwards to another Party.

      (c)   If the Agent or the  Security  Agent  receives  notice  from a Party
            referring to this  Agreement,  describing a Default and stating that
            the  circumstance  described is a Default,  it shall promptly notify
            the Finance Parties.

      (d)   If the Agent or the Security  Agent is aware of the  non-payment  of
            any  principal,  interest,  commitment fee or other fee payable to a
            Finance  Party (other than the Agent,  the Mandated Lead Arranger or
            the Security  Agent) under this Agreement it shall  promptly  notify
            the other Finance Parties.

      (e)   The  Agent's  and the  Security  Agent's  duties  under the  Finance
            Documents are solely mechanical and administrative in nature.

29.8  Role of the Mandated Lead Arranger
      Except as  specifically  provided in the Finance  Documents,  the Mandated
      Lead Arranger has no  obligations  of any kind to any other Party under or
      in connection with any Finance Document.

29.9  No fiduciary duties

      (a)   Except where a Finance  Document  specifically  provides  otherwise,
            nothing in this Agreement  constitutes the Agent, the Security Agent
            or the Mandated Lead Arranger as a trustee or fiduciary of any other
            person.

      (b)   Neither the Agent, the Security Agent nor the Mandated Lead Arranger
            shall be bound to  account  to any  Lender for any sum or the profit
            element of any sum received by it for its own account.

29.10 Business with the Group
      The Agent,  the Security  Agent and the Mandated  Lead Arranger may accept
      deposits from,  lend money to and generally  engage in any kind of banking
      or other business with any member of the Group.

29.11 Rights and discretions of the Agent and the Security Agent

      (a)   The Agent and the Security Agent may rely on:

            (i)   any  representation,  notice or document  believed by it to be
                  genuine, correct and appropriately authorised; and

            (ii)  any  statement  made by a director,  authorised  signatory  or
                  employee  of  any  person  regarding  any  matters  which  may
                  reasonably be assumed to be within his knowledge or within his
                  power to verify.

                                      -62-

<PAGE>

      (b)   The Agent and the Security  Agent may assume (unless it has received
            notice to the  contrary in its  capacity  as agent for the  Lenders)
            that:

            (i)   no Default has occurred  (unless it has actual  knowledge of a
                  Default arising under Clause 26.1 (Non-payment));

            (ii)  any right, power,  authority or discretion vested in any Party
                  or the Majority Lenders has not been exercised; and

            (iii) any notice or request made by the German  Borrower (other than
                  a  Utilisation  Request)  is made on  behalf  of and  with the
                  consent and knowledge of all the Obligors.

      (c)   The Agent and the Security Agent may engage, pay for and rely on the
            advice or services of any lawyers,  accountants,  surveyors or other
            experts.

      (d)   The Agent and the Security  Agent may act in relation to the Finance
            Documents through its personnel and agents.

      (e)   The  Agent  may  disclose  to any other  Party  any  information  it
            reasonably believes it has received as agent under this Agreement.

      (f)   The Security  Agent may, upon a disposal of any property the subject
            of the Security Document by any receiver,  or by any of the Obligors
            or Kronos  Denmark  where the  Security  Agent has  consented to the
            disposal,  to any  third  party,  release  such  property  from  the
            Security Document.

      (g)   Notwithstanding  any other provision of any Finance  Document to the
            contrary,  neither  the  Agent nor the  Mandated  Lead  Arranger  is
            obliged  to do or omit to do  anything  if it  would or might in its
            reasonable  opinion  constitute a breach of any law or a breach of a
            fiduciary duty or duty of confidentiality.

29.12 Majority Lenders' instructions

      (a)   Unless a  contrary  indication  appears in a Finance  Document,  the
            Agent and the Security  Agent shall (i)  exercise any right,  power,
            authority or discretion  vested in it as Agent or Security  Agent in
            accordance with any instructions given to it by the Majority Lenders
            (or,  if  so  instructed  by  the  Majority  Lenders,  refrain  from
            exercising any right, power, authority or discretion vested in it as
            Agent or  Security  Agent)  and (ii) not be  liable  for any act (or
            omission)  if it acts  (or  refrains  from  taking  any  action)  in
            accordance with an instruction of the Majority Lenders.

      (b)   Unless a  contrary  indication  appears in a Finance  Document,  any
            instructions  given by the  Majority  Lenders will be binding on all
            the Finance Parties.

      (c)   The  Agent  and the  Security  Agent  may  refrain  from  acting  in
            accordance  with the  instructions  of the Majority  Lenders (or, if
            appropriate,  the Lenders) (i) if in the  reasonable  opinion of the
            Agent or the Security Agent,  as the case may be, such  instructions
            are contrary to  applicable  law or (ii) until it has received  such
            security as it may require for any cost, loss or liability (together
            with any  associated  VAT) which it may incur in complying  with the
            instructions.

                                      -63-

<PAGE>

      (d)   In the absence of instructions  from the Majority  Lenders,  (or, if
            appropriate,  the Lenders) the Agent and the Security  Agent may act
            (or refrain  from taking  action) as it  considers to be in the best
            interest of the Lenders.

      (e)   The Agent and the Security  Agent is not authorised to act on behalf
            of a Lender (without first  obtaining that Lender's  consent) in any
            legal or arbitration proceedings relating to any Finance Document.

29.13 Responsibility for documentation
      None of the Agent, the Mandated Lead Arranger and the Security Agent:

      (a)   is responsible for the adequacy, accuracy and/or completeness of any
            information  (whether  oral or written)  supplied by the Agent,  the
            Mandated  Lead  Arranger,  the Security  Agent,  an Obligor,  Kronos
            Denmark  or any  other  person  given in or in  connection  with any
            Finance  Document or the Information  Memorandum or the transactions
            contemplated in the Finance Documents; or

      (b)   is responsible for the legality, validity,  effectiveness,  adequacy
            or  enforceability  of  any  Finance  Document  or  the  Transaction
            Security or any other  agreement,  arrangement  or document  entered
            into,  made or executed in anticipation of or in connection with any
            Finance Document or the Transaction Security.

29.14 Exclusion of liability

      (a)   Without  limiting  paragraph  (b) below,  neither  the Agent nor the
            Security Agent will be liable for any action taken by it under or in
            connection with any Finance  Document or the  Transaction  Security,
            unless directly caused by its gross negligence or wilful misconduct.

      (b)   No Party may take any proceedings  against any officer,  employee or
            agent of the Agent or the Security  Agent in respect of any claim it
            might have against the Agent or the Security Agent in respect of any
            act or  omission of any kind by that  officer,  employee or agent in
            relation to any Finance Document and any officer,  employee or agent
            of the Agent or the Security Agent may rely on this Clause.

      (c)   Neither  the Agent nor the  Security  Agent  will be liable  for any
            delay (or any related  consequences) in crediting an account with an
            amount required under the Finance  Documents to be paid by the Agent
            or the Security  Agent if the Agent or the Security  Agent has taken
            all necessary steps as soon as reasonably practicable to comply with
            the regulations or operating  procedures of any recognised  clearing
            or  settlement  system used by the Agent or the  Security  Agent for
            that purpose.

29.15 Lenders' indemnity to the Agent and the Security Agent
      Each Lender shall (in proportion to its share of the Total Commitments or,
      if the  Total  Commitments  are  then  zero,  to its  share  of the  Total
      Commitments  immediately  prior to their reduction to zero) indemnify each
      of the Agent and the Security Agent, within three Business Days of demand,
      against any cost, loss or liability  incurred by the Agent or the Security
      Agent  (otherwise  than by reason of the Agent's or the  Security  Agent's
      gross  negligence or wilful  misconduct) in acting as Agent or as Security
      Agent under the Finance  Documents (unless the Agent or the Security Agent
      has been reimbursed by an Obligor pursuant to a Finance Document).

                                      -64-

<PAGE>

29.16 Resignation of the Agent and the Security Agent

      (a)   The Agent and the  Security  Agent may resign and appoint one of its
            Affiliates  acting  through  an office  in one of the  Participating
            Member  States as  successor by giving  notice to the other  Finance
            Parties and the Borrowers.

      (b)   Alternatively  the Agent and the Security Agent may resign by giving
            notice to the other Finance Parties and the Borrowers, in which case
            the Majority Lenders (after  consultation  with the German Borrower)
            may appoint a successor Agent or Security Agent.

      (c)   If the  Majority  Lenders  have not  appointed a successor  Agent or
            Security Agent in accordance with paragraph (b) above within 30 days
            after  notice of  resignation  was given,  the Agent or the Security
            Agent (after  consultation  with the German  Borrower) may appoint a
            successor  Agent or Security Agent (acting  through an office in one
            of the Participating Member States).

      (d)   The retiring  Agent or Security Agent shall,  at its own cost,  make
            available to the successor  Agent or Security  Agent such  documents
            and records and provide such  assistance as the  successor  Agent or
            the  Security  Agent may  reasonably  request  for the  purposes  of
            performing its functions as Agent under the Finance Documents.

      (e)   The Agent's or the Security  Agent's  resignation  notice shall only
            take effect upon the appointment of a successor.

      (f)   Upon the  appointment  of a  successor,  the  retiring  Agent or the
            Security  Agent shall be discharged  from any further  obligation in
            respect of the Finance  Documents  but shall remain  entitled to the
            benefit  of this  Clause  29.  Its  successor  and each of the other
            Parties  shall  have  the  same  rights  and   obligations   amongst
            themselves  as they  would  have had if such  successor  had been an
            original Party.

