Document:

Exhibit
10.6

 

Execution
Copy

 

 

 

$450,000,000

 

CREDIT AGREEMENT

 

AMONG

 

TRONOX INCORPORATED,

 

TRONOX WORLDWIDE
LLC,

 

AS BORROWER,

 

THE SEVERAL LENDERS

 

FROM TIME TO TIME
PARTIES HERETO,

 

 

LEHMAN BROTHERS INC.

AND

CREDIT SUISSE,

 

 

AS ARRANGERS AND

BOOKRUNNERS,

 

ABN AMRO BANK N.V.,

 

AS SYNDICATION
AGENT,

 

 

JPMORGAN CHASE BANK,
N.A.

AND

CITICORP USA, INC.

 

AS CO-DOCUMENTATION
AGENTS

 

 

AND

LEHMAN COMMERCIAL
PAPER INC.,

 

AS ADMINISTRATIVE
AGENT

 

 

DATED AS OF
NOVEMBER 28, 2005

 

 

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS

  	
   

  	
  1

  
	
  1.1

  	
  Defined Terms

  	
   

  	
  1

  
	
  1.2

  	
  Other Definitional
  Provisions

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  AMOUNT AND TERMS OF
  COMMITMENTS

  	
   

  	
  32

  
	
  2.1

  	
  Term Loan Commitments

  	
   

  	
  32

  
	
  2.2

  	
  Procedure for Term Loan
  Borrowing

  	
   

  	
  32

  
	
  2.3

  	
  Repayment of Term Loans

  	
   

  	
  33

  
	
  2.4

  	
  Revolving Credit
  Commitments

  	
   

  	
  33

  
	
  2.5

  	
  Procedure for Revolving
  Credit Borrowing

  	
   

  	
  34

  
	
  2.6

  	
  Swing Line Commitment

  	
   

  	
  34

  
	
  2.7

  	
  Procedure for Swing Line
  Borrowing; Refunding of Swing Line Loans

  	
   

  	
  35

  
	
  2.8

  	
  Repayment of Loans;
  Evidence of Debt

  	
   

  	
  36

  
	
  2.9

  	
  Commitment Fees, etc

  	
   

  	
  37

  
	
  2.10

  	
  Termination or Reduction
  of Commitments

  	
   

  	
  38

  
	
  2.11

  	
  Optional Prepayments

  	
   

  	
  38

  
	
  2.12

  	
  Mandatory Prepayments

  	
   

  	
  39

  
	
  2.13

  	
  Conversion and
  Continuation Options

  	
   

  	
  40

  
	
  2.14

  	
  Minimum Amounts and
  Maximum Number of LIBO Rate Tranches

  	
   

  	
  41

  
	
  2.15

  	
  Interest Rates and Payment
  Dates

  	
   

  	
  41

  
	
  2.16

  	
  Computation of Interest
  and Fees

  	
   

  	
  42

  
	
  2.17

  	
  Inability to Determine
  Interest Rate

  	
   

  	
  42

  
	
  2.18

  	
  Pro Rata Treatment and
  Payments

  	
   

  	
  43

  
	
  2.19

  	
  Requirements of Law

  	
   

  	
  45

  
	
  2.20

  	
  Taxes

  	
   

  	
  46

  
	
  2.21

  	
  Indemnity

  	
   

  	
  47

  
	
  2.22

  	
  Illegality

  	
   

  	
  48

  
	
  2.23

  	
  Change of Lending Office

  	
   

  	
  48

  
	
  2.24

  	
  Replacement of Lenders
  under Certain Circumstances

  	
   

  	
  49

  
	
  2.25

  	
  Limitation on Additional
  Amounts, etc

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  LETTERS OF CREDIT

  	
   

  	
  50

  
	
  3.1

  	
  L/C Commitment

  	
   

  	
  50

  
	
  3.2

  	
  Procedure for Issuance of
  Letter of Credit

  	
   

  	
  50

  
	
  3.3

  	
  Fees and Other Charges

  	
   

  	
  51

  
	
  3.4

  	
  L/C Participations

  	
   

  	
  51

  
	
  3.5

  	
  Reimbursement Obligation
  of the Borrower

  	
   

  	
  52

  
	
  3.6

  	
  Obligations Absolute

  	
   

  	
  53

  
	
  3.7

  	
  Letter of Credit Payments

  	
   

  	
  53

  
	
  3.8

  	
  Applications

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  	
  54

  
	
  4.1

  	
  Financial Condition

  	
   

  	
  54

  

 

 

	
  4.2

  	
  No Change

  	
   

  	
  55

  
	
  4.3

  	
  Corporate Existence;
  Compliance with Law

  	
   

  	
  55

  
	
  4.4

  	
  Organizational Power;
  Authorization; Enforceable Obligations

  	
   

  	
  55

  
	
  4.5

  	
  No Legal Bar

  	
   

  	
  56

  
	
  4.6

  	
  No Material Litigation

  	
   

  	
  56

  
	
  4.7

  	
  No Default

  	
   

  	
  56

  
	
  4.8

  	
  Ownership of Property; Liens

  	
   

  	
  56

  
	
  4.9

  	
  Intellectual Property

  	
   

  	
  57

  
	
  4.10

  	
  Taxes

  	
   

  	
  57

  
	
  4.11

  	
  Federal Regulations

  	
   

  	
  57

  
	
  4.12

  	
  Labor Matters

  	
   

  	
  57

  
	
  4.13

  	
  ERISA

  	
   

  	
  58

  
	
  4.14

  	
  Investment Company Act;
  Other Regulations

  	
   

  	
  58

  
	
  4.15

  	
  Subsidiaries

  	
   

  	
  58

  
	
  4.16

  	
  Use of Proceeds

  	
   

  	
  59

  
	
  4.17

  	
  Environmental Matters

  	
   

  	
  59

  
	
  4.18

  	
  Accuracy of Information,
  etc

  	
   

  	
  60

  
	
  4.19

  	
  Security Documents

  	
   

  	
  60

  
	
  4.20

  	
  Solvency

  	
   

  	
  61

  
	
  4.21

  	
  Insurance

  	
   

  	
  61

  
	
  4.22

  	
  Transaction

  	
   

  	
  61

  
	
  4.23

  	
  Real Estate

  	
   

  	
  63

  
	
  4.24

  	
  Permits

  	
   

  	
  63

  
	
  4.25

  	
  Regulation H

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  CONDITIONS PRECEDENT

  	
   

  	
  63

  
	
  5.1

  	
  Conditions to Initial
  Extension of Credit

  	
   

  	
  63

  
	
  5.2

  	
  Conditions to Each
  Extension of Credit

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
  68

  
	
  6.1

  	
  Financial Statements

  	
   

  	
  68

  
	
  6.2

  	
  Certificates; Other
  Information

  	
   

  	
  69

  
	
  6.3

  	
  Payment of Obligations

  	
   

  	
  71

  
	
  6.4

  	
  Conduct of Business and
  Maintenance of Existence, etc

  	
   

  	
  71

  
	
  6.5

  	
  Maintenance of Property;
  Insurance

  	
   

  	
  71

  
	
  6.6

  	
  Inspection of Property;
  Books and Records; Discussions

  	
   

  	
  72

  
	
  6.7

  	
  Notices

  	
   

  	
  72

  
	
  6.8

  	
  Environmental Laws

  	
   

  	
  73

  
	
  6.9

  	
  Additional Collateral, etc

  	
   

  	
  74

  
	
  6.10

  	
  Use of Proceeds

  	
   

  	
  76

  
	
  6.11

  	
  ERISA Documents

  	
   

  	
  76

  
	
  6.12

  	
  Further Assurances

  	
   

  	
  76

  
	
  6.13

  	
  Ratings

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  NEGATIVE COVENANTS

  	
   

  	
  77

  
	
  7.1

  	
  Financial Condition
  Covenants

  	
   

  	
  77

  
	
  7.2

  	
  Limitation on Indebtedness

  	
   

  	
  78

  

 

 

	
  7.3

  	
  Limitation on Liens

  	
   

  	
  82

  
	
  7.4

  	
  Limitation on Fundamental
  Changes

  	
   

  	
  85

  
	
  7.5

  	
  Limitation on Disposition
  of Property

  	
   

  	
  85

  
	
  7.6

  	
  Limitation on Restricted
  Payments

  	
   

  	
  87

  
	
  7.7

  	
  Limitation on Capital
  Expenditures

  	
   

  	
  89

  
	
  7.8

  	
  Limitation on Investments

  	
   

  	
  89

  
	
  7.9

  	
  Limitation on Optional
  Payments and Modifications of Debt Instruments, etc

  	
   

  	
  92

  
	
  7.10

  	
  Limitation on Transactions
  with Affiliates

  	
   

  	
  92

  
	
  7.11

  	
  Limitation on Sales and
  Leasebacks

  	
   

  	
  93

  
	
  7.12

  	
  Limitation on Changes in
  Fiscal Periods

  	
   

  	
  93

  
	
  7.13

  	
  Limitation on Negative
  Pledge Clauses

  	
   

  	
  93

  
	
  7.14

  	
  Limitation on Restrictions
  on Subsidiary Distributions

  	
   

  	
  94

  
	
  7.15

  	
  Limitation on Lines of
  Business

  	
   

  	
  94

  
	
  7.16

  	
  Limitation on Amendments
  to Transaction Documents

  	
   

  	
  94

  
	
  7.17

  	
  Special Purpose Subsidiary

  	
   

  	
  95

  
	
  7.18

  	
  Limitation on Activities
  of Holdings

  	
   

  	
  95

  
	
  7.19

  	
  Limitation on Activities
  of Tronox Finance

  	
   

  	
  95

  
	
  7.20

  	
  Limitation on Hedge
  Agreements

  	
   

  	
  95

  
	
  7.21

  	
  Post-Closing Deliveries

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  EVENTS OF DEFAULT

  	
   

  	
  96

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  THE AGENTS; THE ARRANGERS

  	
   

  	
  99

  
	
  9.1

  	
  Appointment

  	
   

  	
  99

  
	
  9.2

  	
  Delegation of Duties

  	
   

  	
  100

  
	
  9.3

  	
  Exculpatory Provisions

  	
   

  	
  100

  
	
  9.4

  	
  Reliance by Agents

  	
   

  	
  100

  
	
  9.5

  	
  Notice of Default

  	
   

  	
  100

  
	
  9.6

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

  	
   

  	
  101

  
	
  9.7

  	
  Indemnification

  	
   

  	
  101

  
	
  9.8

  	
  Arrangers and Agent in
  their Individual Capacities

  	
   

  	
  102

  
	
  9.9

  	
  Successor Administrative
  Agent

  	
   

  	
  102

  
	
  9.10

  	
  Authorization to Release
  Liens and Guarantees

  	
   

  	
  103

  
	
  9.11

  	
  The Arrangers; the
  Syndication Agent and the Documentation Agents

  	
   

  	
  103

  
	
  9.12

  	
  Withholding Tax

  	
   

  	
  103

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  MISCELLANEOUS

  	
   

  	
  103

  
	
  10.1

  	
  Amendments and Waivers

  	
   

  	
  103

  
	
  10.2

  	
  Notices

  	
   

  	
  105

  
	
  10.3

  	
  No Waiver; Cumulative
  Remedies

  	
   

  	
  106

  
	
  10.4

  	
  Survival of
  Representations and Warranties

  	
   

  	
  107

  
	
  10.5

  	
  Payment of Expenses

  	
   

  	
  107

  
	
  10.6

  	
  Successors and Assigns;
  Participations and Assignments

  	
   

  	
  108

  
	
  10.7

  	
  Adjustments; Set-off

  	
   

  	
  111

  
	
  10.8

  	
  Counterparts

  	
   

  	
  112

  
	
  10.9

  	
  Severability

  	
   

  	
  112

  

 

 

	
  10.10

  	
  Integration

  	
   

  	
  112

  
	
  10.11

  	
  GOVERNING
  LAW

  	
   

  	
  112

  
	
  10.12

  	
  Submission To
  Jurisdiction; Waivers

  	
   

  	
  113

  
	
  10.13

  	
  Acknowledgments

  	
   

  	
  113

  
	
  10.14

  	
  Confidentiality

  	
   

  	
  113

  
	
  10.15

  	
  Release of Collateral and
  Guarantee Obligations

  	
   

  	
  114

  
	
  10.16

  	
  Accounting Changes

  	
   

  	
  115

  
	
  10.17

  	
  Delivery of Lender Addenda

  	
   

  	
  115

  
	
  10.18

  	
  Construction

  	
   

  	
  115

  
	
  10.19

  	
  WAIVERS
  OF JURY TRIAL

  	
   

  	
  116

  
	
  10.20

  	
  Customer Identification –
  USA PATRIOT Act Notice

  	
   

  	
  116

  
	
  10.21

  	
  Transaction/Spin-Off

  	
   

  	
  116

  

 

 

	
  ANNEXES:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  Pricing
  Grid

  	
   

  	
   

  
	
  B

  	
  Existing
  Letters of Credit

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1(a)

  	
  Electrolytic
  Assets

  	
   

  	
   

  
	
  1.1(b)

  	
  Foreign
  Subsidiary Indebtedness

  	
   

  	
   

  
	
  1.1(c)

  	
  Mortgaged
  Properties

  	
   

  	
   

  
	
  1.1(d)

  	
  Henderson
  Real Estate

  	
   

  	
   

  
	
  4.4

  	
  Consents,
  Authorizations, Filings and Notices

  	
   

  	
   

  
	
  4.6(b)

  	
  Material
  Litigation

  	
   

  	
   

  
	
  4.8(a)

  	
  Real
  Property Title Exceptions

  	
   

  	
   

  
	
  4.10

  	
  Tax
  Filing Exceptions

  	
   

  	
   

  
	
  4.15

  	
  Subsidiaries

  	
   

  	
   

  
	
  4.19(a)-1

  	
  UCC
  Filing Jurisdictions

  	
   

  	
   

  
	
  4.19(a)-2

  	
  UCC
  Financing Statements to Remain on File

  	
   

  	
   

  
	
  4.19(a)-3

  	
  UCC
  Financing Statements to be Terminated

  	
   

  	
   

  
	
  4.19(b)

  	
  Mortgage
  Filing Offices

  	
   

  	
   

  
	
  4.22

  	
  Transaction
  Documentation

  	
   

  	
   

  
	
  4.23

  	
  Owned
  and Leased Real Property

  	
   

  	
   

  
	
  4.24

  	
  Permits

  	
   

  	
   

  
	
  7.2(d)

  	
  Existing
  Indebtedness

  	
   

  	
   

  
	
  7.3(f)

  	
  Existing
  Liens

  	
   

  	
   

  
	
  7.7

  	
  Limitations
  on Capital Expenditures

  	
   

  	
   

  
	
  7.8(m)

  	
  Investments

  	
   

  	
   

  
	
  7.21

  	
  Post-Closing
  Deliveries

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  Form
  of Guarantee and Collateral Agreement

  	
   

  	
   

  
	
  B

  	
  Form
  of Compliance Certificate

  	
   

  	
   

  
	
  C

  	
  Form
  of Closing Certificate

  	
   

  	
   

  
	
  D

  	
  Form
  of Assignment and Acceptance

  	
   

  	
   

  
	
  E-1

  	
  Form
  of Legal Opinion of Covington & Burling

  	
   

  	
   

  
	
  E-2

  	
  Form
  of Legal Opinion of Local or Foreign Counsel

  	
   

  	
   

  
	
  E-3

  	
  Form
  of Legal Opinion of Borrower’s General Counsel

  	
   

  	
   

  
	
  F-1

  	
  Form
  of Term Note

  	
   

  	
   

  
	
  F-2

  	
  Form
  of Revolving Credit Note

  	
   

  	
   

  
	
  F-3

  	
  Form
  of Swing Line Note

  	
   

  	
   

  
	
  G

  	
  Form
  of Exemption Certificate

  	
   

  	
   

  
	
  H

  	
  Form
  of Lender Addendum

  	
   

  	
   

  
	
  I

  	
  Form
  of Borrowing Notice

  	
   

  	
   

  
	
  J

  	
  Form
  of Solvency Certificate

  	
   

  	
   

  
	
  K

  	
  Form
  of Mortgage

  	
   

  	
   

  
						

 

 

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

 

W I  T  N  E  S  S  E  T  H:

 

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

 

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

 

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

 

SECTION 1. DEFINITIONS

 

 

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

 

“Act”:  as defined in Section 10.20.

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Arrangers”:  as defined in the preamble hereto.

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

“Benefitted Lender”:  as defined in Section 10.7.

 

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

 

“Borrower”:  as defined in the preamble hereto.

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Defaulting Lender”: as defined in
Section 2.24.

 

“Derivatives Counterparty”:  as defined in Section 7.6.

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

“Dollar Loan”:  a Loan denominated in Dollars.

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

“Indemnified Liabilities”:  as defined in Section 10.5.

 

“Indemnitee”:  as defined in Section 10.5.

 

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

 

“Insolvent”:  pertaining to a condition of Insolvency.

 

14

 

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

 

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

 

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

 

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

 

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

 

(c)           any
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar 

 

15

 

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

 

“Investments”:  as defined in Section 7.8.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

“Lenders”:  as defined in the preamble hereto.

 

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

 

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

 

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

 

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

 

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

 

	
   

  	
  LIBOR

  	
   

  
	
   

  	
  1.00
  – LIBOR Statutory Reserves

  	
   

  

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

“Note”:  any promissory note evidencing any Loan.

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

“Restricted Payments”:  as defined in Section 7.6.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

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

 

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

 

(f)            which
has no Subsidiaries.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

29

 

“Term Loan”: 
as defined in Section 2.1.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

“Transferee”: 
as defined in Section 10.14.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

31

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION
2.                                AMOUNT AND TERMS OF
COMMITMENTS

 

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

 

32

 

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

 

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

 

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

 

	
  Installment

  	
   

  	
  Percentage

  	
   

  
	
  March 31, 2006

  	
   

  	
  0.25

  	
  %

  
	
  June 30, 2006

  	
   

  	
  0.25

  	
  %

  
	
  September 30, 2006

  	
   

  	
  0.25

  	
  %

  
	
  December 31, 2006

  	
   

  	
  0.25

  	
  %

  
	
  March 31, 2007

  	
   

  	
  0.25

  	
  %

  
	
  June 30, 2007

  	
   

  	
  0.25

  	
  %

  
	
  September 30, 2007

  	
   

  	
  0.25

  	
  %

  
	
  December 31, 2007

  	
   

  	
  0.25

  	
  %

  
	
  March 31, 2008

  	
   

  	
  0.25

  	
  %

  
	
  June 30, 2008

  	
   

  	
  0.25

  	
  %

  
	
  September 30, 2008

  	
   

  	
  0.25

  	
  %

  
	
  December 31, 2008

  	
   

  	
  0.25

  	
  %

  
	
  March 31, 2009

  	
   

  	
  0.25

  	
  %

  
	
  June 30, 2009

  	
   

  	
  0.25

  	
  %

  
	
  September 30, 2009

  	
   

  	
  0.25

  	
  %

  
	
  December 31, 2009

  	
   

  	
  0.25

  	
  %

  
	
  March 31, 2010

  	
   

  	
  0.25

  	
  %

  
	
  June 30, 2010

  	
   

  	
  0.25

  	
  %

  
	
  September 30, 2010

  	
   

  	
  0.25

  	
  %

  
	
  December 31, 2010

  	
   

  	
  0.25

  	
  %

  
	
  March 31, 2011

  	
   

  	
  23.75

  	
  %

  

 

33

 

	
  Installment

  	
   

  	
  Percentage

  	
   

  
	
  June 30, 2011

  	
   

  	
  23.75

  	
  %

  
	
  September 30, 2011

  	
   

  	
  23.75

  	
  %

  
	
  Term Loan Maturity

  	
   

  	
  23.75

  	
  %

  
	
  Date

  	
   

  	
   

  	
   

  

 

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

 

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

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

 

34

 

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

 

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

 

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

 

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

 

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

 

35

 

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

 

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

 

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

 

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

 

36

 

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

 

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

 

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

 

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

 

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

 

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

 

37

 

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

 

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

 

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

 

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

 

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

 

38

 

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

 

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

 

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

 

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

 

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

 

39

 

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

 

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

 

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

 

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

 

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

 

40

 

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

 

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

 

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

 

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

 

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

 

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

 

41

 

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

 

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

 

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

 

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

 

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

 

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

 

42

 

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

 

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

 

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

 

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

 

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

 

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

 

43

 

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

 

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

 

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

 

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

 

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

 

44

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

45

 

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

 

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

 

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

 

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

 

46

 

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

 

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

 

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

 

47

 

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

 

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

 

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

 

48

 

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

 

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

 

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

 

49

 

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

 

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

 

SECTION
3.           LETTERS OF CREDIT

 

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

 

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

 

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

 

50

 

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

 

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

 

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

 

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

 

51

 

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

 

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

 

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

 

52

 

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

 

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

 

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

 

53

 

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

 

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

 

SECTION
4.           REPRESENTATIONS AND
WARRANTIES

 

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

 

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

 

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

 

54

 

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

 

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

 

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

 

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

 

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

 

55

 

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

 

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

 

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

 

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

 

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

 

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

 

56

 

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

 

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

 

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

 

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

 

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

 

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

 

57

 

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

 

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

 

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

 

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

 

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

 

58

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

59

 

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

 

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

 

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

 

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

 

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

 

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

 

60

 

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

 

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

 

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

 

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

 

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

 

61

 

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

 

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

 

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

 

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

 

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

 

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

 

62

 

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

 

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

 

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

 

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

 

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

 

SECTION
5.           CONDITIONS PRECEDENT

 

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

 

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

 

63

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

64

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

65

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

66

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

67

 

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

 

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

 

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

 

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

 

SECTION
6.           AFFIRMATIVE COVENANTS

 

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

 

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

 

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

 

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

 

68

 

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

 

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

 

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

 

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

 

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

 

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

 

69

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

70

 

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

 

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

 

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

 

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

 

6.5           Maintenance
of Property; Insurance.

 

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

 

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

 

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

 

71

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

72

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

73

 

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

 

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

 

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

 

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

 

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

 

74

 

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

 

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

 

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

 

75

 

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

 

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

 

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

 

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

 

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

 

76

 

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

 

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

 

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

 

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

 

SECTION
7.           NEGATIVE COVENANTS

 

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

 

7.1           Financial
Condition Covenants.

 

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

 

	
  Fiscal Year

  	
   

  	
  Consolidated Total

  Leverage Ratio

  	
   

  
	
  Fiscal Year 2006

  	
   

  	
  3.75

  	
  x 

  
	
  Fiscal Year 2007

  	
   

  	
  3.50

  	
  x 

  
	
  Fiscal Year 2008

  	
   

  	
  3.00

  	
  x 

  
	
  Fiscal Year 2009

  	
   

  	
  2.50

  	
  x 

  
	
  Fiscal Year 2010

  	
   

  	
  2.50

  	
  x 

  
	
  Fiscal Year 2011

  	
   

  	
  2.50

  	
  x 

  

 

77

 

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

 

	
  Fiscal Year

  	
   

  	
  Consolidated

  Interest Coverage Ratio

  	
   

  
	
  Fiscal Year 2006

  	
   

  	
  2.00

  	
  x 

  
	
  Fiscal Year 2007

  	
   

  	
  3.00

  	
  x 

  
	
  Fiscal Year 2008

  	
   

  	
  4.00

  	
  x 

  
	
  Fiscal Year 2009

  	
   

  	
  4.00

  	
  x 

  
	
  Fiscal Year 2010

  	
   

  	
  4.00

  	
  x 

  
	
  Fiscal Year 2011

  	
   

  	
  4.00

  	
  x 

  

 

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

 

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

 

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

 

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

 

78

 

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

 

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

 

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

 

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

 

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

 

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

 

79

 

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

 

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

 

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

 

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

 

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

 

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

 

80

 

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

 

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

 

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

 

81

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

82

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(h)           Liens
created pursuant to the Security Documents;

 

83

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

84

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

85

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

86

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

87

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

88

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           Investments
in Cash Equivalents;

 

89

 

(c)           Guarantee
Obligations permitted by Section 7.2;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

90

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

91

 

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

 

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

 

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

 

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

 

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

 

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

 

92

 

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

 

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

 

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

 

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

 

93

 

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

 

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

 

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

 

94

 

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

 

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

 

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

 

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

 

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

 

95

 

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

 

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

 

SECTION
8.           EVENTS OF DEFAULT

 

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

 

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

 

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

 

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

 

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

 

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

 

96

 

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

 

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

 

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

 

97

 

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

 

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

 

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

 

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

 

(k)           Any
Change of Control shall occur;

 

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

 

98

 

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

 

SECTION
9.           THE AGENTS; THE ARRANGERS

 

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

 

99

 

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

 

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

 

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

 

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

 

100

 

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

 

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

 

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

 

101

 

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

 

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

 

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

 

102

 

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

 

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

 

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

 

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

 

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

 

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

 

103

 

SECTION
10.         MISCELLANEOUS

 

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

 

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

 

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

 

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

 

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

 

104

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

105

 

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

 

	
   

  	
  Holdings
  or the Borrower:

  	
  Tronox
  Incorporated

  
	
   

  	
   

  	
  123
  Robert S. Kerr Avenue

  
	
   

  	
   

  	
  Oklahoma
  City, OK 73102

  
	
   

  	
   

  	
  Attention:
  Chief Financial Officer

  
	
   

  	
   

  	
  Telecopy:
  

  	
  (405)
  270-3474

  
	
   

  	
   

  	
  Telephone:
  

  	
  (405)
  270-2498

  
	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
  General
  Counsel

  
	
   

  	
   

  	
  Telecopy:
  

  	
  (405)
  270-3866

  
	
   

  	
   

  	
  Telephone:
  

  	
  (405)
  270-2869

  
	
   

  	
   

  	
   

  
	
   

  	
  The
  Administrative Agent:

  	
  Lehman
  Commercial Paper Inc.

  
	
   

  	
   

  	
  745
  Seventh Avenue

  
	
   

  	
   

  	
  New
  York, New York 10019

  
	
   

  	
   

  	
  Attention:
  Paul Arzouian

  
	
   

  	
   

  	
  Telecopy:
  

  	
  (646)
  758-4980

  
	
   

  	
   

  	
  Telephone:
  

  	
  (212)
  526-5803

  
	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  	
  Akin
  Gump Strauss Hauer & Feld LLP

  
	
   

  	
   

  	
  1111
  Louisiana Street, Suite 4400

  
	
   

  	
   

  	
  Houston,
  Texas 77002

  
	
   

  	
   

  	
  Attention:
  Eugene F. Cowell III

  
	
   

  	
   

  	
  Telecopy:
  

  	
  (713)
  236-0822

  
	
   

  	
   

  	
  Telephone:
  

  	
  (713)
  220-8185

  
	
   

  	
   

  	
   

  
	
   

  	
  Issuing
  Lender:

  	
  As
  notified by such Issuing Lender to the Administrative

  
	
   

  	
   

  	
  Agent
  and the Borrower

  

 

 

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

 

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

 

106

 

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

 

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

 

107

 

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

 

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

 

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

 

108

 

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

 

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

 

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

 

109

 

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

 

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

 

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

 

110

 

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

 

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

 

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

 

111

 

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

 

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

 

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

 

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

 

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

 

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

 

112

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

113

 

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

 

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

 

114

 

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

 

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

 

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

 

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

 

115

 

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

 

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

 

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

 

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

 

116

 

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

 

	
   

  	
  TRONOX
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary
  Mikkelson

  	
   

  
	
   

  	
   

  	
  Name: Mary
  Mikkelson

  
	
   

  	
   

  	
  Title:
  Senior Vice President and Chief

  
	
   

  	
   

  	
  Financial
  Officer

  
	
   

  	
   

  
	
   

  	
  TRONOX
  WORLDWIDE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary
  Mikkelson

  	
   

  
	
   

  	
   

  	
  Name: Mary
  Mikkelson

  
	
   

  	
   

  	
  Title:
  Senior Vice President and Chief

  
	
   

  	
   

  	
  Financial
  Officer

  
	
   

  	
   

  
	
   

  	
  LEHMAN
  COMMERCIAL PAPER INC.,

  
	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laurie
  B. Perper

  	
   

  
	
   

  	
   

  	
  Name: Laurie
  B. Perper

  
	
   

  	
   

  	
  Title: EVP

  
	
   

  	
   

  
	
   

  	
  LEHMAN
  BROTHERS INC.,

  
	
   

  	
  as Joint
  Lead Arranger

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laurie
  B. Perper

  	
   

  
	
   

  	
   

  	
  Name: Laurie
  B. Perper

  
	
   

  	
   

  	
  Title: EVP

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE,

  
	
   

  	
  Cayman
  Islands Branch,

  
	
   

  	
  as Joint
  Lead Arranger

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vanessa
  Gomez

  	
   

  
	
   

  	
   

  	
  Name:
  Vanessa Gomez

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nupur
  Kumar

  	
   

  
	
   

  	
   

  	
  Name: Nupur
  Kumar

  
	
   

  	
   

  	
  Title:
  Associate

  

 

[Signature Page to Credit Agreement]

 

 

	
   

  	
  ABN AMRO
  BANK N.V.,

  
	
   

  	
  as
  Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jamie
  Conn

  	
   

  
	
   

  	
   

  	
  Name: Jamie
  Conn

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joshua
  Wolf

  	
   

  
	
   

  	
   

  	
  Name: Joshua
  Wolf

  
	
   

  	
   

  	
  Title: Vice
  President

  

 

[Signature Page to Credit Agreement]

 

 

Annex A

 

PRICING GRID FOR APPLICABLE
MARGINS

AND COMMITMENT FEE RATE

 

	
  Facility Rating

  S&P Moody’s

  	
   

  	
  Applicable Margin

  LIBOR Loans-

  	
   

  	
  Commitment

  Fee Rate

  	
   

  	
  Applicable Margin-

  Base Rate Loans

  	
   

  
	
  1.

  	
  >BBB–

  	
  Baa3

  	
   

  	
  1.00

  	
  %

  	
  0.20

  	
  %

  	
  0.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  BB+

  	
  Ba1

  	
   

  	
  1.25

  	
  %

  	
  0.25

  	
  %

  	
  0.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  BB

  	
  Ba2

  	
   

  	
  1.50

  	
  %

  	
  0.375

  	
  %

  	
  0.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  BB–

  	
  Ba3

  	
   

  	
  1.75

  	
  %

  	
  0.375

  	
  %

  	
  0.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  <B+

  	
  B1

  	
   

  	
  2.00

  	
  %

  	
  0.50

  	
  %

  	
  1.00

  	
  %

  

 

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

 

Notwithstanding the foregoing,
at all times after maturity or acceleration of the maturity of the Loans or
during the occurrence and continuance of an Event of Default, the Applicable
Margins and the Commitment Fee Rate set forth in category 5 shall apply.Exhibit 10.7

 

[EXECUTION COPY]

 

 

 

TRONOX WORLDWIDE LLC,

 

TRONOX FINANCE CORP.,

 

THE GUARANTORS PARTIES HERETO,

 

 

AND

 

 

CITIBANK, N.A.,

AS TRUSTEE

 

 

91/2 % Senior Notes due
2012

 

 

INDENTURE

 

Dated as of November 28, 2005

 

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  I DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  	
  1

  
	
  Section 1.1.

  	
  Definitions.

  	
   

  	
  1

  
	
  Section 1.2.

  	
  Other Definitions.

  	
   

  	
  29

  
	
  Section 1.3.

  	
  Incorporation by Reference
  of Trust Indenture Act

  	
   

  	
  32

  
	
  Section 1.4.

  	
  Rules of Construction

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  II THE NOTES

  	
   

  	
  33

  
	
  Section 2.1.

  	
  Form, Dating and Terms.

  	
   

  	
  33

  
	
  Section 2.2.

  	
  Execution and
  Authentication

  	
   

  	
  38

  
	
  Section 2.3.

  	
  Registrar and Paying Agent

  	
   

  	
  39

  
	
  Section 2.4.

  	
  Paying Agent to Hold Money
  in Trust

  	
   

  	
  39

  
	
  Section 2.5.

  	
  Holder Lists

  	
   

  	
  40

  
	
  Section 2.6.

  	
  Transfer and Exchange.

  	
   

  	
  40

  
	
  Section 2.7.

  	
  Form of Certificates to be
  Delivered in Connection with Transfers Pursuant to Regulation S and Rule
  144A.

  	
   

  	
  43

  
	
  Section 2.8.

  	
  Mutilated, Destroyed, Lost
  or Wrongfully Taken Notes

  	
   

  	
  45

  
	
  Section 2.9.

  	
  Outstanding Notes

  	
   

  	
  46

  
	
  Section 2.10.

  	
  Cancellation

  	
   

  	
  46

  
	
  Section 2.11.

  	
  Payment of Interest;
  Defaulted Interest

  	
   

  	
  46

  
	
  Section 2.12.

  	
  Computation of Interest

  	
   

  	
  47

  
	
  Section 2.13.

  	
  CUSIP Numbers

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  III COVENANTS

  	
   

  	
  48

  
	
  Section 3.1.

  	
  Payment of Notes

  	
   

  	
  48

  
	
  Section 3.2.

  	
  Reports

  	
   

  	
  48

  
	
  Section 3.3.

  	
  Incurrence of Indebtedness
  and Issuance of Preferred Stock.

  	
   

  	
  49

  
	
  Section 3.4.

  	
  Restricted Payments.

  	
   

  	
  53

  
	
  Section 3.5.

  	
  Liens

  	
   

  	
  57

  
	
  Section 3.6.

  	
  Dividend and Other Payment
  Restrictions Affecting Subsidiaries.

  	
   

  	
  57

  
	
  Section 3.7.

  	
  Asset Sales.

  	
   

  	
  60

  
	
  Section 3.8.

  	
  Transactions with
  Affiliates.

  	
   

  	
  62

  
	
  Section 3.9.

  	
  Change of Control

  	
   

  	
  64

  
	
  Section 3.10.

  	
  Future Note Guarantees

  	
   

  	
  65

  
	
  Section 3.11.

  	
  Sale and Leaseback
  Transactions

  	
   

  	
  66

  
	
  Section 3.12.

  	
  Business Activities

  	
   

  	
  66

  
	
  Section 3.13.

  	
  Designation of Restricted
  and Unrestricted Subsidiaries

  	
   

  	
  66

  
	
  Section 3.14.

  	
  Maintenance of Office or
  Agency

  	
   

  	
  67

  
	
  Section 3.15.

  	
  Corporate Existence

  	
   

  	
  67

  
	
  Section 3.16.

  	
  Payment of Taxes and Other
  Claims

  	
   

  	
  67

  
	
  Section 3.17.

  	
  Compliance Certificate

  	
   

  	
  68

  
	
  Section 3.18.

  	
  Further Instruments and Acts

  	
   

  	
  68

  
	
  Section 3.19.

  	
  Statement by Officers as
  to Default

  	
   

  	
  68

  
	
  Section 3.20.

  	
  Payments for Consent

  	
   

  	
  68

  

 

i

 

	
  Section 3.21.

  	
  Restrictions on Activities
  of Tronox Finance

  	
   

  	
  68

  
	
  Section 3.22.

  	
  Elimination of Covenants

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IV SUCCESSOR COMPANY

  	
   

  	
  69

  
	
  Section 4.1.

  	
  Merger, Consolidation or
  Sale of Assets

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  V REDEMPTION OF NOTES

  	
   

  	
  70

  
	
  Section 5.1.

  	
  Optional Redemption

  	
   

  	
  70

  
	
  Section 5.2.

  	
  Applicability of Article

  	
   

  	
  71

  
	
  Section 5.3.

  	
  Election to Redeem; Notice
  to Trustee

  	
   

  	
  71

  
	
  Section 5.4.

  	
  Selection by Trustee of
  Notes to Be Redeemed

  	
   

  	
  71

  
	
  Section 5.5.

  	
  Notice of Redemption

  	
   

  	
  71

  
	
  Section 5.6.

  	
  Deposit of Redemption
  Price

  	
   

  	
  73

  
	
  Section 5.7.

  	
  Notes Payable on
  Redemption Date

  	
   

  	
  73

  
	
  Section 5.8.

  	
  Notes Redeemed in Part

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI DEFAULTS AND REMEDIES

  	
   

  	
  74

  
	
  Section 6.1.

  	
  Events of Default

  	
   

  	
  74

  
	
  Section 6.2.

  	
  Acceleration

  	
   

  	
  76

  
	
  Section 6.3.

  	
  Other Remedies

  	
   

  	
  76

  
	
  Section 6.4.

  	
  Waiver of Past Defaults

  	
   

  	
  77

  
	
  Section 6.5.

  	
  Control by Majority

  	
   

  	
  77

  
	
  Section 6.6.

  	
  Limitation on Suits

  	
   

  	
  77

  
	
  Section 6.7.

  	
  Rights of Holders to
  Receive Payment

  	
   

  	
  78

  
	
  Section 6.8.

  	
  Collection Suit by Trustee

  	
   

  	
  78

  
	
  Section 6.9.

  	
  Trustee May File Proofs of
  Claim

  	
   

  	
  78

  
	
  Section 6.10.

  	
  Priorities

  	
   

  	
  78

  
	
  Section 6.11.

  	
  Undertaking for Costs

  	
   

  	
  79

  
	
  Section 6.12.

  	
  Additional Payments

  	
   

  	
  79

  
	
  Section 6.13.

  	
  Waiver of Stay, Extension
  and Usury Laws

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VII TRUSTEE

  	
   

  	
  80

  
	
  Section 7.1.

  	
  Duties of Trustee

  	
   

  	
  80

  
	
  Section 7.2.

  	
  Rights of Trustee

  	
   

  	
  81

  
	
  Section 7.3.

  	
  Individual Rights of
  Trustee

  	
   

  	
  82

  
	
  Section 7.4.

  	
  Trustee’s Disclaimer

  	
   

  	
  82

  
	
  Section 7.5.

  	
  Notice of Defaults

  	
   

  	
  83

  
	
  Section 7.6.