      (g)   After  consultation  with the German Borrower,  the Majority Lenders
            may,  by notice to the Agent or the  Security  Agent,  require it to
            resign in accordance  with paragraph (b) above.  In this event,  the
            Agent  or  the  Security  Agent  shall  resign  in  accordance  with
            paragraph (b) above.

29.17 Confidentiality

      (a)   In acting as agent for the Finance  Parties or as security agent for
            the Secured Parties,  as the case may be, the Agent and the Security
            Agent shall be regarded as acting through its agency  division which
            shall  be  treated  as a  separate  entity  from  any  other  of its
            divisions or departments.

      (b)   If information is received by another  division or department of the
            Agent or the Security  Agent,  it may be treated as  confidential to
            that division or  department  and neither the Agent nor the Security
            Agent shall not be deemed to have notice of it.

29.18 Relationship with the Lenders

      (a)   The Agent and the Security  Agent may treat each Lender as a Lender,
            entitled to payments  under this  Agreement  and acting  through its
            Facility  Office  unless it has received not less than five Business
            Days prior  notice  from that Lender to the  contrary in  accordance
            with the terms of this Agreement.

                                      -65-

<PAGE>

      (b)   Each Lender shall supply the Agent with any information  required by
            the Agent in order to calculate  the  Mandatory  Cost in  accordance
            with Schedule 4 (Mandatory Cost formulae).

      (c)   Each Secured Party shall supply the Agent with any information  that
            the Security  Agent may  reasonably  specify  (through the Agent) as
            being necessary or desirable to enable the Security Agent to perform
            its  functions  as security  agent.  Each Lender shall deal with the
            Security  Agent  exclusively  through  the  Agent and shall not deal
            directly with the Security Agent

29.19 Credit appraisal by the Secured Parties
      Without  affecting  the  responsibility  of any  Obligor  for  information
      supplied by it or on its behalf in connection  with any Finance  Document,
      each Secured Party  confirms to the Agent,  the Mandated Lead Arranger and
      the  Security  Agent that it has been,  and will  continue  to be,  solely
      responsible for making its own independent  appraisal and investigation of
      all  risks  arising  under  or in  connection  with any  Finance  Document
      including but not limited to:

      (a)   the  financial  condition,  status and nature of each  member of the
            Group;

      (b)   the legality, validity, effectiveness, adequacy or enforceability of
            any Finance  Document  and the  Transaction  Security  and any other
            agreement, arrangement or document entered into, made or executed in
            anticipation of, under or in connection with any Finance Document or
            the Transaction Security;

      (c)   whether that Secured Party has  recourse,  and the nature and extent
            of that recourse,  against any Party or any of its respective assets
            under or in connection  with any Finance  Document,  the Transaction
            Security, the transactions  contemplated by the Finance Documents or
            any other  agreement,  arrangement or document entered into, made or
            executed in anticipation of, under or in connection with any Finance
            Document;

      (d)   the  adequacy,  accuracy  and/or  completeness  of  the  Information
            Memorandum  and any other  information  provided  by the Agent,  the
            Security  Agent,  any  Party  or by any  other  person  under  or in
            connection with any Finance Document, the transactions  contemplated
            by the Finance  Documents  or any other  agreement,  arrangement  or
            document entered into, made or executed in anticipation of, under or
            in connection with any Finance Document; and

      (e)   the  right  or  title  of any  person  in or to,  or  the  value  or
            sufficiency of any part of the Charged Property, the priority of any
            of the  Transaction  Security  or  the  existence  of  any  Security
            affecting the Charged Property.

29.20 Application of proceeds
      To the  extent  that  the  Agent or the  Security  Agent  receives  monies
      pursuant  to or as a result of any breach of any  Finance  Document  to be
      applied in  discharging  any  obligation  (whether  actual or  contingent,
      present or future) of any Obligor under any Finance Document,  such monies
      shall be applied in the order set out in Clause 33.5 (Partial Payments).

29.21 Release of Transaction Security
      If the Security Agent,  with the approval of the Majority  Lenders,  shall
      determine  that all  obligations  the discharge of which is secured by the
      Security  Documents have been full and finally  discharged and none of the
      Lenders is under any commitment,  obligation or liability  (whether actual
      or contingent) to make advances or provide other  financial  accommodation
      to the Borrowers under this Agreement the Security Agent shall release all

                                      -66-

<PAGE>

      of the security then held by it, whereupon each of the Security Agent, the
      Agent,  the Mandated Lead Arranger,  the Lenders and the Obligors shall be
      released  from its  obligations  hereunder  or  under  the  other  Finance
      Documents (save for those which arose prior to such winding-up) and Kronos
      Denmark  shall  be  released  from  its  obligations   under  the  Finance
      Documents.

29.22 Reference Banks
      If a Reference Bank (or, if a Reference  Bank is not a Lender,  the Lender
      of which it is an Affiliate) ceases to be a Lender,  the Agent shall (with
      the  approval  of  the  German   Borrower  which  approval  shall  not  be
      unreasonably  withheld or delayed)  appoint another Lender or an Affiliate
      of a Lender to replace that Reference Bank.

29.23 Deduction from amounts payable by the Agent
      If any Party owes an amount to the Agent under the Finance  Documents  the
      Agent  may,  after  giving  notice to that  Party,  deduct  an amount  not
      exceeding that amount from any payment to that Party which the Agent would
      otherwise  be obliged to make under the  Finance  Documents  and apply the
      amount  deducted in or towards  satisfaction  of the amount owed.  For the
      purposes of the Finance  Documents  that Party shall be regarded as having
      received any amount so deducted.

30.   Conduct Of Business By The Finance Parties

      Subject to the  provisions  of Clause 19  (Mitigation  by the  Lenders) no
      provision of this Agreement will:

      (a)   interfere with the right of any Finance Party to arrange its affairs
            (tax or otherwise) in whatever manner it thinks fit;

      (b)   oblige any Finance Party to investigate or claim any credit, relief,
            remission  or  repayment  available  to it or the extent,  order and
            manner of any claim; or

      (c)   oblige any Finance Party to disclose any information relating to its
            affairs (tax or otherwise) or any computations in respect of Tax.

31.   Sharing Among The Finance Parties

31.1  Payments to Finance Parties

      If a Finance Party (a "Recovering Finance Party") receives or recovers any
      amount from an Obligor  other than in  accordance  with Clause 33 (Payment
      mechanics)  or Clause 29.20  (Application  of  proceeds)  and applies that
      amount to a payment due under the Finance Documents then:

      (a)   the  Recovering  Finance Party shall,  within three  Business  Days,
            notify details of the receipt or recovery, to the Agent;

      (b)   the Agent  shall  determine  whether  the  receipt or recovery is in
            excess of the amount the  Recovering  Finance  Party would have been
            paid had the receipt or recovery  been received or made by the Agent
            and  distributed in accordance  with Clause 33 (Payment  mechanics),
            without  taking  account  of any Tax which  would be  imposed on the
            Agent in relation to the receipt, recovery or distribution; and

      (c)   the  Recovering  Finance Party shall,  within three Business Days of
            demand  by the  Agent,  pay to the  Agent an  amount  (the  "Sharing
            Payment")  equal to such  receipt or recovery  less any amount which

                                      -67-

<PAGE>

            the Agent determines may be retained by the Recovering Finance Party
            as its share of any payment to be made,  in  accordance  with Clause
            33.5 (Partial payments).

31.2  Redistribution of payments
      The Agent shall  treat the  Sharing  Payment as if it had been paid by the
      relevant Obligor and distribute it between the Finance Parties (other than
      the  Recovering  Finance  Party) in  accordance  with Clause 33.5 (Partial
      payments).

31.3  Recovering Finance Party's rights
      The  Recovering  Finance  Party will be  assigned  the claims (or the part
      thereof)  to which the  Sharing  Payment is  allocated  (and the  relevant
      Obligor shall be liable to the Recovering Finance Party in an amount equal
      to the Sharing Payment).

31.4  Reversal of redistribution
      If any part of the Sharing  Payment  received or recovered by a Recovering
      Finance Party becomes  repayable and is repaid by that Recovering  Finance
      Party, then:

      (a)   each  Finance  Party  which  has  received  a share of the  relevant
            Sharing Payment pursuant to Clause 31.2 (Redistribution of payments)
            shall,  upon  request of the Agent,  pay to the Agent for account of
            that  Recovering  Finance  Party an amount equal to the  appropriate
            part of its share of the Sharing Payment (together with an amount as
            is necessary  to reimburse  that  Recovering  Finance  Party for its
            proportion  of  any  interest  on the  Sharing  Payment  which  that
            Recovering Finance Party is required to pay); and

      (b)   such  Recovering  Finance Party's rights to an assignment in respect
            of any  reimbursement  shall be cancelled  and the relevant  Obligor
            will be liable to the reimbursing party for the amount so reimbursed
            and such  Recovering  Finance Party shall  re-assign to the relevant
            Finance  Party  any  amount  assigned  to it by such  Finance  Party
            pursuant to Clause 31.3.

31.5  Exceptions

      (a)   This  Clause 31 shall not apply to the  extent  that the  Recovering
            Finance Party would not,  after making any payment  pursuant to this
            Clause,  have a valid and  enforceable  claim  against the  relevant
            Obligor.

      (b)   A  Recovering  Finance  Party is not obliged to share with any other
            Finance  Party any amount  which the  Recovering  Finance  Party has
            received or  recovered  as a result of taking  legal or  arbitration
            proceedings, if:

            (i)   it  notified   that  other  Finance  Party  of  the  legal  or
                  arbitration proceedings; and

            (ii)  that other Finance Party had an  opportunity to participate in
                  those legal or  arbitration  proceedings  but did not do so as
                  soon as reasonably  practicable having received notice and did
                  not take separate legal or arbitration proceedings.

32.   The Lenders and the Fronting Bank

32.1  Lenders' Indemnity
      If any  Borrower  fails to comply with its  obligations  under  Clause 9.2
      (Borrowers'  Indemnity  to Fronting  Banks) the Agent shall make demand on
      each Lender for its share of that L/C Amount  and,  subject to Clause 32.2

                                      -68-

<PAGE>

      (Direct Participation),  each Lender shall indemnify the Fronting Bank for
      that Lender's L/C Proportion of the L/C Amount.

32.2  Direct Participation
      If any Lender is not  permitted  (by its  constitutional  documents or any
      applicable law) to comply with Clause 32.1 (Lenders'  Indemnity) then that
      Lender will not be obliged to comply with Clause 32.1 (Lenders' Indemnity)
      and  shall  instead  be deemed to have  taken,  on the date the  Letter of
      Credit  is  issued  (or if  later,  on the  date  that L/C  Proportion  is
      transferred  or assigned to such  Lender in  accordance  with the terms of
      this Agreement), an undivided interest and participation in that Letter of
      Credit in an amount equal to that  Lender's L/C  Proportion of that Letter
      of Credit.  On receipt of demand by the Agent in  accordance  with  Clause
      32.1  (Lenders'  Indemnity),  each such Lender shall pay to the Agent (for
      the account of the Fronting Bank) its L/C Proportion of any L/C Amount.

32.3  Obligations not Discharged
      Neither the  obligations  of each Lender in this Clause 32 nor the rights,
      powers and remedies  conferred upon the Fronting Bank by this Agreement or
      by law shall be discharged, impaired or otherwise affected by:

      (a)   the winding-up,  dissolution,  administration or  re-organisation of
            the Fronting Bank, the Borrower or any other person or any change in
            its status, function, control or ownership;

      (b)   any of the  obligations  of the Fronting  Bank,  the Borrower or any
            other person under this Agreement, under a Letter of Credit or under
            any other  security taken in respect of its  obligations  under this
            Agreement  or under a Letter of Credit  being or  becoming  illegal,
            invalid, unenforceable or ineffective in any respect;

      (c)   time or other  indulgence  being  granted or agreed to be granted to
            the  Fronting  Bank,  the Borrower or any other person in respect of
            its obligations  under this  Agreement,  under a Letter of Credit or
            under any other security;

      (d)   any  amendment  to, or any  variation,  waiver or  release  of,  any
            obligation  of the Fronting  Bank,  the Borrower or any other person
            under  this  Agreement,  under a Letter of Credit or under any other
            security; and

      (e)   any other act,  event or omission  which,  but for this Clause 32.3,
            might  operate to discharge,  impair or otherwise  affect any of the
            obligations of each Lender in this Agreement contained or any of the
            rights,  powers or remedies conferred upon any Fronting Bank by this
            Agreement or by law.

      The  obligations  of each Lender in this Agreement  contained  shall be in
      addition to and  independent  of every other  security  which the Fronting
      Bank may at any time hold in respect of any Letter of Credit.

32.4  Settlement Conditional
      Any  settlement or discharge  between a Lender and the Fronting Bank shall
      be  conditional  upon no  security  or payment to the  Fronting  Bank by a
      Lender or any other person on behalf of a Lender being  avoided or reduced
      by virtue of any laws relating to bankruptcy,  insolvency,  liquidation or
      similar laws of general  application  and, if any such security or payment
      is so avoided or reduced,  the Fronting  Bank shall be entitled to recover
      the  value  or  amount  of such  security  or  payment  from  such  Lender
      subsequently as if such settlement or discharge had not occurred.

                                      -69-

<PAGE>

32.5  Exercise of Rights
      The  Fronting  Bank  shall not be  obliged  before  exercising  any of the
      rights, powers or remedies conferred upon them in respect of any Lender by
      this Agreement or by law:

      (a)   to take any  action or obtain  judgment  in any  court  against  the
            Borrower;

      (b)   to make or file any claim or proof in a winding-up or dissolution of
            the Borrower; or

      (c)   to enforce or seek to enforce any other security taken in respect of
            any of the obligations of the Borrower under this Agreement.

                                      -70-

<PAGE>

                                   SECTION 11
                                 ADMINISTRATION

33.   Payment Mechanics

33.1  Payments to the Agent

      (a)   On each date on which an Obligor or a Lender is  required  to make a
            payment under a Finance Document,  that Obligor or Lender shall make
            the same  available  to the  Agent  (unless  a  contrary  indication
            appears in a Finance Document) for value on the due date at the time
            and in such funds  specified by the Agent as being  customary at the
            time for settlement of transactions in the relevant  currency in the
            place of payment.

      (b)   Payment  shall be made to such  account in the  principal  financial
            centre of the country of that  currency (or, in relation to euro, in
            a principal  financial  centre in a  Participating  Member  State or
            London) with such bank as the Agent specifies.

33.2  Distributions by the Agent
      Each payment received by the Agent under the Finance Documents for another
      Party  shall,  subject to Clause 33.3  (Distributions  to an Obligor)  and
      Clause 33.4 (Clawback) and Clause 29.23 (Deduction from amounts payable by
      the Agent) be made  available  by the Agent as soon as  practicable  after
      receipt to the Party entitled to receive  payment in accordance  with this
      Agreement  (in the  case of a  Lender,  for the  account  of its  Facility
      Office), to such account as that Party may notify to the Agent by not less
      than five  Business  Days' notice with a bank in the  principal  financial
      centre of the country of that  currency  (or, in relation to euro,  in the
      principal financial centre of a Participating Member State or London).

33.3  Distributions to an Obligor
      The Agent may (with the  consent  of the  Obligor  or in  accordance  with
      Clause 34 (Set-off))  apply any amount  received by it for that Obligor in
      or towards  payment (on the date and in the currency and funds of receipt)
      of any amount due from that Obligor  under the Finance  Documents or in or
      towards purchase of any amount of any currency to be so applied.

33.4  Clawback

      (a)   Where a sum is to be paid to the Agent under the  Finance  Documents
            for another Party,  the Agent is not obliged to pay that sum to that
            other  Party  (or to enter  into or  perform  any  related  exchange
            contract)  until it has been able to establish  to its  satisfaction
            that it has actually received that sum.

      (b)   If the Agent pays an amount to another Party and it proves to be the
            case that the Agent had not actually received that amount,  then the
            Party to whom that amount (or the  proceeds of any related  exchange
            contract)  was paid by the Agent shall on demand  refund the same to
            the Agent  together  with  interest  on that amount from the date of
            payment to the date of receipt by the Agent, calculated by the Agent
            to reflect its cost of funds.

33.5  Partial payments

      (a)   If the Agent  receives a payment that is  insufficient  to discharge
            all the amounts then due and payable by an Obligor under the Finance
            Documents,   the  Agent  shall  apply  that   payment   towards  the
            obligations  of that  Obligor  under the  Finance  Documents  in the
            following order:

                                      -71-

<PAGE>

            (i)   first,  in or towards  payment  pro rata of any  unpaid  fees,
                  costs and expenses of the Agent and the  Security  Agent under
                  the Finance Documents;

            (ii)  secondly,  in or towards  payment  of any  demand  made by the
                  Fronting Bank in respect of a payment made or to be made by it
                  under a Letter of Credit;

            (iii) thirdly,  in or  towards  payment  pro  rata  of  any  accrued
                  interest, commission or Fronting Bank Fee due but unpaid under
                  this Agreement;

            (iv)  fourthly,  in or towards payment pro rata of any  Outstandings
                  due but unpaid under this Agreement; and

            (v)   fifthly,  in or towards  payment pro rata of any other sum due
                  but unpaid under the Finance Documents.

      (b)   The Agent shall,  if so directed by the Majority  Lenders,  vary the
            order set out in paragraphs (a)(ii) to (v) above.

      (c)   Paragraphs (a) and (b) above will override any appropriation made by
            an Obligor.

33.6  No set-off by Obligors
      All payments to be made by an Obligor under the Finance Documents shall be
      calculated  and be made without (and free and clear of any deduction  for)
      set-off or counterclaim.

33.7  Business Days

      (a)   Any payment  which is due to be made on a day that is not a Business
            Day  shall be made on the  next  Business  Day in the same  calendar
            month (if there is one) or the  preceding  Business Day (if there is
            not).

      (b)   During any extension of the due date for payment of any principal or
            Unpaid Sum under this Agreement interest is payable on the principal
            or Unpaid Sum at the rate payable on the original due date.

33.8  Currency of account

      (a)   Subject to  paragraphs  (b) to (f) below,  the Base  Currency is the
            currency  of  account  and  payment  for any sum due from an Obligor
            under any Finance Document.

      (b)   A  repayment  of a Loan or Unpaid  Sum or a part of a Loan or Unpaid
            Sum shall be made in the  currency  in which that Loan or Unpaid Sum
            is denominated on its due date.

      (c)   Each  payment in respect of a Letter of Credit  (including  any Cash
            Collateral  in respect  of a Letter of Credit)  shall be made in the
            Base Currency.

      (d)   Each payment of interest  shall be made in the currency in which the
            sum in respect of which the interest is payable was denominated when
            that interest accrued.