  	
  Reports by Trustee to
  Holders

  	
   

  	
  83

  
	
  Section 7.7.

  	
  Compensation and Indemnity

  	
   

  	
  83

  
	
  Section 7.8.

  	
  Replacement of Trustee

  	
   

  	
  84

  
	
  Section 7.9.

  	
  Successor Trustee by
  Merger

  	
   

  	
  85

  
	
  Section 7.10.

  	
  Eligibility; Disqualification

  	
   

  	
  85

  
	
  Section 7.11.

  	
  Preferential Collection of
  Claims Against Issuers

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE

  	
   

  	
  85

  
	
  Section 8.1.

  	
  Option to Effect Legal
  Defeasance or Covenant Defeasance

  	
   

  	
  85

  
	
  Section 8.2.

  	
  Legal Defeasance and
  Discharge

  	
   

  	
  85

  

 

ii

 

	
  Section 8.3.

  	
  Covenant Defeasance

  	
   

  	
  86

  
	
  Section 8.4.

  	
  Conditions to Legal or
  Covenant Defeasance

  	
   

  	
  87

  
	
  Section 8.5.

  	
  Deposited Cash and
  Government Securities to be Held in Trust; Other Miscellaneous Provisions

  	
   

  	
  88

  
	
  Section 8.6.

  	
  Repayment to Company

  	
   

  	
  88

  
	
  Section 8.7.

  	
  Reinstatement

  	
   

  	
  89

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IX AMENDMENTS

  	
   

  	
  89

  
	
  Section 9.1.

  	
  Without Consent of Holders

  	
   

  	
  89

  
	
  Section 9.2.

  	
  With Consent of Holders

  	
   

  	
  90

  
	
  Section 9.3.

  	
  Compliance with Trust Indenture
  Act

  	
   

  	
  91

  
	
  Section 9.4.

  	
  Revocation and Effect of
  Consents and Waivers

  	
   

  	
  91

  
	
  Section 9.5.

  	
  Notation on or Exchange of
  Notes

  	
   

  	
  91

  
	
  Section 9.6.

  	
  Trustee To Sign Amendments

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  X NOTE GUARANTEE

  	
   

  	
  92

  
	
  Section 10.1.

  	
  Note Guarantee

  	
   

  	
  92

  
	
  Section 10.2.

  	
  Limitation on Liability;
  Termination, Release and Discharge.

  	
   

  	
  93

  
	
  Section 10.3.

  	
  Limitation of Guarantors’
  Liability

  	
   

  	
  95

  
	
  Section 10.4.

  	
  Contribution

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XI SATISFACTION AND DISCHARGE

  	
   

  	
  95

  
	
  Section 11.1.

  	
  Satisfaction and Discharge

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  XII MISCELLANEOUS

  	
   

  	
  96

  
	
  Section 12.1.

  	
  Trust Indenture Act
  Controls

  	
   

  	
  96

  
	
  Section 12.2.

  	
  Notices

  	
   

  	
  96

  
	
  Section 12.3.

  	
  Communication by Holders
  with other Holders

  	
   

  	
  97

  
	
  Section 12.4.

  	
  Certificate and Opinion as
  to Conditions Precedent

  	
   

  	
  97

  
	
  Section 12.5.

  	
  Statements Required in
  Certificate or Opinion

  	
   

  	
  98

  
	
  Section 12.6.

  	
  When Notes Disregarded

  	
   

  	
  98

  
	
  Section 12.7.

  	
  Rules by Trustee, Paying
  Agent and Registrar

  	
   

  	
  98

  
	
  Section 12.8.

  	
  Legal Holidays

  	
   

  	
  98

  
	
  Section 12.9.

  	
  GOVERNING LAW

  	
   

  	
  98

  
	
  Section 12.10.

  	
  No Recourse Against Others

  	
   

  	
  98

  
	
  Section 12.11.

  	
  Successors

  	
   

  	
  99

  
	
  Section 12.12.

  	
  Multiple Originals

  	
   

  	
  99

  
	
  Section 12.13.

  	
  Qualification of Indenture

  	
   

  	
  99

  
	
  Section 12.14.

  	
  Severability

  	
   

  	
  99

  
	
  Section 12.15.

  	
  No Adverse Interpretation
  of Other Agreements

  	
   

  	
  99

  
	
  Section 12.16.

  	
  Table of Contents;
  Headings

  	
   

  	
  99

  
	
  Section 12.17.

  	
  Rights of Paying Agent and
  Registrar

  	
   

  	
  99

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  Form of the Note

  	
   

  	
   

  
	
  EXHIBIT B

  	
  Form of the Exchange Note

  	
   

  	
   

  
	
  EXHIBIT C

  	
  Form of Supplemental Indenture

  	
   

  	
   

  

 

iii

 

CROSS-REFERENCE TABLE

 

	
  TIA

  Section

  	
   

  	
  Indenture

  Section

  	
   

  
	
  310(a)(1)

  	
   

  	
  7.10

  	
   

  
	
  (a)(2)

  	
   

  	
  7.10

  	
   

  
	
  (a)(3)

  	
   

  	
  N/A

  	
   

  
	
  (a)(4)

  	
   

  	
  N/A.

  	
   

  
	
  (b)

  	
   

  	
  7.8; 7.10

  	
   

  
	
  (c)

  	
   

  	
  N/A

  	
   

  
	
  311(a)

  	
   

  	
  7.11

  	
   

  
	
  (b)

  	
   

  	
  7.11

  	
   

  
	
  (c)

  	
   

  	
  N/A

  	
   

  
	
  312(a)

  	
   

  	
  2.5

  	
   

  
	
  (b)

  	
   

  	
  12.3

  	
   

  
	
  (c)

  	
   

  	
  12.3

  	
   

  
	
  313(a)

  	
   

  	
  7.6

  	
   

  
	
  (b)(1)

  	
   

  	
  7.6

  	
   

  
	
  (b)(2)

  	
   

  	
  7.6

  	
   

  
	
  (c)

  	
   

  	
  7.6

  	
   

  
	
  (d)

  	
   

  	
  7.6

  	
   

  
	
  314(a)

  	
   

  	
  3.2; 12.2

  	
   

  
	
  (b)

  	
   

  	
  N/A

  	
   

  
	
  (c)(1)

  	
   

  	
  11.4

  	
   

  
	
  (c)(2)

  	
   

  	
  11.4

  	
   

  
	
  (c)(3)

  	
   

  	
  N/A

  	
   

  
	
  (d)

  	
   

  	
  N/A

  	
   

  
	
  (e)

  	
   

  	
  12.5

  	
   

  
	
  315(a)

  	
   

  	
  7.1

  	
   

  
	
  (b)

  	
   

  	
  7.5; 12.2

  	
   

  
	
  (c)

  	
   

  	
  7.1

  	
   

  
	
  (d)

  	
   

  	
  7.1

  	
   

  
	
  (e)

  	
   

  	
  6.11

  	
   

  
	
  316(a)(last
  sentence)

  	
   

  	
  12.6

  	
   

  
	
  (a)(1)(A)

  	
   

  	
  6.5

  	
   

  
	
  (a)(1)(B)

  	
   

  	
  6.4

  	
   

  
	
  (a)(2)

  	
   

  	
  N/A

  	
   

  
	
  (b)

  	
   

  	
  6.7

  	
   

  
	
  317(a)(1)

  	
   

  	
  6.8

  	
   

  
	
  (a)(2)

  	
   

  	
  6.9

  	
   

  
	
  (b)

  	
   

  	
  2.4

  	
   

  
	
  318(a)

  	
   

  	
  12.1

  	
   

  

 

N/A means Not Applicable.

 

Note:  This Cross-Reference Table
shall not, for any purpose, be deemed to be part of this Indenture.

 

iv

 

INDENTURE dated as of November 28, 2005, among TRONOX WORLDWIDE LLC, a
Delaware limited liability company (the “Company”),
TRONOX FINANCE CORP., a Delaware corporation (“Tronox Finance” and,
together with the Company, the “Issuers”), TRONOX INCORPORATED, a
Delaware corporation (“Parent”), each other Guarantor (as defined
herein) from time to time party hereto and CITIBANK, N.A., a national banking
association, as trustee (the “Trustee”).

 

Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of (i) the Issuers’ 91⁄2 %
Senior Notes due 2012, issued on the date hereof (the “Initial
Notes”), (ii) if and when issued, an unlimited principal amount of
additional 91⁄2 % Senior Notes due 2012 of the Issuers in a non-registered
offering or in a registered offering of the Issuers that may be offered from
time to time subsequent to the date hereof (the “Additional
Notes”) and (iii) if and when issued, the Issuers’ 91⁄2 % Senior Notes
due 2012 that may be issued from time to time in exchange for Initial Notes or
any Additional Notes in an offer registered under the Securities Act as
provided in the Registration Rights Agreement (as hereinafter defined) (the “Exchange Notes,” and together with the Initial
Notes and Additional Notes, the “Notes”).

 

ARTICLE I

Definitions and Incorporation by Reference

 

Section 1.1.            Definitions.

 

“Acquired Debt” means, with respect
to any specified Person:

 

(1)           Indebtedness of any other
Person existing at the time such other Person is merged with or into or became
a Subsidiary of such specified Person, whether or not such Indebtedness is
incurred in connection with, or in contemplation of, such other Person merging
with or into, or becoming a Restricted Subsidiary of, such specified Person;
and

 

(2)           Indebtedness secured by a
Lien encumbering any asset acquired by such specified Person.

 

“Additional Assets” means:

 

(1)           any property or
assets (other than indebtedness and Capital Stock) to be used by the Company or
any of its Restricted Subsidiaries in a Permitted Business;

 

(2)           the Capital
Stock of a Person that becomes a Restricted Subsidiary as a result of the
acquisition of such Capital Stock by the Company or any of its Restricted
Subsidiaries; or

 

(3)           Capital Stock
constituting a minority interest in any Person that at such time is a
Restricted Subsidiary of the Company;

 

1

 

provided, however, that, in the case of
clauses (2) and (3), such Restricted Subsidiary is primarily engaged in a
Permitted Business.

 

“Affiliate” of any specified Person
means any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person.  For purposes of this definition, “control,”
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of
the Voting Stock of a Person will be deemed to be control.  For purposes of this definition, the terms
“controlling,” “controlled by” and “under common control with” have correlative
meanings.

 

“Asset Sale” means:

 

(1)           the sale,
lease, conveyance or other disposition of any assets or rights of the Issuers
or of any Restricted Subsidiary; provided that the sale, lease, conveyance or
other disposition of the Company, or all or substantially all of the assets of
the Company and its Restricted Subsidiaries taken as a whole will be governed
by Section 3.9 and/or Section 4.1, if applicable, and
not by Section 3.7; and

 

(2)           the issuance of
Equity Interests in any of the Company’s Restricted Subsidiaries or the sale of
Equity Interests in any of its Subsidiaries (other than directors’ qualifying
shares and shares required by applicable law to be held by a Person other than
the Company or any of its Restricted Subsidiaries).

 

Notwithstanding the preceding, none of the following items will be
deemed to be an Asset Sale:

 

(1)           any single
transaction or series of related transactions that involves assets having a
Fair Market Value of less than $5.0 million;

 

(2)           a transfer of
assets between or among the Company and its Restricted Subsidiaries;

 

(3)           an issuance of
Equity Interests by a Restricted Subsidiary of the Company to the Company or to
a Restricted Subsidiary of the Company;

 

(4)           the sale or
lease of products, services or accounts receivable in the ordinary course of
business and any sale or other disposition of damaged, worn-out or obsolete
assets in the ordinary course of business;

 

(5)           the sale or
other disposition of cash or Cash Equivalents;

 

(6)           a Restricted
Payment that does not violate Section 3.4;

 

(7)           a Permitted
Investment;

 

(8)           the granting of
Liens not prohibited by this Indenture and the foreclosure thereon;

 

2

 

(9)           any surrender
or waiver of contract rights or the settlement release or surrender of
contract, tort or other litigation claims in the ordinary course of business;

 

(10)         a sale of
accounts receivable and related assets of the type specified in the definition
of “Receivables Financing” to a Receivables Subsidiary in a Qualified
Receivables Financing or in factoring or similar transactions;

 

(11)         a transfer of
accounts receivable and related assets of the type specified in the definition
of “Receivables Financing” (or a fractional undivided interest therein) by a
Receivables Subsidiary in a Qualified Receivables Financing;

 

(12)         the sale and
leaseback of any assets within 180 days after the acquisition thereof;

 

(13)         the lease,
assignment or sublease of any real or personal property in the ordinary course
of business consistent with past practice; and

 

(14)         the licensing
of intellectual property rights.

 

“Attributable Debt” in respect of a
sale and leaseback transaction means, at the time of determination, the present
value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
including any period for which such lease has been extended or may, at the
option of the lessor, be extended. Such present value shall be calculated using
a discount rate equal to the rate of interest implicit in such transaction,
determined in accordance with GAAP; provided, however, that if such sale and
leaseback transaction results in a Capital Lease Obligation, the amount of
Indebtedness represented thereby will be determined in accordance with the
definition of “Capital Lease Obligation.”

 

“Bankruptcy Law” means Title 11, United States Code or any similar Federal or
state law for the relief of debtors.

 

“Beneficial Owner” has the meaning
assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act,
except that in calculating the beneficial ownership of any particular “person”
(as that term is used in Section 13(d)(3) of the Exchange Act), such “person”
will be deemed to have beneficial ownership of all securities that such
“person” has the right to acquire by conversion or exercise of other
securities, whether such right is currently exercisable or is exercisable only
after the passage of time.  The terms
“Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.

 

“Board of Directors” means:

 

(1)           with respect to a
corporation, the board of directors of the corporation or any committee thereof
duly authorized to act on behalf of such board;

 

(2)           with respect to a
partnership, the Board of Directors of the general partner of the partnership;

 

3

 

(3)           with respect to a limited
liability company, the managing member or members or any controlling committee
of managing members thereof; and

 

(3)           with respect to any other
Person, the board or committee of such Person serving a similar function.

 

“Board Resolution” means a copy of
a resolution certified by the Secretary or an Assistant Secretary of the
applicable Person to have been duly adopted by the Board of Directors of such
Person and to be in full force and effect on the date of such certification,
and delivered to the Trustee.

 

“Borrowing Base” means, as of the date of determination, an
amount equal to:

 

(1)           80% of the book
value of all accounts receivable owned by the Company and its Restricted
Subsidiaries that are not more than 90 days past due; plus

 

(2)           60% of the book
value of all inventory owned by the Company and its Restricted Subsidiaries or
scheduled for delivery against letters of credit issued against Credit
Facilities,

 

as set forth in the most recent quarterly or
annual report, as applicable, delivered to the Trustee in accordance with this
Indenture.

 

“Business Day” or “business day”
mean each day that is not a Saturday, Sunday or other day on which banking
institutions in New York, New York or the city in which, at any particular
time, the Trustee conducts its corporate trust business in connection with this
Indenture are authorized or required by law to close.

 

“Capital Lease Obligations” means,
at the time any determination is to be made, the amount of the liability in
respect of a capital lease that would at that time be required to be
capitalized on a balance sheet prepared in accordance with GAAP, and the Stated
Maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may
be prepaid by the lessee without payment of a penalty.

 

“Capital Stock” means:

 

(1)           in the case of a
corporation, corporate stock;

 

(2)           in the case of an
association or business entity, any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock;

 

(3)           in the case of a partnership
or limited liability company, partnership interests (whether general or
limited) or membership interests; and

 

(4)           any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person, but
excluding from all of the foregoing any debt securities convertible into
Capital Stock, whether or not such debt securities include any right of
participation with Capital Stock.

 

4

 

“Cash Equivalents” means:

 

(1)           securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality of the United States government
(provided that the full faith and credit of the United States is pledged in
support of those securities) having maturities of not more than 12 months from
the date of acquisition;

 

(2)           readily
marketable direct obligations issued by any state of the United States having
one of the two highest rating categories obtainable from either Moody’s or
Standard & Poor’s having maturities of 12 months or less from the date of
acquisition;

 

(3)           securities
issued or directly and fully and unconditionally guaranteed or insured by the
government or any agency or instrumentality of the United Kingdom, the
Commonwealth of Australia or any member state of the European Union whose legal
tender is the euro having maturities of not more than 12 months from the date
of acquisition;

 

(4)           certificates of
deposit and eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers’ acceptances with maturities not exceeding six
months and overnight bank deposits, in each case, with any domestic commercial
bank having capital and surplus in excess of $500.0 million and a Thomson Bank
Watch Rating of “B” or better;

 

(5)           repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clauses (1), (2), (3) and (4) above entered into with
any financial institution meeting the qualifications specified in clause (4)
above;

 

(6)           commercial
paper having one of the two highest ratings obtainable from Moody’s or Standard
and Poors and, in each case, maturing within twelve months after the date of
acquisition;

 

(7)           in the case of
any Foreign Subsidiary, demand or time deposit accounts used in the ordinary
course of business with reputable commercial banks located in the jurisdiction
of organization of such Foreign Subsidiary; and

 

(8)           investments in
any fund at least 90% of the assets of which constitute Cash or Cash
Equivalents of the kinds described in clauses (1) through (6) of this
definition.

 

“Change of Control” means the
occurrence of any of the following:

 

5

 

(1)         the direct or
indirect sale, lease, transfer, conveyance or other disposition (other than by
way of merger or consolidation), in one or a series of related transactions, of
all or substantially all of the properties or assets of Parent or the Company
and its Subsidiaries taken as a whole to any “person” (as that term is used in
Section 13(d) of the Exchange Act);

 

(2)         the adoption of
a plan relating to the liquidation or dissolution of the Company or Parent;

 

(3)         the
consummation of any transaction (including any merger or consolidation), the result
of which is that any “person” (as that term is used in Section 13(d) of the
Exchange Act) becomes the Beneficial Owner, directly or indirectly, of more
than 50% of the Voting Stock of Parent, measured by voting power rather than
number of shares;

 

(4)         Parent
consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, Parent, in any such event pursuant
to a transaction in which any of the outstanding Voting Stock of Parent or such
other Person is converted into or exchanged for cash, securities or other
property, other than any such transaction where the Voting Stock of Parent
outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Stock) of the surviving or
transferee Person constituting a majority of the outstanding shares of such
Voting Stock of such surviving or transferee Person (immediately after giving
effect to such issuance);

 

(5)         Parent fails to
own 100% of the Capital Stock of the Company or the Company fails to own 100%
of the Capital Stock of Tronox Finance; or

 

(6)         during any
period of two consecutive years, Continuing Directors cease to constitute a
majority of the Board of Directors of Parent.

 

Notwithstanding the foregoing, neither the initial public offering of
Parent nor the Distribution (as described in the Offering Memorandum) shall
constitute a Change of Control.

 

“Clearstream” means Clearstream Banking, societé anonyme
(formerly Cedelbank).

 

“Code” means the Internal Revenue
Code of 1986, as amended.

 

“Commission” or “SEC” means the Securities and Exchange
Commission.

 

“Consolidated Cash Flow” means,
with respect to any specified Person for any period, the Consolidated Net
Income of such Person for such period plus, without duplication:

 

(1)           an amount equal
to any extraordinary loss plus any net loss realized by such Person or any of
its Restricted Subsidiaries in connection with an Asset Sale, to the extent
such losses were deducted in computing such Consolidated Net Income; plus

 

6

 

(2)           provision for
taxes based on income or profits of such Person and its Restricted Subsidiaries
for such period, to the extent that such provision for taxes was deducted in
computing such Consolidated Net Income; plus

 

(3)           the Fixed
Charges of such Person and its Restricted Subsidiaries for such period, to the
extent that such Fixed Charges were deducted in computing such Consolidated Net
Income; plus

 

(4)           depreciation,
amortization (including amortization of intangibles but excluding amortization
of prepaid cash expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent that it represents
an accrual of or reserve for cash expenses in any future period) of such Person
and its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; plus

 

(5)           charges for
such period related to the shut down of the Savannah Facility (as described in
the Offering Memorandum); plus

 

(6)           all one-time
fees, costs, expenses (including cash compensation payments), in each case
incurred during such period by the Company and its Restricted Subsidiaries in
connection with or resulting from (i) Parent’s separation from Kerr-McGee
Corporation and Parent’s initial public offering and the transactions related
thereto, and (ii) the Distribution; plus

 

(7)           non-cash
compensation charges for such period, including any such charges arising from
stock options, restricted stock grants or other equity-incentive programs; plus

 

(8)           losses for such
period from operations discontinued prior to the Issue Date to the extent that
such expenses were deducted in computing such Consolidated Net Income (not to
exceed $17.0 million in any period in the case of cash expenditures); plus

 

(9)           losses, to the
extent comparable to interest expense, for such period on the sales of accounts
receivable under an asset securitization program or a factoring program to the
extent that such expenses were deducted in computing such Consolidated Net
Income; plus

 

(10)         non-cash
environmental remediation and restoration expense (net of reimbursement) of
such Person and its Restricted Subsidiaries for such period to the extent that
such expenses were deducted in computing such Consolidated Net Income and
represent an accrual of or reserve for cash expenses in any future period;
minus

 

(11)         non-cash items
increasing such Consolidated Net Income for such period, other than the accrual
of revenue in the ordinary course of business,

 

7

 

in each case, on a consolidated basis and
determined in accordance with GAAP.

 

Notwithstanding the preceding sentence, clauses (1) through (11) above
relating to amounts of a Restricted Subsidiary of a Person will be added to (or
subtracted from) Consolidated Net Income to compute Consolidated Cash Flow of
such Person only to the extent (and in the same proportion) that the net income
(loss) of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person.

 

“Consolidated Net Income” means,
with respect to any specified Person for any period, the aggregate of the Net
Income of such Person and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP; provided that:

 

(1)           the Net Income
(but not loss) of any Person that is not a Restricted Subsidiary or that is
accounted for by the equity method of accounting will be included only to the
extent of the amount of dividends or similar distributions paid in cash to the
specified Person or a Restricted Subsidiary of such Person;

 

(2)           the Net Income
of any Restricted Subsidiary will be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or, directly
or indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders;

 

(3)           the cumulative
effect of a change in accounting principles during such period will be
excluded;

 

(4)           notwithstanding
clause (1) above, the Net Income of any Unrestricted Subsidiary will be
excluded, whether or not distributed to the specified Person or one of its
Subsidiaries;

 

(5)           any non-cash
goodwill or other intangible asset impairment charges incurred subsequent to
the Issue Date resulting from the application of the Financial Accounting
Standards Board’s Statement of Financial Accounting Standards No. 142 (or
similar pronouncements) shall be excluded;

 

(6)           any net
after-tax income or loss from discontinued operations (other than losses from
operations discontinued prior to the Issue Date), net after-tax gains or losses
on disposal of discontinued operations and losses arising from lease
dispositions shall be excluded;

 

(7)           items
classified as extraordinary or nonrecurring gains and losses (less all fees and
expenses related thereto) or expenses (including severance, relocation, other
restructuring costs and expenses arising from the transactions closing
contemporaneously with this offering); and the related tax effects according to
GAAP, shall be excluded; provided that with respect to each extraordinary or
nonrecurring item, the Company shall have delivered an Officers’ Certificate (as

 

8

 

to
which the Trustee shall have no responsibility to confirm or verify any
information contained therein) to the Trustee specifying and quantifying such
item and stating that such item is extraordinary or non-recurring; and

 

(8)           to the extent
deducted in the calculation of Net Income, any non-recurring charges associated
with any premium or penalty paid, write-offs of deferred financing costs or
other financial recapitalization charges in connection with redeeming or
retiring any indebtedness prior to its Stated Maturity will be added back to
arrive at Consolidated Net Income.

 

“Consolidated Net Tangible Assets” means Consolidated Tangible
Assets after deducting therefrom all current liabilities, all as set forth on
the most recent balance sheet of Parent delivered to the Trustee, on a
consolidated basis (excluding any Subsidiaries of Parent that are not
Subsidiaries of the Company), determined in accordance with GAAP.

 

“Consolidated Net Worth” means, with respect to any specified
Person as of any date, the sum of:

 

(1)           the
consolidated equity of the common stock (or Capital Stock equivalent to common
stock) of such Person and its consolidated Subsidiaries as of such date; plus

 

(2)           the respective
amounts reported on such Person’s balance sheet as of such date with respect to
any series of Preferred Stock (other than Disqualified Stock) that by its terms
is not entitled to the payment of dividends unless such dividends may be
declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such Preferred Stock.

 

“Consolidated Tangible Assets” means total assets (less
accumulated depreciation and valuation reserves and other reserves and items
deductible from gross book value of specific asset accounts under GAAP) after
deducting therefrom (1) any item representing investments in Unrestricted
Subsidiaries and (2) all goodwill, trade names, trademarks, patents,
unamortized debt discount, organization expenses and other like intangibles,
all as set forth on the most recent balance sheet of Parent delivered to the
Trustee, on a consolidated basis (excluding any Subsidiaries of Parent that are
not Subsidiaries of the Company), determined in accordance with GAAP.

 

“Continuing Directors” means, as of any date of determination,
any member of the Board of Directors of Parent who:

 

(1)           was a member of such Board
of Directors on the Issue Date or becomes a member of such Board in connection
with the Distribution; or

 

(2)           was nominated for election
or elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election.

 

9

 

“Company” has the meaning ascribed
to it in the first introductory paragraph of this Indenture.

 

“Credit Agreement” means that certain Credit Agreement, dated as
of the Issue Date, by and among the Issuers, the lenders and guarantors party
thereto and Lehman Commercial Paper Inc., as Administrative Agent, providing
for up to $450.0 million of revolving credit and term loan borrowings,
including any related notes, Guarantees, collateral documents, instruments and
agreements executed in connection therewith, and, in each case, as amended,
restated, modified, renewed, refunded, replaced (whether upon or after
termination or otherwise) or refinanced (including by means of sales of debt
securities to institutional investors) in whole or in part from time to time.

 

“Credit Facilities” means, one or more debt facilities
(including the Credit Agreement) or commercial paper facilities, in each case
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special
purpose entities formed to borrow from such lenders against such receivables)
or letters of credit, in each case, as amended, restated, modified, renewed,
refunded, replaced (whether upon or after termination or otherwise) or
refinanced (including by means of sales of debt securities to institutional
investors) in whole or in part from time to time.

 

“Custodian” means any receiver,
trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.

 

“Default” means any event that is,
or with the passage of time or the giving of notice or both would be, an Event
of Default.

 

“Definitive Note” means a
certificated Note registered in the name of the Holder thereof and issued in
accordance with Section 2.1 hereof, in the
form of Exhibit A hereto except that such
Note shall not bear the Global Note Legend.

 

“Disqualified Stock” means any
Capital Stock that, by its terms (or by the terms of any security into which it
is convertible, or for which it is exchangeable, in each case, at the option of
the holder of the Capital Stock), or upon the happening of any event, matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder of the Capital Stock, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Notes mature.  Notwithstanding
the preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 3.4. The
amount of Disqualified Stock deemed to be outstanding at any time for purposes
of this Indenture will be the maximum amount that the Company and its
Restricted Subsidiaries may become obligated to pay upon the maturity of, or
pursuant to any mandatory redemption provisions of, such Disqualified Stock,
exclusive of accrued dividends.

 

“Distribution” has the meaning given such term in the Offering
Memorandum.

 

10

 

“Domestic Subsidiary” means any
Restricted Subsidiary of the Company that was formed under the laws of the
United States or any state of the United States or the District of Columbia.

 

“DTC” means The Depository Trust
Company, its nominees and their respective successors and assigns, or such
other depositary institution hereinafter appointed by the Company.

 

“Equity Interests” means Capital
Stock and all warrants, options or other rights to acquire Capital Stock (but
excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).

 

“Equity Offering” means an offer
and sale of Capital Stock (other than Disqualified Stock) of the Company or
Parent pursuant to a registration statement that has been declared effective by
the SEC pursuant to the Securities Act (other than a registration statement on
Form S-8 or otherwise relating to equity securities issuable under any employee
benefit plan of Parent) or a valid private placement on a cash basis after the
consummation of the transactions described in the Offering Memorandum.

 

“Euroclear” means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System.

 

“Exchange Act” means the Securities
Exchange Act of 1934, as amended.

 

“Exchange Notes” has the meaning
ascribed to it in the second introductory paragraph of this Indenture.

 

“Existing Indebtedness” means up to
$0.4 million in aggregate principal amount of Indebtedness of the Company and
its Subsidiaries (other than Indebtedness under the Credit Agreement)
in existence on the Issue Date, until such amounts are repaid.

 

“Fair Market Value” means the value that would be paid by a willing
buyer to an unaffiliated willing seller in a transaction not involving distress
or necessity of either party, determined in good faith by the Board of
Directors of the Company (unless otherwise provided in this Indenture).

 

“Fixed Charge Coverage Ratio” means, with respect to any
specified Person for any period, the ratio of the Consolidated Cash Flow of
such Person for such period to the Fixed Charges of such Person for such
period. In the event that the specified Person or any of its Restricted Subsidiaries
incurs, assumes, guarantees, repays, repurchases, redeems, defeases or
otherwise discharges any Indebtedness (other than ordinary working capital
borrowings, and other than in the case of revolving advances under any
Qualified Receivables Financing, in which case interest expense shall be
computed based upon the average daily balance of such Indebtedness during the
applicable period) or issues, repurchases or redeems Preferred Stock subsequent
to the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated and on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the “Calculation
Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro
forma effect to such incurrence, assumption, Guarantee, repayment, repurchase,
redemption, defeasance or other discharge of Indebtedness, or such 

 

11

 

issuance, repurchase or redemption of
Preferred Stock, and the use of the proceeds therefrom, as if the same had
occurred at the beginning of the applicable four-quarter reference period.

 

In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:

 

(1)           acquisitions
that have been made by the specified Person or any of its Restricted
Subsidiaries, including through mergers or consolidations, or any Person or any
of its Restricted Subsidiaries acquired by the specified Person or any of its
Restricted Subsidiaries, and including any related financing transactions and
including increases in ownership of Restricted Subsidiaries, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date will be given pro forma effect as if they had
occurred on the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period will be calculated on a pro forma basis
(giving effect to any Pro Forma Cost Savings);

 

(2)           the
Consolidated Cash Flow attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses (and ownership interests
therein) disposed of prior to the Calculation Date, will be excluded;

 

(3)           the Fixed
Charges attributable to discontinued operations, as determined in accordance
with GAAP, and operations or businesses (and ownership interests therein)
disposed of prior to the Calculation Date, will be excluded, but only to the
extent that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date;

 

(4)           any Person that
is a Restricted Subsidiary on the Calculation Date will be deemed to have been
a Restricted Subsidiary at all times during such four-quarter period;

 

(5)           any Person that
is not a Restricted Subsidiary on the Calculation Date will be deemed not to
have been a Restricted Subsidiary at any time during such four-quarter period;

 

(6)           if any
Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness
will be calculated as if the rate in effect on the Calculation Date had been
the applicable rate for the entire period (taking into account any Hedging
Obligation applicable to such Indebtedness if such Hedging Obligation has a
remaining term as at the Calculation Date in excess of 12 months);

 

(7)           for any
calculation of the Fixed Charge Coverage Ratio with a Calculation Date in 2005,
Consolidated Cash Flow for the portion of the four-quarter reference period
that is in the 2004 fiscal year shall be determined after giving pro forma
effect to the adjustments used to calculate pro forma Adjusted EBITDA as set
forth in the Offering Memorandum; and

 

(8)           Any Obligation
incurred by a Foreign Subsidiary under or with respect to bank guarantees or
similar instruments issued by banking organizations outside the 

 

12

 

United
States that are supported or backed by letters of credit issued under Credit
Facilities under clause (1) of the definition of Permitted Debt will not be
deemed a separate incurrence of Indebtedness.

 

“Fixed Charges” means, with respect to any specified Person for
any period, the sum, without duplication, of:

 

(1)           the
consolidated interest expense of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued, excluding amortization of debt
issuance costs incurred in connection with the issuance of the Notes and the
Guarantees and including amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers’ acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations in respect of
interest rates; plus

 

(2)           the
consolidated interest expense of such Person and its Restricted Subsidiaries
that was capitalized during such period, whether paid or accrued; plus

 

(3)           any interest on
Indebtedness of another Person that is guaranteed by such Person or one of its
Restricted Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, whether or not such Guarantee or Lien is called
upon; plus

 

(4)           all dividends,
whether paid or accrued and whether or not in cash, on any series of Preferred
Stock of such Person or any of its Restricted Subsidiaries, other than
dividends on Preferred Stock payable solely in Equity Interests of the Company
(other than Disqualified Stock) or to the Company or a Restricted Subsidiary of
the Company.

 

“Foreign
Subsidiary” means any Restricted Subsidiary of the
Company that is not a Domestic Subsidiary.

 

“GAAP”
means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
have been approved by a significant segment of the accounting profession, which
are in effect from time to time.

 

“Government Securities” means
direct obligations of, or obligations guaranteed by, the United States of
America for the payment of which obligations or guarantee the full faith and
credit of the United States of America is pledged.

 

“Guarantee” means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business,
direct or indirect, in any manner including by way of a pledge of assets or
through letters of credit or reimbursement agreements in respect thereof, 

 

13

 

of all or any part of any Indebtedness
(whether arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to take or pay or
to maintain financial statement conditions or otherwise), or entered into for
purposes of assuring in any other manner the obligee of such Indebtedness of
the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part).

 

“Guarantors” means each of:

 

(1)           Cimarron
Corporation, Kerr-McGee Holdings, Inc., Kerr-McGee Minerals Resources
Corporation, Kerr-McGee Pigments (Savannah) Inc., Kerr-McGee Refining
Corporation, Southwestern Refining Company, Inc., Transworld Drilling Company,
Triangle Refineries, Inc., Triple S, Inc. and Tronox LLC;

 

(2)           any other
wholly owned Domestic Subsidiary of the Company that executes a Note Guarantee
in accordance with the provisions of this Indenture; and

 

(3)           Parent,

 

and their respective successors and assigns, in each case, until the
Note Guarantee of such Person has been released in accordance with the
provisions of this Indenture.

 

“Hedging Obligations” means, with respect to any specified
Person, the net obligations of such Person incurred in the ordinary course of
business and not for speculative purposes under:

 

(1)           interest rate
swap agreements (whether from fixed to floating or from floating to fixed),
interest rate cap agreements and interest rate collar agreements entered into
with one or more financial institutions and other arrangements or agreements
designed to protect the Person entering into the agreement against fluctuations
in interest rates with respect to Indebtedness incurred and not for purposes of
speculation;

 

(2)           foreign
exchange contracts and currency protection agreements entered into with one or
more financial institutions and designed to protect the Person entering into
the agreement against fluctuations in currency exchange rates with respect to
Indebtedness incurred and not for purposes of speculation;

 

(3)           any commodity
futures contract, commodity option or other similar agreement or arrangement
designed to protect against fluctuations in the price of commodities used by
that Person at the time; and

 

(4)           other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency exchange rates.

 

“Holder” means a Person in whose
name a Note is registered.

 

“Immaterial Subsidiary” means, as of any date, any Restricted
Subsidiary whose total assets, as of the last day of the most recently ended
four full fiscal quarter period for which internal financial statements are
available immediately preceding such date, are less than $50,000 

 

14

 

and whose total revenues for the most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding such date do not exceed $50,000;
provided that a Restricted Subsidiary will not be considered to be an
Immaterial Subsidiary if it, directly or indirectly, guarantees or otherwise
provides direct credit support for any Indebtedness of any Issuer.

 

“Indebtedness” means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:

 

(1)           in respect of
borrowed money;

 

(2)           evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);

 

(3)           the principal
component of all obligations of such Person in respect of letters of credit,
bankers’ acceptances or other similar instruments (including reimbursement
obligations with respect thereto);

 

(4)           representing
Capital Lease Obligations or Attributable Debt in respect of sale and leaseback
transactions;

 

(5)           representing
the balance deferred and unpaid of the purchase price of any property or
services due more than six months after such property is acquired or such
services are completed;

 

(6)           the principal
component or liquidation preference of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary, any Preferred Stock (but excluding,
in each case, any accrued dividends);

 

(7)           representing
any Hedging Obligations;

 

(8)           the principal
component of all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the amount of such Indebtedness will be the lesser of
(a) the Fair Market Value of such asset at such date of determination and (b)
the amount of such Indebtedness of such other Persons; or

 

(9)           the principal
component of Indebtedness of other Persons to the extent Guaranteed by such
Person.

 

The amount of Indebtedness of any Person at any date will be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.

 

In addition, “Indebtedness” of any Person shall include Indebtedness
described in the preceding paragraph that would not appear as a liability on
the balance sheet of such Person if:

 

15

 

(1)           such
Indebtedness is the obligation of a partnership or joint venture that is not a
Restricted Subsidiary (a “Joint Venture”);

 

(2)           such Person or
a Restricted Subsidiary of such Person is a general partner of the Joint
Venture (a “General Partner”); and

 

(3)           there is
recourse, by contract or operation of law, with respect to the payment of such
Indebtedness to property or assets of such Person or a Restricted Subsidiary of
such Person; and then such Indebtedness shall be included in an amount not to
exceed:

 

(a)           the lesser of
(i) the net assets of such General Partner and (ii) the amount of such
obligations to the extent that there is recourse, by contract or operation of
law, to the property or assets of such Person or a Restricted Subsidiary of
such Person; or

 

(b)           if less than
the amount determined pursuant to clause (a) immediately above, the actual
amount of such Indebtedness that is recourse to such Person or a Restricted
Subsidiary of such Person, if the Indebtedness is evidenced by a writing and is
for a determinable amount and the related interest expense shall be included in
Fixed Charges to the extent actually paid by the Company or its Restricted
Subsidiaries.

 

In addition, the term “Indebtedness” includes all
Indebtedness of others secured by a Lien on any asset of the specified Person
(whether or not such Indebtedness is assumed by the specified Person) and, to
the extent not otherwise included, the Guarantee by the specified Person of any
Indebtedness of any other Person. Notwithstanding the preceding, “Indebtedness”
shall not include accounts payable arising in the ordinary course of business.