      (e)   Each payment in respect of costs, expenses or Taxes shall be made in
            the currency in which the costs, expenses or Taxes are incurred.

      (f)   Any amount expressed to be payable in a currency other than the Base
            Currency shall be paid in that other currency.

                                      -72-

<PAGE>

33.9  Change of currency

      (a)   Unless  otherwise  prohibited  by law, if more than one  currency or
            currency unit are at the same time recognised by the central bank of
            any country as the lawful currency of that country, then:

            (i)   any reference in the Finance Documents to, and any obligations
                  arising  under the Finance  Documents in, the currency of that
                  country shall be translated  into, or paid in, the currency or
                  currency  unit of that country  designated by the Agent (after
                  consultation with the German Borrower); and

            (ii)  any translation  from one currency or currency unit to another
                  shall be at the official  rate of exchange  recognised  by the
                  central bank for the  conversion  of that currency or currency
                  unit into the other,  rounded up or down by the Agent  (acting
                  reasonably).

      (b)   If a change in any  currency  of a country  occurs,  this  Agreement
            will,  to  the  extent  the  Agent  (acting   reasonably  and  after
            consultation with the German Borrower) specifies to be necessary, be
            amended to comply with any generally accepted conventions and market
            practice in the Relevant  Interbank  Market and otherwise to reflect
            the change in currency.

34.   Set-Off

      A Finance  Party may set off any  matured  obligation  due from an Obligor
      under the  Finance  Documents  (to the extent  beneficially  owned by that
      Finance Party) against any matured  obligation  owed by that Finance Party
      to that  Obligor,  regardless of the place of payment,  booking  branch or
      currency  of  either  obligation.  If the  obligations  are  in  different
      currencies,  the Finance Party may convert  either  obligation at a market
      rate of  exchange in its usual  course of business  for the purpose of the
      set-off.

35.   Notices

35.1  Communications in writing

      (a)   Any communication to be made under or in connection with the Finance
            Documents shall be made in writing and, unless otherwise stated, may
            be made by fax, letter or telex.

      (b)   Any  document  to be  delivered  pursuant  to  Clause  4.1  (Initial
            conditions  precedent)  shall be  delivered  in  original  form or a
            certified  copy,  certified  as a true  and  up-to-date  copy  by an
            authorised signatory.

      (c)   Any  Utilisation  Request  shall be  confirmed  by letter,  although
            failure to do so shall not invalidate the original request.

35.2  Addresses
      The address,  fax number and telex number (and the  department or officer,
      if any, for whose attention the communication is to be made) of each Party
      for any  communication  or  document to be made or  delivered  under or in
      connection with the Finance Documents is:

      (a)   in the case of each Obligor, that identified with its name below;

                                      -73-

<PAGE>

      (b)   in the case of each Lender and the Fronting  Bank,  that notified in
            writing  to the Agent on or prior to the date on which it  becomes a
            Party; and

      (c)   in the case of the Agent and the  Security  Agent,  that  identified
            with its name below,

      or any  substitute  address,  fax number,  telex number or  department  or
      officer  as the Party may  notify to the Agent (or the Agent may notify to
      the other Parties, if a change is made by the Agent) by not less than five
      Business Days' notice.

35.3  Delivery

      (a)   Any  communication  or document  made or  delivered by one person to
            another under or in connection with the Finance  Documents will only
            be effective:

            (i)   if by way of fax, when received in legible form; or

            (ii)  if by way of  letter,  when it has been  left at the  relevant
                  address or five  Business  Days after being  deposited  in the
                  post  postage  prepaid in an envelope  addressed to it at that
                  address; or

            (iii) if by way of telex, when despatched,  but only if, at the time
                  of transmission,  the correct  answerback appears at the start
                  and at the end of the sender's copy of the notice;

            and, if a particular  department  or officer is specified as part of
            its address  details  provided  under  Clause 35.2  (Addresses),  if
            addressed to that department or officer.

      (b)   Any  communication  or document to be made or delivered to the Agent
            or the Security Agent will be effective only when actually  received
            by the Agent or the Security  Agent and then only if it is expressly
            marked for the  attention of the  department  or officer  identified
            with the Agent's or the  Security  Agent's  signature  below (or any
            substitute  department  or  officer  as the Agent  shall  specify in
            writing for this purpose).

      (c)   All notices from or to an Obligor shall be sent through the Agent.

      (d)   Any  communication  or  document  made or  delivered  to the  German
            Borrower in accordance  with this Clause will be deemed to have been
            made or delivered to each of the Obligors.

      (e)   All notices to a Lender or the Fronting Bank from the Security Agent
            shall be sent through the Agent.

35.4  Notification of address, fax number and telex number
      Promptly upon receipt of notification of an address,  fax number and telex
      number or change of address, fax number or telex number pursuant to Clause
      35.2 (Addresses) or changing its own address,  fax number or telex number,
      the Agent shall notify the other Parties.

35.5  Electronic communication

      (a)   Any communication to be made between the Agent or the Security Agent
            and a Lender under or in connection  with the Finance  Documents may
            be made by electronic mail or other electronic  means, if the Agent,
            the Security Agent, the Fronting Bank and the relevant Lender:

                                      -74-

<PAGE>

            (i)   agree that, unless and until notified to the contrary, this is
                  to be an accepted form of communication;

            (ii)  notify each other in writing of their  electronic mail address
                  and/or any other  information  required  to enable the sending
                  and receipt of information by that means; and

            (iii) notify each other of any change to their  address or any other
                  such information supplied by them.

      (b)   Any electronic  communication made between the Agent or the Security
            Agent and a Lender and/or the Fronting  Bank will be effective  only
            when  actually  received  in  readable  form  and in the case of any
            electronic  communication  made by a Lender or the Fronting  Bank to
            the Agent or the  Security  Agent only if it is  addressed in such a
            manner as the Agent or the  Security  Agent  shall  specify for this
            purpose.

35.6  English language

      (a)   Any notice given under or in  connection  with any Finance  Document
            must be in English.

      (b)   All other documents provided under or in connection with any Finance
            Document must be:

            (i)   in English; or

            (ii)  if  not  in  English,   and  if  so  required  by  the  Agent,
                  accompanied by a certified  English  translation  and, in this
                  case, the English translation will prevail unless the document
                  is a constitutional, statutory or other official document.

36.   Calculations And Certificates

36.1  Accounts
      In  any  litigation  or  arbitration  proceedings  arising  out  of  or in
      connection  with a Finance  Document,  the  entries  made in the  accounts
      maintained by a Finance  Party are prima facie  evidence of the matters to
      which they relate.

36.2  Certificates and Determinations
      Any  certification or determination by a Finance Party of a rate or amount
      under  any  Finance  Document  shall  contain  reasonable  details  of the
      relevant calculation and is, in the absence of manifest error, prima facie
      evidence of the matters to which it relates.

36.3  Day count convention
      Any  interest,  commission or fee accruing  under a Finance  Document will
      accrue from day to day and is calculated on the basis of the actual number
      of days  elapsed and a year of 360 days or, in any case where the practice
      in the Relevant  Interbank Market differs,  in accordance with that market
      practice.

37.   Partial Invalidity
      If, at any time,  any  provision  of the Finance  Documents  is or becomes
      illegal,  invalid or  unenforceable  in any  respect  under any law of any
      jurisdiction,  neither the  legality,  validity or  enforceability  of the

                                      -75-

<PAGE>

      remaining provisions nor the legality,  validity or enforceability of such
      provision  under  the  law of any  other  jurisdiction  will in any way be
      affected or impaired.

38.   Remedies And Waivers

      No failure to exercise,  nor any delay in  exercising,  on the part of any
      Secured Party or the Mandated Lead Arranger, any right or remedy under the
      Finance  Documents  shall  operate  as a waiver,  nor shall any  single or
      partial  exercise  of any right or remedy  prevent  any  further  or other
      exercise  or the  exercise  of any other  right or remedy.  The rights and
      remedies  provided in this  Agreement are  cumulative and not exclusive of
      any rights or remedies provided by law.

39.   Amendments And Waivers

39.1  Required consents

      (a)   Subject to Clause 39.2  (Exceptions)  and Clause  29.21  (Release of
            Transaction  Security)  any  term of the  Finance  Documents  may be
            amended or waived only with the consent of the Majority  Lenders and
            the Obligors and any such amendment or waiver will be binding on all
            Parties.

      (b)   The Agent,  or in respect of the  Security  Documents  the  Security
            Agent may effect,  on behalf of any Finance Party,  any amendment or
            waiver permitted by this Clause.

39.2  Exceptions

      (a)   An  amendment  or waiver  that has the effect of  changing  or which
            relates to:

            (i)   the   definition   of   "Majority   Lenders"   in  Clause  1.1
                  (Definitions);

            (ii)  the definition of "Availability Period";

            (iii) an  extension  to  the  date  of  payment  of  any  amount  of
                  principal,  interest,  fees or  commission  under the  Finance
                  Documents;

            (iv)  a  reduction  in the  Margin,  the  L/C  Commission  Rate or a
                  reduction in the amount of any payment of principal, interest,
                  fees or commission payable;

            (v)   an increase in or an extension of any Commitment;

            (vi)  a change to the Borrowers or Guarantors;

            (vii) any provision which expressly  requires the consent of all the
                  Lenders;

            (viii)      Clause2.2  (Finance  Parties'  rights and  obligations),
                  Clause 21 (Guarantee and indemnity), Clause 27 (Changes to the
                  Lenders) or this Clause 39;

            (ix)  the nature or scope of the  Charged  Property or the manner in
                  which the proceeds of enforcement of the Transaction  Security
                  are distributed,

            shall not be made without the prior consent of all the Lenders.

      (b)   An amendment or waiver which relates to the rights or obligations of
            the Agent,  the Security  Agent,  the Mandated  Lead Arranger or the
            Fronting Bank may not be effected  without the consent of the Agent,
            the Security Agent, the Mandated Lead Arranger or the Fronting Bank.

                                      -76-

<PAGE>

                                   SECTION 12
                          GOVERNING LAW AND ENFORCEMENT

40.   Governing Law

      This Agreement is governed by the laws of the Federal Republic of Germany.

41.   Enforcement

41.1  Jurisdiction of German courts

      (a)   The  courts of  Frankfurt  am Main have  exclusive  jurisdiction  to
            settle  any  dispute  arising  out  of or in  connection  with  this
            Agreement (including a dispute regarding the existence,  validity or
            termination of this Agreement) (a "Dispute").

      (b)   The Parties  agree that the courts of Frankfurt am Main are the most
            appropriate and convenient courts to settle Disputes and accordingly
            no Party will argue to the contrary.

      (c)   This Clause 41.1 is for the benefit of the Finance  Parties only. As
            a  result,   no  Finance  Party  shall  be  prevented   from  taking
            proceedings   relating  to  a  Dispute  in  any  other  courts  with
            jurisdiction.  To the extent allowed by law, the Finance Parties may
            take concurrent proceedings in any number of jurisdictions.

41.2  Service of process
      Without  prejudice to any other mode of service allowed under any relevant
      law, each Obligor:

      (a)   irrevocably appoints the German Borrower as its agent for service of
            process in relation to any  proceedings  before the German courts in
            connection with any Finance Document; and

      (b)   agrees  that  failure  by a  process  agent to notify  the  relevant
            Obligor  of  the  process  will  not  invalidate   the   proceedings
            concerned.

This Agreement has been entered into on the date stated at the beginning of this
Agreement.

                                      -78-

<PAGE>
                                 EXECUTION PAGE

The Borrowers

KRONOS TITAN GMBH & CO. OHG

By:

Address:    Peschstra(beta)e 5

            51373 Leverkusen

            Germany

Tel:        +49 214 3562201

Fax:        +49 214 42162

E-mail:           volker.roth@nli-usa.com

Attention of:     Volker Roth - Financial Controller

KRONOS EUROPE S.A./N.V.

By:

Address:    Langerbruggekaai 10

            B 9000 Gent

            Belgium

Tel:        +32 925 40341

Fax:        +32 925 36553

E-mail:           Erik.VanderAuwera@nli-usa.com

Attention of:     Erik Van Der Auwera

KRONOS TITAN AS

By:

Address:    Titangaten 1

            Fredrikstad Ostfold

            Norway

Tel:        +47 69 30 9020

Fax:        +47 69 30 9001

E-mail:           Terje.Karlsen@nli-usa.com, Terje.Haglund@nli-usa.com

Attention of:     Terje Haglund - Financial Controller / Terje Karlsen - Manager

<PAGE>

TITANIA AS

By:

Address:    Titangaten 1

            Fredrikstad Ostfold

            Norway

Tel:        +47 69 30 9020

Fax:        +47 69 30 9001

E-mail:           Terje.Karlsen@nli-usa.com, Terje.Haglund@nli-usa.com

Attention of:     Terje Haglund - Financial Controller / Terje Karlsen - Manager

The Guarantors

KRONOS TITAN GMBH & CO. OHG

By:

Address:    Peschstra(beta)e 5

            51373 Leverkusen

            Germany

Tel:        +49 214 3562201

Fax:        +49 214 42162

E-mail:           volker.roth@nli-usa.com

Attention of:     Volker Roth - Financial Controller

KRONOS EUROPE S.A./N.V.

By:

Address:    Langerbruggekaai 10

            B 9000 Gent

            Belgium

Tel:        +32 925 40341

Fax:        +32 925 36553

E-mail:           Erik.VanderAuwera@nli-usa.com

Attention of:     Erik Van Der Auwera

<PAGE>

KRONOS NORGE AS

By:

Address:    Titangaten 1

            Fredrikstad Ostfold

            Norway

Tel:        +47 69 30 9020

Fax:        +47 69 30 9001

E-mail:           Terje.Karlsen@nli-usa.com, Terje.Haglund@nli-usa.com

Attention of:     Terje Haglund - Financial Controller / Terje Karlsen - Manager

Kronos Denmark

KRONOS DENMARK APS

By:

Address:    Hanne Vielsens Vej 10

            2840 Holte
            Denmark

Tel:        +49 69 214 356 2201

Fax:        +49 214 42 162

E-mail:           volker.roth@nli-usa.com

Attention of:     Volker Roth

The Mandated Lead Arranger

DEUTSCHE BANK AG

By:

Address:    Taunusanlage 12

            60325 Frankfurt

Tel:        +49 69 910 32426/32423

Fax:        +49 69 910 38793/32427

E-mail:           mark-van-den.arend@db.com; ralph-dieter.vogel@db.com

Attention of:     Mark van den Arend; Ralph-Dieter Vogel

<PAGE>

The Agent

DEUTSCHE BANK LUXEMBOURG S.A.

By:

Address:    2, Boulevard Konrad Adenauer

            L-1115 Luxembourg

Tel:        +352 421 22331/329

Fax:        +352 421 22287

E-mail:           christoph.koch@db.com; inge.palzer@db.com

Attention of:     Christoph Koch; Inge Palzer

The Security Agent

DEUTSCHE BANK LUXEMBOURG S.A.

By:

Address:    2, Boulevard Konrad Adenauer

            L-1115 Luxembourg

Tel:        +352 421 22 331/329

Fax:        +352 421 22 287

E-mail:           christoph.koch@db.com; inge.palzer@db.com

Attention of:     Christoph Koch/Inge Palzer

The Lenders

DEUTSCHE BANK LUXEMBOURG S.A.

By:

Address:    2, Boulevard Konrad Adenauer

            L-1115 Luxembourg

Tel:        +352 421 22 331/329

Fax:        +352 421 22 287

E-mail:           christoph.koch@db.com; inge.palzer@db.com

Attention of:     Christoph Koch/Inge Palzer

<PAGE>

COMMERZBANK AKTIENGESELLSCHAFT, FILIALE KOLN

By:

Address:    Unter Sachsenhausen 21-27

            D-50667 Koln

Tel:        +49 221 143 2441/2444

Fax:        +49 221 143 2196

E-mail:           peter.manger@commerzbank.com; stefan.leusser@commerzbank.com

Attention of:     Peter Manger/Stefan Leusser, Abteilung fur Firmenkunden (AFK)

DEN NORSKE BANK ASA, FILIALE DEUTSCHLAND

By:

Address:    Bleichenbrucke 11

            D-20354 Hamburg

Tel:        +49 40 35 75 2044

Fax:        +49 40 35 75 20 21

E-mail:           holger.graflich@dnb.no

Attention of:     Holger Graflich

DEXIA BANK BELGIUM NV/SA

By:

Address:    Pachecolaan 44

            B-1000 Brussels

Tel:        +32 2 204 3883

Fax:        +32 2 204 4354

E-mail:           peter.rabaey@dexia.be

Attention of:     Peter Rabaey

<PAGE>

KBC BANK NV

By:

Address:    Havenlaan 2

            B-1080 Brussels

Tel:        +32 9 210 44 63

Fax:        +32 9 210 44 41

E-mail:           etienne.burm@kbc.be

Attention of:     KBC Corporate Branch Gent; Etienne Burm

DRESDNER BANK AG IN KOLN

By:

Address:    Unter Sachsenhausen 5-17

            D-50450 Koln

Tel:        +49 221 146 2677

Fax:        +49 221 146 3022

E-mail:           Rainer.Weiss@Dresdner-Bank.com

Attention of:     Unternehmenskunden Koln Ost, Mr Weiss

THE FRONTING BANK

KBC BANK NV

By:

Address:    Havenlaan 2

            B-1080 Brussels

Tel:        +32 9 210 44 63

Fax:        +32 9 210 44 41

E-mail:           etienne.burm@kbc.be

Attention of:     KBC Corporate Branch Gent; Etienne BurmUAL CORPORATION

Exhibit 10.1

 

 

 

UAL CORPORATION 1995 DIRECTORS PLAN

(As Amended and Restated Effective as of April 30, 2002)

TABLE OF CONTENTS

                                                                                                                                            
Page No.