 

“Indenture” means this Indenture as
amended or supplemented from time to time.

 

“Initial Notes” has the meaning
ascribed to it in the second introductory paragraph of this Indenture.

 

“Investment Grade Rating” means a rating equal to or higher than
Baa3 (or the equivalent) by Moody’s or BBB (or the equivalent) by Standard
& Poor’s, or the equivalent by any other nationally recognized statistical
rating organization.

 

“Investments” means, with respect
to any Person, all direct or indirect investments by such Person in other
Persons (including Affiliates) in the forms of loans (including Guarantees or
other obligations), advances or capital contributions (excluding commission,
travel and similar advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. If the Company or any Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Subsidiary of the Company, the Company will be
deemed to have made an Investment on the date of any such sale or disposition 

 

16

 

equal to the Fair Market Value of the
Company’s Investments in such Subsidiary that were not sold or disposed of in
an amount determined as provided in the final paragraph of Section 3.4.
The acquisition by the Company or any Subsidiary of the Company of a Person
that holds an Investment in a third Person will be deemed to be an Investment
by the Company or such Subsidiary in such third Person in an amount equal to
the Fair Market Value of the Investments held by the acquired Person in such third
Person in an amount determined as provided in the final paragraph of Section
3.4. Except as otherwise provided in this Indenture, the amount of an
Investment will be determined at the time the Investment is made and without
giving effect to subsequent changes in value.

 

“Issue Date” means November 28,
2005.

 

“Lien” means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law, including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction.

 

“Moody’s”
means Moody’s Investors Service, Inc. or any successor to the rating agency
business thereof.

 

“Net Income” means, with respect to any specified Person for any
period, the net income (loss) of such Person, determined in accordance with
GAAP and before any reduction in respect of Preferred Stock dividends,
excluding, however:

 

(1)           any gain or
loss, together with any related provision for taxes on such gain or loss,
realized in connection with: (a) any Asset Sale; or (b) the disposition of any
securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries; and

 

(2)           any
extraordinary or nonrecurring gain or loss, together with any related provision
for taxes on such extraordinary or nonrecurring gain or loss.

 

“Net
Proceeds” means the aggregate cash proceeds received
by the Company or any of its Restricted Subsidiaries in respect of any Asset
Sale (including any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale and any cash payments
received by way of deferred payment of principal pursuant to a note or
installment, earn-out or otherwise, but only as and when received), net of (i)
the direct costs relating to such Asset Sale, including legal, accounting and
investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale, (ii) taxes paid or payable as a result
of the Asset Sale, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, (iii) amounts
required to be applied to the repayment of Indebtedness secured by a Lien on
the asset or assets that were the subject of such Asset Sale, (iv) any reserve
for adjustment in respect of the sale price of such asset or assets established
in accordance with GAAP, (v) all distributions and other payments required to
be 

 

17

 

made to minority interest holders in
Restricted Subsidiaries or joint ventures as a result of such Asset Sale, and
(vi) appropriate amounts to be provided by the Company or any Restricted
Subsidiary as a reserve against any liabilities associated with such Asset
Sale, as determined in conformity with GAAP.

 

“Non-Recourse
Debt” means Indebtedness:

 

(1)           as to which
neither the Company nor any of its Restricted Subsidiaries (a) provides credit
support of any kind (including any undertaking, agreement or instrument that
would constitute Indebtedness), (b) is directly or indirectly liable as a
guarantor or otherwise, or (c) constitutes the lender;

 

(2)           no default with
respect to which (including any rights that the holders of the Indebtedness may
have to take enforcement action against an Unrestricted Subsidiary) would
permit upon notice, lapse of time or both any holder of any other Indebtedness
of the Company or any of its Restricted Subsidiaries to declare a default on
such other Indebtedness or cause the payment of the Indebtedness to be
accelerated or payable prior to its Stated Maturity; and

 

(3)           as to which the
lenders have been notified in writing that they will not have any recourse to
the stock or assets of the Company or any of its Restricted Subsidiaries.

 

“Non-U.S. Person” means a person
who is not a U.S. person, as defined in Regulation S.

 

“Note Guarantee”
means the Guarantee by each Guarantor of the Issuers’ obligations under this
Indenture and the Notes, executed pursuant to the provisions of this Indenture.

 

“Note Register” means the register
of Notes, maintained by the Registrar, pursuant to Section
2.3.

 

“Obligations” means any principal,
interest, penalties, fees, indemnifications, Special Interest, reimbursements,
damages and other liabilities payable under the documentation governing any
Indebtedness or in respect thereof.

 

“Offering Memorandum” means the
offering memorandum, dated November 21, 2005, prepared in connection with the
issuance of the Initial Notes on the Issue Date.

 

“Officer” means the Chairman of the
Board, the President, the Chief Financial Officer, any Vice President, the
Treasurer or the Secretary of the Company or Tronox Finance, as applicable, or,
to the extent explicitly provided for herein, Parent, as applicable.

 

“Officers’ Certificate” means a
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary.

 

“Opinion of Counsel” means a
written opinion from legal counsel who is acceptable to the Trustee.  The counsel may be an employee of or counsel
to the Company.  The cost of any such
Opinion of Counsel shall not be at the expense of the Trustee.

 

18

 

“Permitted Business” means any business engaged in by the
Company or any Restricted Subsidiary on the Issue Date and any business
incidental, ancillary, complementary or reasonably related thereto or which is
a reasonable extension thereof.

 

“Permitted
Investments” means:

 

(1)           any Investment
in the Company or in a Restricted Subsidiary of the Company or by a Restricted
Subsidiary of the Company in another Restricted Subsidiary of the Company;

 

(2)           any Investment
in Cash Equivalents;

 

(3)           any Investment
by the Company or any Restricted Subsidiary of the Company in a Person, if as a
result of such Investment:

 

(a)           such Person
becomes a Restricted Subsidiary of the Company and a Guarantor; or

 

(b)           such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company that is a Guarantor;

 

(4)           any Investment
made as a result of the receipt of non-cash consideration from an Asset Sale
that was made pursuant to and in compliance with Section 3.7;

 

(5)           any Investment
solely in exchange for the issuance of Equity Interests (other than
Disqualified Stock) of the Company or Parent;

 

(6)           any Investments
received in compromise or resolution of (A) obligations of trade creditors or
customers that were incurred in the ordinary course of business of the Company
or any of its Restricted Subsidiaries, including pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of any
trade creditor or customer or as a result of a foreclosure by the Company or
any Restricted Subsidiary with respect to any secured Investment or other
transfer of title with respect to any secured Investment in default; or (B)
litigation, arbitration or other disputes with Persons who are not Affiliates;

 

(7)           Investments
represented by Hedging Obligations;

 

(8)           loans or
advances to employees or officers made in the ordinary course of business of
Parent, the Company or any Restricted Subsidiary of the Company in an aggregate
principal amount not to exceed $1.0 million at any one time outstanding;

 

(9)           receivables
owing to the Company or any Restricted Subsidiary created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided, however, that such trade terms 

 

19

 

may
include such concessionary trade terms as the Company or any such Restricted
Subsidiary deems reasonable under the circumstances;

 

(10)         workers’
compensation, utility, lease and similar deposits and prepaid expenses in the
ordinary course of business and endorsements of negotiable instruments and
documents in the ordinary course of business;

 

(11)         refundable
construction advances made with respect to the construction of properties of a
nature or type that are used in a business similar or related to the business
of the Company or its Restricted Subsidiaries in the ordinary course of
business;

 

(12)         any Investment
in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in
any other Person in connection with a Qualified Receivables Financing,
including Investments of funds held in accounts permitted or required by the
arrangements governing such Qualified Receivables Financing or any related
Indebtedness; provided, however, that any Investment in a Receivables
Subsidiary is in the form of a Purchase Money Note, contribution of additional
receivables or an equity interest;

 

(13)         guarantees
(including Guarantees) of Indebtedness permitted under Section 3.3 and performance
guarantees consistent with past practice;

 

(14)         guarantees by
the Company or any Restricted Subsidiary of operating leases (other than
Capitalized Lease Obligations) or of other obligations that do not constitute
Indebtedness, in each case entered into by any Restricted Subsidiary in the
ordinary course of business;

 

(15)         Investments of
a Restricted Subsidiary acquired after the Issue Date or of an entity merged
into the Company or merged into or consolidated with a Restricted Subsidiary in
accordance with Section 4.1 after the Issue Date to the extent that such
Investments were not made in contemplation of or in connection with such
acquisition, merger or consolidation and were in existence on the date of such
acquisition, merger or consolidation; and

 

(16)         other
Investments in any Person having an aggregate Fair Market Value (measured on
the date each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made pursuant
to this clause (16) that are at the time outstanding not to exceed the greater
of (a) 1.5% of Consolidated Net Tangible Assets or (b) $20.0 million.

 

 “Permitted
Liens” means:

 

(1)           Liens on assets
of the Company or any Guarantor securing Indebtedness and other Obligations
under Credit Facilities that are permitted by clause (1) of the definition
of “Permitted Debt” and/or securing Hedging Obligations related thereto;

 

20

 

(2)           Liens in favor
of the Company or the Guarantors;

 

(3)           Liens on
property of a Person existing at the time such Person is merged with or into or
consolidated with the Company or any Subsidiary of the Company or becomes a
Subsidiary of the Company; provided that such Liens were in existence prior to
the contemplation of such merger or consolidation or prior to the contemplation
of such Person becoming a Subsidiary and do not extend to any assets other than
those of the Person merged into or consolidated with the Company or the
Subsidiary;

 

(4)           Liens on
property (including Capital Stock) existing at the time of acquisition of the
property by the Company or any Subsidiary of the Company, provided that such
Liens were in existence prior to such acquisition, and not incurred in
contemplation of such acquisition;

 

(5)           Liens to secure
Indebtedness (including Capital Lease Obligations) permitted under Section
3.3(b)(4) covering only the assets acquired with or financed by such
Indebtedness;

 

(6)           Liens existing
on the Issue Date;

 

(7)           Liens for
taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded; provided that any reserve or
other appropriate provision as is required in conformity with GAAP has been
made therefor;

 

(8)           survey
exceptions, easements or reservations of, or rights of others for, licenses,
rights-of-way, sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions as to the use of real
property that were not incurred in connection with Indebtedness and that do not
in the aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such Person;

 

(9)           Leases or
subleases granted to others that do not materially interfere with the ordinary
course of business of the Company and its Restricted Subsidiaries, taken as a
whole;

 

(10)         Landlords’,
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or the like
Liens arising by contract or statute in the ordinary course of business and
with respect to amounts which are not yet delinquent or are being contested in
good faith by appropriate proceedings;

 

(11)         Pledges or
deposits made in the ordinary course of business (A) in connection with leases,
performance bonds and similar obligations, or (B) in connection with workers’
compensation, unemployment insurance and other social security legislation;

 

21

 

(12)         Liens
encumbering property or assets under construction arising from progress or
partial payments by a customer of the Company or its Restricted Subsidiaries
relating to such property or assets;

 

(13)         Liens in favor
of customs and revenue authorities arising as a matter of law to secure
payments of customs duties in connection with the importation of goods;

 

(14)         Liens arising
out of conditional sale, title retention, consignment or similar arrangements
for the sale of goods entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business in accordance with the past
practices of the Company and its Restricted Subsidiaries;

 

(15)         Liens on
accounts receivable and related assets of the type specified in the definition
of “Receivables Financing” incurred in connection with a Qualified Receivables
Financing;

 

(16)         any attachment
or judgment Lien that does not constitute an Event of Default;

 

(17)         Liens
(including extensions and renewals thereof) upon real or personal property
acquired after the Issue Date; provided that (a) such Lien is created solely
for the purpose of securing Indebtedness permitted to be incurred under Section 3.3,
(1) to finance the cost (including the cost of improvement or construction) of
the item of property or assets subject thereto and such Lien is created prior
to, at the time of or within six months after the later of the acquisition, the
completion of construction or the commencement of full operation of such
property or (2) to refinance any Indebtedness previously so secured, (b) the
principal amount of the Indebtedness secured by such Lien does not exceed 100%
of such cost and (c) any such Lien shall not extend to or cover any property or
assets other than such item of property, or assets and any accessions, proceeds
and improvements on such item;

 

(18)         Liens incurred
or deposits made to secure the performance of tenders, bids, leases, statutory
or regulatory obligations, banker’s acceptances, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a similar nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money);

 

(19)         Liens arising
from filing Uniform Commercial Code financing statements with respect to
leases;

 

(20)         Liens created
for the benefit of (or to secure) the Notes (or the Note Guarantees);

 

(21)         Liens to secure
any Permitted Refinancing Indebtedness permitted to be incurred under this
Indenture; provided, however, that:

 

(a)           the new Lien
shall be limited to all or part of the same property and assets that secured
or, under the written agreements pursuant to which the 

 

22

 

original
Lien arose, could secure the original Lien (plus improvements and accessions
to, such property or proceeds or distributions thereof); and

 

(b)           the
Indebtedness secured by the new Lien is not increased to any amount greater
than the sum of (x) the outstanding principal amount, or, if greater, committed
amount, of the Permitted Refinancing Indebtedness and (y) an amount necessary
to pay any fees and expenses, including premiums, related to such renewal,
refunding, refinancing, replacement, defeasance or discharge;

 

(22)         Liens granted
by Foreign Subsidiaries to secure Indebtedness permitted to be incurred under Section
3.3(b)(12);

 

(23)         Liens securing
Indebtedness or other obligations of a Restricted Subsidiary owing to the
Company;

 

(24)         Liens that are
contractual rights of set-off (A) relating to the establishment of depository
relations with banks not given in connection with the issuance of Indebtedness,
(B) relating to pooled deposit or sweep accounts of the Company or any
Restricted Subsidiary to permit satisfaction (within two business days) of
overdraft or similar obligations incurred in the ordinary course of business of
the Company and the Restricted Subsidiaries or (C) relating to purchase orders
and other agreements entered into with customers of the Company or any
Restricted Subsidiary in the ordinary course of business;

 

(25)         Liens securing
Hedging Obligations so long as the related Indebtedness is permitted to be
incurred under this Indenture and is secured by a Lien on the same property
securing such Hedging Obligation;

 

(26)         licenses of
intellectual property granted in a manner consistent with past practice;

 

(27)         Liens securing
industrial revenue bonds;

 

(28)         Liens solely on
any cash earnest money deposits made by the Company or any of the Restricted
Subsidiaries in connection with any letter of intent or purchase agreement
permitted under this Indenture; and

 

(29)         Liens incurred in the
ordinary course of business of the Company or any Subsidiary of the Company
with respect to obligations that do not exceed $25.0 million at any one time
outstanding.

 

‘‘Permitted Payments to Parent’’ means, without duplication as
to amounts:

 

(1)           payments to
Parent or any other holding company that directly or indirectly owns 100% of
the Equity Interests of the Company, in amounts sufficient to pay:

 

(a)           franchise taxes
and other tax obligations or fees required in each case to maintain its
corporate existence,

 

23

 

(b)           costs
associated with preparation of required documents for filing with the Commission
and with any exchange on which such company’s securities are traded,

 

(c)           legal,
accounting, and other professional fees and expenses, and

 

(d)           other overhead,
operating or administrative costs incurred in the ordinary course of business
up to $2.0 million per annum; and

 

(2)           payments of up
to $1.0 million per annum to Parent in amounts sufficient to pay fees and
expenses related to any securities offering, investment, acquisition or other
similar financing transaction permitted under this Indenture (whether or not
successful).

 

“Permitted Refinancing Indebtedness” means any Indebtedness of
the Company or any of its Restricted Subsidiaries issued in exchange for, or
the net proceeds of which are used to renew, refund, refinance, replace,
defease or discharge other Indebtedness of the Company or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); provided that:

 

(1)           the principal
amount (or accreted value, if applicable) of such Permitted Refinancing
Indebtedness does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness renewed, refunded, refinanced, replaced,
defeased or discharged (plus all accrued interest on the Indebtedness and the
amount of all fees and expenses, including premiums, incurred in connection
therewith);

 

(2)           such Permitted
Refinancing Indebtedness has a final maturity date later than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
renewed, refunded, refinanced, replaced, defeased or discharged;

 

(3)           if the
Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged is subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness has a final maturity date later than the final
maturity date of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being renewed, refunded, refinanced,
replaced, defeased or discharged; and

 

(4)           such
Indebtedness is incurred either by the Company or by the Restricted Subsidiary
who is the obligor on the Indebtedness being renewed, refunded, refinanced,
replaced, defeased or discharged.

 

“Person” means any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, limited liability company or government or
other entity.

 

24

 

“Preferred Stock”, as applied to
the Capital Stock of any corporation, means Capital Stock of any class or
classes (however designated) which is preferred as to the payment of dividends,
or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such corporation, over shares of Capital Stock of
any other class of such corporation.

 

“Pro Forma Cost Savings” means, with respect to any period, the
reduction in costs and related adjustments that occurred during the four-quarter
reference period or after the end of the four-quarter reference period and on
or prior to the Calculation Date that were (i) directly attributable to an
acquisition or Asset Sale and calculated on a basis that is consistent with
Regulation S-X under the Securities Act as in effect and applied as of the
Issue Date or (ii) implemented, or for which the steps necessary for
implementation have been taken by the Company and are reasonably expected to
occur, with respect to the Company or the business that was the subject of any
such acquisition or Asset Sale within six months before or after the date of
the acquisition or Asset Sale and that are supportable and quantifiable by the
underlying accounting records of such business, as if, in the case of each of
clause (i) and (ii), all such reductions in costs and related adjustments had
been effected as of the beginning of such period.

 

“Purchase Money Note” means a promissory
note of a Receivables Subsidiary evidencing a line of credit, which may be
irrevocable, from the Company or
any of its Subsidiaries to a Receivables Subsidiary in connection with a
Qualified Receivables Financing, which note is intended to finance that portion
of the purchase price that is not paid by cash or a contribution of equity.

 

“Qualified Receivables Financing” means any Receivables
Financing of a Receivables Subsidiary that meets the following conditions:

 

(1)                                  the Board of
Directors of Parent shall have determined in good faith that such Qualified
Receivables Financing (including financing terms, covenants, termination events
and other provisions) is in the aggregate economically fair and reasonable to
the Company and the Receivables Subsidiary;

 

(2)                                  all sales of
accounts receivable and related assets to the Receivables Subsidiary are made
at Fair Market Value (as determined in good faith by the Company); and

 

(3)                                  the financing
terms, covenants, termination events and other provisions thereof shall be
market terms (as determined in good faith by the Company) and may include
Standard Securitization Undertakings.

 

The grant of a security interest in any accounts receivable of the
Company or any of its Restricted Subsidiaries (other than a Receivables
Subsidiary) to secure Indebtedness under Credit Facilities shall not be deemed
a Qualified Receivables Financing.

 

“Receivables
Financing” means any transaction or series of
transactions that may be entered into by the Company or any of its Subsidiaries
pursuant to which the Company or any of its Subsidiaries may sell, convey or
otherwise transfer to (a) a Receivables Subsidiary (in the case of transfer by
the Company or any of its Subsidiaries) and (b) any other Person (in the case
of a transfer by a Receivables Subsidiary), or may grant a security interest
in, any accounts 

 

25

 

receivable (whether now existing or arising
in the future) of the Company or any of its Subsidiaries, and any assets
related thereto including all collateral securing such accounts receivable, all
contracts and all guarantees or other assets which are customarily transferred
or in respect of which security interests are customarily granted in connection
with asset securitization transactions involving accounts receivable and any
Hedging Obligations entered into by the Company or any such Subsidiary in
connection with such accounts receivable.

 

“Receivables Repurchase Obligation” means any obligation of a
seller of receivables in a Qualified Receivables Financing to repurchase
receivables arising as a result of a breach of representation, warranty or
covenant or otherwise, including as a result of a receivable or portion thereof
becoming subject to any asserted defense, dispute, off-set or counterclaim of
any kind as a result of any action taken by, any failure to take action by or
any other event relating to the seller.

 

“Receivables Subsidiary” means any Restricted Subsidiary of the
Company, 100% of the outstanding Capital Stock of which is owned directly or
indirectly by the Company, or another Person formed for the purposes of
engaging in a Qualified Receivables Financing with the Company in which the
Company or any Subsidiary of the Company makes an Investment and to which the
Company or such Subsidiary transfers accounts receivable and related assets,
which engages in no activities other than in connection with the financing of
accounts receivable of the Company and its Subsidiaries, all proceeds thereof
and all rights (contractual or other), collateral and other assets relating
thereto, and any business or activities incidental or related to such business,
and which is designated by the Board of Directors of Parent (as provided below)
as a Receivables Subsidiary and:

 

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

 

(2)                                  with which
neither the Company nor any other Subsidiary of the Company has any material
contract, arrangement, agreement or understanding other than on terms which the
Company reasonably believes to be no less favorable to the Company or such
Subsidiary than those that might be obtained at the time from Persons that are
not Affiliates of the Company; and

 

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

 

Any such designation by the Board of Directors of Parent shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of such Board of Directors 

 

26

 

giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing conditions.

 

“Redemption Date” when used with
respect to any Note to be redeemed, in whole or in part, means the date fixed
for such redemption by or pursuant to this Indenture.

 

“Registered Exchange Offer” has the
meaning set forth for such term in the Registration Rights Agreement.

 

“Registration Rights Agreement”
means that certain registration rights agreement dated as of the Issue Date by
and between the Company, the Guarantors and the initial purchasers set forth
therein and future registration rights agreements with respect to Additional
Notes.

 

“Restricted Investment” means an
Investment other than a Permitted Investment.

 

“Restricted Notes” means Notes
bearing the Private Placement Legend.

 

“Restricted Subsidiary” of a Person
means any Subsidiary of the referent Person that is not an Unrestricted
Subsidiary.

 

“sale and leaseback transaction”
means an arrangement relating to property now owned or hereafter acquired
whereby the Company or a Restricted Subsidiary transfers such property to a
Person and the Company or a Restricted Subsidiary leases it from such Person.

 

“Securities Act” means the
Securities Act of 1933, as amended.

 

“Significant Subsidiary” means any
Subsidiary that would be a “significant subsidiary” as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as
such Regulation is in effect on the date of this Indenture.

 

“Special Interest” means all
liquidated damages then owing pursuant to the Registration Rights
Agreement.  The Trustee shall be under no
obligation to determine or calculate the Special Interest, whether the Special
Interest is due and payable, or to give notice with respect thereto.  The Trustee may conclusively assume, in the
absence of written notice to the contrary from the Company or a Holder or
Holders of Notes, that no Special Interest is due and payable.

 

“Standard
Securitization Undertakings” means representations,
warranties, covenants, indemnities and guarantees of performance entered into
by the Company or any of its Subsidiaries, which the Company has determined in
good faith to be customary in a Receivables Financing including those relating
to the servicing of the assets of a Receivables Subsidiary, it being understood
that any Receivables Repurchase Obligation shall be deemed to be a Standard
Securitization Undertaking.

 

“Standard &
Poor’s” means Standard & Poor’s Ratings Group,
Inc., or any successor to the rating agency business thereof.

 

“Stated Maturity” means, with
respect to any installment of interest or principal on any series of
Indebtedness, the date on which the payment of interest or principal was
scheduled to 

 

27

 

be paid in the documentation governing such
Indebtedness as of the Issue Date, and will not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.

 

“Subsidiary” means, with respect to
any specified Person, any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency and after giving
effect to any voting agreement or stockholders’ agreement that effectively transfers
voting power) to vote in the election of directors, managers or trustees of the
corporation, association or other business entity is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof).

 

“TIA” or “Trust
Indenture Act” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa, 77bbbb), as in effect on
the Issue Date.

 

“Transition Agreements” means the following agreements described
in the Offering Memorandum:

 

(1)                                  the Master
Separation Agreement;

 

(2)                                  the Transition
Services Agreement;

 

(3)                                  the
Transitional License Agreement;

 

(4)                                  the
Registration Rights Agreement;

 

(5)                                  the Tax Sharing
Agreement;

 

(6)                                  the Employee
Benefits Agreement;

 

(7)                                  the Assignment,
Assumption and Indemnity Agreement; and

 

(8)                                  the Toll
Manufacturing Agreement.

 

“Trustee” means the party named as
such in this Indenture until a successor replaces it and, thereafter, means the
successor.

 

“Trust Officer” shall mean, when
used with respect to the Trustee, any officer within the corporate trust
department of the Trustee, including any vice president, assistant vice
president, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person’s knowledge of and familiarity with the
particular subject and who, in each case, shall have direct responsibility for
the administration of this Indenture.

 

28

 

“Unrestricted
Subsidiary” means any Subsidiary of the Company that is designated
by the Board of Directors of the Company as an Unrestricted Subsidiary pursuant
to a resolution of the Board of Directors, but only to the extent that such
Subsidiary:

 

(1)                                  has no
Indebtedness other than Non-Recourse Debt;

 

(2)                                  except as
permitted by Section 3.8, is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of the Company;

 

(3)                                  is a Person
with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests or (b) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results; and

 

(4)                                  has not
guaranteed or otherwise directly or indirectly provided credit support for any
Indebtedness of the Company or any of its Restricted Subsidiaries

 

Any such designation by the Board of Directors of
the Company shall be evidenced for purposes of this Indenture by filing with
the Trustee a Board Resolution giving effect to such designation and an
Officers’ Certificate certifying that such designation complies with the
foregoing conditions.  If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred as of such date.

 

“Voting Stock” of any specified
Person as of any date means the Capital Stock of such Person that is at the
time entitled to vote in the election of the Board of Directors of such Person.

 

“Weighted Average Life to Maturity”
means, when applied to any Indebtedness at any date, the number of years
obtained by dividing:

 

(1)                                  the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness,
by (b) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment; by

 

(2)                                  the then
outstanding principal amount of such Indebtedness.

 

29

 

Section 1.2.            Other Definitions. 

 

	
  Term

  	
   

  	
  Defined
  in Section

  
	
   

  	
   

  	
   

  
	
  “Additional Notes”

  	
   

  	
  Preamble

  
	
   

  	
   

  	
   

  
	
  “Additional Restricted Notes”

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  “Affiliate Transaction”

  	
   

  	
  3.8(a)

  
	
   

  	
   

  	
   

  
	
  “Agent Member”

  	
   

  	
  2.1(e)(iii)

  
	
   

  	
   

  	
   

  
	
  “Asset Sale Offer”

  	
   

  	
  3.7(d)

  
	
   

  	
   

  	
   

  
	
  “Asset Sale Offer Amount”

  	
   

  	
  3.7(e)

  
	
   

  	
   

  	
   

  
	
  “Asset Sale Offer Period”

  	
   

  	
  3.7(e)

  
	
   

  	
   

  	
   

  
	
  “Asset Sale Payment Date”

  	
   

  	
  3.7(e)

  
	
   

  	
   

  	
   

  
	
  “Authenticating Agent”

  	
   

  	
  2.2

  
	
   

  	
   

  	
   

  
	
  “Calculation Date”

  	
   

  	
  1.1 (definition of “Fixed Charge Coverage Ratio”)

  
	
   

  	
   

  	
   

  
	
  “Certificate of Destruction”

  	
   

  	
  2.10

  
	
   

  	
   

  	
   

  
	
  “Change of Control Offer”

  	
   

  	
  3.9

  
	
   

  	
   

  	
   

  
	
  “Change of Control Payment”

  	
   

  	
  3.9

  
	
   

  	
   

  	
   

  
	
  “Change of Control Purchase Date”

  	
   

  	
  3.9

  
	
   

  	
   

  	
   

  
	
  “Change of Control Settlement Date”

  	
   

  	
  3.9

  
	
   

  	
   

  	
   

  
	
  “Company”

  	
   

  	
  Preamble

  
	
   

  	
   

  	
   

  
	
  “Company Order”

  	
   

  	
  2.2

  
	
   

  	
   

  	
   

  
	
  “Corporate Trust Office”

  	
   

  	
  3.14

  
	
   

  	
   

  	
   

  
	
  “Covenant Defeasance”

  	
   

  	
  8.3

  
	
   

  	
   

  	
   

  
	
  “Defaulted Interest”

  	
   

  	
  2.11

  
	
   

  	
   

  	
   

  
	
  “Event of Default”

  	
   

  	
  6.1

  
	
   

  	
   

  	
   

  
	
  “Excess Proceeds”

  	
   

  	
  3.7(c)

  

 

30

 

	
  Term

  	
   

  	
  Defined
  in Section

  
	
   

  	
   

  	
   

  
	
  “Exchange Global Note”

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  “Exchange Notes”

  	
   

  	
  Preamble

  
	
   

  	
   

  	
   

  
	
  “Funding Guarantor”

  	
   

  	
  10.4

  
	
   

  	
   

  	
   

  
	
  “General Partner”

  	
   

  	
  1.1 (definition of “Indebtedness”)

  
	
   

  	
   

  	
   

  
	
  “Global Note Legend”

  	
   

  	
  2.1(d)(B)

  
	
   

  	
   

  	
   

  
	
  “Global Notes”

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  “incur”

  	
   

  	
  3.3(a)

  
	
   

  	
   

  	
   

  
	
  “Initial Notes”

  	
   

  	
  Preamble

  
	
   

  	
   

  	
   

  
	
  “Issuers”

  	
   

  	
  Preamble

  
	
   

  	
   

  	
   

  
	
  “Joint Venture”

  	
   

  	
  1.1 (definition of “Indebtedness”)

  
	
   

  	
   

  	
   

  
	
  “Legal Defeasance”

  	
   

  	
  8.2

  
	
   

  	
   

  	
   

  
	
  “Legal Holiday”

  	
   

  	
  12.8

  
	
   

  	
   

  	
   

  
	
  “Notes”

  	
   

  	
  Preamble

  
	
   

  	
   

  	
   

  
	
  “Parent”

  	
   

  	
  Preamble

  
	
   

  	
   

  	
   

  
	
  “Payment Default”

  	
   

  	
  6.1(6)(a)

  
	
   

  	
   

  	
   

  
	
  “Paying Agent”

  	
   

  	
  2.3

  
	
   

  	
   

  	
   

  
	
  “Permitted Debt”

  	
   

  	
  3.3(b)

  
	
   

  	
   

  	
   

  
	
  “Private Placement Legend”

  	
   

  	
  2.1(d)

  
	
   

  	
   

  	
   

  
	
  “protected purchaser”

  	
   

  	
  2.8

  
	
   

  	
   

  	
   

  
	
  “QIB”

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  “Registrar”

  	
   

  	
  2.3

  
	
   

  	
   

  	
   

  
	
  “Regulation S”

  	
   

  	
  2.1(b)

  

 

31

 

	
  Term

  	
   

  	
  Defined
  in Section

  
	
   

  	
   

  	
   

  
	
  “Regulation S Global Note”

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  “Regulation S Note”

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  “Resale Restriction Termination Date”

  	
   

  	
  2.6(a)

  
	
   

  	
   

  	
   

  
	
  “Restricted Payment”

  	
   

  	
  3.4(a)

  
	
   

  	
   

  	
   

  
	
  “Restricted Period”

  	
   

  	
  2.1(a)

  
	
  “Rule 144A”

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  “Rule 144A Global Note”

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  “Rule 144A Note”

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  “Securities Custodian”

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  “Special Interest Payment Date”

  	
   

  	
  2.11(a)

  
	
   

  	
   

  	
   

  
	
  “Special Record Date”

  	
   

  	
  2.11(a)

  
	
   

  	
   

  	
   

  
	
  “Successor Company”

  	
   

  	
  4.1

  
	
   

  	
   

  	
   

  
	
  “Tronox Finance”

  	
   

  	
  Preamble

  
	
   

  	
   

  	
   

  
	
  “Trustee”

  	
   

  	
  Preamble

  

 

Section
1.3.            Incorporation by Reference of Trust Indenture Act.  This Indenture is subject to the mandatory
provisions of the TIA which are incorporated by reference in and made a part of
this Indenture.  The following TIA terms
have the following meanings:

 

“Commission” means the SEC.

 

“indenture securities” means the Notes.

 

“indenture security holder” means a Holder of a Note.

 

“indenture to be qualified” means this Indenture.

 

“indenture trustee” or “institutional trustee” means the Trustee.

 

“obligor” on the Notes means the Issuers, the Guarantors and any other
obligor on the Notes.

 

32

 

All other TIA terms used in this Indenture that are defined by the TIA,
defined in the TIA by reference to another statute or defined by Commission’s
rule have the meanings assigned to them by such definitions.

 

Section
1.4.            Rules of Construction.  Unless the context otherwise requires:

 

(1)           a term has the meaning assigned to
it;

 

(2)           an accounting term not otherwise
defined has the meaning assigned to it in accordance with GAAP;

 

(3)           “or” is not exclusive;

 

(4)           “including” means including without
limitation;

 

(5)           words in the singular include the
plural and words in the plural include the singular;

 

(6)           the principal amount of any
noninterest bearing or other discount security at any date shall be the
principal amount thereof that would be shown on a balance sheet of the Company
dated such date prepared in accordance with GAAP; and

 

(7)           the principal amount of any Preferred
Stock shall be (i) the maximum liquidation value of such Preferred Stock or
(ii) the maximum mandatory redemption or mandatory repurchase price with
respect to such Preferred Stock, in each case, at the date of determination,
whichever is greater.

 

ARTICLE II

 

The Notes

 

Section 2.1.            Form, Dating and Terms.

 

(a)           The
aggregate principal amount of Notes that may be authenticated and delivered
under this Indenture is unlimited.  The
Initial Notes issued on the Issue Date will be in an aggregate principal amount
of $350,000,000.  In addition, the
Company may issue, from time to time in accordance with the provisions of this
Indenture, including Section 3.3,
Additional Notes and Exchange Notes. 
Furthermore, Notes may be authenticated and delivered upon registration
or transfer, or in lieu of, other Notes pursuant to Section
2.6, 2.8, 2.9,
5.8 or 9.5
or in connection with an Asset Sale Offer pursuant to Section
3.7 or a Change of Control Offer pursuant to Section
3.9.

 

With respect to any Additional Notes, the Issuers shall set forth in a
Board Resolution and an Officer’s Certificate, the following information:

 

(1)           the aggregate principal amount of
such Additional Notes to be authenticated and delivered pursuant to this
Indenture;

 

33

 

(2)           the issue price and the issue date of
such Additional Notes, including the date from which interest shall accrue; and

 

(3)           whether such Additional Notes shall
be Restricted Notes issued in the form of Exhibit A
hereto and/or shall be issued in the form of Exhibit B
hereto.

 

The Initial Notes, the Additional Notes and the Exchange Notes shall be
considered collectively as a single class for all purposes of this Indenture.  Holders of the Initial Notes, the Additional
Notes and the Exchange Notes will vote and consent together on all matters to
which such Holders are entitled to vote or consent as one class, and none of
the Holders of the Initial Notes, the Additional Notes or the Exchange Notes
shall have the right to vote or consent as a separate class on any matter to
which such Holders are entitled to vote or consent.

 

(b)           The
Initial Notes are being offered and sold by the Issuers pursuant to a Purchase
Agreement, dated November 21, 2005, among the Issuers, the Guarantors, Lehman
Brothers Inc., Credit Suisse First Boston LLC and the other initial purchasers
named therein.  The Initial Notes and any
Additional Notes that are not issued in an offer registered under the
Securities Act (“Additional Restricted Notes”) will be resold initially
only to (A) qualified institutional buyers (as defined in Rule 144A under the
Securities Act (“Rule 144A”)) in reliance
on Rule 144A (“QIBs”) and (B) Persons other
than U.S. Persons (as defined in Regulation S under the Securities Act (“Regulation S”)) in reliance on Regulation S.  Such Initial Notes and Additional Restricted
Notes thereafter may be transferred to, among others, QIBs and purchasers in
reliance on Regulation S in accordance with the procedures described herein.

 

Initial Notes and Additional Restricted Notes offered and sold to QIBs
in the United States of America in reliance on Rule 144A (the “Rule 144A Notes”) shall be issued in the form of
a permanent global Note, without interest coupons, substantially in the form of
Exhibit A, which is hereby incorporated by
reference and made a part of this Indenture, including appropriate legends as
set forth in Section 2.1(d) (the “Rule 144A Global Note”), deposited with the Trustee,
as custodian for DTC or its nominee (the “Securities
Custodian”), duly executed by the Issuers and authenticated by the
Trustee as hereinafter provided.  The
Rule 144A Global Note may be represented by more than one certificate, if so
required by DTC’s rules regarding the maximum principal amount to be
represented by a single certificate.  The
aggregate principal amount of the Rule 144A Global Note may from time to time
be increased or decreased by adjustments made on the records of the Trustee, as
Securities Custodian, as hereinafter provided.

 

Initial Notes and Additional Restricted Notes offered and sold outside
the United States of America (the “Regulation S Notes”)
in reliance on Regulation S shall be issued in the form of a permanent global
Note, without interest coupons, substantially in the form of Exhibit A, including appropriate
legends as set forth in Section 2.1(d) (the “Regulation S Global Note”) deposited with the
Trustee as Securities Custodian or as custodian for the nominee of DTC for the
accounts of the designated agents of Euroclear or Clearstream, duly executed by
the Issuers and authenticated by the Trustee as hereinafter provided.  Through and including the 40th day
after the Issue Date (such period through and including such 40th day,
the “Restricted Period”), beneficial
interests in the Regulation S Global Notes may be held only through
Euroclear and Clearstream (as indirect participants in DTC), unless transferred
to a person that takes delivery through a Rule 144A Global Note in accordance
with the certification requirements described 

 

34

 

below. 
Beneficial interests in the Rule 144A Global Notes may not be
exchanged for beneficial interests in the Regulation S Global Notes at any
time except in the limited circumstances described below.  The Regulation S Global Note may be
represented by more than one certificate, if so required by DTC’s rules
regarding the maximum principal amount to be represented by a single
certificate.  The aggregate principal
amount of the Regulation S Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
DTC or its nominee, as hereinafter provided.