	1.	General	
1

	 	1.1  Purpose, History and Effective Date	
1

	 	1.2  Participation	
1

	 	1.3  Administration	
1

	 	1.4  Shares Subject to the Plan	
2

	 	1.5  Compliance with Applicable Laws	
2

	 	1.6  Director and Shareholder Status	
3

	 	1.7  Definition of Fair Market Value	
3

	 	1.8  Source of Payments	
3

	 	1.9  Nonassignment	
3

	 	1.10 Elections	
3

	 	 	 
	2.	Awards	
3

	 	2.1  Formula Stock Awards	
3

	 	2.2  Deferred Stock Units	
3

	 	 	 
	3.	Receipt of Stock in Lieu of Eligible Cash Fees	
4

	 	3.1  Election to Receive Stock	
4

	 	3.2  Revocation of Election to Receive
Stock	
4

	 	3.3  Election Pursuant to Retirement Plan
Resolutions	
4

	 	3.4  Equivalent Amount of Stock	
4

	 	 	 
	4.	Deferral Elections	
5

	 	4.1  Deferrals of Fees	
5

	 	4.2  Deferral of Stock Awards and Deferred
Stock Units	
6

	 	4.3  Crediting and Adjustment of Deferred
Amounts	
7

	 	4.4  Payment of Deferred Compensation Account	
9

	 	4.5  Payments in the Event of Death	
10

	 	4.6  Multiple Distribution Dates	
11

	 	 	 
	5.	Amendment and Termination	
13

 

UAL CORPORATION

1995 DIRECTORS PLAN

(As Amended and Restated Effective as of April 30, 2002)

SECTION 1

General

          1.1. Purpose,
History and Effective Date.  UAL Corporation (the "Company") previously
maintained the UAL Corporation 1992 Stock Plan for Outside Directors (the
"Prior Plan") which provided certain benefits to non-employee directors
of the Company.  In order to (i) encourage stock ownership by directors
to further align their interests with those of the stockholders of the
Company, while at the same time providing flexibility for directors who,
due to their individual circumstances, may be unable to take stock in lieu
of cash compensation, and (ii) add certain deferral features for fees and
stock awards and other items of cash compensation as determined by the
Board of Directors, the Company authorized a variety of compensation alternatives,
including those set forth in the Prior Plan, that would be available to
Outside Directors (as defined in subsection 1.2) and established the UAL
Corporation 1995 Directors Plan (the "Plan").  The Plan and any and
all amendments thereto were effective immediately upon the respective approval
thereof by the Board of Directors, except that subsections 1.4, 1.5, 1.7,
1.8, 2.1, 3.1, 3.2 and 3.4 and all references to Stock Awards, Stock Deferrals
and the Company Stock Subaccount were first effective on and the Prior
Plan was terminated as of July 3, 1995 (the "Initial Effective Date"). 
Stock deferrals made prior to the Initial Effective Date under the Prior
Plan were treated as deferrals under subsection 4.2 of the Plan. 
The following provisions constitute an amendment, restatement and continuation
of the Plan as in effect immediately prior to April 30, 2002.

          1.2. Participation. 
Only Outside Directors shall be eligible to participate in the Plan. 
As of any applicable date, an "Outside Director" is a person who is serving
as a director of the Company who is not an employee of the Company or any
subsidiary of the Company as of that date.

          1.3. Administration. 
The authority to manage and control the operation and administration of
the Plan shall be vested in the Executive Committee of the Board (the "Committee"). 
Subject to the limitations of the Plan, the Committee shall have the sole
and complete authority to:

(a) interpret the Plan and to adopt, amend and rescind administrative
guidelines and other rules and regulations relating to the Plan;
 

(b) correct any defect or omission and to reconcile any inconsistency in
the Plan or in any payment made hereunder; and
 

(c) to make all other determinations and to take all other actions necessary
or advisable for the implementation and administration of the Plan.
The Committee's determinations on matters within its control shall be conclusive
and binding on the Company and all other persons.  Notwithstanding
the foregoing, no member of the Committee shall act with respect to the
administration of the Plan except to the extent consistent with the exempt
status of the Plan under Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as amended ("Rule 16b-3").
          1.4. Shares
Subject to the Plan.  Shares of stock which may be distributed
under the plan are shares of common stock of the Company, par value $.01
per share ("Stock").  The shares of Stock which shall be available
for distribution pursuant to the Plan shall be treasury shares (including,
in the discretion of the Company, shares purchased in the open market). 
The number of shares of Stock to be distributed pursuant to Outside Directors'
elections to receive shares of Stock in lieu of Eligible Cash Fees (as
described in subsection 3.1) shall be determined in accordance with Section
3.  The number of shares of Stock to be distributed pursuant to awards
of Deferred Stock Units (as described in subsection 2.2) shall be determined
in accordance with subsection 2.2.  The number of shares of Stock
to be distributed pursuant to Outside Directors' Deferral Elections (as
described in Section 4) shall be determined in accordance with Section
4.  The number of shares of Stock which are available for awards under
subsection 2.1 shall be 78,800; provided, however, that:

(a) in the event of any merger, consolidation, reorganization, recapitalization,
spinoff, stock dividend, stock split, reverse stock split, rights offering,
exchange or other change in the corporate structure or capitalization of
the Company affecting the Stock, the number and kind of shares of Stock
available for awards under Section 2 and the annual awards of Stock and
Deferred Stock Units provided thereunder shall be equitably adjusted in
such manner as the Committee shall determine in its sole judgment;
 

(b) in determining what adjustment, if any, is appropriate pursuant to
paragraph (a), the Committee may rely on the advice of such experts as
they deem appropriate, including counsel, investment bankers and the accountants
of the Company; and
 

(c) no fractional shares shall be granted or authorized pursuant to any
adjustment pursuant to paragraph (a), although cash payments may be authorized
in lieu of fractional shares that may otherwise result from such an equitable
adjustment.
The shareholders of the Company approved a stock split in the form of a
300% stock dividend on April 24, 1996.  The foregoing number of authorized
shares of Stock reflects the stock split and the Stock Awards awarded under
the Plan prior to the stock split have been adjusted to reflect the stock
split.
          1.5. Compliance
with Applicable Laws.  Notwithstanding any other provision of
the Plan, the Company shall have no obligation to deliver any shares of
Stock under the Plan unless such delivery would comply with all applicable
laws and the applicable requirements of any securities exchange or similar
entity.  Prior to the delivery of any shares of Stock under the Plan,
the Company may require a written statement that the recipient is acquiring
the shares for investment and not for the purpose or with the intention
of distributing the shares.  If the redistribution of shares is restricted
pursuant to this subsection 1.5, the certificates representing such shares
may bear a legend referring to such restrictions.

          1.6. Director
and Shareholder Status.  The Plan will not give any person the
right to continue as a director of the Company, or any right or claim to
any benefits under the Plan unless such right or claim has specifically
accrued under the terms of the Plan.  Participation in the Plan shall
not create any rights in a director (or any other person) as a shareholder
of the Company until shares of Stock are registered in the name of the
director (or such other person).

          1.7. Definition
of Fair Market Value.  The "Fair Market Value" of a share of Stock
on any date shall be equal to the average of the high and low prices of
a share of Stock reported for New York Stock Exchange Composite Transactions
for the applicable date or, if there are no such reported trades for such
date, for the last previous date for which trades were reported.

          1.8. Source
of Payments.  Except for Stock actually delivered pursuant to
the Plan, the Plan constitutes only an unfunded, unsecured promise of the
Company to make payments or awards to directors (or other persons) or deliver
Stock in the future in accordance with the terms of the Plan.

          1.9. Nonassignment. 
Neither a director's nor any other person's rights to payments or awards
under the Plan are subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment or garnishment by
creditors of the director.

          1.10. Elections. 
Any notice or document required to be filed with the Committee under the
Plan will be properly filed if delivered or mailed by registered mail,
postage prepaid, or sent via facsimile or by electronic mail, to the Committee,
in care of the Company's Corporate Secretary's Office, at the Company's
principal executive offices.  The Committee may, by advance written
notice to affected persons, revise such notice procedure from time to time. 
Any notice required under the Plan may be waived by the person entitled
thereto.

 

 

SECTION 2

Awards

          2.1. Formula
Stock Awards.  As of the first business day of January of each
year commencing on and after January 1, 1997, each Outside Director shall
be awarded 400 shares of Stock ("Stock Award").

          2.2. Deferred
Stock Units.  As of December 31, 2002 and each December 31st
thereafter, each person who was an Outside Director at any time during
the calendar year ended on that date shall be awarded 189 deferred stock
units (each such unit representing the right to receive a share of Stock
at a future date) ("Deferred Stock Units").  Notwithstanding the foregoing,
the number of Deferred Stock Units awarded to an Outside Director who is
not an Outside Director for the entire calendar year shall be prorated
based on the number of whole calendar months he or she was an Outside Director
during such calendar year.

 

 

SECTION 3

Receipt of Stock in Lieu of Eligible Cash Fees

          3.1. Election
to Receive Stock.  Subject to the terms and conditions of the
Plan, including subsection 3.3, each Outside Director may elect (but not
retroactively) to forego receipt of all or any portion of the Eligible
Cash Fees (as defined below) payable to him or her for any period and instead
to receive whole shares of Stock of equivalent value to the Eligible Cash
Fees so foregone (determined in accordance with subsection 3.4). 
An election under this subsection 3.1 to have Eligible Cash Fees paid in
shares of Stock shall be valid only if it is in writing, signed by the
Outside Director, and filed with the Committee in accordance with uniform
and nondiscriminatory rules adopted by the Committee and shall be effective
with respect to Eligible Cash Fees payable after the date on which it is
received by the Committee (or as soon as practicable thereafter) or such
later date specified in the election. For purposes of the Plan, the term
"Eligible Cash Fees" means the retainer fees, meeting fees, committee fees,
committee chair fees, and any other items of cash compensation as designated
by the Board of Directors that would otherwise be payable to the Outside
Director by the Company in cash as established, from time to time, by the
Board or any committee thereof, including without limitation, the amounts
credited to an Outside Director's Deferred Compensation Account (as hereinafter
defined) pursuant to resolutions (the "Retirement Plan Resolutions") adopted
by the Board on September 26, 1996 in respect of the cessation of benefit
accruals under the UAL Corporation Retirement Plan for Outside Directors
(the "Retirement Plan").

          3.2. Revocation
of Election to Receive Stock.  Once effective, an election pursuant
to subsection 3.1 to receive Stock shall remain in effect until it is revised
or revoked.  Any such revision or revocation shall be in writing,
signed by the Outside Director and filed with the Committee and shall be
effective with respect to Eligible Cash Fees payable after the date on
which it is received by the Committee (or as soon as practicable thereafter)
or such later date specified in such notice.

          3.3. Election
Pursuant to Retirement Plan Resolutions.  If no election to have
Eligible Cash Fees which have been credited to an Outside Director's Deferred
Compensation Account pursuant to the Retirement Plan Resolutions deferred
in the form of cash is received on or before December 1, 1996, such Outside
Director shall automatically be deemed to have elected to have such fees
deferred in the form of Stock.

          3.4. Equivalent
Amount of Stock.

(a) The number of whole shares of Stock to be distributed to any Outside
Director, or credited to his or her Deferred Compensation Account (as defined
in subsection 4.3) pursuant to a Deferral Election made in accordance with
Section 4, by reason of his or her election pursuant to subsection 3.1
to receive Stock in lieu of Eligible Cash Fees or pursuant to subsection
3.3 shall be equal to:

 
(i) the amount of the Eligible Cash Fees which the Outside Director
has elected to have paid to him or her in shares of Stock or credited to
his or her Company Stock Subaccount (as defined in subsection 4.3);
DIVIDED BY

(ii) (A)  the Fair Market Value of a share of Stock as of the date
on which such Eligible Cash Fees would otherwise have been payable to the
Outside Director or (B) in the case of Eligible Cash Fees credited pursuant
to the Retirement Plan Resolutions, the average Fair Market Value of a
share of Stock for the twenty consecutive trading days ending December
31, 1996.

 

(b) The Fair Market Value of any fractional share shall be paid to the
Outside Director in cash; provided, however, that fractional shares subject
to a Deferral Election filed in accordance with subsection 4.1 shall be
deferred and credited to the Company Stock Subaccount.

SECTION 4
Deferral Elections

4.1. Deferrals of Fees.

(a) General.  Subject to the terms and conditions of the
Plan, each Outside Director, by filing a written "Deferral Election" with
the Committee in accordance with uniform and nondiscriminatory rules adopted
by the Committee, may elect to defer the receipt of all or any portion
of the Eligible Cash Fees otherwise payable to him or her for any period
(including any Eligible Cash Fees that he or she has elected to receive
in Stock pursuant to Section 3) until a future date (the "Distribution
Date") specified by the Outside Director in his or her Deferral Election
as of which payment of his or her Deferred Compensation Account attributable
to amounts deferred pursuant to his or her Deferral Election shall commence
in accordance with subsection 4.4; provided, however, that in no event
shall the Distribution Date elected pursuant to this subsection 4.1(a)
be different from the Distribution Date, if any, elected by the Outside
Director pursuant to subsection 4.2.  If no Distribution Date is specified
in an Outside Director's Deferral Election or has otherwise been elected
by the Outside Director pursuant to subsection 4.2, the Distribution Date
shall be deemed to be the first business day in January of the year following
the date on which the Outside Director ceases to be a director of the Company
for any reason. An Outside Director's Deferral Election shall be effective
with respect to Eligible Cash Fees (including any Eligible Cash Fees that
he or she has elected to receive in Stock pursuant to Section 3) and (i)
which are otherwise payable to him or her for services rendered after the
last day of the calendar year in which such election is made or (ii) which
are otherwise payable to him or her at least six months after the date
on which such election is filed with the Committee, as specified in the
Deferral Election.  Notwithstanding the foregoing, except as provided
in subsection 4.1(b):

 
(A) a Deferral Election which is filed with the Committee within 45
days after the date on which a director first becomes an Outside Director
shall be effective with respect to all Eligible Cash Fees (including any
Eligible Cash Fees that he or she has elected to receive in Stock pursuant
to Section 3) otherwise payable to him or her after the date the Deferral
Election the Deferral Election is received by the Committee (or as soon
as practicable thereafter) or such later date specified in the Deferral
Election; and
 

(B) by notice filed with the Committee in accordance with uniform and nondiscriminatory
rules established by it, an Outside Director may terminate or modify any
Deferral Election as to Eligible Cash Fees which are payable at least six
months after the date on which such notice is filed with the Committee
or which are payable to the Outside Director for services rendered after
the last day of the calendar year in which the notice is filed with the
Committee; provided, however, that no modification may be made to the Distribution
Date unless the Outside Director shall file such notice with the Committee
at least six months prior thereto.

Notwithstanding the foregoing provisions of this subsection 4.1(a),
the Committee may, in its sole discretion, after considering all of the
pertinent facts and circumstances, approve a change to a Distribution Date
which is requested by an Outside Director less than six months prior thereto.

 

(b) Deferral of Eligible Cash Fees Credited Pursuant to Retirement Plan
Resolutions and Subsection 2.2.   A Deferral Election shall
be deemed to have been made and shall be effective automatically without
the requirement of a written Deferral Election for the Eligible Cash Fees
credited to the Plan pursuant to (i) the Retirement Plan Resolutions, the
deferral of which is mandatory pursuant to the terms of such resolutions,
and (ii) subsection 2.2, the deferral of which is mandatory.  The
Distribution Date for such deferrals shall not be different than the Distribution
Date selected pursuant to subsections 4.1(a) and 4.2; provided, however,
that in no event shall the Distribution Date for such Eligible Cash Fees
be earlier than the first business day in January of the year following
the date on which the Outside Director ceases to be a director of the Company
for any reason.
          4.2. Deferral
of Stock Awards and Deferred Stock Units.  Subject to the terms
and conditions of the Plan, each Outside Director, by filing a written
"Stock Deferral Election" with the Committee in accordance with uniform
and nondiscriminatory rules adopted by the Committee, may elect to defer
the receipt of all or any portion of the Stock Award which is otherwise
to be made to him or her for 1996 and subsequent years until the Distribution
Date; provided, however, that if no Distribution Date has been elected
(or is deemed to have been elected) pursuant to subsection 4.1, the "Distribution
Date" shall be the date specified by the Outside Director in his or her
Stock Deferral Election or, if no such date is specified, the first business
day in January of the year following the date on which the Outside Director
ceases to be a director of the Company for any reason.  An Outside
Director's Stock Deferral Election shall be effective with respect to Stock
Awards otherwise to be made to him or her pursuant to subsection 2.1 (i)
after the last day of the calendar year in which such election is filed
with the Committee or (ii) at least six months after the date on which
such election is made, as specified in the Stock Deferral Election. 
Notwithstanding the foregoing, by notice filed with the Committee in accordance
with uniform and nondiscriminatory rules established by it, an Outside
Director may terminate or modify any Stock Deferral Election as to Stock
Awards to be made at least six months after the date on which such notice
is filed with the Committee or which are to be made for services rendered
after the last day of the calendar year in which the notice is filed with
the Committee; provided, however, that no modification may be made to the
Distribution Date unless the Outside Director shall file such notice with
the Committee at least six months prior thereto.  Notwithstanding
the provisions of this subsection 4.2, the Committee may, in its sole discretion,
after considering all of the pertinent facts and circumstances, approve
a change to the Distribution Date which is requested by an Outside Director
less than six months prior thereto.  The Distribution Date for Deferred
Stock Units awarded pursuant to subsection 2.2 shall be established, and
may be modified, in the same manner as the Distribution Date for Stock
Awards as provided in this subsection 4.2; provided, however, that in no
event shall the Distribution Date for Deferred Stock Units be earlier than
the first business day in January of the year following the date on which
the Outside Director ceases to be a director of the Company for any reason. 
Subject to the proviso to the preceding sentence, the Distribution Date
for Deferred Stock Units awarded pursuant to subsection 2.2 shall be the
same as the Distribution Date, if any, for Stock Awards pursuant to this
subsection 4.2.
          4.3. Crediting
and Adjustment of Deferred Amounts.  The amount of any Eligible
Cash Fees (including any Eligible Cash Fees that he or she has elected
to receive in Stock pursuant to Section 3) deferred pursuant to subsection
4.1 or the Retirement Plan Resolutions ("Deferred Compensation"), and the
amount of any Stock Award deferred by an Outside Director pursuant to a
Stock Deferral Election and any Deferred Stock Unit (each, a "Stock Deferral"),
shall be credited to a bookkeeping account maintained by the Company in
the name of the Outside Director (the "Deferred Compensation Account"),
which account shall consist of two subaccounts, one known as the "Cash
Subaccount" and the other as the "Company Stock Subaccount."  Any
Stock Deferrals and Eligible Cash Fees that the Outside Director has elected
or is deemed to have elected to receive in Stock pursuant to Section 3
and which he or she has also elected to defer pursuant to subsection 4.1
or is required to defer pursuant to subsection 2.2 or the Retirement Plan
Resolutions shall be credited to his or her Company Stock Subaccount. 
Any other Deferred Compensation shall be credited to his or her Cash Subaccount. 
An Outside Director's Deferred Compensation Account shall be adjusted as
follows:

(a) As of the first day of February, May, August and November, and
as of the Initial Effective Date (each such date referred to herein as
an "Accounting Date"), the Outside Director's Cash Subaccount shall be
adjusted as follows:

 
(i) first, the amount of any distributions made since the last preceding
Accounting Date and attributable to the Cash Subaccount shall be charged
to the Cash Subaccount;
 

(ii) next, the balance of the Cash Subaccount after adjustment in accordance
with subparagraph (i) above shall be credited with interest for the period
since the last preceding Accounting Date computed at the prime rate as
reported by The Wall Street Journal for the current Accounting Date,
or if such date is not a business day, for the next preceding business
day, except that, for the February 1, 1997 Accounting Date, the portion
of the Cash Subaccount representing amounts credited pursuant to the last
sentence of this paragraph (a) shall be credited with interest for only
the period since December 31, 1996;
 

(iii) next, on the Accounting Date occurring on Initial Effective Date,
the balance in the Cash Subaccount shall be charged with a distribution
equal to that portion of the balance in the Cash Subaccount which is attributable
to Eligible Cash Fees payable prior to the Initial Effective Date which
the Outside Director has elected to receive in Stock pursuant to Section
3 and which were credited to the Cash Subaccount pursuant to the Outside
Director's Deferral Election (as adjusted in accordance with the terms
of the Plan through the Initial Effective Date); and
 

(iv) finally, after adjustment in accordance with the foregoing provisions
of this paragraph (a), the Cash Subaccount shall be credited with the portion
of the Deferred Compensation or Supplemental Benefit (as defined in the
Retirement Plan Resolutions) otherwise payable to the Outside Director
since the last preceding Accounting Date or, in the case of the Accounting
Date occurring on February 1, 1995, subsequent to January 1, 1995, which
is to be credited to the Cash Subaccount, excluding amounts previously
credited pursuant to the following sentence.