 

Exchange Notes exchanged for interests in the Rule 144A Notes and the
Regulation S Notes will be issued in the form of a permanent global Note,
without interest coupons, substantially in the form of Exhibit
B, which is hereby incorporated by reference and made a part of this
Indenture, deposited with the Trustee as hereinafter provided, including the
appropriate legend set forth in Section 2.1(d)
(the “Exchange Global Note”).  The Exchange Global Note may be represented
by more than one certificate, if so required by DTC’s rules regarding the maximum
principal amount to be represented by a single certificate.

 

The Rule 144A Global Note, the Regulation S Global Note and the
Exchange Global Note are sometimes collectively herein referred to as the “Global Notes.”

 

Payments of all principal, interest and premium and Special Interest,
if any, on the Notes will be made to each registered Holder by wire transfer in
immediately available funds if that Holder has given to the Issuers, through
the Paying Agent or otherwise, wire instructions at least five business days
prior to the applicable payment date or by check mailed to the address of the
Holder as it appears on the books of the registrar if the Holder has not
provided wire instructions; provided that the final distribution in respect of
any Note will be made only upon presentation and surrender of such Note at the
applicable Corporate Trust Office of the Trustee.

 

The Notes may have notations, legends or endorsements required by law,
stock exchange rule or usage, in addition to those set forth on Exhibit A and Exhibit B
and in Section 2.1(d).  The Issuers shall approve the forms of the
Notes and any notation, endorsement or legend on them.  Each Note shall be dated the date of its
authentication.  The terms of the Notes
set forth in Exhibit A and Exhibit B are part of the terms of this Indenture
and, to the extent applicable, the Issuers, the Guarantors and the Trustee, by
their execution and delivery of this Indenture, expressly agree to be bound by
such terms.

 

(c)           Denominations. 
The Notes shall be issuable only in fully registered form, without
coupons, and only in denominations of $1,000 and any integral multiple thereof.

 

(d)           Legends. 
Unless and until (i) an Initial Note or an Additional Restricted Note is
sold under an effective registration statement or (ii) an Initial Note or an
Additional Restricted Note is exchanged for an Exchange Note in connection with
an effective registration statement, in each case pursuant to the Registration
Rights Agreement or a similar agreement,

 

(A)          the
Initial Note or Additional Restricted Note, as the case may be, shall bear the
following legend (the “Private Placement Legend”)
on the face thereof:

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY 

 

35

 

NOT BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1)
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2),
(3) OR (7) IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE BLUE SKY LAWS OF THE
STATES OF THE UNITED STATES.

 

 (B)          The Global Notes, whether or not an
Initial Note, Additional Restricted Note or Exchange Note, shall bear the
following legend (the “Global Note Legend”)
on the face thereof:

 

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.”

 

(e)           Book-Entry
Provisions

 

(1)           This Section
2.1(e) shall apply only to Global Notes deposited with the Trustee,
as custodian for DTC.

 

(2)           Each Global Note initially shall (x)
be registered in the name of DTC for such Global Note or the nominee of DTC,
(y) be delivered to the Trustee as custodian for DTC and (z) bear legends as
set forth in Section 2.1(d).

 

36

 

(3)           Members of, or participants in, DTC
(“Agent Members”) shall have no rights
under this Indenture with respect to any Global Note held on their behalf by
DTC or by the Trustee as the custodian of DTC or under such Global Note, and
DTC may be treated by the Issuers, the Trustee and any agent of the Issuers or
the Trustee as the absolute owner of such Global Note for all purposes
whatsoever.  Notwithstanding the
foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent
of the Issuers or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by DTC or impair, as between DTC and its
Agent Members, the operation of customary practices of DTC governing the
exercise of the rights of a Holder of a beneficial interest in any Global Note.

 

(4)           In connection with any transfer of a
portion of the beneficial interest in a Global Note pursuant to subsection (f)
of this Section 2.1 to beneficial owners who are required to hold
Definitive Notes, the Securities Custodian shall reflect on its books and
records the date and a decrease in the principal amount of such Global Note in
an amount equal to the principal amount of the beneficial interest in the Global
Note to be transferred, and the Issuers shall execute, and the Trustee shall
authenticate and deliver, one or more Definitive Notes of like tenor and
amount.

 

(5)           In connection with the transfer of an
entire Global Note to beneficial owners pursuant to subsection (f) of this Section
2.1, such Global Note shall be deemed to be surrendered to the Trustee for
cancellation, and the Issuers shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by DTC in exchange for its
beneficial interest in such Global Note, an equal aggregate principal amount of
Definitive Notes of authorized denominations.

 

(6)           The registered Holder of a Global
Note may grant proxies and otherwise authorize any person, including Agent
Members and persons that may hold interests through Agent Members, to take any
action which a Holder is entitled to take under this Indenture or the Notes.

 

(f)            Euroclear and
Clearstream Procedures Applicable.  The provisions of the “Operating Procedures
of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear”
and the “General Terms and Conditions of Clearstream Banking” and “Customer
Handbook” of Clearstream will be applicable to transfers of beneficial
interests in the Regulation S Global Note that are held by Agent Members
through Euroclear or Clearstream.

 

(g)           Definitive Notes. 
Except as provided below, owners of beneficial interests in Global Notes
will not be entitled to receive Definitive Notes.  If required to do so pursuant to any applicable
law or regulation, beneficial owners may obtain Definitive Notes in exchange
for their beneficial interests in a Global Note upon written request in
accordance with DTC’s and the Registrar’s procedures.  In addition, Definitive Notes shall be transferred
to all beneficial owners in exchange for their beneficial interests in a Global
Note if (a) DTC notifies the Issuers that it is unwilling or unable to continue
as depositary for such Global Note or DTC ceases to be a clearing agency
registered under the Exchange Act, at a time when DTC is required to be so
registered in order to act as depositary, and in each case a successor
depositary is not appointed by the Issuers within 90 days of such notice,
(b) the Issuers, at their option, notify the Trustee in 

 

37

 

writing that they elect to cause the issuance of the Definitive Notes
or (c) an Event of Default has occurred and is continuing.

 

(1)           Any Definitive Note delivered in
exchange for an interest in a Global Note pursuant to Section
2.1(e)(4) or (5) will be
registered in the names and issued in any approved denominations, requested by
or on behalf of DTC (in accordance with its customary procedures) and, except
as otherwise provided by Section 2.6(c), bear
the Private Placement Legend set forth in Section
2.1(d).

 

(2)           In connection with the exchange of a
portion of a Definitive Note for a beneficial interest in a Global Note, the
Trustee shall cancel such Definitive Note, and the Issuers shall execute, and
the Trustee shall authenticate and deliver, to the transferring Holder a new
Definitive Note representing the principal amount not so transferred.

 

Section
2.2.            Execution and Authentication.  One Officer of each Issuer shall sign the
Notes for such Issuer by manual or facsimile signature.  If an Officer whose signature is on a Note no
longer holds that office at the time the Trustee authenticates the Note, the
Note shall be valid nevertheless, after giving effect to any exchange of
Initial Notes for Exchange Notes.

 

A Note shall not be valid until an authorized signatory of the Trustee
manually authenticates the Note.  The
signature of the Trustee on a Note shall be conclusive evidence that such Note
has been duly and validly authenticated and issued under this Indenture.  A Note shall be dated the date of its
authentication.

 

At any time and from time to time after the execution and delivery of
this Indenture, the Trustee shall authenticate and make available for
delivery:  (1) Initial Notes for original
issue on the Issue Date in an aggregate principal amount of $350,000,000, (2)
Additional Notes for original issue and (3) Exchange Notes for issue only in an
exchange offer pursuant to the Registration Rights Agreement, and only in
exchange for Initial Notes or Additional Notes of an equal principal amount, in
each case upon a written order of the Issuers signed by two Officers of each
Issuer or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of each Issuer (the “Company Order”).  Such Company Order shall specify the amount
of the Notes to be authenticated and the date on which the original issue of
Notes is to be authenticated and whether the Notes are to be Initial Notes,
Additional Notes or Exchange Notes.

 

The Trustee may appoint an agent (the “Authenticating
Agent”) reasonably acceptable to the Issuers to authenticate the
Notes.  Unless limited by the terms of
such appointment, any such Authenticating Agent may authenticate Notes whenever
the Trustee may do so.  Each reference in
this Indenture to authentication by the Trustee includes authentication by the
Authenticating Agent.

 

In case any Issuer or any Guarantor, pursuant to Article
IV or Section 10.2, shall be
consolidated or merged with or into any other Person or shall convey, transfer,
lease or otherwise dispose of all or substantially all of its properties and
assets to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which any Issuer or any
Guarantor shall have been merged, or the Person which shall have received a
conveyance, transfer, lease or other disposition as aforesaid, shall have
executed an indenture supplemental 

 

38

 

hereto with the Trustee pursuant to Article IV, any of the Notes authenticated or
delivered prior to such consolidation, merger, conveyance, transfer, lease or
other disposition may, from time to time, at the request of the successor
Person, be exchanged for other Notes executed in the name of the successor
Person with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Notes surrendered for such exchange
and of like principal amount; and the Trustee, upon Company Order of the
successor Person, shall authenticate and deliver Notes as specified in such
order for the purpose of such exchange. 
If Notes shall at any time be authenticated and delivered in any new
name of a successor Person pursuant to this Section
2.2 in exchange or substitution for or upon registration of transfer
of any Notes, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Notes at the time
outstanding for Notes authenticated and delivered in such new name.

 

Section
2.3.            Registrar and Paying Agent.  The Issuers shall maintain an office or
agency where Notes may be presented for registration of transfer or for
exchange (the “Registrar”) and an office or
agency where Notes may be presented for payment (the “Paying
Agent”).  The Issuers shall
cause each of the Registrar and the Paying Agent to maintain an office or
agency in the Borough of Manhattan, The City of New York.  The Registrar shall keep a register of the
Notes and of their transfer and exchange (the “Note
Register”).  The Issuers may
have one or more co-registrars and one or more additional paying agents.  The term “Paying Agent” includes any
additional paying agent.

 

The Issuers shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. 
The agreement shall implement the provisions of this Indenture that
relate to such agent.  The Issuers shall
notify the Trustee of the name and address of each such agent.  If the Issuers fail to maintain a Registrar
or Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.7.  The Company or any of its Restricted
Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer
agent.

 

The Issuers initially appoint the Trustee as Registrar and Paying Agent
for the Notes.

 

Section
2.4.            Paying Agent to Hold Money in Trust.  By no later than 11:00 a.m. (New York City
time) on the date on which any principal of, premium, if any, on or interest
and Special Interest, if any, on, any Note is due and payable, the Issuers
shall deposit with the Paying Agent a sum sufficient in immediately available
funds to pay such principal, premium, interest and Special Interest, if any,
when due.  The Issuers shall require each
Paying Agent (other than the Trustee) to agree in writing that such Paying
Agent shall hold in trust for the benefit of the Holders or the Trustee all
money held by such Paying Agent for the payment of principal of, or premium, if
any, on, and interest and Special Interest, if any, on, the Notes and shall
notify the Trustee in writing of any default by the Issuers or any Guarantor in
making any such payment.  If an Issuer or
a Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund.  The Issuers at any time may require a Paying
Agent (other than the Trustee) to pay all money held by it to the Trustee and
to account for any funds disbursed by such Paying Agent.  Upon complying with this Section 2.4, the
Paying Agent (if other than an Issuer or a Subsidiary) shall have no further
liability for the money delivered to the 

 

39

 

Trustee.  Upon any bankruptcy,
reorganization or similar proceeding with respect to any Issuer, the Trustee
shall serve as Paying Agent for the Notes.

 

Section
2.5.            Holder Lists.  The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders.  If the
Trustee is not the Registrar, or to the extent otherwise required under the
TIA, the Issuers shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders.

 

Section 2.6.            Transfer and Exchange.

 

(a)           The following
provisions shall apply with respect to any proposed transfer of a Rule 144A
Note prior to the date which is two years after the later of the date of its
original issue and the last date on which the Issuers or any Affiliate of the
Issuers was the owner of such Notes (or any predecessor thereto) (the “Resale Restriction Termination Date”):

 

(1)           a transfer of a
Rule 144A Note or a beneficial interest therein to a QIB shall be made upon the
representation of the transferee in the form as set forth on the reverse of the
Note that it is purchasing for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such account
is a “qualified institutional buyer” within the meaning of Rule 144A, and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon its foregoing representations in order to claim the exemption from
registration provided by Rule 144A; and

 

(2)           a transfer of a
Rule 144A Note or a beneficial interest therein to a Non-U.S. Person shall be
made upon receipt by the Trustee or its agent of a certificate substantially in
the form set forth in Section 2.7(a) from
the proposed transferee and, if requested by the Issuers or the Trustee, the
delivery of an opinion of counsel, certification and/or other information
satisfactory to each of them.

 

(b)           (1)           The following
provisions shall apply with respect to any proposed exchange of beneficial
interests in the Regulation S Global Note for beneficial interests in the Rule
144A Global Note prior to the expiration of the Restricted Period:

 

Prior to the expiration of the Restricted Period,
beneficial interests in the Regulation S Global Note may be exchanged for
beneficial interests in the Rule 144A Global Note only if:

 

(A)          such exchange
occurs in connection with a transfer of the Notes pursuant to Rule 144A; and

 

(B)           the transferor
first delivers to the Trustee a written certificate substantially in the form
set forth in Section 2.7(b) from the proposed transferee and, if
requested by the Issuers or the Trustee, the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them.

 

40

 

After the expiration of the Restricted Period, interests in the
Regulation S Note may be transferred without requiring the certification set
forth in Section 2.7(b) or any additional
certification.

 

(2) Beneficial interests in a Rule 144A Global Note
may be transferred to a Person who takes delivery in the form of an interest in
the Regulation S Global Note, whether before or after the expiration of the
Restricted Period, only if the transferor first delivers to the trustee a
written certificate (substantially in the form provided in Section 2.7(a))
to the effect that such transfer is being made in accordance with Rule 903 or
904 of Regulation S or Rule 144 (if available) and that, if such transfer
occurs prior to the expiration of the Restricted Period, the interest
transferred will be held immediately thereafter through Euroclear or
Clearstream.

 

(3) Transfers involving exchanges of beneficial
interests between the Regulation S Global Notes and the Rule 144A Global Notes
will be effected by DTC by means of an instruction originated by the Trustee
through the DTC Deposit/Withdraw at Custodian system. Accordingly, in
connection with any such transfer, appropriate adjustments will be made to
reflect a decrease in the principal amount of the Regulation S Global Note and
a corresponding increase in the principal amount of the Rule 144A Global Note
or vice versa, as applicable. Any beneficial interest in one of the Global
Notes that is transferred to a Person who takes delivery in the form of an
interest in the other Global Note will, upon transfer, cease to be an interest
in such Global Note and will become an interest in the other Global Note and,
accordingly, will thereafter be subject to all transfer restrictions and other
procedures applicable to beneficial interests in such other Global Note for so
long as it remains such an interest. 
Notwithstanding anything herein to the contrary, the policies and
practices of DTC may prohibit transfers of beneficial interests in the
Regulation S Global Note prior to the expiration of the Restricted Period.

 

(c)           Private Placement Legend.  Upon the transfer, exchange or replacement of
Notes not bearing a Private Placement Legend, the Registrar shall deliver Notes
that do not bear a Private Placement Legend unless such transferee is an
affiliate (as defined in Rule 144) of the Issuers.  Upon the transfer, exchange or replacement of
Notes bearing a Private Placement Legend, the Registrar shall deliver only
Notes that bear a Private Placement Legend unless there is delivered to the
Registrar an Opinion of Counsel to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.

 

(d)           The Registrar
shall retain copies of all letters, notices and other written communications
received pursuant to Section 2.1 or this Section 2.6.  The Issuers shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable prior written notice to the
Registrar.

 

(e)           Obligations with Respect to Transfers and Exchanges of Notes.

 

(1)           To permit
registrations of transfers and exchanges, the Issuers shall, subject to the
other terms and conditions of this Article II, execute, and the Trustee
shall authenticate, Definitive Notes and Global Notes at the Registrar’s or
co-registrar’s request.

 

41

 

(2)           No service
charge shall be made to a Holder for any registration of transfer or exchange,
but the Issuers may require payment of a sum sufficient to cover any transfer
tax, assessments, or similar governmental charge payable in connection
therewith (other than any such transfer taxes, assessments or similar
governmental charges payable upon exchange or transfer pursuant to Sections 3.7, 3.9, 5.8
or 9.5).

 

(3)           The Registrar
or co-registrar shall not be required to register the transfer or exchange of
(i) any Notes selected for redemption (except in the case of Notes to be
redeemed in part, the portion of the Note not to be redeemed) or (ii) any Notes
for a period beginning 15 days before a selection of Notes to be redeemed.

 

(4)           Prior to the
due presentation for registration of transfer of any Note, the Issuers, the
Trustee, the Paying Agent, the Registrar or any co-registrar may deem and treat
the person in whose name a Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of, premium, if any, on
and interest and Special Interest, if any, on, such Note and for all other
purposes whatsoever, whether or not such Note is overdue, and none of the
Company, the Trustee, the Paying Agent, the Registrar or any co-registrar shall
be affected by notice to the contrary.

 

(5)              Any Definitive
Note delivered in exchange for an interest in a Global Note pursuant to Section 2.1(e) shall, except as otherwise
provided by Section 2.6(c), bear the
Private Placement Legend set forth in Section 2.1(d).

 

(6)              All Notes
issued upon any transfer or exchange pursuant to the terms of this Indenture
shall evidence the same debt and shall be entitled to the same benefits under
this Indenture as the Notes surrendered upon such transfer or exchange.

 

(7)              The Registrar
or any co-registrar may require certain documentation including but not limited
to signature guarantees, before effecting any transfer or exchange.

 

(f)            No Obligation of the Trustee

 

(1)           The Trustee
shall have no responsibility or obligation to any beneficial owner of a Global
Note, a member of, or a participant in, DTC or other Person with respect to the
accuracy of the records of DTC or its nominee or of any participant or member
thereof, with respect to any ownership interest in the Notes or with respect to
the delivery to any participant, member, beneficial owner or other Person
(other than DTC) of any notice (including any notice of redemption) or the
payment of any amount or delivery of any Notes (or other Note or property)
under or with respect to such Notes.  All
notices and communications to be given to the Holders and all payments to be
made to Holders in respect of the Notes shall be given or made only to or upon
the order of the registered Holders (which shall be DTC or its nominee in the
case of a Global Note).  The rights of
beneficial owners in any Global Note shall be exercised only through DTC
subject to the applicable rules and procedures of DTC.  The Trustee may rely and shall be fully
protected in relying upon information furnished by DTC with respect to its
members, participants and any beneficial owners.

 

42

 

(2)           The Trustee shall
have no obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Indenture or under
applicable law with respect to any transfer of any interest in any Note
(including any transfers between or among DTC participants, members or
beneficial owners in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by, the terms of this Indenture,
and to examine the same to determine substantial compliance as to form with the
express requirements hereof.

 

Section
2.7.            Form of
Certificates to be Delivered in Connection with Transfers Pursuant to
Regulation S and Rule 144A.

 

(a)           Form of Certificate to be Delivered in Connection with Transfers
Pursuant to Regulation S.

 

[Date]

 

Tronox Worldwide LLC

Tronox Finance Corp.

Citibank, N.A., as Trustee

111 Wall Street, 15th
Floor Window

New York, NY 10005

Attention:  Corporate Trust Services - Tronox
Worldwide LLC

 

Re:          Tronox Worldwide LLC and
Tronox Finance Corp.

91⁄2 % Senior Notes
due 2012 (the “Notes”)

 

Ladies and Gentlemen:

 

In connection with our proposed sale of $                      
aggregate principal amount of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the United
States Securities Act of 1933, as amended (the “Securities Act”), and,
accordingly, we represent that:

 

(a)           the offer of the Notes was
not made to a person in the United States;

 

(b)           either (i) at the time the
buy order was originated, the transferee was outside the United States or we
and any person acting on our behalf reasonably believed that the transferee was
outside the United States or (ii) the transaction was executed in, on or
through the facilities of a designated off-shore securities market and neither
we nor any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;

 

(c)           no directed selling efforts
have been made in the United States in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S, as applicable;

 

43

 

(d)           the transaction is not part
of a plan or scheme to evade the registration requirements of the Securities
Act; and

 

(e)           we have advised the
transferee of the transfer restrictions applicable to the Notes.

 

The Trustee and the Issuers are entitled to
rely upon this letter and are irrevocably authorized to produce this letter or
a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered
hereby.  Terms used in this certificate
have the meanings set forth in Regulation S.

 

	
  Very
  truly yours,

  	
   

  
	
   

  	
   

  
	
  [Name
  of Transferor]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signature

  	
   

  	
   

  
					

 

(b)           Form of Certificate to be Delivered in Connection with Transfers
Pursuant to Rule 144A.

 

[Date]

 

Tronox Worldwide LLC

Tronox Finance Corp.

Citibank, N.A., as Trustee

111 Wall Street, 15th
Floor Window

New York, NY 10005

Attention:  Corporate Trust Services -
Tronox Worldwide LLC

 

Re:          Tronox Worldwide LLC and
Tronox Finance Corp.

91⁄2 % Senior Notes
due 2012 (the “Notes”)

 

Ladies and Gentlemen:

 

In connection with our proposed sale of $                     
aggregate principal amount of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Rule 144A (“Rule 144A”)
under the United States Securities Act of 1933, as amended (the “Securities
Act”), and, accordingly, we represent that the Notes are being transferred
to a Person:

 

(a)           that we reasonably believe
to be a qualified institutional buyer (as defined in Rule 144A under the
Securities Act) (a “QIB”);

 

(b)           purchasing for its own
account or the account of a QIB in a transaction meeting the requirements of
Rule 144A; and

 

44

 

(c)           in accordance with all
applicable securities laws of the states of the United States and other
jurisdictions.

 

The Trustee and the Issuers are entitled to
rely upon this letter and are irrevocably authorized to produce this letter or
a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.

 

	
  Very
  truly yours,

  	
   

  
	
   

  	
   

  
	
  [Name
  of Transferor]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signature

  	
   

  	
   

  
					

 

Section 2.8.            Mutilated, Destroyed, Lost or Wrongfully Taken Notes.  If a mutilated Note is surrendered to the
Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall
authenticate a replacement Note of like tenor and principal amount, bearing a
number not contemporaneously outstanding if the requirements of Section 8-405
of the Uniform Commercial Code are met, such that the Holder (a) makes such
request to the Issuers or Trustee prior to the Issuer or Trustee having notice
that the Note has been acquired by a protected purchaser as defined in Section
8-303 of the Uniform Commercial Code (a “protected
purchaser”), (b) files with the Issuer or the Trustee an
indemnity bond, sufficient in the judgment of the Issuers and the Trustee to
protect the Issuers, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss which any of them may suffer if a Note is replaced,
and, in the absence of notice to the Issuers or the Trustee that such Note has
been acquired by a protected purchaser and (c) satisfies any other reasonable
requirements of the Trustee.

 

In case any such mutilated, destroyed, lost or wrongfully taken Note
has become or is about to become due and payable, the Issuers in their
discretion may, instead of issuing a new Note, pay such Note.

 

Upon the issuance of any new Note under this Section
2.8, the Issuers may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
in connection therewith.

 

Every new Note issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or wrongfully taken Note shall constitute an
original additional contractual obligation of the Issuers, any Guarantor (if
applicable) and any other obligor upon the Notes, whether or not the mutilated,
destroyed, lost or wrongfully taken Note shall be at any time enforceable by
anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

 

45

 

The provisions of this Section 2.8
are exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes.

 

Section
2.9.            Outstanding
Notes.  Notes
outstanding at any time are all Notes authenticated by the Trustee except for
those canceled by it, those accepted by it for cancellation and those described
in this Section 2.9 as not
outstanding.  A Note ceases to be
outstanding in the event Parent, any Issuer or a Subsidiary of Parent or of any
Issuer holds the Note, provided,
however,
that (i) for purposes of determining which are outstanding for consent or
voting purposes hereunder, the provisions of Section
12.6 shall apply and (ii) in determining whether the Trustee shall
be protected in making a determination whether the Holders of the requisite
principal amount of outstanding Notes are present at a meeting of Holders of
Notes for quorum purposes or have consented to or voted in favor of any
request, demand, authorization, direction, notice, consent, waiver, amendment
or modification hereunder, or relying upon any such quorum, consent or vote,
only Notes which a Trust Officer of the Trustee actually knows to be held by
Parent or an Affiliate thereof shall not be considered outstanding.

 

If a Note is replaced pursuant to Section 2.8,
it ceases to be outstanding unless the Trustee and the Issuers receive proof
satisfactory to them that the replaced Note is held by a protected purchaser.

 

If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a Redemption Date or maturity date money sufficient to pay
all principal, premium, if any, and interest and Special Interest, if any,
payable on that date with respect to the Notes (or portions thereof) to be
redeemed or maturing, as the case may be, and the Paying Agent is not
prohibited from paying such money to the Holders on that date pursuant to the
terms of this Indenture, then on and after that date such Notes (or portions
thereof) cease to be outstanding and interest on them ceases to accrue.

 

Section
2.10.          Cancellation.  The Issuers at any time may deliver Notes to
the Trustee for cancellation.  The
Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment or
cancellation and destroy such Notes in accordance with its internal policies,
including delivery of a certificate (a “Certificate of
Destruction”) describing such Notes disposal (subject to the record
retention requirements of the Exchange Act). 
The Issuers may not issue new Notes to replace Notes they have paid or
delivered to the Trustee for cancellation for any reason other than in
connection with a transfer or exchange.

 

Section
2.11.          Payment of
Interest; Defaulted Interest.  Interest and Special Interest, if any, on any
Note which is payable, and is punctually paid or duly provided for, on any
interest payment date shall be paid to the Person in whose name such Note (or
one or more predecessor Notes) is registered at the close of business on the
regular record date for such interest at the office or agency of the Issuers
maintained for such purpose pursuant to Section 2.3.

 

Any interest and Special Interest, if any, on any Note which is
payable, but is not paid when the same becomes due and payable and such
nonpayment continues for a period of 30 days

 

46

 

shall forthwith cease to be payable to the
Holder on the regular record date, and such defaulted interest and (to the
extent lawful) interest on such defaulted interest at the rate borne by the
Notes (such defaulted interest and interest thereon herein collectively called
“Defaulted Interest”) shall be paid by the
Issuers, at their election in each case, as provided in clause (a) or (b)
below:

 

(a)           The Issuers may
elect to make payment of any Defaulted Interest to the Persons in whose names
the Notes (or their respective predecessor Notes) are registered at the close
of business on a Special Record Date (as defined below) for the payment of such
Defaulted Interest, which shall be fixed in the following manner.  The Issuers shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each Note
and the date (not less than 30 days after such notice) of the proposed payment
(the “Special Interest Payment Date”), and
at the same time the Issuers shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when deposited to
be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. 
Thereupon the Trustee shall fix a record date (the “Special Record Date”) for the payment of such
Defaulted Interest, which date shall be not more than 15 days and not less than
10 days prior to the Special Interest Payment Date and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Issuers
of such Special Record Date, and in the name and at the expense of the Issuers,
shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date and Special Interest Payment Date therefor to be given in
the manner provided for in Section 12.2,
not less than 10 days prior to such Special Record Date.  Notice of the proposed payment of such
Defaulted Interest and the Special Record Date and Special Interest Payment
Date therefor having been so given, such Defaulted Interest shall be paid on
the Special Interest Payment Date to the Persons in whose names the Notes (or
their respective predecessor Notes) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to the
following clause (b).

 

(b)           The Issuers may
make payment of any Defaulted Interest in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Issuers to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed practicable by
the Trustee.

 

Subject to the foregoing provisions of this Section
2.11, each Note delivered under this Indenture upon registration of,
transfer of or in exchange for or in lieu of any other Note shall carry the
rights to interest and Special Interest, if any, each as accrued and unpaid,
and to accrue, which were carried by such other Note.

 

Section
2.12.          Computation of
Interest.  Interest on
the Notes shall be computed on the basis of a 360-day year of twelve 30-day
months.

 

Section
2.13.          CUSIP Numbers.  The Issuers in issuing the Notes may use
“CUSIP” numbers (if then generally in use) and, if so, the Trustee shall use
“CUSIP” numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that 

 

47

 

no representation is made as to the correctness of such numbers either
as printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or omission
of such CUSIP numbers.  The Issuers shall
promptly notify the Trustee in writing of any change in the CUSIP numbers.

 

ARTICLE III

 

Covenants

 

Section
3.1.            Payment of
Notes.  The Company
shall promptly pay the principal of, premium, if any, on, and interest and
Special Interest, if any, on, the Notes on the dates and in the manner provided
in the Notes and in this Indenture. 
Principal, premium, if any, interest and Special Interest, if any, shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent, in its capacity as Trustee or Paying Agent, respectively, holds in
accordance with this Indenture immediately available funds deposited by or on
behalf of the Issuer or the Guarantor sufficient to pay all principal, premium,
interest and Special Interest, if any, then due and the Trustee or Paying
Agent, as the case may be, is not prohibited from paying money to the Holders
on that date pursuant to the terms of this Indenture.

 

The Issuers shall pay interest on overdue principal at the rate
specified therefor in the Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.

 

Notwithstanding anything to the contrary contained in this Indenture,
the Issuers may, to the extent they are required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.

 

Section
3.2.            Reports.  Whether or not required by the rules and
regulations of the Commission, so long as any Notes are outstanding, the
Company will cause Parent to file with the Commission for public availability
within the time periods specified in the Commission’s rules and regulations
(unless the Commission will not accept such a filing), and (if not filed
electronically with the Commission) within such periods the Company will cause
Parent to furnish to the Holders of Notes or cause the Trustee to make
available to such Holders for inspection:

 

(a)           all quarterly and annual
financial and other information with respect to Parent and its Subsidiaries
that would be required to be contained in a filing with the Commission on Forms
10-Q and 10-K if Parent were required to file such Forms, including a
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and, with respect to the annual information only, a report on
Parent’s consolidated financial statements by Parent’s certified independent
accountants; and

 

(b)           all current reports and
other information that would be required to be filed with the Commission on
Form 8-K if Parent were required to file such reports.

 

The delivery of all such reports, documents and information to the
Trustee does not imply any knowledge by the Trustee of the contents thereof nor
shall such delivery constitute 

 

48

 

constructive
notice of any information contained therein or determinable thereby or require
any action by the Trustee other than to maintain the reports for examination by
the Holders.

 

If, at any time, Parent is no longer subject to the periodic reporting
requirements of the Exchange Act for any reason, the Company will nevertheless
cause Parent to continue filing the reports specified in the preceding
paragraphs of this covenant with the Commission within the time periods
specified above unless the Commission will not accept such a filing.  The Company will not permit Parent to take
any action for the purpose of causing the Commission not to accept any such
filings.  If, notwithstanding the
foregoing, the Commission will not accept Parent’s filings for any reason, the
Company will cause Parent to post the reports referred to in the preceding
paragraphs on its website within the time periods that would apply if Parent
were required to file those reports with the SEC.

 

In addition, the Company and the Guarantors shall, for so long as any
Notes remain outstanding, if at any time they are not required to file the
reports required by the preceding paragraphs with the Commission, furnish to
the Holders and to securities analysts and prospective investors in the Notes,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.

 

Section 3.3.            Incurrence of Indebtedness and Issuance of Preferred Stock.

 

(a)           The Company will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise, with respect to (collectively, “incur”)
any Indebtedness (including Acquired Debt), and the Company will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to
issue any shares of Preferred Stock; provided, however, that the Company and
its Restricted Subsidiaries that are Guarantors may incur Indebtedness
(including Acquired Debt) or issue Disqualified Stock, if the Fixed Charge
Coverage Ratio for the Company’s most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock is issued, as the case may be, would have been at least 2.0 to 1,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or the
Disqualified Stock had been issued, as the case may be, at the beginning of
such four-quarter period.

 

(b)           The provisions
of Section 3.3(a) will not prohibit the
incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):

 

(1)           the incurrence
by the Company and any Guarantor of Indebtedness and letters of credit under
Credit Facilities in an aggregate principal amount at any one time outstanding
under this Section 3.3(b)(1) (with letters of credit being deemed to
have a principal amount equal to the maximum potential liability of the Company
and its Restricted Subsidiaries thereunder) not to exceed the greater of $450.0
million and the Borrowing Base;

 

49

 

(2)           the incurrence
by the Company and its Restricted Subsidiaries of the Existing Indebtedness;

 

(3)           the incurrence
by the Company and the Guarantors of Indebtedness represented by the Initial
Notes and the related Note Guarantees to be issued on the Issue Date and the
Exchange Notes and the related Note Guarantees to be issued pursuant to the
Registration Rights Agreement;

 

(4)           the incurrence
by the Company or any of its Restricted Subsidiaries of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of financing all or any
part of the purchase price or cost of design, construction, installation or
improvement of property, plant or equipment used in the business of the Company
or any of its Restricted Subsidiaries, in an aggregate principal amount,
including all Permitted Refinancing Indebtedness incurred to renew, refund,
refinance, replace, defease or discharge any Indebtedness incurred pursuant to
this Section 3.3(b)(4), at any time
outstanding, not to exceed the greater of (a) $25.0 million and (b) 1.5% of
Consolidated Net Tangible Assets;

 

(5)           the incurrence
by the Company or any of its Restricted Subsidiaries of Permitted Refinancing
Indebtedness in exchange for, or the net proceeds of which are used to renew,
refund, refinance, replace, defease or discharge any Indebtedness (other than
intercompany Indebtedness) that was permitted by this Indenture to be incurred
under Section 3.3(a) or clauses (2),
(3), (4) or (5) of this Section 3.3(b);

 

(6)           the incurrence
by the Company or any of its Restricted Subsidiaries of intercompany
Indebtedness between or among the Company and any of its Restricted
Subsidiaries; provided, however, that:

 

(a)           if the Company
or any Guarantor is the obligor on such Indebtedness and the payee is not the
Company or a Guarantor, such Indebtedness must be expressly subordinated to the
prior payment in full in cash of all Obligations then due with respect to the
Notes, in the case of the Company, or the Note Guarantee, in the case of a
Guarantor; and

 

(b)           (i) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Restricted
Subsidiary of the Company and (ii) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary of the Company, will be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company or such Restricted Subsidiary,
as the case may be, that was not permitted by this Section 3.3(b)(6);

 

(7)           the issuance by
any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted
Subsidiaries of shares of Preferred Stock; provided, however, that:

 

50

 

(a)           any subsequent
issuance or transfer of Equity Interests that results in any such Preferred
Stock being held by a Person other than the Company or a Restricted Subsidiary
of the Company; and

 

(b)           any sale or
other transfer of any such Preferred Stock to a Person that is not either the
Company or a Restricted Subsidiary of the Company,

 

will be deemed, in each
case, to constitute an issuance of such Preferred Stock by such Restricted
Subsidiary that was not permitted by this Section 3.3(b)(7);

 

(8)           the incurrence
by the Company or any of its Restricted Subsidiaries of Hedging Obligations in
the ordinary course of business;

 

(9)           the guarantee
by the Company or any of the Guarantors of Indebtedness of the Company or a
Restricted Subsidiary of the Company that was permitted to be incurred by
another provision of this covenant; provided that if the Indebtedness being
guaranteed is subordinated to or pari passu with the Notes, then the guarantee
shall be subordinated or pari passu, as applicable, to the same extent as the
Indebtedness guaranteed;

 

(10)         the incurrence
by the Company or any of its Restricted Subsidiaries of Indebtedness (including
letters of credit) in respect of workers’ compensation claims, self-insurance
obligations, bankers’ acceptances, performance and surety bonds in the ordinary
course of business;

 

(11)         the incurrence
by the Company or any of its Restricted Subsidiaries of Indebtedness (including
letters of credit) arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn against
insufficient funds, so long as such Indebtedness is covered within five
business days;

 

(12)         the incurrence
by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any
time outstanding pursuant to this Section 3.3(b)(12), not to exceed the
greater of (a) $30.0 million and (b) 5.0% of the combined Consolidated Tangible
Assets of the Foreign Subsidiaries (or the equivalent thereof, measured at the
time of each incurrence, in applicable foreign currency);

 

(13)         Indebtedness
consisting of the financing of insurance premiums in customary amounts
consistent with the operations and business of the Issuers and the Restricted
Subsidiaries;

 

(14)         Indebtedness
incurred by a Receivables Subsidiary in a Qualified Receivables Financing that
is not recourse to the Company or any Restricted Subsidiary of the Company other
than a Receivables Subsidiary (except for Standard Securitization
Undertakings);

 

(15)         Indebtedness or
Preferred Stock of Persons that are acquired by the Company or any Restricted
Subsidiary or merged into the Company or a Restricted Subsidiary in accordance
with the terms of this Indenture; provided that such 

 

51

 

Indebtedness or Preferred
Stock is not incurred in connection with or in contemplation of such
acquisition or merger; and provided, further, that after giving effect to such
acquisition or merger, the Company or such Restricted Subsidiary would be
permitted to incur at least $1.00 of additional Indebtedness under Section
3.3(a); and

 

(16)         the incurrence
by the Company or any of the Restricted Subsidiaries of additional Indebtedness
in an aggregate principal amount (or accreted value, as applicable) at any time
outstanding, not to exceed $35.0 million.

 

(c)           Notwithstanding the
foregoing, neither the Issuers nor any Guarantor will incur any Indebtedness
(including Permitted Debt) that is contractually subordinated in right of
payment to any other Indebtedness of any Issuer or such Guarantor unless such
Indebtedness is also contractually subordinated in right of payment to the
Notes and the applicable Note Guarantee on substantially identical terms;
provided, however, that no Indebtedness will be deemed to be contractually
subordinated in right of payment to any other Indebtedness of an Issuer solely
by virtue of being unsecured or by virtue of being secured on a first or junior
Lien basis.

 

(d)           For purposes of
determining compliance with this Section 3.3, in the event that an item
of proposed Indebtedness meets the criteria of more than one of the categories
of Permitted Debt described in Section 3.3(b)(1) through (16)
above, or is entitled to be incurred pursuant to Section 3.3(a), the
Company will be permitted to classify such item of Indebtedness on the date of
its incurrence, or later reclassify all or a portion of such item of
Indebtedness, in any manner that complies with this covenant. Indebtedness
under Credit Facilities outstanding on the date on which Notes are first issued
and authenticated under this Indenture will initially be deemed to have been
incurred on such date in reliance on Section 3.3(b)(1).

 

(e)           The
accrual of interest, the accretion or amortization of original issue discount,
the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, the reclassification of Preferred Stock as
Indebtedness due to a change in accounting principles, and the payment of
dividends on Disqualified Stock in the form of additional shares of the same
class of Disqualified Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of this
covenant; provided, in each such case, that the amount of any such accrual,
accretion or payment is included in Fixed Charges of the Company as accrued.
Notwithstanding any other provision of this covenant, the maximum amount of
Indebtedness that the Company or any Restricted Subsidiary may incur pursuant
to this covenant shall not be deemed to be exceeded solely as a result of
fluctuations in exchange rates or currency values.

 

(f)            The
amount of any Indebtedness outstanding as of any date will be:

 

(1)           the accreted
value of the Indebtedness, in the case of any Indebtedness issued with original
issue discount;

 

(2)           the principal
amount of the Indebtedness, together with any interest on the Indebtedness that
is more than 30 days past due, in the case of any other Indebtedness; and

 

52

 

(3)           in respect of
Indebtedness of another Person secured by a Lien on the assets of the specified
Person, the lesser of:

 

(A)          the Fair Market
Value of such assets at the date of determination; and

 

(B)           the amount of
the Indebtedness of the other Person.

 

If at any time an
Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of
the Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under this Section 3.3,
the Company shall be in Default of this Section 3.3).

 

Section 3.4.            Restricted Payments.

 

(a)           The Issuers will not, and
will not permit any of their Restricted Subsidiaries to, directly or
indirectly:

 

(1)           declare or pay
any dividend or make any other payment or distribution on account of the
Company’s or any of its Restricted Subsidiaries’ Equity Interests or to the
direct or indirect holders of the Company’s or any of its Restricted
Subsidiaries’ Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
the Company and other than dividends or distributions payable to the Company or
a Restricted Subsidiary of the Company);

 

(2)           purchase,
redeem or otherwise acquire or retire for value any Equity Interests of the
Company or any direct or indirect parent of the Company other than Equity
Interests owned by the Company or any Restricted Subsidiary;

 

(3)           make any
payment on or with respect to, or purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness of the Company or any Guarantor
that is contractually subordinated to the Notes or to any Note Guarantee
(excluding any intercompany Indebtedness between or among the Company and any
of its Restricted Subsidiaries), except (A) a payment of interest or principal
at the Stated Maturity thereof and (B) the purchase, repurchase or other
acquisition of Indebtedness in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due within
one year of the date of such purchase, repurchase or acquisition; or

 

(4)           make any Restricted
Investment

 

(all such payments and other actions set forth in clauses (1) through
(4) above being collectively referred to as “Restricted
Payments”),

 

unless, at the time of and after giving effect to such Restricted
Payment:

 

53

 

(1)           no Default has
occurred and is continuing or would occur as a consequence of such Restricted
Payment;

 

(2)           the Company
would, at the time of such Restricted Payment and after giving pro forma effect
thereto as if such Restricted Payment had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to Section 3.3(a); or

 

(3)           such Restricted
Payment, together with the aggregate amount of all other Restricted Payments
made by the Company and its Restricted Subsidiaries since the Issue Date
(excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6),
(7), (8), (9), (14) and (16) of Section 3.4(b)), is less than the sum,
without duplication, of:

 

(A)          50% of the
Consolidated Net Income of the Company for the period (taken as one accounting
period) from the beginning of the first fiscal quarter commencing after the
Issue Date to the end of the Company’s most recently ended fiscal quarter for
which internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit); plus

 

(B)           100% of the
aggregate net cash proceeds received, and the Fair Market Value of property
received from a non-Affiliate for use in a Permitted Business, by the Company
since the Issue Date as a contribution to its common equity capital or from the
issue or sale of Equity Interests of the Company (other than Disqualified
Stock) or from the issue or sale of convertible or exchangeable Disqualified
Stock or convertible or exchangeable debt securities of the Company that have
been converted into or exchanged for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of
the Company or an employee stock ownership plan, option plan or similar trust
to the extent such sale to an employee stock ownership plan or similar trust is
financed by loans from or guaranteed by the Company or any of its Restricted
Subsidiaries unless such loans have been repaid with cash on or prior to the
date of determination); plus

 

(C)           to the extent
that any Restricted Investment that was made after the Issue Date is sold for
cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash
return of capital with respect to such Restricted Investment (less the cost of
disposition, if any) and (ii) the initial amount of such Restricted Investment;
plus

 

(D)          to the extent that
any Unrestricted Subsidiary of the Company designated as such after the Issue
Date is redesignated as a Restricted Subsidiary after the Issue Date, the
lesser of (i) the Fair Market Value of the Company’s Investment in such
Subsidiary as of the date of such redesignation or (ii) such Fair Market Value
as of the date on which such Subsidiary was originally designated as an
Unrestricted Subsidiary after the Issue Date; plus

 

54

 

(E)           50% of any
dividends received by the Company or a Restricted Subsidiary of the Company
that is a Guarantor after the Issue Date from an Unrestricted Subsidiary of the
Company, to the extent that such dividends were not otherwise included in the
Consolidated Net Income of the Company for such period; plus

 

(F)           $10.0 million.

 

(b)           So long as no
Default has occurred and is continuing or would be caused thereby, the
preceding provisions of Section 3.4(a) will not prohibit:

 

(1)           the payment of
any dividend or the consummation of any irrevocable redemption within 60 days
after the date of declaration of the dividend or giving of the redemption
notice, as the case may be, if at the date of declaration or notice, the
dividend or redemption payment would have complied with the provisions of this
Indenture;

 

(2)           the making of
any Restricted Payment in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Subsidiary of the Company) of,
Equity Interests of the Company (other than Disqualified Stock and other than
Equity Interests issued or sold to an employee stock ownership plan or similar
trust is financed by loans from or guaranteed by the Company or any of its
Restricted Subsidiaries unless such loans have been repaid with cash on or
prior to the date of determination) or from the substantially concurrent
contribution of common equity capital to the Company; provided that the amount
of any such net cash proceeds that are utilized for any such Restricted Payment
will be excluded from clause (3)(B) of the preceding paragraph;

 

(3)           the repurchase,
redemption, defeasance or other acquisition or retirement for value of
Indebtedness of the Company or any Guarantor that is contractually subordinated
to the Notes or to any Note Guarantee with the net cash proceeds from a
substantially concurrent incurrence of Permitted Refinancing Indebtedness;

 

(4)           the payment of
any dividend (or, in the case of any partnership or limited liability company,
any similar distribution) by a Restricted Subsidiary of the Company (including
a Receivables Subsidiary) to the holders of its Equity Interests on a pro rata
basis;

 

(5)           the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
of the Company, any Restricted Subsidiary of the Company or Parent held by any
then-current or former officer, director or employee of the Company, any of its
Restricted Subsidiaries or Parent pursuant to any equity subscription
agreement, stock option agreement, shareholders’ agreement, management equity
plan, incentive plan, stock option plan, or any other similar management or
employee benefit plan; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests may not exceed $5.0
million in any twelve-month period (with unused amounts in any such 12-month
period being carried over to the next (and only the next) succeeding 12-month
period);

 

55

 

(6)           the repurchase
of Equity Interests deemed to occur upon the exercise of stock options or
vesting of restricted stock to the extent such Equity Interests represent a
portion of the exercise price of those stock options or the withholding tax
obligations with respect to such exercise or vesting;

 

(7)           the declaration
and payment of regularly scheduled or accrued dividends to holders of any class
or series of Disqualified Stock of the Company or any Restricted Subsidiary of
the Company issued on or after the Issue Date in accordance with Section
3.3(a);

 

(8)           any payments
made in connection with the consummation of the transactions closing
contemporaneously with the issuance of the Initial Notes on the Issue Date on
substantially the terms described in the Offering Memorandum;

 

(9)           so long as no
Default has occurred and is continuing or would be caused thereby, repurchases
of Indebtedness that is subordinated to the Notes or a Note Guarantee at a
purchase price not greater than (i) 101% of the principal amount of such
subordinated Indebtedness in the event of a Change of Control or (ii) 100% of
the principal amount of such subordinated Indebtedness in the event of an Asset
Sale, in each case plus accrued interest, in connection with any change of
control offer or asset sale offer required by the terms of such Indebtedness,
but only if:

 

(A)          in the case of
a Change of Control, the Company has first complied with and fully satisfied
its obligations under Section 3.9; or

 

(B)           in the case of
an Asset Sale, the Company has complied with and fully satisfied its
obligations under Section 3.7;

 

(10)         the repurchase, redemption or other acquisition for
value of Capital Stock of the Company or any direct or indirect parent of the
Company representing fractional shares of such Capital Stock in connection with
a merger, consolidation, amalgamation or other combination involving the
Company or any direct or indirect parent of the Company;

 

(11)         purchases of
receivables pursuant to a Receivables Repurchase Obligation in connection with
a Qualified Receivables Financing;

 

(12)         payments
contemplated by the Transition Agreements as in effect on the Issue Date, as
the Transition Agreements may be amended, modified or supplemented from time to
time; provided, however, that any future amendment, modification, or supplement
entered into after the Issue Date will be permitted to the extent that its
terms do not adversely affect, as a whole, the rights of any Holders of the
Notes as compared to the terms of the agreements in effect on the Issue Date;

 

(13)         the payment of
dividends on the Company’s common equity capital (or the payment of dividends
to Parent to fund a payment of dividends on Parent’s common stock) after the
Issue Date, of an amount per annum equal to up to 6% of the net proceeds 

 

56

 

of Parent’s public equity
offering closing on the Issue Date; provided that any amounts so utilized are
excluded from the calculation set forth in Section 3.4(a)(3)(B)
above;

 

(14)         Permitted
Payments to Parent in the ordinary course of business;

 

(15)         the distribution,
as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed
by the Company or a Restricted Subsidiary of the Company to, Unrestricted
Subsidiaries;

 

(16)         payments to
Parent in respect of the tax liabilities owed by Parent as a result of Parent’s
ownership of membership interests in the Company or as a result of Parent being
the common parent of any consolidated or combined tax group under applicable
law (“Tax Payments”). Any Tax Payment received from the Company or its
Subsidiaries shall be paid over to the appropriate taxing authority within 30
days of Parent’s receipt of such Tax Payments or refunded to the Company or the
relevant Subsidiary; and

 

(17)         other Restricted Payments in
an aggregate amount not to exceed $20.0 million since the Issue Date.

 

(c)           The amount of
all Restricted Payments (other than cash) will be the Fair Market Value on the
date of the Restricted Payment of the asset(s) or securities proposed to be
transferred or issued by the Company or such Restricted Subsidiary, as the case
may be, pursuant to the Restricted Payment. The Fair Market Value of any assets
or securities that are required to be valued by this covenant will be
determined by the Board of Directors of the Company whose resolution with
respect thereto will be delivered to the Trustee.  For purposes of determining compliance with
this Section 3.4, in the event that a Restricted Payment meets the
criteria of more than one of the exceptions described in (1) through (17) above
or is entitled to be made pursuant to Section 3.4(a), the Company shall,
in its sole discretion, classify such Restricted Payment, or later classify,
reclassify or re-divide all or a portion of such Restricted Payment, in any
manner that complies with this Section 3.4.

 

Section 3.5.            Liens.  The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien of
any kind on any asset now owned or hereafter acquired, except Permitted Liens.

 

Section 3.6.            Dividend and Other Payment Restrictions Affecting Subsidiaries.

 

(a)           The Company
will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, create or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary to:

 

(1)           pay dividends
or make any other distributions on its Capital Stock to the Company or any of
its Restricted Subsidiaries, or with respect to any other interest or
participation in, or measured by, its profits, or pay any Indebtedness owed to
the Company or any of its Restricted Subsidiaries;

 

57

 

(2)           make loans or
advances to the Company or any of its Restricted Subsidiaries; or

 

(3)           sell, lease or
transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries.

 

(b)           However, the
preceding restrictions will not apply to encumbrances or restrictions existing
under or by reason of:

 

(1)           agreements
governing Existing Indebtedness and Credit Facilities as in effect on the Issue
Date and any amendments, restatements, modifications, renewals, supplements,
refundings, replacements or refinancings of those agreements, provided that the
amendments, restatements, modifications, renewals, supplements, refundings,
replacement or refinancings are not materially more restrictive, taken as a
whole, with respect to such dividend and other payment restrictions than those
contained in those agreements on the Issue Date;

 

(2)           this Indenture,
the Notes and the Note Guarantees;

 

(3)           applicable law,
or any applicable rule, regulation or order;

 

(4)           any agreement
or other instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness or Capital
Stock was incurred in connection with or in contemplation of such acquisition),
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property or
assets of the Person, so acquired; provided that, in the case of Indebtedness,
such Indebtedness was permitted by the terms of this Indenture to be incurred;

 

(5)           customary
non-assignment provisions in contracts and licenses (including licenses of
intellectual property) entered into in the ordinary course of business;

 

(6)           purchase money
obligations for property acquired in the ordinary course of business and
Capital Lease Obligations that impose restrictions on the property purchased or
leased of the nature described in Section 3.6(a)(3);

 

(7)           any agreement
for the sale or other disposition of assets, including an agreement for the
sale or other disposition of a Restricted Subsidiary, that restricts
distributions by the applicable Restricted Subsidiary pending the sale or other
disposition;

 

(8)           Permitted
Refinancing Indebtedness; provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are not materially
more restrictive, taken as a whole, than those contained in the agreements
governing the Indebtedness being refinanced;

 

(9)           Liens permitted
to be incurred under Section 3.5 that limit the right of the debtor to
dispose of the assets subject to such Liens;

 

58

 

(10)         provisions
limiting the disposition or distribution of assets or property in joint venture
agreements, asset sale agreements, sale-leaseback agreements, stock sale
agreements and other similar agreements entered into with the approval of the
Company’s Board of Directors, which limitation is applicable only to the assets
that are the subject of such agreements;

 

(11)         provisions with
respect to the disposition or distribution of assets or property in joint
venture agreements, stockholder agreements, asset sale agreements, stock sale
agreements and other similar agreements entered into in the ordinary course of
business;

 

(12)         other
Indebtedness of the Company or any Restricted Subsidiary permitted to be
incurred pursuant to an agreement entered into subsequent to the Issue Date in
accordance with Section 3.3; provided that the provisions relating to
such encumbrance or restriction contained in such Indebtedness are not
materially less favorable to the Company taken as a whole, as determined by the
Board of Directors of Parent in good faith, than the provisions contained in
the Credit Agreement and in this Indenture as each is in effect on the closing
date of the Credit Agreement and the Issue Date under the Indenture,
respectively;

 

(13)         the issuance of
Preferred Stock by a Restricted Subsidiary or the payment of dividends thereon
in accordance with the terms thereof; provided that issuance of such Preferred
Stock is permitted pursuant to Section 3.3 and the terms of such
Preferred Stock do not expressly restrict the ability of a Restricted
Subsidiary to pay dividends or make any other distributions on its Capital
Stock (other than requirements to pay dividends or liquidation preferences on such
Preferred Stock prior to paying any dividends or making any other distributions
on such other Capital Stock);

 

(14)         supermajority
voting requirements existing under corporate charters, by laws, stockholders
agreements and similar documents and agreements;

 

(15)         any encumbrance
or restriction of a Receivables Subsidiary effected in connection with a
Qualified Receivables Financing; provided, however, that such restrictions
apply only to such Receivables Subsidiary;

 

(16)         customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest; and

 

(17)         restrictions on
cash or other deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business.

 

59

 

Section 3.7.            Asset Sales.

 

(a)           The
Issuers will not, and will not permit any of the Company’s Restricted
Subsidiaries to, consummate an Asset Sale unless:

 

(1)           the Company (or
the Restricted Subsidiary, as the case may be) receives consideration at the
time of the Asset Sale at least equal to the Fair Market Value of the assets or
Equity Interests issued or sold or otherwise disposed of; and

 

(2)           at least 75% of
the consideration received in the Asset Sale by the Company or such Restricted
Subsidiary is in the form of cash, Cash Equivalents or Additional Assets.  For purposes of this provision, each of the
following will be deemed to be cash:

 

(A)          any
liabilities, as shown on the Company’s most recent consolidated balance sheet,
of the Company or any Restricted Subsidiary (other than contingent liabilities
and liabilities that are by their terms subordinated to the Notes or any Note
Guarantee) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Restricted
Subsidiary from any further liability;

 

(B)           any securities,
notes or other obligations received by the Company or any such Restricted
Subsidiary from such transferee that are converted by the Company or such
Subsidiary into cash within 180 days after the date of the Asset Sale, to the
extent of the cash received in that conversion; and

 

(C)           any stock or
assets of the kind referred to in Section 3.7(b)(2) or (4).

 

(b)           Within
360 days after the receipt of any Net Proceeds from an Asset Sale, the Company
or the applicable Restricted Subsidiary, as the case may be, may apply those
Net Proceeds at its option:

 

(1)           to repay
Indebtedness and other Obligations under Credit Facilities that are permitted
by clause (i) of the definition of “Permitted Debt” of the Company or a
Restricted Subsidiary of the Company that is a Guarantor;

 

(2)           to acquire all
or substantially all of the assets of, or any Capital Stock of, another
Permitted Business (or a division or unit thereof), if, after giving effect to
any such acquisition of Capital Stock, the Permitted Business is or becomes a
Restricted Subsidiary of the Company;

 

(3)           to make a
capital expenditure; or

 

(4)           to acquire
other assets that are not classified as current assets under GAAP and that are
used or useful in a Permitted Business.

 

60

 

(c)           Pending the
final application of any Net Proceeds, the Issuers may temporarily reduce
revolving credit borrowings or otherwise invest the Net Proceeds in any manner
that is not prohibited by this Indenture.

 

(d)           Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
preceding Section 3.7(b) will constitute “Excess Proceeds”; provided, that the 360-day
period provided above to apply any portion of Net Proceeds in accordance with Section
3.7(b)(2) or (4) shall be extended by an additional 90 days if, by not
later than the 360th day after receipt of such Net Proceeds, the
Company or a Restricted Subsidiary, as applicable, has entered into a bona fide
binding contract with a Person other than an Affiliate of the Company to make
an investment of the type described in Section 3.7(b)(2) or (4) in the
amount of such Net Proceeds. When the aggregate amount of Excess Proceeds exceeds
$15.0 million, within ten days thereof, the Issuers will make an offer (an “Asset Sale Offer”) to all Holders of Notes and
all holders of other Indebtedness that ranks pari passu with the Notes
containing provisions similar to those set forth in this Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets to
purchase, on a pro rata basis, the maximum principal amount of Notes and such
other pari passu Indebtedness that may be purchased out of the Excess Proceeds.  The offer price in any Asset Sale Offer will
be equal to 100% of the principal amount plus accrued and unpaid interest and
Special Interest, if any, to the date of purchase, and will be payable in
cash.  If any Excess Proceeds remain
after consummation of an Asset Sale Offer, the Issuers may use those Excess
Proceeds for any purpose not otherwise prohibited by this Indenture.  If the aggregate principal amount of Notes
and other pari passu Indebtedness tendered into such Asset Sale Offer exceeds
the amount of Excess Proceeds, the Trustee will select the Notes to be
purchased on a pro rata basis on the basis of the aggregate principal amount of
tendered Notes.  Upon completion of each
Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.  If the Asset Sale Payment Date is on or after
an interest payment record date and on or before the related interest payment
date, any accrued and unpaid interest (including Special Interest, if any) will
be paid to the Holder in whose name a Note is registered at the close of
business on such record date, and no interest or Special Interest, if any, will
be payable to the Holder who tenders the Notes pursuant to the Asset Sale
Offer.

 

(e)           The Asset Sale
Offer will remain open for a period of 20 Business Days following its
commencement, except to the extent that a longer period is required by
applicable law (the “Asset Sale Offer Period”).  No later than five Business Days after the
termination of the Asset Sale Offer Period (the “Asset
Sale Payment Date”), the Company will purchase the principal amount
of Notes and other pari passu Indebtedness required to be purchased pursuant to
this covenant (the “Asset Sale Offer Amount”)
or, if less than the Asset Sale Offer Amount has been so validly tendered, all
Notes and other pari passu Indebtedness validly tendered in response to the
Asset Sale Offer.  On or before the Asset
Sale Payment Date, the Company will, to the extent lawful, accept for payment,
on a pro rata basis to the extent necessary, the Asset Sale Offer Amount of
Notes and other pari passu Indebtedness or portions thereof so validly tendered
and not properly withdrawn pursuant to the Asset Sale Offer, or if less than
the Asset Sale Offer Amount has been validly tendered and not properly
withdrawn, all Notes and other pari passu Indebtedness so validly tendered and
not properly withdrawn.  The Company will
deliver to the Trustee an Officers’ Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this covenant; and, in addition, the Company will make such deliveries
of all certificates and notes as are required by the 

 

61

 

agreements governing the other pari passu Indebtedness.  The Company or the Paying Agent, as the case
may be, will promptly (but in any case not later than five Business Days after
the termination of the Asset Sale Offer Period) mail or deliver to each
tendering Holder of Notes, an amount equal to the purchase price of the Notes
so validly tendered and not properly withdrawn by such Holder and accepted by
the Company for purchase, and the Company will promptly issue a new Note, and
the Trustee, upon receipt by the Trustee of such an Officers’ Certificate from
the Company, will authenticate and mail or deliver such new Note to such
Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered.  In addition, the Company
will take any and all other actions required by the agreements governing the
other pari passu Indebtedness.  Any Note
not so accepted will be promptly mailed or delivered by the Company to the
Holder thereof.  The Company will
publicly announce the results of the Asset Sale Offer on or as soon as
practicable after the Asset Sale Payment Date.

 

(f)            The Issuers
will comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent those laws and
regulations are applicable in connection with each repurchase of Notes pursuant
to an Asset Sale Offer.  To the extent
that the provisions of any securities laws or regulations conflict with the
Asset Sale provisions hereunder, the Issuers will comply with the applicable
securities laws and regulations and will not be deemed to have breached their
obligations under the Asset Sale provisions hereunder by virtue of such
compliance.

 

(g)           The Trustee
shall be under no obligation to ascertain the occurrence of an Asset Sale, or
to determine or calculate Excess Proceeds, the Asset Sale Offer Period, the
Asset Sale Payment Date or the Asset Sale Offer Amount, or give any notice with
respect thereto.  The Trustee may
conclusively assume, in the absence of written notice to the contrary from the
Company or a Holder or Holders of Notes, that no Asset Sale has occurred.

 

Section 3.8.            Transactions with Affiliates.

 

(a)           The Company
will not, and will not permit any of its Restricted Subsidiaries to, make any
payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or Guarantee with, or for the benefit of, any Affiliate of the Company
(each, an “Affiliate Transaction”), unless:

 

(1)           the Affiliate
Transaction is on terms that are no less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person; and

 

(2)           the Company
delivers to the Trustee:

 

(A)          with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, a resolution of the Board
of Directors of the Company set forth in an Officers’ Certificate certifying
that such Affiliate Transaction complies with this 

 

62

 

covenant and that such
Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors of the Company; and

 

(B)           with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $25.0 million, an opinion as to the
fairness to the Company or such Subsidiary of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment
banking firm of national standing.

 

(b)           The following
items will not be deemed to be Affiliate Transactions and, therefore, will not
be subject to the provisions of Section 3.8(a):

 

(1)           any employment
agreement, employee benefit plan, officer or director indemnification agreement
or any similar arrangement entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business and payments pursuant thereto;

 

(2)           transactions
between or among the Company and/or any of its Restricted Subsidiaries
(including Persons that become Restricted Subsidiaries as a result thereof);

 

(3)           transactions
with a Person (other than an Unrestricted Subsidiary of the Company) that is an
Affiliate of the Company solely because the Company owns, directly or through a
Restricted Subsidiary, an Equity Interest in, or controls, such Person;

 

(4)           reasonable fees
and expenses and compensation paid to, and indemnity provided on behalf of,
officers, directors or employees of the Company or any Restricted Subsidiaries
as determined in good faith by the Board of Directors or senior management of
Parent;

 

(5)           any issuance of
Equity Interests (other than Disqualified Stock) of the Company to Affiliates
of the Company;

 

(6)           Restricted
Payments that do not violate Section 3.4;

 

(7)           transactions
effected in connection with the transactions closing contemporaneously with the
sale of the Initial Notes on the Issue Date, including the payment of all fees
and expenses, which transactions are described in the Offering Memorandum under
the caption “Arrangements between Kerr-McGee and Our Company”;

 

(8)           any transaction
effected as part of a Qualified Receivables Financing;

 

(9)           transactions
between the Company or any Restricted Subsidiaries and any Person, a director
of which is also a director of the Company or any direct or indirect parent
company of the Company and such director is the sole cause for such Person to
be deemed an Affiliate of the Company or any Restricted Subsidiaries; provided,
however, that such director abstains from voting as director of the Company or
such direct or indirect parent company, as the case may be, on any matter involving
such other Person;

 

63

 

(10)         any
contribution to the capital of the Company; and

 

(11)         transactions
pursuant to any contract or agreement described in the Offering Memorandum
under the caption “Arrangements between Kerr-McGee and Our Company,” as in
effect on the Issue Date, in each case as amended, modified or replaced from
time to time so long as the amended, modified or new agreements, taken as a
whole, are not materially less favorable to the Company and its Restricted
Subsidiaries than those in effect on the Issue Date.

 

Change of Control.  If a Change of Control occurs, each Holder of
Notes will have the right to require the Issuers to repurchase all or any part
(equal to $1,000 or an integral multiple of $1,000) of that Holder’s Notes at a
purchase price in cash equal to 101% of the aggregate principal amount of the
Notes repurchased plus accrued and unpaid interest and Special Interest, if
any, on the Notes repurchased to the date of purchase (subject to the right of
Holders of Notes on the relevant record date to receive interest due on the
relevant interest payment date).

 

Within 30 days following any Change of Control, the Issuers will mail a
notice (the “Change of Control Offer”) to
each Holder with a copy to the Trustee stating:

 

(1)           that a Change
of Control has occurred and that such Holder has the right to require the
Company to purchase such Holder’s Notes at a purchase price in cash equal to
101% of the principal amount of such Notes plus accrued and unpaid interest and
Special Interest, if any, to the date of settlement (the “Change of Control Payment Date”) (subject to
the right of Holders of record on a record date to receive interest on the
relevant interest payment date that is on or prior to the Change of Control
Settlement Date) (the “Change of Control Payment”);

 

(2)           the purchase
date (which shall be no earlier than 30 days nor later than 60 days from the
date such notice is mailed) (the “Change of Control
Purchase Date”); and

 

(3)           the procedures
determined by the Company, consistent with this Indenture, that a Holder must
follow in order to have its Notes purchased.

 

On the Change
of Control Payment Date, the Issuers will, to the extent lawful, accept for
payment all Notes or portions of Notes (equal to $1,000 or an integral multiple
of $1,000) properly tendered pursuant to the Change of Control Offer.  Promptly thereafter on the Change of Control
Settlement Date, the Company will:

 

(1)           deposit with
the Paying Agent an amount equal to the Change of Control Payment in respect of
all Notes or portions of Notes properly tendered; and

 

(2)           deliver or
cause to be delivered to the Trustee the Notes properly accepted together with
an Officers’ Certificate stating the aggregate principal amount of Notes or
portions of Notes being purchased by the Issuers.

 

On the Change of Control Payment Date, if the Company has properly
complied with the requirements of items (1) and (2) immediately above, the
Paying Agent will remit to each Holder 

 

64

 

of Notes properly tendered the Change of
Control Payment for such Notes, and the Trustee will, upon receipt of a Company
Order, authenticate and deliver to each Holder a new Note equal in principal
amount to any unpurchased portion of the Notes surrendered, if any; provided
that each such new Note will be in a principal amount of $1,000 or an integral
multiple of $1,000.  The Issuers will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.

 

If the Change of Control Payment Date is on or after an interest record
date and on or before the related interest payment date, any accrued and unpaid
interest and Special Interest, if any, will be paid to the Person in whose name
a Note is registered at the close of business on such record date, and no
Special Interest will be payable to Holders who tender pursuant to the Change
of Control Offer.

 

The Issuers will not be required to make a Change of Control Offer upon
a Change of Control if (1) a third party makes the Change of Control Offer
in the manner, at the time and otherwise in compliance with the requirements
set forth in this Indenture applicable to a Change of Control Offer made by the
Issuers and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer, or (2) a notice of redemption has been given
pursuant to Section 5.1, unless and
until there has been a default in payment of the applicable redemption price.

 

The Company will comply, to the extent applicable, with the
requirements of Rule 14e-1 of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Notes pursuant to this
Section 3.9.  To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Indenture, the
Issuers will comply with the applicable securities laws and regulations and
will not be deemed to have breached their obligations described in this
Indenture by virtue of such compliance.

 

The Trustee shall be under no obligation to ascertain the occurrence of
a Change of Control or to give notice with respect thereto.  The Trustee may conclusively assume, in the
absence of written notice to the contrary from the Company, or a Holder or
Holders of Notes, that no Change of Control has occurred.

 

Section 3.10.          Future Note Guarantees.

 

(a)           If the Company
or any of its Restricted Subsidiaries acquires or creates another wholly-owned
Domestic Subsidiary after the Issue Date, then that newly acquired or created
wholly-owned Domestic Subsidiary will become a Guarantor by executing a
supplemental indenture substantially in the form of Exhibit C hereto and
delivering it and an Opinion of Counsel to the Trustee within 10 Business Days
of the date on which it was acquired or created, as the case may be; provided,
however, that the foregoing shall not apply to Subsidiaries of the Company that
have properly been designated as Unrestricted Subsidiaries in accordance with
this Indenture for so long as they continue to constitute Unrestricted
Subsidiaries; and provided, further, that any wholly-owned Domestic Subsidiary
that constitutes an Immaterial Subsidiary need not become a Guarantor until
such time as it ceases to be an Immaterial Subsidiary.

 

65

 

(b)           Except with
respect to Permitted Debt, the Issuers will not permit any of their Restricted
Subsidiaries, directly or indirectly, to Guarantee or pledge any assets to
secure the payment of any other Indebtedness of the Issuers unless such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture substantially in the form of Exhibit C hereto providing
for the Guarantee of the payment of the Notes by such Restricted Subsidiary
and/or the pledging of such assets on the same basis, as the case may be, which
Guarantee will be senior to or pari passu with such Restricted Subsidiary’s
Guarantee of or pledge to secure such other Indebtedness.

 

Section 3.11.          Sale and Leaseback Transactions.  The Company will not, and will not permit any
of its Restricted Subsidiaries to, enter into any sale and leaseback
transaction; provided that the Company or any Guarantor may enter into a sale
and leaseback transaction if:

 

(a)           the Company or
that Guarantor, as applicable, could have (i) incurred Indebtedness in an
amount equal to the Attributable Debt relating to such sale and leaseback
transaction under the Fixed Charge Coverage Ratio test in Section 3.3(a) and (ii) incurred a Lien to secure
such Indebtedness pursuant to Section 3.5;

 

(2)           the gross cash
proceeds of that sale and leaseback transaction are at least equal to the Fair
Market Value, as determined in good faith by the Board of Directors of the
Company and set forth in an Officers’ Certificate delivered to the Trustee, of
the property that is the subject of that sale and leaseback transaction; and

 

(3)           the transfer of
assets in that sale and leaseback transaction is permitted by, and the Company
applies the proceeds of such transaction in compliance with, Section 3.7.

 

Section 3.12.          Business Activities.  The Company will not, and will not permit any
Restricted Subsidiary to, engage in any business other than Permitted
Businesses, except to such extent as would not be material to the Company and
its Restricted Subsidiaries taken as a whole.

 

Section 3.13.          Designation of Restricted and Unrestricted Subsidiaries.  The Board of Directors of the Company may
designate any Restricted Subsidiary of the Company (other than Tronox Finance so
long as the Company is a limited liability company or a partnership) to be an
Unrestricted Subsidiary if that designation would not cause a Default.  If a Restricted Subsidiary is designated as
an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding
Investments owned by the Company and its Restricted Subsidiaries in the
Subsidiary designated as Unrestricted will be deemed to be an Investment made
as of the time of the designation and will reduce the amount available for
Restricted Payments under the first paragraph of Section
3.4(a) or represent Permitted Investments, as determined by the
Company.  That designation will only be
permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.

 

The Board of Directors of the Company may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary if that redesignation would not cause
a Default.  Any designation of a
Subsidiary of the Company as an Unrestricted Subsidiary will be evidenced to
the Trustee by filing with the Trustee a Board Resolution of the Company giving
effect to such designation and an Officers’ Certificate certifying that such
designation complied with the preceding conditions 

 

66

 

and was permitted by Section 3.4.  If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted Subsidiary, it
will thereafter cease to be an Unrestricted Subsidiary for purposes of this
Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred
by a Restricted Subsidiary of the Company as of such date and, if such
Indebtedness is not permitted to be incurred as of such date under Section
3.3, the Company will be in default thereof.

 

Section 3.14.          Maintenance of Office or Agency.  The Issuers will maintain in The City of New
York, an office or agency where the Notes may be presented or surrendered for
payment, where, if applicable, the Notes may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served.  The principal corporate trust office of the
Trustee, or if the Trustee’s principal corporate trust office is not located in
The City of New York, any other office or agency maintained by the Trustee in
The City of New York (the “Corporate Trust Office”),
shall be such office or agency of the Issuers, unless the Issuers shall designate
and maintain some other office or agency for one or more of such purposes.  The Issuers will give prompt written notice
to the Trustee of any change in the location of any such office or agency.  If at any time the Issuers shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Issuers hereby appoint the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.

 

The Issuers may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes may
be presented or surrendered for any or all such purposes and may from time to
time rescind any such designation; provided, however, that no such designation
or rescission shall in any manner relieve the Issuers of their obligation to
maintain an office or agency in The City of New York for such purposes.  The Issuers will give prompt written notice
to the Trustee of any such designation or rescission and any change in the
location of any such other office or agency.

 

Section 3.15.          Corporate Existence.  Subject to Article
IV and Section 10.2, each Issuer
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and that of each of their Restricted
Subsidiaries and the corporate rights (charter and statutory) licenses and franchises
of the Issuers and each of their Restricted Subsidiaries; provided, however,
that the Issuers shall not be required to preserve any such existence (except
the Company), right, license or franchise if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Issuers and each of their Restricted
Subsidiaries, taken as a whole, and that the loss thereof would not have a
material adverse effect on the ability of the Issuers to perform their
obligations under the Notes or this Indenture, provided further that the
Company and the Guarantors may merge in accordance with Sections
4.1 and 10.2.

 

Section 3.16.          Payment of Taxes and Other Claims.  The Issuers will pay or discharge or cause to
be paid or discharged, before the same shall become delinquent, (i) all
material taxes, assessments and governmental charges levied or imposed upon the
Issuers or any Restricted Subsidiary or upon the income, profits or property of
the Issuers or any Restricted Subsidiary and (ii) all lawful claims for labor,
materials and supplies, which, if unpaid, might by law become a 

 

67

 

material liability or lien upon the property of the Issuers or any
Restricted Subsidiary, except for any Lien permitted to be incurred pursuant to
subsections (7) and (10) of the definition of “Permitted Liens”;
provided, however, that the Issuers shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate reserves, if necessary (in
the good faith judgment of management of the Issuers), are being maintained in
accordance with GAAP or where the failure to pay or discharge the same would
not have a material adverse effect on the ability of the Issuers to perform its
obligations under the Notes or this Indenture.

 

Section 3.17.          Compliance Certificate.  The Issuers shall deliver to the Trustee
within 120 days after the end of each fiscal year of the Issuers an Officers’
Certificate stating that in the course of the performance by the signers of
their duties as Officers of the Issuers they would normally have knowledge of
any Default or Event of Default and whether or not the signers know of any
Default or Event of Default that occurred during such period.  If they do, the certificate shall describe
the Default or Event of Default, its status and what action the Issuers are is
taking or proposes to take with respect thereto.  The Issuers also shall comply with TIA §
314(a)(4).

 

Section 3.18.          Further Instruments and Acts.  Upon the reasonable request of the Trustee,
the Issuers will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

 

Section 3.19.          Statement by Officers as to Default.  The Issuers shall deliver to the Trustee, as
soon as possible and in any event within 5 Business Days after any Issuer
becomes aware of the occurrence of any Event of Default or Default an Officers’
Certificate setting forth the details of such Event of Default or Default and
the action which the Issuers are taking or proposes to take in respect thereof.

 

Section 3.20.          Payments for Consent.  The Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be
paid any consideration to or for the benefit of any Holder of Notes for or as
an inducement to any consent, waiver or amendment of any terms or provisions of
this Indenture or the Notes, unless such consideration is offered to be paid
and is paid to all Holders of the Notes which so consent, waive or agree to
amend in the time frame set forth in solicitation documents relating to such
consent, waiver or agreement.

 

Section 3.21.          Restrictions on Activities of Tronox Finance.  Tronox Finance will not hold any material
assets, become liable for any material obligations, other than the Notes and
guarantee obligations under the Credit Agreement, or engage in any significant
business activities; provided that Tronox Finance may be a co-obligor with
respect to Indebtedness if the Company is the primary obligor of such
Indebtedness and the net proceeds of such Indebtedness are received by the
Company or one or more of the Company’s Restricted Subsidiaries other than
Tronox Finance.  At any time after the
Company is a corporation, Tronox Finance may consolidate or merge with or into
the Company or any Restricted Subsidiary.