In addition, as of the close of business on December 31, 1996, the
Cash Subaccount shall be credited with the Eligible Cash Fees to be credited
to such account pursuant to the Retirement Plan Resolutions which the Outside
Director has elected to receive in cash.
 

(b) The Outside Director's Company Stock Subaccount shall be adjusted as
follows:

 
(i) as of the Initial Effective Date, the Company Stock Subaccount
shall be credited with that number of stock units ("Stock Units") which
is equal to the amount charged to the Cash Subaccount as of that date pursuant
to subparagraph (a) (iii) next above, divided by the Fair Market Value
of a share of Stock as of the Initial Effective Date;
 

(ii) as of any date on or after the Initial Effective Date on which Eligible
Cash Fees would have been payable to the Outside Director in Stock but
for his or her Deferral Election, and as of December 31, 1996, in the case
of the Eligible Cash Fees credited pursuant to the Retirement Plan Resolutions
which the Outside Director has elected to take in Stock pursuant to Section
3, the Company Stock Subaccount shall be credited with a number of Stock
Units equal to the number of shares of Stock (including any fractional
shares) to which he or she would have been entitled pursuant to Section
3;
 

(iii) as of the date on which a Stock Award would be made to the Outside
Director pursuant to subsection 2.1 but for his or her Stock Deferral Election,
the Company Stock Subaccount shall be credited with a number of Stock Units
equal to the number of shares of Stock that would have been awarded to
the Outside Director as of such date but for his or her Stock Deferral
Election;
 

(iv) as of December 31, 1997, and each December 31st thereafter, the Company
Stock Subaccount shall be credited with a number of Stock Units equal to
the number of Deferred Stock Units awarded pursuant to subsection 2.2;
 

(v) as of the date on which shares of Stock are distributed to the Outside
Director in accordance with subsection 4.4 below, the Company Stock Subaccount
shall be charged with an equal number of Stock Units; and
 

(vi) as of the record date for any dividend (other than a stock dividend)
paid on Stock, the Company Stock Subaccount shall be credited with that
number of additional Stock Units which is equal to the number obtained
by multiplying the number of Stock Units then credited to the Company Stock
Subaccount by the amount of the cash dividend or the fair market value
(as determined by the Board of Directors) of any dividend in kind payable
on a share of Stock and dividing that product by the then Fair Market Value
of a share of Stock.

In the event of any merger, consolidation, reorganization, recapitalization,
spinoff, stock dividend, stock split, reverse stock split, rights offering,
exchange or other change in the corporate structure or capitalization of
the Company affecting the Stock, each Outside Director's Company Stock
Subaccount shall be equitably adjusted in such manner as the Committee
shall determine in its sole judgment.
          4.4. Payment
of Deferred Compensation Account.  Except as otherwise provided
in this subsection 4.4 or subsection 4.5, the balances credited to the
Cash Subaccount and Company Stock Subaccount of an Outside Director's Deferred
Compensation Account shall each be payable to the Outside Director in 10
annual installments commencing as of the Distribution Date and continuing
on each annual anniversary thereof.  Notwithstanding the foregoing,
an Outside Director may elect, by filing a notice with the Committee at
least six months prior to the Distribution Date, to change the number of
payments to a single payment or to any number of annual payments not in
excess of ten; provided, however, that the Committee may, in its sole discretion,
after considering all of the pertinent facts and circumstances, approve
a change to the payment form which is requested by an Outside Director
less than six months prior to the Distribution Date .  Each such payment
shall include a cash portion, if applicable, and a Stock portion, if applicable,
as follows:

(a) The cash portion to be paid as of the Distribution Date or any
anniversary thereof and charged to the Cash Subaccount shall be equal to
the balance of the Cash Subaccount multiplied by a fraction, the numerator
of which is one and the denominator of which is the number of remaining
payments to be made, including such payment.
 

(b) The Stock portion to be paid as of the Distribution Date or any anniversary
thereof and charged to the Company Stock Subaccount shall be distributed
in whole shares of Stock, the number of shares of which shall be determined
by rounding to the next lower integer the product obtained by multiplying
the number of Stock Units then credited to the Outside Director's Company
Stock Subaccount by a fraction, the numerator of which is one and the denominator
of which is the number of remaining payments to be made, including such
payment.  The Fair Market Value of any fractional share of Stock remaining
after all Stock distributions have been made to the Outside Director pursuant
to this paragraph (b) shall be paid to the Outside Director in cash.
Notwithstanding the foregoing, the Committee, in its sole discretion, may
distribute all balances in any Deferred Compensation Account and/or all
of the balance in any Company Stock Subaccount to the Outside Director
(or former Outside Director) in a lump sum as of any date.
          4.5. Payments
in the Event of Death.  If an Outside Director dies before payment
of his or her Deferred Compensation Account commences, all amounts then
credited to his or her Deferred Compensation Account shall be distributed
to his or her Beneficiary (as described below), as soon as practicable
after his or her death, in a lump sum.  If an Outside Director dies
after payment of his or her Deferred Compensation Account has commenced
but before the entire balance of such account has been distributed, the
remaining balance thereof shall be distributed to his or her Beneficiary,
as soon as practicable after his or her death, in a lump sum.  Any
amounts in the Cash Subaccount shall be distributed in cash and any amounts
in the Company Stock Subaccount shall be distributed in whole shares of
Stock determined in accordance with subsection 4.4(b), and the Fair Market
Value of any fractional share of Stock shall be distributed in cash. 
For purposes of the Plan, the Outside Director's "Beneficiary" is the person
or persons the Outside Director designates, which designation shall be
in writing, signed by the Outside Director and filed with the Committee
prior to the Outside Director's death.  A Beneficiary designation
shall be effective when filed with the Committee in accordance with the
preceding sentence.  If more than one Beneficiary has been designated,
the balance in the Outside Director's Deferred Compensation Account shall
be distributed to each such Beneficiary per capita (with cash distributed
in lieu of any fractional share of Stock).  In the absence of a Beneficiary
designation or if no Beneficiary survives the Outside Director, the Beneficiary
shall be the Outside Director's estate.

          4.6. Multiple
Distribution Dates.  If, as a result of the applicable proviso
to the last sentence of subsection 4.1(b) or the penultimate sentence of
4.2 (the "Multiple Distribution Date Rules"), there shall be more than
one Distribution Date for an Outside Director's Cash Subaccount or Company
Stock Subaccount, then the Company shall take all steps reasonably practicable
to divide the respective subaccount into two separate subaccounts, so that
the credits, charges and payments related to the different Distribution
Dates are kept separate.  In the event an Outside Director has attempted
to elect more than one Distribution Date pursuant to the provisions of
subsections 4.1 and 4.2 (other than under the circumstances contemplated
by the preceding sentence), the following rules of construction shall apply:

(a) the most recent Distribution Date election received by the Company
in accordance with the Plan shall constitute a revocation of all prior
Distribution Date elections; and
 

(b) with respect to contemporaneous elections, elections made pursuant
to subsection 4.2 shall take precedence over elections made pursuant to
subsection 4.1, elections made pursuant to subsection 4.1(a) shall take
precedence over elections made pursuant to subsection 4.1(b), and elections
made with respect to Stock Awards shall take precedence over elections
made with respect to Deferred Stock Units.
 

SECTION 5
Amendment and Termination

          While the Company
expects and intends to continue the Plan, the Board of Directors of the
Company reserves the right to, at any time and in any way, amend, suspend
or terminate the Plan; provided, however, that no amendment, suspension
or termination shall:

(a) be made without shareholder approval to the extent such approval
is required by law, agreement or the rules of any exchange or automated
quotation system upon which the Stock is listed or quoted;
 

(b) except as provided in subsection 4.4 (relating to lump sum payments
of amounts held in an Outside Director's Deferred Compensation Account)
or this Section 5, materially alter or impair the rights of an Outside
Director under the Plan without the consent of the Outside Director with
respect to rights already accrued hereunder; or
 

(c) make any change that would disqualify the Plan or any other plan of
the Company intended to be so qualified from the exemption provided by
Rule 16b-3 under the Securities Exchange Act of 1934, as amended.

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