 

68

 

Section 3.22.          Elimination of Covenants.  From and after the first day following a
period of 90 consecutive days during which the Notes have an Investment Grade
Rating from both Rating Agencies and no Default has occurred and is then
continuing under this Indenture, Parent, the Issuers and all of their
Restricted Subsidiaries will no longer be subject to the provisions of Section
3.3, 3.4, 3.6, 3.7, 3.8, 3.9, 3.11(a)(i),
3.11(c), 3.13, and 4.1(4) (collectively, the “Eliminated Covenants”).

 

ARTICLE IV

 

Successor Company

 

Section 4.1.            Merger, Consolidation or Sale of Assets.  Neither Issuer will, directly or indirectly:
(a) consolidate or merge with or into another Person (whether or not such
Issuer is the surviving corporation); or (b) sell, assign, transfer, convey or
otherwise dispose of all or substantially all of its respective properties or
assets taken as a whole, in one or more related transactions, to another
Person, unless:

 

(1)           either: (a)
such Issuer is the surviving entity; or (b) the Person (the “Successor Company”) formed by or surviving any
such consolidation or merger (if other than such Issuer) or to which such sale,
assignment, transfer, conveyance or other disposition has been made is a
corporation, partnership, trust or limited liability company organized or
existing under the laws of the United States, any state of the United States or
the District of Columbia; provided, that Tronox Finance may not consolidate or
merge with or into any entity other than a corporation satisfying such
requirements for so long as the Company remains a limited liability company or
a partnership;

 

(2)           the Person
formed by or surviving any such consolidation or merger (if other than such
Issuer) or the Person to which such sale, assignment, transfer, conveyance or
other disposition has been made assumes all the obligations of such Issuer
under the Notes, this Indenture and the Registration Rights Agreement;

 

(3)           immediately
after such transaction, no Default or Event of Default exists;

 

(4)           such Issuer or
the Successor Company (if other than such Issuer), or to which such sale,
assignment, transfer, conveyance or other disposition has been made:

 

(A)             would have
Consolidated Net Worth immediately after the transaction equal to or greater
than the Consolidated Net Worth of such Issuer immediately preceding the
transaction; or

 

(B)             would, on the
date of such transaction after giving pro forma effect thereto and any related
financing transactions as if the same had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness under Section 3.3; or

 

(C)             would, on the
date of such transaction after giving pro forma effect thereto and to any
related financing transactions as if the same had occurred at the beginning of
the most recently ended four fiscal quarters for which internal financial
statements are 

 

69

 

available, have a Fixed
Charge Coverage Ratio that is not less than the Fixed Charge Coverage Ratio of
the Company for such period calculated without giving pro forma effect to such
transaction and any related financing transactions; and

 

(5)           the Company
shall have delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or disposition and such
supplemental indenture (if any) comply with the applicable provision of this
Indenture.

 

In addition, such Issuer will not, directly or indirectly, lease all or
substantially all of the properties and assets of it and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to any
other Person.

 

For purposes of this covenant, the sale, lease, conveyance, assignment,
transfer, or other disposition of all or substantially all of the properties
and assets of one or more Subsidiaries of the Company, which properties and
assets, if held by the Company instead of such Subsidiaries, would constitute
all or substantially all of the properties and assets of the Company on a
consolidated basis, shall be deemed to be the transfer of all or substantially
all of the assets of the Company.

 

The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the particular Issuer under this Indenture,
but, in the case of a lease of all or substantially all its assets, the
particular Issuer will not be released from the obligation to pay the principal
of and interest on the Notes.

 

Notwithstanding the foregoing, (x) any Restricted Subsidiary of the
Company may consolidate with, merge into or transfer all or part of its
properties and assets to the Company or any Guarantor, (y) any Issuer may merge
with an Affiliate solely for the purpose of reincorporating such Issuer in
another jurisdiction and (z) the Company may reorganize as a corporation in
accordance with the procedures established in this Indenture, provided that (i)
the corporation is organized and existing under the laws of the United States,
any state thereof or the District of Columbia, (ii) the corporation assumes all
of the Company’s obligations under the Notes and this Indenture and (iii) the
Company delivers to the Trustee an Opinion of Counsel confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such reorganization.

 

ARTICLE V

 

Redemption of Notes

 

Section 5.1.            Optional Redemption.  Except as described below, the Notes will not
be redeemable by the Company’s option prior to December 1, 2009.

 

(a)           On or after
December 1, 2009 the Issuers may redeem all or any part of the Notes upon not
less than 30 nor more than 60 days’ notice, at the redemption prices (expressed
as percentages of principal amount) set forth below, plus accrued and unpaid
interest and Special Interest, if any, on the Notes redeemed to the applicable
Redemption Date (subject to the right of Holders of record on the relevant record
date to receive interest due on an interest payment date 

 

70

 

that is on or prior to the Redemption Date), if redeemed during the
twelve-month period beginning on December 1 of the years indicated
below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2009

  	
   

  	
  104.750

  	
  %

  
	
  2010

  	
   

  	
  102.375

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)           At any time
prior to December 1, 2008, the Issuers may on any one or more occasions redeem
up to 35% of the aggregate principal amount of Notes issued hereunder (calculated
after giving effect to any issuance of Additional Notes) at a redemption price
of 109.5% of the principal amount, plus accrued and unpaid interest and Special
Interest, if any, to the Redemption Date (subject to the right of Holders of
record on the relevant record date to receive interest due on an interest
payment date that is on or prior to the Redemption Date), with the net cash
proceeds of one or more Equity Offerings, provided that:

 

(1)           at least 65% of
the aggregate principal amount of Notes (calculated after giving effect to any
issuance of Additional Notes) issued hereunder remains outstanding immediately
after the occurrence of such redemption (excluding Notes held by Parent, any
Issuer and their Subsidiaries); and

 

(2)           the redemption
occurs within 90 days of the date of the closing of such Equity Offering.

 

Section 5.2.            Applicability of Article.  Redemption of Notes at the election of the
Issuers or otherwise, as permitted or required by any provision of this
Indenture, shall be made in accordance with such provision and this Article V.

 

Section 5.3.            Election to Redeem; Notice to Trustee.  The election of the Issuers to redeem any
Notes pursuant to Section 5.1 shall be
evidenced by a Board Resolution.  In case
of any redemption at the election of the Issuers, the Issuers shall, upon not
later than the earlier of the date that is 45 days prior to the Redemption Date
fixed by the Issuers or the date on which notice is given to the Holders
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Notes to be
redeemed and shall deliver to the Trustee such documentation and records as
shall enable the Trustee to select the Notes to be redeemed pursuant to Section 5.4.

 

Section 5.4.            Selection by Trustee of Notes to Be Redeemed.  If fewer than all of the Notes are to be
redeemed at any time, the Trustee will select Notes for redemption as follows:

 

(1)           if the Notes are listed on
any national securities exchange, in compliance with the requirements of the
principal national securities exchange on which the Notes are listed; or

 

(2)           if the Notes are not listed
on any national securities exchange, on a pro rata basis.

 

Section 5.5.            Notice of Redemption.  Notice of redemption shall be given in the
manner provided for in Section 12.2 not
less than 30 nor more than 60 days prior to the Redemption 

 

71

 

Date, to each Holder of Notes to be redeemed, except that redemption
notices may be mailed more than 60 days prior to a Redemption Date if such
notice is issued in connection with a defeasance of the Notes or a satisfaction
and discharge of this Indenture.  Notices
of any redemption upon any Equity Offering may be given prior to the completion
of the related Equity Offering.  Except
for notices of redemption pursuant to Section 5.1, which redemption
notices may, at the Company’s discretion, be subject to the satisfaction of one
or more conditions precedent, notices of redemption may not be
conditional.  The Trustee shall give
notice of redemption in the Issuers’ names and at the Issuers’ expense; provided, however, that the Issuers shall
deliver to the Trustee, at least 45 days prior to the Redemption Date (unless a
shorter notice shall be satisfactory to the Trustee), an Officers’ Certificate
requesting that the Trustee give such notice at the Issuers’ expense and
setting forth the information to be stated in such notice as provided in the
following items.

 

All notices of redemption shall state:

 

(1)           the Redemption
Date;

 

(2)           the redemption
price and the amount of accrued interest and Special Interest, if any, to the
Redemption Date payable as provided in Section 5.7;

 

(3)           if less than
all outstanding Notes are to be redeemed, the identification of the particular
Notes (or portion thereof) to be redeemed, as well as the aggregate principal
amount of Notes to be redeemed and the aggregate principal amount of Notes to
be outstanding after such partial redemption;

 

(4)           in case any
Note is to be redeemed in part only, the notice which relates to such Note
shall state the portion of the principal amount of that Note that is to be
redeemed and that on and after the Redemption Date, upon surrender of such
Note, the Holder will receive, without charge, a new Note or Notes of
authorized denominations for the principal amount thereof remaining unredeemed;

 

(5)           in case any
Note is to be redeemed pursuant to Section 5.1, and such redemption
is subject to conditions precedent, the conditions precedent to such optional
redemption, if any;

 

(6)           that on the
Redemption Date the redemption price (and accrued interest, if any, to the
Redemption Date payable as provided in Section 5.7)
will become due and payable upon each such Note, or the portion thereof, to be redeemed,
and, unless the Issuers default in making the redemption payment, that interest
and Special Interest, if any, on Notes (or the portions thereof) called for
redemption will cease to accrue on and after said date;

 

(7)           the place or
places where such Notes are to be surrendered for payment of the Redemption
Price and accrued interest, if any;

 

(8)           the name and
address of the Paying Agent;

 

72

 

(9)           that Notes
called for redemption (other than a Global Note) must be surrendered to the
Paying Agent to collect the redemption price;

 

(10)         the CUSIP
number, and that no representation is made as to the accuracy or correctness of
the CUSIP number, if any, listed in such notice or printed on the Notes; and

 

(11)         the section of
this Indenture and the paragraph of the Notes pursuant to which the Notes are
to be redeemed.

 

Section 5.6.            Deposit of Redemption Price.  Not later than 11:00 a.m. New York time on
the Redemption Date, the Issuers shall deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 2.4)
an amount of money sufficient to pay the redemption price of, and accrued
interest and Special Interest, if any, on, all the Notes which are to be
redeemed on that date.

 

Section 5.7.            Notes Payable on Redemption Date.  Notice of redemption having been given as
aforesaid, the Notes so to be redeemed shall, on the Redemption Date, become
due and payable at the redemption price therein specified (together with
accrued and unpaid interest and Special Interest, if any, to the Redemption
Date), and from and after such date (unless the Issuers shall default in the
payment of the redemption price and accrued interest and Special Interest, if
any) such Notes shall cease to bear interest and Special Interest, if any.  Upon surrender of any such Note for
redemption in accordance with said notice, such Note shall be paid by the
Issuers at the redemption price, together with accrued and unpaid interest and
Special Interest, if any, to the Redemption Date (subject to the rights of
Holders of record on the relevant record date to receive interest and Special
Interest, if any, due on an interest payment date that is on or prior to the
Redemption Date).

 

If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest and Special Interest, if any, from the Redemption Date at the
rate borne by the Notes.

 

Section 5.8.            Notes Redeemed in Part.  Any Note which is to be redeemed only in part
(pursuant to the provisions of this Article V)
shall be surrendered at the office or agency of the Issuers maintained for such
purpose pursuant to Section 3.14 (with, if
the Issuers or the Trustee so require, due endorsement by, or a written
instrument of transfer in form satisfactory to the Issuers and the Trustee duly
executed by, the Holder thereof or such Holder’s attorney duly authorized in
writing), and the Issuers shall execute, and the Trustee shall authenticate and
make available for delivery to the Holder of such Note at the expense of the
Issuers, a new Note or Notes, of any authorized denomination as requested by
such Holder, in an aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Note so surrendered, provided that each such new Note
will be in a principal amount of $1,000 or integral multiple thereof.  No Notes of $1,000 or less may be redeemed in
part.

 

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ARTICLE VI

 

Defaults and Remedies

 

Section 6.1.            Events of Default.  Each of the following is an “Event of Default”:

 

(1)           default in the
payment when due of interest or Special Interest, if any, on the Notes
continues for a period of 30 days;

 

(2)           default in the
payment when due (at maturity, upon redemption or otherwise) of principal of or
premium, if any, on the Notes;

 

(3)           failure by the
Company or any of its Restricted Subsidiaries to comply with the provisions of Sections 3.7, 3.9
or 4.1 hereof;

 

(4)           failure by the
Company or any of its Restricted Subsidiaries for 60 days after notice to the
Company to comply with any of the other agreements in this Indenture not
specified in clauses (1) through (3) above;

 

(5)           default under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed by
the Company or any of its Restricted Subsidiaries (or the payment of which is
Guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or Guarantee now exists, or is created after the Issue Date, if
that default:

 

(a)           is caused by a
failure to pay principal of, or interest or premium, if any, on, such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a “Payment
Default”); or

 

(b)           results in the
acceleration of such Indebtedness prior to its Stated Maturity,

 

and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $25.0 million or more;

 

(6)           failure by an Issuer
or any of the Company’s Restricted Subsidiaries to pay final judgments entered
by a court or courts of competent jurisdiction aggregating in excess of $5.0
million (net of any amount with respect to which a reputable and solvent
insurance company has acknowledged liability in writing), which judgments are
not paid, discharged or stayed for a period of 60 days;

 

(7)           except as
permitted by this Indenture, any Note Guarantee is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in
full force and effect, or any Guarantor, or any Person acting on behalf of any
Guarantor, denies or disaffirms its obligations under its Note Guarantee; and

 

74

 

(8)           (a) the Company
or any Restricted Subsidiary or group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements for the
Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

 

(i)            commences a voluntary case
or proceeding;

 

(ii)           consents to the entry of a
judgment, decree or order for relief against it in an involuntary case or
proceeding;

 

(iii)          consents to the appointment
of a Custodian of it or for any substantial part of its property;

 

(iv)          makes a general assignment
for the benefit of its creditors; or

 

(v)           consents to or acquiesces in
the institution of a bankruptcy or an insolvency proceeding against it;

 

or takes any comparable
action under any foreign laws relating to insolvency; or

 

(b)           a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(i)            is for relief against the
Company or any Restricted Subsidiary or group of Restricted Subsidiaries that,
taken together (as of the latest audited consolidated financial statements for
the Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary in an involuntary case;

 

(ii)           appoints a Custodian of the
Company or any Restricted Subsidiary or group of Restricted Subsidiaries that,
taken together (as of the latest audited consolidated financial statements for
the Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary or for any substantial part of its Property; or

 

(iii)          orders the winding up or
liquidation of the Company or any Restricted Subsidiary or group of Restricted
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries) would
constitute a Significant Subsidiary;

 

or any similar relief is
granted under any foreign laws and the order, decree or relief remains unstayed
and in effect for 60 days.

 

However, a Default under clause (4) of this Section 6.1
will not constitute an Event of Default until the Trustee or the Holders of 25%
in aggregate principal amount of the outstanding Notes notify the Company, and
the Trustee in the case of a notice given by the Holders, of the Default and
the Company does not cure such Default within the time specified in
clause (5) of this Section 6.1
after receipt of such notice.

 

75

 

Section 6.2.            Acceleration. 
If any Event of Default (other than those of the type described in
clause (8) of Section 6.1) occurs and is
continuing, the Trustee may and, at the direction of the Holders of at least
25% in aggregate principal amount of the then outstanding Notes, shall declare
the principal of all the Notes, together with all accrued and unpaid interest and
Special Interest, if any, and premium, if any, to be due and payable
immediately by notice in writing to the Issuers and, in case of a notice by
Holders, also to the Trustee specifying the respective Event of Default and
that such notice is a notice of acceleration, and the same shall become
immediately due and payable.

 

In the case of an Event of Default specified in clause (8) of Section
6.1, all outstanding Notes shall become due and payable immediately without
further action or notice by the Trustee or the Holders.  Holders may not enforce this Indenture or the
Notes except as provided in this Indenture.

 

At any time after a declaration of acceleration with respect to the
Notes, the Holders of a majority in principal amount of the Notes then
outstanding (by notice to the Trustee) may, on behalf of the Holders of all of
the Notes, rescind and cancel such declaration and its consequences if:

 

(1)           the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction;

 

(2)           all existing
Defaults and Events of Default have been cured or waived except nonpayment of
principal of or interest or premium or Special Interest, if any, on the Notes
that has become due solely by reason of such declaration of acceleration;

 

(3)           to the extent
the payment of such interest is lawful, interest (at the same rate specified in
the Notes) on overdue installments of interest and Special Interest, if any,
and overdue payments of principal which has become due otherwise than by such
declaration of acceleration has been paid;

 

(4)           the Company has paid the
Trustee its reasonable compensation and reimbursed the Trustee for its
reasonable expenses, disbursements and advances; and

 

(5)           in the event of
the cure or waiver of an Event of Default of the type described in clause (8)
of Section 6.1, the Trustee has received an
Officers’ Certificate and Opinion of Counsel that such Event of Default has
been cured or waived.

 

Notwithstanding the foregoing, if an Event of
Default listed in clause (5) of Section 6.1 shall have occurred and been
continuing, such Event of Default and any consequential acceleration shall be
automatically rescinded if (i) the Indebtedness that is the subject of such
Event of Default has been repaid or (ii) if the default relating to such Indebtedness
is waived or cured and if such Indebtedness has been accelerated, then the
holders thereof have rescinded their declaration of acceleration in respect of
such Indebtedness.

 

Section 6.3.            Other Remedies. 
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal of (or premium, if 

 

76

 

any) or interest or Special Interest, if any, on the Notes or to
enforce the performance of any provision of the Notes or this Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any
Holder in exercising any right or remedy accruing upon an Event of Default
shall not impair the right or remedy or constitute a waiver of or acquiescence
in the Event of Default.  No remedy is
exclusive of any other remedy.  All
available remedies are cumulative.

 

Section 6.4.            Waiver of Past Defaults.  The Holders of a majority in principal amount
of the then outstanding Notes by notice to the Trustee may, on behalf of the
Holders of all the Notes, (a) waive, by their consent (including consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes), an existing Default or Event of Default and its consequences or
compliance with any provisions except (i) a Default or Event of Default in the
payment of the principal of, or premium, if any, or interest or Special
Interest, if any, on a Note or (ii) a Default or Event of Default in respect of
a provision that under Section 9.2 cannot
be amended without the consent of each Holder affected and (b) rescind any such
acceleration with respect to the Notes and its consequences if rescission would
not conflict with any judgment or decree of a court of competent
jurisdiction.  When a Default or Event of
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any consequent right.

 

Section 6.5.            Control by Majority.  The Holders of a majority in principal amount
of the outstanding Notes may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or of exercising any
trust or power conferred on the Trustee. 
However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture or, subject to Sections 7.1
and 7.2, that the Trustee determines is
unduly prejudicial to the rights of the other Holders or would involve the
Trustee in personal liability.  Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses
caused by taking or not taking such action.

 

Section 6.6.            Limitation on Suits.  Subject to Section
6.7, a Holder may not pursue any remedy with respect to this
Indenture or the Notes unless:

 

(1)           such Holder has
previously given to the Trustee notice that an Event of Default is continuing;

 

(2)           Holders of at
least 25% in aggregate principal amount of the then outstanding Notes have
requested that the Trustee pursue the remedy;

 

(3)           such Holders
have offered to the Trustee security or indemnity satisfactory to it against
any loss, liability or expense;

 

(4)           the Trustee has
not complied with such request within 60 days after receipt of the request and
the offer of security or indemnity; and

 

77

 

(5)           the Holders of
a majority in aggregate principal amount of the then outstanding Notes have not
given the Trustee a direction that is inconsistent with such request within
such 60-day period.

 

A Holder may not use this Indenture to
prejudice the rights of another Holder or to obtain a preference or priority
over another Holder.

 

Section 6.7.            Rights of Holders to Receive Payment.  Notwithstanding any other provision of this
Indenture (including Section 6.6), the
right of any Holder to receive payment of principal of, premium (if any) or interest
or Special Interest, if any, when due on the Notes held by such Holder, on or
after the respective due dates expressed in the Notes, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.

 

Section 6.8.            Collection Suit by Trustee.  If an Event of Default specified in clauses
(1) or (2) of Section 6.1 occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Issuers for the whole amount then due and owing
(together with interest on any unpaid interest to the extent lawful) and the
amounts provided for in Section 7.7.

 

Section 6.9.            Trustee May File Proofs of Claim.  The Trustee may file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee and the Holders allowed in any judicial proceedings
relative to Parent, the Issuers, their Subsidiaries or its or their respective
creditors or properties and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.7.  To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section
7.7 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.  Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

 

Section 6.10.          Priorities. 
If the Trustee collects any money or property pursuant to this Article VI, it shall pay out the money or
property in the following order:

 

FIRST:  to the Trustee for amounts due under Section 7.7;

 

78

 

SECOND:  to Holders for amounts due and unpaid on the
Notes for principal, premium, if any, and interest and Special Interest, if
any, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium, if any, and
interest and Special Interest, if any, respectively; and

 

THIRD:  to the Issuers or the Guarantors or to such
other party as a court of competent jurisdiction may direct.

 

The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10.  At least 15 days before such record date, the
Company shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid.

 

Section 6.11.          Undertaking for Costs.  In any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys’ fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made
by the party litigant.  This Section 6.11 does not apply to a suit by the
Trustee, a suit by the Issuers, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10%
in outstanding principal amount of the Notes.

 

Section 6.12.          Additional Payments.  In the case of any Event of Default occurring
by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Issuers with the intention of avoiding payment of the premium
that the Issuers would have had to pay if the Issuers then had elected to
redeem the Notes on or after December 1, 2009
pursuant to the optional redemption provisions of this Indenture, an equivalent
premium shall also become and be immediately due and payable to the extent
permitted by law upon the acceleration of the Notes.  If an Event of Default occurs prior to
December 1, 2009 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Issuers with the intention of avoiding the
prohibition on redemption of the Notes prior to such date, then the premium
specified in this Indenture with the respect to the first year that the Notes
may be redeemed at the Issuers’ option (other than with the net cash proceeds
of an Equity Offering) shall also become immediately due and payable to the
extent permitted by law upon the acceleration of the Notes.

 

Section 6.13.          Waiver of Stay, Extension and Usury Laws.  Each of the Issuers and the Guarantors
covenant (to the extent permitted by applicable law) that it will not at any
time insist upon, plead or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension or usury law or other law wherever
enacted, now or at any time hereafter in force, which would prohibit or forgive
the Issuers or any Guarantor from paying all of any portion of the principal of
(premium, if any, on) or interest and Special Interest, if any, on the Notes as
contemplated herein, or which may affect the covenants or the performance of
this Indenture; and (to the extent that it may lawfully do so) each of the
Issuers and the Guarantors hereby expressly waive all benefit or advantage of
any such law, and covenants that they will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been
enacted.

 

79

 

ARTICLE VII

 

Trustee

 

Section 7.1.            Duties of Trustee.  (a) If an Event of Default has occurred and
is continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in their exercise as a
prudent Person would exercise or use under the circumstances in the conduct of such
Person’s own affairs; provided
that if such an Event of Default occurs and is continuing, the Trustee will be
under no obligation to exercise the rights or powers under this Indenture at
the request or direction of any of the Holders unless such Holders have offered
to the Trustee indemnity or security against loss, liability or expense
satisfactory to the Trustee in its sole discretion.

 

(b)           Except during the
continuance of an Event of Default of which a Trust Officer of the Trustee has
actual knowledge:

 

(1)           the Trustee
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and

 

(2)           in the absence
of bad faith on its part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates, opinions or orders furnished to the Trustee and conforming to the
requirements of this Indenture.  However,
in the case of any such certificates or opinions which by any provisions hereof
are specifically required to be furnished to the Trustee, the Trustee shall
examine such certificates and opinions to determine whether or not they conform
on their face to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein).

 

(c)           The Trustee may not be
relieved from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:

 

(1)           this paragraph
does not limit the effect of paragraph (b) of this Section
7.1;

 

(2)           the Trustee
shall not be liable for any error of judgment made in good faith by a Trust
Officer unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and

 

(3)           the Trustee
shall not be liable with respect to any action it takes or omits to take in
good faith in accordance with a direction received by it pursuant to Section 6.5.

 

(d)           Every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b) and (c) of this Section 7.1.

 

(e)           The Trustee shall not be
liable for interest on any money received by it except as the Trustee may agree
in writing with the Issuers.

 

80

 

(f)            Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.

 

(g)           No provision of this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers.

 

(h)           Every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section 7.1 and to the provisions of the TIA.

 

(i)            Unless otherwise
specifically provided in this Indenture, any demand, request, direction or
notice from any Issuer shall be sufficient if signed by an Officer of the
Company.

 

(j)            The Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders unless such Holders
shall have offered to the Trustee reasonable security or indemnity satisfactory
to it against the costs, expenses (including reasonable attorneys’ fees and
expenses) and liabilities that might be incurred by it in compliance with such
request or direction.

 

(k)           The Trustee shall have no
duty to confirm or verify the contents of any reports or certificates delivered
to the Trustee pursuant to this Indenture believed by the Trustee to be genuine
and to have been signed or presented by the proper party or parties.

 

Section 7.2.            Rights of Trustee.  Subject to Section
7.1:

 

(a)           The Trustee may
conclusively rely on any document (whether in its original or facsimile form)
reasonably believed by it to be genuine and to have been signed or presented by
the proper person.  The Trustee need not
investigate any fact or matter stated in the document.

 

(b)           Before the
Trustee acts or refrains from acting, it may require an Officers’ Certificate
and/or an Opinion of Counsel.  The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officers’ Certificate or Opinion of Counsel.

 

(c)           The Trustee may
act through its attorneys and agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.

 

(d)           The Trustee
shall not be liable for any action it takes or omits to take in good faith
which it believes to be authorized or within its rights or powers, unless the
Trustee’s conduct constitutes willful misconduct or negligence.

 

(e)           The Trustee may
consult with counsel of its selection, and the advice or opinion of counsel
with respect to legal matters relating to this Indenture and the Notes shall be
full and complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.

 

81

 

(f)            The Trustee is
not required to make any inquiry or investigation into facts or matters stated
in any document but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit and, if
the Trustee determines to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company.

 

(g)           The Trustee is
not required to take notice or shall not be deemed to have notice of any
Default or Event of Default hereunder, unless a Trust Officer of the Trustee
has actual knowledge thereof or has received notice in writing of such Default
or Event of Default from any Issuer or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding, and in the absence of any such
notice, the Trustee may conclusively assume that no such Default or Event of
Default exists.

 

(h)           The Trustee is
not required to give any bond or surety with respect to the performance of its
duties or the exercise of its powers under this Indenture.

 

(i)            In the event
the Trustee receives inconsistent or conflicting requests and indemnity from
two or more groups of Holders of Notes, each representing less than the
aggregate principal amount of Notes outstanding required to take any action
thereunder, the Trustee, in its sole discretion may determine what action, if
any, shall be taken.

 

(j)            The Trustee’s
immunities and protections from liability and its right to indemnification in
connection with the performance of its duties under this Indenture shall extend
to the Trustee’s officers, directors, agents, attorneys and employees.  Such immunities and protections and right to
indemnification, together with the Trustee’s right to compensation, shall
survive the Trustee’s resignation or removal, the discharge of this Indenture
and final payments of the Notes.

 

(k)           The permissive
right of the Trustee to take actions permitted by this Indenture shall not be
construed as an obligation or duty to do so and the Trustee shall not be
answerable for other than its negligence or willful misconduct in the
performance of such act.

 

Section 7.3             Individual Rights of Trustee.  The Trustee in its commercial banking or any
other capacity may become the owner or pledgee of Notes and may otherwise deal
with the Issuers, any Guarantor or any Affiliate of the Issuers with the same
rights it would have if it were not Trustee. 
Any Affiliate of the Trustee, and any Paying Agent, Registrar,
co-registrar or co-paying agent, may do the same with like rights.  However, in the event that the Trustee
acquires any conflicting interest (as defined in the TIA) it must eliminate
such conflict within 90 days, apply to the Commission for permission to
continue as trustee (if this Indenture has been qualified under the TIA) or
resign. The Trustee is also subject to Sections 7.10
and 7.11.

 

Section 7.4             Trustee’s Disclaimer.  The Trustee shall not be responsible for and
makes no representation as to the validity or adequacy of this Indenture or the
Notes, it shall not be accountable for the Issuers’ use of the proceeds from
the Notes, and it shall not be responsible for any statement of the Issuers in
this Indenture or in any document issued in connection with the sale of the
Notes or in the Notes other than the Trustee’s certificate of authentication.

 

82

 

Section 7.5             Notice of Defaults.  If a Default or Event of Default occurs and
is continuing and if a Trust Officer has actual knowledge thereof, the Trustee
shall mail to each Holder notice of the Default or Event of Default within 90
days after it.  Except in the case of a Default
or Event of Default in payment of principal of, premium, if any, or interest or
Special Interest, if any, on any Note, the Trustee may withhold the notice if
and so long as a committee of its trust officers in good faith determines that
withholding the notice is in the interests of Holders.

 

Section 7.6             Reports by Trustee to Holders.  As promptly as practicable after each May 15
beginning with the May 15 following the date of this Indenture, and for so long
as the Notes remain outstanding, the Trustee shall mail to each Holder a brief
report dated as of such reporting date that complies with TIA § 313(a).  The Trustee also shall comply with TIA §
313(b).  The Trustee shall also transmit
by mail all reports required by TIA § 313(c).

 

A copy of each report at the time of its mailing to Holders shall be
filed with the Commission and each stock exchange (if any) on which the Notes
are listed.  The Issuers agree to notify
promptly the Trustee whenever the Notes become listed on any stock exchange and
of any delisting thereof.

 

Section 7.7             Compensation and Indemnity.  The Issuers shall pay to the Trustee from
time to time reasonable compensation for its acceptance of this Indenture and
services hereunder as the Issuers and the Trustee shall from time to time agree
in writing.  The Trustee’s compensation
shall not be limited by any law on compensation of a trustee of an express
trust.  The Issuers shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, costs of preparing and reviewing reports,
certificates and other documents, costs of preparation and mailing of notices
to Holders, in addition to the compensation for its services.  Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee’s agents,
counsel, accountants and experts.  The
Issuers shall indemnify the Trustee against any and all loss, liability,
damages, claims or expense (including, but not limited to, reasonable attorneys’
fees and expenses) incurred by it without negligence or willful misconduct on
its part in connection with the administration of this trust and the
performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture (including, but not limited to, this Section 7.7) and of defending itself against any
claims (whether asserted by any Holder, the Issuers or otherwise).  The Trustee shall notify the Issuers promptly
of any claim for which it may seek indemnity. 
Failure by the Trustee to so notify the Issuers shall not relieve the
Issuers of their obligations hereunder. 
The Issuers shall defend the claim and the Trustee shall provide
reasonable cooperation at the Issuers’ expense in the defense.  The Trustee may have separate counsel and the
Issuers shall pay the fees and expenses of such counsel provided that the
Issuers shall not be required to pay such fees and expenses if they assume the
Trustee’s defense, and, in the reasonable judgment of outside counsel to the
Trustee, there is no conflict of interest between the Issuers and the Trustee
in connection with such defense.  The
Issuers shall not be under any obligation to pay for any written settlement
without their consent, which consent shall not be unreasonably delayed,
conditioned or withheld.  The Issuers
need not reimburse any expense or indemnify against any loss, liability or
expense incurred by the Trustee through the Trustee’s own willful misconduct or
negligence.

 

83

 

Anything in this Indenture to the contrary notwithstanding, in no event
shall the Trustee be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits) even
if the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.

 

To secure the Issuers’ payment obligations in this Section 7.7, the Trustee shall have a Lien prior
to the Notes on all money or property held or collected by the Trustee other
than money or property held in trust to pay principal of, interest and Special
Interest, if any, on particular Notes.

 

The Issuers’ payment obligations pursuant to this Section 7.7 shall survive the discharge of this
Indenture.  When the Trustee incurs
expenses after the occurrence of a Default specified in clause (8) of Section 6.1 with respect to any Issuer, the
expenses are intended to constitute expenses of administration under any
Bankruptcy Law.

 

Section 7.8             Replacement of Trustee.  The Trustee may resign at any time by so
notifying the Issuers.  The Holders of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee.  The Issuers shall remove the Trustee if:

 

(1)           the Trustee
fails to comply with Section 7.10;

 

(2)           the Trustee is
adjudged bankrupt or insolvent;

 

(3)           a receiver or
other public officer takes charge of the Trustee or its property; or

 

(4)           the Trustee
otherwise becomes incapable of acting.

 

If the Trustee resigns or is removed by the Issuers or by the Holders
of a majority in principal amount of the then outstanding Notes and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of the Trustee for any reason (the Trustee in such event
being referred to herein as the retiring Trustee), the Issuers shall promptly
appoint a successor Trustee.

 

A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers.  Thereupon the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail a notice of
its succession to Holders.  The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the Lien provided for in Section 7.7.

 

If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
at least 10% in principal amount of the then outstanding Notes may petition, at
the Issuers’ expense, any court of competent jurisdiction for the appointment
of a successor Trustee.

 

84

 

 

If the
Trustee fails to comply with Section 7.10,
unless the Trustee’s duty to resign is stayed as provided in TIA § 310(b),
any Holder who has been a bona fide Holder of a Note for at least six months
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

 

Notwithstanding
the replacement of the Trustee pursuant to this Section 7.8,
the Issuers’ obligations under Section 7.7
shall continue for the benefit of the retiring Trustee.

 

Section 7.9.            Successor Trustee by Merger.  If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee.

 

In case
at the time such successor or successors by merger, conversion or consolidation
to the Trustee shall succeed to the trusts created by this Indenture, any of
the Notes shall have been authenticated but not delivered, any such successor
to the Trustee may adopt the certificate of authentication of any predecessor
trustee, and deliver such Notes so authenticated; and in case at that time any
of the Notes shall not have been authenticated, any successor to the Trustee
may authenticate such Notes either in the name of any predecessor hereunder or
in the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture.

 

Section 7.10.          Eligibility; Disqualification.  The Trustee shall at all times
satisfy the requirements of TIA § 310(a). 
The Trustee shall have a combined capital and surplus of at least
$100,000,000 as set forth in its most recent published annual report of
condition.  The Trustee shall comply with
TIA § 310(b); provided, however,
that there shall be excluded from the operation of TIA § 310(b)(1) any
indenture or indentures under which other securities or certificates of
interest or participation in other securities of the Issuers are outstanding if
the requirements for such exclusion set forth in TIA § 310(b)(1) are
met.

 

Section 7.11.          Preferential Collection of Claims Against Issuers.  The Trustee shall comply with TIA
§ 311(a), excluding any creditor relationship listed in TIA § 311(b).  A Trustee who has resigned or been removed
shall be subject to TIA § 311(a) to the extent indicated.

 

ARTICLE VIII

 

Legal Defeasance and Covenant Defeasance

 

Section 8.1.            Option to Effect Legal Defeasance or Covenant
Defeasance.  The Issuers may, at any time at the option of
their respective Boards of Directors, evidenced by a Board Besolution set forth
in an Officers’ Certificate, elect to have either Section 8.2
or 8.3 be applied to all outstanding Notes and
Note Guarantees upon compliance with the conditions set forth in this Article VIII.

 

Section 8.2.            Legal Defeasance and Discharge.  Upon the Issuers’ exercise under Section 8.1
of the option applicable to this Section 8.2,
the Issuers shall, subject to the satisfaction of the conditions set forth in Section 8.4, be deemed to have been
discharged from their Obligations with respect to all outstanding Notes on the
date the conditions set forth below

 

85

 

 

are
satisfied (hereinafter, “Legal Defeasance”)
and each Guarantor shall be released from all of its Obligations under its Note
Guarantee.  For this purpose, Legal
Defeasance means that the Issuers shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes, which shall
thereafter be deemed to be “outstanding” only for the purposes of Section 8.5 and the other Sections of this
Indenture referred to in clauses (a) through (d) below, and to have
satisfied all its other obligations under the Notes and this Indenture (and the
Trustee, on demand of and at the expense of the Issuers, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder:  (a) the rights of Holders of outstanding
Notes to receive, solely from the trust fund described in Sections 8.4 and 8.5
hereof, and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, interest and Special Interest, if any, on such
Notes when such payments are due; (b) the Issuers’ Obligations with
respect to such Notes under Article II
and Sections 3.1 and 3.14;
(c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Issuers’ and the Guarantors’ Obligations in connection
therewith; and (d) this Article VIII.  If the Issuers exercise under Section 8.1 the option applicable to this Section 8.2, subject to the satisfaction of
the conditions set forth in Section 8.4,
payment of the Notes may not be accelerated because of an Event of
Default.  Subject to compliance with this
Article VIII, the Issuers may exercise
their option under this Section 8.2
notwithstanding the prior exercise of its option under Section 8.3.

 

Section 8.3.            Covenant Defeasance.  Upon the Issuers’ exercise under Section 8.1 of the option applicable to this
Section 8.3, the Issuers shall,
subject to the satisfaction of the conditions set forth in Section 8.4, be released from their
obligations under the covenants contained in Sections
3.2 through 3.13, 3.15 (other
than with respect to the Company’s corporate existence), 3.16,
3.17 and 3.21, and the operation of
clause (4) of Section 4.1 hereof,
with respect to the outstanding Notes on and after the date the conditions set
forth in Section 8.4 are satisfied
(hereinafter, “Covenant Defeasance”) and
each Guarantor shall be released from all of its obligations under its Note
Guarantee with respect to such covenants in connection with such outstanding
Notes and the Notes shall thereafter be deemed not “outstanding” for the
purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed “outstanding” for all other purposes hereunder (it
being understood that such Notes shall not be deemed outstanding for accounting
purposes).  For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Issuers and
the Guarantors may omit to comply with and shall have no liability in respect
of any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.1,
but, except as specified above, the remainder of this Indenture and such Notes
shall be unaffected thereby.  If the
Issuers exercise under Section 8.1
hereof the option applicable to this Section 8.3,
subject to the satisfaction of the conditions set forth in Section 8.4, payment of the Notes may not be
accelerated because of an Event of Default specified in clauses (3), (4) (with
respect to Sections 3.2 through 3.13, 3.15 (other than with respect to the Company’s
corporate existence), 3.16, and 3.17 and clause (4) of Section 4.1), (5), (6) and (8) of
such Section 6.1 (but in the case of
clause (8) of Section 6.1, with
respect to Significant Subsidiaries only).

 

86

 

Section 8.4.            Conditions to Legal or Covenant Defeasance.  The following shall be the
conditions to the application of either Section 8.2
or 8.3 hereof to the outstanding Notes.

 

In
order to exercise Legal Defeasance or Covenant Defeasance:

 

(1)           the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Notes, cash in U.S. dollars, non-callable
Government Securities, or a combination of cash in U.S. dollars, and
non-callable Government Securities, in amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public accountants (which
opinion shall be addressed to and delivered to the Trustee), to pay the
principal of, and interest, Special Interest, if any, and premium, if any, on
the outstanding Notes on the date of fixed maturity or on the applicable
Redemption Date, as the case may be, and the Company must specify whether the
Notes are being defeased to the date of fixed maturity or to a particular
Redemption Date;

 

(2)           in the case of Legal Defeasance, the Company shall deliver to the Trustee
an Opinion of Counsel confirming that:

 

(a)           the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling; or

 

(b)           since
the date of this Indenture, there has been a change in the applicable federal
income tax law,

 

in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the beneficial owners of
the outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax in the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred;

 

(3)           in the case of Covenant Defeasance, the Company shall deliver to the
Trustee an Opinion of Counsel confirming that the beneficial owners of the
outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and will be subject to
federal income tax in the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;

 

(4)           no Default or Event of Default shall have occurred and be continuing on
the date of such deposit (other than a Default or Event of Default resulting
from the borrowing of funds to be applied to such deposit) and the deposit will
not result in a breach or violation of, or constitute a default under, any
other instrument to which the Issuers or any Guarantor is a party or by which
the Issuers or any Guarantor is bound;

 

(5)           such Legal Defeasance or Covenant Defeasance will not result in a breach
or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Issuers or any of its
Subsidiaries is a party or by which any of them is bound;

 

87

 

(6)           the Company shall have delivered to the Trustee an Officers’ Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders of Notes over the other creditors of the Company with
the intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and

 

(7)           the Company shall have delivered to the Trustee an Officers’ Certificate
and an Opinion of Counsel, each stating that all conditions precedent relating
to the Legal Defeasance or the Covenant Defeasance have been complied with.

 

Section 8.5.            Deposited Cash and Government Securities to be
Held in Trust; Other Miscellaneous Provisions.  Subject to Section 8.6,
all cash and non-callable Government Securities (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee), collectively
for purposes of this Section 8.5, the
“Trustee”) pursuant to Section 8.4
in respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of all
sums due and to become due thereon in respect of principal, premium, if any,
interest and Special Interest, if any, but such cash and securities need not be
segregated from other funds except to the extent required by law.

 

The Issuers
shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the cash or non-callable Government Securities
deposited pursuant to Section 8.4 or
the principal and interest received in respect thereof other than any such tax,
fee or other charge which by law is for the account of the Holders of the
outstanding Notes.

 

Anything
in this Article VIII to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the request of the Company any cash or non-callable Government
Securities held by it as provided in Section 8.4
hereof which, in the opinion of a nationally recognized independent registered
public accounting firm expressed in a written certification thereof delivered
to the Trustee (which may be the certification delivered under clause (1) of
Section 8.4 hereof), are in excess of
the amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.

 

Section 8.6.            Repayment to Company.  Any cash or non-callable
Government Securities deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, on, or interest or Special Interest, if any, on, any Note and remaining
unclaimed for one year after such principal, premium, if any, or interest or
Special Interest, if any, has become due and payable shall be paid to the
Company on its request (unless an abandoned property law designates another
Person) or (if then held by the Company) shall be discharged from such trust;
and the Holder shall thereafter, as an unsecured creditor, look only to the
Issuers for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such cash and securities, and all liability of the
Company as Trustee thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Issuers cause to be published once, in The New York Times and The Wall Street Journal
(national edition), notice that such cash and securities remains unclaimed and
that, after a date specified therein, which shall not be less

 

88

 

than 30
days from the date of such notification or publication, any unclaimed balance
of such cash and securities then remaining shall be repaid to the Company.

 

Section 8.7.            Reinstatement.  If the Trustee or Paying Agent is
unable to apply any cash or non-callable Government Securities in accordance
with Section 8.2,  8.3 or 8.5, as the case may be, by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Issuers’ obligations
under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.4
until such time as the Trustee or Paying Agent is permitted to apply all such
cash and securities in accordance with Section 8.2, 8.3
or 8.5, as the case may be; provided, however,
that, if the Issuers make any payment of principal of, premium, if any, on, or
interest or Special Interest, if any, on, any Note following the reinstatement
of its obligations, the Issuers shall be subrogated to the rights of the
Holders to receive such payment from the cash and securities held by the
Trustee or Paying Agent.

 

ARTICLE IX

 

Amendments

 

Section 9.1.            Without Consent of Holders.  The Issuers, the Guarantors and
the Trustee may amend or supplement this Indenture or the Notes or the Note
Guarantees without notice to or consent of any Holder:

 

(1)           to cure any ambiguity, defect or inconsistency;

 

(2)           to provide for uncertificated Notes in addition to or in place of
certificated Notes;

 

(3)           to provide for the assumption of an Issuer’s or a Guarantor’s obligations
to Holders of Notes and Note Guarantees in the case of a merger or
consolidation or sale of all or substantially all of such Issuer’s or such
Guarantor’s assets, as applicable;

 

(4)           to make any change that would provide any additional rights or benefits to
the Holders of Notes or that does not adversely affect the legal rights under
this Indenture of any Holder;

 

(5)           to comply with requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act;

 

(6)           to conform the text of this Indenture, the Notes or the Note Guarantees to
any provision of the section of the Offering Memorandum entitled
“Description of Notes” to the extent such provision was intended to be a
verbatim recitation of a provision of this Indenture, the Notes or the Note
Guarantees;

 

(7)           to provide for the issuance of Additional Notes in accordance with the
limitations set forth in this Indenture;

 

89

 

(8)           to allow any Guarantor to execute a supplemental indenture and/or a Note
Guarantee with respect to the Notes;

 

(9)           to add or release Note Guarantees pursuant to the terms of this Indenture;

 

(10)         to secure the Notes; or

 

(11)         to evidence and provide for the acceptance under this Indenture of a
successor trustee.

 

After
an amendment under this Indenture becomes effective, the Issuers are required
to mail to the Holders a notice briefly describing such amendment.  However, the failure to give such notice to
all the Holders, or any defect therein, will not impair or affect the validity
of the amendment or supplemental indenture under this Section 9.1.

 

Section 9.2.            With Consent of Holders.  The Issuers, the Guarantors and
the Trustee may amend or supplement this Indenture or the Notes or the Note
Guarantees without notice to any Holder but with the written consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, Notes), and any
existing Default or Event of Default or compliance with any provision of this
Indenture or the Notes or the Note Guarantees may be waived with the consent of
the Holders of a majority in aggregate principal amount of the then outstanding
Notes (including consents obtained in connection with a purchase of, or tender
offer or exchange offer for, Notes).

 

However,
without the consent of each Holder affected, an amendment, supplement or waiver
may not (with respect to any Notes held by a non-consenting Holder):

 

(1)           reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver;

 

(2)           reduce the principal of or change the fixed maturity of any Note or alter
the provisions with respect to the redemption or repurchase of the Notes (other
than provisions relating to Sections 3.7 and 3.9);

 

(3)           reduce the rate of or change the time for payment of interest on any Note;

 

(4)           waive a Default or Event of Default in the payment of principal of, or
interest or premium or Special Interest, if any, on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a majority
in principal amount of the Notes and a waiver of the payment default that
resulted from such acceleration);

 

(5)           make any Note payable in currency other than that stated in the Notes;

 

(6)           make any change in the provisions of this Indenture relating to waivers of
past Defaults or the rights of Holders of Notes to receive payments of
principal of, or interest or premium, if any, on the Notes;

 

90

 

(7)           waive a redemption payment with respect to any Note (other than a payment
required by Section 3.7 or 3.9);

 

(8)           release any Guarantor from any of its obligations under its Note Guarantee
or this Indenture, except in accordance with the terms of this Indenture; or

 

(9)           make any change in the preceding amendment, supplement and waiver
provisions.

 

It
shall not be necessary for the consent of the Holders under this Section 9.2 to approve the particular form
of any proposed amendment, but it shall be sufficient if such consent approves
the substance thereof.  A consent to any
amendment or waiver under this Indenture by any Holder of the Notes given in
connection with a tender of such Holder’s Notes will not be rendered invalid by
such tender.

 

After
an amendment under this Section becomes effective, the Issuers shall mail
to Holders a notice briefly describing such amendment.  The failure to give such notice to all
Holders, or any defect therein, shall not impair or affect the validity of an
amendment supplemental indenture or waiver under this Section 9.2.

 

Section 9.3.            Compliance with Trust Indenture Act.  Every amendment or supplement to
this Indenture or the Notes shall comply with the TIA as then in effect.

 

Section 9.4.            Revocation and Effect of Consents and Waivers.  A consent to an amendment or a
waiver by a Holder of a Note shall bind the Holder and every subsequent Holder
of that Note or portion of the Note that evidences the same debt as the
consenting Holder’s Note, even if notation of the consent or waiver is not made
on the Note.  However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder’s Note or
portion of the Note if the Trustee receives the notice of revocation before the
date the amendment or waiver becomes effective. 
After an amendment or waiver becomes effective, it shall bind every
Holder.

 

For
purposes of this Indenture, the written consent of the Holder of a Global Note
shall be deemed to include any consent delivered by an Agent Member by
electronic means in accordance with the Automated Tender Offer Procedures
system or other customary procedures of, and pursuant to authorization by, DTC.

 

The
Issuers may, but shall not be obligated to, fix a record date for the purpose
of determining the Holders entitled to give their consent or take any other
action described above or required or permitted to be taken pursuant to this
Indenture.  If a record date is fixed,
then notwithstanding the immediately preceding paragraph, those Persons who
were Holders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. 
No such consent shall become valid or effective more than 120 days after
such record date.

 

Section 9.5.            Notation on or Exchange of Notes.  If an amendment changes the terms
of a Note, the Trustee may require the Holder of the Note to deliver it to the
Trustee.  The Trustee may place an
appropriate notation on the Note regarding the changed terms and return it to
the

 

91

 

Holder.  Alternatively, if the Issuers or the Trustee
so determine, the Issuers in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.  Failure to make the appropriate notation or
to issue a new Note shall not affect the validity of such amendment.

 

Section 9.6.            Trustee To Sign Amendments.  The Trustee shall sign any
amendment authorized pursuant to this Article IX
if the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee.  If the
amendment does so affect the Trustee, the Trustee may but need not sign it.  In signing such amendment the Trustee shall
be entitled to receive indemnity reasonably satisfactory to it and to receive,
and (subject to Sections 7.1 and 7.2) shall be fully protected in relying upon an
Officers’ Certificate and an Opinion of Counsel both stating that such
amendment is authorized or permitted by this Indenture.

 

ARTICLE X

 

Note Guarantee

 

Section 10.1.          Note Guarantee.  Subject to the limitations set
forth in this Article X and Section 12.10, each Guarantor hereby fully
and unconditionally guarantees, as primary obligor and not merely as surety,
jointly and severally with each other Guarantor, to each Holder of a Note
authenticated and delivered by the Trustee and the Trustee the full and
punctual payment when due, whether at maturity, by acceleration, by redemption
or otherwise, of the principal of, premium, if any, interest and Special
Interest, if any, on the Notes and all other monetary Obligations of the
Issuers under this Indenture.  Each
Guarantor further agrees (to the extent permitted by law) that the Obligations
may be extended or renewed, in whole or in part, without notice or further
assent from it, and that it will remain bound under this Article X
notwithstanding any extension or renewal of any Obligation.

 

Each
Guarantor waives presentation to, demand of payment from and protest to the
Issuers of any of the Obligations and also waives notice of protest for
nonpayment.  Each Guarantor waives notice
of any default under the Notes or the Obligations.  The obligations of each Guarantor hereunder
shall not be affected by (a) the failure of any Holder to assert any claim
or demand or to enforce any right or remedy against any Issuer or any other
Person under this Indenture, the Notes or any other agreement or otherwise; (b) any
extension or renewal of any thereof; (c) any rescission, waiver, amendment
or modification of any of the terms or provisions of this Indenture, the Notes
or any other agreement; (d) the release of any Note held by any Holder or
the Trustee for the Obligations owed to any of them; (e) the failure of
any Holder to exercise any right or remedy against any other Guarantor; or (f) any
change in the ownership of any Issuer.

 

Each
Guarantor further agrees that its Note Guarantee herein constitutes a Guarantee
of payment when due (and not a Guarantee of collection) and waives any right to
require that any resort be had by any Holder to any Note held for payment of
the Obligations.

 

Except
as expressly set forth in Article VIII
and Section 10.2, the obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than payment of the Obligations
in full), including any claim of waiver,

 

92

 

release, surrender, alteration or compromise, and shall
not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise.  Without limiting the generality of the
foregoing, the obligations of each Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of the Trustee or any Holder to
assert any claim or demand or to enforce any remedy under this Indenture, the
Notes or any other agreement, by any waiver or modification of any thereof, by
any default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
any Guarantor or would otherwise operate as a discharge of such Guarantor as a
matter of law or equity.

 

Each
Guarantor further agrees that its Note Guarantee herein shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest or Special Interest, if any, on any
of the Obligations is rescinded or must otherwise be restored by any Holder
upon the bankruptcy or reorganization of the Company or otherwise.

 

In
furtherance of the foregoing and not in limitation of any other right which any
Holder has at law or in equity against any Guarantor by virtue hereof, upon the
failure of the Issuers to pay any of the Obligations when and as the same shall
become due, whether at maturity, by acceleration, by redemption or otherwise,
each Guarantor hereby promises to and will, upon receipt of written demand by
the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders an
amount equal to the sum of (i) the unpaid amount of such Obligations then
due and owing and (ii) accrued and unpaid interest on such Obligations
then due and owing (but only to the extent not prohibited by law) and except as
provided in Section 10.2.

 

Each
Guarantor further agrees that, as between such Guarantor, on the one hand, and
the Holders, on the other hand, (x) the maturity of the Obligations Guaranteed
hereby may be accelerated as provided in this Indenture for the purposes of its
Note Guarantee herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations Guaranteed hereby
and (y) in the event of any such declaration of acceleration of such
Obligations, such Obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantor for the purposes of this Note
Guarantee.

 

Each
Guarantor also agrees to pay any and all reasonable costs and expenses
(including, but not limited to, reasonable attorneys’ fees) incurred by the
Trustee or the Holders in enforcing any rights under this Section 10.1.

 

Section 10.2.          Limitation on Liability; Termination, Release and Discharge.

 

(a)           The
obligations of each Guarantor hereunder will be limited to the maximum amount
as will, after giving effect to all other contingent and fixed liabilities of
such Guarantor and after giving effect to any collections from or payments made
by or on behalf of any other Guarantor in respect of the obligations of such
other Guarantor under its Note Guarantee or pursuant to its contribution
obligations under this Indenture, result in the obligations of such Guarantor
under its Note Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under federal or state law.

 

93

 

(b)           Subject
to Article IV and Section 3.7, a Subsidiary Guarantor may not
sell or otherwise dispose of all or substantially all of its assets to, or
consolidate with or merge into (whether or not such Guarantor is the surviving
Person), another Person, other than the Company or another Guarantor, unless:

 

(1)           immediately after giving effect to such transaction, no Default or Event
of Default exists; and

 

(2)           either:

 

(A)          the
Person acquiring the property in any such sale or disposition or the Person
formed by or surviving any such consolidation or merger assumes all the
obligations of that Guarantor under this Indenture, its Note Guarantee and the
Registration Rights Agreement on terms set forth therein pursuant to a
supplemental indenture substantially in the form set forth as Exhibit C
to this Indenture; or

 

(B)           the Net
Proceeds of such sale or other disposition are applied in accordance with Section 3.7.

 

(c)           A
Guarantor may consolidate with or merge into or sell or otherwise dispose of
all or substantially all of its assets to the Company or another Guarantor
without limitation, except to the extent that any such transaction is subject
to the provisions of Article IV and Section 3.7.

 

(d)           The
Note Guarantee of a Guarantor will be released and the Guarantor will be
relieved of its obligations under this Indenture and its Note Guarantee without
any further action required on the part of the Company or such Guarantor:

 

(1)           in connection with any sale or other disposition of all or substantially
all of the assets of that Guarantor (including by way of merger or
consolidation) to a Person that is not (either before or after giving effect to
such transaction) the Company or a Restricted Subsidiary thereof, if the sale
or other disposition does not violate Section 3.7;
or

 

(2)           in connection with any sale or other disposition of all of the Capital
Stock of that Guarantor (including by way of merger or consolidation) to a
Person that is not (either before or after giving effect to such transaction)
the Company or a Restricted Subsidiary thereof, if the sale or other
disposition does not violate Section 3.7;
or

 

(3)           if the Company designates any Restricted Subsidiary that is a Guarantor to
be an Unrestricted Subsidiary in accordance with the applicable provisions of
this Indenture;

 

(4)           upon Legal Defeasance or Covenant Defeasance as provided in Article VIII or upon satisfaction and
discharge of this Indenture as provided in Article XI;
or

 

94

 

(5)           at such time as such Guarantor ceases to have outstanding guarantees of
any Indebtedness under the Credit Facility.

 

Section 10.3.          Limitation of Guarantors’ Liability.  Each Guarantor, and by its acceptance hereof
each Holder, hereby confirms that it is the intention of all such parties that
the Guarantee by such Guarantor pursuant to its Note Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Federal Bankruptcy Code,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law.  To
effectuate the foregoing intention, the Holders, Trustee and each Guarantor
hereby irrevocably agree that the obligations of such Guarantor under its Note
Guarantee will be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under its Note
Guarantee or pursuant to Section 10.4,
result in the obligations of such Guarantor under its Note Guarantee not
constituting such a fraudulent conveyance or fraudulent transfer.  This Section 10.3
is for the benefit of the creditors of each Guarantor.

 

Section 10.4.          Contribution.  The Guarantors shall have the right to
contribution from any non-paying Guarantors so long as the exercise of such
right does not impair the rights of the Holders.

 

ARTICLE XI

 

Satisfaction and Discharge

 

Section 11.1.          Satisfaction and Discharge.  This Indenture will be discharged and will
cease to be of further effect as to all Notes issued hereunder (except as to
surviving rights of registration of transfer or exchange of the Notes and as
otherwise specified hereunder), when:

 

(1)           either:

 

(a)           all Notes that have been authenticated, except lost, stolen or destroyed
Notes that have been replaced or paid and Notes for whose payment money has
been deposited in trust and thereafter repaid to the Issuers, have been
delivered to the Trustee for cancellation; or

 

(b)           all Notes that have not been delivered to the Trustee for cancellation
have become due and payable or will become due and payable within one year by
reason of the mailing of a notice of redemption or otherwise and any Issuer or
any Guarantor has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust solely for the benefit of the Holders, cash in
U.S. dollars, non-callable Government Securities, or a combination of cash in
U.S. dollars and non-callable Government Securities, in amounts as will be
sufficient without consideration of any reinvestment of interest, to pay and
discharge the entire indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium, if any, and accrued interest and Special
Interest, if any, to the date of fixed maturity or redemption;

 

95

 

(2)           no
Default or Event of Default has occurred and is continuing on the date of the
deposit (other than a Default or Event of Default resulting from the borrowing
of funds to be applied to such deposit) and the deposit will not result in a
breach or violation of, or constitute a default under, any other instrument
(other than this Indenture) to which an Issuer or any Guarantor is a party or
by which an Issuer or any Guarantor is bound;

 

(3)           an
Issuer or any Guarantor has paid or caused to be paid all sums payable by it
under this Indenture;

 

(4)           the
Issuers have delivered irrevocable instructions to the Trustee hereunder to
apply the deposited money toward the payment of the Notes at fixed maturity or
the Redemption Date, as the case may be; and

 

(5)           the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, which, taken together, state that all conditions precedent under the
Indenture relating to the satisfaction and discharge of this Indenture have
been complied with.

 

ARTICLE XII

 

Miscellaneous

 

Section 12.1.          Trust Indenture Act Controls.  If any provision of this Indenture limits,
qualifies or conflicts with another provision which is required to be included
in this Indenture by the TIA, the provision required by the TIA shall
control.  Each Guarantor in addition to
performing its obligations under its Note Guarantee shall perform such other
obligations as may be imposed upon it with respect to this Indenture under the
TIA.

 

Section 12.2.          Notices.  Any notice or communication shall be in
writing and delivered in person, by telecopier or overnight air courier
guaranteeing next day delivery or mailed by first-class mail addressed as
follows:

 

if to the Issuers:

 

Tronox Worldwide LLC

Tronox Finance Corp.

123 Robert S. Kerr Avenue

Oklahoma City, Oklahoma 73102

Facsimile No.:

 

if to the Trustee:

 

Citibank, N.A.

388 Greenwich
Street, 14th 

New York, NY
10013

Facsimile No.:
(212) 816-5527

Attention:  Agency & Trust Dept.

 

96

 

The
Issuers or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.

 

Any
notice or communication mailed to a registered Holder shall be mailed to the
Holder at the Holder’s address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.  Any notice or communication
shall also be mailed to any Person described in TIA § 3.13(c), to the
extent required by the TIA.

 

Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.  If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not the addressee receives
it.

 

Section 12.3.          Communication by Holders with other Holders.  Holders may communicate pursuant
to TIA § 312(b) with other Holders with respect to their rights under
this Indenture or the Notes.  The
Issuers, the Trustee, the Registrar and anyone else shall have the protection
of TIA § 312(c).

 

Section 12.4.          Certificate and Opinion as to Conditions Precedent.  Upon any request or application
by the Issuers to the Trustee to take or refrain from taking any action under
this Indenture, the Company shall furnish to the Trustee:

 

(1)           an Officers’ Certificate in form and substance reasonably satisfactory to
the Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and

 

(2)           an Opinion of Counsel in form and substance reasonably satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.

 

In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion as to such matters in one or several documents.

 

Any
certificate or opinion of an Officer of an Issuer or any Guarantor may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such Officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous.  Any such certificate or
Opinion of Counsel may be based, and may state that it is so based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an Officer or Officers of an Issuer or such Guarantor
stating that the information with respect to such factual matters is in
possession of such Issuer or such Guarantor, unless such counsel knows that the
certificate or opinion or representations with respect to such matters are
erroneous.

 

97

 

Where
any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be consolidated and form one
instrument.

 

Section 12.5.          Statements Required in Certificate or Opinion.  Each certificate or opinion with
respect to compliance with a covenant or condition provided for in this
Indenture (except the Certificate specified in Section 3.17) shall
include:

 

(1)           a statement that the individual making such certificate or opinion has
read such covenant or condition;

 

(2)           a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

 

(3)           a statement that, in the opinion of such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

 

(4)           a statement as to whether or not, in the opinion of such individual, such
covenant or condition has been complied with.

 

Section 12.6.          When Notes Disregarded.  In determining whether the Holders of the
required principal amount of Notes have concurred in any direction, waiver or
consent, Notes owned by Parent, any Issuer or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with Parent or any Issuer shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which the Trustee has actual knowledge are so owned shall be so
disregarded.  Also, subject to the
foregoing, only Notes outstanding at the time shall be considered in any such
determination.

 

Section 12.7.          Rules by Trustee, Paying Agent and Registrar.  The Trustee may make reasonable rules for
action by, or a meeting of, Holders.  The
Registrar and the Paying Agent may make reasonable rules for their
functions.

 

Section 12.8.          Legal Holidays.  A “Legal Holiday” is a Saturday, a
Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York, New York. 
If a payment date is a Legal Holiday, payment shall be made on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for
the intervening period.  If a regular
record date is a Legal Holiday, the record date shall not be affected.

 

Section 12.9.          GOVERNING LAW.  THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

 

Section 12.10.        No Recourse Against Others.  No director, manager, officer, employee,
incorporator, member or stockholder or other owner of Capital Stock of any
Issuer or any Guarantor, as such, shall have any liability for any obligations
of any Issuer or any Guarantor

 

98

 

under
the Notes, this Indenture or the Note Guarantees, or for any claim based on, in
respect of, or by reason of such obligations or their creation.  Each Holder of Notes by accepting a Note
waives and releases all such liability.

 

Section 12.11.        Successors.  All agreements of each Issuer in this
Indenture and the Notes shall bind its successors.  All agreements of the Trustee in this
Indenture shall bind its successors.

 

Section 12.12.        Multiple Originals.  The parties may sign any number of copies of
this Indenture.  Each signed copy shall
be an original, but all of them together represent the same agreement.  One signed copy is enough to prove this
Indenture.

 

Section 12.13.        Qualification of Indenture.  The Issuers shall qualify this Indenture
under the TIA in accordance with the terms and conditions of the Registration
Rights Agreement and shall pay all reasonable costs and expenses (including,
but not limited to, attorneys’ fees and expenses for the Issuers, the Trustee
and the Holders) incurred in connection therewith, including, but not limited
to, costs and expenses of qualification of this Indenture and the Notes and
printing this Indenture and the Notes. 
The Trustee shall be entitled to receive from the Issuers any such
Officers’ Certificates or other documentation as it may reasonably request in
connection with any such qualification of this Indenture under the TIA.

 

Section 12.14.        Severability.  In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

 

Section 12.15.        No Adverse Interpretation of Other Agreements.  This Indenture may not be used to
interpret any other indenture, loan or debt agreement of any Issuer, any
Guarantor or any other Person.  Any such
indenture, loan or debt agreement may not be used to interpret this Indenture
or the Note Guarantees.

 

Section 12.16.        Table of Contents; Headings.  The table of contents, cross-reference sheet
and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not intended to be considered a part
hereof and shall not modify or restrict any of the terms or provisions hereof.

 

Section 12.17.        Rights of Paying Agent and Registrar.  For so long as the Trustee also serves as
Paying Agent and/or Registrar, all rights, protections and indemnities set
forth in this Indenture for the Trustee shall be equally applicable for the
Paying Agent and/or Registrar.

 

[Signature Page Follows]

 

99

 

IN
WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as
of the date first written above.

 

	
   

  	
  TRONOX
  WORLDWIDE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Marty J. Rowland

  	
   

  
	
   

  	
   

  	
  Name:
  Marty J. Rowland

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TRONOX
  FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas W. Adams

  	
   

  
	
   

  	
   

  	
  Name:
  Thomas W. Adams

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
  CIMARRON
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mary Mikkelson

  	
   

  
	
   

  	
   

  	
  Name:
  Mary Mikkelson

  
	
   

  	
   

  	
  Title:
  Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KERR-MCGEE
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marty
  J. Rowland

  	
   

  
	
   

  	
   

  	
  Name:
  Marty J. Rowland

  
	
   

  	
   

  	
  Title:
  President

  

 

[Signature Page to Indenture]

 

 

	
   

  	
  KERR-MCGEE
  MINERALS RESOURCES

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marty
  J. Rowland

  	
   

  
	
   

  	
   

  	
  Name:
  Marty J. Rowland

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KERR-MCGEE
  PIGMENTS (SAVANNAH) INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas W. Adams

  	
   

  
	
   

  	
   

  	
  Name:
  Thomas W. Adams

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KERR-MCGEE
  REFINING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mary Mikkelson

  	
   

  
	
   

  	
   

  	
  Name:
  Mary Mikkelson

  
	
   

  	
   

  	
  Title:
  Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SOUTHWESTERN
  REFINING COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mary Mikkelson

  	
   

  
	
   

  	
   

  	
  Name:
  Mary Mikkelson

  
	
   

  	
   

  	
  Title:
  Senior Vice President and Chief Financial Officer

  

 

[Signature Page to Indenture]

 

 

	
   

  	
  TRANSWORLD
  DRILLING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mary Mikkelson

  	
   

  
	
   

  	
   

  	
  Name:
  Mary Mikkelson

  
	
   

  	
   

  	
  Title:
  Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TRIANGLE
  REFINERIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mary Mikkelson

  	
   

  
	
   

  	
   

  	
  Name:
  Mary Mikkelson

  
	
   

  	
   

  	
  Title:
  Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRIPLE
  S, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mary Mikkelson

  	
   

  
	
   

  	
   

  	
  Name:
  Mary Mikkelson

  
	
   

  	
   

  	
  Title:
  Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TRONOX
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marty
  J. Rowland

  	
   

  
	
   

  	
   

  	
  Name:
  Marty J. Rowland

  
	
   

  	
   

  	
  Title:
  President

  

 

[Signature Page to Indenture]

 

 

	
   

  	
  TRONOX
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marty
  J. Rowland

  	
   

  
	
   

  	
   

  	
  Name:
  Marty J. Rowland

  
	
   

  	
   

  	
  Title:
  Chief Operating Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CITIBANK, N.A.,

  
	
   

  	
  as
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John J. Byrnes

  	
   

  
	
   

  	
   

  	
  Name:
  John J. Byrnes

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

[Signature Page to Indenture]

 

 

EXHIBIT A

 

[FORM OF FACE OF NOTE]

 

UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS
OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF.

 

THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH
RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN
ACCORDANCE WITH ALL APPLICABLE BLUE SKY LAWS OF THE STATES OF THE UNITED
STATES.

 

A-1

 

	
  No. [     ]

  	
   

  	
  Principal Amount
  $[               ]

  
	
   

  	
   

  	
  CUSIP NO. [               ]

  

 

TRONOX WORLDWIDE LLC

TRONOX FINANCE CORP.

 

91⁄2 % Senior Note due 2012

 

Tronox
Worldwide LLC, a Delaware limited liability company (the “Company”), and
Tronox Finance Corp., a Delaware corporation (“Tronox Finance” and,
together with the Company, the “Issuers”), promise to pay to
                        ,
or registered assigns, the principal sum of
[                    ]
Dollars or such greater or lesser amount as shall be reflected on the books and
records of the custodian with respect to the Global Note (as appointed by DTC)
(the “Notes Custodian”)(1), on December 1, 2012.

 

Interest
Payment Dates:  June 1 and December 1,
commencing on June 1, 2006

 

Record
Dates:  May 15 and November 15

 

Additional
provisions of this Note are set forth on the other side of this Note.

 

(1) Global Note only

 

A-2

 

In witness
whereof, the Issuers have caused this instrument to be duly executed.

 

 

	
   

  	
  TRONOX
  WORLDWIDE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRONOX
  FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
  TRUSTEE’S
  CERTIFICATE

  
	
  OF
  AUTHENTICATION

  
	
   

  
	
  Citibank,
  N.A., not in its individual

  
	
  capacity
  but solely as Trustee,

  
	
  certifies
  that this is

  
	
  one
  of the Notes referred

  
	
  to in
  the Indenture.

  
	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
  Date:

  	
   

  	
   

  

 

A-3

 

[FORM OF
REVERSE SIDE OF NOTE]

 

91⁄2 %
Senior Note due 2012

 

1.             Interest

 

Tronox
Worldwide LLC, a Delaware limited liability company (the “Company”), and
Tronox Finance Corp., a Delaware corporation (“Tronox Finance” and,
together with the Company, the “Issuers”), promise to pay interest on
the principal amount of this Note at the rate per annum shown above.

 

The
Issuers will pay interest semiannually in arrears in cash on June 1 and December 1
of each year or if any such day is not a business day, on the next succeeding
business day (each an “Interest Payment Date”) commencing on June 1,
2006 and will pay Special Interest, if any, as provided in the Registration
Rights Agreement relating to these Notes. 
Interest on the Notes will accrue from the most recent date to which
interest has been paid on the Notes or, if no interest has been paid, from and
including November 28, 2005.  The
Issuers shall pay interest on overdue principal and interest and Special
Interest, if any, from time to time at a rate that is 1% per annum higher than
the interest rate then in effect under the Indenture and this Note.  Interest will be computed on the basis of a
360-day year of twelve 30-day months.

 

2.             Method of Payment

 

By no
later than 11:00 a.m. (New York City time) on the date on which any
principal of, interest and premium and Special Interest, if any, on, any Note
is due and payable, the Issuers shall deposit with the Trustee or the Paying
Agent money sufficient to pay such principal, interest and premium and Special
Interest, if any.  The Issuers will pay
principal, interest (except Defaulted Interest) and premium and Special
Interest, if any, to the Persons who are registered Holders of Notes at the
close of business on May 15 or November 15 preceding the Interest
Payment Date, even if Notes are cancelled, repurchased or redeemed after the
record date and on or before the Interest Payment Date.  Holders must surrender Notes to a Paying
Agent to collect principal payments.  The
Issuers will pay principal, interest and premium and Special Interest, if any,
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. 
Payments of all principal, interest and premium and Special Interest, if
any, on the Notes will be made to each registered Holder by wire transfer in
immediately available funds if that Holder has given to the Issuers, through
the Paying Agent or otherwise, wire instructions at least five business days
prior to the applicable payment date or by check mailed to the address of the
Holder as it appears on the books of the registrar if the Holder has not
provided wire instructions; provided that the final distribution in respect of
any Note will be made only upon presentation and surrender of such Note at the
applicable Corporate Trust Office of the Trustee.

 

3.             Paying Agent and Registrar

 

Initially,
Citibank, N.A. (the “Trustee”), will act as Trustee, Paying Agent and
Registrar.  The Issuers may appoint and
change any Paying Agent, Registrar or co-registrar without prior notice to any
Holder of the Notes.  The Issuers or any
of their Subsidiaries may act as Paying Agent, Registrar or co-registrar.

 

A-4

 

4.             Indenture

 

The
Issuers issued the Notes under an Indenture dated as of November 21, 2005
(as it may be amended or supplemented from time to time in accordance with the
terms thereof, the “Indenture”), among the Issuers, the Guarantors party
thereto and the Trustee.  The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb)
as in effect on the Issue Date (the “Act”).  Capitalized terms used herein and not defined
herein have the meanings ascribed thereto in the Indenture.  The Notes are subject to all terms in the
Indenture, and Holders are referred to the Indenture and the Act for a
statement of those terms.  To the extent
any provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling.

 

The
Notes are general unsecured senior obligations of the Issuers.  The aggregate principal amount of Notes that
may be authenticated and delivered under the Indenture is limited to an
aggregate principal amount at maturity of $350,000,000, subject to the Issuers’
ability to issue Additional Notes.  The
Indenture imposes certain limitations, among other things, on the ability of
the Issuers and their Restricted Subsidiaries to make Investments; incur
additional Indebtedness or issue Preferred Stock; create certain Liens; sell
assets; enter into agreements that restrict dividends or other payments from
the Restricted Subsidiaries; consolidate, merge or transfer all or
substantially all of the assets of the Issuers and their Restricted
Subsidiaries; engage in transactions with Affiliates; pay dividends or make
other distributions on Capital Stock or subordinated Indebtedness; enter into
different lines of business; create Unrestricted Subsidiaries; and enter into
sale and leaseback transactions.

 

To
guarantee the due and punctual payment of the principal of, interest and
premium and Special Interest, if any, on, the Notes and all other amounts
payable by the Issuers under the Indenture and the Notes when and as the same
shall be due and payable, whether at maturity, by acceleration or otherwise,
according to the terms of the Notes and the Indenture, the Guarantors have
unconditionally guaranteed (and future Guarantors, together with the
Guarantors, will unconditionally guarantee), jointly and severally, such
obligations pursuant to the terms of the Indenture.

 

5.             Redemption

 

Except
as forth below, the Notes will not be redeemable at the option of the Issuers
prior to December 1, 2009.  On and
after such date, the Notes will be redeemable, at the Issuers’ option, in whole
or in part, at any time upon not less than 30 nor more than 60 days prior
notice mailed by first-class mail to each Holder’s registered address, at the
following redemption prices (expressed in percentages of principal amount),
plus accrued and unpaid interest and Special Interest, if any, thereon, if any,
to the Redemption Date (subject to the right of Holders of record on the
relevant record date to receive interest due on an interest payment date that
is on or prior to the Redemption Date) if redeemed during the 12-month period
commencing on December 1 of the years indicated below, subject to the
rights of Holders of Notes on the relevant record date to receive interest due
on the relevant Interest Payment Date:

 

A-5

 

	
  Period

  	
   

  	
  Redemption Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  104.750

  	
  %

  
	
  2010

  	
   

  	
  102.375

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In
addition, at any time and from time to time prior to December 1, 2008, the
Issuers may redeem up to 35% of the aggregate principal amount of the Notes
(calculated after giving effect to any issuance of Additional Notes) at a
redemption price of 109.500 % of the principal amount plus accrued and unpaid
interest and Special Interest, if any, to the Redemption Date, with the net
cash proceeds of one or more Equity Offerings; provided, that (1) at least
65% of the aggregate principal amount of the Notes, calculated after giving
effect to any issuance of Additional Notes, originally issued under the
Indenture (including Notes held by Parent, any Issuer and their Subsidiaries)
remains outstanding after each such redemption and (2) each such
redemption occurs within 90 days of the date of closing of such Equity
Offering.

 

Notice
of any redemption upon an Equity Offering may be given prior to the completion
of the related Equity Offering, and any such redemption or notice may, at the
Issuers’ discretion, be subject to one or more conditions precedent, including
completion of the related Equity Offering.

 

If the
optional Redemption Date is on or after an interest record date and on or
before the related interest payment date, the accrued and unpaid interest and
Special Interest, if any, will be paid to the Person in whose name the Note is
registered at the close of business on such record date, and no Special
Interest will be payable to Holders whose Notes will be subject to redemption
by the Issuers.

 

In the
case of any partial redemption, selection of the Notes for redemption will be
made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed or, if the
Notes are not listed, then on a pro rata basis, although no Notes of $1,000 in
original principal amount or less will be redeemed in part.  If any Note is to be redeemed in part only,
the notice of redemption relating to such Note shall state the portion of the
principal amount thereof to be redeemed. 
A new Note in principal amount equal to the unredeemed portion thereof
will be issued in the name of the Holder thereof upon cancellation of the
original Note.  On and after the
Redemption Date, interest will cease to accrue on Notes or portions thereof
called for redemption as long as the Issuers have deposited with the Paying
Agent funds in satisfaction of the applicable redemption price pursuant to the
Indenture.

 

6.             Mandatory Redemption

 

The
Issuers are not required to make mandatory redemption or sinking fund payments
with respect to the Notes.  However, the
Issuers may be required to offer to repurchase the Notes under Sections 3.7 and
3.9 of the Indenture.

 

7.             Repurchase Provisions

 

(a)           Upon a
Change of Control any Holder of Notes will have the right to cause the Company
to repurchase all or any part of the Notes of such Holder at a purchase price
in cash

 

A-6

 

equal to 101% of the principal amount thereof, plus
accrued and unpaid interest and Special Interest, if any, to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on an interest payment date that is on or prior to
the date of repurchase) as provided in, and subject to the terms of, the
Indenture.

 

(b)                                 In the event of an Asset Sale that requires the purchase of Notes pursuant
to Section 3.7(d) of the Indenture, the Company will be
required to apply such Excess Proceeds to the repayment of the Notes and any
pari passu Indebtedness in accordance with the procedures set forth in Section 3.7
of the Indenture.

 

8.                                       Denominations; Transfer; Exchange

 

The
Notes are in registered form without coupons in denominations of principal
amount of $1,000 and integral multiples of $1,000.  A Holder may transfer or exchange Notes in
accordance with the Indenture.  The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. 
Neither the Issuers nor the Registrar are required to register the
transfer or exchange of (i) any Notes selected for redemption (except, in
the case of a Note to be redeemed in part, the portion of the Note not to be
redeemed) or (ii) any Notes for a period of 15 days before a selection of
Notes to be redeemed.

 

9.                                       Persons Deemed Owners

 

The
registered Holder of this Note may be treated as the owner of it for all
purposes.

 

10.                                 Unclaimed Money

 

If
money for the payment of principal or interest remains unclaimed for one year,
the Trustee or Paying Agent shall pay the money back to the Company at its
request unless an abandoned property law designates another Person.  After any such payment, Holders entitled to
the money must look only to the Company and not to the Trustee for payment.

 

11.                                 Defeasance

 

Subject
to certain conditions set forth in the Indenture, the Issuers at any time may
terminate some or all of their obligations under the Notes and the Indenture if
the Issuers deposit with the Trustee money or non-callable Government
Securities for the payment of principal, premium, interest and Special
Interest, if any, on the Notes to redemption or maturity, as the case may be.

 

12.                                 Amendment, Waiver

 

Subject
to certain exceptions set forth in the Indenture, (i) the Indenture or the
Notes may be amended with the written consent or electronic consent pursuant to
the second paragraph of Section 9.4 of the Indenture, as
applicable, of the Holders of at least a majority in principal amount of the
then outstanding Notes and (ii) any default (other than with respect to
nonpayment or in respect of a provision that cannot be amended without the
written consent of each Holder affected) or noncompliance with any provision
may be waived with the written consent or

 

A-7

 

electronic consent pursuant to the second paragraph of Section 9.4
of the Indenture, as applicable, of the Holders of a majority in principal
amount of the then outstanding Notes. 
Subject to certain exceptions set forth in the Indenture, without the
consent of any Holder, the Issuers, the Guarantors and the Trustee may amend
the Indenture or the Notes to cure any ambiguity, defect or inconsistency, or
to comply with Article IV of the Indenture, or to provide for
uncertificated Notes in addition to or in place of certificated Notes, or to
add guarantees with respect to the Notes, to release a Guarantor in accordance
with the Indenture or to secure the Notes, or to allow any Guarantor to execute
a supplemental Indenture or Note Guarantee, or to provide additional rights or
benefits to the Holders of the Notes, or to comply with any requirement of the Commission
in connection with qualifying or maintaining the qualification of the Indenture
under the Act, or to make any change that does not adversely affect the rights
of any Holder, or to conform the text of the Indenture, the Notes or the Note
Guarantees to the description of notes in the Offering Memorandum, or to
provide for the issuance of Additional Notes or to evidence or provide for a
successor trustee.

 

13.                                 Defaults and Remedies

 

Under
the Indenture, Events of Default include in summary form: (i) default for
30 days in payment of interest or Special Interest, if any, when due on the
Notes; (ii) default in payment when due (at maturity, upon redemption or
otherwise) of principal or premium, if any, on the Notes; (iii) the
failure by the Company or its Restricted Subsidiaries to comply with their
obligations under Sections 3.7, 3.9 or 4.1 of the
Indenture; (iv) the failure by the Company or any of its Restricted
Subsidiaries to comply for 60 days after notice with its other agreements
contained in the Indenture or under the Notes (other than those referred to in
(i), (ii), or (iii) above); (v) default under any mortgage, indenture
or instrument under which there may be issued or by which there may be secured
or evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Company
or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee
now exists, or is created after the Issue Date, if that default (a) is
caused by a failure to pay principal of, or interest or Special Interest or
premium, if any, on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (“Payment
Default”) or (b) results in the acceleration of such Indebtedness
prior to its Stated Maturity, and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $25.0 million or more; (vi) failure
by an Issuer or any of the Company’s Restricted Subsidiaries to pay final
judgments entered by a court or courts of competent jurisdiction aggregating in
excess of $5.0 million, which judgments are not paid, discharged or stayed for
a period of 60 days, (vii) except as permitted by the Indenture, any Note
Guarantee is held in a judicial proceeding to be not enforceable or valid or
ceases to be in full force and effect, or any Guarantor or other Person acting
on its behalf denies or disaffirms its obligations under its Note Guarantee or (viii) certain
events of bankruptcy, insolvency or reorganization of the Company or a
Restricted Subsidiary or group of Restricted Subsidiaries that, taken together
(as of the latest audited consolidated financial statements for the Company and
its Restricted Subsidiaries), would constitute a Significant Subsidiary.

 

If an
Event of Default occurs and is continuing (other than an Event of Default
described in clause (vi) above), the Trustee may, or at the written
direction of the Holders of at least 25% in

 

A-8

 

aggregate principal amount of the Notes shall declare all
the Notes to be due and payable.  Certain
events of bankruptcy or insolvency are Events of Default which will result in
the Notes being due and payable immediately upon the occurrence of such Events
of Default.

 

Holders
may not enforce the Indenture or the Notes except as provided in the
Indenture.  The Trustee may refuse to
enforce the Indenture or the Notes unless it receives reasonable indemnity or
security.  Subject to certain
limitations, Holders of a majority in principal amount of the Notes may direct
the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders notice
of any continuing Default or Event of Default (except a Default or Event of
Default in payment of principal or interest) if it determines that withholding
notice is in their interest.

 

14.                                 Trustee Dealings with the Issuers

 

Subject
to certain limitations set forth in the Indenture, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Issuers or their Affiliates and may otherwise deal with the Issuers or
their Affiliates with the same rights it would have if it were not Trustee.

 

15.                                 No Recourse Against Others

 

No
manager, director, officer, employee, incorporator, member or stockholder of
any Issuer, or any Guarantor, as such, shall have any liability for any
obligations of the Issuers or the Guarantors under the Notes, the Indenture,
the Note Guarantees or for any claim based on, in respect of, or by reason of,
such obligations of their creation.  Each
Holder by accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the Notes.

 

16.                                 Authentication

 

This
Note shall not be valid until an authorized signatory of the Trustee (or an
authenticating agent acting on its behalf) manually signs the certificate of
authentication on the other side of this Note.

 

17.                                 Abbreviations

 

Customary
abbreviations may be used in the name of a Holder or an assignee, such as TEN
COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint
tenants with rights of survivorship and not as tenants in common), CUST (=
custodian) and U/G/M/A (= Uniform Gift to Minors Act).

 

18.                                 Additional Rights of Holders of Restricted Notes 

 

In
addition to the rights provided to Holders of Notes under the Indenture,
Holders of Restricted Notes that are Initial Notes shall have all the rights
set forth in the Registration Rights Agreement, dated as of November 28,
2005, among the Company, Parent and the parties named in the signature pages thereto
or, in the case of Additional Notes, Holders of Restricted Notes

 

A-9

 

that are Additional Notes shall have the rights set forth
in one or more Registration Rights Agreements, if any, among the Company and
the other parties thereto, relating to rights given by the Company to the
purchasers of such Additional Notes.

 

19.                                 CUSIP Numbers

 

Pursuant
to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Issuers have caused CUSIP numbers to be printed
on the Notes and have directed the Trustee to use CUSIP numbers in notices of
redemption as a convenience to Holders. 
No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.

 

20.                                 Governing Law

 

This
Note shall be governed by, and construed in accordance with, the laws of the
State of New York.

 

The
Issuers will furnish to any Holder upon written request and without charge to
the Holder a copy of the Indenture, which has in it the text of this Note in
larger type.  Requests may be made to:

 

	
   

  	
  Tronox
  Worldwide LLC

  
	
   

  	
  123
  Robert S. Kerr Avenue

  
	
   

  	
  Oklahoma
  City, Oklahoma 73102

  

 

A-10

 

ASSIGNMENT FORM

 

	
  To assign this Note, fill in the form below:

  
	
   

  
	
  I or we assign and transfer this Note to

  
	
   

  
	
   

  	
   

  
	
  (Print or type assignee’s name, address and zip code)

  
	
   

  
	
   

  	
   

  
	
  (Insert assignee’s soc. see. or tax I.D. No.)

  

 

and irrevocably appoint                               
agent to transfer this Note on the books of the Issuers.  The agent may substitute another to act for
him.

 

	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  
	
  Signature
  Guarantee:

  	
   

  
	
   

  	
  (Signature
  must be guaranteed)

  
	
   

  
	
   

  
	
  Sign exactly as your name appears on the other side of this Note.

  
							

 

The
signatures) should be guaranteed by an eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to Commission Rule 17Ad-15.

 

In
connection with any transfer or exchange of any of the Notes evidenced by this
certificate occurring prior to the date that is two years after the later of
the date of original issuance of such Notes and the last date, if any, on which
such Notes were owned by an Issuer or any Affiliate of an Issuer, the
undersigned confirms that such Notes are being:

 

CHECK
ONE BOX BELOW:

 

1 o                           acquired for the undersigned’s own account, without transfer; or

 

2 o                           transferred to the Company; or

 

3 o                           transferred pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”); or

 

4 o                           transferred pursuant to an effective registration statement under the
Securities Act; or

 

A-11

 

5 o                           transferred pursuant to and in compliance with Regulation S under the
Securities Act; or

 

6 o                           transferred pursuant to another available exemption from the registration
requirements of the Securities Act of 1933.

 

Unless
one of the boxes is checked, the Trustee will refuse to register any of the
Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided, however, that if box (5) or (6) is
checked, the Trustee or the Issuers may require, prior to registering any such
transfer of the Notes, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Issuers may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by Rule 144
under such Act.

 

	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature
  must be guaranteed)

  	
  Signature

  
	
   

  	
   

  
	
   

  
			

 

The
signature(s) should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in an approved signature guarantee medallion program), pursuant to Commission Rule 17Ad-15.

 

TO BE
COMPLETED BY PURCHASER IF (1) OR (3) ABOVE IS CHECKED.

 

The
undersigned represents and warrants that it is purchasing this Note for its own
account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act of 1933,
as amended, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Issuers as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned’s foregoing representations in order to claim the
exemption from registration provided by Rule 144A.

 

	
   

  	
   

  
	
  Dated:

  

 

A-12

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you
want to elect to have this Note purchased by the Issuers pursuant to Section 3.7
or Section 3.9 of the Indenture, check either box:

 

o                                    o

3.7                                 3.9

 

If you
want to elect to have only part of this Note purchased by the Issuers pursuant
to Section 3.7 or Section 3.9 of the Indenture, state
the amount in principal amount (must be integral multiple of $1,000): $

 

	
  Date:

  	
   

  	
   

  	
  Your
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name
  appears on the other side of the Note)

  

 

	
  Signature
  Guarantee:

  	
   

  
	
   

  	
   

  	
  (Signature
  must be guaranteed)

  	
   

  

 

The
signature(s) should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in an approved signature guarantee medallion program), pursuant to Commission Rule 17Ad-15.

 

A-13

 

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE(1)

 

The
following increases or decreases in this Global Note have been made:

 

	
  Date
  of

  Exchange

  	
   

  	
  Amount of

  decrease in

  Principal

  Amount of this

  Global Note

  	
   

  	
  Amount of

  increase in

  Principal

  Amount of this

  Global Note

  	
   

  	
  Principal Amount of

  this Global Note

  following such

  decrease or increase

  	
   

  	
  Signature of

  authorized signatory

  of Trustee or Notes

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(1) Include only if security
is issued in global form.

 

A-14

 

EXHIBIT B

 

[FORM OF FACE OF EXCHANGE NOTE]

 

[UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS
OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF.]

 

B-1

 

	
  No. [     ]

  	
   

  	
  Principal Amount
  $[               ]

  
	
   

  	
   

  	
  CUSIP NO. [               ]

  

 

TRONOX WORLDWIDE LLC

TRONOX FINANCE CORP.

 

91⁄2 % Senior Note due 2012

 

Tronox
Worldwide LLC, a Delaware limited liability company (the “Company”), and
Tronox Finance Corp., a Delaware corporation (“Tronox Finance” and,
together with the Company, the “Issuers”), promise to pay to
                        ,
or registered assigns, the principal sum of
[                    ]
Dollars or such greater or lesser amount as shall be reflected on the books and
records of the custodian with respect to the Global Note (as appointed by DTC)
(the “Notes Custodian”)(2), on December 1, 2012.

 

Interest
Payment Dates:  June 1 and December 1,
commencing June 1, 2006

 

Record
Dates:  May 15 and November 15

 

Additional
provisions of this Note are set forth on the other side of this Note.

 

(2) Global Note only

 

B-2

 

In
witness whereof, the Issuers have caused this instrument to be duly executed.

 

 

	
   

  	
  TRONOX
  WORLDWIDE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRONOX
  FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
  TRUSTEE’S
  CERTIFICATE

  
	
  OF
  AUTHENTICATION

  
	
   

  
	
  Citibank,
  N.A., not in its individual

  
	
  capacity
  but solely as Trustee,

  
	
  certifies
  that this is

  
	
  one
  of the Notes referred

  
	
  to in
  the Indenture.

  
	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
  Date:

  	
   

  	
   

  

 

B-3

 

[FORM OF
REVERSE SIDE OF NOTE]

 

91⁄2 %
Senior Note due 2012

 

1.                                       Interest

 

Tronox
Worldwide LLC, a Delaware limited liability company (the “Company”), and
Tronox Finance Corp., a Delaware corporation (“Tronox Finance” and,
together with the Company, the “Issuers”), promise to pay interest on
the principal amount of this Note at the rate per annum shown above.

 

The
Issuers will pay interest semiannually in arrears in cash on June 1 and December 1
of each year or if any such day is not a business day, on the next succeeding
business day (each an “Interest Payment Date”) commencing on June 1,
2006 and will pay Special Interest, if any, as provided in the Registration
Rights Agreement relating to these Notes. 
Interest on the Notes will accrue from the most recent date to which
interest has been paid on the Notes or, if no interest has been paid, from and
including November 28, 2005.  The
Issuers shall pay interest on overdue principal and interest and Special
Interest, if any, from time to time at a rate that is 1% per annum higher than
the interest rate then in effect under the Indenture and this Note.  Interest will be computed on the basis of a
360-day year of twelve 30-day months.

 

2.                                       Method of Payment

 

By no
later than 11:00 a.m. (New York City time) on the date on which any
principal of, interest and premium and Special Interest, if any, on, any Note
is due and payable, the Issuers shall deposit with the Trustee or the Paying
Agent money sufficient to pay such principal, interest and premium and Special
Interest, if any.  The Issuers will pay
principal, interest (except Defaulted Interest) and premium and Special
Interest, if any, to the Persons who are registered Holders of Notes at the
close of business on May 15 or November 15 preceding the Interest
Payment Date, even if Notes are cancelled, repurchased or redeemed after the
record date and on or before the Interest Payment Date.  Holders must surrender Notes to a Paying
Agent to collect principal payments.  The
Issuers will pay principal, interest and premium and Special Interest, if any,
in money of the United States that at the time of payment is legal tender for
payment of public and private debts Payments of all principal, interest and
premium and Special Interest, if any, on the Notes will be made to each
registered Holder by wire transfer in immediately available funds if that
Holder has given to the Issuers, through the Paying Agent or otherwise, wire
instructions at least five business days prior to the applicable payment date
or by check mailed to the address of the Holder as it appears on the books of
the registrar if the Holder has not provided wire instructions; provided that
the final distribution in respect of any Note will be made only upon
presentation and surrender of such Note at the applicable Corporate Trust
Office of the Trustee.

 

3.                                       Paying Agent and Registrar

 

Initially,
Citibank, N.A. (the “Trustee”), will act as Trustee, Paying Agent and
Registrar.  The Issuers may appoint and
change any Paying Agent, Registrar or co-registrar without prior notice to any
Holder of the Notes.  The Issuers or any
of their Subsidiaries may act as Paying Agent, Registrar or co-registrar.

 

B-4

 

4.                                       Indenture

 

The
Issuers issued the Notes under an Indenture dated as of November 28, 2005
(as it may be amended or supplemented from time to time in accordance with the
terms thereof, the “Indenture”), among the Issuers, the Guarantors party
thereto and the Trustee.  The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb)
as in effect on the Issue Date (the “Act”).  Capitalized terms used herein and not defined
herein have the meanings ascribed thereto in the Indenture.  The Notes are subject to all terms in the
Indenture, and Holders are referred to the Indenture and the Act for a
statement of those terms.  To the extent
any provision of this Note conflicts with the express provisions of the
Indenture, the provisions of the Indenture shall govern and be controlling.

 

The
Notes are general unsecured senior obligations of the Issuers.  The aggregate principal amount of Notes that
may be authenticated and delivered under the Indenture is limited to an
aggregate principal amount at maturity of $350,000,000, subject to the Issuers’
ability to issue Additional Notes.  The
Indenture imposes certain limitations, among other things, on the ability of
the Issuers and their Restricted Subsidiaries to make Investments; incur
additional Indebtedness or issue Preferred Stock; create certain Liens; sell
assets; enter into agreements that restrict dividends or other payments from
the Restricted Subsidiaries; consolidate, merge or transfer all or
substantially all of the assets of the Issuers and their Restricted
Subsidiaries; engage in transactions with Affiliates; pay dividends or make
other distributions on Capital Stock or subordinated Indebtedness; enter into
different lines of business; create Unrestricted Subsidiaries; and enter into
sale and leaseback transactions.

 

To
guarantee the due and punctual payment of the principal of, interest and premium
and Special Interest, if any, on, the Notes and all other amounts payable by
the Issuers under the Indenture and the Notes when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to
the terms of the Notes and the Indenture, the Guarantors have unconditionally
guaranteed (and future Guarantors, together with the Guarantors, will
unconditionally guarantee), jointly and severally, such obligations pursuant to
the terms of the Indenture.

 

5.                                       Redemption

 

Except
as forth below, the Notes will not be redeemable at the option of the Issuers
prior to December 1, 2009.  On and
after such date, the Notes will be redeemable, at the Issuers’ option, in whole
or in part, at any time upon not less than 30 nor more than 60 days prior
notice mailed by first-class mail to each Holder’s registered address, at the
following redemption prices (expressed in percentages of principal amount),
plus accrued and unpaid interest and Special Interest, if any, thereon, if any,
to the Redemption Date (subject to the right of Holders of record on the
relevant record date to receive interest due on an interest payment date that
is on or prior to the Redemption Date) if redeemed during the 12-month period
commencing on December of the years indicated below, subject to the rights
of Holders of Notes on the relevant record date to receive interest due on the
relevant Interest Payment Date:

 

B-5

 

	
  Period

  	
   

  	
  Redemption Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  104.750

  	
  %

  
	
  2010

  	
   

  	
  102.375

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In
addition, at any time and from time to time prior to December 1, 2008, the
Issuers may redeem up to 35% of the aggregate principal amount of the Notes
(calculated after giving effect to any issuance of Additional Notes) at a
redemption price of 109.500% of the principal amount plus accrued and unpaid
interest and Special Interest, if any, to the Redemption Date, with the net
cash proceeds of one or more Equity Offerings; provided, that (1) at least
65% of the aggregate principal amount of the Notes, calculated after giving
effect to any issuance of Additional Notes, originally issued under the
Indenture (including Notes held by Parent, any Issuer and their Subsidiaries)
remains outstanding after each such redemption and (2) each such
redemption occurs within 90 days of the date of closing of such Equity
Offering.

 

Notice
of any redemption upon an Equity Offering may be given prior to the completion
of the related Equity Offering, and any such redemption or notice may, at the
Issuers’ discretion, be subject to one or more conditions precedent, including
completion of the related Equity Offering.

 

If the
optional Redemption Date is on or after an interest record date and on or
before the related interest payment date, the accrued and unpaid interest and
Special Interest, if any, will be paid to the Person in whose name the Note is
registered at the close of business on such record date, and no Special
Interest will be payable to Holders whose Notes will be subject to redemption
by the Issuers.

 

In the
case of any partial redemption, selection of the Notes for redemption will be
made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed or, if the
Notes are not listed, then on a pro rata basis, although no Notes of $1,000 in
original principal amount or less will be redeemed in part.  If any Note is to be redeemed in part only,
the notice of redemption relating to such Note shall state the portion of the
principal amount thereof to be redeemed. 
A new Note in principal amount equal to the unredeemed portion thereof
will be issued in the name of the Holder thereof upon cancellation of the original
Note.  On and after the Redemption Date,
interest will cease to accrue on Notes or portions thereof called for
redemption as long as the Issuers have deposited with the Paying Agent funds in
satisfaction of the applicable redemption price pursuant to the Indenture.

 

6.                                       Mandatory Redemption

 

The
Issuers are not required to make mandatory redemption or sinking fund payments
with respect to the Notes.  However, the
Issuers may be required to offer to repurchase the Notes under Sections 3.7 and
3.9 of the Indenture.

 

7.                                       Repurchase Provisions

 

(a)                                  Upon a Change of Control any Holder of Notes will have the right to cause
the Company to repurchase all or any part of the Notes of such Holder at a
purchase price in cash

 

B-6

 

equal to 101% of the principal amount thereof, plus
accrued and unpaid interest and Special Interest, if any, to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on an interest payment date that is on or prior to
the date of repurchase) as provided in, and subject to the terms of, the
Indenture.

 

(b)                                 In the event of an Asset Sale that requires the purchase of Notes pursuant
to Section 3.7(d) of the Indenture, the Company will be
required to apply such Excess Proceeds to the repayment of the Notes and any
pari passu Indebtedness in accordance with the procedures set forth in Section 3.7
of the Indenture.

 

8.                                       Denominations; Transfer; Exchange

 

The
Notes are in registered form without coupons in denominations of principal
amount of $1,000 and integral multiples of $1,000.  A Holder may transfer or exchange Notes in
accordance with the Indenture.  The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. 
Neither the Issuers nor the Registrar are required to register the
transfer or exchange of (i) any Notes selected for redemption (except, in
the case of a Note to be redeemed in part, the portion of the Note not to be
redeemed) or (ii) any Notes for a period of 15 days before a selection of
Notes to be redeemed.

 

9.                                       Persons Deemed Owners

 

The
registered Holder of this Note may be treated as the owner of it for all
purposes.

 

10.                                 Unclaimed Money

 

If
money for the payment of principal or interest remains unclaimed for one year,
the Trustee or Paying Agent shall pay the money back to the Company at its
request unless an abandoned property law designates another Person.  After any such payment, Holders entitled to
the money must look only to the Company and not to the Trustee for payment.

 

11.                                 Defeasance

 

Subject
to certain conditions set forth in the Indenture, the Issuers at any time may
terminate some or all of their obligations under the Notes and the Indenture if
the Issuers deposit with the Trustee money or non-callable Government
Securities for the payment of principal, premium, interest and Special
Interest, if any, on the Notes to redemption or maturity, as the case may be.

 

12.                                 Amendment, Waiver

 

Subject
to certain exceptions set forth in the Indenture, (i) the Indenture or the
Notes may be amended with the written consent or electronic consent pursuant to
the second paragraph of Section 9.4 of the Indenture, as
applicable, of the Holders of at least a majority in principal amount of the
then outstanding Notes and (ii) any default (other than with respect to
nonpayment or in respect of a provision that cannot be amended without the
written consent of each Holder affected) or noncompliance with any provision
may be waived with the written consent or

 

B-7

 

electronic consent pursuant to the second paragraph of Section 9.4
of the Indenture, as applicable, of the Holders of a majority in principal
amount of the then outstanding Notes. 
Subject to certain exceptions set forth in the Indenture, without the
consent of any Holder, the Issuers, the Guarantors and the Trustee may amend
the Indenture or the Notes to cure any ambiguity, defect or inconsistency, or
to comply with Article IV of the Indenture, or to provide for
uncertificated Notes in addition to or in place of certificated Notes, or to
add guarantees with respect to the Notes, to release a Guarantor in accordance
with the Indenture or to secure the Notes, or to allow any Guarantor to execute
a supplemental Indenture or Note Guarantee, or to provide additional rights or
benefits to the Holders of the Notes, or to comply with any requirement of the
Commission in connection with qualifying or maintaining the qualification of
the Indenture under the Act, or to make any change that does not adversely
affect the rights of any Holder, or to conform the text of the Indenture, the
Notes or the Note Guarantees to the description of notes in the Offering
Memorandum, or to provide for the issuance of Additional Notes or to evidence
or provide for a successor trustee.

 

13.                                 Defaults and Remedies

 

Under
the Indenture, Events of Default include in summary form: (i) default for
30 days in payment of interest or Special Interest, if any, when due on the
Notes; (ii) default in payment when due (at maturity, upon redemption or
otherwise) of principal or premium, if any, on the Notes; (iii) the
failure by the Company or its Restricted Subsidiaries to comply with their
obligations under Sections 3.7, 3.9 or 4.1 of the
Indenture; (iv) the failure by the Company or any of its Restricted
Subsidiaries to comply for 60 days after notice with its other agreements
contained in the Indenture or under the Notes (other than those referred to in
(i), (ii), or (iii) above); (v) default under any mortgage, indenture
or instrument under which there may be issued or by which there may be secured
or evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Company
or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee
now exists, or is created after the Issue Date, if that default (a) is
caused by a failure to pay principal of, or interest or Special Interest or
premium, if any, on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (“Payment
Default”) or (b) results in the acceleration of such Indebtedness
prior to its Stated Maturity, and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $25.0 million or more; (vi) failure
by an Issuer or any of the Company’s Restricted Subsidiaries to pay final
judgments entered by a court or courts of competent jurisdiction aggregating in
excess of $5.0 million, which judgments are not paid, discharged or stayed for
a period of 60 days, (vii) except as permitted by the Indenture, any Note
Guarantee is held in a judicial proceeding to be not enforceable or valid or
ceases to be in full force and effect, or any Guarantor or other Person acting
on its behalf denies or disaffirms its obligations under its Note Guarantee or (viii) certain
events of bankruptcy, insolvency or reorganization of the Company or a
Restricted Subsidiary or group of Restricted Subsidiaries that, taken together
(as of the latest audited consolidated financial statements for the Company and
its Restricted Subsidiaries), would constitute a Significant Subsidiary.

 

If an
Event of Default occurs and is continuing (other than an Event of Default
described in clause (vi) above), the Trustee may, or at the written
direction of the Holders of at least 25% in

 

B-8

 

aggregate principal amount of the Notes shall declare all
the Notes to be due and payable.  Certain
events of bankruptcy or insolvency are Events of Default which will result in
the Notes being due and payable immediately upon the occurrence of such Events
of Default.

 

Holders
may not enforce the Indenture or the Notes except as provided in the
Indenture.  The Trustee may refuse to
enforce the Indenture or the Notes unless it receives reasonable indemnity or
security.  Subject to certain
limitations, Holders of a majority in principal amount of the Notes may direct
the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders notice
of any continuing Default or Event of Default (except a Default or Event of
Default in payment of principal or interest) if it determines that withholding
notice is in their interest.

 

14.                                 Trustee Dealings with the Issuers

 

Subject
to certain limitations set forth in the Indenture, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Issuers or their Affiliates and may otherwise deal with the Issuers or
their Affiliates with the same rights it would have if it were not Trustee.

 

15.                                 No Recourse Against Others

 

No
manager, director, officer, employee, incorporator, member or stockholder of
any Issuer, or any Guarantor, as such, shall have any liability for any
obligations of the Issuers or the Guarantors under the Notes, the Indenture,
the Note Guarantees or for any claim based on, in respect of, or by reason of,
such obligations of their creation.  Each
Holder by accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the Notes.

 

16.                                 Authentication

 

This
Note shall not be valid until an authorized signatory of the Trustee (or an
authenticating agent acting on its behalf) manually signs the certificate of
authentication on the other side of this Note.

 

17.                                 Abbreviations

 

Customary
abbreviations may be used in the name of a Holder or an assignee, such as TEN
COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint
tenants with rights of survivorship and not as tenants in common), CUST (=
custodian) and U/G/M/A (= Uniform Gift to Minors Act).

 

18.                                 CUSIP Numbers

 

Pursuant
to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Issuers have caused CUSIP numbers to be printed
on the Notes and have directed the Trustee to use CUSIP numbers in notices of
redemption as a convenience to Holders. 
No representation is made as to the accuracy of such numbers either as
printed on the

 

B-9

 

Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.

 

19.                                 Governing Law

 

This
Note shall be governed by, and construed in accordance with, the laws of the
State of New York.

 

The
Issuers will furnish to any Holder upon written request and without charge to
the Holder a copy of the Indenture, which has in it the text of this Note in
larger type.  Requests may be made to:

 

	
   

  	
  Tronox
  Worldwide LLC

  
	
   

  	
  123
  Robert S. Kerr Avenue

  
	
   

  	
  Oklahoma
  City, Oklahoma 73102

  

 

B-10

 

ASSIGNMENT FORM

 

	
  To assign this Note, fill in the form below:

  
	
   

  
	
  I or we assign and transfer this Note to

  
	
   

  
	
   

  	
   

  
	
  (Print or type assignee’s name, address and zip code)

  
	
   

  
	
   

  	
   

  
	
  (Insert assignee’s soc. see. or tax I.D. No.)

  

 

and irrevocably appoint                               
agent to transfer this Note on the books of the Issuers.  The agent may substitute another to act for
him.

 

	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  
	
  Signature
  Guarantee:

  	
   

  
	
   

  	
  (Signature
  must be guaranteed)

  
	
   

  
	
   

  
	
  Sign exactly as your name appears on the other side of this Note.

  
							

 

The
signatures) should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in an approved signature guarantee medallion program), pursuant to Commission Rule 17Ad-15.

 

B-11

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you
want to elect to have this Note purchased by the Issuers pursuant to Section 3.7
or Section 3.9 of the Indenture, check either box:

 

o                                    o

3.7                                 3.9

 

If you
want to elect to have only part of this Note purchased by the Issuers pursuant
to Section 3.7 or Section 3.9 of the Indenture, state
the amount in principal amount (must be integral multiple of $1,000): $

 

 

	
  Date:

  	
   

  	
   

  	
  Your
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name
  appears on the other side of the Note)

  

 

	
  Signature
  Guarantee:

  	
   

  
	
   

  	
   

  	
  (Signature
  must be guaranteed)

  	
   

  

 

The
signature(s) should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in an approved signature guarantee medallion program), pursuant to Commission Rule 17Ad-15.

 

B-12

 

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE(1)

 

The
following increases or decreases in this Global Note have been made:

 

	
  Date
  of

  Exchange

  	
   

  	
  Amount of

  decrease in

  Principal

  Amount of this

  Global Note

  	
   

  	
  Amount of

  increase in

  Principal

  Amount of this

  Global Note

  	
   

  	
  Principal Amount of

  this Global Note

  following such

  decrease or increase

  	
   

  	
  Signature of

  authorized signatory

  of Trustee or Notes

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(1) Include only if security
is issued in global form.

 

B-13

 

EXHIBIT C

 

FORM OF SUPPLEMENTAL INDENTURE

 

This
Supplemental Indenture, dated as of                               
(this “Supplemental Indenture” or “Note Guarantee”), among [name
of future Guarantor] (the “New Guarantor”), Tronox Worldwide LLC (the “Company”),
Tronox Finance Corp. (“Tronox Finance” and, together with the Company,
the “Issuers”), Tronox Incorporated (“Parent”) and Citibank,
N.A., as Trustee under the Indenture referred to below.

 

W I T N E S S E T H:

 

WHEREAS,
the Issuers, the Guarantors named therein and the Trustee have heretofore
executed and delivered an Indenture, dated as of November 28, 2005 (as
amended, supplemented, waived or otherwise modified, the “Indenture”),
providing for the initial issuance of an aggregate principal amount of
$350,000,000 of 91⁄2 % Senior Notes due 2012 of the Issuers (the “Notes”);

 

WHEREAS,
Section 3.10 of the Indenture provides that the Issuers are is
required to cause each wholly-owned Domestic Subsidiary (other than Immaterial
Subsidiaries) created or acquired by the Company or any of its Restricted
Subsidiaries after the Issue Date, to the extent set forth in the Indenture, to
execute and deliver to the Trustee a Note Guarantee pursuant to which such
Guarantor will unconditionally Guarantee, on a joint and several basis with the
other Guarantors, the full and prompt payment of the principal of, premium,
interest and Special Interest, if any, on the Notes on a senior basis; and

 

WHEREAS,
pursuant to Section 9.1 of the Indenture, the Trustee, the Issuers
and the Guarantors are authorized to execute and deliver this Supplemental
Indenture to amend the Indenture, without the consent of any Holder,

 

NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the New Guarantor,
the Issuers, the Guarantors and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.1                          Defined Terms.  As used in this Note Guarantee, terms defined
in the Indenture or in the preamble or recital hereto are used herein as
therein defined, except that the term “Holders” in this Note Guarantee
shall refer to the term “Holders” as defined in the Indenture and the
Trustee acting on behalf or for the benefit of such Holders.  The words “herein,” “hereof’ and “hereby” and
other words of similar import used in this Supplemental Indenture refer to this
Supplemental Indenture as a whole and not to any particular section hereof.

 

C-1

 

ARTICLE II

 

Agreement to be Bound, Note Guarantee

 

SECTION 2.1                          Agreement to be Bound.  The New Guarantor hereby becomes a party to
the Indenture as a Guarantor and as such will have all of the rights and be
subject to all of the obligations and agreements of a Guarantor under the
Indenture.  The New Guarantor agrees to
be bound by all of the provisions of the Indenture applicable to a Guarantor
and to perform all of the obligations and agreements of a Guarantor under the
Indenture.

 

SECTION 2.2                          Note Guarantee.  The New Guarantor hereby fully,
unconditionally and irrevocably Guarantees, as primary obligor and not merely
as surety, jointly and severally with each Guarantor, to each Holder of the
Notes and the Trustee, the full and punctual payment when due, whether at
maturity, by acceleration, by redemption or otherwise, of the Obligations
pursuant to Article X of the Indenture on a senior basis.

 

ARTICLE III

 

Miscellaneous

 

SECTION 3.1                          Notices.  All notices and other communications to the
New Guarantor shall be given as provided in the Indenture to the Guarantors, at
its address set forth below, with a copy to the Issuers as provided in the
Indenture for notices to the Company.

 

SECTION 3.2                          Parties.  Nothing expressed or mentioned herein is
intended or shall be construed to give any Person, firm or corporation, other
than the Holders and the Trustee, any legal or equitable right, remedy or claim
under or in respect of this Supplemental Indenture or the Indenture or any
provision herein or therein contained.

 

SECTION 3.3                          Governing Law.  This Supplemental Indenture shall be governed
by, and construed in accordance with, the laws of the State of New York.

 

SECTION 3.4                          Severability Clause.  In case any provision in this Supplemental
Indenture shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby and such provision shall be ineffective only to the extent
of such invalidity, illegality or unenforceability.

 

SECTION 3.5                          Ratification of Indenture; Supplemental Indenture Part of Indenture.  Except as expressly amended
hereby, the Indenture is in all respects ratified and confirmed and all the
terms, conditions and provisions thereof shall remain in full force and effect.  This Supplemental Indenture shall form a part
of the Indenture for all purposes, and every Holder of Notes heretofore or
hereafter authenticated and delivered shall be bound hereby.  The Trustee makes no representation or
warranty as to the validity or sufficiency of this Supplemental Indenture.

 

SECTION 3.6                          Counterparts.  The parties hereto may sign one or more
copies of this Supplemental Indenture in counterparts, all of which together
shall constitute one and the same agreement.

 

C-2

 

SECTION 3.7                          Headings.  The headings of the Articles and the sections
in this Note Guarantee are for convenience of reference only and shall not be
deemed to alter or affect the meaning or interpretation of any provisions
hereof.

 

IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to
be duly executed as of the date first above written.

 

	
   

  	
  [NEW GUARANTOR],

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  CITIBANK, N.A., as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRONOX WORLDWIDE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRONOX FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

C-3

 

	
   

  	
  TRONOX INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

[INSERT
SIGNATURE BLOCKS FOR OTHER GUARANTORS]

 

C-4

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